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: www.hibernia.comE-mail: mailus@hibernia.comSHAREHOLDER, EMPLOYEE DATA(at December 31, 2001)
Shareholder's of record: 16,004
Full-time equivalent employees: 5,398

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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.                       

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.

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, 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.

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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|
|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                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                         
|Per common share information: (2)                                                                                                                                                                                                                                                        
|Net income                                                                                                                                                                                                                                                                               
|Net income - assuming dilution                                                                                                                                                                                                                                                           
|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                                                                                                                                                                                                                                                                         
|Average equity/average assets                                                                                                                                                                                                                                                            
|Tier 1 risk-based capital ratio                                                                                                                                                                                                                                                          
|Total risk-based capital ratio                                                                                                                                                                                                                                                           
|Leverage ratio                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                         
|Cash-basis financial data (3)                                                                                                                                                                                                                                                            
|Net income applicable to common shareholders                                                                                                                                                                                                                                             
|Net income per common share (2)                                                                                                                                                                                                                                                          
|Net income per common share - assuming dilution (2)                                                                                                                                                                                                                                      
|Return on assets                                                                                                                                                                                                                                                                         
|Return on common equity                                                                                                                                                                                                                                                                  
|Efficiency ratio                                                                                                                                                                                                                                                                         
|Average equity/average assets                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                         
|(1)
All financial information has been restated for mergers accounted for as poolings of
interest. 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)
Dividends per common share are historical amounts. For a discussion of net income per
common share computations refer to Note 19 of the consolidated financial
statements - Net      Income Per Common Share Data.                                                                 
|(3)
Excluding amortization and balances of purchase accounting intangibles net of applicable taxes.                                                                                                                                                                                      

## Management's Discussion and Analysis of Financial Condition and Results of Operations

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

## 2001 HIGHLIGHTS

| | Net income for 2001 totaled $218.8 million, a 28% increase compared to
$170.6 million for 2000. Net income per common share for 2001 of $1.37 increased
30% compared to $1.05 for 2000, and net income per common share - assuming
dilution was $1.35 for 2001, an increase of 30% compared to $1.04 for 2000.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Cash-basis net income in 2001 was $234.8 million ($1.47 per common share)
compared to $187.0 million ($1.15 per common share) in 2000. Cash-basis net
income excludes the effect of the amortization of purchase accounting
intangibles.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net interest income increased $54.1 million (9%) to $664.7 million in
2001 from $610.6 million in 2000. The net interest margin was 4.39% for 2001,
compared to 4.21% for 2000. The increase in the margin was primarily the result
of growth in interest-earning assets and rates on interest-bearing liabilities
declining faster than yields on earning assets.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On a taxable-equivalent basis, excluding securities transactions,
revenues for 2001 totaled $1,001.3 million, a $127.6 million (15%) increase from
the 2000 level of $873.7 million. Excluding a net gain of $10.4 million from the
securitization of indirect auto loans, revenues for 2001 totaled $990.9 million.
Noninterest income, excluding securities transactions and the net gain on the
indirect auto loan securitization, increased $64.0 million (25%) from 2000 to
$316.7 million. Noninterest expense for 2001 totaled $548.3 million, an increase
of $72.2 million (15%) from 2000.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Hibernias continued efforts to diversify the risk of the loan
portfolio resulted in a decrease in loans of 7% from December 31, 2000, to $11.2
billion at December 31, 2001. The decrease in total loans is the result of a
strategic decision to reduce the commercial portfolio, a securitization of
approximately $600 million of indirect auto loans and an increase in the
production and resulting sale of fixed-rate mortgage loans. Hibernia originated
a record $4.5 billion mortgage loans in 2001, up from $2.1 billion in 2000.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Shared national credits totaled $873.4 million at December 31, 2001, down
31% from a year earlier. Shared national credits as a percentage of total loans
were 7.8% at December 31, 2001, compared to 10.5% at December 31, 2000.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Deposits grew to $13.0 billion at December 31, 2001, a $260.4
million (2%) increase from December 31, 2000. Noninterest-bearing deposits grew
to $2.5 billion at December 31, 2001, a $241.8 million increase (11%) from
December 31, 2000.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The provision for loan losses in 2001 totaled $97.3 million compared to
$120.7 million in 2000. The 2001 provision exceeded net charge-offs by $24.8
million.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Reserve coverage of total loans improved to 1.74% at December 31, 2001, compared
to 1.47% a year earlier.
|- | ---------------------------------------------------------------------------------------------------------

| | The nonperforming asset and nonperforming loan ratios improved to 0.69%
and 0.63% , respectively, at December 31, 2001, compared to 0.73% and 0.68% a
year earlier.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Capital remained strong at December 31, 2001, with a leverage ratio of
8.14% compared to 7.65% at December 31, 2000. In October 2001, the Company
redeemed its Series A Fixed/Adjustable Rate Preferred Stock, totaling $87.0
million.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Return on assets and return on common equity ratios improved to 1.33% and
14.42%, respectively, for the year ended December 31, 2001, compared to 1.08%
and 12.35% for the prior year.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Cash dividends per common share for 2001 increased to $.53, or 8% higher
than the 2000 cash dividend of $.49 per common share and 22% higher than the
1999 cash dividend of $.435 per common share. The dividend payout ratios for
2001, 2000 and 1999 were 38.7%, 46.7% and 40.7%, respectively.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Hibernias common stock price experienced a 40% increase during
2001, closing at $17.79 per share at December 31, 2001, compared to $12.75 per
share at December 31, 2000.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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.

## MERGER ACTIVITY

The
Company did not consummate any mergers in 2001. In 2000, Hibernia further
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 the Rosenthal Agency (Rosenthal), Louisianas largest
independent insurance broker. Southcoast provides equity research,
institutional equity sales and trading services to large, institutional money
managers and corporate finance services to middle-market companies in the Gulf
South. Rosenthal offers property and casualty insurance and consulting services
to a client base that includes specialty industries such as energy and marine,
construction and bonding, transportation, real estate, wholesalers and auto
dealerships. 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. In 1999, the Company completed a merger in
East Texas which was accounted for as a pooling of interests and purchased the
assets and assumed the liabilities of the Beaumont banking offices of Chase Bank
of Texas, N.A. (the Beaumont transaction).

The
institutions with which the Company merged are collectively referred to as the
merged companies. The merged company in the transaction accounted
for as a pooling of interests is referred to as the pooled company.
The merged companies in transactions accounted for as purchases are referred to
as the purchased companies.

All
prior-year information has been restated to reflect the effect of mergers
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; therefore, certain items contained in this
discussion are only comparable after excluding the effect of the purchased
companies.

Measures
of financial performance subsequent to the purchase transactions are more
relevant when comparing cash-basis results (i.e., before
amortization of purchase accounting intangibles) because they are more
indicative of cash flows, and thus the Companys ability to support growth
and pay dividends. The cash-basis measures of financial performance are
presented in the Five-Year and Quarterly Consolidated Summary of Income and
Selected Financial Data on pages 18 and 44.

## 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 2001, compared to $14.8 billion in 2000 and $13.6 billion in 1999.
The increase of $612.6 million in average earning assets for 2001 compared to
2000 was due to growth spread among all areas. The increase of $1.1 billion in
average earning assets for 2000 compared to 1999 was primarily in loans.

Average
loans as a percentage of average earning assets decreased to 75.6% in 2001
compared to 78.0% in 2000 and 76.7% in 1999. Average securities were 20.8% of
average earning assets in 2001 compared to 20.6% in 2000 and 20.3% in 1999. The
Company funded the 2001 increase in average earning assets primarily through
growth in interest-bearing deposits of $381.8 million.

Total
earning assets at December 31, 2001, were $15.3 billion, down from $15.5 billion
(1%) a year earlier. This change was primarily due to decreases in loans of
$883.7 million (7%) and short-term investments of $138.8 million (75%), which
were partially offset by increases in securities of $442.3 million (15%) and
mortgage loans held for sale of $443.3 million (358%).

LOANS.
The 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
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 are
considered. Hibernias credit policy, including the underwriting criteria
for major loan categories, is reviewed on a regular basis and adjusted when
warranted.

|TABLE
1
|
COMPOSITION OF LOAN PORTFOLIO
|---------------------------------------

|December 31 ($ in millions) | 2001                                         | 2000      
|--------------------------- | -------------------------------------------- | ----------
|                           
|                            |                                              | Balance   
|                           
|Commercial:                 | Commercial and industrial                    | $ 1,084.7 
|                            | Services industry                            | 717.1     
|                            | Real estate                                  | 422.5     
|                            | Health care                                  | 265.3     
|                            | Transportation, communications and utilities | 154.6     
|                            | Energy                                       | 235.1     
|                            | Other                                        | 83.1      
|                           
|                            | Total commercial                             | 2,962.4   
|                           
|Small Business:             | Commercial and industrial                    | 775.9     
|                            | Services industry                            | 632.0     
|                            | Real estate                                  | 422.8     
|                            | Health care                                  | 149.7     
|                            | Transportation, communications and utilities | 106.7     
|                            | Energy                                       | 33.9      
|                            | Other                                        | 369.8     
|                           
|                            | Total small business                         | 2,490.8   
|                           
|Consumer:                   | Residential mortgages:                      
|                            | First mortgages                              | 2,615.5   
|                            | Junior liens                                 | 500.1     
|                            | Indirect                                     | 1,535.6   
|                            | Revolving credit                             | 518.5     
|                            | Other                                        | 618.1     
|                           
|                            | Total consumer                               | 5,787.8   
|                           
|Total loans                 |                                              | $ 11,241.0
|                           

Average
loans increased $118.1 million (1%) in 2001 and $1,048.9 million (10%) in 2000.
Average loans remained relatively flat in 2001 compared to 2000 primarily due to
efforts to diversify the risk of the portfolio, discussed in further detail
below.

Table
1 details Hibernias commercial and small business loans classified by
repayment source and consumer loans classified by type. In 2001 commercial loans
decreased $539.2 million (15%), small business loans increased $94.8 million
(4%) and consumer loans decreased $439.3 million (7%). The portfolio mix was 26%
commercial, 22% small business and 52% consumer at year-end 2001, compared to
29%, 20% and 51%, respectively, at year-end 2000.

Commercial
Loans. The change in the commercial portfolio was due to decreases in all
industries, with the largest decreases in commercial and industrial, down $303.2
million (22%); the services industry, down $94.3 million (12%) and
transportation, communications and utilities, down $58.2 million (27%).

The
decrease in commercial loans was primarily the result of a strategic decision to
increase the granularity of the commercial portfolio and to refine the
Companys approach to participation in shared national credits. This
strategy focuses on lending to customers which operate in its markets,
particularly those which use other Company services, and on retaining a smaller
piece of the credit relationship. Shared national credits totaled $873.4 million
at December 31, 2001, down 31% from $1.3 billion 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 revenues of
less than $10 million as small businesses. The small business portfolio showed
growth primarily in the services industry, up $37.7 million (6%); commercial and
industrial, up $20.2 million (3%); real estate, up $20.0 million (5%) and
transportation, communications and utilities, up $10.9 million (11%). The growth
in the small business portfolio was impacted by slowing demand for loans as a
result of a softening economy.

Hibernia
continues to be an industry leader in process efficiency and technology for
small business lending. In 2002, Hibernia enters its tenth year of centralized
underwriting and its ninth year using credit scoring models for loan
decisioning. Automated decisioning and a new simplified suite of standardized
products for loans $50,000 and less have been added to an already impressive
list of innovations. These innovations include shortened application forms, an
automated workflow system, paperless application processing and underwriting,
credit file imaging, behavioral scoring and ongoing enhancements to the  risk management
data warehouse.

Consumer
Loans. The decrease in the consumer portfolio was primarily due to decreases
in indirect, down $328.1 million (18%) and residential mortgages, down $193.4
million (6%), partially offset by an increase in revolving credit, up $69.8
million (16%).

In
the second quarter of 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. Excluding the
effect of this transaction, indirect loans would have increased 6% from December
31, 2000.

Residential
mortgage loans comprise more than half of the consumer loan portfolio. Through
the innovative use of technology enhancements, such as Hibernias online
mortgage-loan application, the mortgage process has become more streamlined,
with less documentation and faster approvals. The favorable interest rate
environment, along with these improvements, resulted in $4.5 billion in loan
originations during 2001, compared to $2.1 billion in 2000. 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, 2001, Hibernia
serviced approximately $8.8 billion in residential mortgage loans.

During
2001 and 2000, Hibernia securitized $305.2 million and $112.5 million,
respectively, of its residential first mortgages through the Federal National
Mortgage Association (FNMA). These portions of the consumer portfolio were
securitized with recourse provisions, and 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 Equity
PrimeLineSM, an attractively priced line of credit secured by the
customers residence.

INVESTMENT
SECURITIES. At the end of 2001, investment securities totaled $3.5 billion,
an increase of $442.3 million, or 15%, from the end of 2000. Of total investment
securities at December 31, 2001, 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 $195.9
million (7%) to $2.9 billion in 2001. This increase was primarily due to
purchases of securities required to collateralize certain public fund deposits
and repurchase agreements, as well as changes in unrealized gains (losses)
reflecting the changing interest rate environment. The securitization of
residential first mortgages in the first and second quarters of 2001 also
contributed to this increase. Average securities available for sale decreased
$54.8 million, or 2%, from 1999 to 2000.

At
December 31, 2001, the securities available for sale portfolio included $360.4
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.

|TABLE
2
|
COMPOSITION OF INVESTMENT SECURITIES
|----------------------------------------------

|December 31  ($ in millions) | 2001                              | 2000      | 1999     
|---------------------------- | --------------------------------- | --------- | ---------
|                            
|Available for sale:          | U.S. Treasuries                   | $ 37.8    | $ 230.7  
|                             | U.S. government agencies:        
|                             | Mortgage-backed securities        | 1,066.3   | 820.3    
|                             | Bonds                             | 1,740.1   | 1,204.4  
|                             | Stocks                            | 103.4     | 110.8    
|                             | States and political subdivisions | 189.6     | 215.9    
|                             | Other                             | 104.1     | 104.9    
|                            
|                             | Total available for sale          | 3,241.3   | 2,687.0  
|                            
|Held to maturity:            | U.S. government agencies:        
|                             | Mortgage-backed securities        | 249.9     | 361.9    
|                            
|                             | Total held to maturity            | 249.9     | 361.9    
|                            
|Total investment securities  | $ 3,491.2                         | $ 3,048.9 | $ 2,960.8
|                            

The
average repricing period of securities available for sale at December 31, 2001,
was 2.2 years, down from 5.1 years at December 31, 2000. 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 $316.6 million
in 2001, down from $356.3 million in 2000.

At
December 31, 2001, the securities held to maturity portfolio included $209.9
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, 2001, was 2.8 years, down from 3.7 years at December 31, 2000.

Maturities
and yields of investment securities at year-end 2001 are detailed in Table 3.
Mortgage-backed securities are classified according to contractual maturity
without consideration of principal amortization, projected prepayments or call
options.

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

|                                                                                                                                                                                                                    | Due after 1   | Due after 5 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | ------------
|                                                                                                                                                                                                                    | Due in 1 year | year through
|December 31, 2001 ($ in millions)                                                                                                                                                                                   | or less       | 5 years     
|                                                                                                                                                                                                                   
|                                                                                                                                                                                                                    | Amount        | Yield       
|                                                                                                                                                                                                                   
|Available for sale:                                                                                                                                                                                                
|U.S. Treasuries                                                                                                                                                                                                     | $ 3.1         | 6.67        
|U.S. government agencies:                                                                                                                                                                                          
|Mortgage-backed securities                                                                                                                                                                                          | 1.9           | 6.17        
|Bonds                                                                                                                                                                                                               | 480.5         | 1.83        
|Stocks                                                                                                                                                                                                              | -             | -           
|States and political subdivisions                                                                                                                                                                                   | 12.3          | 7.70        
|Other                                                                                                                                                                                                               | 101.8         | 3.00        
|                                                                                                                                                                                                                   
|Total available for sale                                                                                                                                                                                            | $ 599.6       | 2.19        
|                                                                                                                                                                                                                   
|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%.

SHORT-TERM  INVESTMENTS.  Average 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 $118.0
million (103%) in 2001 to $232.6 million. This increase in short-term
investments resulted primarily from an increase in federal funds sold and the
addition of the interest-only strip receivable, partially offset by a decreased
level of reverse repurchase agreements. The increase in federal funds sold is
due to higher levels of cash resulting from the previously mentioned
securitization and sale of indirect auto loans in the second quarter of 2001.
Average short-term investments decreased $117.9 million (51%) in 2000 compared
to 1999.

At December 31, 2001, the Company held an additional $0.1 million of
trading account assets resulting from activity in its investment banking
subsidiary. The Company held a minimal amount of trading account assets at
December 31, 2000. Trading gains and losses are included in other noninterest
income. There were no material trading gains or losses for 2001, 2000 or 1999.

MORTGAGE
LOANS HELD FOR SALE. Mortgage 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 $311.2 million in 2001, a $220.3
million (242%) increase from $90.9 million in 2000. Average mortgage loans held
for sale in 2000 decreased $76.3 million (46%) from $167.2 million in 1999. As a
result of changes in the interest rate environment, there was an increased
demand for fixed-rate mortgages during 2001 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 2001, mortgage loans held for sale totaled
$566.9 million compared to $123.7 million and $92.7 million in 2000 and 1999,
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.

