EXHIBIT 13

HIBERNIA CORPORATIONCORPORATE OFFICES
313 Carondelet Street
New Orleans, LA 70130
504-533-3333MAILING ADDRESS
P.O. Box 61540
New Orleans, LA 70161ELECTRONIC ADDRESSInternet: Hibernia.comE-mail: Hibernia.com/emailusSHAREHOLDER, EMPLOYEE DATA(at December 31, 2002)
Shareholder's of record: 14,926
Full-time equivalent employees: 5,588

STOCK LISTINGCommon Stock
Exchange: NYSE     
Symbol:  HIBPrice and volume
Listed asHibernia or HIB in the Wall Street Journal and under
similar designations in other daily newspapers.

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|Hibernia Stock Price and Dividend Information
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|1st quarter                                  
|2nd quarter                                  
|3rd quarter                                  
|4th quarter                                  
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|(1)NYSE closing price.                       

SHAREHOLDER ASSISTANCE
For change of address,
records, transfer of stock from one name to another, assistance with lost
certificates, direct deposits of dividends or a Dividend Reinvestment and Stock
Purchase Plan prospectus:
     Mellon Investor Services
     Securityholder Relations Department
     85 Challenger Road, Overpeck Centre
     Ridgefield Park, NJ 07660
     Toll free:800-814-0305
     www.melloninvestor.com

DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Once enrolled, shareholders
may purchase new shares directly from the Company through reinvested dividends,
optional cash purchases or bothan economical, convenient way to increase
Hibernia holdings. For more information, call800-814-0305.

DIRECT DEPOSIT OF DIVIDENDS
Obtain dividends faster
through direct deposit. To sign up or to receive information, call 800-814-0305.

FOR INFORMATION
Shareholders, media and other
individuals requesting the annual report, Forms 10-K or 10-Q and general
information: Jim Lestelle, Senior Vice President and Manager of Corporate
Communications, 504-533-5482 or 800-245-4388, option 4.
        Analysts
and others requesting financial data: Trisha Voltz, Senior Vice President and Manager
of Investor Relations, 504-533-2180 or 800-245-4388, option 2.
        For
fax access to news releases, quarterly reports and dividend
reinvestment details, call 800-207-9063.
        The Company's annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports are available free
of charge through the Company's web site as soon as reasonably practicable after such material is
electronically filed or furnished to the SEC.  The Company's web site address is www.hibernia.com.

DUPLICATE MAILINGS
Shareholders of record who receive more than one copy of this annual report can contact
Mellon Investor Services at the address to the left and arrange to have their accounts consolidated.

|Five-Year Consolidated Summary of Income and Selected Financial Data (1)                                                                                                                                                                                                                  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                          
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|                                                                                                                                                                                                                                                                                          
|HIBERNIA CORPORATION AND SUBSIDIARIES                                                                                                                                                                                                                                                     
|Year Ended December 31                                                                                                                                                                                                                                                                    
|($ in thousands, except per-share data)                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                          
|Interest income                                                                                                                                                                                                                                                                           
|Interest expense                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                          
|Net interest income                                                                                                                                                                                                                                                                       
|Provision for loan losses                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                          
|Net interest income after                                                                                                                                                                                                                                                                 
|provision for loan losses                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                          
|Noninterest income:                                                                                                                                                                                                                                                                       
|Noninterest income                                                                                                                                                                                                                                                                        
|Securities gains (losses), net                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                          
|Noninterest income                                                                                                                                                                                                                                                                        
|Noninterest expense                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                          
|Income before taxes                                                                                                                                                                                                                                                                       
|Income tax expense                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                          
|Net income                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                          
|Net income applicable to common shareholders                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                          
|Adjusted net income(2)                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                          
|Adjusted net income applicable to common shareholders(2)                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                          
|Per common share information: (3)                                                                                                                                                                                                                                                         
|Net income                                                                                                                                                                                                                                                                                
|Net income - assuming dilution                                                                                                                                                                                                                                                            
|Adjusted net income(2)                                                                                                                                                                                                                                                                    
|Adjusted net income - assuming dilution(2)                                                                                                                                                                                                                                                
|Cash dividends declared                                                                                                                                                                                                                                                                   
|Average shares outstanding (000s)                                                                                                                                                                                                                                                         
|Average shares outstanding - assuming dilution (000s)                                                                                                                                                                                                                                     
|Dividend payout ratio                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                          
|Selected year-end balances (in millions)                                                                                                                                                                                                                                                  
|Loans                                                                                                                                                                                                                                                                                     
|Deposits                                                                                                                                                                                                                                                                                  
|Federal Home Loan Bank advances                                                                                                                                                                                                                                                           
|Equity                                                                                                                                                                                                                                                                                    
|Total assets                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                          
|Selected average balances (in millions)                                                                                                                                                                                                                                                   
|Loans                                                                                                                                                                                                                                                                                     
|Deposits                                                                                                                                                                                                                                                                                  
|Federal Home Loan Bank advances                                                                                                                                                                                                                                                           
|Equity                                                                                                                                                                                                                                                                                    
|Total assets                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                          
|Selected ratios                                                                                                                                                                                                                                                                           
|Net interest margin (taxable-equivalent)                                                                                                                                                                                                                                                  
|Return on assets                                                                                                                                                                                                                                                                          
|Return on common equity                                                                                                                                                                                                                                                                   
|Return on total equity                                                                                                                                                                                                                                                                    
|Efficiency ratio                                                                                                                                                                                                                                                                          
|Adjusted efficiency ratio(2)                                                                                                                                                                                                                                                              
|Average equity/average assets                                                                                                                                                                                                                                                             
|Tier 1 risk-based capital ratio                                                                                                                                                                                                                                                           
|Total risk-based capital ratio                                                                                                                                                                                                                                                            
|Leverage ratio                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                          
|(1)All financial information has been restated for mergers accounted for as poolings of interests. The effects of mergers accounted for as purchase transactions have been included 
     from the date of consummation. Prior periods have been conformed to current-period presentation.
|(2)Excludes amortization of goodwill.                                                                                                                                                                                                                                                     
|(3)Dividends per common share are historical amounts. For a discussion of net income per common share computations refer to Note 20 of the consolidated financial statements - 
     "Net Income Per Common Share Data."                                                                  

|Managements
Discussion and Analysis of Financial Condition and
Results of Operations                                                                                                                                                                                                                                                                            
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                 
|Managements
Discussion presents a review of the major factors and trends affecting the performance of
Hibernia Corporation  and its subsidiaries (collectively, the Company or
Hibernia), principally Hibernia National Bank (the Bank). This
discussion should be read in conjunction with the accompanying tables and consolidated
financial statements.

2002 Highlights

| |  | Net income for 2002 totaled $249.9 million, a 14% increase compared to $218.8 million for
2001. Net income per common share for 2002 of $1.59 increased 16% compared to $1.37 for
2001, and net income per common share  assuming dilution was $1.56 for 2002, an
increase of 16% compared to $1.35 for 2001.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Net income, adjusted to exclude goodwill amortization, which was eliminated beginning in
2002 under a new accounting rule, increased 8% from $230.3 million in 2001. On that same
basis, net income per common share and net income per common share  assuming
dilution were up 10% from $1.45 and $1.42, respectively.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Net interest income increased $39.6 million (6%) to $704.2 million in 2002 from $664.7
million in 2001. The net interest margin was 4.62% for 2002, compared to 4.39% for 2001.
The increase in the margin was primarily the result of a favorable change in the mix of
interest-bearing liabilities, combined with funding costs declining faster than earning
asset yields.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | On a taxable-equivalent basis, excluding securities transactions, revenues for 2002
totaled $1,078.7 million, a $74.9 million (7%) increase from the 2001 level of $1,003.8
million. Excluding the $10.4 million second-quarter 2001 net indirect auto securitization
gain, 2002 revenues would have increased $85.3 million (9%) from the 2001 level of $993.4
million.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Noninterest income totaled $352.9 million at December 31, 2002, an increase of $32.3
million (10%) from $320.6 million at December 31, 2001. Noninterest income, excluding
securities transactions and adjusted to exclude the net indirect auto securitization gain
in the second quarter of 2001, increased $47.1 million (15%) from $319.1 million at
December 31, 2001.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Deposits grew to $13.5 billion at December 31, 2002, a $527.9 million (4%) increase from
December 31, 2001. Noninterest-bearing deposits grew to $2.9 billion at December 31, 2002,
a $382.5 million increase (15%) from December 31, 2001.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The provision for loan losses in 2002 totaled $80.6 million compared to $97.3 million in
2001. The 2002 provision exceeded net charge-offs by $17.0 million.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Reserve coverage of total loans improved to 1.85% at December 31, 2002, compared to 1.74%
a year earlier. The reserve coverage of nonperforming loans at December 31, 2002 improved
to 388%, compared to 276% a year earlier. The nonperforming asset and nonperforming loan
ratios improved to 0.54% and 0.48%, respectively, at December 31, 2002, compared to 0.69%
and 0.63% a year earlier.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Capital remained strong at December 31, 2002, with a leverage ratio of 8.45% compared to
8.14% at December 31, 2001. In 2002, the Company repurchased approximately 5.5 million
shares of its common stock under buyback programs.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Return on assets and return on common equity ratios improved to 1.51% and 15.43%,
respectively, for the year ended December 31, 2002, compared to 1.33% and 14.42% for the
prior year.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Cash dividends per common share for 2002 increased to $.57, and were 8% higher than the
2001 cash dividend of $.53 per common share and 16% higher than the 2000 cash dividend of
$.49 per common share.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Hibernia funded a record $5.3 billion in mortgage loans in 2002, up 18% from $4.5 billion a year earlier.
|- |  | ---------------------------------------------------------------------------------------------------------

| |  | Hibernia reported total assets exceeding $17 billion for the first time in the Companys history.
|- |  | -------------------------------------------------------------------------------------------------

| |  | Hibernias common stock price experienced an 8% increase during 2002, closing at
$19.26 per share at December 31, 2002, compared to $17.79 per share at December 31, 2001.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Application of CriticalAccounting Policies
|------------------------------------------
|                                          

The
Companys management exercises judgment in choosing and applying the most appropriate
accounting policies and methodologies in many different areas. These choices are
important; not only to ensure compliance with generally accepted accounting principles,
but also to reflect the exercise of managements judgment in determining the most
appropriate manner in which to record Hibernias financial performance. For Hibernia,
these key areas include the accounting for the reserve for loan losses, the valuations of
goodwill and mortgage servicing rights, and the accounting for stock options.

The
reserve for loan losses is maintained to provide for probable credit losses related to
specifically identified loans and for losses inherent in the loan portfolio that have been
incurred as of the balance sheet date. The reserve is comprised of three components:
specific reserves on certain problem loans, general reserves determined from historical
loss allocation factors applied to pools of loans, and an unallocated portion. The reserve
is calculated using both objective and subjective information. The provision for loan
losses is a charge to earnings to maintain the reserve for loan losses at a level
consistent with managements assessment of the loan portfolio in light of current
economic conditions and market trends. For further discussion on this calculation and
assumptions and methods used, see the Reserve and Provision for Loan Losses
section of this analysis.

The
Company is required to perform valuations of assets in accordance with various generally
accepted accounting principles. Impairment testing of goodwill requires the Company to
determine its fair value by reporting unit. Impairment testing is a two step process that
first compares the fair value of a reporting unit with its carrying amount, and second
measures impairment loss by comparing the implied fair value of the reporting unit
goodwill with the carrying amount of that goodwill. The Companys reporting units are
operating segments as defined by Statement of Financial Accounting Standard (SFAS) No.
131, Disclosure about Segments of an Enterprise and Related Information. The
Companys reporting units are based on lines of business. Assets and liabilities are
allocated to reporting units using the Companys internal management reporting
system. Goodwill is allocated directly to these reporting units, when applicable, or based
on the allocation of loans to the reporting segments for each region in which the goodwill
originated. When quoted market prices are not available for assets and liabilities, fair
values are based on estimates using present value or other valuation techniques. Those
techniques are significantly affected by the assumptions used, including the discount rate
and estimates of future cash flows. However, management uses assumptions that it considers
to be conservative in its impairment testing. The results of these tests did not indicate
impairment of goodwill in 2002.

The
Company records a servicing asset when the right to service mortgage loans for others is
acquired through a purchase or retained upon the sale of loans. Based upon current fair
values, servicing rights are periodically assessed for impairment. For this valuation, the
mortgage servicing portfolio is stratified on the basis of certain risk characteristics
including loan type and interest rate. A discounted cash flow analysis is performed using
various assumptions including prepayment speeds, discount rates and servicing costs. The
Company uses national prepayment speed assumptions and adjusts them to meet actual
prepayment behavior of its own portfolio with information obtained from an independent
third party. To the extent that temporary impairment exists, write-downs are recognized in
current earnings as an adjustment to the corresponding valuation allowance. Permanent
impairment is recognized through a write-down of the asset with a corresponding reduction
in the valuation allowance. Changes in these assumptions could materially affect the
operating results of the Company, however, management considers the assumptions used to be
appropriate.

The
Company has elected to account for its stock-based compensation plans under the intrinsic
value method of Accounting Principles Board (APB) Opinion No. 25, Accounting for
Stock Issued to Employees, which is allowed by SFAS No. 123, Accounting for
Stock-Based Compensation. In accordance with APB Opinion No. 25, compensation
expense relating to stock options is not reflected in net income provided the exercise
price of the stock options granted equals or exceeds the market value of the underlying
common stock at the date of grant. The Companys practice has been to grant options
at no less than the fair market value of the stock at the date of grant. If the Company
had elected to apply the fair value recognition provisions of SFAS No. 123 for stock
options, net income would have been reduced by $6.1 million, $5.6 million and $4.7 million
at December 31, 2002, 2001 and 2000, respectively. Net income per common share would have
been $1.55, $1.34 and $1.02 at December 31, 2002, 2001 and 2000, respectively.
Compensation expense under the fair value method was calculated using the Black-Scholes
option valuation model with the following weighted-average assumptions for 2002, 2001 and
2000, respectively: risk-free interest rates of 4.68%, 5.62% and 6.79%; expected dividend
yields of 3.11%, 3.83% and 4.82%; expected volatility factors of the market price of
Hibernia Class A Common Stock of 33%, 35% and 32%; and the expected life of the options.
The Black-Scholes option valuation model was developed for use in estimating the fair
value of traded options which have no vesting restrictions and are fully transferable. In
addition, option valuation models require the input of highly subjective assumptions,
including the expected stock price volatility. Because the Companys stock options
have characteristics significantly different from those traded options, and because
changes in the subjective input assumptions can materially affect the fair value estimate,
in managements opinion the existing models do not necessarily provide a reliable
single measure of the fair value of its stock options.

The
Company adopted SFAS No. 142, Goodwill and Other Intangible Assets, on January
1, 2002. Under the new rules, goodwill and intangible assets deemed to have indefinite
lives are no longer amortized but are subject to annual impairment tests in accordance
with the provisions of SFAS No. 142. Applications of the nonamortization provisions of
SFAS No. 142 increased net income by approximately $11.0 million ($.07 per share) in 2002.

The
Companys management has discussed the development and selection of these critical
accounting policies with the Audit Committee of our Board of Directors and the Audit
Committee has reviewed the Companys disclosure relating to these policies in this
annual report.

|Merger Activity
|---------------
|               

On
April 1, 2002, the Company enhanced its expertise in life insurance and financial planning
by consummating the purchase of Friedler/LaRocca Financial Partners, L.L.C.
(Friedler/LaRocca). Friedler/LaRocca, a New Orleans based firm specializing in life
insurance and other financial services for wealthy clients, serves customers in shipping,
financial services, legal and other key regional industries. It now operates as part of
Hibernias Private Client Group and continues to serve the needs of clients in such
areas as life insurance, incentive-compensation and deferred compensation planning, estate
and financial planning, retirement planning and other investment products. The Company did
not consummate any mergers in 2001. In 2000, Hibernia broadened its range of financial
products and services through the completion of mergers with Southcoast Capital, L.L.C.
(Southcoast), a full-service investment banking firm, and Rosenthal Agency, Inc.
(Rosenthal), Louisianas largest independent insurance broker. Additionally in 2000,
the Company purchased the assets and assumed the liabilities of three East Texas banking
offices from Compass Bank (the Compass transaction). These transactions were accounted for
using the purchase method of accounting.

All
prior-year information has been restated to reflect the effect of mergers in 1999 and
previous years which were accounted for as poolings of interests. For all purchase
transactions, the financial information of those institutions is combined with Hibernia as
of and subsequent to consummation.

|Financial Condition
|-------------------
|                   
|EARNING ASSETS     

Interest
income from earning assets (primarily loans and securities) is the Companys main
source of income. Average earning assets totaled $15.4 billion in 2002, unchanged from
2001 and up from $14.8 billion in 2000. The increase of $612.6 million in average earning
assets for 2001 compared to 2000 was due to growth spread among all asset categories.

Average
loans as a percentage of average earning assets decreased to 73.2% in 2002 compared to
75.6% in 2001 and 78.0% in 2000. Average securities were 22.5% of average earning assets
in 2002 compared to 20.8% in 2001 and 20.6% in 2000.

Total
earning assets at December 31, 2002, were $16.1 billion, up from $15.3 billion (5%) a year
earlier. This change was primarily due to growth in short-term investments, loans and
securities.

LOANSThe
Companys lending activities are subject to both liquidity considerations and
underwriting standards which are tailored to each of the Companys loan portfolios.
Loans allow Hibernia to meet customer credit needs and at the same time achieve yields
that are generally higher than those available on other earning assets. Lending
relationships are one way Hibernia meets its goal of providing for all the financial needs
of its customers.

Hibernia
engages in commercial, small business and consumer lending. The specific underwriting
criteria for each major loan category are outlined in a credit policy that is approved by
the Board of Directors. In general, commercial loans and larger small business loans are
evaluated based on cash flow, collateral, market conditions, prevailing economic trends,
character and leverage capacity of the borrower, and capital and investment in a
particular property, if applicable. Most small business and consumer loans are
underwritten using credit scoring models which consider factors including payment
capacity, credit history and collateral. In addition, market conditions, economic trends
and the character of the borrower may be considered. Hibernias credit policy,
including the underwriting criteria for major loan categories, is reviewed on a regular
basis and adjusted when warranted.

Average
loans decreased $347.9 million (3%) in 2002 and increased $118.1 million (1%) in 2001. The
decrease in 2002 compared to 2001 is primarily due to continued efforts to diversify the
risk of the portfolio, discussed in further detail below, weak loan demand and some
tightening of credit underwriting standards.

Table
1 details Hibernias commercial and small business loans classified by repayment
source and consumer loans classified by type. In 2002, commercial loans decreased $85.9
million (3%), small business loans increased $17.0 million (1%) and consumer loans
increased $320.1 million (6%). The portfolio mix was 25% commercial, 22% small business
and 53% consumer at year-end 2002, compared to 26%, 22% and 52%, respectively, at year-end
2001.

|Table 1                      
|-----------------------------
|                             
|COMPOSITION OF LOAN
PORTFOLIO

|December 31 ($ in millions)                  | 2002       | 2001   
|-------------------------------------------- | ---------- | -------
|                                            
|                                             |            | Balance
|                                            
|Commercial                                  
|Commercial and industrial                    | $ 1,030.5  | 9.0    
|Services industry                            | 663.9      | 5.8    
|Real estate                                  | 405.8      | 3.5    
|Health care                                  | 219.9      | 1.9    
|Transportation, communications and utilities | 160.6      | 1.4    
|Energy                                       | 291.9      | 2.5    
|Other                                        | 103.9      | 0.9    
|                                            
|Total commercial                             | 2,876.5    | 25.0   
|                                            
|Small Business                               |           
|Commercial and industrial                    | 737.1      | 6.4    
|Services industry                            | 634.3      | 5.5    
|Real estate                                  | 478.8      | 4.2    
|Health care                                  | 161.9      | 1.4    
|Transportation, communications and utilities | 97.5       | 0.8    
|Energy                                       | 27.1       | 0.2    
|Other                                        | 371.1      | 3.3    
|                                            
|Total small business                         | 2,507.8    | 21.8   
|                                            
|Consumer                                    
|Residential mortgages:                      
|First mortgages                              | 2,445.3    | 21.3   
|Junior liens                                 | 536.9      | 4.7    
|Indirect                                     | 1,957.1    | 17.0   
|Revolving credit:                           
|Secured                                      | 550.9      | 4.8    
|Unsecured                                    | 105.9      | 0.9    
|Other:                                      
|Secured                                      | 366.0      | 3.2    
|Unsecured                                    | 145.8      | 1.3    
|                                            
|Total consumer                               | 6,107.9    | 53.2   
|                                            
|Total loans                                  | $ 11,492.2 | 100.0  
|                                            

Commercial Loans The change in the
commercial portfolio was due to decreases in commercial and industrial, down $54.2 million
(5%); the services industry, down $53.2 million (7%); and health care, down $45.4 million
(17%), partially offset by increases in energy, up $56.8 million (24%) and other
commercial loans, up $20.8 million (25%).

The
decrease in commercial loans was the result of weak loan demand and managements
strategy over the past few years to achieve more granularity in the commercial portfolio
and to decrease participation in broadly syndicated shared national credits. This strategy
focuses on lending to customers who operate in Hibernias markets, particularly those
who use other Company services, and on retaining a smaller piece of the credit
relationship. Shared national credits totaled $803.0 million at December 31, 2002, down 8%
from $873.4 million a year earlier. A shared national credit is one that is shared by
three or more banks and aggregates $20 million or more.

Hibernias commercial loan
portfolio remains well diversified across industries, as evidenced by the portfolio
percentages presented in Table 1. Hibernias commercial loan portfolio does not
contain significant exposure to foreign countries.

Small Business Loans Hibernia
generally categorizes companies with annual revenues of less than $10 million as small
businesses. The small business portfolio showed growth primarily in real estate, up $56.0
million (13%) and health care, up $12.2 million (8%), partially offset by a decrease in
commercial and industrial, down $38.8 million (5%). The small business portfolio continued
to be impacted by slow demand for loans as a result of the soft economy.

Consumer Loans The increase in the
consumer portfolio was primarily due to the increase in indirect, up $421.5 million (27%),
partially offset by a decrease in first mortgages, down $170.2 million (7%). An indirect
loan is a loan purchased from a retailer who arranged the loan to the consumer.

During
2001, the Company securitized and sold $592.2 million of indirect auto loans from its
consumer portfolio. This transaction further diversified the loan portfolio and reduced
short-term borrowings.

Residential
mortgage loans comprise almost half of the consumer loan portfolio. The favorable interest
rate environment, along with the customer-oriented application and approval process,
resulted in $5.3 billion in loan fundings during 2002, compared to $4.5 billion in 2001.
While the Company experienced a record volume of fundings, the majority of these loans
were fixed-rate mortgages and were sold with servicing retained. Generally, Hibernia
retains adjustable-rate mortgage loans and sells fixed-rate mortgage loans, while
retaining the associated servicing rights. At December 31, 2002, Hibernia serviced
approximately $10.8 billion in residential mortgage loans.

During 2001, Hibernia
securitized $305.2 million of its residential first mortgages through the Federal National
Mortgage Association (FNMA). These portions of the consumer portfolio were securitized and
classified as available for sale securities with recourse provisions. Reserves have been
established to cover estimated losses. These transactions affect the categorization of
individual line items on the balance sheet by reducing mortgage loans and increasing
securities.

In
addition to loans for the purchase of homes, Hibernia offers customers a broad assortment
of loans secured by residential mortgages, including the Hibernia Equity PrimeLineSM, an
attractively priced line of credit secured by the customers residence.

INVESTMENT SECURITIESAt
the end of 2002, investment securities totaled $3.7 billion, an increase of $160.5
million, or 5%, from the end of 2001. Of total investment securities at December 31, 2002,
89% are debt securities of the U.S. government or its agencies. Most securities held by
the Company qualify as pledgeable securities and are used to collateralize repurchase
agreements and public fund deposits. The composition of the investment securities
portfolio is shown in Table 2.

Securities Available for Sale Average
securities available for sale increased $381.0 million (13%) to $3.3 billion in 2002. This
increase was primarily due to purchases of securities required to collateralize certain
public fund deposits and repurchase agreements. Further, as the Company experienced slower
loan growth, additional purchases of securities available for sale helped enhance its
earning assets yields. Average securities available for sale increased $195.9 million, or
7%, from 2000 to 2001.

|Table 2                             
|------------------------------------
|                                    
|COMPOSITION OF
INVESTMENT SECURITIES

|December 31 ($ in millions) | 2002                              | 2001      | 2000     
|--------------------------- | --------------------------------- | --------- | ---------
|                           
|Available for sale:         | U.S. Treasuries                   | $ 32.4    | $ 37.8   
|                            | U.S. government agencies:        
|                            | Mortgage-backed securities        | 1,995.2   | 1,066.3  
|                            | Bonds                             | 1,129.6   | 1,740.1  
|                            | Stocks                            | 99.4      | 103.4    
|                            | States and political subdivisions | 159.2     | 189.6    
|                            | Other                             | 95.4      | 104.1    
|                           
|Total available for sale    |                                   | 3,511.2   | 3,241.3  
|                           
|Held to maturity:           | U.S. government agencies:        
|                            | Mortgage-backed securities        | 140.5     | 249.9    
|                           
|Total held to maturity      |                                   | 140.5     | 249.9    
|                           
|Total investment securities | $ 3,651.7                         | $ 3,491.2 | $ 3,048.9
|                           

|Table 3                                           
|--------------------------------------------------
|                                                  
|MATURITIES AND YIELDS
OF INVESTMENT SECURITIES (1)

|                                                                                                                                                                                                                | Due after 1   | Due after 5 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | ------------
|                                                                                                                                                                                                                | Due in 1 year | year through
|December 31, 2002 ($ in millions)                                                                                                                                                                               | or less       | 5 years     
|                                                                                                                                                                                                               
|                                                                                                                                                                                                                | Amount        | Yield       
|                                                                                                                                                                                                               
|Available for sale:                                                                                                                                                                                            
|U.S. Treasuries                                                                                                                                                                                                 | $       -     | -           
|U.S. government agencies:                                                                                                                                                                                      
|Mortgage-backed securities                                                                                                                                                                                      | 2.3           | 4.59        
|Bonds                                                                                                                                                                                                           | 1.3           | 5.81        
|Stocks                                                                                                                                                                                                          | 99.4          | 3.31        
|States and political subdivisions                                                                                                                                                                               | 9.3           | 7.85        
|Other                                                                                                                                                                                                           | 92.5          | 3.18        
|                                                                                                                                                                                                               
|Total available for sale                                                                                                                                                                                        | $ 204.8       | 3.49        
|                                                                                                                                                                                                               
|Held to maturity:                                                                                                                                                                                              
|U.S. government agencies:                                                                                                                                                                                      
|Mortgage-backed securities                                                                                                                                                                                      | $ -           | -           
|                                                                                                                                                                                                               
|Total held to maturity                                                                                                                                                                                          | $ -           | -           
|                                                                                                                                                                                                               
|(1)Yield computations are presented on a taxable-equivalent basis using market values for securities available for sale,
amortized cost for securities held to maturity and a statutory income tax rate of 35%.

At
December 31, 2002, the securities available for sale portfolio included $986.5 million of
adjustable-rate securities, primarily mortgage-backed securities, which are tied to a
cost-of-funds index. In much the same manner as Hibernias cost of funds adjusts to
new market rates over a period of time, the rates on these securities may not fully
reflect a change in market interest rates for more than a year.

The
average repricing period of securities available for sale at December 31, 2002, was 3.5
years, up from 2.2 years at December 31, 2001. Carrying securities available for sale at
market value has the effect of recognizing a yield on the securities equal to the current
market yield.

Securities Held to Maturity Average
securities held to maturity totaled $201.3 million in 2002, down from $316.6 million in
2001. This decrease is due to increased prepayments on mortgage-backed securities.

At
December 31, 2002, the securities held to maturity portfolio included $113.0 million of
adjustable-rate mortgage-backed securities which are tied to a cost-of-funds index. The
average repricing period of securities held to maturity at December 31, 2002, was 2.0
years, down from 2.8 years at December 31, 2001.