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 $71.5 million, or 0.61%
of total managed loans at December 31, 2001, down from $78.4 million, or 0.65%
at December 31, 2000, and up from $49.6 million, or 0.46% at year-end 1999. The
decrease in 2001 reflected declines in the commercial and small business
portfolios partially offset by higher levels of delinquent loans in the consumer
portfolio. Commercial delinquencies decreased to 0.25% at year-end 2001, down
from 0.33% a year ago and up from 0.15% at year-end 1999. The small business
loan delinquency ratio was 0.41% at December 31, 2001, down from 0.63% at
December 31, 2000, and up from 0.34% at December 31, 1999. The managed consumer
loan delinquency ratio increased to 0.87% at year-end 2001, up from 0.83% at
year-end 2000 and 0.75% at the end of 1999. These increases primarily reflect
the impact of slowing economic conditions in 2001 and growth in the managed
indirect portfolio. The reduction in consumer delinquencies from 1997 to 1998 is
primarily due to a change in the reporting methodology for mortgage loans from
number of days past due to payment cycle date, a methodology utilized in the
banking industry.

|TABLE
4
|
LOAN DELINQUENCIES
|----------------------------

|December 31 ($ in millions)                   | 2001   | 2000   | 1999   | 1998   | 1997  
|--------------------------------------------- | ------ | ------ | ------ | ------ | ------
|                                             
|Days past due:                               
|30 to 89 days                                 | $ 57.8 | $ 69.5 | $ 43.6 | $ 52.6 | $ 64.6
|90 days or more                               | 8.0    | 8.9    | 6.0    | 7.0    | 5.8   
|                                             
|Total delinquencies                           | 65.8   | 78.4   | 49.6   | 59.6   | 70.4  
|Securitized indirect auto delinquencies       | 5.7    | -      | -      | -      | -     
|                                             
|Total managed delinquencies                   | $ 71.5 | $ 78.4 | $ 49.6 | $ 59.6 | $ 70.4
|                                             
|Total delinquencies as a percentage of loans:
|Commercial                                    | 0.25%  | 0.33%  | 0.15%  | 0.27%  | 0.18% 
|Small business                                | 0.41%  | 0.63%  | 0.34%  | 0.50%  | 0.80% 
|Consumer                                      | 0.84%  | 0.83%  | 0.75%  | 0.98%  | 1.47% 
|Total held loans                              | 0.59%  | 0.65%  | 0.46%  | 0.60%  | 0.84% 
|Managed consumer                              | 0.87%  | 0.83%  | 0.75%  | 0.98%  | 1.47% 
|Total managed loans                           | 0.61%  | 0.65%  | 0.46%  | 0.60%  | 0.84% 
|                                             

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 $70.9 million at December 31, 2001, down
from $82.0 million a year ago and $76.5 million in 1999. The decline was driven
by a $31.6 million decrease in commercial nonperforming loans resulting
primarily from sales and charge-offs. Commercial nonperforming loans comprised
40% of total nonperforming loans at December 31, 2001, down from 73% a year ago.
However, small business and consumer nonperforming loans increased as a result
of the slowing economic environment in 2001 which was exacerbated by
terrorist activities. 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.

|TABLE
5
|
NONPERFORMING ASSETS
|------------------------------

|($ in thousands)                  | 2001      | 2000      | 1999      | 1998      | 1997     
|--------------------------------- | --------- | --------- | --------- | --------- | ---------
|                                 
|Nonaccrual loans:                
|Commercial                        | $ 28,361  | $ 59,916  | $ 51,620  | $ 19,215  | $ 5,282  
|Small business                    | 31,448    | 16,005    | 18,329    | 17,694    | 11,762   
|Consumer                          | 11,079    | 6,034     | 6,512     | 4,031     | 6,532    
|                                 
|Total nonperforming loans         | 70,888    | 81,955    | 76,461    | 40,940    | 23,576   
|                                 
|Foreclosed assets                 | 5,782     | 4,267     | 7,710     | 10,762    | 3,056    
|Excess bank-owned property        | 1,482     | 2,586     | 4,197     | 2,648     | 2,360    
|                                 
|Total nonperforming assets        | $ 78,152  | $ 88,808  | $ 88,368  | $ 54,350  | $ 28,992 
|                                 
|Reserve for loan losses           | $ 195,766 | $ 178,253 | $ 156,072 | $ 130,347 | $ 126,557
|Nonperforming loan ratio:        
|Commercial loans                  | 0.96%     | 1.71%     | 1.40%     | 0.50%     | 0.17%    
|Small business loans              | 1.26%     | 0.67%     | 0.78%     | 0.85%     | 0.61%    
|Consumer loans                    | 0.19%     | 0.10%     | 0.14%     | 0.10%     | 0.19%    
|Total loans                       | 0.63%     | 0.68%     | 0.70%     | 0.41%     | 0.28%    
|Nonperforming asset ratio         | 0.69%     | 0.73%     | 0.81%     | 0.55%     | 0.35%    
|Reserve for loan losses as a     
|percentage of nonperforming loans | 276.16%   | 217.50%   | 204.12%   | 318.39%   | 536.80%  
|                                 

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 Statement of Financial
Accounting Standards No. 114, totaling $59.8 million at December 31, 2001 and
$76.0 million at December 31, 2000. These amounts included $49.7 million and
$61.2 million, respectively, of impaired loans for which the related reserve for
loan losses was $11.0 million and $13.2 million at December 31, 2001 and 2000,
respectively. The remaining impaired loans did not require specific reserves.
Impaired loans are included in nonaccrual loans in Table 5.

In
addition to the nonperforming loans discussed earlier, there are $91.2 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 2001 by loan type
(commercial real estate, other commercial, small business and consumer). Loans
totaling $114.5 million were added during 2001, down from $130.8 million in
2000. The majority of these additions in both years related to the commercial
loan portfolio. However, $36.3 million of small business loans were added in
2001, compared with $19.8 million in 2000. The additions to nonperforming loans
in 2001 were offset by sales of $48.6 million and charge-offs of $37.0 million,
which included the impact of the sale of several large credit relationships in
the secondary market. Payments of $31.5 million also reduced nonperforming loans
in 2001. 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.

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

|                                         | Commercial  | Other      | Small   
|---------------------------------------- | ----------- | ---------- | --------
|($ in thousands)                         | Real Estate | Commercial | Business
|                                        
|Nonperforming loans at December 31, 2000 | $  115      | $ 59,801   | $ 16,005
|Additions                                | 5,070       | 58,956     | 36,260  
|Gross charge-offs                        | -           | (29,361)   | (7,578) 
|Transfers to foreclosed assets           | -           | (2,027)    | (1,353) 
|Returned to performing status            | -           | -          | (212)   
|Payments                                 | -           | (16,190)   | (11,071)
|Sales                                    | -           | (48,003)   | (603)   
|                                        
|Nonperforming loans at December 31, 2001 | $ 5,185     | $ 23,176   | $ 31,448
|                                        

Foreclosed
assets and excess bank-owned property, which are recorded at fair value less
estimated selling costs, totaled $7.3 million at December 31, 2001, up from $6.9
million at December 31, 2000, and down from $11.9 million at December 31, 1999.
The decrease in 2000 was primarily the result of sales of these nonperforming
assets.

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, 2001, the Companys nonperforming asset ratio was 0.69%
compared to 0.73% at year-end 2000 and 0.81% at year-end 1999.

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 $72.4
million in 2001 compared to $98.9 million in 2000 and $64.9 million in 1999. Net
charge-offs as a percentage of average loans were 0.62% in 2001 compared to
0.86% in 2000 and 0.62% in 1999. The decrease was principally due to the
commercial loan portfolio which had a net charge-off ratio of 0.76% in 2001,
down from 1.76% in 2000 and 1.06% in 1999. The commercial charge-offs primarily
related to large syndicated loans, with a significant portion resulting from
credits to borrowers with relatively higher levels of leverage. The small
business net charge-off ratio increased to 0.70% in 2001, up from 0.48% in 2000
and 0.33% in 1999. The increase in 2001 was primarily due to the impact of the
weaker economy. Small business net charge-offs in 1999 included several
relatively large recoveries. The increase in the consumer loan net charge-off
ratio to 0.52% in 2001 from 0.43% in 2000 was driven primarily by increases in
the indirect portfolio. In addition, 1999 consumer net charge-offs included $0.7
million of recoveries related to the sale of a pool of charged-off loans, a
majority of which related to 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 a $97.3 million provision for loan losses in 2001 compared to $120.7
million in 2000 and $87.8 million in 1999. While the provision remained at
relatively high levels in 2001, it was down almost 20% from the prior year. The
provision for loan losses for 2001 exceeded net charge-offs by $24.8 million.
Table 7 presents an analysis of the activity in the reserve for loan losses for
the past three years.

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

|Year Ended December 31 ($ in thousands)           | 2001      | 2000      | 1999     
|------------------------------------------------- | --------- | --------- | ---------
|                                                 
|Balance at beginning of year                      | $ 178,253 | $ 156,072 | $ 130,347
|Loans charged off:                               
|Commercial                                        | (29,982)  | (65,750)  | (46,195) 
|Small business                                    | (21,796)  | (15,337)  | (12,134) 
|Consumer                                          | (39,847)  | (31,366)  | (25,037) 
|Recoveries:                                      
|Commercial                                        | 6,203     | 2,182     | 5,303    
|Small business                                    | 4,564     | 3,929     | 4,835    
|Consumer                                          | 8,412     | 7,491     | 8,300    
|                                                 
|Net loans charged off                             | (72,446)  | (98,851)  | (64,928) 
|Provision for loan losses                         | 97,250    | 120,650   | 87,800   
|Addition due to purchase transactions             | -         | 450       | 3,035    
|Transfer due to securitizations                   | (7,291)   | (68)      | (182)    
|                                                 
|Balance at end of year                            | $ 195,766 | $ 178,253 | $ 156,072
|                                                 
|Reserve for loan losses as a percentage of loans  | 1.74%     | 1.47%     | 1.44%    
|Net charge-offs as a percentage of average loans:
|Commercial                                        | 0.76%     | 1.76%     | 1.06%    
|Small business                                    | 0.70%     | 0.48%     | 0.33%    
|Consumer                                          | 0.52%     | 0.43%     | 0.38%    
|Total loans                                       | 0.62%     | 0.86%     | 0.62%    
|                                                 

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.

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 residential mortgage and indirect portfolios, offset
by the previously discussed securitizations and sales. In addition, the
residential mortgage portfolio was impacted by a high level of refinancing
activity in 2001 which resulted in higher levels of fixed-rate loans  the
majority of which are sold in the secondary market with servicing retained. The
Company continued to proactively manage its problem loan exposure in 2001 as
evidenced by the charge-off of portions of credits, including those related to
the disposition of certain large commercial credits through sales. Reserve
levels increased during 2001 in view of current economic conditions and the risk
profile of the portfolio as indicated by the Companys internal risk rating
system and based upon consistent application of the Companys reserve
methodology.

The
reserve coverage of net charge-offs increased during 2001 to 270% from 180% in
2000 and 240% in 1999. This increase was primarily due to the lower level of
commercial net charge-offs experienced during 2001. 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 2001 reserve of $195.8 million provided 276% coverage of nonperforming
loans compared to $178.3 million with 218% coverage at year-end 2000 and $156.1
million with 204% coverage at year-end 1999. As a percentage of total loans, the
reserve for loan losses amounted to 1.74% at December 31, 2001, compared to
1.47% and 1.44% at December 31, 2000, and 1999, respectively.

The allocation of the December 31, 2001, reserve for loan losses is presented in Table 8.

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

|December 31, 2001            | Reserve for | % of Total
|---------------------------- | ----------- | ----------
|($ in millions)              | Loan Losses | Reserve   
|                            
|Commercial real estate loans | $ 2.9       | 1.5       
|Other commercial loans       | 48.0        | 24.5      
|Small business loans         | 42.1        | 21.5      
|Consumer loans               | 55.0        | 28.1      
|Unallocated reserve          | 47.8        | 24.4      
|                            
|Total                        | $ 195.8     | 100.0     
|                            

The
assumptions and methodologies used in allocating the reserve for loan losses
were refined during the year to more fully reflect the separate loss experience
of certain segments of the commercial and consumer portfolios. Allocations to
the commercial portfolio increased to $50.9 million at December 31, 2001, from
$48.2 million a year ago as a result of the higher levels of losses experienced
over the past several years. The allocation to the small business portfolio also
increased from $39.0 million at December 31, 2000, to $42.1 million at December
31, 2001, reflecting higher charge off experience in recent years. The
allocation to the consumer portfolio declined from $62.6 million at December 31,
2000, to $55.0 million at December 31, 2001, in part due to the indirect auto
loan securitization. The unallocated reserve increased from 16% of the total
reserve in 2000 to 24% in 2001 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.

The
Company expects the provision for loan losses for 2002 to remain relatively
high. Economic forecasts for the overall U.S. economy are mixed, with some
economists forecasting a recovery during 2002, while others indicate a
continuation of current conditions. Management believes that the current local
economic conditions, which have only experienced modest weakness in 2001, will
continue throughout 2002. Other factors which could impact the provision level
for 2002 include loan growth; the level of delinquent and nonperforming loans;
the risk profile of the portfolio, including the impact of a soft economy on the
large syndicated loan portfolio (which includes borrowers with significant
operations outside the Companys local markets) as well as the small
business and consumer portfolios; and the amounts and timing of future cash
flows expected to be received on impaired loans. Negative trends in any of these
factors could result in deterioration in asset quality resulting in higher
levels of nonperforming loans, charge-offs and provisioning. The Company will
continue to evaluate these levels and trends and provide accordingly.

## 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 $12.6 billion in 2001, a $513.2 million (4%) increase from
2000. Average deposits totaled $12.1 billion in 2000, a $917.9 million (8%)
increase from 1999. Excluding the effect of the Beaumont and Compass
transactions, average deposits increased approximately 6% in 2000 compared to
1999.

Average
core deposits in 2001 totaled $10.1 billion or 80.5% of total average deposits,
up $544.8 million (6%) compared to 2000. Average noninterest-bearing deposits
increased $131.4 million (6%) and average savings grew $398.9 million (19%). The
increase in average core deposits was a result of Hibernias emphasis on
attracting new deposits and expanding current banking relationships. 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.

Average
core deposits in 2000 totaled $9.6 billion or 79.4% of total average deposits,
up $533.5 million (6%) compared to 1999. Approximately one-third of this
increase was due to the effect of the Beaumont and Compass transactions. Average
noninterest-bearing deposits increased $78.1 million (4%) and average savings
grew $427.7 million (25%) as a result of the continued promotion of specialty
consumer deposit products.

NOW
account average balances for 2001 increased $49.3 million (16%) compared to 2000
and money market average deposits were up $112.1 million (5%) in 2001 compared
to 2000. NOW account average balances for 2000 were down $42.8 million (12%)
compared to 1999, and money market average deposits were up $87.0 million (4%)
in 2000 compared to 1999. 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 $1,779.3 million in 2001, $1,622.7
million in 2000 and $1,389.1 million in 1999 (reducing NOW account average
balances and increasing money market deposit account average balances). Net of
this effect, NOW account average balances were up $205.9 million (11%) in 2001
compared to 2000 and up $190.8 million (11%) in 2000 compared to 1999, and money
market deposit account average balances were down $44.5 million (8%) in 2001
compared to 2000 and down $146.6 million (21%) in 2000 compared to 1999.

|TABLE
9
|
AVERAGE DEPOSIT RATES
|-------------------------------

|                                            | 2001 | 2000 | 1999
|------------------------------------------- | ---- | ---- | ----
|                                           
|NOW accounts                                | 2.37 | %    | 3.80
|Money market deposit accounts               | 2.12 |      | 2.88
|Savings accounts                            | 3.07 |      | 4.52
|Other consumer time deposits                | 5.20 |      | 5.37
|Public fund certificates of deposit of     
|$100,000 or more                            | 4.66 |      | 6.09
|Certificates of deposit of $100,000 or more | 5.64 |      | 6.03
|Foreign time deposits                       | 3.56 |      | 5.93
|                                           
|Total interest-bearing deposits             | 3.82 | %    | 4.77
|                                           

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 rate
environment and the movement of longer-term deposit funds into more liquid
deposit products as the volatility of the market has increased. Foreign deposits
were positively impacted by a treasury management sweep product which moves
commercial customer funds into higher-yielding Eurodollar deposits. Because of
the nature of these commercial customer funds, they are considered stable and
not subject to the same volatility as other sources of foreign deposits.

Average
noncore deposits increased $384.4 million (18%) from 1999 to $2,490.4 million in
2000. Approximately 20% of the increase was due to the effects of the Beaumont
and Compass transactions. Average public fund certificates of deposit of
$100,000 or more decreased $108.2 million (10%). Average other
large-denomination certificates of deposit increased $387.7 million (52%) and
foreign deposits increased $104.9 million (34%). The growth in other
large-denomination certificates of deposit was primarily the result of
competitive pricing and increased marketing efforts as the Company funded loan
growth. Foreign deposits were positively impacted by the treasury management
sweep product.