Maturities
and yields of investment securities at year-end 2002 are detailed in Table 3.
Mortgage-backed securities are classified according to contractual maturity without
consideration of principal amortization, projected prepayments or call options.

SHORT-TERM INVESTMENTSAverage
short-term investments, primarily federal funds sold, securities purchased under
agreements to resell (reverse repurchase agreements) and an interest-only strip receivable
resulting from the previously mentioned indirect auto loan securitization, increased $36.6
million (16%) in 2002 to $269.2 million. This increase in short-term investments resulted
from an increase in federal funds sold, partially offset by a decreased level of reverse
repurchase agreements. Average short-term investments increased $118.0 million (103%) in
2001 compared to 2000. This increase in short-term investments is primarily due to higher
levels of cash resulting from the previously mentioned securitization and sale of indirect
auto loans in 2001.

At
December 31, 2002 and 2001, the Company held minimal amounts of trading account assets
resulting from activity in its investment banking subsidiary. Trading gains and losses on
these securities are included in other noninterest income. There were no material trading
gains or losses for 2002, 2001 or 2000.

MORTGAGE LOANS HELD FOR
SALEMortgage
loans held for sale are loans that have been originated and are pending securitization or
sale in the secondary market. Average mortgage loans held for sale were $397.5 million in
2002, an $86.3 million (28%) increase from $311.2 million in 2001. Average mortgage loans
held for sale in 2001 increased $220.3 million (242%) from $90.9 million in 2000. As a
result of changes in the interest-rate environment, there was an increased demand for
fixed-rate mortgages during 2002 and 2001 as compared to 2000. Generally, Hibernia retains
adjustable-rate mortgage loans and sells fixed-rate mortgage loans.

Since
mortgage warehouse loans are generally held in inventory for a short period of time (30 to
60 days), there may be significant differences between average and period-end balances. At
year-end 2002, mortgage loans held for sale totaled $526.3 million compared to $566.9
million and $123.7 million in 2001 and 2000, respectively.

ASSET QUALITY

Several
key measures are used to evaluate and monitor the Companys asset quality. These
measures include the level of loan delinquencies; nonaccrual loans; restructured loans;
charge-offs; and foreclosed assets and excess bank-owned property, in addition to their
related ratios.

A
loans past due or delinquency status is based on contractual terms. Table 4 details
loan delinquencies and delinquencies as a percentage of their related portfolio segment
and in total for each of the past five years. Managed accruing, delinquent loans past due
30 days or more were $61.1 million, or 0.52% of total managed loans at December 31, 2002,
down from $71.5 million, or 0.61% at December 31, 2001, and $78.4 million, or 0.65% at
year-end 2000. These decreases reflect improvement in the quality of the portfolio despite
the impact of slow economic conditions over the last several years. The decrease in
delinquent loans in 2002 reflected declines in delinquencies in the commercial and
consumer portfolios. Commercial delinquencies decreased to 0.05% at year-end 2002, down
from 0.25% a year ago and 0.33% at year-end 2000. The small business loan delinquency
ratio was 0.41% at December 31, 2002, unchanged from December 31, 2001, and down from
0.63% at December 31, 2000. The managed consumer loan delinquency ratio decreased to 0.78%
at year-end 2002, down from 0.87% at year-end 2001 and 0.83% at the end of 2000.

|Table 4           
|------------------
|                  
|LOAN DELINQUENCIES

|December 31 ($ in millions)                   | 2002   | 2001   | 2000   | 1999   | 1998  
|--------------------------------------------- | ------ | ------ | ------ | ------ | ------
|                                             
|Days past due:                               
|30 to 89 days                                 | $ 46.9 | $ 57.8 | $ 69.5 | $ 43.6 | $ 52.6
|90 days or more                               | 10.8   | 8.0    | 8.9    | 6.0    | 7.0   
|                                             
|Total delinquencies                           | 57.7   | 65.8   | 78.4   | 49.6   | 59.6  
|Securitized indirect auto delinquencies       | 3.4    | 5.7    | -      | -      | -     
|                                             
|Total managed delinquencies                   | $ 61.1 | $ 71.5 | $ 78.4 | $ 49.6 | $ 59.6
|                                             
|Total delinquencies as a percentage of loans:
|Commercial                                    | 0.05%  | 0.25%  | 0.33%  | 0.15%  | 0.27% 
|Small business                                | 0.41%  | 0.41%  | 0.63%  | 0.34%  | 0.50% 
|Consumer                                      | 0.75%  | 0.84%  | 0.83%  | 0.75%  | 0.98% 
|Total held loans                              | 0.50%  | 0.59%  | 0.65%  | 0.46%  | 0.60% 
|Managed consumer                              | 0.78%  | 0.87%  | 0.83%  | 0.75%  | 0.98% 
|Total managed loans                           | 0.52%  | 0.61%  | 0.65%  | 0.46%  | 0.60% 
|                                             

Nonperforming
loans consist of nonaccrual loans (loans on which interest income is not currently
recognized) and restructured loans (loans with below-market interest rates or other
concessions due to the deteriorated financial condition of the borrower). Nonperforming
loans totaled $54.9 million at December 31, 2002, down from $70.9 million a year ago and
$82.0 million in 2000. Total additions to nonperforming loans in 2002 were $56.2 million,
down 51% from $114.5 million in 2001. The decline in nonperforming loans was driven by a
$12.5 million or 44%, decrease in commercial nonperforming loans resulting primarily from
fewer additions, charge-offs, payments and sales. Commercial nonperforming loans comprised
29% of total nonperforming loans at December 31, 2002, down from 40% a year ago and 73% in
2000. Small business and consumer nonperforming loans at December 31, 2002 also decreased
from the prior year-end. The majority of nonperforming consumer loans are residential
mortgage loans on which no significant losses are expected. The composition of
nonperforming loans, foreclosed assets (assets to which title has been assumed in
satisfaction of debt) and excess bank-owned property, as well as certain key asset quality
ratios for the past five years, are presented in Table 5.

Interest
payments received on nonperforming loans are applied to reduce principal if there is doubt
as to the collectibility of the principal; otherwise, these receipts are recorded as
interest income. Certain nonperforming loans are current as to principal and interest
payments but are classified as nonperforming because there is doubt concerning full
collectibility.

Loans
are considered to be impaired when it is probable that all amounts due in accordance with
the contractual terms will not be collected. Specific reserves are established for
impaired loans based on a review of the collectibility of the principal after considering
any prior charge-offs. Included in nonaccrual loans are loans that are considered to be
impaired under SFAS No. 114, totaling $44.6 million at December 31, 2002 and $59.8 million
at December 31, 2001. These amounts included $32.3 million and $49.7 million,
respectively, of impaired loans for which the related reserve for loan losses was $6.8
million and $11.0 million at December 31, 2002 and 2001, respectively. The remaining
impaired loans did not require specific reserves. Impaired loans are included in
nonaccrual loans in Table 5.

|Table 5             
|--------------------
|                    
|NONPERFORMING ASSETS

|($ in thousands)                  | 2002      | 2001      | 2000      | 1999      | 1998     
|--------------------------------- | --------- | --------- | --------- | --------- | ---------
|                                 
|Nonaccrual loans:                
|Commercial                        | $ 15,905  | $ 28,361  | $ 59,916  | $ 51,620  | $ 19,215 
|Small business                    | 28,668    | 31,448    | 16,005    | 18,329    | 17,694   
|Consumer                          | 10,307    | 11,079    | 6,034     | 6,512     | 4,031    
|                                 
|Total nonperforming loans         | 54,880    | 70,888    | 81,955    | 76,461    | 40,940   
|                                 
|Foreclosed assets                 | 5,919     | 5,782     | 4,267     | 7,710     | 10,762   
|Excess bank-owned property        | 902       | 1,482     | 2,586     | 4,197     | 2,648    
|                                 
|Total nonperforming assets        | $ 61,701  | $ 78,152  | $ 88,808  | $ 88,368  | $ 54,350 
|                                 
|Reserve for loan losses           | $ 212,765 | $ 195,766 | $ 178,253 | $ 156,072 | $ 130,347
|Nonperforming loan ratio:        
|Commercial loans                  | 0.55%     | 0.96%     | 1.71%     | 1.40%     | 0.50%    
|Small business loans              | 1.14%     | 1.26%     | 0.67%     | 0.78%     | 0.85%    
|Consumer loans                    | 0.17%     | 0.19%     | 0.10%     | 0.14%     | 0.10%    
|Total loans                       | 0.48%     | 0.63%     | 0.68%     | 0.70%     | 0.41%    
|Nonperforming asset ratio         | 0.54%     | 0.69%     | 0.73%     | 0.81%     | 0.55%    
|Reserve for loan losses as a     
|percentage of nonperforming loans | 387.69%   | 276.16%   | 217.50%   | 204.12%   | 318.39%  
|                                 

In
addition to the nonperforming loans discussed earlier, there are $44.2 million of loans
which, in managements opinion, are currently subject to potential future
classification as nonperforming.

Table
6 presents a summary of changes in nonperforming loans for 2002 by loan type (commercial
real estate, other commercial, small business and consumer). Loans totaling $56.2 million
were added during 2002, down from $114.5 million in 2001. The majority of the additions in
the prior year related to the commercial loan portfolio. While small business loans were
the largest component of the additions to nonperforming loans in 2002, additions from this
portfolio of $30.9 million in 2002 were down from $36.3 million in 2001. The additions to
nonperforming loans in 2002 were offset by charge-offs of $22.4 million and sales of $9.2
million. Payments of $30.6 million also reduced nonperforming loans in 2002. Recoveries
experienced on previously charged-off loans are reflected in the reserve for loan losses
in Table 7 and are not a component of nonperforming loan activity.

Foreclosed
assets and excess bank-owned property, which are recorded at fair value less estimated
selling costs, totaled $6.8 million at December 31, 2002, down from $7.3 million at
December 31, 2001, and $6.9 million at December 31, 2000.

Nonperforming
assets as a percentage of total loans plus foreclosed assets and excess bank-owned
property (nonperforming asset ratio) is one measure of asset quality. At December 31,
2002, the Companys nonperforming asset ratio was 0.54% compared to 0.69% at year-end
2001 and 0.73% at year-end 2000.

|Table 6                               
|--------------------------------------
|                                      
|SUMMARY OF
NONPERFORMING LOAN ACTIVITY

|                                         | Commercial  | Other      | Small   
|---------------------------------------- | ----------- | ---------- | --------
|($ in thousands)                         | Real Estate | Commercial | Business
|                                        
|Nonperforming loans at December 31, 2001 | $ 5,185     | $ 23,176   | $ 31,448
|Additions                                | -           | 13,141     | 30,905  
|Gross charge-offs                        | (2,018)     | (7,349)    | (13,019)
|Transfers to foreclosed assets           | -           | (310)      | (3,295) 
|Returned to performing status            | -           | -          | (554)   
|Payments                                 | (1,523)     | (6,729)    | (15,284)
|Sales                                    | -           | (7,668)    | (1,533) 
|                                        
|Nonperforming loans at December 31, 2002 | $ 1,644     | $ 14,261   | $ 28,668
|                                        

Another
measure of asset quality is the amount of net charge-offs during the year compared to
average loans. As shown in Table 7, net charge-offs totaled $63.6 million in 2002 compared
to $72.4 million in 2001 and $98.9 million in 2000. Net charge-offs as a percentage of
average loans were 0.56% in 2002 compared to 0.62% in 2001 and 0.86% in 2000. The decrease
was principally due to the commercial loan portfolio which had a net charge-off ratio of
0.22% in 2002, down from 0.76% in 2001 and 1.76% in 2000. The commercial charge-offs in
each of the last three years primarily related to large syndicated loans, with a
significant portion resulting from credits to borrowers with relatively high levels of
leverage. As previously discussed, exposure to these types of credits has been
significantly reduced over the past several years. The small business net charge-off ratio
increased to 0.91% in 2002, up from 0.70% in 2001 and 0.48% in 2000. The increases in 2002
and 2001 were primarily due to the impact of the weaker economy. The increase in the
consumer loan net charge-off ratio to 0.58% in 2002 from 0.52% in 2001 and 0.43% in 2000
was driven primarily by increased charge-offs in the indirect portfolio.

RESERVE AND PROVISION
FOR LOAN LOSSES

The
provision for loan losses is a charge to earnings to maintain the reserve for loan losses
at a level consistent with managements assessment of the loan portfolio in light of
current economic conditions and market trends. The Company recorded an $80.6 million
provision for loan losses in 2002 compared to $97.3 million in 2001 and $120.7 million in
2000. The provision for loan losses for 2002 exceeded net charge-offs by $17.0 million.
Table 7 presents an analysis of the activity in the reserve for loan losses for the past
three years.

The
reserve for loan losses is comprised of specific reserves (assessed for each loan that is
reviewed for impairment or for which a probable loss has been identified), general
reserves and an unallocated reserve.

The
Company continuously evaluates its reserve for loan losses to maintain an adequate level
to absorb loan losses inherent in the loan portfolio. Reserves on impaired loans are based
on discounted cash flows using the loans initial effective interest rate, the
observable market value of the loan or the fair value of the collateral for certain
collateral-dependent loans. Factors contributing to the determination of specific reserves
include the financial condition of the borrower, changes in the value of pledged
collateral and general economic conditions. General reserves are established based on
historical charge-offs, considering factors which include risk rating, industry
concentration and loan type, with the most recent charge-off experience weighted more
heavily. The unallocated reserve, which is judgmentally determined, generally serves to
compensate for the uncertainty in estimating loan losses, particularly in times of
changing economic conditions, and considers the possibility of improper risk ratings and
possible over- or under-allocations of specific reserves. It also considers the lagging
impact of historical charge-off ratios in periods where future charge-offs are expected to
increase or decrease significantly. In addition, the unallocated reserve considers trends
in delinquencies and nonaccrual loans, industry concentration, the volatility of risk
ratings and the evolving portfolio mix in terms of collateral, relative loan size, the
degree of seasoning in the various loan products and loans recently acquired through
mergers. Changes in underwriting standards, credit administration and collection,
regulation and other factors which impact the credit quality and collectibility of the
loan portfolio also affect the unallocated reserve levels. The results of reviews
performed by internal and external examiners are also considered.

|Table 7                         
|--------------------------------
|                                
|RESERVE FOR LOAN LOSSES
ACTIVITY

|Year Ended December 31 ($ in thousands)           | 2002      | 2001      | 2000     
|------------------------------------------------- | --------- | --------- | ---------
|                                                 
|Balance at beginning of year                      | $ 195,766 | $ 178,253 | $ 156,072
|Loans charged off:                               
|Commercial                                        | (9,381)   | (29,982)  | (65,750) 
|Small business                                    | (27,244)  | (21,796)  | (15,337) 
|Consumer                                          | (43,210)  | (39,847)  | (31,366) 
|Recoveries:                                      
|Commercial                                        | 3,127     | 6,203     | 2,182    
|Small business                                    | 4,579     | 4,564     | 3,929    
|Consumer                                          | 8,503     | 8,412     | 7,491    
|                                                 
|Net loans charged off                             | (63,626)  | (72,446)  | (98,851) 
|Provision for loan losses                         | 80,625    | 97,250    | 120,650  
|Addition due to purchase transactions             | -         | -         | 450      
|Transfer due to securitizations                   | -         | (7,291)   | (68)     
|                                                 
|Balance at end of year                            | $ 212,765 | $ 195,766 | $ 178,253
|                                                 
|Reserve for loan losses as a percentage of loans  | 1.85%     | 1.74%     | 1.47%    
|Net charge-offs as a percentage of average loans:
|Commercial                                        | 0.22%     | 0.76%     | 1.76%    
|Small business                                    | 0.91%     | 0.70%     | 0.48%    
|Consumer                                          | 0.58%     | 0.52%     | 0.43%    
|Total loans                                       | 0.56%     | 0.62%     | 0.86%    
|                                                 

The
methodology used in the periodic review of reserve adequacy, which is performed at least
quarterly, is designed to be dynamic and responsive to changes in actual and expected
credit losses and general economic conditions. These changes are reflected in both the
general and unallocated reserves. The historical loss ratios, which are key factors in
this analysis, are updated quarterly and are weighted more heavily for recent charge-off
experience. The review of reserve adequacy is performed by executive management and
presented to the Board of Directors for its review, consideration and ratification.

The
composition of the loan portfolio reflected the previously discussed changes, including
the decrease in the commercial portfolio which was driven by managements strategy to
continue to diversify risk in that portfolio. The loan portfolio composition was also
impacted by growth in the consumer portfolio, primarily in the indirect portfolio. In
addition, the residential mortgage portfolio was impacted by a high level of refinancing
activity in 2002 and 2001 which resulted in higher levels of fixed-rate loans, the
majority of which were sold in the secondary market with servicing retained. The Company
continued to proactively manage its exposure to credit risk in 2002, including both
tighter credit standards and enhancements to the underwriting and portfolio monitoring
processes. Reserve levels increased during 2002 in view of current economic conditions,
the risk profile of the portfolio and based upon consistent application of the
Companys reserve methodology.

The
reserve coverage of net charge-offs increased during 2002 to 334% from 270% in 2001 and
180% in 2000. These increases were due to the strengthened reserve levels discussed
previously, as well as the lower level of commercial net charge-offs experienced. The
reserve for loan losses is established to provide for losses which are inherent in the
portfolio. Therefore, a comparison of historical charge-offs to the reserve, which is a
backward-looking measure, is not necessarily an appropriate measure of reserve adequacy,
especially in periods where net charge-off ratios are expected to significantly increase
or decrease and where there is a lag between the timing of charge-offs and recoveries.
This is particularly true with respect to the last three years, since a significant
portion of charge-offs in these years related to the complete disposition through sale of
several large commercial credits.

The
year-end 2002 reserve of $212.8 million provided 388% coverage of nonperforming loans
compared to $195.8 million with 276% coverage at year-end 2001 and $178.3 million with
218% coverage at year-end 2000. As a percentage of total loans, the reserve for loan
losses amounted to 1.85% at December 31, 2002, compared to 1.74% and 1.47% at December 31,
2001 and 2000, respectively.

The
allocation of the December 31, 2002, reserve for loan losses is presented in Table 8.

|Table 8                              
|-------------------------------------
|                                     
|ALLOCATION OF RESERVE
FOR LOAN LOSSES

|December 31, 2002            | Reserve for | % of Total
|---------------------------- | ----------- | ----------
|($ in millions)              | Loan Losses | Reserve   
|                            
|Commercial real estate loans | $      2.4  | 1.1       
|Other commercial loans       | 37.8        | 17.8      
|Small business loans         | 47.9        | 22.5      
|Consumer loans               | 70.2        | 33.0      
|Unallocated reserve          | 54.5        | 25.6      
|                            
|Total                        | $ 212.8     | 100.0     
|                            

The
assumptions and methodologies used in allocating the reserve for loan losses were
relatively unchanged in 2002. Allocations to the commercial portfolio decreased to $40.2
million at December 31, 2002, from $50.9 million a year ago as a result of the lower
levels of losses experienced over the past several years. The allocation to the small
business portfolio increased from $42.1 million at December 31, 2001, to $47.9 million at
December 31, 2002, reflecting higher charge-off experience in recent years. The allocation
to the consumer portfolio increased from $55.0 million at December 31, 2001, to $70.2
million at December 31, 2002, primarily related to the indirect auto loan portfolio. The
unallocated reserve increased from 24% of the total reserve in 2001 to 26% in 2002 as a
result of the strengthening of reserves in view of the current weak economy which has
resulted in negative earnings trends across many industries and increased personal and
corporate bankruptcies. These allocations reflect the loan loss methodology which weighs
recent history more heavily. As a result, the allocated portion of the reserve increases
in periods when charge-offs are relatively high. Management considers both the allocated
and unallocated reserve levels when assessing reserve adequacy.

Management
believes the present level of the reserve for loan losses is adequate to absorb probable
loan losses inherent in the portfolio considering the level and mix of the loan portfolio,
current expectations with respect to economic conditions and market trends.

|Funding Sources
|---------------
|               
|DEPOSITS       

Deposits
are the Companys primary source of funding for earning assets. Hibernia offers a
variety of products designed to attract and retain customers, with the primary focus on
core deposits. Summaries of average deposit rates and deposit composition are presented in
Tables 9 and 10, respectively.

Average
deposits totaled $12.9 billion in 2002, a $258.4 million (2%) increase from 2001. Average
deposits totaled $12.6 billion in 2001, a $513.2 million (4%) increase from 2000.

Average
core deposits in 2002 totaled $10.5 billion or 81.9% of total average deposits, up $391.1
million (4%) compared to 2001. Average money market deposit accounts increased $280.3
million (12%), average noninterest-bearing deposits increased $268.1 million (12%) and
average savings grew $107.8 million (4%), offset by a decrease in other consumer time
deposits of $255.4 million (9%).

In
March 2002, Hibernia launched a high performance checking campaign, a simplified
consumer-checking program that includes Hibernias Completely Free CheckingSM
product. This program offers gifts to customers who open new personal checking accounts or
refer prospects who then open new personal checking accounts. Following the successful
introduction of the free checking program for consumers, Hibernia launched Completely Free
Small Business CheckingSM in August of 2002. The Completely Free Small Business CheckingSM
program, much like the consumer version, eliminates monthly cycle service charges, offers
free gifts for new accounts and buys back unused checks and banking cards. The goal of
both programs is to grow lower-cost deposits and increase revenues through cross-selling
opportunities. These campaigns include extensive advertising and marketing programs that
are focused on Hibernias Completely Free CheckingSM product and Hibernias
Completely Free Small Business CheckingSM product as well as other high performance
checking products. The introduction of the high performance checking products is
anticipated to grow core deposits in 2003 and beyond.

Average
core deposits in 2001 totaled $10.1 billion or 80.5% of total average deposits, up $544.8
million (6%) compared to 2000. The increase in average core deposits was a result of
Hibernias emphasis on attracting new deposits and expanding current banking
relationships. Average noninterest-bearing deposits increased $131.4 million (6%) and
average savings grew $398.9 million (19%). A marketing campaign launched in January 2001
focused on Tower Gold ServicesSM, Tower Advantage Checking and One Price Business
CheckingSM, and fueled the growth in these deposit products.

|Table 9              
|---------------------
|                     
|AVERAGE DEPOSIT RATES

|                                            | 2002 | 2001 | 2000
|------------------------------------------- | ---- | ---- | ----
|                                           
|NOW accounts                                | 1.16 | %    | 2.37
|Money market deposit accounts               | 1.06 |      | 2.12
|Savings accounts                            | 1.25 |      | 3.07
|Other consumer time deposits                | 3.75 |      | 5.20
|Public fund certificates of deposit of     
|$100,000 or more                            | 2.37 |      | 4.66
|Certificates of deposit of $100,000 or more | 3.68 |      | 5.64
|Foreign time deposits                       | 1.50 |      | 3.56
|                                           
|Total interest-bearing deposits             | 2.13 | %    | 3.82
|                                           

NOW
account average balances for 2002 decreased $9.7 million (3%) compared to 2001 and money
market average deposits were up $280.3 million (12%) in 2002 compared to 2001. NOW account
average balances for 2001 were up $49.3 million (16%) compared to 2000, and money market
average deposits were up $112.1 million (5%) in 2001 compared to 2000. These balances are
affected by the Reserve Money Manager account, in which each NOW account is joined with a
money market deposit account. As needed, funds are moved from the money market deposit
account to cover items presented for payment to the customers NOW account up to a
maximum of six transfers per statement cycle. The effect of the Reserve Money Manager
account on average balances was $2,105.8 million in 2002, $1,779.3 million in 2001 and
$1,622.7 million in 2000 (reducing NOW account average balances and increasing money
market deposit account average balances). Net of this effect, NOW account average balances
were up $316.8 million (15%) in 2002 compared to 2001 and up $205.9 million (11%) in 2001
compared to 2000, and money market deposit account average balances were down $46.2
million (9%) in 2002 compared to 2001 and down $44.5 million (8%) in 2001 compared to
2000.

Average
noncore deposits decreased $132.7 million (5%) from 2001 to $2,326.1 million in 2002.
Average public fund certificates of deposit of $100,000 or more increased $53.9 million
(6%). Average other large-denomination certificates of deposit decreased $163.5 million
(16%), and foreign deposits decreased $23.1 million (4%). The decrease in consumer time
deposits was the result of competitive pricing in the market and the movement of
longer-term deposit funds into more liquid deposit products as interest rates continued to
fall in 2002.

Average
noncore deposits decreased $31.6 million (1%) from 2000 to $2,458.8 million in 2001.
Average public fund certificates of deposit of $100,000 or more decreased $112.8 million
(12%). Average other large-denomination certificates of deposit decreased $88.7 million
(8%) and foreign deposits increased $169.9 million (41%). The decrease in consumer time
deposits was primarily due to the declining rate environment. Foreign deposits were
positively impacted by a treasury management sweep product.

|Table 10           
|-------------------
|                   
|DEPOSIT COMPOSITION

|                              | 2002       | 2001     | 2000    
|----------------------------- | ---------- | -------- | --------
|                             
|                              | Average    | % of     | Average 
|($ in millions)               | Balances   | Deposits | Balances
|                             
|Noninterest-bearing           | $ 2,490.0  | 19.3     | %       
|NOW accounts                  | 346.0      | 2.7      |         
|Money market deposit accounts | 2,552.7    | 19.8     |         
|Savings accounts              | 2,622.4    | 20.4     |         
|Other consumer time deposits  | 2,529.5    | 19.7     |         
|                             
|Total core deposits           | 10,540.6   | 81.9     |         
|                             
|Public fund certificates of  
|deposit of $100,000 or more   | 884.7      | 6.9      |         
|Certificates of deposit of   
|$100,000 or more              | 881.2      | 6.8      |         
|Foreign time deposits         | 560.2      | 4.4      |         
|                             
|Total deposits                | $ 12,866.7 | 100.0    | %       
|                             

Deposits
at December 31, 2002, totaled $13.5 billion, up $527.9 million (4%) from December 31,
2001.

BORROWINGS

Average
borrowings  which include federal funds purchased; securities sold under agreements
to repurchase (repurchase agreements); treasury, tax and loan accounts; and Federal Home
Loan Bank (FHLB) advances  decreased $398.9 million (19%) from 2001 to $1.7 billion
in 2002.

Average
federal funds purchased and treasury, tax and loan borrowings were $75.3 million during
2002, a decrease of $287.2 million (79%) from 2001. This decrease reflects the reduction
of federal funds purchased at the end of the second quarter of 2001 resulting from the
proceeds of $570.0 million from the securitization and sale of a portion of the indirect
auto loan portfolio discussed earlier and weaker loan demand experienced in 2002. Average
repurchase agreements decreased $35.7 million (6%) in 2002 from 2001. This decrease is the
result of customer demand for repurchase agreements due to the lower rate environment.

The
Companys FHLB advances totaled $1.1 billion at December 31, 2002, and are comprised
of various advances from the Federal Home Loan Bank of Dallas. The average rate on FHLB
advances during 2002 was 5.12% compared to 5.29% during 2001. FHLB advances increased
$59.3 million (6%) when compared to December 31, 2001. During 2002 and 2001, FHLB advances
totaling $40 million and $300 million, respectively, reached maturity. Replacement funding
consisted of FHLB advances of $100 million in fourth-quarter 2002 and $300 million in
first-quarter 2001, each bearing quarterly adjustable rates. The FHLB may demand payment
of $200 million in callable advances at quarterly intervals. An additional $200 million
becomes callable at quarterly intervals beginning June 2003. If called prior to maturity,
replacement funding will be offered by the FHLB at a then-current rate.

Of the $1.1
billion in FHLB advances outstanding at December 31, 2002, $700 million accrues interest
at variable rates. Hibernia instituted hedges against the effect of rising interest rates
on its variable rate debt by entering into a total of $600 million in interest rate swap
agreements in 2001 and $100 million of interest rate swap agreements in 2002. The interest
rate swap agreements enable Hibernia to receive quarterly variable rate (LIBOR) payments
and pay a fixed rate on a notional amount of $700 million. The maturities of these
interest rate swap agreements match the maturities of the underlying debt. The estimated
negative fair value of these interest rate swap agreements totaled $36.4 million and $11.1
million at December 31, 2002 and 2001, respectively, and is recorded as a liability, with
the corresponding offset, net of deferred taxes, recorded in other comprehensive income.
Net settlements on the swap agreements are accrued monthly, effectively converting $700
million of FHLB advances from a variable rate to a fixed rate.