Deposits
at December 31, 2001, totaled $13.0 billion, up $260.4 million (2%) from
December 31, 2000.

|TABLE
10
|
DEPOSIT COMPOSITION
|------------------------------

|                              | 2001       | 2000     | 1999    
|----------------------------- | ---------- | -------- | --------
|                             
|                              | Average    | % of     | Average 
|($ in millions)               | Balances   | Deposits | Balances
|                             
|Noninterest-bearing           | $ 2,221.9  | 17.6     | %       
|NOW accounts                  | 355.7      | 2.8      |         
|Money market deposit accounts | 2,272.4    | 18.0     |         
|Savings accounts              | 2,514.6    | 20.0     |         
|Other consumer time deposits  | 2,784.9    | 22.1     |         
|                             
|Total core deposits           | 10,149.5   | 80.5     |         
|                             
|Public fund certificates of  
|deposit of $100,000 or more   | 830.8      | 6.6      |         
|Certificates of deposit of   
|$100,000 or more              | 1,044.7    | 8.3      |         
|Foreign time deposits         | 583.3      | 4.6      |         
|                             
|Total deposits                | $ 12,608.3 | 100.0    | %       
|                             

## BORROWINGS

Average
borrowings - which include federal funds purchased; securities sold under
agreements to repurchase (repurchase agreements); treasury, tax and loan
account; and Federal Home Loan Bank (FHLB) advances - decreased $89.0 million
(4%) from 2000 to $2.1 billion in 2001.

Average
federal funds purchased and treasury, tax and loan borrowings were $362.5
million during 2001, a decrease of $371.4 million from 2000. This decrease
reflects the reduction of federal funds purchased in 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. Other fluctuations in short-term borrowings stem from
differences in the timing of growth in the loan portfolio and growth of other
funding sources (deposits, proceeds from maturing securities and FHLB advances).
Average repurchase agreements increased $53.2 million in 2001 from 2000. This
increase primarily resulted from treasury management products which sweep funds
from commercial customers deposit accounts.

The
Companys FHLB advances totaled $1.0 billion at December 31, 2001, and are
comprised of various advances from the Federal Home Loan Bank of Dallas. The
average rate on FHLB advances during 2001 was 5.29% compared to 5.78% during
2000. FHLB advances were relatively unchanged when compared to December 31,
2000. During 2001 and 2000, FHLB advances totaling $300 million and $100
million, respectively, reached maturity. Replacement funding consisted of a $300
million FHLB advance obtained in the third quarter of 2000 and an additional
$300 million FHLB advance obtained in the first quarter of 2001, each bearing
quarterly adjustable rates. The FHLB may demand payment of $400 million in
callable advances at quarterly intervals, of which $200 million is not callable
before June 2003. If called prior to maturity, replacement funding will be
offered by the FHLB at a then-current rate.

Of
the $1.0 billion in FHLB advances outstanding at December 31, 2001, $640 million
accrues interest at variable rates. Hibernia instituted partial hedges against
the effect of rising interest rates on its variable rate debt by entering into
interest rate swap agreements in the first and second quarters of 2001, whereby
Hibernia will receive quarterly variable rate (LIBOR) payments and pay a fixed
rate on a notional amount of $600 million. The estimated negative fair value of
these interest rate swap agreements totaled $11.1 million at December 31, 2001,
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 $600 million of FHLB
advances from a variable rate to a fixed rate.

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
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. 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, 2001, the Company would expect
a decrease in after-tax net interest income of $7.9 million in the event of an
immediate and sustained 200-basis-point parallel interest rate increase, and an
increase in after-tax net interest income of $2.0 million in the event of an
immediate and sustained 100-basis-point parallel interest rate decrease. Due to
the low rate environment experienced at year-end 2001, with a federal funds rate
of 1.75%, the 200-basis-point interest rate decrease would have been unrealistic
and was therefore replaced with a 100-basis-point interest rate decrease.
Results of both scenarios are within the limits of Hibernias policy
objective. In addition, the Company projects a decrease in after-tax net
interest income of $2.9 million and an increase of $3.3 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, 2000, the Company could
expect a decrease in after-tax net interest income of $14.4 million in the event
of an immediate and sustained 200-basis-point parallel interest rate increase,
and an increase in after-tax net interest income of $3.4 million in the event of
an immediate and sustained 200-basis-point parallel interest rate decrease.
Results of both scenarios were within the limits of Hibernias policy
objective. In addition, the Company projected an increase in after-tax net
interest income of $2.1 million and an increase of $18.6 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,
2001. 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, 2001               | 1-30         
|($ in thousands)                | Days         
|                               
|Earning assets:                
|Loans                           | $ 3,068,106  
|Securities available for sale   | 3,241,277    
|Securities held to maturity     | 9,412        
|Mortgage loans held for sale    | 566,933      
|Other earning assets            | 46,356       
|                               
|Total earning assets            | 6,932,084    
|                               
|Funding sources:               
|NOW accounts                    | 384,898      
|Money market deposit accounts   | 2,493,630    
|Savings accounts                | 2,665,233    
|Foreign deposits                | 586,848      
|Other interest-bearing deposits | 1,537,655    
|Short-term borrowings           | 752,747      
|Federal Home Loan Bank advances | 40,070       
|Noninterest-bearing sources     | -            
|                               
|Total funding sources           | 8,461,081    
|                               
|Repricing/maturity gap:        
|Period                          | $ (1,528,997)
|Cumulative                      | $ (1,528,997)
|                               
|Gap/total earning assets:      
|Period                          | (10.0)%      
|Cumulative                      | (10.0)%      
|                               

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 45% 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, 2001, these deposits totaled $394.3 million, of which
approximately $66.4 million had been repriced. Of the remaining $327.9 million,
$311.1 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 Statement of
Financial Accounting Standards (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 (including 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 with
a notional value of $483.5 million and an estimated positive fair value of $8.8
million were designated as fair value hedges at December 31, 2001. The related
hedged mortgage loans held for sale had a principal balance of $483.5 million
and were 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 hedge. 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, 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 $1.6 billion at December 31, 2001, 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
$10.6 million at December 31, 2001, 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 Federal Home Loan Bank advances. Hibernia will
receive quarterly variable-rate (LIBOR) payments and pay fixed rates under the
interest rate swap agreements on a total notional amount of $600 million. The
estimated negative fair value of derivative financial instruments designated as
cash flow hedges totaled $11.1 million at December 31, 2001.

## 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 18.97% in 2001 compared to
17.59% in 2000 and 18.61% in 1999. Table 12 details the components of the net
interest margin for the past five years.

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

|                                                    | 2001   | 2000   | 1999   | 1998   | 1997  
|--------------------------------------------------- | ------ | ------ | ------ | ------ | ------
|                                                   
|Yield on earning assets                             | 7.61%  | 8.32%  | 7.83%  | 8.04%  | 8.21% 
|Rate on interest-bearing liabilities                | 3.97   | 4.99   | 4.24   | 4.40   | 4.34  
|                                                   
|Net interest spread                                 | 3.64   | 3.33   | 3.59   | 3.64   | 3.87  
|Contribution of noninterest-bearing funds           | 0.75   | 0.88   | 0.79   | 0.87   | 0.86  
|                                                   
|Net interest margin                                 | 4.39%  | 4.21%  | 4.38%  | 4.51%  | 4.73% 
|                                                   
|Noninterest-bearing funds supporting earning assets | 18.97% | 17.59% | 18.61% | 19.67% | 19.92%
|                                                   

|TABLE
13
|
INTEREST-EARNING ASSET COMPOSITION
|---------------------------------------------

|(Percentage of average balances) | 2001  |   | 2000  |   | 1999  |   | 1998  |   | 1997 
|-------------------------------- | ----- | - | ----- | - | ----- | - | ----- | - | -----
|                                
|Commercial loans                 | 20.4  | % | 24.5  | % | 28.4  | % | 28.5  | % | 24.9 
|Small business loans             | 16.0  |   | 16.0  |   | 16.4  |   | 16.0  |   | 16.5 
|Consumer loans                   | 39.3  |   | 37.5  |   | 31.9  |   | 29.7  |   | 28.9 
|                                
|Total loans                      | 75.7  |   | 78.0  |   | 76.7  |   | 74.2  |   | 70.3 
|                                
|Securities available for sale    | 18.7  |   | 18.2  |   | 20.1  |   | 22.1  |   | 26.1 
|Securities held to maturity      | 2.1   |   | 2.4   |   | 0.2   |   | -     |   | -    
|                                
|Total securities                 | 20.8  |   | 20.6  |   | 20.3  |   | 22.1  |   | 26.1 
|                                
|Short-term investments           | 1.5   |   | 0.8   |   | 1.7   |   | 2.1   |   | 3.0  
|Mortgage loans held for sale     | 2.0   |   | 0.6   |   | 1.3   |   | 1.6   |   | 0.6  
|                                
|Total interest-earning assets    | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0
|                                

The
net interest margin of 4.39% in 2001 compares to 4.21% in 2000 and 4.38% in
1999. 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.

The
decline in the net interest margin in 1999 was the result of a decline in loan
yields to 8.29% from 8.63% in 1998, a decline in the interest rate spread to
3.59% from 3.64% in 1998, an increased use of market-rate funds and a decline in
the level of noninterest-bearing funds supporting earning assets. The level of
noninterest-bearing funds supporting earning assets decreased 106 basis points
to 18.61% in 1999 from 19.67% in 1998. This change resulted in an eight
basis-point decline in the contribution of noninterest-bearing funds to the net
interest margin. These negative impacts were partially offset by the change in
the mix of earning assets to proportionately more loans, which have historically
been higher-yielding than other investments and short-term assets.

## RESULTS OF OPERATIONS

The
Company earned $218.8 million, or $1.37 per common share, in 2001. In 2000 net
income was $170.6 million, or $1.05 per common share, and 1999 net income was
$175.1 million, or $1.07 per common share. Net income per common share -
assuming dilution was $1.35 in 2001 compared to $1.04 and $1.06 for 2000 and
1999, respectively.

Operating
results increased in 2001 due to a $74.4 million increase in noninterest income
(excluding securities transactions), a $53.2 million increase in
taxable-equivalent net interest income and a $23.4 million decrease in the
provision for loan losses compared to 2000. These positive effects on operations
were partially offset by a $72.2 million increase in noninterest expense and a
$5.0 million increase in net securities losses.

The
slight decrease in 2000 from 1999 was due to a $120.7 million provision for loan
losses compared to a $87.8 million provision recorded in 1999, a $35.2 million
increase in noninterest expense and a $4.4 million decrease in net securities
gains (losses). Partially offsetting these negative effects, 2000 results
included a $24.8 million increase in taxable-equivalent net interest income and
a $38.3 million increase in noninterest income (excluding securities
transactions).

Effective
January 1, 2002, with the adoption of SFAS No. 142, Goodwill and Other
Intangible Assets, the Company will apply new accounting rules regarding
amortization of goodwill and other intangible assets. Application of the
nonamortization provisions of this accounting pronouncement is expected to
result in an increase in net income of approximately $11,000,000 ($.07 per
share) per year.

## NET INTEREST
INCOME

Net
interest income on a taxable-equivalent basis increased $53.2 million, or 9%, to
$674.2 million in 2001 from $621.1 million in 2000. Taxable-equivalent net
interest income in 1999 was $596.3 million. Taxable-equivalent net interest
income increased in 2001 compared to 2000 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. The increase in
taxable-equivalent net interest income in 2000 as compared to 1999 is the result
of the growth of and change in the mix of earning assets, particularly in
consumer loans which increased $1.2 billion (27%) from 1999.

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

|                                                                                                                                                                                   | 2001 Compared to 2000                 | 2000 Compared to 1999
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | ---------------------
|                                                                                                                                                                                  
|                                                                                                                                                                                   | Increase (Decrease) Due to Change In:
|                                                                                                                                                                                  
|($ in thousands)                                                                                                                                                                   | Volume                                | Rate                 
|                                                                                                                                                                                  
|Taxable-equivalent interest earned on:                                                                                                                                            
|Commercial loans                                                                                                                                                                   | $(39,390)                             | $(57,244)            
|Small business loans                                                                                                                                                               | 8,644                                 | (13,048)             
|Consumer loans                                                                                                                                                                     | 42,135                                | (6,596)              
|                                                                                                                                                                                  
|Loans                                                                                                                                                                              | 11,389                                | (76,888)             
|                                                                                                                                                                                  
|Securities available for sale                                                                                                                                                      | 12,439                                | (18,078)             
|Securities held to maturity                                                                                                                                                        | (2,411)                               | (537)                
|                                                                                                                                                                                  
|Securities                                                                                                                                                                         | 10,028                                | (18,615)             
|                                                                                                                                                                                  
|Short-term investments                                                                                                                                                             | 5,368                                 | (3,594)              
|Mortgage loans held for sale                                                                                                                                                       | 14,618                                | (1,168)              
|                                                                                                                                                                                  
|Total                                                                                                                                                                              | 41,403                                | (100,265)            
|                                                                                                                                                                                  
|Interest paid on:                                                                                                                                                                 
|NOW accounts                                                                                                                                                                       | 1,660                                 | (4,846)              
|Money market deposit accounts                                                                                                                                                      | 3,087                                 | (17,194)             
|Savings accounts                                                                                                                                                                   | 15,891                                | (34,377)             
|Other consumer time deposits                                                                                                                                                       | (7,737)                               | (4,969)              
|Public fund certificates of                                                                                                                                                       
|deposit of $100,000 or more                                                                                                                                                        | (6,323)                               | (12,386)             
|Certificates of deposit                                                                                                                                                           
|of $100,000 or more                                                                                                                                                                | (5,158)                               | (4,248)              
|Foreign time deposits                                                                                                                                                              | 8,028                                 | (11,787)             
|Federal funds purchased                                                                                                                                                            | (20,105)                              | (9,164)              
|Repurchase agreements                                                                                                                                                              | 2,855                                 | (13,020)             
|Federal Home Loan Bank advances                                                                                                                                                    | 12,402                                | (4,640)              
|                                                                                                                                                                                  
|Total                                                                                                                                                                              | 4,600                                 | (116,631)            
|                                                                                                                                                                                  
|Taxable-equivalent net interest income                                                                                                                                             | $ 36,803                              | $ 16,366             
|                                                                                                                                                                                  
|(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.

As
indicated in Table 14, the change in volume increased taxable-equivalent net
interest income in 2001 by $36.8 million from 2000. 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.

Although
interest rates declined in 2001, 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.

For
2000 compared to 1999, the change in net volume increased taxable-equivalent net
interest income by $41.4 million. This increase was primarily the result
of growth in loans, adding $90.1 million to taxable-equivalent
interest income, partially offset by a higher level of interest-bearing
funds which increased interest expense by $52.6 million. The change in interest
rates caused a $16.6 million decline in taxable-equivalent net interest income
for 2000 compared to 1999. Taxable-equivalent interest income on loans increased
$56.2 million, and interest expense increased $83.6 million due to increases in
the interest rate environment and a change in the mix of funding sources toward
market-rate funds.

## NONINTEREST INCOME

Noninterest
income totaled $318.1 million in 2001 compared to $248.7 million in 2000 and
$214.7 million in 1999. Excluding securities transactions, noninterest income
was up $74.4 million (29%) in 2001 compared to 2000 and $38.3 million (18%) in
2000 compared to 1999.

The
major categories contributing to the increase in noninterest income were gains
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; other service, collection and exchange charges, up $9.0 million;
mortgage loan origination and servicing fees, up $6.5 million; insurance fees,
up $6.2 million and investment banking fees, up $4.1 million.

Service
charges on deposits increased $14.3 million (14%) from 2000 to $117.3 million in
2001. This change was primarily due to growth in transaction-based fees,
commercial account analysis fees and increased treasury management products and
services. In the fourth quarter of 2001, the Company implemented a new fee
structure which further contributed to the increase in this category.

Mortgage
loan origination and servicing fees were $29.4 million in 2001, up $6.5 million
(29%) compared to 2000. The increase in mortgage fees is primarily the result of
increased mortgage activity due to favorable interest rates during 2001. The
volume of mortgage loans serviced increased to $8.8 billion at December 31,
2001, compared to $6.6 billion at December 31, 2000. In 2001 Hibernia originated
a record $4.5 billion in residential first mortgages.

Trust
fees were $25.9 million in 2001, down $1.1 million (4%) compared to 2000,
primarily due to a decline in market value of trust assets resulting in lower
trust fees.

The
merger with Southcoast in April 2000 initiated the Companys entry into the
full-service investment banking business. Investment banking fees, which include
brokerage commissions, contributed $13.4 million to noninterest income in 2001,
up $4.1 million (45%) from 2000.

Insurance
fees were $13.3 million in 2001, up $6.2 million (88%) from 2000. The purchase
of the Rosenthal Agency, consummated in July 2000, significantly expanded
Hibernias property and casualty insurance capabilities.

ATM
fees were up $1.5 million (11%) from 2000 to $14.6 million in 2001. This
increase was fueled by Hibernias continued growth of remote ATMs, along
with an expansion of ATM services.

Debit/credit
card fees were $17.9 million in 2001, an increase of $3.0 million (20%) compared
to 2000. The increase primarily resulted from fees generated by Hibernias
MasterMoney debit card and Capital AccessSM credit card for small
businesses.