In
December 2002, the Company entered into agreements to borrow a total of $100 million in
variable-rate advances from the FHLB to be received in January 2003.

The
Companys reliance on borrowings continues to be within parameters determined by
management to be prudent in terms of liquidity and interest rate sensitivity.

INTEREST RATE
SENSITIVITY

Interest
rate risk represents the potential impact from changes in the level of interest rates on
net income and capital resulting from mismatches in repricing opportunities of assets and
liabilities. A number of tools are used to monitor and manage interest rate risk,
including simulation models and interest rate sensitivity (Gap) analyses. Management uses
simulation models to estimate the effects of changing interest rates and various balance
sheet strategies on the level of the Companys net income and capital. Gap reports
measure the net amounts of assets or liabilities that reprice in the same time period over
the remaining lives of those assets and liabilities. As a means of limiting interest rate
risk to an acceptable level, management may alter the mix of floating- and fixed-rate
assets and liabilities, change pricing schedules, adjust maturities through sales and
purchases of securities available for sale, and enter into derivative contracts.

The
simulation models incorporate managements assumptions regarding the level of
interest rates and balances for indeterminate maturity deposits (demand, NOW, savings and
money market deposits) for a given level of market rate changes. These assumptions have
been developed through a combination of historical analysis and future expected pricing
behavior. Key assumptions in the simulation models include anticipated prepayments on
mortgage-related instruments, loans and investments; contractual cash flows and maturities
of all financial instruments; deposit sensitivity; and changes in market conditions. In
addition, the impact of planned growth and anticipated new business is factored into the
simulation models. These assumptions are inherently uncertain, and as a result, the models
cannot precisely estimate net interest income or precisely predict the impact of a change
in interest rates on net income or capital. Actual results will differ from simulated
results due to the timing, magnitude and frequency of interest rate changes and changes in
market conditions and management strategies, among other factors.

Hibernias
policy objective is to limit the change in after-tax net interest income, from an
immediate and sustained change in interest rates of 200 basis points compared to a flat
rate scenario, to 15% of projected 12-month net income. Based on the results of the
simulation models at December 31, 2002, the Company would expect an increase in after-tax
net interest income of $7.1 million in the event of a 200-basis-point increase in interest
rates, and a decrease in after-tax net interest income of $32.0 million in the event of a
100-basis-point decrease in interest rates (utilized in place of a 200-basis-point-drop
scenario due to the low interest rate environment). The $32.0 million decline in after-tax
net interest income is the result of the rates on interest-bearing liabilities reaching
their floor prior to the 100-basis-point decline, while the yields on interest-earning
assets can decline the full 100 basis points. Results of both scenarios are within the
limits of Hibernias policy objective. In addition, the Company projects an increase
in after-tax net interest income of $1.3 million and a decrease of $1.8 million if
interest rates gradually rise or decline, respectively, by 100 basis points over the next
year.

Based
on the results of the simulation models at December 31, 2001, the Company would have
expected a decrease in after-tax net interest income of $7.9 million in the event of a
200-basis-point increase in interest rates, and an increase in after-tax net interest
income of $2.0 million in the event of a 100-basis-point decrease in interest rates
(utilized in place of a 200-basis-point-drop scenario due to the low interest rate
environment). Results of both scenarios were within the limits of Hibernias policy
objective. In addition, the Company projected a decrease in after-tax net interest income
of $2.9 million and an increase of $3.3 million if interest rates gradually increased or
decreased, respectively, by 100 basis points over the next year.

Table
11 presents Hibernias interest rate sensitivity position at December 31, 2002. This
Gap analysis is based on a point in time and may not be meaningful because assets and
liabilities must be categorized according to contractual maturities and repricing periods
rather than estimating more realistic behaviors, as is done in the simulation models.
Also, the Gap analysis does not consider subsequent changes in interest rate levels or
spreads between asset and liability categories.

|Table 11                                  
|------------------------------------------
|                                          
|INTEREST RATE
SENSITIVITY AND GAP ANALYSIS

|                                | Over 5 Years
|------------------------------- | ------------
|December 31, 2002               | 1-30        
|($ in thousands)                | Days        
|                               
|Earning assets:                
|Loans                           | $ 3,887,993 
|Securities available for sale   | 3,511,153   
|Securities held to maturity     | 21,464      
|Mortgage loans held for sale    | 526,288     
|Other earning assets            | 383,264     
|                               
|Total earning assets            | 8,330,162   
|                               
|Funding sources:               
|NOW accounts                    | 298,954     
|Money market deposit accounts   | 2,945,578   
|Savings accounts                | 2,568,850   
|Foreign deposits                | 530,943     
|Other interest-bearing deposits | 1,484,908   
|Short-term borrowings           | 575,448     
|Federal Home Loan Bank advances | 50          
|Noninterest-bearing sources     | -           
|                               
|Total funding sources           | 8,404,731   
|                               
|Repricing/maturity gap:        
|Period                          | $ (74,569)  
|Cumulative                      | $ (74,569)  
|                               
|Gap/total earning assets:      
|Period                          | (0.5)%      
|Cumulative                      | (0.5)%      
|                               

Although
the Gap analysis indicates the Company is liability-sensitive (interest-bearing
liabilities exceed interest-earning assets) for the 1-30 days deposit category, this may
not be true in practice. The 1-30 days deposit category includes NOW, money market and
savings deposits which have indeterminate maturities. The rates paid on these core
deposits, which account for 47% of interest-bearing liabilities, do not necessarily
reprice in a direct relationship to changes in market interest rates. In addition, one of
Hibernias deposit products is the consumer One Way CDSM, which gives the customer a
one-time opportunity to adjust the rate on a certificate of deposit during its two-year
term. As of December 31, 2002, these deposits totaled $498.3 million, of which
approximately $23.3 million had been repriced. Of the remaining $475.0 million, $462.9
million are included in the 1-30 days deposit category because they may reprice at any
time. However, these deposits adjust to market rates over a much longer period as
depositors choose when to exercise the option to adjust the rate on their deposits.

In
addition to core deposits, which serve to lessen the volatility of net interest income in
changing rate conditions, the Companys loan portfolio contains mortgage loans that
have actual maturities and cash flows that vary with the level of interest rates.
Depending on market interest rates, actual cash flows from these earning assets will vary
from the contractual maturities due to payoffs and refinancing activity.

On
a limited basis the Company has entered into interest rate and foreign exchange rate
swaps, forward and option contracts, and forward sales contracts to hedge interest rate or
foreign exchange rate risk on specific assets and liabilities on behalf of itself and for
customers. With the implementation of SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities on January 1, 2001, previous off-balance sheet
items, primarily interest rate swaps and forward sales contracts, are now recorded as
assets and liabilities on the balance sheet.

The
Company enters into forward sales contracts relating to its mortgage origination activity.
These contracts protect the Company against changes in the fair value of mortgage loans
held for sale (as well as anticipated loan fundings) due to changes in market conditions,
primarily the interest rate environment. The Company designates a portion of these forward
sales contracts relating to mortgage loans held for sale as fair value hedges. Forward
sales contracts designated as fair value hedges had notional values of $451.4 million and
$483.5 million at December 31, 2002 and 2001, respectively, with an estimated negative
fair value of $8.2 million at December 31, 2002 and an estimated positive fair value of
$8.8 million at December 31, 2001. The related hedged mortgage loans held for sale had
principal balances of $451.4 million and $483.5 million at December 31, 2002 and 2001,
respectively, and were increased by a positive change in fair value of $8.2 million at
December 31, 2002 and decreased by a negative change in fair value of $8.8 million at
December 31, 2001, resulting in no impact on earnings related to the hedges. The forward
sales contracts relating to interest rate lock commitments are not designated as hedges
and are adjusted to fair value through income. At December 31, 2002, interest rate lock
commitments had a notional amount of $559.3 million with a positive fair value of $6.8
million, and the related forward sales contracts had a notional amount of $559.3 million
and a negative fair value of $6.1 million. At December 31, 2001, interest rate lock
commitments had a notional amount of $447.5 million with a negative fair value of $4.1
million, and the related forward sales contracts had a notional amount of $447.5 million
and a positive fair value of $4.5 million.

Derivative
financial instruments are also held or issued by the Company to provide customers the
ability to manage their own interest rate sensitivity. Matched positions are ordinarily
established to minimize risk to the Company. The notional value of customer-related
derivative financial instruments not designated as hedges totaled $1.9 billion at December
31, 2002, with positive fair values of $44.0 million and negative fair values of $40.3
million. Notional amounts at December 31, 2001 totaled $1.6 billion, with positive fair
values of $23.5 million and negative fair values of $20.3 million.

Hibernia
holds foreign exchange rate forward contracts that had notional amounts totaling $6.5
million and $10.6 million at December 31, 2002 and 2001, respectively, which minimize the
Companys exchange rate risk on loans to be repaid in foreign currencies.

The
interest rate swap agreements discussed in Borrowings were entered into by the
Company to hedge against the effect of rising interest rates on portions of its variable
rate FHLB advances. Hibernia receives quarterly variable-rate (LIBOR) payments and pays
fixed rates under the interest rate swap agreements. The notional amount of these interest
rate swap agreements was $700 million at December 31, 2002 and $600 million at December
31, 2001. The estimated negative fair value of derivative financial instruments designated
as cash flow hedges totaled $36.4 million and $11.1 million at December 31, 2002 and 2001,
respectively.

NET INTEREST MARGIN

The
net interest margin is taxable-equivalent net interest income as a percentage of average
earning assets. Net interest income is the difference between total interest and fee
income generated by earning assets and total interest expense incurred on interest-bearing
liabilities and is affected by the:

| |  | volume, yield and mix of earning assets;
|- |  | ----------------------------------------

| |  | level of nonperforming loans;
|- |  | -----------------------------

| |  | volume, yield and mix of interest-bearing liabilities;
|- |  | ------------------------------------------------------

| |  | amount of noninterest-bearing funds supporting
earning assets; and
|- |  | ------------------------------------------------------------------

| |  | interest rate environment.
|- |  | --------------------------

The
net interest margin is comprised of the net interest spread, which measures the difference
between the average yield on earning assets and the average rate paid on interest-bearing
liabilities, and the contribution of noninterest-bearing funds supporting earning assets
(primarily demand deposits and shareholders equity). The net interest margin is
impacted not only by the level of noninterest-bearing liabilities supporting earning
assets, but also by the value of these funds in relation to the interest rate environment.
Hibernias noninterest-bearing funds ratio was 21.83% in 2002 compared to 18.97% in
2001 and 17.59% in 2000. Table 12 details the components of the net interest margin for
the past five years.

|Table 12                                
|----------------------------------------
|                                        
|NET INTEREST MARGIN
(taxable-equivalent)

|                                                    | 2002   | 2001   | 2000   | 1999   | 1998  
|--------------------------------------------------- | ------ | ------ | ------ | ------ | ------
|                                                   
|Yield on earning assets                             | 6.46%  | 7.61%  | 8.32%  | 7.83%  | 8.04% 
|Rate on interest-bearing liabilities                | 2.35   | 3.97   | 4.99   | 4.24   | 4.40  
|                                                   
|Net interest spread                                 | 4.11   | 3.64   | 3.33   | 3.59   | 3.64  
|Contribution of noninterest-bearing funds           | 0.51   | 0.75   | 0.88   | 0.79   | 0.87  
|                                                   
|Net interest margin                                 | 4.62%  | 4.39%  | 4.21%  | 4.38%  | 4.51% 
|                                                   
|Noninterest-bearing funds supporting earning assets | 21.83% | 18.97% | 17.59% | 18.61% | 19.67%
|                                                   

The
net interest margin of 4.62% in 2002 compares to 4.39% in 2001 and 4.21% in 2000. The
increase in the net interest margin in 2002 reflects the benefits derived from the lower
rate environment, steeper yield curve, an increase in broad-based low-cost deposit funding
and accelerated downward repricing of liabilities in comparison to assets. The yield on
average interest-earning assets declined 115 basis points while the rate on average
interest-bearing liabilities declined 162 basis points for 2002 compared to 2001.

The
net interest margin of 4.39% in 2001 compares to 4.21% in 2000. The increase in the net
interest margin in 2001 reflects the benefits derived from the Companys net
liability sensitive balance sheet position, as well as the favorable impact of a
steepening yield curve. Rate cuts by the Federal Reserve caused the yield on average
interest-earning assets to decline 71 basis points while the rate on average
interest-bearing liabilities declined 102 basis points for 2001 compared to 2000. The
indirect loan securitization in the second quarter of 2001, the average deposit growth and
the slowing loan growth negated the need to replace maturing higher-rate liabilities.

The
net interest margin of 4.21% in 2000 compares to 4.38% in 1999. The decline in the net
interest margin in 2000 was the result of a 26 basis-point decrease in the net interest
spread, reflecting a change in the mix of earning assets to lower-yielding consumer loans
and a change in the mix of interest-bearing liabilities to more market-rate funding.
Although the level of noninterest-bearing funds supporting earning assets decreased, the
contribution from this funding source increased nine basis points due to the higher
interest rate environment.

|Table 13                          
|----------------------------------
|                                  
|INTEREST-EARNING ASSET
COMPOSITION

|(Percentage of average balances) | 2002  |   | 2001  |   | 2000  |   | 1999  |   | 1998 
|-------------------------------- | ----- | - | ----- | - | ----- | - | ----- | - | -----
|                                
|Commercial loans                 | 18.5  | % | 20.4  | % | 24.5  | % | 28.4  | % | 28.5 
|Small business loans             | 16.2  |   | 16.0  |   | 16.0  |   | 16.4  |   | 16.0 
|Consumer loans                   | 38.5  |   | 39.3  |   | 37.5  |   | 31.9  |   | 29.7 
|                                
|Total loans                      | 73.2  |   | 75.7  |   | 78.0  |   | 76.7  |   | 74.2 
|                                
|Securities available for sale    | 21.2  |   | 18.7  |   | 18.2  |   | 20.1  |   | 22.1 
|Securities held to maturity      | 1.3   |   | 2.1   |   | 2.4   |   | 0.2   |   | -    
|                                
|Total securities                 | 22.5  |   | 20.8  |   | 20.6  |   | 20.3  |   | 22.1 
|                                
|Short-term investments           | 1.7   |   | 1.5   |   | 0.8   |   | 1.7   |   | 2.1  
|Mortgage loans held for sale     | 2.6   |   | 2.0   |   | 0.6   |   | 1.3   |   | 1.6  
|                                
|Total interest-earning assets    | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0
|                                

|Results of Operations
|---------------------
|                     

The
Company earned $249.9 million, or $1.59 per common share, in 2002. In 2001, net income was
$218.8 million, or $1.37 per common share, and 2000 net income was $170.6 million, or
$1.05 per common share. Net income per common share  assuming dilution was $1.56 in
2002 compared to $1.35 and $1.04 for 2001 and 2000, respectively.

Effective
January 1, 2002, with the adoption of SFAS No. 142, Goodwill and Other Intangible
Assets, the Company applied the new accounting that eliminated amortization of
goodwill. Net income adjusted to exclude goodwill amortization, net of taxes, for 2001 and
2000 was $230.3 million and $181.4 million, respectively. On that same basis, net income
per common share and net income per common share  assuming dilution were $1.45 and
$1.42, respectively, for 2002 and $1.12 and $1.11, respectively, for 2001.

Operating
results increased in 2002 due to a $38.2 million increase in taxable-equivalent net
interest income, a $32.3 million increase in noninterest income (which includes a $4.4
million increase in net securities losses) and a $16.6 million decrease in the provision
for loan losses compared to 2001. These positive effects on operations were partially
offset by a $42.9 million increase in noninterest expense.

The
increase in 2001 from 2000 was due to increases in noninterest income of $69.3 million
(which includes a $5.0 million increase in net securities losses), a $53.2 million
increase in taxable-equivalent net interest income and a $23.4 million decrease in the
provision for loan losses. Partially offsetting these positive effects was a $72.2 million
increase in noninterest expense.

NET INTEREST INCOME

Net
interest income on a taxable-equivalent basis increased $38.2 million, or 6%, to $712.4
million in 2002 from $674.2 million in 2001. Taxable-equivalent net interest income in
2000 was $621.1 million. Taxable-equivalent net interest income increased in 2002 compared
to 2001 primarily due to the change in the mix of funding sources, the impact of declining
interest rates and funding costs decreasing faster than earning asset yields. The increase
in taxable-equivalent net interest income in 2001 as compared to 2000 is primarily due to
the growth in interest-earning assets and rates on interest-bearing liabilities declining
faster than earning asset yields, reflecting the Companys net liability sensitive
balance sheet position.

As
indicated in Table 14, the change in volume increased taxable-equivalent net interest
income in 2002 by $21.7 million from 2001. A $3.1 million decrease in taxable-equivalent
interest income due to the volume of earning assets was offset by a $24.8 million decrease
in interest expense due to the volume of interest-bearing liabilities. As interest rates
declined in 2002, taxable-equivalent net interest income increased $16.5 million.
Taxable-equivalent interest income on earning assets decreased $170.6 million due to
decreases in yields. Interest expense decreased $187.1 million due to decreases in the
rates paid on interest-bearing deposits and the maturity of some high-rate
interest-bearing products.

For
2001 compared to 2000, the change in net volume increased taxable-equivalent net interest
income by $36.8 million. A $41.4 million increase in taxable-equivalent interest income
due to the growth in earning assets was partially offset by a $4.6 million increase in
interest expense due to growth in interest-bearing liabilities. The change in interest
rates caused taxable-equivalent net interest income to increase $16.4 million.
Taxable-equivalent interest income on earning assets decreased $100.3 million due to
decreases in yields. Interest expense decreased $116.6 million due to decreases in the
rates paid on interest-bearing deposits and the maturity of some high-rate
interest-bearing products.

|Table 14                                             
|-----------------------------------------------------
|                                                     
|CHANGES IN
TAXABLE-EQUIVALENT NET INTEREST INCOME (1)

|                                                                                                                                                                                   | 2002 Compared to 2001                 | 2001 Compared to 2000
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | ---------------------
|                                                                                                                                                                                  
|                                                                                                                                                                                   | Increase (Decrease) Due to Change In:
|                                                                                                                                                                                  
|($ in thousands)                                                                                                                                                                   | Volume                                | Rate                 
|                                                                                                                                                                                  
|Taxable-equivalent interest earned on:                                                                                                                                            
|Commercial loans                                                                                                                                                                   | $(19,114)                             | $(56,798)            
|Small business loans                                                                                                                                                               | 3,058                                 | (38,486)             
|Consumer loans                                                                                                                                                                     | (8,079)                               | (39,729)             
|                                                                                                                                                                                  
|Loans                                                                                                                                                                              | (24,135)                              | (135,013)            
|                                                                                                                                                                                  
|Securities available for sale                                                                                                                                                      | 21,152                                | (28,846)             
|Securities held to maturity                                                                                                                                                        | (6,670)                               | (894)                
|                                                                                                                                                                                  
|Securities                                                                                                                                                                         | 14,482                                | (29,740)             
|                                                                                                                                                                                  
|Short-term investments                                                                                                                                                             | 1,259                                 | (4,127)              
|Mortgage loans held for sale                                                                                                                                                       | 5,320                                 | (1,726)              
|                                                                                                                                                                                  
|Total                                                                                                                                                                              | (3,074)                               | (170,606)            
|                                                                                                                                                                                  
|Interest paid on:                                                                                                                                                                 
|NOW accounts                                                                                                                                                                       | (224)                                 | (4,200)              
|Money market deposit accounts                                                                                                                                                      | 5,345                                 | (26,245)             
|Savings accounts                                                                                                                                                                   | 3,176                                 | (47,672)             
|Other consumer time deposits                                                                                                                                                       | (12,363)                              | (37,550)             
|Public fund certificates of                                                                                                                                                       
|deposit of $100,000 or more                                                                                                                                                        | 2,369                                 | (20,092)             
|Certificates of deposit                                                                                                                                                           
|of $100,000 or more                                                                                                                                                                | (8,226)                               | (18,246)             
|Foreign time deposits                                                                                                                                                              | (791)                                 | (11,532)             
|Federal funds purchased                                                                                                                                                            | (8,920)                               | (7,912)              
|Repurchase agreements                                                                                                                                                              | (1,202)                               | (11,793)             
|Federal Home Loan Bank advances                                                                                                                                                    | (3,932)                               | (1,862)              
|                                                                                                                                                                                  
|Total                                                                                                                                                                              | (24,768)                              | (187,104)            
|                                                                                                                                                                                  
|Taxable-equivalent net interest income                                                                                                                                             | $ 21,694                              | $ 16,498             
|                                                                                                                                                                                  
|(1)Change due to mix (both volume and rate) has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts to the
changes in each.

NONINTEREST INCOME

Noninterest
income totaled $352.9 million in 2002 compared to $320.6 million in 2001 and $251.3
million in 2000. Noninterest income was up $32.3 million (10%) in 2002 compared to 2001
and $69.3 million (28%) in 2001 compared to 2000.

The
major categories contributing to the 2002 increase in noninterest income were service
charges on deposits, up $21.6 million; card-related fees, up $7.4 million; the gain on
sales of mortgage loans, up $6.9 million; mortgage loan origination and servicing fees, up
$6.1 million; insurance fees, up $2.8 million; and retail investment fees, up $2.5
million. These increases were partially offset by a decrease in gain on indirect auto loan
securitization of $11.4 million and an increase in securities losses of $4.4 million.

Service
charges on deposits increased $21.6 million (18%) from 2001 to $138.9 million in 2002.
This change was primarily due to growth in transaction-based fees due to a new fee
structure implemented in the fourth quarter of 2001 and an increased number of accounts
resulting from the high performance checking campaigns launched in 2002, as well as
increased commercial account analysis fees.

Card-related
fees were $39.9 million in 2002, up $7.4 million (23%) compared to 2001. This increase
resulted from fees generated by Hibernias debit and credit cards, annual card fees
from the consumer and small business high performance checking campaigns launched in 2002,
continued growth of off-premises ATMs and expansion of ATM services.

Mortgage
loan origination and servicing fees were $35.5 million in 2002, up $6.1 million (21%)
compared to 2001. The increase in mortgage fees is primarily the result of increased
mortgage activity due to favorable interest rates during 2002. The volume of mortgage
loans serviced increased to $10.8 billion at December 31, 2002, compared to $8.8 billion
at December 31, 2001. In 2002 Hibernia funded a record $5.3 billion in residential first
mortgages compared to $4.5 billion in 2001.

Retail
investment fees were $30.5 million in 2002, up $2.5 million (9%) from 2001. This increase
was due to higher fixed annuity income due to the current interest rate environment.

Trust
fees were $24.4 million in 2002, down $1.5 million (6%) compared to 2001, primarily due to
a decline in market value of trust assets resulting in lower trust fees.

Insurance
fees were $16.1 million in 2002, up $2.8 million (21%) from 2001. This increase was
primarily due to increased property and casualty commissions in 2002.

Investment
banking fees, which include brokerage commissions, contributed $15.0 million to
noninterest income in 2002, up $1.7 million (13%) from 2001.

The
increase in other service, collection and exchange charges of $2.0 million (11%) was
primarily due to increased commercial letter of credit fees in 2002.

Gain
on sales of mortgage loans increased $6.9 million (33%) in 2002 compared to 2001. This
increase was primarily due to the lower interest rate environment, resulting in an
increased volume of fixed-rate loans funded and subsequently sold. Generally, Hibernia
retains adjustable-rate mortgage loans and sells fixed-rate mortgage loans, while
retaining the associated servicing rights.

On
January 1, 2001, the Company implemented SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. As a result of the adoption of SFAS No. 133 (as
amended), $0.6 million was recognized in noninterest income due to the cumulative effect
of the accounting change. The after-tax cumulative effect of the change in accounting of
$0.4 million was considered immaterial and therefore is not separately presented in the
Consolidated Income Statements.

Derivative
income associated with interest rate contracts decreased $1.1 million (35%) in 2002
compared to 2001. This decrease was impacted by the adoption of SFAS No. 133, which
accelerated the timing of revenue recognition on derivative instruments and a decrease in
the volume of new interest rate swap agreements in 2002.

Net
securities losses totaled $13.4 million in 2002 compared to $8.9 million in 2001. The net
securities losses in 2002 and 2001 are primarily due to the writedown for permanent
impairment of private equity investments. The private-equity portfolio totaled $22.3
million at December 31, 2002, with additional unfunded commitments of $5.4 million. While
the Company does not plan any new direct private-equity investments, there may be
instances when additional uncommitted funding of existing investments will be required.

The
major categories contributing to the increase in noninterest income in 2001 compared to
2000 were gain on sales of mortgage loans, up $17.2 million; service charges on deposits,
up $14.3 million; the gain on the indirect auto loan securitization of $11.4 million
(which was offset by a $1.0 million loss on an interest rate swap related to this
transaction); mortgage loan origination and servicing fees, up $6.5 million; insurance
fees, up $6.2 million; card-related fees, up $4.5 million; other service, collection and
exchange charges, up $4.5 million; and investment banking fees, up $4.1 million, offset by
an increase in securities losses of $5.0 million.

|Table 15          
|------------------
|                  
|NONINTEREST INCOME

|                                               | Percent Increase (Decrease)
|---------------------------------------------- | ---------------------------
|                                              
|                                               | 2002                       
|($ in thousands)                               | 2002                       
|                                              
|Service charges on deposits                    | $ 138,857                  
|Card-related fees                              | 39,949                     
|Mortgage loan origination and servicing fees   | 35,485                     
|Retail investment fees                         | 30,488                     
|Trust fees                                     | 24,394                     
|Insurance                                      | 16,137                     
|Investment banking                             | 15,033                     
|Other service, collection and exchange charges | 20,769                     
|Gain on sales of mortgage loans                | 27,987                     
|Other operating income:                       
|Gain on indirect auto loan securitization      | -                          
|Mortgage loan derivative income                | 230                        
|Derivative income from interest rate contracts | 1,982                      
|Other income                                   | 14,947                     
|                                              
|Total other operating income                   | 17,159                     
|                                              
|Securities gains (losses), net                 | (13,353)                   
|                                              
|Total noninterest income                       | $ 352,905                  
|                                              
|                                              

NONINTEREST EXPENSE

Noninterest
expense totaled $593.7 million in 2002 compared to $550.8 million in 2001 and $478.7
million in 2000.

Noninterest
expense increased $42.9 million (8%) in 2002 compared to 2001. The major categories
contributing to the increase in noninterest expense were amortization of intangibles, up
$24.0 million; staff costs, up $11.8 million; advertising and promotional expense, up $6.6
million; data processing expense, up $3.1 million; and professional fees, up $2.1 million,
offset by a $12.7 million decrease in amortization of goodwill.

Staff
costs, which represent the largest component of noninterest expense, increased $11.8
million in 2002 compared to 2001. The increase compared to the prior year was primarily
due to $6.2 million in wage increases and $5.1 million in higher incentives. The increase
in incentive expense was driven primarily by the growth in revenues during the year.

Data
processing costs increased $3.1 million (10%) to $34.6 million in 2002. This change was
primarily due to higher outside data processing services and software maintenance costs in
2002.

Advertising
and promotional expenses were up $6.6 million (42%) in 2002, primarily due to increased
marketing expenses associated with the promotion of high performance checking products for
consumers introduced in the first quarter of 2002 and for small businesses introduced in
the third quarter of 2002.

Effective
January 1, 2002, the Company adopted the provisions of SFAS No. 142, Goodwill and
Other Intangible Assets, in which intangible assets deemed to have indefinite lives
are no longer amortized but are subject to annual impairment tests. The Companys
goodwill qualifies for the nonamortization provisions of this statement, and therefore, no
goodwill amortization expense was recorded in 2002. The Company did not record any
impairment of goodwill in 2002.