The
increase in other service, collection and exchange charges of $4.5 million is
primarily due to indirect lending servicing fees of $3.1 million resulting from
the securitization of indirect loans discussed earlier.

Gains
on sales of mortgage loans increased $17.2 million (440%) in 2001 compared to
2000. 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.

Other
operating income increased $18.4 million (201%) to $27.5 million in 2001
compared to 2000. The gain on the indirect auto loan securitization added $11.4
million to other income. This gain was partially offset by a loss included in
derivative income from interest rate contracts of $1.0 million on an interest
rate swap entered into to lock in the gain on the transaction. Other income
related to the indirect loan securitization also added $2.1 million to other
operating income in 2001.

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 increased $2.4 million in 2001
compared to 2000. This increase was impacted by the adoption of SFAS No. 133,
which accelerates the timing of revenue recognition on derivative instruments.
Also contributing to the increase was a higher volume of customer interest rate
swaps initiated in 2001, which are generally matched to reduce the
Companys risk in these transactions. This increase in revenue was offset
by the $1.0 million loss on the interest rate swap discussed above, entered into
in conjunction with the indirect auto loan securitization.

Net
securities losses totaled $8.9 million in 2001 compared to net securities losses
of $3.9 million in 2000. The net securities losses in 2001 and 2000 are
primarily due to other-than-temporary impairment in the Companys
private-equity investments. The Company does not plan any new direct
private-equity investments.

The
major categories contributing to the increase in noninterest income in 2000 were
investment banking fees, up $9.2 million; retail investment service fees, up
$7.1 million; service charges on deposits, up $5.6 million; insurance fees, up
$4.7 million; mortgage loan origination and servicing fees, up $4.1 million;
trust fees, up $3.7 million; and debit and credit card fees, up $3.2 million.

|TABLE
15
|
NONINTEREST INCOME
|-----------------------------

|                                                | Percent Increase (Decrease)
|----------------------------------------------- | ---------------------------
|                                               
|                                                | 2001                       
|($ in thousands)                                | 2001                       
|                                               
|Service charges on deposits                     | $ 117,265                  
|Mortgage loan origination                      
|and servicing fees                              | 29,366                     
|Retail investment service fees                  | 27,953                     
|Trust fees                                      | 25,851                     
|Investment banking                              | 13,355                     
|Insurance                                       | 13,338                     
|Other service, collection and exchange charges:
|ATM fees                                        | 14,633                     
|Debit/credit card fees                          | 17,888                     
|Other                                           | 18,776                     
|                                               
|Total other service, collection                
|and exchange charges                            | 51,297                     
|                                               
|Gain on sales of mortgage loans                 | 21,073                     
|Other operating income:                        
|Gain on indirect auto loan securitization       | 11,417                     
|Mortgage loan derivative income                 | 423                        
|Derivative income from interest rate contracts  | 3,043                      
|Other income                                    | 12,664                     
|                                               
|Total other operating income                    | 27,547                     
|                                               
|Securities gains (losses), net                  | (8,921)                    
|                                               
|Total noninterest income                        | $ 318,124                  
|                                               
|N/M = not meaningful                           

## NONINTEREST
EXPENSE

Noninterest
expense totaled $548.3 million in 2001 compared to $476.1 million in 2000 and
$440.9 million in 1999.

Noninterest
expense increased $72.2 million (15%) in 2001 compared to 2000. Excluding the
effect of the purchase transactions in 2000, noninterest expense would have
increased approximately 13% in 2001 compared to 2000. The major categories
contributing to the increase in noninterest expense were staff costs, up $31.8
million; amortization of intangibles, up $16.9 million; occupancy and equipment
expense, up $3.4 million; and loan collection expenses, up $2.7 million.

Staff
costs, which represent the largest component of noninterest expense, increased
$31.8 million in 2001 compared to 2000. The effect of purchased companies
accounted for approximately 25% of the increase. The remaining increase compared
to the prior year is primarily due to $11.3 million in wage increases and $10.7
million in higher incentives. The increase in incentive expense was driven
primarily by the growth in revenues during the year.

Occupancy
and equipment costs increased $3.4 million (5%) to $69.1 million in 2001. This
increase is primarily due to the effect of the purchased companies as well as
higher utility, rental and maintenance costs in 2001.

Data
processing costs increased $1.8 million (6%) to $31.4 million in 2001. This
change is primarily due to higher software amortization and maintenance costs in
2001.

Amortization
of intangibles, a non-cash expense, increased $16.9 million (57%) to $46.6
million in 2001. This increase is primarily the result of a $12.3 million
provision for the temporary impairment of mortgage servicing rights recorded in
2001 and a higher amortization of mortgage servicing rights as a result of
increased volume of mortgage loans serviced and 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. For purposes of
performing its impairment evaluation, the mortgage servicing portfolio is
stratified on the basis of certain risk characteristics including loan type and
interest rate.

Loan
collection expense increased $2.7 million (44%) to $8.9 million in 2001. This
increase reflects increased legal fees associated with the collection of
delinquent and criticized assets. Approximately one-quarter of the $2.7 million
increase in 2001 relates to collection expenses associated with property taxes
due on one real estate secured commercial loan.

Advertising
and promotional expenses were up $1.1 million (7%) in 2001 due to
Hibernias brand campaign, along with Tower Gold ServicesSM and
home equity line campaigns. Other noninterest expense increased $10.1 million
(26%) to $49.0 million in 2001 primarily due to the reversal of approximately
$5.0 million of various balance sheet reserves in 2000, which were considered
excess at year-end.

Noninterest
expense increased $35.2 million (8%) in 2000 compared to 1999. Excluding the
effect of purchase transactions in 2000 and 1999, noninterest expense would have
increased approximately 3% in 2000 compared to 1999. Noninterest expense
excluding certain merger-related expenses would have increased $44.0 million
(10%) in 2000 from 1999. Merger-related expenses were $0.1 million and $9.0
million in 2000 and 1999, respectively. The major categories contributing to the
increase in noninterest expense were staff costs, up $34.2 million; amortization
of intangibles, up $6.0 million; state taxes on equity, up $1.6 million; and
foreclosed property expenses, up $1.6 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 2001 was 54.76%
compared to 54.49% in 2000 and 54.40% in 1999. Excluding merger-related
expenses, the efficiency ratio would have been 54.76%, 54.48% and 53.29% in
2001, 2000 and 1999, respectively.

The
cash-basis efficiency ratio, which excludes the impact of the amortization of
purchase accounting intangibles, was 52.80% in 2001 compared to 52.15% in 2000
and 52.29% in 1999. Excluding the effect of merger-related expenses, the
cash-basis efficiency ratio would have been 52.80%, 52.13% and 51.18% in 2001,
2000 and 1999, respectively.

|TABLE
16
|
NONINTEREST EXPENSE
|------------------------------

|                                                                                                                                                | Percent Increase (Decrease)
|----------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------
|                                                                                                                                               
|                                                                                                                                                | 2001                       
|($ in thousands)                                                                                                                                | 2001                       
|                                                                                                                                               
|Salaries                                                                                                                                        | $ 233,445                  
|Benefits                                                                                                                                        | 44,063                     
|                                                                                                                                               
|Total staff costs                                                                                                                               | 277,508                    
|                                                                                                                                               
|Occupancy, net                                                                                                                                  | 37,747                     
|Equipment                                                                                                                                       | 31,356                     
|                                                                                                                                               
|Total occupancy and equipment                                                                                                                   | 69,103                     
|                                                                                                                                               
|Data processing                                                                                                                                 | 31,427                     
|Advertising and promotional expenses                                                                                                            | 15,877                     
|Foreclosed property expense, net                                                                                                                | 887                        
|Amortization of intangibles                                                                                                                     | 46,604                     
|Telecommunications                                                                                                                              | 9,220                      
|Postage                                                                                                                                         | 7,940                      
|Stationery and supplies                                                                                                                         | 5,604                      
|Professional fees                                                                                                                               | 7,398                      
|State taxes on equity                                                                                                                           | 14,652                     
|Regulatory expense                                                                                                                              | 4,244                      
|Loan collection expense                                                                                                                         | 8,850                      
|Other                                                                                                                                           | 48,981                     
|                                                                                                                                               
|Total noninterest expense                                                                                                                       | $ 548,295                  
|                                                                                                                                               
|Efficiency ratio (1)                                                                                                                            | 54.76%                     
|                                                                                                                                               
|Cash-basis efficiency ratio (2)                                                                                                                 | 52.80%                     
|                                                                                                                                               
|(1)  Noninterest expense as a percentage of taxable-equivalent net interest income plus noninterest income (excluding securities transactions).
|(2) Excluding amortization of purchase accounting intangibles.                                                                                 

## INCOME TAXES

The
Company recorded a $118.5 million provision for income taxes in 2001 compared to
$91.9 million in 2000 and $95.7 million in 1999. The Companys effective
tax rates for 2001, 2000 and 1999 were 35.1%, 35.0% and 35.3%, respectively.

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 Hibernia National Bank are subject to Louisiana
state income tax. The Texas operations of Hibernia National Bank are subject to
Texas franchise tax.

Net
future deductible temporary differences at December 31, 2001, were $61.1
million. The reserve for loan losses, the largest component of future deductible
temporary differences, represents $195.8 million of this amount. The provision
for loan losses has been recognized as expense for financial reporting purposes
but is not deductible for federal income tax purposes until the loans are
charged off. Valued at the 35% federal statutory tax rate, the net future
deductible amounts, if ultimately recognized, would generate tax benefits of
$21.4 million. These benefits are recorded as a deferred tax asset at December
31, 2001.

## 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 $.53 per share were declared on the Companys common stock in 2001,
representing an 8% increase over the $.49 per common share declared in 2000.
Hibernias common dividend payout ratio (common dividends declared per
share divided by net income per common share) was 38.7% in 2001, 46.7% in 2000
and 40.7% in 1999.

Shareholders
equity totaled $1,559.8 million at the end of 2001 compared to $1,479.7 million
at the end of 2000 and $1,375.5 million at the end of 1999. The $80.1 million
(5%) increase in 2001 was primarily due to current-year earnings totaling $218.8
million, the issuance of $15.0 million of common stock and a $14.0 million
change in accumulated other comprehensive income. These increases were partially
offset by the redemption of $87.0 million of preferred stock and $82.7 million
in dividends on common stock.

In
April 2000, Hibernias Board of Directors authorized the Company to begin a
buyback of up to 7.5 million common shares over the following 12 months. At
December 31, 2000, the Company had repurchased 3,268,400 shares of its common
stock under this program at a cumulative weighted average price of $10.92. In
April 2001, Hibernias Board of Directors authorized the continuation of
the repurchase plan under terms that allow the repurchase of up to 3.5 million
additional shares of Hibernia common stock over the next 12 months. No shares
were repurchased under this plan in 2001.

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.

The
$104.1 million (8%) increase in shareholders equity in 2000 was primarily
due to $170.6 million in earnings and a $53.4 million change in accumulated
other comprehensive income, partially offset by $76.8 million in dividends on
common stock, the acquisition of $38.1 million of treasury stock and the
redemption of $13.1 million of preferred stock. The change in accumulated other
comprehensive income was primarily due to the declining interest rate
environment.

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 11.39% at year-end 2001, 10.94% at year-end 2000 and 11.46% at
year-end 1999. Leverage ratios were 8.14%, 7.65% and 8.11% at year-end 2001,
2000 and 1999, respectively. Table 17 shows the calculation of capital ratios
for the Company for the past five years.

The
purchase of the Compass banking offices during 2000 and the Beaumont banking
offices during 1999 enabled Hibernia to leverage its capital by acquiring assets
without increasing equity. As a result of these transactions, leverage and
risk-based capital ratios declined. The common share repurchase program
discussed earlier also lowered the regulatory capital ratios in 2000, but
Hibernias capital ratios still significantly exceed the minimum regulatory
capital adequacy requirements administered by the Federal Reserve Board.

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, 2001, the Banks Tier 1, total risk-based and leverage ratios
were 9.37%, 10.62% and 7.51%, respectively.

|TABLE
17
|
CAPITAL
|------------------

|($ in millions)                                                                                     |                             | 2001      | 2000      | 1999      | 1998      | 1997     
|--------------------------------------------------------------------------------------------------- | --------------------------- | --------- | --------- | --------- | --------- | ---------
|                                                                                                   
|Risk-based capital:                                                                                 | Tier 1                      | $ 1,307.7 | $ 1,230.7 | $ 1,203.2 | $ 1,166.0 | $ 1,042.5
|                                                                                                    | Total                       | 1,469.3   | 1,389.8   | 1,350.7   | 1,296.3   | 1,158.4  
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Assets:                                                                                             | Quarterly average assets(1) | 16,062.9  | 16,089.3  | 14,833.7  | 13,629.9  | 12,108.1 
|                                                                                                    | Net risk-adjusted assets    | 12,894.7  | 12,706.5  | 11,788.6  | 10,819.7  | 9,258.4  
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Ratios:                                                                                             | Tier 1 risk-based capital   | 10.14%    | 9.69%     | 10.21%    | 10.78%    | 11.26%   
|                                                                                                    | Total risk-based capital    | 11.39%    | 10.94%    | 11.46%    | 11.98%    | 12.51%   
|                                                                                                    | Leverage                    | 8.14%     | 7.65%     | 8.11%     | 8.55%     | 8.61%    
|                                                                                                   
|(1)Excluding the adjustment for accumulated other comprehensive income and other disallowed assets.

## 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 $10.6 billion at year-end 2001, up
$574.9 million (6%) from $10.1 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. As previously
discussed in the Funding Sources section, 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 2001 decreased to 86.8% compared to 95.5% at
year-end 2000 and 91.6% at year-end 1999. The decrease from the last two years
is primarily due to the decline in loans, 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, 21.0% of Hibernias earning assets
were funded by net large liabilities (total liabilities less short-term
investments) at year-end 2001, down approximately 390 basis points from the
prior-year level of 24.9%.

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 $2.6 billion residential
first mortgage portfolio and $1.5 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, 2001,
the Parent Company had $86.4 million in available funds. During 2001 the Parent
Company received $179.3 million in dividends from its subsidiaries. The issuance
of common stock during 2001 provided the Parent Company with $12.1 million of
additional funds. The Parent Company paid $82.7 million in dividends to common
shareholders and $6.0 million in dividends to preferred shareholders.
Additionally, the Parent Company paid $87.0 million to redeem shares of its
preferred stock.

The
payment of dividends by the Bank to the Parent Company is restricted by various
regulatory limitations. In 2002, 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 $116.2 million plus net retained profits earned
in 2002 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 decrease in cash and
cash equivalents in 2001 of $121.6 million. This decrease was the result of cash
used in financing activities of $461.9 million, primarily due to the decrease in
short-term borrowings of $557.8 million, the payment of dividends of $88.7
million and the redemption of preferred stock of $87.0 million, partially offset
by increased deposits of $260.4 million. Net cash of $423.3 million provided
from investing activities primarily resulted from a net reduction in loans of
$507.2 million, partially offset by purchases of premises and equipment of $74.3
million. Net cash used in operating activities totaled $83.1 million after
adjusting 2001 net income for non-cash and other operating items, the largest
being an increase of $452.1 million in mortgage loans held for sale.

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 with 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.

Cash
and cash equivalents decreased $117.3 million in 1999. Cash used in investing
activities totaled $1,035.9 million, as loan growth (net of sales) used cash of
$1,365.1 million and purchases of securities available for sale used $428.3
million, partially offset by $608.2 million in cash provided from the sales and
maturities of securities available for sale and the maturities of securities
held to maturity. These activities were partially offset with net cash provided
from financing activities of $435.4 million, as deposit growth provided cash of
$498.5 million. Net cash provided by operating activities totaled $483.2 million
after adjusting 1999 net income for non-cash and other operating items.

## FOURTH QUARTER RESULTS

Hibernia
reported net income of $56.4 million in the fourth quarter of 2001, compared to
$17.4 million in the fourth quarter of 2000 and $57.2 million in the third
quarter of 2001. Net income per common share was $.36 in the fourth quarter of
2001 compared to $.10 and $.36 in the fourth quarter of 2000 and the third
quarter of 2001, respectively. Fourth quarter 2001 net income per common share -
assuming dilution was $.35 compared to $.10 and $.35 for the fourth quarter of
2000 and the third quarter of 2001, respectively. Fourth quarter results include
a $29.3 million provision for loan losses, compared to $70.0 million in the
fourth quarter of 2000 and $23.0 million in the third quarter of 2001.

Cash-basis
net income totaled $60.2 million in the fourth quarter of 2001 compared to $21.7
million in the fourth quarter of 2000 and $61.1 million in the third quarter of
2001. Cash-basis net income per common share was $.38 for the fourth quarter of
2001, $.13 for the fourth quarter of 2000 and $.38 for the third quarter of
2001. Fourth quarter 2001 cash-basis net income per common share assuming
dilution was $.38 compared to $.13 for the fourth quarter of 2000 and $.37 for
the third quarter of 2001.

Average
earning assets totaled $15.2 billion in the fourth quarter, which was relatively
flat when compared to the fourth quarter of 2000. Significant variances from the
fourth quarter of 2000 include a decrease in loans of $727.6 million, offset by
increases in mortgage loans held for sale of $352.3 million and securities of
$279.8 million. The decrease in loans is primarily due to a reduction of
commercial loans and the securitization of approximately $600 million of
indirect auto loans in the second quarter of 2001. The increase in mortgage
loans held for sale is primarily due to the increased volume of fixed-rate
mortgages as a result of the interest rate environment.