Amortization
of other intangibles, a non-cash expense, increased $24.0 million (71%) to $57.9 million
in 2002. The increase is the result of higher amortization of mortgage servicing rights
and an increase in the provision for the temporary impairment of these mortgage servicing
rights. Amortization of mortgage servicing rights increased in 2002 as a result of the
higher volume of mortgage loans serviced and increased expected future prepayments. Based
upon current fair values, capitalized mortgage servicing rights are periodically assessed
for impairment. To the extent that temporary impairment exists, write-downs are recognized
in current earnings as an adjustment to the corresponding valuation allowance. Permanent
impairment is recognized through a write-down of the asset with a corresponding reduction
in the valuation allowance. The Company recorded temporary impairment of $23.2 million in
2002 and $12.3 million in 2001, primarily due to an increase in the expected speed of
mortgage loan repayments resulting from the low interest rate environment. Future
increases in interest rates and slower expected prepayment speeds could result in a
reversal of the temporary impairment reserve. Conversely, future decreases in interest
rates and faster than expected prepayment speeds would necessitate an increase in the
temporary impairment reserve. The Company has not recorded any permanent impairment on its
mortgage loan servicing portfolio.

Professional
fees increased $2.1 million (29%) to $9.5 million in 2002. The increase in 2002 was
primarily the result of a contingency fee associated with certain revenue enhancement
initiatives and higher consulting fees related to the launch of the high performance
checking products.

Loan
collection expense increased $1.4 million (16%) to $10.2 million in 2002. This increase
reflects increased legal and collection agency fees associated with the collection of
delinquent and criticized assets.

Noninterest
expense increased $72.1 million (15%) in 2001 compared to 2000. The major categories
contributing to the increase in noninterest expense were staff costs, up $31.8 million;
amortization of other intangibles, up $16.1 million; occupancy and equipment, up $3.4
million; and loan collection expenses, up $2.7 million.

The
Companys efficiency ratio, defined as noninterest expense as a percentage of
taxable-equivalent net interest income plus noninterest income (excluding securities
transactions), is one measure of the success of efforts to control costs and generate
income efficiently. The efficiency ratio for 2002 was 55.04% compared to 54.87% in 2001
and 54.63% in 2000.

The
adjusted efficiency ratio, which excludes the impact of the amortization of goodwill, was
55.04% in 2002 compared to 53.61% in 2001 and 53.28% in 2000. The 2002 efficiency ratios
were negatively impacted by the non-cash mortgage servicing impairment charges and
increased marketing expense related to the high performance checking products. The
marketing expenses are expected to build revenue over the long term.

|Table 16           
|-------------------
|                   
|NONINTEREST EXPENSE

|                                                                                                                                               | Percent Increase (Decrease)
|---------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------
|                                                                                                                                              
|                                                                                                                                               | 2002                       
|($ in thousands)                                                                                                                               | 2002                       
|                                                                                                                                              
|Salaries                                                                                                                                       | $ 242,323                  
|Benefits                                                                                                                                       | 46,941                     
|                                                                                                                                              
|Total staff costs                                                                                                                              | 289,264                    
|                                                                                                                                              
|Occupancy, net                                                                                                                                 | 36,983                     
|Equipment                                                                                                                                      | 31,238                     
|                                                                                                                                              
|Total occupancy and equipment                                                                                                                  | 68,221                     
|                                                                                                                                              
|Data processing                                                                                                                                | 34,560                     
|Advertising and promotional expenses                                                                                                           | 22,471                     
|Foreclosed property expense, net                                                                                                               | 1,088                      
|Amortization of goodwill                                                                                                                       | -                          
|Amortization of other intangibles                                                                                                              | 57,910                     
|Telecommunications                                                                                                                             | 9,345                      
|Postage                                                                                                                                        | 7,838                      
|Stationery and supplies                                                                                                                        | 8,394                      
|Professional fees                                                                                                                              | 9,518                      
|State taxes on equity                                                                                                                          | 15,875                     
|Regulatory expense                                                                                                                             | 4,156                      
|Loan collection expense                                                                                                                        | 10,222                     
|Other                                                                                                                                          | 54,835                     
|                                                                                                                                              
|Total noninterest expense                                                                                                                      | $ 593,697                  
|                                                                                                                                              
|Efficiency ratio (1)                                                                                                                           | 55.04%                     
|                                                                                                                                              
|Adjusted efficiency ratio (2)                                                                                                                  | 55.04%                     
|                                                                                                                                              
|(1) Noninterest expense as a percentage of taxable-equivalent net interest income plus noninterest income (excluding securities transactions).
|(2) Excludes amortization of goodwill.                                                                                                        

INCOME TAXES

The
Company recorded a $133.0 million provision for income taxes in 2002 compared to $118.5
million in 2001 and $91.9 million in 2000. The Companys effective tax rates for
2002, 2001 and 2000 were 34.7%, 35.1% and 35.0%, respectively. The 2002 effective tax rate
declined primarily due to the elimination of non-deductible goodwill expense in 2002 as a
result of the adoption of a new accounting standard, discussed earlier.

Hibernia
National Bank is subject to a Louisiana shareholders tax based partly on income. The
income portion is reported as state income tax. In addition, certain subsidiaries of the
Company and the Bank are subject to Louisiana state income tax. The Texas operations of
the Bank and certain subsidiaries of the Company are subject to Texas franchise tax.

SEGMENT RESULTS

The
Companys segment information is presented by line of business with each line
providing various products and services to groups of customers who share certain
characteristics. The reportable operating segments are Consumer, Small Business,
Commercial, and Investments and Public Funds. Segment net income for the last three years
is presented in Table 17.

|Table 17       
|---------------
|               
|SEGMENT RESULTS

|($ in thousands)                                                                                    | 2002      | 2001 | 2000     
|--------------------------------------------------------------------------------------------------- | --------- | ---- | ---------
|                                                                                                   
|Consumer                                                                                            | $ 125,536 |      | $ 108,215
|Small Business                                                                                      | 49,096    |      | 44,771   
|Commercial                                                                                          | 28,112    |      | 22,607   
|Investments and                                                                                    
|Public Funds                                                                                        | 61,471    |      | 54,350   
|Other                                                                                               | (18,177)  |      | (12,563) 
|                                                                                                   
|Segments total                                                                                      | 246,038   |      | 217,380  
|Reconciling items(1)                                                                                | 3,819     |      | 1,418    
|                                                                                                   
|Total net income                                                                                    | $ 249,857 |      | $ 218,798
|                                                                                                   
|(1)For a discussion of reconciling items refer to Note 28 of the consolidated financial statements.

Net
income for the Consumer segment was $125.5 million in 2002, up $17.3 million (16%) from
$108.2 million for 2001. The increase in the Consumer segment net income is primarily due
to increases in the mortgage and retail banking areas. The mortgage area has benefited
from the lower interest rate environment. The retail banking area benefited from growth in
transaction-based fees related to the new high performance checking campaign. The Small
Business segment net income was up $4.3 million (10%) to $49.1 million for 2002 from $44.8
million in 2001. The increase in the Small Business segment is primarily due to an
increase in noninterest income from treasury management products and service charges on
deposits. The Commercial segment net income increased $5.5 million (24%) from $22.6
million in 2001 to $28.1 million in 2002, primarily due to a reduction in the provision
for loan losses resulting from improved asset quality. The Investments and Public Funds
segment net income was $61.5 million for 2002, up $7.1 million (13%) from $54.4 million
for 2001. The Investments and Public Funds segment provides a treasury function for the
Company by managing public entity deposits, the investment portfolio, interest rate risk,
and liquidity and funding positions. The increase in net income for this segment is
primarily due to the benefit of the lower interest rate environment on the Companys
liability sensitive balance sheet structure. Other segment net losses increased $5.6
million to $18.2 million in 2002 from $12.6 million in 2001.

In
2001, the Consumer segment net income increased $19.6 million (22%) to $108.2 million,
from $88.6 million in 2000. The increase in the Consumer segment was primarily due to
growth in the mortgage area and indirect lending area, which includes the 2001
securitization gain, offset by declines in the retail banking area. The Small Business
segment net income was $44.8 million in 2001, up $5.5 million (14%) from $39.3 million in
2000. The increase in 2001 was primarily due to increased income associated with small
business loans. The Commercial segment net income increased from $15.6 million in 2000 to
$22.6 million in 2001. The increase in the Commercial segment is primarily due to a
reduction in the provision for loan losses resulting from improved asset quality. The
Investment and Public Funds segment net income was $54.4 million in 2001, up $23.0 million
(73%) from the 2000 level of $31.4 million. The increase in the Investments and Public
Funds segment is due to the benefit of the lower interest rate environment on the
Companys liability sensitive balance sheet. Other segment net losses totaled $12.6
million in 2001, an increase of $6.7 million from the 2000 loss of $5.8 million.

|Capital
|-------
|       

Capital
represents shareholder ownership in the Company  the book value of assets in excess
of liabilities. It provides a base for asset growth while serving, together with the
reserve for loan losses, as a cushion against potential losses. Support for future asset
expansion could come from utilization of existing capital, issuance of debt or new capital
and retention of earnings.

Dividends
of $.57 per share were declared on the Companys common stock in 2002, representing
an 8% increase over the $.53 per common share declared in 2001. Hibernias common
dividend payout ratio (common dividends declared per share divided by net income per
common share) was 35.9% in 2002, 38.7% in 2001 and 46.7% in 2000.

Shareholders
equity totaled $1,680.9 million at the end of 2002 compared to $1,559.8 million at the end
of 2001 and $1,479.7 million at the end of 2000. The $121.1 million (8%) increase in 2002
was primarily due to earnings totaling $249.9 million, the issuance of $35.8 million of
common stock, a net tax benefit related to stock option plans and the Employee Stock
Ownership Plan of $12.7 million and a $12.1 million change in accumulated other
comprehensive income. These increases were partially offset by the acquisition of $107.0
million of treasury stock, most of which was purchased under buyback programs, and payment
of $89.4 million in dividends on common stock.

During
2002, the Company repurchased approximately 5.5 million shares of its common stock at a
cumulative weighted average price of $19.29 per share under common stock repurchase plans
authorized by the Board of Directors. At December 31, 2002, approximately 2.8 million
shares remained authorized for repurchase under the Companys current repurchase
plan.

The
$80.1 million (5%) increase in shareholders equity in 2001 was primarily due to
$218.8 million in earnings, a $14.0 million increase in accumulated other comprehensive
income and the issuance of $12.1 million of common stock, partially offset by the
redemption of $87.0 million of preferred stock and $82.7 million in dividends on common
stock.

As
part of the Companys capital-management strategy, the Company redeemed its Series A
Fixed/Adjustable Rate Noncumulative Preferred Stock on October 1, 2001. The redemption
consisted of the repurchase of 1,739,000 shares at a par value of $50 per share for a
total repurchase price of $87.0 million.

Regulations
applicable to national banks and their holding companies prescribe minimum capital levels.
These levels are based on established guidelines which relate required capital standards
to both risk-weighted assets (risk-based capital ratios) and total assets (leverage
ratio). In accordance with risk-based guidelines, assets and off-balance-sheet financial
instruments are assigned weights to measure their levels of risk. The total risk-based
capital ratio for the Company was 11.82% at year-end 2002, 11.39% at year-end 2001 and
10.94% at year-end 2000. Leverage ratios were 8.45%, 8.14% and 7.65% at year-end 2002,
2001 and 2000, respectively. Table 18 shows the calculation of capital ratios for the
Company for the past five years.

|Table 18
|--------
|        
|CAPITAL 

|($ in millions)                                                                                     |                             | 2002      | 2001      | 2000      | 1999      | 1998     
|--------------------------------------------------------------------------------------------------- | --------------------------- | --------- | --------- | --------- | --------- | ---------
|                                                                                                   
|Risk-based capital:                                                                                 | Tier 1                      | $ 1,412.3 | $ 1,307.7 | $ 1,230.7 | $ 1,203.2 | $ 1,166.0
|                                                                                                    | Total                       | 1,580.0   | 1,469.3   | 1,389.8   | 1,350.7   | 1,296.3  
|                                                                                                   
|Assets:                                                                                             | Quarterly average assets(1) | 16,715.3  | 16,062.9  | 16,089.3  | 14,833.7  | 13,629.9 
|                                                                                                    | Net risk-adjusted assets    | 13,367.1  | 12,894.7  | 12,706.5  | 11,788.6  | 10,819.7 
|                                                                                                   
|Ratios:                                                                                             | Tier 1 risk-based capital   | 10.57%    | 10.14%    | 9.69%     | 10.21%    | 10.78%   
|                                                                                                    | Total risk-based capital    | 11.82%    | 11.39%    | 10.94%    | 11.46%    | 11.98%   
|                                                                                                    | Leverage                    | 8.45%     | 8.14%     | 7.65%     | 8.11%     | 8.55%    
|                                                                                                   
|(1)Excluding the adjustment for accumulated other comprehensive income and other disallowed assets.

In
addition, the most recent notifications from the Office of the Comptroller of the Currency
categorized Hibernia National Bank as well capitalized under the regulatory framework for
prompt corrective action. For a bank to be designated as well capitalized, it must have
Tier 1 and total risk-based capital ratios of at least 6.0% and 10.0%, respectively, and a
leverage ratio of at least 5.0%. At December 31, 2002, the Banks Tier 1, total
risk-based and leverage ratios were 9.72%, 10.98% and 7.78%, respectively.

|Liquidity
|---------
|         

Liquidity
is a measure of the ability to fund loan commitments and meet deposit maturities and
withdrawals in a timely and cost-effective way. These needs can be met by generating
profits, attracting new deposits, converting assets (including short-term investments,
mortgage loans held for sale, securities available for sale and loans) to cash through
sales or securitizations and increasing borrowings. To minimize funding risks, management
monitors liquidity through a periodic review of maturity profiles, yield and rate
behaviors, and loan and deposit forecasts.

Core
deposits that are maintained at competitive rates are the Companys primary source of
liquidity. Core deposits totaled $11.1 billion at year-end 2002, up $475.5 million (4%)
from $10.6 billion a year earlier. This increase is the result of Hibernias
extensive banking office network, aided by the introduction and promotion of new and
attractive deposit products. Management expects the volume of core deposits to continue to
increase as a result of the promotion of high performance checking products, discussed
earlier. In addition, Hibernia has a large base of treasury management-related repurchase
agreements and foreign deposits that are a part of total customer relationships. Because
of the nature of these relationships, the funds are considered stable and not subject to
the same volatility as other sources of noncore funds. Large-denomination certificates of
deposit and public funds were additional sources of liquidity during the year.

Hibernias
loan-to-deposit ratio at year-end 2002 decreased to 85.2% compared to 86.8% at year-end
2001 and 95.5% at year-end 2000. The decrease from the last two years is primarily due to
slower loan growth, as discussed earlier.

Another
indicator of liquidity is the large liability dependence ratio, which measures reliance on
short-term borrowings and other large liabilities (including large-denomination and public
fund certificates of deposit and foreign deposits). Based on average balances, 17.7% of
Hibernias earning assets were funded by net large liabilities (total liabilities
less short-term investments) at year-end 2002, down approximately 326 basis points from
the prior-year level of 21.0%.

Management
believes that the current level of short-term investments and securities available for
sale is adequate to meet the Companys current liquidity needs. Additional sources of
liquidity available to the Company include the ability to issue brokered certificates of
deposit and the ability to sell or securitize a substantial portion of the Companys
$2.4 billion residential first mortgage portfolio and $2.0 billion indirect consumer
portfolio. The Company also has available federal funds lines and its membership in the
FHLB to further augment liquidity by providing a readily accessible source of funds at
competitive rates. As previously discussed, the Company securitized and sold $592.2
million of indirect auto loans from its consumer portfolio in the second quarter of 2001
and used the proceeds to substantially reduce the balance of federal funds purchased.

Hibernia
Corporation (the Parent Company) requires liquidity to fund operating expenses
and investments and to pay dividends. At December 31, 2002, the Parent Company had $86.7
million in available funds. During 2002, the Parent Company received $167.7 million in
dividends from its subsidiaries. The issuance of common stock during 2002 provided the
Parent Company with $35.8 million of additional funds. The Parent Company repurchased
$107.0 million in common stock and paid $89.4 million in dividends to common shareholders.

The
payment of dividends by the Bank to the Parent Company is restricted by various regulatory
limitations. In 2003, the Bank would have available to pay dividends to the Parent
Company, without prior approval of the Office of the Comptroller of the Currency,
approximately $143.4 million plus net retained profits earned in 2003 prior to the
dividend declaration date.

The
Consolidated Statements of Cash Flows can be used to assess the Companys ability to
generate positive future net cash flows from operations and its ability to meet future
obligations. The Company had a net increase in cash and cash equivalents in 2002 of $405.0
million. Net cash provided by operating activities totaled $508.4 million after adjusting
2002 net income for non-cash and other operating items. These activities were partially
offset by net cash used in investing activities of $352.5 million, primarily resulting
from a net increase in loans of $307.5 million, and the purchases of premises, equipment
and other assets of $87.0 million. Cash provided by financing activities totaled $249.1
million, resulting from the increase in deposits of $527.9 million and a net increase in
FHLB advances of $59.3 million, partially offset by the decrease in short-term borrowings
of $177.3 million, the repurchase of common stock of $107.0 million and the payment of
dividends of $89.4 million.

Cash
and cash equivalents decreased $121.6 million in 2001. Cash used in financing activities
totaled $461.9 million, as a decrease in short-term borrowings of $557.8 million was
partially offset by increased deposits of $260.4 million. Net cash used in operating
activities totaled $83.1 million after adjusting 2001 net income for non-cash and other
operating items. These activities were partially offset by net cash provided from
investing activities of $423.3 million, primarily resulting from a net reduction in loans
of $507.2 million and premises, equipment and other asset purchases of $74.3 million.

Cash
and cash equivalents decreased $7.4 million in 2000. Cash used in investing activities
totaled $1,290.3 million, as loan growth (net of sales) used cash of $1,445.7 million.
These activities were partially offset by net cash provided from financing activities of
$991.1 million, as deposit growth provided cash of $717.0 million. Net cash provided by
operating activities totaled $291.7 million after adjusting 2000 net income for non-cash
and other operating items.

|Quarterly Consolidated Summary of Income and Selected Financial Data (1)                                                                                                            
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|HIBERNIA CORPORATION AND SUBSIDIARIES                                                                                                                                               
|                                                                                                                                                                                    
|($ in thousands, except per-share data)                                                                                                                                             
|                                                                                                                                                                                    
|Interest income                                                                                                                                                                     
|Interest expense                                                                                                                                                                    
|                                                                                                                                                                                    
|Net interest income                                                                                                                                                                 
|Provision for loan losses                                                                                                                                                           
|                                                                                                                                                                                    
|Net interest income after                                                                                                                                                           
|provision for loan losses                                                                                                                                                           
|                                                                                                                                                                                    
|Noninterest income:                                                                                                                                                                 
|Noninterest income                                                                                                                                                                  
|Securities gains (losses), net                                                                                                                                                      
|                                                                                                                                                                                    
|Noninterest income                                                                                                                                                                  
|Noninterest expense                                                                                                                                                                 
|                                                                                                                                                                                    
|Income before taxes                                                                                                                                                                 
|Income tax expense                                                                                                                                                                  
|                                                                                                                                                                                    
|Net income                                                                                                                                                                          
|                                                                                                                                                                                    
|Net income applicable to common shareholders                                                                                                                                        
|                                                                                                                                                                                    
|Adjusted net income(2)                                                                                                                                                              
|                                                                                                                                                                                    
|Adjusted net income applicable to common shareholders(2)                                                                                                                            
|                                                                                                                                                                                    
|Per common share information:(3)                                                                                                                                                    
|Net income                                                                                                                                                                          
|Net income - assuming dilution                                                                                                                                                      
|Adjusted net income(2)                                                                                                                                                              
|Adjusted net income - assuming dilution(2)                                                                                                                                          
|Cash dividends declared                                                                                                                                                             
|Average shares outstanding (000s)                                                                                                                                                   
|Average shares outstanding - assuming dilution (000s)                                                                                                                               
|Dividend payout ratio                                                                                                                                                               
|                                                                                                                                                                                    
|Selected quarter-end balances (in millions)                                                                                                                                         
|Loans                                                                                                                                                                               
|Deposits                                                                                                                                                                            
|Federal Home Loan Bank advances                                                                                                                                                     
|Equity                                                                                                                                                                              
|Total assets                                                                                                                                                                        
|                                                                                                                                                                                    
|Selected average balances (in millions)                                                                                                                                             
|Loans                                                                                                                                                                               
|Deposits                                                                                                                                                                            
|Federal Home Loan Bank advances                                                                                                                                                     
|Equity                                                                                                                                                                              
|Total assets                                                                                                                                                                        
|                                                                                                                                                                                    
|Selected ratios                                                                                                                                                                     
|Net interest margin (taxable-equivalent)                                                                                                                                            
|Annualized return on assets                                                                                                                                                         
|Annualized return on common equity                                                                                                                                                  
|Annualized return on total equity                                                                                                                                                   
|Efficiency ratio                                                                                                                                                                    
|Adjusted efficiency ratio(2)                                                                                                                                                        
|Average equity/average assets                                                                                                                                                       
|Tier 1 risk-based capital ratio                                                                                                                                                     
|Total risk-based capital ratio                                                                                                                                                      
|Leverage ratio                                                                                                                                                                      
|                                                                                                                                                                                    
|(1)The effects of mergers accounted for as purchase transactions have been included from the date of consummation. Prior periods have been conformed to current-period presentation.
|(2)Excludes amortization of goodwill.                                                                                                                                               
|(3)For a discussion of net income per common share computations refer to Note 20 of the consolidated financial statements - "Net Income Per Common Share Data."                     

|Fourth Quarter Results
|----------------------
|                      

Hibernia
reported net income of $64.9 million in the fourth quarter of 2002, compared to $56.4
million in the fourth quarter of 2001 and $63.2 million in the third quarter of 2002. Net
income per common share was $.42 in the fourth quarter of 2002, compared to $.36 and $.40
in the fourth quarter of 2001 and the third quarter of 2002, respectively. Fourth quarter
2002 net income per common share  assuming dilution was $.41 compared to $.35 and
$.40 for the fourth quarter of 2001 and the third quarter of 2002, respectively. Net
income adjusted to exclude amortization of goodwill in the fourth quarter of 2001 was
$59.2 million. On that same basis, net income per common share and net income per common
share  assuming dilution for the fourth quarter of 2001 was $.38 and $.37,
respectively.

Average
earning assets totaled $15.8 billion in the fourth quarter of 2002, a $601.3 million
increase from the fourth quarter of 2001. Significant variances from the fourth quarter of
2001 include increases in securities of $249.9 million, short-term investments of $149.7
million and loans of $140.0 million. The increase in securities were partially due to
increased purchases to collateralize certain public fund deposits and repurchase
agreements, in addition to enhancing the earning asset yield due to the Companys
slow loan growth. Average earning assets were up $466.2 million in the fourth quarter of
2002 compared to the prior quarter. This increase is primarily due to the increases in
securities of $198.0 million, mortgage loans held for sale of $148.3 million and
short-term investments of $105.7 million.

Average
deposits increased $443.0 million (3%) to $13.1 billion in the fourth quarter of 2002 from
$12.7 billion in the fourth quarter of 2001. Average deposits were up $306.6 million (2%)
from the third quarter of 2002. Average short-term borrowings in the fourth quarter of
2002 decreased $140.0 million compared to the fourth quarter of 2001.

Net
interest income, on a taxable-equivalent basis, totaled $178.4 million in the fourth
quarter of 2002 compared to $174.7 million in the fourth quarter of 2001 and $184.2
million in the third quarter of 2002. The increase in net interest income in the fourth
quarter of 2002 compared to the fourth quarter of 2001 was primarily the result of an
increase in earning assets, a reduction of interest-bearing liabilities and the impact of
change in interest rates on the Companys balance sheet. The decrease in net interest
income as compared to the third quarter of 2002 is due to the accelerated downward
repricing of interest-earning assets as compared to rates paid on interest-bearing
liabilities and a $3.9 million prepayment fee on a commercial loan received in the third
quarter of 2002.

The
net interest margin of 4.50% for the fourth quarter of 2002 decreased eight basis points
from the fourth quarter of 2001. A 74 basis-point decrease in loan yields and an 81
basis-point decrease in securities yield led to the 82 basis-point decrease in the yield
on earning assets. The rate on interest-bearing liabilities decreased 84 basis points, and
the contribution of noninterest-bearing funds decreased 10 basis points compared to the
fourth quarter of 2001.

The
net interest margin of 4.50% for the fourth quarter of 2002 decreased 29 basis points from
4.79% in the third quarter of 2002. The decrease in the margin was primarily the result of
a decrease in the yield on earning assets of 50 basis points. The $3.9 million commercial
loan prepayment fee in the third quarter of 2002 added 11 basis points to that
quarters net interest margin. Table 19 illustrates the components of the net
interest margin for the last eight quarters.

|Table 19                                
|----------------------------------------
|                                        
|NET INTEREST MARGIN
(taxable-equivalent)

|                             | 2002    | 2001
|---------------------------- | ------- | ----
|                            
|                             | Fourth  |     
|                             | Quarter |     
|                            
|Yield on earning assets      | 6.11    | %   
|Rate on interest-bearing    
|liabilities                  | 2.12    |     
|                            
|Net interest spread          | 3.99    |     
|Contribution of noninterest-
|bearing funds                | 0.51    |     
|                            
|Net interest margin          | 4.50    | %   
|                            
|Noninterest-bearing funds   
|supporting earning assets    | 23.97   | %   
|                            

The
Company recorded a $15.0 million provision for loan losses in the fourth quarter of 2002
compared to $18.1 million in the prior quarter and $29.3 million in the comparable period
a year ago. Net charge-offs were $14.6 million in the fourth quarter, down from $18.1
million in the prior quarter and $15.7 million in the fourth quarter of 2001.

Noninterest
income was $95.0 million, up $8.0 million (9%) from the fourth quarter of 2001 and $5.9
million (7%) from the third quarter of 2002. Service charges on deposits; gain on the
sales of mortgage loans; card-related fees; and mortgage loan origination and servicing
fees were the major categories of noninterest income that increased in the fourth quarter
of 2002 compared to the fourth quarter of 2001. Net securities losses of $2.0 million were
recorded in the fourth quarter of 2002 relating to other-than-temporary impairment of
private equity securities. Increased gain on sales of mortgage loans and service charges
on deposits, offset by decreases in other operating income and retail investment fees,
contributed to the increase in the fourth quarter of 2002 compared to the third quarter of
2002.

Noninterest
expense of $156.8 million in the fourth quarter of 2002 was $13.1 million (9%) higher than
$143.7 million in the fourth quarter of 2001 and $0.5 million lower than $157.3 million in
the third quarter of 2002. Noninterest expense was up $16.2 million (12%) compared to the
fourth quarter of 2001, when adjusted to exclude amortization of goodwill of $3.1 million
in the 2001 fourth quarter. The increase compared to the fourth quarter 2001 is primarily
the result of increased amortization of mortgage servicing rights, increased salaries and
benefits and increased advertising and promotional expenses associated with the promotion
of high performance checking products for consumers and small businesses.

The
Companys efficiency ratio was 56.94% in the fourth quarter of 2002 compared to
55.00% and 57.28% in the fourth quarter of 2001 and the third quarter of 2002,
respectively. The adjusted efficiency ratio, which excludes the amortization of goodwill,
was 56.94% in the fourth quarter of 2002 compared to 53.81% in the fourth quarter of 2001
and 57.28% in the third quarter of 2002.

Statements
in this report 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 report. By nature, forward-looking statements involve inherent risk
and uncertainties. Various factors, including, but not limited to, unforeseen local,
regional, national or global events, economic conditions, asset quality, interest rates,
prepayment speeds, loan demand, changes in business or consumer spending, borrowing or
savings habits, competition, stock price volatility, government monetary policy, changes
in laws and regulations, the level of success of the Companys asset/liability
management strategies as well as its marketing, product development, sales and other
strategies, changes in real estate and construction costs and availability, 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. Hibernia
undertakes no obligation to update or revise forward-looking statements to reflect
subsequent circumstances, events or information or for any other reason.

|Consolidated Average Balances, Interest and Rates                   
|--------------------------------------------------------------------
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|HIBERNIA CORPORATION AND SUBSIDIARIES                               
|                                                                    
|Taxable-equivalent basis (1)                                        
|                                                                    
|(Average balances $ in millions,                                    
|interest $ in thousands)                                            
|                                                                    
|Assets                                                              
|Interest-earning assets:                                            
|Commercial loans                                                    
|Small business loans                                                
|Consumer loans                                                      
|                                                                    
|Total loans(2)                                                      
|                                                                    
|Securities available for sale                                       
|Securities held to maturity                                         
|                                                                    
|Total securities                                                    
|                                                                    
|Short-term investments                                              
|Mortgage loans held for sale                                        
|                                                                    
|Total interest-earning assets                                       
|                                                                    
|Reserve for loan losses                                             
|Noninterest-earning assets:                                         
|Cash and due from banks                                             
|Other assets                                                        
|                                                                    
|Total noninterest-earning assets                                    
|                                                                    
|Total assets                                                        
|                                                                    
|Liabilities and Shareholders' Equity                                
|Interest-bearing liabilities:                                       
|Interest-bearing deposits:                                          
|NOW accounts                                                        
|Money market deposit accounts                                       
|Savings accounts                                                    
|Other consumer time deposits                                        
|Public fund certificates of deposit                                 
|of $100,000 or more                                                 
|Certificates of deposit                                             
|of $100,000 or more                                                 
|Foreign time deposits                                               
|                                                                    
|Total interest-bearing deposits                                     
|                                                                    
|Short-term borrowings:                                              
|Federal funds purchased                                             
|Repurchase agreements                                               
|Federal Home Loan Bank advances                                     
|                                                                    
|Total interest-bearing liabilities                                  
|                                                                    
|Noninterest-bearing liabilities:                                    
|Noninterest-bearing deposits                                        
|Other liabilities                                                   
|                                                                    
|Total noninterest-bearing liabilities                               
|                                                                    
|Total shareholders' equity                                          
|                                                                    
|Total liabilities and                                               
|shareholders' equity                                                
|                                                                    
|Spread and Net Yield                                                
|Interest rate spread                                                
|Cost of funds supporting interest-earning assets                    
|Net interest income/margin                                          
|                                                                    
|(1)Based on the statutory income tax rate of 35%.                   
|(2)Yield computations include nonaccrual loans in loans outstanding.

|Consolidated Average Balances, Interest and Rates                   
|--------------------------------------------------------------------
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|HIBERNIA CORPORATION AND SUBSIDIARIES                               
|                                                                    
|Taxable-equivalent basis (1)                                        
|                                                                    
|(Average balances $ in millions,                                    
|interest $ in thousands)                                            
|                                                                    
|Assets                                                              
|Interest-earning assets:                                            
|Commercial loans                                                    
|Small business loans                                                
|Consumer loans                                                      
|                                                                    
|Total loans(2)                                                      
|                                                                    
|Securities available for sale                                       
|Securities held to maturity                                         
|                                                                    
|Total securities                                                    
|                                                                    
|Short-term investments                                              
|Mortgage loans held for sale                                        
|                                                                    
|Total interest-earning assets                                       
|                                                                    
|Reserve for loan losses                                             
|Noninterest-earning assets:                                         
|Cash and due from banks                                             
|Other assets                                                        
|                                                                    
|Total noninterest-earning assets                                    
|                                                                    
|Total assets                                                        
|                                                                    
|Liabilities and Shareholders' Equity                                
|Interest-bearing liabilities:                                       
|Interest-bearing deposits:                                          
|NOW accounts                                                        
|Money market deposit accounts                                       
|Savings accounts                                                    
|Other consumer time deposits                                        
|Public fund certificates of deposit                                 
|of $100,000 or more                                                 
|Certificates of deposit                                             
|of $100,000 or more                                                 
|Foreign time deposits                                               
|                                                                    
|Total interest-bearing deposits                                     
|                                                                    
|Short-term borrowings:                                              
|Federal funds purchased                                             
|Repurchase agreements                                               
|Federal Home Loan Bank advances                                     
|                                                                    
|Total interest-bearing liabilities                                  
|                                                                    
|Noninterest-bearing liabilities:                                    
|Noninterest-bearing deposits                                        
|Other liabilities                                                   
|                                                                    
|Total noninterest-bearing liabilities                               
|                                                                    
|Total shareholders' equity                                          
|                                                                    
|Total liabilities and                                               
|shareholders' equity                                                
|                                                                    
|Spread and Net Yield                                                
|Interest rate spread                                                
|Cost of funds supporting interest-earning assets                    
|Net interest income/margin                                          
|                                                                    
|(1)Based on the statutory income tax rate of 35%.                   
|(2)Yield computations include nonaccrual loans in loans outstanding.

|Consolidated Average Balances, Interest and Rates                   
|--------------------------------------------------------------------
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|HIBERNIA CORPORATION AND SUBSIDIARIES                               
|                                                                    
|Taxable-equivalent basis (1)                                        
|                                                                    
|(Average balances $ in millions,                                    
|interest $ in thousands)                                            
|                                                                    
|Assets                                                              
|Interest-earning assets:                                            
|Commercial loans                                                    
|Small business loans                                                
|Consumer loans                                                      
|                                                                    
|Total loans(2)                                                      
|                                                                    
|Securities available for sale                                       
|Securities held to maturity                                         
|                                                                    
|Total securities                                                    
|                                                                    
|Short-term investments                                              
|Mortgage loans held for sale                                        
|                                                                    
|Total interest-earning assets                                       
|                                                                    
|Reserve for loan losses                                             
|Noninterest-earning assets:                                         
|Cash and due from banks                                             
|Other assets                                                        
|                                                                    
|Total noninterest-earning assets                                    
|                                                                    
|Total assets                                                        
|                                                                    
|Liabilities and Shareholders' Equity                                
|Interest-bearing liabilities:                                       
|Interest-bearing deposits:                                          
|NOW accounts                                                        
|Money market deposit accounts                                       
|Savings accounts                                                    
|Other consumer time deposits                                        
|Public fund certificates of deposit                                 
|of $100,000 or more                                                 
|Certificates of deposit                                             
|of $100,000 or more                                                 
|Foreign time deposits                                               
|                                                                    
|Total interest-bearing deposits                                     
|                                                                    
|Short-term borrowings:                                              
|Federal funds purchased                                             
|Repurchase agreements                                               
|Federal Home Loan Bank advances                                     
|                                                                    
|Total interest-bearing liabilities                                  
|                                                                    
|Noninterest-bearing liabilities:                                    
|Noninterest-bearing deposits                                        
|Other liabilities                                                   
|                                                                    
|Total noninterest-bearing liabilities                               
|                                                                    
|Total shareholders' equity                                          
|                                                                    
|Total liabilities and                                               
|shareholders' equity                                                
|                                                                    
|Spread and Net Yield                                                
|Interest rate spread                                                
|Cost of funds supporting interest-earning assets                    
|Net interest income/margin                                          
|                                                                    
|(1)Based on the statutory income tax rate of 35%.                   
|(2)Yield computations include nonaccrual loans in loans outstanding.

|GRAPHIC DESRIPTION                               | CROSS REFERENCE/FINANCIAL INFORMATION                                    
|------------------------------------------------ | -------------------------------------------------------------------------
|Average Earning Assets Bar Graph                 | See Consolidated Average Balances, Interest and Rates                    
|Total Deposits Bar Graph                         | See Five-Year Consolidated Summmary of Income and Selected Financial Data
|Taxable-Equivalent Net Interest Income Bar Graph | See Consolidated Average Balances, Interest and Rates                    
|Annual Common Dividends Bar Graph                | See Five-Year Consolidated Summmary of Income and Selected Financial Data

Report of Independent
Auditors

The Board of Directors
and Shareholders  Hibernia Corporation

We have audited the accompanying
consolidated balance sheets of Hibernia Corporation and Subsidiaries as of
December 31, 2002 and 2001, and the related consolidated statements of income,
changes in shareholders equity, and cash flows for each of the three years in the
period ended December 31, 2002. These financial statements are the responsibility of
the Companys management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance
with auditing standards generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial
statements referred to above present fairly, in all material respects, the consolidated
financial position of Hibernia Corporation and Subsidiaries at December 31, 2002 and
2001, and the consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States.

As discussed in Note 1 to the
financial statements, effective January 1, 2002, the Company adopted Statement of
Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.

/s/ Ernst & Young, LLP 
New Orleans, Louisiana 
January 15, 2003

|Consolidated Balance Sheets                                                 
|----------------------------------------------------------------------------
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|HIBERNIA CORPORATION AND SUBSIDIARIES                                       
|December 31 ($ in thousands)                                                
|                                                                            
|Assets                                                                      
|Cash and cash equivalents                                                   
|Trading account assets                                                      
|Securities available for sale                                               
|Securities held to maturity (estimated fair value of $146,369 and $254,087  
|at December 31, 2002 and 2001, respectively)                                
|Mortgage loans held for sale                                                
|Loans, net of unearned income                                               
|Reserve for loan losses                                                     
|                                                                            
|Loans, net                                                                  
|                                                                            
|Premises and equipment                                                      
|Goodwill                                                                    
|Other intangible assets                                                     
|Other assets                                                                
|                                                                            
|Total assets                                                                
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Liabilities                                                                 
|Deposits:                                                                   
|Noninterest-bearing                                                         
|Interest-bearing                                                            
|                                                                            
|Total deposits                                                              
|                                                                            
|Short-term borrowings                                                       
|Other liabilities                                                           
|Federal Home Loan Bank advances                                             
|                                                                            
|Total liabilities                                                           
|                                                                            
|Shareholders' equity                                                        
|Class A Common Stock, no par value:                                         
|Authorized - 300,000,000 shares; issued - 166,252,171 and                   
|162,351,682 shares at December 31, 2002 and 2001, respectively              
|Surplus                                                                     
|Retained earnings                                                           
|Treasury stock at cost - 8,840,005 and 3,284,720 shares at December 31, 2002
|and 2001, respectively                                                      
|Accumulated other comprehensive income                                      
|Unearned compensation                                                       
|                                                                            
|Total shareholders' equity                                                  
|                                                                            
|Total liabilities and shareholders' equity                                  
|                                                                            
|See notes to consolidated financial statements.                             

|Consolidated Income Statements                                   
|-----------------------------------------------------------------
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|HIBERNIA CORPORATION AND SUBSIDIARIES                            
|Year Ended December 31 ($ in thousands, except per-share data)   
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Interest income                                                  
|Interest and fees on loans                                       
|Interest on securities available for sale                        
|Interest on securities held to maturity                          
|Interest on short-term investments                               
|Interest on mortgage loans held for sale                         
|                                                                 
|Total interest income                                            
|                                                                 
|Interest expense                                                 
|Interest on deposits                                             
|Interest on short-term borrowings                                
|Interest on Federal Home Loan Bank advances                      
|                                                                 
|Total interest expense                                           
|                                                                 
|Net interest income                                              
|Provision for loan losses                                        
|                                                                 
|Net interest income after provision for loan losses              
|                                                                 
|Noninterest income                                               
|Service charges on deposits                                      
|Card-related fees                                                
|Mortgage loan origination and servicing fees                     
|Retail investment fees                                           
|Trust fees                                                       
|Insurance                                                        
|Investment banking                                               
|Other service, collection and exchange charges                   
|Gain on sales of mortgage loans                                  
|Other operating income                                           
|Securities gains (losses), net                                   
|                                                                 
|Total noninterest income                                         
|                                                                 
|Noninterest expense                                              
|Salaries and employee benefits                                   
|Occupancy expense, net                                           
|Equipment expense                                                
|Data processing expense                                          
|Advertising and promotional expense                              
|Foreclosed property expense, net                                 
|Amortization of goodwill                                         
|Amortization of other intangibles                                
|Other operating expense                                          
|                                                                 
|Total noninterest expense                                        
|                                                                 
|Income before income taxes                                       
|Income tax expense                                               
|                                                                 
|Net income                                                       
|                                                                 
|Net income applicable to common shareholders                     
|                                                                 
|Net income excluding amortization of goodwill                    
|                                                                 
|Net income applicable to common shareholders excluding           
|amortization of goodwill                                         
|                                                                 
|Per common share information:                                    
|Net income                                                       
|                                                                 
|Net income - assuming dilution                                   
|                                                                 
|Net income excluding amortization of goodwill                    
|                                                                 
|Net income excluding amortization of goodwill - assuming dilution
|                                                                 
|See notes to consolidated financial statements.                  

|Consolidated Statements of Changes in Shareholders' Equity
|----------------------------------------------------------
|                                                          
|                                                          
|                                                          
|                                                          
|HIBERNIA CORPORATION AND SUBSIDIARIES                     
|($ in thousands, except per-share data)                   
|                                                          
|                                                          
|                                                          
|                                                          
|                                                          
|Balances at December 31, 1999                             
|Net income for 2000                                       
|Change in unrealized gains (losses) on securities,        
|net of reclassification adjustments                       
|Comprehensive income                                      
|Issuance of common stock:                                 
|Stock option plans                                        
|Restricted stock awards                                   
|Shares issued in acquisitions                             
|Cash dividends declared:                                  
|Preferred ($3.45 per share)                               
|Common ($.49 per share)                                   
|Issuance of 790,888 common stock                          
|purchase warrants in acquisition                          
|Acquisition of treasury stock                             
|Redemption of preferred stock                             
|Allocation of ESOP shares                                 
|Net tax benefit related to stock option                   
|plans and ESOP                                            
|Other                                                     
|                                                          
|Balances at December 31, 2000                             
|                                                          
|Net income for 2001                                       
|Change in unrealized gains (losses) on securities,        
|net of reclassification adjustments                       
|Change in accumulated gains (losses)                      
|on cash flow hedges, net of                               
|reclassification adjustments                              
|Comprehensive income                                      
|Issuance of common stock:                                 
|Stock option plans                                        
|Restricted stock awards                                   
|Cash dividends declared:                                  
|Preferred ($2.5875 per share)                             
|Common ($.53 per share)                                   
|Acceleration of vesting of                                
|stock options                                             
|Redemption of preferred stock                             
|Allocation of ESOP shares                                 
|Net tax benefit related to stock option                   
|plans and ESOP                                            
|Other                                                     
|                                                          
|Balances at December 31, 2001                             
|                                                          
|Net income for 2002                                       
|Change in unrealized gains (losses) on securities,        
|net of reclassification adjustments                       
|Change in accumulated gains (losses)                      
|on cash flow hedges, net of                               
|reclassification adjustments                              
|Comprehensive income                                      
|Issuance of common stock:                                 
|Stock option plans                                        
|Restricted stock awards                                   
|Cash dividends declared:                                  
|Common ($.57 per share)                                   
|Acquisition of treasury stock                             
|Allocation of ESOP shares                                 
|Net tax benefit related to stock option                   
|plans and ESOP                                            
|Other                                                     
|                                                          
|Balances at December 31, 2002                             
|                                                          
|See notes to consolidated financial statements.           

|Consolidated Statements of Cash Flows                                  
|-----------------------------------------------------------------------
|                                                                       
|                                                                       
|                                                                       
|HIBERNIA CORPORATION AND SUBSIDIARIES                                  
|Year Ended December 31 ($ in thousands)                                
|                                                                       
|Operating activities                                                   
|Net income                                                             
|Adjustments to reconcile net income to net                             
|cash provided (used) by operating activities:                          
|Provision for loan losses                                              
|Amortization of intangibles and deferred charges                       
|Depreciation and amortization                                          
|Non-cash derivative instruments gains, net                             
|Non-cash compensation expense                                          
|Premium amortization (discount accretion), net                         
|Realized securities losses, net                                        
|Gains on sales of assets, net                                          
|Provision for losses on foreclosed and other assets                    
|Decrease (increase) in mortgage loans held for sale                    
|Decrease in deferred income tax asset                                  
|Net tax benefit (expense) related to stock options and the employee    
|stock ownership plan                                                   
|Increase in interest receivable and other assets                       
|Increase (decrease) in interest payable and other liabilities          
|                                                                       
|Net cash provided (used) by operating activities                       
|                                                                       
|Investing activities                                                   
|Purchases of securities available for sale                             
|Proceeds from maturities of securities available for sale              
|Proceeds from maturities of securities held to maturity                
|Proceeds from sales of securities available for sale                   
|Net decrease (increase) in loans                                       
|Proceeds from sales of loans                                           
|Purchases of loans                                                     
|Acquisitions, net of cash acquired of $36 and $78,049 for the years    
|ended December 31, 2002 and 2000, respectively                         
|Purchases of premises, equipment and other assets                      
|Proceeds from sales of foreclosed assets and excess bank-owned property
|Proceeds from sales of premises, equipment and other assets            
|                                                                       
|Net cash provided (used) by investing activities                       
|                                                                       
|Financing activities                                                   
|Net increase in deposits                                               
|Net increase (decrease) in short-term borrowings                       
|Proceeds from issuance of Federal Home Loan Bank advances              
|Payments on Federal Home Loan Bank advances                            
|Proceeds from issuance of common stock                                 
|Dividends paid                                                         
|Redemption of preferred shares                                         
|Acquisition of treasury stock                                          
|                                                                       
|Net cash provided (used) by financing activities                       
|                                                                       
|Increase (decrease) in cash and cash equivalents                       
|Cash and cash equivalents at beginning of year                         
|                                                                       
|Cash and cash equivalents at end of year                               
|                                                                       
|Supplemental disclosures                                               
|Cash paid during the year for:                                         
|Interest expense                                                       
|Income taxes                                                           
|Non-cash investing and financing activities:                           
|Loans and premises and equipment transferred to foreclosed             
|assets and excess bank-owned property                                  
|Mortgage loans securitized and retained                                
|Acquisitions:                                                          
|Common stock issued                                                    
|Common stock purchase warrants issued                                  
|Fair value of assets acquired                                          
|Fair value of liabilities assumed                                      
|                                                                       
|See notes to consolidated financial statements.                        

|Notes to Consolidated Financial Statements
|------------------------------------------
|                                          
|Hibernia Cororation and Subsidiaries      

|Note 1                                    
|------------------------------------------
|                                          
|SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Hibernia
Corporation (the Parent Company) is a financial holding company which, through its bank
and nonbank subsidiaries, provides a broad array of financial products and services
throughout Louisiana, East Texas and South Mississippi. The principal products and
services offered include retail, small business, commercial, international, mortgage and
private banking; leasing; investment banking; corporate finance; treasury management;
insurance; and trust and investment management. Hibernia National Bank (the Bank), through
a wholly owned subsidiary, also provides retail brokerage and alternative investments,
including mutual funds and annuities.

The
accounting principles followed by Hibernia Corporation and Subsidiaries (the Company or
Hibernia) and the methods of applying those principles conform with generally accepted
accounting principles and those generally practiced within the banking industry.

# CONSOLIDATION

The
consolidated financial statements include the accounts of the Parent Company and its
subsidiaries, all of which are wholly owned. The effects of mergers accounted for as
purchase transactions have been included from the date of consummation (see Note 2). All
significant intercompany transactions and balances have been eliminated.

# CASH AND CASH EQUIVALENTS

The
Company considers all highly liquid investments with a stated maturity of three months or
less when purchased to be cash equivalents.

# SHORT-TERM INVESTMENTS

Short-term
investments include interest-bearing time deposits in domestic banks, federal funds sold,
securities purchased under agreements to resell and trading account assets. Included in
trading account assets is an interest-only strip receivable resulting from a loan
securitization and equity securities held by an investment banking subsidiary. Certain
short-term investments are considered to be cash equivalents.

# SECURITIES PURCHASED
UNDER AGREEMENTS TO RESELL AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities
purchased under agreements to resell and securities sold under agreements to repurchase
are generally treated as collateralized financing transactions and are recorded at the
amounts at which the securities were acquired or sold plus accrued interest. The fair
value of securities pledged as collateral under these agreements is continually monitored
to ensure protection of the Companys assets.

# SECURITIES

Management
determines the appropriate classification of securities (trading, available for sale or
held to maturity) at the time of purchase and re-evaluates this classification
periodically. Securities classified as trading account assets are held for sale in
anticipation of short-term market movements. Debt securities are classified as held to
maturity when the Company has the positive intent and ability to hold the securities to
maturity. Securities not classified as held to maturity or trading are classified as
available for sale.

Securities
classified as trading account assets are carried at market value and are included in
short-term investments. Gains and losses, both realized and unrealized, are reflected in
earnings as other operating income. Securities classified as held to maturity are stated
at amortized cost. Securities classified as available for sale are stated at fair value,
with unrealized gains and losses, net of tax, reported in shareholders equity and
included in other comprehensive income.

The
amortized cost of securities classified as held to maturity or available for sale is
adjusted for amortization of premiums and accretion of discounts to maturity or, in the
case of mortgage-backed securities, over the estimated life of the security. Amortization,
accretion and accruing interest are included in interest income on securities using the
level-yield method. Realized gains and losses, and declines in value judged to be other
than temporary, are included in net securities gains (losses). The cost of securities sold
is determined based on the specific identification method.

# MORTGAGE LOANS HELD FOR
SALE

Mortgage loans
held for sale consist primarily of single-family residential loans collateralized by the
underlying property. Effective January 1, 2001, with the adoption of Statement of
Financial Accounting Standards (SFAS) No. 133, mortgage loans held for sale that are
covered by forward sales contracts are designated as hedged items. These mortgage loans
are carried at cost, adjusted for changes in fair value based on sales commitments or
current market quotes after the date of designation as a hedged item. Those loans not
designated as hedged items are carried at the lower of aggregate cost or market. Prior to
January 1, 2001, all mortgage loans held for sale were carried at the lower of aggregate
cost or market. Market adjustments and realized gains and losses are classified as
noninterest income.

# LOANS

Loans
are stated at the principal amounts outstanding, less unearned income and the reserve for
loan losses. Interest on loans and accretion of unearned income are computed by methods
which approximate a level rate of return on recorded principal. Loan origination and
commitment fees and certain direct loan origination costs are deferred, and the net amount
is amortized as an adjustment of the related loans yield over the life of the loan.

A
loans past due or delinquency status is determined based on its contractual terms.
Commercial and small business loans are placed in nonaccrual status when, in
managements opinion, there is doubt concerning full collectibility of both principal
and interest. Commercial and small business nonaccrual loans are considered to be impaired
when it is probable that all amounts due in accordance with the contractual terms will not
be collected. These loans are charged off when deemed uncollectible. Consumer loans are
generally charged off when any payment of principal or interest is more than 120 days
delinquent. Interest payments received on nonaccrual loans are applied to principal if
there is doubt as to the collectibility of the principal; otherwise, these receipts are
recorded as interest income. A loan remains in nonaccrual status until it is current as to
principal and interest and the borrower demonstrates the ability to fulfill the
contractual obligation.

# RESERVE FOR LOAN LOSSES

The
reserve for loan losses is maintained to provide for probable credit losses related to
specifically identified loans and for losses inherent in the loan portfolio that have been
incurred as of the balance sheet date. The reserve is comprised of specific reserves,
general reserves and an unallocated reserve. Specific reserves are assessed for each loan
that is reviewed for impairment or for which a probable loss has been identified. The
reserve related to loans that are identified as impaired is based on discounted expected
future cash flows (using the loans initial effective interest rate), the observable
market value of the loan, or the estimated fair value of the collateral for certain
collateral dependent loans. Factors contributing to the determination of specific reserves
include the financial condition of the borrower, changes in the value of pledged
collateral and general economic conditions.

General
reserves are established based on historical charge-offs considering factors which include
risk rating, industry concentration and loan type, with the most recent charge-off
experience weighted more heavily. The unallocated reserve, which is judgmentally
determined, generally serves to compensate for the uncertainty in estimating loan losses,
particularly in times of changing economic conditions, and considers the possibility of
improper risk ratings and possible over- or under-allocations of specific reserves. It
also considers the lagging impact of historical charge-off ratios in periods where future
charge-offs are expected to increase or decrease significantly. In addition, the
unallocated reserve considers trends in delinquencies and nonaccrual loans, industry
concentration, the volatility of risk ratings and the evolving portfolio mix in terms of
collateral, relative loan size, the degree of seasoning in the various loan products and
loans recently acquired through mergers. Changes in underwriting standards, credit
administration and collection, regulation and other factors which impact the credit
quality and collectibility of the loan portfolio also impact the unallocated reserve
levels. The results of reviews performed by internal and external examiners are also
considered.

The
reserve for loan losses is based on managements estimate of probable credit losses
inherent in the loan portfolio; actual credit losses may vary from the current estimate.
The reserve for loan losses is reviewed periodically, taking into consideration the risk
characteristics of the loan portfolio, past charge-off experience, general economic
conditions and other factors that warrant current recognition. As adjustments to the
reserve for loan losses become necessary, they are reflected as a provision for loan
losses in current earnings. Actual loan charge-offs are deducted from and subsequent
recoveries are added to the reserve.

# PREMISES AND EQUIPMENT

Premises
and equipment are stated at cost less accumulated depreciation and amortization.
Depreciation and amortization are computed primarily using the straight-line method over
the estimated useful lives of the assets, which generally are 10 to 20 years for buildings
and 3 to 10 years for equipment, and over the shorter of the lease terms or the estimated
lives of leasehold improvements.

# FORECLOSED ASSETS AND
EXCESS BANK-OWNED PROPERTY

Foreclosed
assets include real estate and other collateral acquired upon the default of loans.
Foreclosed assets and excess bank-owned property are recorded at the fair value of the
assets less estimated selling costs. Losses arising from the initial reduction of an
outstanding loan amount to fair value are deducted from the reserve for loan losses.
Losses arising from the transfer of premises and equipment to excess bank-owned property
are charged to expense. A valuation reserve for foreclosed assets and excess bank-owned
property is maintained for subsequent valuation adjustments on a specific-property basis.
Income and expenses associated with foreclosed assets and excess bank-owned property prior
to sale are included in current earnings.

# GOODWILL AND OTHER
PURCHASE ACCOUNTING INTANGIBLES

Effective
January 1, 2002, the Company adopted SFAS No. 142, Goodwill and Other Intangible
Assets which addresses the accounting and reporting for excess costs of net assets
acquired in purchase transactions (goodwill) and other intangible assets. In accordance
with these rules, goodwill and intangible assets deemed to have indefinite lives are no
longer amortized but are subject to impairment tests. These impairment tests are performed
at a reporting unit level annually, or more frequently if events or changes in
circumstances indicate that the asset might be impaired. Purchased intangible assets with
finite useful lives are amortized using various methods over the period which each such
asset is expected to contribute directly to the future cash flows of the Company.

Prior
to the adoption of SFAS No. 142, goodwill was being amortized using the straight-line
method over the estimated periods benefited, generally 25 years. The Company reviewed its
intangible assets periodically for other-than-temporary impairment. The realizability of
goodwill was evaluated by geographic region and line of business based on a comparison of
the recorded balance of goodwill to the applicable discounted cumulative net income,
before goodwill amortization expense, over the remaining amortization period of the
associated goodwill. To the extent that impairment existed, write-downs to realizable
value were recorded.

# TRANSFERS AND SERVICING
OF FINANCIAL ASSETS

The
Company sells mortgage and other loans through secondary market securitizations. A
transfer of financial assets is accounted for as a sale when control is surrendered over
the asset transferred. Upon consummation of the sale, the securitized loans are removed
from the balance sheet and a gain or loss on the sale is recognized. If the securitized
asset is retained rather than sold, the asset is reclassified on the balance sheet and no
gain or loss is recognized.

The
Company may retain residual interests in the securitized and sold assets, which may take
the form of an interest-only strip receivable, a cash reserve account (securitization
proceeds receivable) or a servicing asset. Gains and losses on sales of loans depend in
part on the previous carrying amount of the financial assets involved in the transfer,
which are allocated between the assets sold and the retained interests based on their
relative fair values at the date of transfer. The fair value of retained interests are
determined using quoted market prices, if available, or estimated based on the present
value of expected future cash flows using managements estimates of key assumptions.
Key assumptions may include credit losses, prepayment speeds and discount rates
commensurate with the risks involved.

Interest-only
strip receivables are carried at fair value in trading account assets. Cash receipts are
applied as a reduction of the balance. Securitization proceeds receivable are included in
other assets. Changes in the fair value of retained interests are recorded as other
operating income.