Average
earning assets were down $140.8 million in the fourth quarter of 2001 compared
to the prior quarter. This decrease is primarily due to the decrease in
short-term investments of $358.0 million, offset by increases in mortgage loans
held for sale of $161.2 million and securities of $131.5 million. Third quarter
2001 had a higher-than-normal level of short-term investments as a result of
excess cash from the indirect auto loan securitization.

Average
deposits increased $525.6 million (4%) to $12.7 billion in the fourth quarter of
2001 from $12.1 billion in the fourth quarter of 2000. Average deposits were
down $120.8 million (1%) from the third quarter of 2001. Average short-term
borrowings in the fourth quarter of 2001 decreased $745.8 million compared to
the fourth quarter of 2000. This decrease reflects the use of proceeds from the
indirect auto loan securitization to reduce short-term borrowings.

Net
interest income, on a taxable-equivalent basis, totaled $174.7 million in the
fourth quarter of 2001 compared to $156.7 million in the fourth quarter of 2000
and $168.0 million in the third quarter of 2001.The increase in net interest
income in the fourth quarter of 2001 compared to the fourth quarter of 2000 and
the third quarter of 2001 was primarily the result of growth in the net interest
margin due to the rates on interest-bearing liabilities decreasing faster than
the rates on earning assets.

The
net interest margin of 4.58% for the fourth quarter of 2001 increased 47 basis
points from the fourth quarter of 2000. A 145-basis-point decrease in loan
yields led to the 148-basis-point decrease in the yield on earning assets. The
rate on interest-bearing liabilities decreased 225 basis points, and the
contribution of noninterest-bearing funds decreased 30 basis points compared to
the fourth quarter of 2000.

The
net interest margin of 4.58% for the fourth quarter of 2001 increased 21 basis
points from 4.37% in the third quarter of 2001. The increase in the margin was
primarily a result of a decrease in the yield on earning assets of 49 basis
points which was offset by a decline of 70 basis points in the cost of funds
supporting earning assets. Driving the cost of funds decline is the maturity of
higher-rate liabilities along with the impact of the Companys net liability
sensitive position. Table 18 illustrates the components of the net interest
margin for the last eight quarters.

|TABLE
18
|
NET INTEREST MARGIN (taxable-equivalent)
|---------------------------------------------------

|                             | 2001    | 2000
|---------------------------- | ------- | ----
|                            
|                             | Fourth  |     
|                             | Quarter |     
|                            
|Yield on earning assets      | 6.93    | %   
|Rate on interest-bearing    
|liabilities                  | 2.96    |     
|                            
|Net interest spread          | 3.97    |     
|Contribution of noninterest-
|bearing funds                | 0.61    |     
|                            
|Net interest margin          | 4.58    | %   
|                            
|Noninterest-bearing funds   
|supporting earning assets    | 20.75   | %   
|                            

The
Company recorded a $29.3 million provision for loan losses in the fourth quarter
of 2001 compared to $23.0 million in the prior quarter and $70.0 million in the
comparable period a year ago. The provision in the fourth quarter of 2000 was
increased primarily to address credit quality issues within the commercial loan
portfolio. The provision for loan losses exceeded net charge-offs by $13.6
million in the fourth quarter of 2001, and by $3.6 million and $15.6 million in
the prior quarter and the year-ago quarter, respectively.

Net
charge-offs were $15.7 million in the fourth quarter, down from $19.4 million in
the prior quarter and $54.4 million in the fourth quarter of 2000.

Noninterest
income, excluding securities transactions, was $85.9 million, up $19.1 million
(29%) from the fourth quarter of 2000 and up $4.8 million (6%) from the third
quarter of 2001. Gain on the sales of mortgage loans; service charges on
deposits; other service, collection and exchange charges; and mortgage loan
origination and servicing fees were the major categories of noninterest income
that increased in the fourth quarter of 2001 compared to the fourth quarter of
2000. Increased service charges on deposits and gain on sales of mortgage loans,
offset by a decrease in other operating income, contributed to the increase in
the fourth quarter of 2001 compared to the third quarter of 2001.

Noninterest
expense of $143.0 million in the fourth quarter of 2001 was $18.0 million (14%)
higher than $125.0 million in the fourth quarter of 2000 and $6.1 million (4%)
higher than $136.9 million in the third quarter of 2001. The increase compared
to the fourth quarter 2000 is primarily the result of an increase in the
provision for the temporary impairment of mortgage servicing rights and
increased amortization of mortgage servicing rights, as well as increased
salaries and benefits.

The
Companys efficiency ratio was 54.88% in the fourth quarter of 2001
compared to 55.92% and 54.98% in the fourth quarter of 2000 and the third
quarter of 2001, respectively. The cash-basis efficiency ratio, which excludes
the amortization of purchase accounting intangibles, was 53.09% in the fourth
quarter of 2001 compared to 53.57% in the fourth quarter of 2000 and 53.03% in
the third quarter of 2001.

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, loan demand,
changes in business or consumer spending, borrowing or savings habits,
competition, stock price volatility, government monetary policy, changes in laws
and regulations 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.

|QUARTERLY CONSOLIDATED SUMMARY OF INCOME AND SELECTED FINANCIAL DATA (1)                                                                                                             
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
|
|
|2001                                                                                                                                                                                 
|                                                                                                                                                                                     
|($ 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                                                                                                                                         
|                                                                                                                                                                                     
|Per common share information: (2)                                                                                                                                                    
|Net income                                                                                                                                                                           
|Net income - assuming dilution                                                                                                                                                       
|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                                                                                                                                                                     
|Average equity/average assets                                                                                                                                                        
|Tier 1 risk-based capital ratio                                                                                                                                                      
|Total risk-based capital ratio                                                                                                                                                       
|Leverage ratio                                                                                                                                                                       
|                                                                                                                                                                                     
|Cash-basis financial data(3)                                                                                                                                                         
|Net income applicable to common shareholders                                                                                                                                         
|Net income per common share(2)                                                                                                                                                       
|Net income per common share - assuming dilution (2)                                                                                                                                  
|Annualized return on assets                                                                                                                                                          
|Annualized return on common equity                                                                                                                                                   
|Efficiency ratio                                                                                                                                                                     
|Average equity/average assets                                                                                                                                                        
|                                                                                                                                                                                     
|(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)For a discussion of net income per common share computations refer to Note 19 of the consolidated financial statements - "Net Income Per Common Share Data."                      
|(3)Excluding amortization and balances of purchase accounting intangibles net of applicable taxes.                                                                                   

|GRAPHIC DESRIPTION                               | CROSS REFERENCE/FINANCIAL INFORMATION                                    
|------------------------------------------------ | -------------------------------------------------------------------------
|Average Earning Assets Bar Graph                 | See Consolidated Average Balances, Interest and Rates                    
|                                                
|                                                
|                                                
|Loan Mix Pie Chart                               | See Table 1 - Composition of Loan Portfolio                              
|                                                 | 1999 Total Loans $10,857,000: Commercial $3,693,000 (34%),               
|                                                 | Small Business Loans $2,362,000 (22%), Consumer Loans $4,802,000 (44%)   
|                                                
|                                                
|                                                
|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, 2001 and 2000, 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, 2001. 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, 2001 and 2000, and the consolidated results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally
accepted in the United States.

/s/ Ernst & Young, LLP

New Orleans, Louisiana
January 16, 2002

|CONSOLIDATED BALANCE SHEETS                                               
|--------------------------------------------------------------------------
|
|
|
|
|December 31 ($ in thousands)                                              
|                                                                          
|Assets                                                                    
|Cash and cash equivalents                                                 
|Trading account assets                                                    
|Securities available for sale                                             
|Securities held to maturity (estimated fair value of $254,087 and $356,211
|at December 31, 2001 and 2000, respectively)                              
|Mortgage loans held for sale                                              
|Loans, net of unearned income                                             
|Reserve for loan losses                                                   
|                                                                          
|Loans, net                                                                
|                                                                          
|Bank premises and equipment                                               
|Customers' acceptance liability                                           
|Other assets                                                              
|                                                                          
|Total assets                                                              
|                                                                          
|Liabilities                                                               
|Deposits:                                                                 
|Noninterest-bearing                                                       
|Interest-bearing                                                          
|                                                                          
|Total deposits                                                            
|                                                                          
|Short-term borrowings                                                     
|Liability on acceptances                                                  
|Other liabilities                                                         
|Federal Home Loan Bank advances                                           
|                                                                          
|Total liabilities                                                         
|                                                                          
|Shareholders' equity                                                      
|Preferred Stock, no par value:                                            
|Authorized - 100,000,000 shares; Series A issued                          
|and outstanding - 1,739,000 shares at December 31, 2000                   
|Class A Common Stock, no par value:                                       
|Authorized - 300,000,000 shares; issued - 162,351,682 and                 
|161,014,058 shares at December 31, 2001 and 2000, respectively            
|Surplus                                                                   
|Retained earnings                                                         
|Treasury stock at cost - 3,284,720 shares at December 31, 2001 and 2000   
|Accumulated other comprehensive income                                    
|Unearned compensation                                                     
|                                                                          
|Total shareholders' equity                                                
|                                                                          
|Total liabilities and shareholders' equity                                
|                                                                          
|See notes to consolidated financial statements.                           

|CONSOLIDATED INCOME STATEMENTS                                
|--------------------------------------------------------------
|
|
|
|
|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 and fees 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                                   
|Mortgage loan origination and servicing fees                  
|Retail investment service fees                                
|Trust fees                                                    
|Investment banking                                            
|Insurance                                                     
|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 intangibles                                   
|Other operating expense                                       
|                                                              
|Total noninterest expense                                     
|                                                              
|Income before income taxes                                    
|Income tax expense                                            
|                                                              
|Net income                                                    
|                                                              
|Net income applicable to common shareholders                  
|                                                              
|Net income per common share                                   
|                                                              
|Net income per common share - assuming dilution               
|                                                              
|See notes to consolidated financial statements.               

|CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
|----------------------------------------------------------
|
|
|
|
|($ in thousands, except per-share data)                   
|                                                          
|                                                          
|                                                          
|                                                          
|                                                          
|                                                          
|Balances at December 31, 1998                             
|Net income for 1999                                       
|Unrealized gains (losses) on securities,                  
|net of reclassification adjustments                       
|Comprehensive income                                      
|Issuance of common stock:                                 
|Stock Option Plan                                         
|Restricted stock awards                                   
|By pooled company prior to merger                         
|Cash dividends declared:                                  
|Preferred ($3.45 per share)                               
|Common ($.435 per share)                                  
|By pooled company prior to merger                         
|Allocation of ESOP shares                                 
|Other                                                     
|                                                          
|Balances at December 31, 1999                             
|                                                          
|Net income for 2000                                       
|Unrealized gains (losses) on securities,                  
|net of reclassification  adjustments                      
|Comprehensive income                                      
|Issuance of common stock:                                 
|Stock Option Plan                                         
|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                                 
|Other                                                     
|                                                          
|Balances at December 31, 2000                             
|                                                          
|Net income for 2001                                       
|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 Plan                                         
|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                                 
|Other                                                     
|                                                          
|Balances at December 31,  2001                            
|                                                          
|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 (gains) 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 (increase) 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 $78,049 and $277,702 for the     
|years ended December 31, 2000 and 1999, 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                       
|                                                                       
|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 bank 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
Corporation and Subsidiaries

|
|
|

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. Effective January 1, 1999, Hibernia
National Bank of Texas was merged with and into Hibernia National Bank in a
transaction that was accounted for at historical cost in a manner similar to
that of a pooling-of-interests transaction.

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. These consolidated financial
statements give retroactive effect to mergers accounted for as poolings of
interests. In addition, the effects of mergers accounted for as purchase
transactions have been included from the date of consummation (see Note 2). All
significant intercompany transactions and balances have been eliminated.

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 other
operating 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.

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. 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.

BANK PREMISES AND EQUIPMENT
        Bank
premises and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation and amortization are computed primarily using the
straight-line method over the estimated useful lives of the assets, which
generally are 10 to 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 bank premises
and equipment to excess bank-owned property are charged to expense. A valuation
reserve for foreclosed assets and excess bank-owned property is maintained for
subsequent valuation adjustments on a specific-property basis. Income and
expenses associated with foreclosed assets and excess bank-owned property prior
to sale are included in current earnings.

GOODWILL AND OTHER INTANGIBLES
        The
excess of cost over the fair value of net assets acquired (goodwill) is being
amortized using the straight-line method over the estimated periods benefited,
generally 25 years. Other purchased intangible assets arising from acquisitions
are amortized using various methods over the estimated lives of the assets.

The
Company reviews its intangible assets periodically for other-than-temporary
impairment. The realizability of goodwill is 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 exists, write-downs to realizable value are 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. Effective January 1,
1999, Hibernia National Bank of Texas was merged with and into Hibernia National
Bank, resulting in one bank in all markets. The Texas operations of Hibernia
National Bank 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.
Derivative financial instruments used to manage exposure to changes in interest
rates on the market value of its securities available for sale portfolio were
recorded using the fair value method of accounting. Under this method, gains and
losses were recognized, net of tax, in shareholders equity and were
included in other comprehensive income. 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.

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 2000 and 1999 have
been reclassified to conform with the 2001 presentation.

RECENT ACCOUNTING PRONOUNCEMENTS
        
         In June 1998,  the  Financial  Accounting  Standards  Board  (FASB)  issued SFAS No. 133,  "Accounting  for  Derivative
Instruments and Hedging Activities." This statement established  accounting and reporting standards for derivative  instruments,
including  certain  derivative  instruments  embedded in other contracts,  and for hedging  activities.  Subsequently,  the FASB
issued SFAS No. 137,  "Accounting  for Derivative  Instruments  and Hedging  Activities - Deferral of the Effective Date of FASB
Statement No. 133," which deferred the effective date of SFAS No. 133 to apply to all financial  statements for years  beginning
after June 15,  2000.  The FASB also  issued  SFAS No.  138,  which  amended  certain  provisions  of SFAS No. 133 by  providing
implementation  guidance in selected  areas.  The adoption of SFAS No. 133 in the first  quarter of 2001 did not have a material
impact on the financial condition or operating results of the Company (see Note 22).

In
September 2000, the FASB issued SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities. This
statement revises and clarifies the standards for accounting for securitizations
and other transfers of financial assets and collateral and requires certain
additional disclosures. The disclosure requirements were effective for fiscal
years ending after December 15, 2000 and were included in the 2000 Annual
Report. The accounting requirements of SFAS No. 140 were effective for transfers
and servicing of financial assets and extinguishments of liabilities occurring
after March 31, 2001. The adoption of the accounting requirements SFAS No. 140
in the second quarter of 2001 did not have a material impact on the financial
condition or operating results of the Company.

In
June 2001, the FASB issued SFAS No. 141, Business Combinations, 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 will no longer be
amortized but will be 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 will apply 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 is expected to result in an increase in net income of approximately
$11,000,000 ($.07 per share) per year. During 2002, the Company will perform the
first of the required impairment tests of goodwill and indefinite lived
intangible assets as of January 1, 2002. The results of these impairment tests
are not expected to have a material impact on the financial condition or
operating results of the Company.

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 are effective for fiscal
years beginning after December 15, 2001. The adoption of SFAS No. 144 is not
expected to have a material impact on the financial condition or operating
results of the Company.

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

In
1999, the Company completed a merger with one East Texas financial institution
which was accounted for as a pooling of interests and purchased the assets and
assumed the liabilities of the Beaumont banking offices of Chase Bank of Texas,
N.A. In 2000, the Company purchased a full-service investment banking firm and
an insurance brokerage firm. Additionally in 2000, the Company purchased the
assets and assumed the liabilities of three East Texas banking offices of
Compass Bank. Completed mergers include MarTex Bancshares, Inc. (MarTex) in
1999; and Southcoast Capital, L.L.C. (Southcoast) and the Rosenthal Agency
(Rosenthal) in 2000.

The
institutions with which the Company merged are collectively referred to as the
merged companies. The merged company in the transaction accounted
for as a pooling of interests is referred to as the pooled company.
The merged companies in transactions accounted for as purchases are referred to
as the purchased companies.

The
following table shows the merger date, consideration issued, exchange ratio and
accounting method for each merger.

|                                                         |                           |                  | Exchange |                     
|-------------------------------------------------------- | ------------------------- | ---------------- | -------- | --------------------
|                                                         | Merger Date               | Consideration(1) | Ratio    | Accounting Method   
|                                                        
|MarTex                                                   | March 8, 1999             | 3,450,000 shares | 0.25:1   | Pooling of interests
|Beaumont banking offices of                             
|Chase Bank of Texas, N.A.                                | May 21, 1999              | $87,000,000      | N/A      | Purchase            
|Southcoast                                               | April 1, 2000             | $ 412,000        | N/A      | Purchase            
|                                                         |                           | 698,512 shares  
|East Texas banking offices of                           
|Compass Bank                                             | June 22, 2000             | $13,417,000      | N/A      | Purchase            
|Rosenthal                                                | July 6, 2000              | $21,000,000      | N/A      | Purchase            
|                                                         | 790,888 purchase warrants |                 
|                                                        
|(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.
In the Beaumont transaction consummated in 1999, the excess of cost over the
fair value of net assets acquired was $62.6 million and is being amortized on a
straight-line basis over 25 years. In addition, intangibles of $12.7 million
related to core deposits and $17.1 million related to trust business were
recorded and are being amortized on an accelerated basis over approximately
seven years. 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 is 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 is
being amortized on a straight-line basis over 15 years.