A
servicing asset is recorded when the right to service mortgage loans for others is
acquired through a purchase or retained upon the sale of loans. The fair value of
capitalized servicing rights is based upon the present value of estimated future cash
flows. Based upon current fair values, capitalized servicing rights are periodically
assessed for impairment. To the extent that temporary impairment exists, write-downs are
recognized in current earnings as an adjustment to the corresponding valuation allowance.
Permanent impairment is recognized through a write-down of the asset with a corresponding
reduction in the valuation allowance. For purposes of performing its impairment
evaluation, the portfolio is stratified on the basis of certain risk characteristics
including loan type and interest rate. Capitalized servicing rights are amortized over the
period of estimated net servicing income, which considers appropriate prepayment
assumptions.

# INCOME TAXES

The
Parent Company and its subsidiaries file a consolidated federal income tax return. The
Company accounts for income taxes using the liability method. Temporary differences occur
between the financial reporting and tax bases of assets and liabilities. Deferred tax
assets and liabilities are recorded for these differences based on enacted tax rates and
laws that will be in effect when the differences are expected to reverse.

Hibernia
National Bank is subject to a Louisiana shareholders tax, which is based partly on
income. The income portion is reported as state income tax. In addition, certain
subsidiaries of the Parent Company and Hibernia National Bank are subject to Louisiana
state income and franchise tax. The Texas operations of Hibernia National Bank and other
subsidiaries of the Parent are subject to Texas franchise tax.

# DERIVATIVE FINANCIAL
INSTRUMENTS

The
Company may enter into derivative contracts for the purposes of managing exposure to
interest rate or foreign exchange risk or to meet the financing needs of its customers.
Effective January 1, 2001, the Company adopted the requirements of SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities as amended by
SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities 
Deferral of the Effective Date of FASB Statement No. 133, and SFAS No. 138,
Accounting for Certain Derivative Instruments and Certain Hedging Activities.
These statements require all derivatives to be recorded on the balance sheet at fair
value.

For
derivatives designated as hedging the exposure to changes in the fair value of an asset or
liability (fair value hedge), the gain or loss is recognized in earnings in the period of
change together with the offsetting loss or gain to the hedged item attributable to the
risk being hedged. Earnings will be affected to the extent to which the hedge is not
effective in achieving offsetting changes in fair value. For derivatives designated as
hedging exposure to variable cash flows of a forecasted transaction (cash flow hedge), the
effective portion of the derivatives gain or loss is initially reported as a
component of other comprehensive income and subsequently reclassified into earnings when
the forecasted transaction affects earnings or when the hedge is terminated. The
ineffective portion of the gain or loss is reported in earnings immediately. For
derivatives that are not designated as hedging instruments, changes in the fair value of
the derivatives are recognized in earnings immediately.

In
applying hedge accounting for derivatives, the Company establishes a method for assessing
the effectiveness of the hedging derivative and a measurement approach for determining the
ineffective aspect of the hedge upon the inception of the hedge. These methods are
consistent with the Companys approach to managing risk.

Prior
to the adoption of SFAS No. 133, derivative financial instruments used for asset and
liability hedges were recorded using the accrual method of accounting. Under this method,
the expected differential to be paid or received was accrued in the appropriate income or
expense caption on the income statement (i.e., hedge of a loan in interest income, hedge
of a deposit or debt in interest expense). The fair value of these instruments and the
changes in the fair value were not recognized in the financial statements.

The
Company also entered into derivative financial instruments for trading purposes. These
instruments were recorded using the fair value method of accounting. Changes in the fair
value of these instruments were recorded in noninterest income.

# STOCK OPTIONS

The
Company provides stock-based compensation under plans which grant stock options to
employees and directors (see Note 16). SFAS No. 123, Accounting for Stock-Based
Compensation, defines financial accounting and reporting standards for stock-based
compensation plans. However, SFAS No. 123 also allows an entity to measure stock-based
compensation cost using the intrinsic value method of Accounting Principles Board (APB)
Opinion No. 25, Accounting for Stock Issued to Employees. The Company has
elected to account for its stock-based compensation plans under APB Opinion No. 25. In
accordance with APB Opinion No. 25, compensation expense relating to stock options is not
reflected in net income provided the exercise price of the stock options granted equals or
exceeds the market value of the underlying common stock at the date of the grant. The
Companys practice has been to grant options at no less than the fair market value of
the stock at the date of grant. The following table illustrates the effect on net income
and earnings per share if the Company had applied the fair value recognition provisions of
SFAS No. 123 for stock options.

|( $ in thousands, except per share data)                   | Year ended December 31
|---------------------------------------------------------- | ----------------------
|                                                          
|                                                           | 2002                  
|                                                          
|Reported net income                                        | $ 249,857             
|Deduct: Stock option compensation expense under the       
|fair value method, net of related tax effect (see Note 16) | (6,065)               
|                                                          
|Pro forma net income                                       | $ 243,792             
|                                                          
|Reported net income per common share                       | $ 1.59                
|                                                          
|Pro forma net income per common share                      | $ 1.55                
|                                                          
|Reported net income per common share - assuming dilution   | $ 1.56                
|                                                          
|Pro forma net income per common share- assuming dilution   | $ 1.52                
|                                                          

The
fair values of the options were estimated using a Black-Scholes option valuation model.
The Black-Scholes option valuation model was developed for use in estimating the fair
value of traded options which have no vesting restrictions and are fully transferable. In
addition, the option valuation model requires the input of highly subjective assumptions,
including the expected stock price volatility. Because the Companys stock options
have characteristics substantially different from those of traded options, and because
changes in subjective input assumptions can materially affect the fair value estimate, in
managements opinion the existing models do not necessarily provide a reliable single
measure of the fair value of its stock options.

# USE OF ESTIMATES

The
preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. Actual results
could differ from those estimates.

# RECLASSIFICATION

Certain
items included in the consolidated financial statements for 2001 and 2000 have been
reclassified to conform with the 2002 presentation.

# RECENT ACCOUNTING
PRONOUNCEMENTS

In June
2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, Business
Combinations, effective for all business combinations initiated after June 30, 2001,
and SFAS No. 142, Goodwill and Other Intangible Assets, effective for fiscal
years beginning after December 15, 2001. Under the new rules, goodwill and intangible
assets deemed to have indefinite lives are no longer amortized but are subject to annual
impairment tests in accordance with the provisions of SFAS No. 142. Other intangible
assets will continue to be amortized over their useful lives. The Company applied the new
rules regarding accounting for goodwill and other intangible assets beginning in the first
quarter of 2002. Application of the nonamortization provisions of SFAS No. 142 resulted in
an increase in net income of approximately $11,000,000 ($.07 per share) in 2002. The
required impairment tests of goodwill and indefinite-lived intangible assets performed by
the Company in 2002 did not result in any impairment charges (see Note 8).

In
October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which supersedes SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of and
the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results
of Operations  Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions. SFAS No.
144 addresses the financial accounting and reporting requirements for the impairment or
disposal of long-lived assets. The requirements of the statement were effective for fiscal
years beginning after December 15, 2001. The adoption of SFAS No. 144 in the first quarter
of 2002 did not have a material impact on the financial condition or operating results of
the Company.

In
July 2002, the FASB issued SFAS No. 146, Obligations Associated with Disposal
Activities. Under SFAS No. 146, a liability for a disposal obligation is recognized
and measured at fair value when it is incurred. SFAS No. 146 is effective for disposal
activities initiated after December 31, 2002 and is not expected to have a material impact
on the financial condition or operating results of the Company.

In
October 2002, the FASB issued SFAS No. 147, Acquisitions of Certain Financial
Institutions, which amends SFAS No. 72, Accounting for Certain Acquisitions of
Banking or Thrift Institutions, FASB Interpretation No. 9, Applying APB
Opinions No. 16 and 17 When a Savings and Loan Association or a Similar Institution Is
Acquired in a Business Combination Accounted for by the Purchase Method, and SFAS
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS
No. 147 removes acquisitions of financial institutions from the scope of both SFAS No. 72
and FASB Interpretation No. 9 and requires that those transactions be accounted for in
accordance with SFAS No. 141, Business Combinations and SFAS No. 142,
Goodwill and Other Intangible Assets. SFAS No. 147 addresses the financial
accounting and reporting requirements for the acquisition of all or part of a financial
institution, except for a transaction between two or more mutual enterprises, and provides
guidance on accounting for the impairment and disposal of acquired long-term
customer-relationship intangible assets, including those acquired in transactions between
two or more mutual enterprises. SFAS No. 147 was effective October 1, 2002 and did not
have a material impact on the financial condition or operating results of the Company.

In
November 2002, the FASB issued Interpretation No. 45, Guarantors Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness
of Others. This interpretation requires additional disclosure of obligations under
certain guarantees and requires the guarantor to recognize, at inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the guarantee. The
disclosure requirements are effective for financial statements ending after December 15,
2002 and are included in this Annual Report. The recognition and measurement provisions of
the interpretation are applicable on a prospective basis to guarantees issued or modified
after December 31, 2002. Application of this interpretation is not expected to have a
material impact on the financial condition or operating results of the Company.

In
December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation
 Transition and Disclosure. This statement provides alternative methods of
transition for a voluntary change to the fair value based method of accounting for
stock-based employee compensation and amends the disclosure requirement of SFAS No. 123,
Accounting for Stock-Based Compensation. This statement is effective for
fiscal years ending after December 15, 2002 and did not have an impact on the financial
condition or operating results of the Company. The disclosure requirements are included in
this Annual Report.

|Note 2 
|-------
|       
|MERGERS

In
2000, the Company purchased a full-service investment banking firm, Southcoast Capital,
L.L.C. (Southcoast), and an insurance brokerage firm, Rosenthal Agency, Inc. (Rosenthal).
Additionally in 2000, the Company purchased the assets and assumed the liabilities of
three East Texas banking offices of Compass Bank. In 2002, the Company purchased a firm
specializing in life insurance and other financial services for wealthy clients,
Friedler/LaRocca Financial Partners, L.L.C. (Friedler/LaRocca).

The
following table shows the merger date and consideration issued for the purchase
transactions.

|                                                         | Merger Date               | Consideration(1)
|-------------------------------------------------------- | ------------------------- | ----------------
|                                                        
|Southcoast                                               | April 1, 2000             | $ 412,000       
|                                                         | 698,512 shares           
|East Texas banking offices of                           
|Compass Bank                                             | June 22, 2000             | $ 13,417,000    
|Rosenthal                                                | July 6, 2000              | $ 21,000,000    
|                                                         | 790,888 purchase warrants
|Friedler/LaRocca                                         | April 1, 2002             | $ 2,500,000     
|                                                        
|(1)All shares issued were Hibernia Class A Common Stock.

Under
the purchase method of accounting, the assets and liabilities of the purchased companies
were adjusted to their estimated fair values as of the purchase date. The excess of cost
over the fair value of net assets acquired in the Southcoast and Compass transactions was
approximately $4.3 million and $10.6 million, respectively, and prior to the adoption of
SFAS No. 142 on January 1, 2002, was being amortized on a straight-line basis over 20
years. In the Compass transaction, intangibles of $3.1 million related to core deposits
were also recorded and are being amortized on an accelerated basis over approximately 10
years. The excess cost over the fair value of net assets acquired in the Rosenthal
transaction was approximately $22.6 million and prior to the adoption of SFAS No. 142 on
January 1, 2002 was being amortized on a straight-line basis over 15 years.

On
an unaudited pro forma basis, after giving effect to the purchase of Southcoast, the three
East Texas banking offices of Compass Bank and Rosenthal as if the transactions had
occurred at the beginning of the year, 2000 net interest and noninterest income would have
been $869,784,000, net income would have been $169,676,000, and net income per common
share and net income per common share  assuming dilution would have been $1.04 and
$1.03, respectively. The Friedler/LaRocca purchase was not considered material to the
operations of the Company and therefore was not included in the above computations. The
effect of anticipated savings resulting from the mergers has not been included in the pro
forma information. Unaudited pro forma information is not necessarily indicative of future
results.

|Note 3                   
|-------------------------
|                         
|CASH AND CASH EQUIVALENTS

The
following is a summary of cash and cash equivalents.

|($ in thousands)                                 | December 31
|------------------------------------------------ | -----------
|                                                
|                                                 | 2002       
|                                                
|Cash and due from banks                          | $ 728,991  
|Federal funds sold                               | 252,780    
|Securities purchased under agreements to resell  | 110,000    
|Interest-bearing time deposits in domestic banks | 11,923     
|                                                
|Total cash and cash equivalents                  | $ 1,103,694
|                                                

|Note 4    
|----------
|          
|SECURITIES

The following
is a summary of securities classified as available for sale and held to maturity.

|($ in thousands)    |                                     | December 31, 2002
|------------------- | ----------------------------------- | -----------------
|                   
|                    | Amortized                           | Fair             
|                    | Cost                                | Value            
|                   
|Available for sale: | U.S. Treasuries                     | $ 31,459         
|                    | U.S. government agencies:          
|                    | Mortgage-backed securities          | 1,944,640        
|                    | Bonds                               | 1,107,646        
|                    | Stocks                              | 105,000          
|                    | States and political subdivisions   | 150,673          
|                    | Other                               | 96,299           
|                   
|                    | Total securities available for sale | $ 3,435,717      
|                   
|Held to maturity:   | U.S. government agencies:          
|                    | Mortgage-backed securities          | $ 140,525        
|                   
|                    | Total securities held to maturity   | $ 140,525        
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|($ in thousands)    |                                     | December 31, 2001
|                   
|                    | Amortized                           | Fair             
|                    | Cost                                | Value            
|                   
|Available for sale: | U.S. Treasuries                     | $ 38,236         
|                    | U.S. government agencies:          
|                    | Mortgage-backed securities          | 1,049,313        
|                    | Bonds                               | 1,728,813        
|                    | Stocks                              | 105,000          
|                    | States and political subdivisions   | 183,858          
|                    | Other                               | 104,572          
|                   
|                    | Total securities available for sale | $ 3,209,792      
|                   
|Held to maturity:   | U.S. government agencies:          
|                    | Mortgage-backed securities          | $ 249,884        
|                   
|                    | Total securities held to maturity   | $ 249,884        
|                   

The
following is a summary of realized gains and losses from the sale or writedown due to
otherthantemporary impairment of securities available for sale.

|($ in thousands)    | Year Ended December 31
|------------------- | ----------------------
|                   
|                    | 2002                  
|                   
|Realized gains      | $ 689                 
|Realized losses     | (14,042)              
|                   
|Net realized losses | $ (13,353)            
|                   

Securities
with carrying values of $3,130,279,000 and $3,115,058,000 at December 31, 2002 and 2001,
respectively, were pledged to secure public or trust deposits or were sold under
repurchase agreements. The following is a summary of pledged securities.

|($ in thousands)    |                                            | December 31
|------------------- | ------------------------------------------ | -----------
|                   
|                    | 2002                                       | 2001       
|                   
|Available for sale: | U.S. Treasuries                            | $ 32,409   
|                    | U.S. government agencies:                 
|                    | Mortgage-backed securities                 | 1,796,700  
|                    | Bonds                                      | 1,014,924  
|                    | States and political subdivisions          | 145,434    
|                    | Other                                      | 287        
|                   
|                    | Total available for sale                   | 2,989,754  
|                   
|Held to maturity:   | U.S. government agencies:                 
|                    | Mortgage-backed securities                 | 140,525    
|                   
|                    | Total held to maturity                     | 140,525    
|                   
|                    | Total carrying value of pledged securities | $ 3,130,279
|                   

The
amortized cost and estimated fair value by maturity of securities are shown in the
following table. Securities are classified according to their contractual maturities
without consideration of principal amortization, potential prepayments or call options.
Accordingly, actual maturities may differ from contractual maturities.

|($ in thousands)    |                                     | December 31, 2002
|------------------- | ----------------------------------- | -----------------
|                   
|                    |                                     | Amortized        
|                    |                                     | Cost             
|                   
|Available for sale: | Due in 1 year or less               | $ 211,143        
|                    | Due after 1 year through 5 years    | 301,099          
|                    | Due after 5 years through 10 years  | 419,712          
|                    | Due after 10 years                  | 2,503,763        
|                   
|                    | Total securities available for sale | $ 3,435,717      
|                   
|Held to maturity:   | Due after 1 years through 5 years   | $ 1,807          
|                    | Due after 10 years                  | 138,718          
|                   
|                    | Total securities held to maturity   | $ 140,525        
|                   

|Note 5
|------
|      
|LOANS 

The
following is a summary of commercial and small business loans classified by repayment
source and consumer loans classified by type.

|($ in thousands) |                                              | December 31
|---------------- | -------------------------------------------- | -----------
|                
|                 |                                              | 2002       
|                
|Commercial:      | Commercial and industrial                    | $ 1,030,456
|                 | Services industry                            | 663,853    
|                 | Real estate                                  | 405,839    
|                 | Health care                                  | 219,944    
|                 | Transportation, communications and utilities | 160,620    
|                 | Energy                                       | 291,879    
|                 | Other                                        | 103,880    
|                
|                 | Total commercial                             | 2,876,471  
|                
|Small Business:  | Commercial and industrial                    | 737,085    
|                 | Services industry                            | 634,332    
|                 | Real estate                                  | 478,814    
|                 | Health care                                  | 161,872    
|                 | Transportation, communications and utilities | 97,465     
|                 | Energy                                       | 27,126     
|                 | Other                                        | 371,094    
|                
|                 | Total small business                         | 2,507,788  
|                
|Consumer:        | Residential mortgages:                      
|                 | First mortgages                              | 2,445,324  
|                 | Junior liens                                 | 536,881    
|                 | Indirect                                     | 1,957,069  
|                 | Revolving credit:                           
|                 | Secured                                      | 550,899    
|                 | Unsecured                                    | 105,907    
|                 | Other:                                      
|                 | Secured                                      | 366,039    
|                 | Unsecured                                    | 145,834    
|                
|                 | Total consumer                               | 6,107,953  
|                
|                 | Total loans                                  | $11,492,212
|                

The
following is a summary of nonperforming loans, foreclosed assets and excess bank-owned
property.

|($ in thousands)               | December 31
|------------------------------ | -----------
|                              
|                               | 2002       
|                              
|Nonaccrual loans               | $ 54,880   
|Restructured loans             | -          
|                              
|Nonperforming loans            | 54,880     
|                              
|Foreclosed assets              | 5,919      
|Excess bank-owned property     | 902        
|                              
|Total nonperforming assets     | $ 61,701   
|                              
|Loans 90 days or more past due | $ 10,843   
|                              

At
December 31, 2002 and 2001, the recorded investment in loans that were considered to be
impaired was $44,573,000 and $59,809,000, respectively. Included in the 2002 and 2001
amounts were $32,346,000 and $49,723,000, respectively, of impaired loans for which the
related reserve for loan losses was $6,804,000 and $10,966,000, respectively. At December
31, 2002 and 2001, impaired loans that did not require a reserve for loan losses amounted to $12,227,000 and
$10,086,000, respectively. The average recorded investment in impaired loans during the
years ended December 31, 2002, 2001 and 2000 was approximately $55,205,000, $62,277,000
and $84,803,000, respectively.

The
amount of interest income actually recognized on nonperforming loans during 2002, 2001 and
2000 was approximately $903,000, $645,000 and $1,669,000, respectively, substantially all
of which related to impaired loans. The amount of interest income that would have been
recorded during 2002, 2001 and 2000 if these loans had been current in accordance with
their original terms was approximately $5,322,000, $8,812,000 and $10,032,000,
respectively. Interest payments received on impaired loans are applied to principal if
there is doubt as to the collectibility of the principal; otherwise, these receipts are
recorded as interest income.

The
following is a summary of activity in the reserve for loan losses.

|($ in thousands)                     | Year Ended December 31
|------------------------------------ | ----------------------
|                                    
|                                     | 2002                  
|                                    
|Balance at beginning of year         | $ 195,766             
|Loans charged off                    | (79,835)              
|Recoveries                           | 16,209                
|                                    
|Net loans charged off                | (63,626)              
|                                    
|Provision for loan losses            | 80,625                
|Addition due to purchase transaction | -                     
|Transfer due to securitizations      | -                     
|                                    
|Balance at end of year               | $ 212,765             
|                                    

|Note 6              
|--------------------
|                    
|LOAN SECURITIZATIONS

In
June 2001, the Company sold fixed-rate indirect automobile loans totaling $592,177,000 in
a securitization transaction and recognized a pre-tax gain of $11,417,000, which was
recorded in other operating income. This gain was partially offset by a loss of $1,025,000
on an interest rate swap used to lock in the gain on the transaction. Under the terms of
the transaction, the Company receives annual servicing fees of approximately one percent
of the outstanding balance of the automobile loans and retains the rights to future cash
flows remaining after the investors in the securitization trust have received their
contractual return. The investors have no recourse to the Companys other assets
beyond a cash reserve account in the event of failure of debtors to pay when due. The
Companys retained interests are subordinate to the investors interests. The
value of the retained interests is subject to credit and prepayment risks on the
transferred financial assets.

Key
economic assumptions used in measuring the retained interests and the components of
retained interests at the date of securitization were as follows: a monthly prepayment
rate of 1.5%, a weighted average remaining life of 1.5 years, expected annual net credit
losses of 0.98% and residual cash flows discounted at 15%. The fair value of the retained
interests at the date of the securitization included an interest-only strip receivable of
$24,648,000, recorded as a trading account asset, and a cash reserve account
(securitization proceeds receivable) of $20,494,000, included in other assets. Cash flows
from the securitization and sale consisted of proceeds received of $570,041,000.

At
December 31, 2002 and 2001, the outstanding principal balance of the securitized
automobile loans totaled $245,720,000 and $446,354,000, respectively, of which $664,000
and $604,000, respectively were past due 90 days or more. Net charge-offs on these
securitized automobile loans totaled $4,710,000 and $2,154,000 during 2002 and 2001,
respectively. Cash flows consisted of $3,714,000 and $2,680,000 of servicing income and
$482,000 and $416,000 of interest on the securitization proceeds receivable in 2002 and
2001, respectively. During 2002, $3,644,000 was added to the securitization proceeds
receivable. Additionally, excess cash flows of $12,103,000 and $4,156,000 were applied to
reduce the balance of the interest-only strip receivable during 2002 and 2001,
respectively.

At
December 31, 2002 and 2001, key economic assumptions and the sensitivity to current fair
value of residual cash flows to immediate 10 percent and 20 percent adverse changes in
those assumptions are reflected in the following table. These sensitivities are
hypothetical and should be used with caution. In this table, the effect of a variation in
a particular assumption on the fair value of the retained interests is calculated without
changing any other assumptions; in actuality, changes in one factor may result in changes
in another which could magnify or counteract the sensitivities.

|($ in thousands)                                 | December 31
|------------------------------------------------ | -----------
|                                                
|                                                 | 2002       
|                                                
|Carrying amount/fair value of retained interests | $ 33,734   
|                                                
|Prepayment speed assumption (monthly rate)       | 1.5%       
|Impact on fair value of 10% adverse change       | $ (633)    
|Impact on fair value of 20% adverse change       | $ (1,372)  
|                                                
|Expected credit losses (annual rate)             | 1.43%      
|Impact on fair value of 10% adverse change       | $ (266)    
|Impact on fair value of 20% adverse change       | $ (532)    
|                                                
|Residual cash flows discount rate (annual rate)  | 15%        
|Impact on fair value of 10% adverse change       | $ (591)    
|Impact on fair value of 20% adverse change       | $ (1,169)  
|                                                

The
Company securitized and retained $305,245,000 of its first residential mortgage loans with
recourse provisions through the Federal National Mortgage Association (FNMA) during 2001.
The loans were reclassified to investment securities. Investment securities resulting from
mortgage loan securitizations had carrying values of $125,830,000 and $255,837,000 in
securities available for sale at December 31, 2002 and 2001, respectively, and
$140,525,000 and $249,884,000 in securities held to maturity at December 31, 2002 and
2001, respectively. The balance of these securitized loans, which are serviced by the
Bank, totaled $276,015,000 and $527,070,000 at December 31, 2002 and 2001, respectively.
Included in these balances are securitized loans 90 days or more past due of $601,000 and
$1,011,000 at December 31, 2002 and 2001, respectively. Under the recourse provisions with
FNMA, the Company assumes the risk of borrower default and has established reserves to
cover potential losses.

|Note 7                
|----------------------
|                      
|PREMISES AND EQUIPMENT

The
following tables detail premises and equipment and related depreciation and amortization
expense.

|($ in thousands)                               | December 31
|---------------------------------------------- | -----------
|                                              
|                                               | 2002       
|                                              
|Land                                           | $ 44,136   
|Buildings                                      | 199,255    
|Leasehold improvements                         | 37,721     
|Furniture and equipment                        | 198,182    
|                                              
|                                               | 479,294    
|Less accumulated depreciation and amortization | (269,320)  
|                                              
|Total premises and equipment                   | $ 209,974  
|                                              

|($ in thousands)                                          | Year Ended December 31
|--------------------------------------------------------- | ----------------------
|                                                         
|                                                          | 2002                  
|                                                         
|Provisions for depreciation and amortization included in:
|Occupancy expense                                         | $ 10,153              
|Equipment expense                                         | 15,637                
|                                                         
|Total depreciation and amortization expense               | $ 25,790              
|                                                         

|Note 8                        
|------------------------------
|                              
|GOODWILL AND OTHER INTANGIBLES

Effective
January 1, 2002 the Company adopted the requirements of SFAS No. 142, Goodwill and
Other Intangible Assets. Under the new accounting rules, goodwill and intangible
assets deemed to have indefinite lives are no longer amortized but are subject to annual
impairment tests in accordance with the provisions of SFAS No. 142. Other intangible
assets continue to be amortized over their useful lives.

The
Company performed the required impairment tests of goodwill as of January 1, 2002 and its
annual impairment tests as of September 30, 2002. The results of these tests did not
indicate impairment of the Companys recorded goodwill. The carrying amount of
goodwill not subject to amortization totaled $206,625,000 at January 1, 2002, which was
net of accumulated amortization of $66,914,000. On April 1, 2002, goodwill of $2,489,000
was recorded and added to the Consumer segment as a result of the Companys purchase
of Friedler/LaRocca. At December 31, 2002, goodwill totaled $209,114,000 and is included
in the Companys reportable segments as follows: Consumer  $102,490,000; Small
Business  $48,340,000; Commercial  $58,276,000; and Investments and Public
Funds  $8,000.

The
following table summarizes the Companys purchase accounting intangible assets which
are subject to amortization.

|(in thousands)                  | December 31, 2002 | December 31, 2001
|------------------------------- | ----------------- | -----------------
|                               
|                                | Gross             |                  
|                                | Carrying          | Accumulated      
|Purchase accounting intangibles | Amount            | Amortization     
|                               
|Core deposit                    | $ 36,152          | $ 29,458         
|Trust                           | 17,059            | 9,545            
|Insurance expirations           | 4,253             | 949              
|                               
|Total                           | $ 57,464          | $ 39,952         
|                               

Amortization
expense relating to purchase accounting intangibles totaled $5,940,000, $7,342,000 and
$8,766,000 for the years ended December 31, 2002, 2001 and 2000, respectively. The
weighted-average amortization period of these assets is 9 years. Estimated future
amortization expense is as follows: 2003  $5,045,000; 2004  $4,372,000; 2005
 $3,778,000; 2006  $2,254,000; 2007  $756,000 and thereafter 
$1,307,000. These estimates do not assume the additions of any new purchase accounting
intangibles.

Also
included in intangible assets are capitalized mortgage servicing rights with net carrying
amounts of $114,403,000 and $95,022,000 as of December 31, 2002 and 2001, respectively.
The carrying amounts are net of a reserve for temporary impairment of $38,500,000 and
$15,301,000 at December 31, 2002 and 2001, respectively. Amortization expense of mortgage
servicing rights totaled $28,771,000, $14,293,000 and $6,914,000 for the years ended
December 31, 2002, 2001 and 2000, respectively. Activity in the valuation reserve included
additions, recorded in amortization expense, of $23,199,000, $12,301,000 and $2,200,000 in
2002, 2001 and 2000, respectively.

|Note 9       
|-------------
|             
|TIME DEPOSITS

At
December 31, 2002, time deposits with a remaining maturity of one year or more amounted to
$1,578,773,000. Maturities of all time deposits are as follows: 2003 
$3,222,753,000; 2004  $760,887,000; 2005  $228,204,000; 2006 
$47,873,000; 2007  $473,894,000; and thereafter  $67,915,000.

Domestic
certificates of deposit of $100,000 or more amounted to $1,927,822,000 and $1,808,231,000
at December 31, 2002 and 2001, respectively. Interest on these certificates amounted to
$53,453,000, $97,648,000 and $125,763,000 in 2002, 2001 and 2000, respectively.

Foreign
deposits, which are deposit liabilities of the Cayman Island office of Hibernia National
Bank, amounted to $530,943,000 and $586,848,000 at December 31, 2002 and 2001,
respectively. These deposits are comprised primarily of individual deposits of $100,000 or
more. Interest expense on foreign deposits amounted to $8,418,000, $20,741,000 and
$24,500,000 for 2002, 2001 and 2000, respectively.

|Note 10                
|-----------------------
|                       
|SHORT - TERM BORROWINGS

The
following is a summary of short-term borrowings.

|($ in thousands)                                    | December 31
|--------------------------------------------------- | -----------
|                                                   
|                                                    | 2002       
|                                                   
|Federal funds purchased                             | $ 40,045   
|Securities sold under agreements to repurchase      | 472,681    
|Federal Reserve Bank treasury, tax and loan account | 62,688     
|Trading account liabilities                         | 34         
|                                                   
|Total short-term borrowings                         | $ 575,448  
|                                                   

Federal
funds purchased and securities sold under agreements to repurchase generally mature within
one to 14 days from the transaction date. The Federal Reserve Bank treasury, tax and loan
account is an open-ended note option with the Federal Reserve Bank of Atlanta. Trading
account liabilities result from trading activity by the Companys investment banking
subsidiary. The following is a summary of pertinent data related to short-term borrowings.

|($ in thousands)               | December 31
|------------------------------ | -----------
|                              
|                               | 2002       
|                              
|Outstanding at December 31     | $ 575,448  
|Maximum month-end outstandings | $ 722,157  
|Average daily outstandings     | $ 625,611  
|Average rate during the year   | 1.44%      
|Average rate at year end       | 1.14%      
|                              

|Note 11                        
|-------------------------------
|                               
|FEDERAL HOME LOAN BANK ADVANCES

The
following is a summary of Federal Home Loan Bank (FHLB) advances.

|($ in thousands)                          | December 31
|----------------------------------------- | -----------
|                                         
|                                          | 2002       
|                                         
|Federal Home Loan Bank callable advances  | $ 400,000  
|Federal Home Loan Bank long-term advances | 702,241    
|                                         
|Total Federal Home Loan Bank advances     | $ 1,102,241
|                                         

The FHLB
advances are secured by the Companys investment in FHLB stock, which totaled
$60,547,000 and $58,801,000 at December 31, 2002 and 2001, respectively, and also by a
blanket floating lien on portions of the Companys residential mortgage loan
portfolio.

The
FHLB callable advances require monthly interest payments. An advance in the amount of
$200,000,000 matures in 2004, accrues interest at a rate of 5.65%, and is callable at
quarterly intervals which began in September 2001. Another $200,000,000 advance matures in
2008, accrues interest at a rate of 5.28%, and is callable at quarterly intervals which
begin in June 2003. If called prior to maturity, replacement funding will be offered by
the FHLB at a then-current rate. At December 31, 2002, the FHLB long-term advances include
advances of $2,241,000 which accrue interest at fixed contractual rates ranging from 5.70%
to 8.36%, and advances of $700,000,000 which accrue interest at variable rates. The
variable rate advances had rates ranging from 1.30% to 1.73% at December 31, 2002 and an
average rate of 1.84% during 2002. The long-term fixed-rate advances are due in monthly
installments and are scheduled to amortize through various dates between 2003 and 2008.
However, should the residential mortgage loans for which the long-term advances were obtained
repay at a faster rate than anticipated, the advances are to be repaid at a
correspondingly faster rate. The variable rate advances have maturities ranging from 2004
to 2007.

The
Company instituted hedges against the effect of rising interest rates on its variable rate
debt by entering into interest rate swap agreements during 2001 and 2002 whereby the
Company will receive quarterly variable rate (LIBOR) payments and pay fixed rates on
notional amounts totaling $700,000,000. The maturities of these interest rate swaps match
the maturities of the underlying debt. Net settlements on the swap agreements are accrued
monthly, effectively converting $700,000,000 of FHLB advances from variable rates to an
average fixed rate of 4.80%.

Maturities
of FHLB advances are as follows: 2003  $429,000; 2004  $500,369,000; 2005
 $300,704,000; 2006  $291,000; 2007  $100,289,000; and thereafter 
$200,159,000.

|Note 12                           
|----------------------------------
|                                  
|OTHER ASSETS AND OTHER LIABILITIES

The
following are summaries of other assets and other liabilities.

|($ in thousands)   |                                                  | December 31
|------------------ | ------------------------------------------------ | -----------
|                  
|                   |                                                  | 2002       
|                  
|Other assets:      | Accrued interest receivable                      | $ 74,266   
|                   | Fair value derivative assets                     | 51,013     
|                   | Accounts receivable                              | 29,093     
|                   | Securitization proceeds receivable               | 25,381     
|                   | Cash surrender value of life insurance           | 26,870     
|                   | Other private equity investments                 | 14,545     
|                   | Prepaid expenses                                 | 11,029     
|                   | Foreclosed assets and excess bank-owned property | 6,821      
|                   | Deferred income taxes                            | 4,952      
|                   | Other                                            | 28,020     
|                  
|                   | Total other assets                               | $ 271,990  
|                  
|Other liabilities: | Trade date securities payable                    | $ 310,047  
|                   | Fair value derivative liabilities                | 91,467     
|                   | Trade accounts payable and accrued liabilities   | 73,354     
|                   | Accrued interest payable                         | 24,551     
|                   | Other                                            | 53,669     
|                  
|                   | Total other liabilities                          | $ 553,088  
|                  

|Note 13                   
|--------------------------
|                          
|PREFERRED AND COMMON STOCK

The
Company has authorized 100,000,000 shares of no par value preferred stock. There were no
preferred shares issued and outstanding at December 31, 2002 or 2001. At December 31,
2000, there were 1,739,000 shares of Series A Fixed/Adjustable Rate Noncumulative
Preferred Stock (Series A Preferred Stock) issued and outstanding. The Series A Preferred
Stock was nonconvertible, with a $50 per-share liquidation preference and a 6.9% annual
dividend. The Series A Preferred Stock was redeemable at Hibernias option at any
time after October 1, 2001. During 2000, with prior Federal Reserve Board approval, the
Company redeemed 261,000 shares of the Series A Preferred Stock at a redemption price of
approximately $49 per share for a total cost of $12,798,000. The redemption discount of
$252,000 was included in surplus at December 31, 2000. On October 1, 2001, the Company
redeemed the remaining 1,739,000 outstanding shares. The redemption price was $50 per
share for a total cost of $86,950,000. The Series A Preferred Stock qualified as Tier 1
capital for regulatory purposes.

The
Company has authorized 300,000,000 shares of no par value Class A Common Stock. There were
166,252,171 and 162,351,682 shares issued and 157,412,166 and 159,066,962 shares
outstanding at December 31, 2002 and 2001, respectively. The Company held 8,840,005 and
3,284,720 shares of Class A Common Stock in treasury at December 31, 2002 and 2001,
respectively. During 2000, the Company repurchased 3,268,000 shares of common stock under
a buyback program at a total cost of $35,677,000. During 2002, the Company repurchased
5,452,000 shares of common stock under buyback programs at a total cost of $105,175,000.
There were no repurchases of common stock during 2001.

As
partial consideration in the acquisition of Rosenthal Agency, Inc. on July 6, 2000 (see
Note 2), the Company issued 790,888 common stock purchase warrants recorded at a fair
value of $2,000,000. Each warrant is convertible into one share of Class A Common Stock at
an exercise price of $13.12 per share. The warrants become exercisable July 7, 2003 and
expire July 6, 2005.

|Note 14               
|----------------------
|                      
|EMPLOYEE BENEFIT PLANS

The
Company maintains a defined-contribution benefit plan under Section 401(k) of the Internal
Revenue Code, the Retirement Security Plan (RSP). Substantially all employees who have
completed one year of service are eligible to participate in the RSP. Employees contribute
a portion of their compensation with the Company matching 100% of the first 5%. The
matching contributions are invested in Hibernia Class A Common Stock and are charged to
employee benefits expense. Participants may elect to immediately transfer Company
contributions received to any of the plans investment options. At December 31, 2002,
the RSP owned approximately 3,895,000 shares of Hibernia Class A Common Stock. The
Companys contributions to the RSP totaled $8,071,000 in 2002, $7,291,000 in 2001 and
$6,401,000 in 2000.

The
Company maintains incentive pay and bonus programs for certain employees. Costs of these
programs were $58,252,000, $52,646,000 and $35,469,000 for the years ended December 31,
2002, 2001 and 2000, respectively.

|Note 15                       
|------------------------------
|                              
|EMPLOYEE STOCK OWNERSHIP PLANS

The Company
has an internally-leveraged employee stock ownership plan (ESOP) in which substantially
all employees participate. The ESOP owned approximately 3,777,000 and 3,868,000 shares of
Hibernia Class A Common Stock at December 31, 2002 and 2001, respectively. The outstanding
debt obligation of the ESOP totaled $21,565,000 and $26,483,000 at December 31, 2002 and
2001, respectively. The Bank makes annual contributions to the ESOP in an amount
determined by its Board of Directors, but at least equal to the ESOPs minimum debt
service less dividends received by the ESOP. Dividends received by the ESOP in 2002, 2001
and 2000 were used to pay debt service, and it is anticipated that this practice will
continue in the future. The ESOP shares initially were pledged as collateral for its debt.
As the debt is repaid, shares are released from collateral and allocated to active
participants.

The
debt of the ESOP is recorded as debt of the Parent Company, and the shares pledged as
collateral are reported as unearned compensation in equity. Hibernia National Banks
loan asset and the Parent Companys debt liability are eliminated in consolidation.
As shares are committed to be released, the Company reports compensation expense equal to
the current market value of the shares, and the shares become outstanding for net income
per common share computations. Dividends on allocated ESOP shares are recorded as a
reduction of retained earnings; dividends on unallocated ESOP shares are recorded as a
reduction of debt and accrued interest by the Parent Company.

Compensation
expense of $5,971,000, $5,337,000 and $3,570,000 relating to the ESOP was recorded during
2002, 2001 and 2000, respectively. The ESOP held 2,072,000 and 1,798,000 allocated shares
and 1,705,000 and 2,070,000 suspense shares at December 31, 2002 and 2001, respectively.
The fair value of the suspense shares at December 31, 2002 and 2001 was $32,833,000 and
$36,826,000, respectively.

|Note 16      
|-------------
|             
|STOCK OPTIONS

SFAS
No. 123, Accounting for Stock-Based Compensation, defines financial accounting
and reporting standards for stock-based compensation plans. Those plans include all
arrangements by which employees and directors receive shares of stock or other equity
instruments of a company, or a company incurs liabilities to employees or directors in
amounts based on the price of the stock. SFAS No. 123 defines a fair-value-based method of
accounting for stock-based compensation. However, SFAS No. 123 also allows an entity to
continue to measure stock-based compensation cost using the intrinsic value method of APB
Opinion No. 25, Accounting for Stock Issued to Employees. Entities electing to
retain the accounting prescribed in APB No. 25 must make pro forma disclosures of net
income, net income per common share and net income per common share  assuming
dilution as if the fair-value-based method of accounting defined in SFAS No. 123 had been
applied. The Company retained the provisions of APB No. 25 for expense recognition
purposes. Under APB No. 25, because the exercise price of the Companys stock options
equals the market price of the underlying stock on the date of grant, no compensation
expense is recognized.

The
Companys stock option plans provide incentive and non-qualified options to various
key employees and non-employee directors. The Companys practice has been to grant
options at no less than the fair market value of the stock at the date of grant. Options
granted to non-employee directors upon inception of service as a director and certain
options granted to directors who retire as employees vest in six months. Until October
1997, those options were granted under the 1987 Stock Option Plan; after October 1997,
those options are granted under the 1993 Directors Stock Option Plan. Other options
granted under the 1987 Stock Option Plan, the Long-Term Incentive Plan and the 1993
Directors Stock Option Plan generally become exercisable in the following
increments: 50% after the expiration of two years from the date of grant, an additional
25% three years from the date of grant and the remaining 25% four years from the date of
grant. During 2001, an option was granted to a former chief executive officer, prior to
his separation from the Company, under an individual stock option plan referred to as the
2001 Nonqualified Stock Option Plan. That option vested in July 2001.

The
1987 Stock Option Plan, the Long-Term Incentive Plan and the 1993 Directors Stock
Option Plan have been approved by shareholders. The 2001 Nonqualified Stock Option Plan is
a non-shareholder approved plan.

Options
granted to employees and directors generally become immediately exercisable if the holder
of the option dies while the option is outstanding. Options granted under the 1987 Stock
Option Plan generally expire 10 years from the date granted unless the holder leaves the
employ of the Company other than through retirement, death or disability, in which case
the options expire at the date of termination. Options granted under the Long-Term
Incentive Plan and the 1993 Directors Stock Option Plan generally expire 10 years
from the date of grant; although they may expire earlier if the holder dies, retires,
becomes permanently disabled or otherwise leaves the employ of the Company (in which case
the options expire at various times ranging from 90 days to 12 months). The option granted
under the 2001 Nonqualified Stock Option Plan expires January 31, 2006, unless the holder
dies, in which case the option expires one year following the death (but not later than
January 31, 2006). All options vest immediately upon a change of control of the Company.
Shares to be issued upon the exercise of the option granted under the 2001 Nonqualified
Stock Option Plan are to be issued out of the Companys treasury stock.

The
following summarizes the option activity in the plans during 2002, 2001 and 2000. During
1997, the 1987 Stock Option Plan was terminated; therefore, there are no shares available
for grant under this plan. The termination did not impact options outstanding under the
1987 Stock Option Plan. At December 31, 2002 there were 3,619,372 shares available for
grant under the Long-Term Incentive Plan and 322,500 shares available for grant under the
1993 Directors Stock Option Plan. There are no shares available for grant under the
2001 Nonqualified Stock Option Plan.

|                                                      | Weighted-
|----------------------------------------------------- | ---------
|                                                      | Average  
|                                                      | Exercise 
|                                                      | Incentive
|                                                     
|1987 Stock Option Plan:                              
|Outstanding, December 31, 1999                        | 43,913   
|Canceled                                              | -        
|Exercised                                             | -        
|                                                     
|Outstanding, December 31, 2000                        | 43,913   
|Exercised                                             | (22,500) 
|Converted to non-qualified                            | (13,913) 
|                                                     
|Outstanding, December 31, 2001                        | 7,500    
|Exercised                                             | (7,500)  
|                                                     
|Outstanding, December 31, 2002                        | -        
|                                                     
|Exercisable, December 31, 2002                        | -        
|                                                     
|                                                     
|                                                     
|                                                     
|Long-Term Incentive Plan:                            
|Outstanding, December 31, 1999                        | 12,598   
|Granted (weighted-average fair value $2.33 per share) | -        
|Canceled                                              | -        
|Exercised                                             | -        
|                                                     
|Outstanding, December 31, 2000                        | 12,598   
|Granted (weighted-average fair value $3.66 per share) | -        
|Canceled                                              | -        
|Exercised                                             | -        
|Converted to non-qualified                            | (12,598) 
|                                                     
|Outstanding, December 31, 2001                        | -        
|Granted (weighted-average fair value $4.87 per share) | -        
|Canceled                                              | -        
|Exercised                                             | -        
|                                                     
|Outstanding, December 31, 2002                        | -        
|                                                     
|Exercisable, December 31, 2002                        | -        
|                                                     

|1993 Directors' Stock Option Plan:                   
|-----------------------------------------------------
|Outstanding, December 31, 1999                       
|Granted (weighted-average fair value $2.42 per share)
|                                                     
|Outstanding, December 31, 2000                       
|Granted (weighted-average fair value $4.35 per share)
|Canceled                                             
|Exercised                                            
|                                                     
|Outstanding, December 31, 2001                       
|Granted (weighted-average fair value $5.47 per share)
|Exercised                                            
|                                                     
|Outstanding, December 31, 2002                       
|                                                     
|Exercisable, December 31, 2002                       
|                                                     

|                                                      | Weighted-
|----------------------------------------------------- | ---------
|                                                      | Average  
|                                                      | Exercise 
|                                                      | Incentive
|                                                     
|2001 Nonqualified Stock Option Plan:                 
|Granted (weighted-average fair value $3.61 per share) | -        
|                                                     
|Outstanding, December 31, 2001                        | -        
|                                                     
|Outstanding, December 31, 2002                        | -        
|                                                     
|Exercisable, December 31, 2002                        | -        
|                                                     

In addition
to the above option activity in the plans, 44,627 shares, 41,350 shares and 112,814 shares
of restricted stock were awarded under the Long-Term Incentive Plan during the years ended
December 31, 2002, 2001 and 2000, respectively.

The
following table presents the weighted-average remaining life by plan as of December 31,
2002 for options outstanding within the stated exercise price ranges.

|                                     | Outstanding |                | Exercisable   
|------------------------------------ | ----------- | -------------- | --------------
|                                     |             |                |               
|                                     |             | Weighted-      | Weighted-     
|                                     | Number      | Average        | Average       
|Exercise Price Range Per Share       | of Options  | Exercise Price | Remaining Life
|                                    
|1987 Stock Option Plan:             
|$7.88 to $8.75                       | 20,000      | $ 8.31         | 1.82 years    
|                                    
|Long-Term Incentive Plan:           
|$6.94 to $11.88                      | 2,718,563   | $ 9.57         | 5.53 years    
|$12.04 to $14.00                     | 3,218,085   | $ 13.45        | 7.17 years    
|$15.13 to $16.79                     | 1,720,380   | $ 16.08        | 6.18 years    
|$17.96 to $18.89                     | 3,992,800   | $ 18.06        | 7.84 years    
|$19.03 to $20.25                     | 97,000      | $ 19.60        | 5.50 years    
|                                    
|1993 Directors' Stock Option Plan:  
|$7.31 to $10.44                      | 170,000     | $ 9.26         | 3.78 years    
|$11.81 to $15.48                     | 153,750     | $ 13.83        | 6.59 years    
|$17.00 to $21.72                     | 130,000     | $ 20.42        | 7.48 years    
|                                    
|2001 Nonqualified Stock Option Plan:
|$13.84                               | 250,000     | $ 13.84        | 3.09 years    
|                                    

The
following pro forma information was determined as if the Company had accounted for stock
options using the fair-value-based method as defined in SFAS No. 123, in which the
estimated fair value of the options granted is amortized to expense over the options
vesting period. The fair value of the options was estimated using a Black-Scholes option
valuation model with the following weighted-average assumptions for 2002, 2001 and 2000,
respectively: risk-free interest rates of 4.68%, 5.62% and 6.79%; expected dividend yields
of 3.11%, 3.83% and 4.82%; expected volatility factors of the market price of the Hibernia
Class A Common Stock of 33%, 35% and 32%; and the expected life of the options.

The
Black-Scholes option valuation model was developed for use in estimating the fair value of
traded options which have no vesting restrictions and are fully transferable. In addition,
option valuation models require the input of highly subjective assumptions, including the
expected stock price volatility. Because the Companys stock options have
characteristics significantly different from those of traded options, and because changes
in the subjective input assumptions can materially affect the fair value estimate, in
managements opinion the existing models do not necessarily provide a reliable single
measure of the fair value of its employee and director stock options.

|($ in thousands, except per-share data)         | Year Ended December 31
|----------------------------------------------- | ----------------------
|                                               
|                                                | 2002                  
|                                               
|                                                | As Reported           
|                                               
|Net income                                      | $ 249,857             
|Net income per common share                     | $ 1.59                
|Net income per common share - assuming dilution | $ 1.56                
|                                               

|Note 17
|-------
|       
|LEASES 

The
Company leases its headquarters, operations center and certain other office space,
premises and equipment under non-cancelable operating leases which expire at various dates
through 2035. Certain of the leases have escalation clauses and renewal options ranging
from one to 50 years.

Total
rental expense (none of which represents contingent rentals) included in occupancy and
equipment expense was $16,030,000, $15,462,000 and $14,582,000 in 2002, 2001 and 2000,
respectively.

Minimum
rental commitments for long-term operating leases are as follows: 2003  $13,441,000;
2004  $13,257,000; 2005  $12,906,000; 2006  $10,203,000; 2007 
$9,709,000; and thereafter  $16,817,000.

|Note 18                 
|------------------------
|                        
|OTHER OPERATING EXPENSES

The
following is a summary of other operating expense.

|($ in thousands)              | Year Ended December 31
|----------------------------- | ----------------------
|                             
|                              | 2002                  
|                             
|State taxes on equity         | $ 15,875              
|Loan collection expense       | 10,222                
|Professional fees             | 9,518                 
|Telecommunications            | 9,345                 
|Stationery and supplies       | 8,394                 
|Postage                       | 7,838                 
|Regulatory expense            | 4,156                 
|Other                         | 54,835                
|                             
|Total other operating expense | $ 120,183             
|                             

|Note 19     
|------------
|            
|INCOME TAXES

Deferred
income taxes are based on differences between the bases of assets and liabilities for
financial statement purposes and tax reporting purposes and capital loss and net operating
loss carryforwards. The tax effects of the cumulative temporary differences and loss
carryforwards which create deferred tax assets and liabilities are detailed in the
following table.

|($ in thousands)          |                                                       | December 31
|------------------------- | ----------------------------------------------------- | -----------
|                         
|                          |                                                       | 2002       
|                         
|Deferred tax assets:      | Reserve for loan losses                               | $ 74,468   
|                          | Net unrealized losses on cash flow hedges             | 12,733     
|                          | Securities writedowns                                 | 8,603      
|                          | Loan fees                                             | 3,739      
|                          | Accrued expenses                                      | 11,283     
|                          | Deferred compensation                                 | 6,418      
|                          | Goodwill and other purchase accounting intangibles    | 837        
|                          | Other                                                 | 14,552     
|                         
|                          | Total deferred tax assets                             | 132,633    
|                         
|Deferred tax liabilities: | Net unrealized gains on securities available for sale | 26,403     
|                          | Depreciation                                          | 15,972     
|                          | Leasing                                               | 27,717     
|                          | Mortgage servicing rights                             | 32,720     
|                          | Other                                                 | 24,869     
|                         
|                          | Total deferred tax liabilities                        | 127,681    
|                         
|                          | Deferred tax assets, net of deferred tax liabilities  | $ 4,952    
|                         

Management
assesses realizability of the net deferred tax asset based on the Companys ability
to first, recover taxes previously paid and, second, generate taxable income and capital
gains in the future. A deferred tax valuation reserve is established, if needed, to limit
the net deferred tax asset to its realizable value.

Income
tax expense includes amounts currently payable and amounts deferred to or from other years
as a result of differences in the timing of recognition of income and expense for
financial reporting and federal tax purposes. The following is a summary of the components
of income tax expense.

|($ in thousands)           | Year Ended December 31
|-------------------------- | ----------------------
|                          
|                           | 2002                  
|                          
|Current tax expense:      
|Federal income tax         | $ 113,944             
|State income tax           | 8,433                 
|                          
|Total current tax expense  | 122,377               
|                          
|Deferred tax expense:     
|Federal income tax         | 10,586                
|                          
|Total deferred tax expense | 10,586                
|                          
|Income tax expense         | $ 132,963             
|                          

The
preceding table does not reflect the tax effects of unrealized gains and losses on
securities and cash flow hedges that are included in shareholders equity, and the
tax effects recorded in shareholders equity related to the Companys stock
option plans and employee stock ownership plan. As a result of these tax effects,
shareholders equity increased by $6,169,000 in 2002, decreased by $5,266,000 in 2001
and decreased by $28,795,000 in 2000.

The
following is a reconciliation of the federal statutory income tax rate to the
Companys effective rate.

|($ in thousands)                            | Year Ended December 31
|------------------------------------------- | ----------------------
|                                           
|                                            | 2002                  
|                                           
|                                            | Amount                
|                                           
|Tax expense based on federal statutory rate | $ 133,987             
|Tax-exempt interest                         | (4,997)               
|State income tax, net of federal benefit    | 5,482                 
|Amortization of non-deductible goodwill     | -                     
|Other                                       | (1,509)               
|                                           
|Income tax expense                          | $ 132,963             
|                                           

|Note 20                         
|--------------------------------
|                                
|NET INCOME PER COMMON SHARE DATA

The
following sets forth the computation of net income per common share and net income per
common share  assuming dilution.

|($ in thousands, except per-share data)         | Year Ended December 31                                         
|----------------------------------------------- | ---------------------------------------------------------------
|                                               
|                                                |                                                                
|                                               
|Numerator:                                      | Net income                                                     
|                                                | Preferred stock dividends                                      
|                                               
|                                                | Numerator for net income per common share                      
|                                                | Effect of dilutive securities                                  
|                                               
|                                                | Numerator for net income per common share - assuming dilution  
|                                               
|Denominator:                                    | Denominator for net income per common                          
|                                                | share (weighted-average shares outstanding)                    
|                                                | Effect of dilutive securities:                                 
|                                                | Stock options                                                  
|                                                | Purchase warrants                                              
|                                                | Restricted stock awards                                        
|                                               
|                                                | Denominator for net income per common share - assuming dilution
|                                               
|Net income per common share                     | $ 1.59                                                         
|                                               
|Net income per common share - assuming dilution | $ 1.56                                                         
|                                               

The
weighted-average shares outstanding exclude 1,952,030, 2,298,581 and 2,621,757 average
common shares in 2002, 2001 and 2000, respectively, held by the Hibernia ESOP (see Note
15) which have not been committed to be released.

Options
with an exercise price greater than the average market price of the Companys Class A
Common Stock for the year are antidilutive and, therefore, are not included in the
computation of net income per common share  assuming dilution. During 2002 there
were 218,500 antidilutive options outstanding (which had exercise prices ranging from
$19.50 to $21.72), during 2001 there were 3,505,653 antidilutive options outstanding
(which had exercise prices ranging from $16.09 to $21.72) and during 2000 there were
5,411,417 antidilutive options outstanding (which had exercise prices ranging from $11.38
to $21.72).

|Note 21             
|--------------------
|                    
|COMPREHENSIVE INCOME

The
following is a summary of the components of other comprehensive income.

|                                                                          | Income Tax  
|------------------------------------------------------------------------- | ------------
|                                                                          | Before      
|($ in thousands)                                                          | Income Taxes
|                                                                         
|Year ended December 31, 2002                                             
|                                                                         
|Unrealized gains (losses) on securities available for sale, net           | $ 43,990    
|Reclassification adjustment for net (gains) losses realized in net income | (39)        
|                                                                         
|Unrealized gains (losses) on securities available for sale, net           | 43,951      
|                                                                         
|Unrealized gains (losses) on cash flow hedges                             | (25,324)    
|Reclassification adjustment for net (gains) losses realized in net income | -           
|                                                                         
|Unrealized gains (losses) on cash flow hedges, net                        | (25,324)    
|                                                                         
|Other comprehensive income                                                | $ 18,627    
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Year ended December 31, 2001                                             
|                                                                         
|Unrealized gains (losses) on securities available for sale, net           | $ 30,686    
|Reclassification adjustment for net (gains) losses realized in net income | 1,844       
|                                                                         
|Unrealized gains (losses) on securities available for sale, net           | 32,530      
|                                                                         
|Unrealized gains (losses) on cash flow hedges                             | (11,055)    
|Reclassification adjustment for net (gains) losses realized in net income | -           
|                                                                         
|Unrealized gains (losses) on cash flow hedges, net                        | (11,055)    
|                                                                         
|Other comprehensive income                                                | $ 21,475    
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Year ended December 31, 2000                                             
|                                                                         
|Unrealized gains (losses) on securities available for sale, net           | $ 81,661    
|Reclassification adjustment for net (gains) losses realized in net income | 558         
|                                                                         
|Other comprehensive income                                                | $ 82,219    
|                                                                         

The following
is a summary of the components of accumulated other comprehensive income.

|($ in thousands)                                       | December 31
|------------------------------------------------------ | -----------
|                                                      
|                                                       | 2002       
|                                                      
|Unrealized gains on securities available for sale, net | $ 49,033   
|Unrealized losses on cash flow hedges                  | (23,646)   
|                                                      
|Total accumulated other comprehensive income           | $ 25,387   
|                                                      

|Note 22                                                
|-------------------------------------------------------
|                                                       
|DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

Effective
January 1, 2001 the Company adopted the requirements of SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities as amended by SFAS No. 137,
Accounting for Derivative Instruments and Hedging Activities  Deferral of the
Effective Date of FASB Statement No. 133, and SFAS No. 138, Accounting for
Certain Derivative Instruments and Certain Hedging Activities. These statements
require the Company to recognize all derivatives on the balance sheet at fair value.
Derivatives that are not hedges must be adjusted to fair value through other operating
income. If the derivative is a hedge, depending on the nature of the hedge, changes in the
fair value of the derivative are either offset against the change in the fair value of the
hedged item through other operating income or recognized in other comprehensive income
until the hedged item is recognized in earnings. As a result of the adoption of SFAS No.
133 (as amended) on January 1, 2001, $640,000 was recognized in noninterest income due to
the cumulative effect of the accounting change. The after-tax cumulative effect of the
accounting change of $416,000 was considered immaterial and therefore is not separately
presented in the Consolidated Income Statements.