The
following table presents unaudited pro forma information giving effect to the
purchase transactions discussed above as if the transactions had occurred at the
beginning of each period presented. The effect of anticipated savings resulting
from the mergers has not been included in the pro forma information. Unaudited
pro forma information is not necessarily indicative of future results. There
were no purchase transactions in 2001.

|($ in thousands, except per-share data)         | Year Ended December 31
|----------------------------------------------- | ----------------------
|                                               
|                                                | 2000                  
|                                               
|Net interest and noninterest income             | $ 869,784             
|Net income                                      | $ 169,676             
|Net income per common share                     | $ 1.04                
|Net income per common share - assuming dilution | $ 1.03                
|                                               

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

The following is a summary of cash and cash equivalents.

|($ in thousands)                                 | December 31
|------------------------------------------------ | -----------
|                                                
|                                                 | 2001       
|                                                
|Cash and due from banks                          | $ 670,435  
|Federal funds sold                               | 18,033     
|Securities purchased under agreements to resell  | -          
|Interest-bearing time deposits in domestic banks | 10,245     
|                                                
|Total cash and cash equivalents                  | $ 698,713  
|                                                

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

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

|($ in thousands)    |                                     | December 31, 2001
|------------------- | ----------------------------------- | -----------------
|                   
|                    |                                     | Amortized        
|                    |                                     | Cost             
|                   
|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        
|                   

|($ in thousands)    |                                     | December 31, 2000
|------------------- | ----------------------------------- | -----------------
|                   
|                    |                                     | Amortized        
|                    |                                     | Cost             
|                   
|Available for sale: | U.S. Treasuries                     | $ 230,548        
|                    | U.S. government agencies:          
|                    | Mortgage-backed securities          | 823,033          
|                    | Bonds                               | 1,208,760        
|                    | Stocks                              | 109,903          
|                    | States and political subdivisions   | 210,259          
|                    | Other                               | 105,530          
|                   
|                    | Total securities available for sale | $ 2,688,033      
|                   
|Held to maturity:   | U.S. government agencies:          
|                    | Mortgage-backed securities          | $ 361,872        
|                   
|                    | Total securities held to maturity   | $ 361,872        
|                   

The
following is a summary of realized gains and losses from the sale of securities
available for sale.

|($ in thousands)            | Year Ended December 31
|--------------------------- | ----------------------
|                           
|                            | 2001                  
|                           
|Realized gains              | $ 850                 
|Realized losses             | (9,771)               
|                           
|Net realized gains (losses) | $ (8,921)             
|                           

Securities
with carrying values of $3,115,058,000 and $2,741,650,000 at December 31, 2001
and 2000, 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
|------------------- | ------------------------------------------ | -----------
|                   
|                    |                                            | 2001       
|                   
|Available for sale: | U.S. Treasuries                            | $ 37,737   
|                    | U.S. government agencies:                 
|                    | Mortgage-backed securities                 | 988,387    
|                    | Bonds                                      | 1,677,247  
|                    | States and political subdivisions          | 161,382    
|                    | Other                                      | 421        
|                   
|                    | Total available for sale                   | 2,865,174  
|                   
|Held to maturity:   | U.S. government agencies:                 
|                    | Mortgage-backed securities                 | 249,884    
|                   
|                    | Total held to maturity                     | 249,884    
|                   
|                    | Total carrying value of pledged securities | $ 3,115,058
|                   

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, 2001
|------------------- | ----------------------------------- | -----------------
|                   
|                    |                                     | Amortized        
|                    |                                     | Cost             
|                   
|Available for sale: | Due in 1 year or less               | $ 599,837        
|                    | Due after 1 year through 5 years    | 231,620          
|                    | Due after 5 years through 10 years  | 546,970          
|                    | Due after 10 years                  | 1,831,365        
|                   
|                    | Total securities available for sale | $ 3,209,792      
|                   
|Held to maturity:   | Due after 5 years through 10 years  | $ 2,986          
|                    | Due after 10 years                  | 246,898          
|                   
|                    | Total securities held to maturity   | $ 249,884        
|                   

|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 
|---------------- | -------------------------------------------- | ------------
|                
|                 |                                              | 2001        
|                
|Commercial:      | Commercial and industrial                    | $1,084,650  
|                 | Services industry                            | 717,088     
|                 | Real estate                                  | 422,540     
|                 | Health care                                  | 265,302     
|                 | Transportation, communications and utilities | 154,561     
|                 | Energy                                       | 235,114     
|                 | Other                                        | 83,122      
|                
|                 | Total commercial                             | 2,962,377   
|                
|Small Business:  | Commercial and industrial                    | 775,928     
|                 | Services industry                            | 631,997     
|                 | Real estate                                  | 422,810     
|                 | Health care                                  | 149,740     
|                 | Transportation, communications and utilities | 106,670     
|                 | Energy                                       | 33,954      
|                 | Other                                        | 369,748     
|                
|                 | Total small business                         | 2,490,847   
|                
|Consumer:        | Residential mortgages:                      
|                 | First mortgages                              | 2,615,530   
|                 | Junior liens                                 | 500,098     
|                 | Indirect                                     | 1,535,589   
|                 | Revolving credit                             | 518,478     
|                 | Other                                        | 618,063     
|                
|                 | Total consumer                               | 5,787,758   
|                
|                 | Total loans                                  | $ 11,240,982
|                

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

|($ in thousands)           | December 31
|-------------------------- | -----------
|                          
|                           | 2001       
|                          
|Nonaccrual loans           | $ 70,888   
|Restructured loans         | -          
|                          
|Nonperforming loans        | 70,888     
|                          
|Foreclosed assets          | 5,782      
|Excess bank-owned property | 1,482      
|                          
|Total nonperforming assets | $ 78,152   
|                          

At
December 31, 2001 and 2000, the recorded investment in loans that were
considered to be impaired was $59,809,000 and $75,991,000, respectively.
Included in the 2001 and 2000 amounts were $49,723,000 and $61,192,000,
respectively, of impaired loans for which the related reserve for loan losses
was $10,966,000 and $13,195,000, respectively. At December 31, 2001 and 2000,
impaired loans that did not require a reserve for loan losses amounted to
$10,086,000 and $14,799,000, respectively. The average recorded investment in
impaired loans during the years ended December 31, 2001, 2000 and 1999 was
approximately $62,277,000, $84,803,000 and $60,834,000, respectively.

The
amount of interest income actually recognized on nonperforming loans during
2001, 2000 and 1999 was approximately $645,000, $1,669,000 and $3,145,000,
respectively, substantially all of which related to impaired loans. The
additional amount of interest income that would have been recorded during 2001,
2000 and 1999 if these loans had been current in accordance with their original
terms was approximately $8,812,000, $10,032,000 and $6,723,000, 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
|------------------------------------- | ----------------------
|                                     
|                                      | 2001                  
|                                     
|Balance at beginning of year          | $ 178,253             
|Loans charged off                     | (91,625)              
|Recoveries                            | 19,179                
|                                     
|Net loans charged off                 | (72,446)              
|                                     
|Provision for loan losses             | 97,250                
|Addition due to purchase transactions | -                     
|Transfer due to securitizations       | (7,291)               
|                                     
|Balance at end of year                | $ 195,766             
|                                     

|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 noninterest 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
will receive annual servicing fees of approximately one percent of the
outstanding balance of the automobile loans and retain 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 the 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, 2001, the outstanding principal balance of the securitized
automobile loans totaled $446,354,000, of which $604,000 was past due 90 days or
more. Net charge-offs on these securitized automobile loans totaled $2,154,000
during 2001. Cash flows in 2001 consisted of $2,680,000 of servicing income and
$416,000 of interest on the securitization proceeds receivable. Additionally,
excess cash flows of $4,156,000 were applied to reduce the balance of the
interest-only strip receivable.

At
December 31, 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 as follows. 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, 2001
|------------------------------------------------ | -----------------
|                                                
|Carrying amount/fair value of retained interests | $ 39,675         
|                                                
|Prepayment speed assumption (monthly rate)       | 1.5%             
|Impact on fair value of 10% adverse change       | $ (1,091)        
|Impact on fair value of 20% adverse change       | $ (2,259)        
|                                                
|Expected credit losses (annual rate)             | 0.98%            
|Impact on fair value of 10% adverse change       | $ (556)          
|Impact on fair value of 20% adverse change       | $ (1,137)        
|                                                
|Residual cash flows discount rate (annual rate)  | 15%              
|Impact on fair value of 10% adverse change       | $ (938)          
|Impact on fair value of 20% adverse change       | $ (1,846)        
|                                                

The
Company securitized and retained $305,245,000 and $112,476,000 of its first
residential mortgage loans with recourse provisions through the Federal National
Mortgage Association (FNMA) during 2001 and 2000, respectively. The loans were
reclassified to investment securities. Investment securities resulting from
mortgage loan securitizations had carrying values of $255,837,000 and
$87,155,000 in securities available for sale at December 31, 2001 and 2000,
respectively, and $249,884,000 and $361,872,000 in securities held to maturity
at December 31, 2001 and 2000, respectively. During 2000 securities relating to
these transactions with a carrying value of approximately $49,625,000 were sold
from the available for sale portfolio to a third party. The balance of these
securitized loans, which are serviced by the Bank, totaled $527,070,000 and
$500,587,000 at December 31, 2001 and 2000, respectively. Included in these
balances are securitized loans 90 days or more past due of $1,011,000 and
$349,000 at December 31, 2001 and 2000, respectively. Under the recourse
provisions with FNMA, the Company assumes the risk of borrower default and has
established reserves to cover potential losses.

|7
|
BANK PREMISES AND EQUIPMENT
|-------------------------------

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

|($ in thousands)                               | December 31
|---------------------------------------------- | -----------
|                                              
|                                               | 2001       
|                                              
|Land                                           | $ 42,754   
|Buildings                                      | 195,367    
|Leasehold improvements                         | 37,947     
|Furniture and equipment                        | 177,447    
|                                              
|                                               | 453,515    
|Less accumulated depreciation and amortization | (248,676)  
|                                              
|Total bank premises and equipment              | $204,839   
|                                              

|($ in thousands)                                          | Year Ended December 31
|--------------------------------------------------------- | ----------------------
|                                                         
|                                                          | 2001                  
|                                                         
|Provisions for depreciation and amortization included in:
|Occupancy expense                                         | $ 10,140              
|Equipment expense                                         | 14,935                
|                                                         
|Total depreciation and amortization expense               | $ 25,075              
|                                                         

|8
|
DEPOSITS
|------------

At
December 31, 2001, time deposits with a remaining maturity of one year or more
amounted to $683,225,000. Maturities of all time deposits are as follows: 2002 -
$4,240,878,000; 2003 - $416,093,000; 2004 - $127,210,000; 2005 - $86,925,000;
2006 - $35,805,000; and thereafter - $17,192,000.

Domestic
certificates of deposit of $100,000 or more amounted to $1,808,231,000 and
$2,073,508,000 at December 31, 2001 and 2000, respectively. Interest on these
certificates amounted to $97,648,000, $125,763,000 and $90,594,000 in 2001, 2000
and 1999, respectively.

Foreign
deposits, which are deposit liabilities of the Cayman Island office of Hibernia
National Bank, amounted to $586,848,000 and $628,348,000 at December 31, 2001
and 2000, respectively. These deposits are comprised primarily of individual
deposits of $100,000 or more. Interest expense on foreign deposits amounted to
$20,741,000, $24,500,000 and $14,266,000 for 2001, 2000 and 1999, respectively.

|9
|
SHORT-TERM BORROWINGS
|-------------------------

The following is a summary of short-term borrowings.

|($ in thousands)                                    | December 31
|--------------------------------------------------- | -----------
|                                                   
|                                                    | 2001       
|                                                   
|Federal funds purchased                             | $ 121,872  
|Securities sold under agreements to repurchase      | 554,118    
|Federal Reserve Bank treasury, tax and loan account | 76,730     
|Trading account liabilities                         | 27         
|                                                   
|Total short-term borrowings                         | $ 752,747  
|                                                   

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
|------------------------------ | -----------
|                              
|                               | 2001       
|                              
|Outstanding at December 31     | $ 752,747  
|Maximum month-end outstandings | $1,569,441 
|Average daily outstandings     | $ 948,494  
|Average rate during the year   | 4.09%      
|Average rate at year end       | 1.51%      
|                              

|10
|
FEDERAL HOME LOAN BANK ADVANCES
|------------------------------------

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

|($ in thousands)                          | December 31
|----------------------------------------- | -----------
|                                         
|                                          | 2001       
|                                         
|Federal Home Loan Bank callable advances  | $ 400,000  
|Federal Home Loan Bank long-term advances | 642,983    
|                                         
|Total Federal Home Loan Bank advances     | $ 1,042,983
|                                         

The
FHLB advances are secured by the Companys investment in FHLB stock, which
totaled $58,801,000 and $53,924,000 at December 31, 2001 and 2000, 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. The FHLB long-term advances include advances of $2,983,000 which accrue
interest at fixed contractual rates of 5.70% to 8.36%, and advances of
$640,000,000 which accrue interest at variable rates. The variable rate advances
had rates ranging from 1.80% to 2.23% at December 31, 2001. The average rate on
these advances during 2001 was 4.24%. The long-term fixed-rate advances are due
in monthly installments of approximately $78,000, including interest, and are
scheduled to amortize through various dates between 2002 and 2015. 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 Company  instituted  partial hedges  against the effect of rising  interest rates on its variable rate
debt by entering  into  interest  rate swap  agreements  during 2001 whereby the Company will receive  quarterly  variable  rate
(LIBOR)  payments and pay fixed rates on notional  amounts  totaling  $600,000,000.  Net  settlements on the swap agreements are
accrued monthly, effectively converting $600,000,000 of FHLB advances from variable rates to an average fixed rate of 5.01%.

Maturities of FHLB advances are as follows: 2002 - $40,741,000; 2003 - $429,000; 2004 -
$500,369,000; 2005 - $300,704,000; 2006 - $291,000; and thereafter -
$200,449,000.

|11
|
OTHER ASSETS AND OTHER LIABILITIES
|---------------------------------------

The following are summaries of other assets and other liabilities.

|($ in thousands)   |                                                         | December 31
|------------------ | ------------------------------------------------------- | -----------
|                  
|                   |                                                         | 2001       
|                  
|Other assets:      | Accrued interest receivable                             | $ 85,236   
|                   | Foreclosed assets and excess bank-owned property        | 7,264      
|                   | Deferred income taxes                                   | 21,400     
|                   | Goodwill, net                                           | 206,625    
|                   | Core deposit intangibles, net                           | 10,050     
|                   | Trust intangibles, net                                  | 9,661      
|                   | Insurance expirations, net                              | 3,372      
|                   | Mortgage servicing rights, net                          | 95,022     
|                   | Fair value derivative assets                            | 36,925     
|                   | Other                                                   | 117,681    
|                  
|                   | Total other assets                                      | $ 593,236  
|                  
|Other liabilities: | Accrued interest payable                                | $ 31,227   
|                   | Trade accounts payable and accrued liabilities          | 63,946     
|                   | Trade date securities payable                           | 135,702    
|                   | Fair value derivative liabilities                       | 35,624     
|                   | Reserve for future rental payments under sale/leaseback | 14,891     
|                   | Other                                                   | 28,165     
|                  
|                   | Total other liabilities                                 | $ 309,555  
|                  

Amortization
expense relating to goodwill totaled $12,668,000, $11,839,000 and $9,840,000 for
the years ended December 31, 2001, 2000 and 1999, respectively. Accumulated
amortization relating to goodwill at December 31, 2001 and 2000 totaled
$66,914,000 and $60,611,000, respectively. Amortization expense related to
core deposit intangibles totaled $4,576,000, $5,674,000 and $5,197,000 in 2001,
2000 and 1999, respectively. Accumulated amortization related to core deposit
intangibles totaled $26,102,000 and $21,526,000 at December 31, 2001 and 2000,
respectively. Amortization expense related to trust intangibles totaled
$2,380,000, $2,966,000 and $2,052,000 in 2001, 2000 and 1999 respectively.
Accumulated amortization related to trust intangibles totaled $7,398,000 and
$5,018,000 at December 31, 2001 and 2000.

Insurance
expirations of $600,000 and $3,284,000 were added during the years ended
December 31, 2001 and 2000, respectively. Amortization expense related to
insurance expirations totaled $386,000 and $126,000 in 2001 and 2000,
respectively. Accumulated amortization related to insurance expirations totaled
$512,000 and $126,000 at December 31, 2001 and 2000, respectively.