The
Company maintains positions in a variety of derivative financial instruments. Many of
these positions are customer-oriented and include interest rate swaps, options, caps,
floors and foreign exchange contracts. Matched positions are generally established for
these customer-oriented activities to minimize risk to the Company. Additionally, the
Company enters into forward sales contracts for its own account related to mortgage
origination activity. These contracts protect the Company against changes in the fair
value of mortgage loans held for sale (as well as anticipated loan fundings) due to
changes in market conditions, primarily the interest rate environment. Portions of these
contracts are designated as fair value hedges. The Company also enters into interest rate
swap agreements to manage interest rate risk on its FHLB advances and into foreign
exchange forward contracts to minimize risk on loans which will be repaid in foreign
currencies. These contracts are designated as hedges.

Interest
rate contracts are entered into by the Company in order to manage interest rate exposure.
Interest rate contracts involve the risk of dealing with counterparties and their ability
to meet contractual terms. These counterparties must receive appropriate credit approval
before the Company enters into such interest rate contracts.

The
amounts disclosed in the following table represent the notional amounts and estimated fair
values of derivative financial instruments which were not designated as hedges at December
31, 2002 and 2001. Notional principal amounts express the volume of these derivative
financial instruments although the amounts potentially subject to credit and market risk
are much smaller. The estimated fair values represent the net present values of the
expected future cash flows of these derivative financial instruments, based on quoted
market prices, dealer quotes and prices obtained from independent pricing services.

|                                        | December 31
|--------------------------------------- | -----------
|                                       
|($ in thousands)                        | 2002       
|                                       
|                                        | Notional   
|                                        | Amount     
|                                       
|Interest rate swaps:                   
|Assets                                  | $ 929,956  
|Liabilities                             | $ 929,956  
|Options, caps and floors held           | $ 21,569   
|Options, caps and floors written        | $ 21,569   
|Mortgage interest rate lock commitments | $ 559,337  
|Mortgage forward sales contracts        | $ 559,337  
|Foreign exchange contracts:            
|Purchased                               | $ 1,703    
|Sold                                    | $ 1,704    
|                                       

During
2002 and 2001, noninterest income of $1,982,000 and $4,068,000, respectively, was
recognized on interest rate contracts not designated as hedges. Also during 2002 and 2001,
noninterest income of $230,000 and $423,000, respectively, was recognized on the value of
interest rate lock commitment derivatives and the related forward sales contracts
resulting from the Companys mortgage origination activity.

The
amounts disclosed in the following table represent the notional amounts and estimated fair
values of derivative financial instruments which were designated as hedges at December 31,
2002 and 2001. Notional principal amounts express the volume of these derivative financial
instruments although the amounts potentially subject to credit and market risk are much
smaller. The estimated fair values represent the net present values of the expected future
cash flows of these derivative financial instruments, based on quoted market prices,
dealer quotes and prices obtained from independent pricing services.

|($ in thousands)                 | December 31, 2002 | December 31, 2001
|-------------------------------- | ----------------- | -----------------
|                                
|                                 |                   | Hedged Item      
|                                
|                                 |                   |                  
|                                 | Notional          | Estimated        
|                                 | Amount            | Fair Value       
|                                
|Fair value hedges:              
|Mortgage forward sales contracts | $ 451,399         | $ (8,190)        
|Mortgage loans held for sale     |                   |                  
|Foreign exchange contracts       | $ 6,451           | $ (215)          
|Foreign-denominated loans        |                   |                  
|Cash flow hedges:               
|Interest rate swap liability    
|relating to FHLB advances        | $ 700,000         | $ (36,379)       
|                                

Fair
value hedges:Portions of the forward sales contracts relating to mortgage loans held
for sale are designated as fair value hedges. The purpose of these contracts is to protect
the Company from the risk that changes in the interest rate environment will affect the
sales price of loans when they are eventually sold. As interest rates rise, the decline in
the value of the loans is offset by the increase in the value of the forward sales
contracts. Conversely, as interest rates decline, the value of the forward sales contracts
decreases, but the value of the loans increases, resulting in no impact on earnings. There
was no effect on income related to hedge ineffectiveness in 2002 and 2001.

The
Company enters into forward exchange contracts to hedge certain expected loan payments
denominated in foreign currencies. The purpose of these derivative contracts is to protect
the Company from risk that changes in the foreign exchange rates will affect the value of
the foreign-denominated loans. Changes in the fair value of the foreign exchange contracts
are offset by changes in the fair value of the corresponding hedged loans, resulting in no
impact on earnings.

Cash
flow hedges:During 2002 and 2001, the Company entered into interest rate swap
agreements that effectively modify the Companys exposure to interest rate risk by
converting a portion of the Companys variable rate Federal Home Loan Bank (FHLB)
advances to fixed rates. The maturities of these interest rate swaps match the maturities
of the underlying debt, with various maturities from 2004 to 2007. These contracts are
designated as cash flow hedges. These agreements involve the receipt of floating rate
amounts in exchange for fixed-rate interest payments over the life of the agreements
without an exchange of the underlying principal amount. There was no effect on income
related to hedge ineffectiveness in 2002 and 2001. As a result of these swaps, interest
expense was increased by $19,176,000 and $5,892,000 for the years ended December 31, 2002
and 2001, respectively. This impact represents the difference between fixed and floating
rates for the period the swap was in effect. As interest is accrued monthly on the
underlying FHLB advance, the fair value of the swap recorded in other comprehensive income
is adjusted and the current months swap payable or receivable is recorded in
interest expense. In accordance with the provisions of SFAS No. 133 for cash flow hedges,
the hedged FHLB advances are not marked to market and therefore are not reflected in the
preceding table.

During
2001, the Company entered into an interest rate swap agreement designated as a fair value
hedge relating to the indirect automobile loan securitization discussed in Note 6. A loss
of $1,025,000 was recognized in other noninterest income upon the termination of this
swap.

Prior
to the adoption of SFAS No. 133 on January 1, 2001, derivative financial instruments were
not recorded on the balance sheet. Net trading gains recognized in earnings on derivative
contracts were immaterial in 2000.

|Note 23                      
|-----------------------------
|                             
|COMMITMENTS AND CONTINGENCIES

In
the normal course of business, the Company enters into a number of financial commitments.
Commitments to extend credit are legally binding, conditional agreements generally having
fixed expiration or termination dates and specified interest rates and purposes. These
commitments generally require customers to maintain certain credit standards. Collateral
requirements and loan-to-value ratios are the same as those for funded transactions and
are established based on managements credit assessment of the customer. Commitments
may expire without being drawn upon. Therefore, the total commitment amount does not
necessarily represent future requirements.

The
Company issues letters of credit and financial guarantees (standby letters of credit)
whereby it agrees to honor certain financial commitments in the event its customers are
unable to perform. The majority of the standby letters of credit consist of performance
guarantees. At December 31, 2002, standby letters of credit had expiration dates ranging
from 2003 through 2007. Collateral requirements are the same as those for funded
transactions and are established based on managements credit assessment of the
customer. Management conducts regular reviews of all outstanding standby letters of
credit, and the results of these reviews are considered in assessing the adequacy of the
Companys reserve for loan losses. Management does not anticipate any material losses
related to these instruments.

The
Company entered into agreements for advances from the Federal Home Loan Bank of Dallas in
December 2002 to be received in January 2003. These advances will mature in 2006 and will
accrue interest at variable rates that adjust quarterly.

The
following is a summary of the contractual amounts of financial commitments at December 31,
2002 and 2001.

|($ in thousands)                              | December 31
|--------------------------------------------- | -----------
|                                             
|                                              | 2002       
|                                             
|Commitments to extend credit                  | $ 3,145,890
|Letters of credit and financial guarantees    | $ 456,047  
|Commitment for Federal Home Loan Bank advance | $ 100,000  
|                                             

The
Company is a party to certain legal proceedings arising from matters incidental to its
business. Management and counsel are of the opinion that these actions will not have a
material effect on the financial condition or operating results of the Company.

|Note 24                            
|-----------------------------------
|                                   
|FAIR VALUE OF FINANCIAL INSTRUMENTS

Generally
accepted accounting principles require disclosure of fair value information about
financial instruments for which it is practicable to estimate fair value, whether or not
the financial instruments are recognized in the financial statements. When quoted market
prices are not available, fair values are based on estimates using present value or other
valuation techniques. Those techniques are significantly affected by the assumptions used,
including the discount rate and estimates of future cash flows. The derived fair value
estimates cannot be substantiated through comparison to independent markets and, in many
cases, could not be realized in immediate settlement of the instrument. Certain financial
instruments and all non-financial instruments are excluded from these disclosure
requirements. Further, the disclosures do not include estimated fair values for items
which are not financial instruments but which represent significant value to the Company,
including core deposit intangibles, trust operations and other fee-generating businesses.
Accordingly, the aggregate fair value amounts presented do not represent the underlying
value of the Company.

The
carrying amount of cash and cash equivalents, trading account assets, mortgage loans held
for sale, noninterest-bearing deposits and short-term borrowings approximates the
estimated fair value of these financial instruments. The estimated fair value of
securities is based on quoted market prices and prices obtained from independent pricing
services, when available, or estimated by management using various factors for securities
for which there is no public market. The estimated fair value of loans, interest-bearing
deposits and Federal Home Loan Bank (FHLB) advances is based on present values using
applicable risk-adjusted spreads to the appropriate yield curve to approximate current
interest rates applicable to each category of these financial instruments. The estimated
fair value of mortgage servicing rights is based on present values of estimated future
cash flows. Mortgage servicing rights are valued on an individual loan basis, grouped in
tranches stratified by loan type, rate type (fixed vs. adjustable) and interest rate. The
estimated fair value of commitments to extend credit and letters of credit and financial
guarantees are based on fees currently charged to enter into similar agreements, taking
into account the remaining terms of the agreements and the counterparties credit
standing. The estimated fair value of the commitment for FHLB advances is based on the
estimated fee charged to cancel the commitment, which is based on changes in the interest
rate environment from the date of the commitment.

Interest
rates are not adjusted for changes in credit risk of performing commercial and small
business loans for which there are no known credit concerns. Management segregates loans
in appropriate risk categories and believes the risk factor embedded in the interest rates
results in a fair valuation of these loans on an entry-value basis.

Variances
between the carrying amount and the estimated fair value of loans reflect both credit risk
and interest rate risk. The Company is protected against changes in credit risk by the
reserve for loan losses which totaled $212,765,000 and $195,766,000 at December 31, 2002
and 2001, respectively. In addition, credit risk exposure on loans is mitigated by many
factors including maintaining a diversified portfolio and obtaining collateral or other
forms of credit support from the borrower. The loan portfolio is diversified by loan type,
industry and borrower. The requirements for collateral, covenants or guarantees are
assessed as part of the Companys underwriting process based on the loan type and the
borrowers credit worthiness. The Companys credit policies provide standards
with respect to monitoring and valuation of collateral.

The
fair value estimates presented are based on information available to management as of
December 31, 2002 and 2001. Although management is not aware of any factors that would
significantly affect the estimated fair value amounts, these amounts have not been
revalued for purposes of these financial statements since those dates. Therefore, current
estimates of fair value may differ significantly from the amounts presented.

|($ in thousands)                | December 31 
|------------------------------- | ------------
|                               
|                                | 2002        
|                               
|                                | Carrying    
|                                | Amount      
|                               
|Assets                         
|Cash and cash equivalents       | $ 1,103,694 
|Trading account assets          | $ 8,561     
|Securities available for sale   | $ 3,511,153 
|Securities held to maturity     | $ 140,525   
|Mortgage loans held for sale    | $ 526,288   
|Commercial loans                | $ 2,876,471 
|Small business loans            | $ 2,507,788 
|Consumer loans                  | $ 6,107,953 
|Mortgage servicing rights, net  | $ 114,403   
|                               
|                               
|Liabilities                    
|Noninterest-bearing deposits    | $ 2,867,307 
|Interest-bearing deposits       | $ 10,613,715
|Short-term borrowings           | $ 575,448   
|Federal Home Loan Bank advances | $ 1,102,241 
|                               

The
following table represents the contractual amounts and estimated fair value of other
financial instruments.

|($ in thousands)                                | December 31
|----------------------------------------------- | -----------
|                                               
|                                                | 2002       
|                                               
|                                                | Contract   
|                                                | Amount     
|                                               
|Commitments to extend credit                    | $ 3,145,890
|Letters of credit and financial guarantees      | $ 456,047  
|Commitments for Federal Home Loan Bank advances | $ 100,000  
|                                               

See
Note 22 for fair value information on derivative financial instruments.

|Note 25                     
|----------------------------
|                            
|RELATED - PARTY TRANSACTIONS

Certain
directors and officers of the Company, members of their immediate families and entities in
which they or members of their immediate families have principal ownership interests are
customers of and have other transactions with the Company in the ordinary course of
business. Loans to these parties are made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable third-party
transactions and do not involve more than normal risks of collectibility or present other
unfavorable features.

Loans
outstanding to these related parties were $17,924,000 and $16,922,000 at December 31, 2002
and 2001, respectively. The change during 2002 reflects $63,073,000 in loan advances,
$74,224,000 in loan payments and $12,153,000 in other increases due to the change in
status of those who are considered related parties. These amounts do not include loans
made in the ordinary course of business to other entities with which the Company has no
relationship, other than a director of the Company being a director of the other entity,
unless that director had the ability to significantly influence the other entity.

Additionally,
the Company has a 50% interest in a joint venture with an unrelated third party to
originate, sell and service loans under the Federal National Mortgage Association (Fannie
Mae) Delegated Underwriting and Servicing (DUS) program. The Companys investment in
this joint venture, which is accounted for using the equity method, totaled $4,716,000 at
December 31, 2002 and $5,066,000 at December 31, 2001. Pretax earnings of $1,345,000 and
$1,432,000 related to the joint venture were recorded during 2002 and 2001, respectively.
At December 31, 2002 and 2001, the Company had extended a line of credit to this joint
venture totaling $35,000,000 and $57,500,000, respectively. Loans outstanding under the
line of credit were $9,165,000 and $42,450,000 at December 31, 2002 and 2001,
respectively. The change from 2002 reflects $81,629,000 in advances and $114,914,000 in
payments. These loans were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable third-party transactions
and do not involve more than normal risks of collectibility or present other unfavorable
features.

Securities
sold to related parties under repurchase agreements amounted to $8,427,000 and $7,992,000
at December 31, 2002 and 2001, respectively.

|Note 26                                     
|--------------------------------------------
|                                            
|REGULATORY MATTERS AND DIVIDEND RESTRICTIONS

The
Company and the Bank are subject to various regulatory capital requirements administered
by the Federal Reserve Bank (FRB) and the Office of the Comptroller of the Currency (OCC),
respectively. Failure to meet minimum capital requirements can initiate certain mandatory
 and possibly additional discretionary  actions by the FRB and OCC that, if
undertaken, could have a direct material effect on the Companys financial
statements. Under capital adequacy guidelines and the regulatory framework for prompt
corrective action, the Company and the Bank must meet specific capital guidelines that
involve quantitative measures of assets, liabilities and certain off-balance-sheet items
as calculated under regulatory accounting practices. The Companys and the
Banks capital amounts and classifications are also subject to qualitative judgments
by the FRB and OCC about components, risk weightings and other factors.

As
of December 31, 2002 and 2001, the most recent notifications from the OCC categorized the
Bank as well capitalized under the regulatory framework for prompt corrective action. For
a bank to be designated as well capitalized, it must have Tier 1 and total risk-based
capital ratios of at least 6.0% and 10.0%, respectively, and a leverage ratio of at least
5.0%. There are no conditions or events since those notifications that management believes
have changed the Banks categories.

The
Companys and the Banks actual capital amounts and ratios are presented in the
following table.

|($ in thousands)       | Tier 1 Risk-Based Capital | Total Risk-Based Capital | Leverage   
|---------------------- | ------------------------- | ------------------------ | -----------
|                      
|                       | Amount                    | Ratio                    | Amount     
|                      
|December 31, 2002     
|                      
|Hibernia Corporation   | $ 1,412,327               | 10.57%                   | $ 1,579,991
|Hibernia National Bank | $ 1,298,624               | 9.72%                    | $ 1,466,172
|                      
|                      
|                      
|December 31, 2001     
|                      
|Hibernia Corporation   | $ 1,307,655               | 10.14%                   | $ 1,469,283
|Hibernia National Bank | $ 1,205,435               | 9.37%                    | $ 1,366,761
|                      

Under
current FRB regulations, the Bank may lend the Parent Company up to 10% of its capital and
surplus, provided that any such loan is secured at the time of the transaction by
collateral having the market value required by applicable regulations.

The
payment of dividends by the Bank to the Parent Company is restricted by various regulatory
and statutory limitations. In 2003, the Bank would have available to pay dividends to the
Parent Company, without approval of the OCC, approximately $143,446,000, plus net retained
profits earned in 2003 prior to the dividend declaration date.

Banks
are required to maintain cash on hand or noninterest-bearing balances with the FRB to meet
reserve requirements. Average noninterest-bearing balances with the FRB were $28,430,000
in 2002 and $23,408,000 in 2001.

|Note 27             
|--------------------
|                    
|HIBERNIA CORPORATION

The
following Balance Sheets, Income Statements and Statements of Cash Flows reflect the
financial position and results of operations for the Parent Company only.

|Balance Sheets                             | December 31
|------------------------------------------ | -----------
|                                          
|($ in thousands)                           | 2002       
|                                          
|Investment in bank subsidiary              | $ 1,536,110
|Investment in nonbank subsidiaries         | 61,749     
|Other assets                               | 109,770    
|                                          
|Total assets                               | $ 1,707,629
|                                          
|                                          
|Other liabilities                          | $ 5,202    
|Debt (ESOP guarantee)                      | 21,565     
|Shareholders' equity                       | 1,680,862  
|                                          
|Total liabilities and shareholders' equity | $ 1,707,629
|                                          

|Income Statements                                  | Year Ended December 31
|-------------------------------------------------- | ----------------------
|                                                  
|($ in thousands)                                   | 2002                  
|                                                  
|Equity in undistributed net income of subsidiaries | $ 85,506              
|Dividends from subsidiaries                        | 167,650               
|Other income                                       | 1,800                 
|Securities losses, net                             | (873)                 
|                                                  
|Total income                                       | 254,083               
|Total expense                                      | 2,608                 
|                                                  
|Income before income taxes                         | 251,475               
|Income tax expense                                 | 1,618                 
|                                                  
|Net income                                         | $ 249,857             
|                                                  

|Statements of Cash Flows                             | Year Ended December 31
|---------------------------------------------------- | ----------------------
|                                                    
|($ in thousands)                                     | 2002                  
|                                                    
|Operating activities                                
|Net income                                           | $ 249,857             
|Non-cash adjustment for equity in                   
|subsidiaries' undistributed net income               | (85,506)              
|Realized securities losses, net                      | 873                   
|Other adjustments                                    | 5,212                 
|                                                    
|Net cash provided by operating activities            | 170,436               
|                                                    
|Investing activities                                
|Investment in subsidiaries                           | (9,975)               
|Purchases of securities available for sale           | (1,094)               
|Proceeds from sales of securities available for sale | 1,058                 
|Other                                                | 571                   
|                                                    
|Net cash used by investing activities                | (9,440)               
|                                                    
|Financing activities                                
|Dividends paid                                       | (89,442)              
|Issuance of common stock                             | 35,783                
|Redemption of preferred stock                        | -                     
|Purchase of treasury stock                           | (107,004)             
|                                                    
|Net cash used by financing activities                | (160,663)             
|                                                    
|Increase (decrease) in cash and cash equivalents     | 333                   
|Cash and cash equivalents at beginning of year       | 86,400                
|                                                    
|Cash and cash equivalents at end of year             | $ 86,733              
|                                                    

|Note 28            
|-------------------
|                   
|SEGMENT INFORMATION

SFAS
No. 131, Disclosures about Segments of an Enterprise and Related Information,
establishes standards for the reporting of financial information from operating segments
in annual and interim financial statements. SFAS No. 131 requires that financial
information be reported on the same basis that is reported internally for evaluating
segment performance and allocating resources to segments.

The
Companys segment information is presented by line of business. Each line of business
is a strategic unit that provides various products and services to groups of customers
that have certain common characteristics. The reportable operating segments are Consumer,
Small Business, Commercial, and Investments and Public Funds. The Consumer segment
provides individuals with comprehensive products and services, including mortgage and
other loans, deposit accounts, trust and investment management, brokerage, and life and
health insurance. The Small Business and Commercial segments provide business entities
with comprehensive products and services, including loans, deposit accounts, leasing,
treasury management, investment banking, property and casualty insurance and private
equity investments. The Small Business segment provides products and services to mid-size
and smaller business entities and the Commercial segment provides products and services to
larger business entities. The Investments and Public Funds segment provides a treasury
function for the Company by managing public entity deposits, the investment portfolio,
interest rate risk, and liquidity and funding positions.

The
accounting policies used by each segment are the same as those discussed in the summary of
significant accounting policies, except as described in the reconciliation of segment
totals to consolidated totals. The following is a summary of certain average balances by
segment.

|                  | Investments
|----------------- | -----------
|                  | Small      
|($ in thousands)  | Consumer   
|                 
|December 31, 2002
|                 
|Average loans     | $ 5,968,000
|Average assets    | $ 8,714,500
|Average deposits  | $ 7,393,800
|                 
|December 31, 2001
|                 
|Average loans     | $ 6,039,200
|Average assets    | $ 8,696,100
|Average deposits  | $ 7,361,100
|                 

The
following table presents condensed income statements for each segment.

|                             | Investments
|---------------------------- | -----------
|                             | Small      
|($ in thousands)             | Consumer   
|                            
|Year ended December 31, 2002
|                            
|Net interest income          | $ 343,173  
|Provision for loan losses    | 28,445     
|                            
|Net interest income after   
|provision for loan losses    | 314,728    
|                            
|Noninterest income           | 248,324    
|Noninterest expense          | 369,920    
|                            
|Income before income taxes   | 193,132    
|Income tax expense           | 67,596     
|                            
|Net income                   | $ 125,536  
|                            
|                            
|                            
|Year ended December 31, 2001
|                            
|Net interest income          | $ 307,078  
|Provision for loan losses    | 34,496     
|                            
|Net interest income after   
|provision for loan losses    | 272,582    
|                            
|Noninterest income           | 223,773    
|Noninterest expense          | 329,870    
|                            
|Income before income taxes   | 166,485    
|Income tax expense           | 58,270     
|                            
|Net income                   | $ 108,215  
|                            
|                            
|                            
|Year ended December 31, 2000
|                            
|Net interest income          | $ 284,204  
|Provision for loan losses    | 35,483     
|                            
|Net interest income after   
|provision for loan losses    | 248,721    
|                            
|Noninterest income           | 172,307    
|Noninterest expense          | 284,735    
|                            
|Income before income taxes   | 136,293    
|Income tax expense           | 47,703     
|                            
|Net income                   | $ 88,590   
|                            

Each
segments balance sheet is adjusted to reflect its net funding position. Assets are
increased if excess funds are provided; liabilities are increased if the funds are needed
to support assets. Segment assets and deposits are decreased for cash items in process of
collection, which are reclassified from assets to deposits.

Each
segments net interest income includes an adjustment for match funding of the
segments earning assets and liabilities. Match funding is calculated as the net
interest income attributable to the various products of the segment and also indicates the
historical interest rate risk taken by the entity as a whole. Interest income for
tax-exempt and tax-deferred loans is adjusted to a taxable-equivalent basis. Each segment
is charged a provision for loan losses that is determined based on each loans risk
rating or loan type. In addition, each reportable segment recognizes income tax assuming a
35% income tax rate. State income tax expense is included in the Other segment.

Direct
support costs, such as deposit servicing, technology, and loan servicing and underwriting,
are allocated to each segment based on activity-based cost studies, where appropriate, or
on various statistics or staff costs. Indirect costs, such as management expenses and
corporate support, are allocated to each segment based on various statistics or staff
costs. There are no significant intersegment revenues.

The
following is a reconciliation of segment totals to consolidated totals.

|                                                        | Average      | Average      | Average     
|------------------------------------------------------- | ------------ | ------------ | ------------
|($ in thousands)                                        | Loans        | Assets       | Deposits    
|                                                       
|December 31, 2002                                      
|                                                       
|Segment total                                           | $ 11,274,900 | $ 18,255,200 | $ 12,524,300
|Excess funds invested                                   | -            | (2,036,400)  | -           
|Reclassification of cash items in process of collection | -            | 342,400      | 342,400     
|                                                       
|Consolidated total                                      | $ 11,274,900 | $ 16,561,200 | $ 12,866,700
|                                                       
|                                                       
|                                                       
|December 31, 2001                                      
|                                                       
|Segment total                                           | $ 11,622,800 | $ 18,257,600 | $ 12,285,300
|Excess funds invested                                   | -            | (2,102,200)  | -           
|Reclassification of cash items in process of collection | -            | 323,000      | 323,000     
|                                                       
|Consolidated total                                      | $ 11,622,800 | $ 16,478,400 | $ 12,608,300
|                                                       

|                              |              | Provision |             |             | Income Tax
|----------------------------- | ------------ | --------- | ----------- | ----------- | ----------
|                              | Net Interest | for Loan  | Noninterest | Noninterest | Expense   
|($ in thousands)              | Income       | Losses    | Income      | Expense     | (Benefit) 
|                             
|Year ended December 31, 2002 
|                             
|Segment total                 | $ 708,369    | $ 80,625  | $ 352,905   | $ 593,697   | $ 140,914 
|Taxable-equivalent adjustment | (4,132)      | -         | -           | -           | (4,132)   
|Income tax expense            | -            | -         | -           | -           | (3,819)   
|                             
|Consolidated total            | $ 704,237    | $ 80,625  | $ 352,905   | $ 593,697   | $ 132,963 
|                             
|                             
|                             
|Year ended December 31, 2001 
|                             
|Segment total                 | $ 669,072    | $ 97,250  | $ 320,618   | $ 550,789   | $ 124,271 
|Taxable-equivalent adjustment | (4,401)      | -         | -           | -           | (4,401)   
|Income tax expense            | -            | -         | -           | -           | (1,418)   
|                             
|Consolidated total            | $ 664,671    | $ 97,250  | $ 320,618   | $ 550,789   | $ 118,452 
|                             
|                             
|                             
|Year ended December 31, 2000 
|                             
|Segment total                 | $ 615,401    | $ 120,650 | $ 251,295   | $ 478,688   | $ 98,387  
|Taxable-equivalent adjustment | (4,842)      | -         | -           | -           | (4,842)   
|Income tax expense            | -            | -         | -           | -           | (1,662)   
|                             
|Consolidated total            | $ 610,559    | $ 120,650 | $ 251,295   | $ 478,688   | $ 91,883  
|