Mortgage
servicing rights of $66,295,000 and $19,144,000 were added during the years
ended December 31, 2001 and 2000, respectively. Amortization expense related to
mortgage servicing rights totaled $14,293,000, $6,914,000, and $6,674,000 for
2001, 2000 and 1999, respectively. A valuation reserve for the temporary
impairment of mortgage servicing rights totaled $15,301,000 and $3,000,000 at
December 31, 2001 and 2000, respectively. Activity in the valuation reserve
included additions, recorded in amortization expense, of $12,301,000 and
$2,200,000 in 2001 and 2000, respectively. There was no activity in the
valuation reserve during 1999.

|12
|
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, 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 162,351,682 and 161,014,058 shares issued and 159,066,962 and
157,729,338 shares outstanding at December 31, 2001 and 2000, respectively. The
Company held 3,284,720 shares of Class A Common Stock in treasury at December
31, 2001 and 2000. In April 2000, the Companys Board of Directors
authorized the buyback of up to 7,500,000 shares of common stock over the
following twelve month period. During 2000, the Company repurchased 3,268,400
shares of common stock under the buyback program at a total cost of $35,677,000.
In April 2001, the Companys Board of Directors authorized the continuation
of the repurchase plan for the next twelve months under terms that allow the
repurchase of up to 3,500,000 additional shares of common stock. There were no
repurchases of common stock during 2001.

As
partial consideration in the acquisition of the Rosenthal Agency 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.

|13
|
EMPLOYEE BENEFIT PLANS
|---------------------------

The
Company maintains a defined-contribution benefit plan under Section 401(k) of
the Internal Revenue Code, the Retirement Security Plan (RSP). Substantially all
employees who have completed one year of service are eligible to participate in
the RSP. 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, 2001, the RSP owned
approximately 3,959,000 shares of Hibernia Class A Common Stock. The
Companys contributions to the RSP totaled $7,291,000 in 2001, $6,401,000
in 2000 and $5,627,000 in 1999.

The
Company maintains incentive pay and bonus programs for certain employees. Costs
of these programs were $52,646,000, $35,469,000 and $24,371,000 for the years
ended December 31, 2001, 2000 and 1999, respectively.

During
1998, the Company established a plan (1998-2000 Plan) for the grant of
performance share awards under its Long-Term Incentive Plan for certain members
of management. Under the 1998-2000 Plan, if the Company achieved certain
predetermined performance goals during the three-year period from January 1,
1998 through December 31, 2000, the Company would award Hibernia Class A Common
Stock to certain members of management who contributed to that achievement.
Compensation ___ expense of $8,000,000 was recorded in 1998 relating to the
1998-2000 Plan and reversed in 1999. The reversal resulted from the failure to
meet certain requirements necessary to achieve a payout under the plan, and
accordingly, no expense relating to this plan was recorded in 2000.

|14
|
EMPLOYEE STOCK OWNERSHIP PLAN
|----------------------------------

The
Company has an internally-leveraged employee stock ownership plan (ESOP) in
which substantially all employees participate. The ESOP owned approximately
3,868,000 and 3,872,000 shares of Hibernia Class A Common Stock at December 31,
2001 and 2000, respectively. The outstanding debt obligation of the ESOP totaled
$26,483,000 and $30,937,000 at December 31, 2001 and 2000, 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 2001, 2000 and
1999 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 $5,337,000, $3,570,000 and $2,763,000 relating to the ESOP was
recorded during 2001, 2000 and 1999, respectively. The ESOP held 1,798,000 and
1,459,000 allocated shares and 2,070,000 and 2,413,000 suspense shares at
December 31, 2001 and 2000, respectively. The fair value of the suspense shares
at December 31, 2001 and 2000 was $36,826,000 and $30,762,000, respectively.

|15
|
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 the company,  or the company  incurs  liabilities to employees or directors in amounts based on
the price of the stock.  SFAS No. 123 defines a  fair-value-based  method of accounting for stock-based  compensation.  However,
SFAS No. 123 also allows an entity to continue to measure  stock-based  compensation  cost using the  intrinsic  value method of
Accounting  Principles  Board Opinion No. 25 (APB No. 25),  "Accounting  for Stock Issued to  Employees."  Entities  electing to
retain the accounting  prescribed in APB No. 25 must make pro forma  disclosures of net income,  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 on July 26, 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 unless the holder dies, retires, becomes permanently disabled or otherwise
leaves the employ or ceases to be a director 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 2001, 2000 and
1999. 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. An option to
purchase 250,000 shares at $13.84 per share, weighted-average fair value of
$3.61 per share, was granted to a former chief executive officer during 2001
under the 2001 Nonqualified Stock Option Plan. This option remains outstanding
at December 31, 2001. There are no shares available for grant under the 2001
Nonqualified Stock Option Plan at December 31, 2001.

|                                                      |           |               |             | Weighted-
|----------------------------------------------------- | --------- | ------------- | ----------- | ---------
|                                                      |           |               |             | Average  
|                                                      |           |               |             | Exercise 
|                                                      | Incentive | Non-Qualified | Total       | Price    
|                                                     
|1987 Stock Option Plan:                              
|Outstanding, December 31, 1998                        | 50,163    | 1,179,337     | 1,229,500   | $ 7.00   
|Canceled                                              | -         | (86,876)      | (86,876)    | 18.80    
|Exercised                                             | (6,250)   | (8,949)       | (15,199)    | 6.05     
|                                                     
|Outstanding, December 31, 1999                        | 43,913    | 1,083,512     | 1,127,425   | 6.10     
|Canceled                                              | -         | (2,000)       | (2,000)     | 14.94    
|Exercised                                             | -         | (2,233)       | (2,233)     | 4.94     
|                                                     
|Outstanding, December 31, 2000                        | 43,913    | 1,079,279     | 1,123,192   | 6.09     
|Exercised                                             | (22,500)  | (84,856)      | (107,356)   | 5.15     
|Converted to non-qualified                            | (13,913)  | 13,913        | -           | 7.19     
|                                                     
|Outstanding, December 31, 2001                        | 7,500     | 1,008,336     | 1,015,836   | $ 6.19   
|                                                     
|Exercisable, December 31, 2001                        | 7,500     | 1,008,336     | 1,015,836   | $ 6.19   
|                                                     
|Long-Term Incentive Plan:                            
|Outstanding, December 31, 1998                        | 12,598    | 7,066,149     | 7,078,747   | $ 11.97  
|Granted (weighted-average fair value $4.49 per share) | -         | 2,411,175     | 2,411,175   | 15.95    
|Canceled                                              | -         | (260,788)     | (260,788)   | 16.29    
|Exercised                                             | -         | (407,062)     | (407,062)   | 8.40     
|                                                     
|Outstanding, December 31, 1999                        | 12,598    | 8,809,474     | 8,822,072   | 13.09    
|Granted (weighted-average fair value $2.33 per share) | -         | 2,890,335     | 2,890,335   | 10.04    
|Canceled                                              | -         | (513,057)     | (513,057)   | 13.66    
|Exercised                                             | -         | (206,218)     | (206,218)   | 8.03     
|                                                     
|Outstanding, December 31, 2000                        | 12,598    | 10,980,534    | 10,993,132  | 12.36    
|Granted (weighted-average fair value $3.66 per share) | -         | 2,774,585     | 2,774,585   | 13.54    
|Canceled                                              | -         | (507,855)     | (507,855)   | 13.68    
|Exercised                                             | -         | (1,158,247)   | (1,158,247) | 9.77     
|Converted to non-qualified                            | (12,598)  | 12,598        | -           | 7.94     
|                                                     
|Outstanding, December 31, 2001                        | -         | 12,101,615    | 12,101,615  | $ 12.82  
|                                                     
|Exercisable, December 31, 2001                        | -         | 5,992,262     | 5,992,262   | $ 12.81  
|                                                     
|Available for Grant, December 31, 2001                |           |               | 1,223,735  
|                                                     

|                                                      |           |               |          | Weighted-
|----------------------------------------------------- | --------- | ------------- | -------- | ---------
|                                                      |           |               |          | Average  
|                                                      |           |               |          | Exercise 
|                                                      | Incentive | Non-Qualified | Total    | Price    
|                                                     
|1993 Directors' Stock Option Plan:                   
|Outstanding, December 31, 1998                        | -         | 335,000       | 335,000  | $ 12.21  
|Granted (weighted-average fair value $3.45 per share) | -         | 80,000        | 80,000   | 12.90    
|Canceled                                              | -         | (5,000)       | (5,000)  | 21.72    
|Exercised                                             | -         | (40,000)      | (40,000) | 9.79     
|                                                     
|Outstanding, December 31, 1999                        | -         | 370,000       | 370,000  | 12.49    
|Granted (weighted-average fair value $2.42 per share) | -         | 60,000        | 60,000   | 10.38    
|                                                     
|Outstanding, December 31, 2000                        | -         | 430,000       | 430,000  | 12.20    
|Granted (weighted-average fair value $4.35 per share) | -         | 60,000        | 60,000   | 15.48    
|Canceled                                              | -         | (10,000)      | (10,000) | 21.72    
|Exercised                                             | -         | (77,500)      | (77,500) | 9.78     
|                                                     
|Outstanding, December 31, 2001                        | -         | 402,500       | 402,500  | $ 12.91  
|                                                     
|Exercisable, December 31, 2001                        | -         | 240,000       | 240,000  | $ 12.48  
|                                                     
|Available for Grant, December 31, 2001                |           |               | 392,500 
|                                                     

In
addition to the above option activity in the plans, 41,350 shares, 112,814
shares and 82,346 shares of restricted stock were awarded under the Long-Term
Incentive Plan during the years ended December 31, 2001, 2000 and 1999,
respectively.

The
following table presents the weighted-average remaining life as of December 31,
2001 for options outstanding for the 1987 Stock Option Plan, the Long-Term
Incentive Plan and the 1993 Directors Stock Option Plan within the stated
exercise price ranges. The 2001 Nonqualified Stock Option Plan had 250,000
options outstanding and exercisable with a weighted-average exercise price of
$13.84 and weighted-average remaining life of 4.07 years.

|                                   | Outstanding | Exercisable   
|---------------------------------- | ----------- | --------------
|                                   |             | Weighted-     
|                                   | Number      | Average       
|Exercise Price Range Per Share     | of Options  | Exercise Price
|                                  
|1987 Stock Option Plan:           
|$4.19 to $5.31                     | 353,170     | $ 4.25        
|$7.19 to $8.75                     | 662,666     | $ 7.22        
|                                  
|Long-Term Incentive Plan:         
|$6.94 to $9.91                     | 3,918,352   | $ 8.97        
|$10.19 to $13.47                   | 4,629,810   | $ 12.84       
|$13.88 to $16.79                   | 2,029,124   | $ 16.04       
|$18.28 to $20.25                   | 1,524,329   | $ 18.36       
|                                  
|1993 Directors' Stock Option Plan:
|$7.31 to $8.13                     | 75,000      | $ 7.83        
|$10.38 to $13.00                   | 207,500     | $ 11.63       
|$15.48 to $21.72                   | 120,000     | $ 18.31       
|                                  

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 2001, 2000 and 1999, respectively: risk-free
interest rates of 5.62%, 6.79%, and 4.92%; expected dividend yields of 3.83%,
4.82% and 2.66%; expected volatility factors of the market price of the Hibernia
Class A Common Stock of 35%, 32%, and 29%; 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
|--------------------------------------- | ----------------------
|                                       
|                                        | 2001                  
|                                       
|                                        | As Reported           
|                                       
|Net income                              | $ 218,798             
|Net income per common share             | $ 1.37                
|Net income per common share -          
|assuming dilution                       | $ 1.35                
|                                       

|16
|
LEASES
|-----------

The
Company leases its headquarters, operations center and certain other office
space, bank 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 $15,462,000, $14,582,000 and $13,697,000 in
2001, 2000 and 1999, respectively.

Minimum
rental commitments for long-term operating leases are as follows: 2002 -
$13,167,000; 2003 - $12,918,000; 2004 - $12,260,000; 2005 - $11,967,000; 2006 -
$9,560,000; and thereafter - $24,355,000.

|17
|
OTHER OPERATING EXPENSE
|----------------------------

The following is a summary of other operating expense.

|($ in thousands)              | Year Ended December 31
|----------------------------- | ----------------------
|                             
|                              | 2001                  
|                             
|State taxes on equity         | $ 14,652              
|Telecommunications            | 9,220                 
|Loan collection expense       | 8,850                 
|Postage                       | 7,940                 
|Professional fees             | 7,398                 
|Stationery and supplies       | 5,604                 
|Regulatory expense            | 4,244                 
|Other                         | 48,981                
|                             
|Total other operating expense | $ 106,889             
|                             

|18
|
INCOME TAXES
|-----------------

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

|($ in thousands)                                                           | Year Ended December 31
|-------------------------------------------------------------------------- | ----------------------
|                                                                          
|                                                                           | 2001                  
|                                                                          
|Current tax expense:                                                      
|Federal income tax                                                         | $ 98,980              
|State income tax                                                           | 7,219                 
|                                                                          
|Total current tax expense                                                  | 106,199               
|                                                                          
|Deferred tax expense (benefit):                                           
|Federal income tax                                                         | 12,253                
|                                                                          
|Total deferred tax expense (benefit)                                       | 12,253                
|                                                                          
|Income tax expense                                                         | $ 118,452             
|                                                                          
|Tax liabilities (benefits) recorded directly to shareholders' equity:     
|(Increase) decrease in net unrealized gain (loss)                         
|on securities and cash flow hedges                                         | $ 7,517               
|                                                                          
|(Increase) decrease related to stock options                              
|and the employee stock ownership plan                                      | (2,251)               
|                                                                          
|Total tax liabilities (benefits) recorded directly to shareholders' equity | $ 5,266               
|                                                                          

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

|($ in thousands)                            | Year Ended December 31
|------------------------------------------- | ----------------------
|                                           
|                                            | 2001                  
|                                           
|                                            | Amount                
|                                           
|Tax expense based on federal statutory rate | $ 118,038             
|Tax-exempt interest                         | (5,536)               
|State income tax, net of federal benefit    | 4,693                 
|Amortization of non-deductible goodwill     | 3,307                 
|Other                                       | (2,050)               
|                                           
|Income tax expense                          | $ 118,452             
|                                           

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
|------------------------- | ------------------------------------------------------ | -----------
|                         
|                          |                                                        | 2001       
|                         
|Deferred tax assets:      | Reserve for loan losses                                | $ 68,518   
|                          | Sale/leaseback                                         | 4,049      
|                          | Loan fees                                              | 4,020      
|                          | Accrued expenses                                       | 8,833      
|                          | Deferred compensation                                  | 5,776      
|                          | Goodwill and other purchase accounting intangibles     | 1,407      
|                          | Net unrealized losses on securities available for sale | -          
|                          | Other                                                  | 9,821      
|                         
|                          | Total deferred tax assets                              | 102,424    
|                         
|Deferred tax liabilities: | Net unrealized gains on securities available for sale 
|                          | and cash flow hedges                                   | 7,151      
|                          | Depreciation                                           | 12,338     
|                          | Leasing                                                | 20,822     
|                          | Mortgage servicing rights                              | 23,226     
|                          | Other                                                  | 17,487     
|                         
|                          | Total deferred tax liabilities                         | 81,024     
|                         
|                          | Deferred tax assets, net of deferred tax liabilities   | $ 21,400   
|                         

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.

|19
|
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                     | $ 1.37                                     
|                                               
|Net income per common share - assuming dilution | $ 1.35                                     
|                                               

The
weighted-average shares outstanding exclude 2,298,581, 2,621,757 and 2,902,121
average common shares in 2001, 2000 and 1999, respectively, held by the Hibernia
ESOP (see Note 14) which have not been committed to be released. The common
shares issued in the merger accounted for as a pooling of interests consummated
in 1999 are considered to be outstanding as of the beginning of the earliest
period presented.

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 2001 there were 3,505,653 antidilutive options
outstanding with exercise prices ranging from $16.09 to $21.72, during 2000
there were 5,411,417 antidilutive options outstanding with exercise prices
ranging from $11.38 to $21.72, and during 1999 there were 4,014,750 antidilutive
options outstanding with exercise prices ranging from $13.97 to $21.72.

|20
|
COMPREHENSIVE INCOME
|-------------------------

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

|                                                                          |              | Income Tax
|------------------------------------------------------------------------- | ------------ | ----------
|                                                                          | Before       | Expense   
|($ in thousands)                                                          | Income Taxes | (Benefit) 
|                                                                         
|Year ended December 31, 2001                                             
|                                                                         
|Unrealized gains (losses) on securities available for sale, net           | $ 30,686     | $ 10,741  
|Reclassification adjustment for net (gains) losses realized in net income | 1,844        | 645       
|                                                                         
|Unrealized gains (losses) on securities available for sale, net           | 32,530       | 11,386    
|                                                                         
|Unrealized gains (losses) on cash flow hedges                             | (11,055)     | (3,869)   
|Reclassification adjustment for net (gains) losses realized in net income | -            | -         
|                                                                         
|Unrealized gains (losses) on cash flow hedges, net                        | (11,055)     | (3,869)   
|                                                                         
|Other comprehensive income                                                | $ 21,475     | $ 7,517   
|                                                                         
|Year ended December 31, 2000                                             
|                                                                         
|Unrealized gains (losses) on securities available for sale, net           | $ 81,661     | $ 28,581  
|Reclassification adjustment for net (gains) losses realized in net income | 558          | 195       
|                                                                         
|Other comprehensive income                                                | $ 82,219     | $ 28,776  
|                                                                         
|Year ended December 31, 1999                                             
|                                                                         
|Unrealized gains (losses) on securities available for sale, net           | $(124,472)   | $ (43,552)
|Reclassification adjustment for net (gains) losses realized in net income | (1,754)      | (614)     
|                                                                         
|Other comprehensive income                                                | $(126,226)   | $ (44,166)
|                                                                         

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

|($ in thousands)                                                | December 31
|--------------------------------------------------------------- | -----------
|                                                               
|                                                                | 2001       
|                                                               
|Unrealized gains (losses) on securities available for sale, net | $ 20,465   
|Unrealized losses on cash flow hedges                           | (7,186)    
|                                                               
|Total accumulated other comprehensive income                    | $ 13,279   
|                                                               

|21
|
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 $16,922,000 and $17,916,000 at
December 31, 2001 and 2000, respectively. The change during 2001 reflects
$96,665,000 in loan advances and $97,659,000 in loan payments. These amounts do
not include loans made in the ordinary course of business to other entities with
which the Company has no relationship, other than a director of the Company
being a director of the other entity, unless 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 $5,066,000 at December 31, 2001. Pretax earnings of
$1,432,000 were realized during 2001 related to the joint venture. At December
31, 2001, the Company had extended a $57,500,000 line of credit to this joint
venture. The line of credit at December 31, 2000 totaled $75,000,000. Loans
outstanding under the line of credit were $42,450,000 and $41,635,000 at
December 31, 2001 and 2000, respectively. The change from 2001 reflects
$170,434,000 in advances and $169,619,000 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 $7,992,000 and
$8,158,000 at December 31, 2001 and 2000, respectively.

|22
|
FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS
|---------------------------------------------------------------

Generally
accepted accounting principles require disclosure of fair value information
about financial instruments for which it is practicable to estimate fair value,
whether or not the financial instruments are recognized in the financial
statements. When quoted market prices are not available, fair values are based
on estimates using present value or other valuation techniques. Those techniques
are significantly affected by the assumptions used, including the discount rate
and estimates of future cash flows. The derived fair value estimates cannot be
substantiated through comparison to independent markets and, in many cases,
could not be realized in immediate settlement of the instrument. Certain
financial instruments and all non-financial instruments are excluded from these
disclosure requirements. Further, the disclosures do not include estimated fair
values for items which are not financial instruments but which represent
significant value to the Company, 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,
noninterest-bearing deposits and short-term borrowings approximates the
estimated fair value of these financial instruments. The estimated fair value of
securities, interest rate agreements and other derivative instruments is based
on quoted market prices, dealer quotes and prices obtained from independent
pricing services. The estimated fair value of loans, interest-bearing deposits
and Federal Home Loan Bank 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.

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 $195,766,000 and
$178,253,000 at December 31, 2001 and 2000, respectively. In addition, credit
risk exposure on loans is mitigated by many factors including maintaining a
diversified portfolio and the extent to which collateral or other forms of
credit support are obtained 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, 2001 and 2000. 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 
|------------------------------- | ------------
|                               
|                                | 2001        
|                               
|                                | Carrying    
|                                | Amount      
|                               
|Assets                         
|Cash and cash equivalents       | $ 698,713   
|Trading account assets          | $ 18,078    
|Securities available for sale   | $ 3,241,277 
|Securities held to maturity     | $ 249,884   
|Mortgage loans held for sale    | $ 566,933   
|Commercial loans                | $ 2,962,377 
|Small business loans            | $ 2,490,847 
|Consumer loans                  | $ 5,787,758 
|Mortgage servicing rights, net  | $ 95,022    
|                               
|                               
|                               
|                               
|Liabilities                    
|Noninterest-bearing deposits    | $ 2,484,812 
|Interest-bearing deposits       | $ 10,468,300
|Short-term borrowings           | $ 752,747   
|Federal Home Loan Bank advances | $ 1,042,983 
|                               

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

The
Company issues letters of credit and financial guarantees (standby letters of
credit) whereby it agrees to honor certain financial commitments in the event
its customers are unable to perform. The majority of the standby letters of
credit consist of performance guarantees. Management conducts regular reviews of
all outstanding standby letters of credit, and the results of these reviews are
considered in assessing the adequacy of the Companys reserve for loan
losses. Management does not anticipate any material losses related to these
instruments.

The
following table represents the contractual amounts and estimated fair value of
these off-balance-sheet financial instruments.

|($ in thousands)                           | December 31
|------------------------------------------ | -----------
|                                          
|                                           | 2001       
|                                          
|                                           | Contract   
|                                           | Amount     
|                                          
|Commitments to extend credit               | $ 2,998,802
|Letters of credit and financial guarantees | $ 351,514  
|                                          

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 generally, matched positions
are 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
(including 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.

The
amounts disclosed in the following table represent the notional amounts and
estimated fair values at December 31, 2001, of derivative financial instruments
which are not designated as hedges. 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.

|($ in thousands)                 | December 31, 2001
|-------------------------------- | -----------------
|                                
|                                 | Notional         
|                                 | Amount           
|                                
|Interest rate swaps:            
|Assets                           | $ 828,069        
|Liabilities                      | $ 722,828        
|Options, caps and floors held    | $ 8,174          
|Options, caps and floors written | $ 8,174          
|Interest rate lock commitments   | $ 447,519        
|Forward sales contracts          | $ 447,519        
|Foreign exchange contracts:     
|Purchased                        | $ 429            
|Sold                             | $ 429            
|                                

During 2001,  noninterest  income of $4,068,000 was recognized on interest rate contracts not designated as hedges and
$423,000 was  recognized in  noninterest  income  relating to 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 at December 31, 2001, of derivative financial instruments
which are designated as hedges. 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.

|($ in thousands)             | December 31, 2001    
|---------------------------- | ---------------------
|                            
|                             | Derivative Instrument
|                            
|                             | Change in            
|                             | Notional             
|                             | Amount               
|                            
|Fair value hedges:          
|Forward sales contracts      | $ 483,491            
|Mortgage loans held for sale |                      
|Foreign exchange contracts   | $ 10,576             
|Foreign-denominated loans    |                      
|Cash flow hedges:           
|Interest rate swap liability | $ 600,000            
|                            

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. The notional values of these forward sales
contracts total $483,491,000 with an estimated fair value of $8,834,000 at
December 31, 2001. The estimated fair values of the corresponding hedged loans
reflected a decrease of $8,834,000 from their book values at December 31, 2001,
resulting in no impact on earnings.

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. The
notional amount of these contracts totaled approximately $10,576,000 with an
estimated fair value of $197,000 at December 31, 2001. The estimated fair values
of the corresponding hedged loans reflected a decrease of $197,000 from their
book values at December 31, 2001, resulting in no impact on earnings.

Cash
flow hedges:The Company enters into interest rate contracts in order to
manage interest rate exposure. Interest rate contracts involve the risk of
dealing with counterparties and their ability to meet contractual terms. These
counterparties must receive appropriate credit approval before the Company
enters into such interest rate contracts. At December 31, 2001, the Company has
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 a fixed rate. These
contracts are designated as cash flow hedges. The notional amount of the swaps,
which mature in 2005 and 2008, total $600,000,000. 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. The estimated negative fair value of these interest rate swaps was
$11,055,000 at December 31, 2001. There was no effect on income related to hedge
ineffectiveness. As a result of this swap, interest expense was increased by
$5,892,000 for the year ended December 31, 2001. 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 relating to the
indirect automobile loan securitization discussed in Note 6. A loss of
$1,025,000 was recognized in other noninterest income on 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. The amounts disclosed in the
following table represent the end-of-period notional and estimated fair value of
derivative financial instruments held or issued for trading purposes at December
31, 2000 and the average aggregate fair value of those instruments during the
year. Net trading gains recognized in earnings on derivative contracts
outstanding were immaterial in 2000.

|                                 |                   |                   | Year Ended        
|-------------------------------- | ----------------- | ----------------- | ------------------
|($ in thousands)                 | December 31, 2000 | December 31, 2000
|                                
|                                 | Notional Amount   | Fair Value        | Average Fair Value
|                                
|Interest rate swaps:            
|Assets                           | $ 204,583         | $ 2,672           | $ 2,324           
|Liabilities                      | $ 204,583         | $ (2,188)         | $ (1,741)         
|Options, caps and floors held    | $ 8,277           | $ 323             | $ 219             
|Options, caps and floors written | $ 8,277           | $ (323)           | $ (219)           
|Foreign exchange contracts:     
|Purchased                        | $ 1,806           | $ 137             | $ 133             
|Sold                             | $ 1,807           | $ (131)           | $ (128)           
|                                

In
addition to the derivative financial instruments held or issued for trading
purposes discussed above, the Company held other off-balance-sheet derivative
financial instruments at December 31, 2000. The Company entered into limited
foreign exchange contracts to manage its exposure to foreign currency changes
for certain foreign currency denominated loans. These contracts had notional
amounts of $11,481,000 and an estimated negative fair value of $161,000 at
December 31, 2000. The Company also entered 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
(including anticipated loan fundings) due to changes in market conditions. These
contracts had notional amounts outstanding of $224,285,000 and an estimated
negative fair value of $2,564,000 at December 31, 2000.

|23
|
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, 2001 and 2000, 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, 2001     
|                      
|Hibernia Corporation   | $ 1,307,655               | 10.14%                   | $ 1,469,283
|Hibernia National Bank | $ 1,205,435               | 9.37%                    | $ 1,366,761
|                      
|December 31, 2000     
|                      
|Hibernia Corporation   | $ 1,230,725               | 9.69%                    | $ 1,389,796
|Hibernia National Bank | $ 1,146,704               | 9.04%                    | $ 1,305,423
|                      

Under current FRB regulations, the Bank may lend the Parent Company up to 10% of its
capital and surplus.

The payment of dividends by the Bank to the Parent Company
is restricted by various regulatory and statutory limitations. In 2002, the
Bank would have available to pay dividends to the Parent Company, without
approval of the OCC, approximately $116,159,000, plus net retained profits
earned in 2002 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 $23,408,000 in 2001 and $16,708,000 in 2000.

|24
|
CONTINGENCIES
|------------------

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

|25
|
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)                           | 2001       
|                                          
|Investment in bank subsidiary              | $ 1,429,652
|Investment in nonbank subsidiaries         | 60,341     
|Other assets                               | 104,818    
|                                          
|Total assets                               | $ 1,594,811
|                                          
|Other liabilities                          | $ 8,549    
|Debt (ESOP guarantee)                      | 26,483     
|Shareholders' equity                       | 1,559,779  
|                                          
|Total liabilities and shareholders' equity | $ 1,594,811
|                                          

|Income Statements                                  | Year Ended December 31
|-------------------------------------------------- | ----------------------
|                                                  
|($ in thousands)                                   | 2001                  
|                                                  
|Equity in undistributed net income of subsidiaries | $ 42,095              
|Dividends from subsidiaries                        | 179,260               
|Other income                                       | 3,648                 
|Securities gains (losses), net                     | (15)                  
|                                                  
|Total income                                       | 224,988               
|Total expense                                      | 4,993                 
|                                                  
|Income before income taxes                         | 219,995               
|Income tax expense                                 | 1,197                 
|                                                  
|Net income                                         | $ 218,798             
|                                                  

|Statements of Cash Flows                             | Year Ended December 31
|---------------------------------------------------- | ----------------------
|                                                    
|($ in thousands)                                     | 2001                  
|                                                    
|Operating activities                                
|Net income                                           | $ 218,798             
|Non-cash adjustment for equity in                   
|subsidiaries' undistributed net income               | (42,095)              
|Realized securities (gains) losses, net              | 15                    
|Other adjustments                                    | 3,888                 
|                                                    
|Net cash provided by operating activities            | 180,606               
|                                                    
|Investing activities                                
|Investment in subsidiaries                           | (4,024)               
|Purchases of securities available for sale           | (947)                 
|Proceeds from sales of securities available for sale | 750                   
|Other                                                | 1,118                 
|                                                    
|Net cash used by investing activities                | (3,103)               
|                                                    
|Financing activities                                
|Dividends paid                                       | (88,722)              
|Issuance of common stock                             | 12,095                
|Redemption of preferred stock                        | (86,950)              
|Purchase of treasury stock                           | -                     
|Other                                                | -                     
|                                                    
|Net cash used by financing activities                | (163,577)             
|                                                    
|Increase (decrease) in cash and cash equivalents     | 13,926                
|Cash and cash equivalents at beginning of year       | 72,474                
|                                                    
|Cash and cash equivalents at end of year             | $ 86,400              
|                                                    

|26
|
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 Commercial, Small Business, Consumer, and Investments and
Public Funds. The Commercial and Small Business segments provide business
entities with comprehensive products and services, including loans, deposit
accounts, leasing, factoring, treasury management, investment banking, property
and casualty insurance and private equity investments. The Commercial segment
provides products and services to larger business entities and the Small
Business segment provides products and services to mid-size and smaller business
entities. 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 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
|----------------- | -----------
|                  |            
|($ in thousands)  | Commercial 
|                 
|December 31, 2001
|                 
|Average loans     | $ 3,128,900
|Average assets    | $ 3,203,200
|Average deposits  | $ 1,106,300
|                 
|December 31, 2000
|                 
|Average loans     | $ 3,596,000
|Average assets    | $ 3,659,400
|Average deposits  | $ 1,055,700
|                 

The following table presents condensed income statements for each segment.

|                             | Investments
|---------------------------- | -----------
|                             |            
|($ in thousands)             | Commercial 
|                            
|Year ended December 31, 2001
|                            
|Net interest income          | $ 119,317  
|Provision for loan losses    | 40,622     
|                            
|Net interest income after   
|provision for loan losses    | 78,695     
|                            
|Noninterest income           | 59,178     
|Noninterest expense          | 105,285    
|                            
|Income before income taxes   | 32,588     
|Income tax expense           | 11,406     
|                            
|Net income                   | $ 21,182   
|                            
|Year ended December 31, 2000
|                            
|Net interest income          | $ 128,681  
|Provision for loan losses    | 63,480     
|                            
|Net interest income after   
|provision for loan losses    | 65,201     
|                            
|Noninterest income           | 45,584     
|Noninterest expense          | 89,989     
|                            
|Income before income taxes   | 20,796     
|Income tax expense           | 7,279      
|                            
|Net income                   | $ 13,517   
|                            
|Year ended December 31, 1999
|                            
|Net interest income          | $ 133,188  
|Provision for loan losses    | 43,393     
|                            
|Net interest income after   
|provision for loan losses    | 89,795     
|                            
|Noninterest income           | 32,795     
|Noninterest expense          | 69,112     
|                            
|Income before income taxes   | 53,478     
|Income tax expense           | 18,717     
|                            
|Net income                   | $ 34,761   
|                            

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, 2001                                      
|                                                       
|Segment total                                           | $ 11,622,800 | $ 18,253,400 | $ 12,285,300
|Excess funds invested                                   | -            | (2,098,000)  | -           
|Reclassification of cash items in process of collection | -            | 323,000      | 323,000     
|                                                       
|Consolidated total                                      | $ 11,622,800 | $ 16,478,400 | $ 12,608,300
|                                                       
|December 31, 2000                                      
|                                                       
|Segment total                                           | $ 11,504,700 | $ 18,108,100 | $ 11,785,200
|Excess funds invested                                   | -            | (2,563,800)  | -           
|Reclassification of cash items in process of collection | -            | 309,900      | 309,900     
|                                                       
|Consolidated total                                      | $ 11,504,700 | $ 15,854,200 | $ 12,095,100
|                                                       

|                              |              | Provision |             |             | Income Tax
|----------------------------- | ------------ | --------- | ----------- | ----------- | ----------
|                              | Net Interest | for Loan  | Noninterest | Noninterest | Expense   
|($ in thousands)              | Income       | Losses    | Income      | Expense     | (Benefit) 
|                             
|Year ended December 31, 2001 
|                             
|Segment total                 | $ 669,072    | $ 97,250  | $ 318,124   | $ 548,295   | $ 124,271 
|Taxable-equivalent adjustment | (4,401)      | -         | -           | -           | (1,540)   
|Income tax expense            | -            | -         | -           | -           | (4,279)   
|                             
|Consolidated total            | $ 664,671    | $ 97,250  | $ 318,124   | $ 548,295   | $ 118,452 
|                             
|Year ended December 31, 2000 
|                             
|Segment total                 | $ 615,401    | $ 120,650 | $ 248,685   | $ 476,078   | $ 98,387  
|Taxable-equivalent adjustment | (4,842)      | -         | -           | -           | (1,695)   
|Income tax expense            | -            | -         | -           | -           | (4,809)   
|                             
|Consolidated total            | $ 610,559    | $ 120,650 | $ 248,685   | $ 476,078   | $ 91,883  
|                             
|Year ended December 31, 1999 
|                             
|Segment total                 | $ 589,747    | $ 87,800  | $ 214,703   | $ 440,921   | $ 101,032 
|Taxable-equivalent adjustment | (4,942)      | -         | -           | -           | (1,730)   
|Income tax expense            | -            | -         | -           | -           | (3,618)   
|                             
|Consolidated total            | $ 584,805    | $ 87,800  | $ 214,703   | $ 440,921   | $ 95,684  
|