Hibernia National Bank

Last updated
Hibernia Corporation
Industry Banking
FateAcquired by Capital One
FoundedApril 1870;148 years ago (1870-04)
DefunctNovember 16, 2005;13 years ago (2005-11-16)
Headquarters New Orleans, Louisiana
Area served
 Louisiana, Texas
Key people
 J. Herbert Boydstun, President & CEO
Marsha M. Gassan, CFO
Total assets Increase2.svg $22.3 billion (2004)
Number of employees
6,210 (2004)
Footnotes /references
[1]
The Hibernia Bank Building in the New Orleans Central Business District. Although all former Hibernia branches have been re-branded as Capital One, this building's historic name and signage remain unaltered. Hibernia National Bank building.JPG
The Hibernia Bank Building in the New Orleans Central Business District. Although all former Hibernia branches have been re-branded as Capital One, this building's historic name and signage remain unaltered.

Hibernia National Bank was a bank headquartered in New Orleans, Louisiana. The bank was the primary subsidiary of Hibernia Corporation, a bank holding company. In November 2005, the bank was acquired by Capital One.

Bank financial institution

A bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries. Most nations have institutionalized a system known as fractional reserve banking under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords.

A bank holding company is a company that controls one or more banks, but does not necessarily engage in banking itself. The compound bancorp is often used to refer to these companies as well.

Capital One company

Capital One Financial Corporation is a bank holding company specializing in credit cards, auto loans, banking and savings accounts headquartered in McLean, Virginia.

Hibernia is the classical Latin name for Ireland. The logo of the bank included a harp, the national symbol of Ireland.

Hibernia Classical Latin name for Ireland

Hibernia is the Classical Latin name for the island of Ireland. The name Hibernia was taken from Greek geographical accounts. During his exploration of northwest Europe, Pytheas of Massilia called the island Iérnē. In his book Geographia, Claudius Ptolemaeus ("Ptolemy") called the island Iouerníā. The Roman historian Tacitus, in his book Agricola, uses the name Hibernia.

Latin Indo-European language of the Italic family

Latin is a classical language belonging to the Italic branch of the Indo-European languages. The Latin alphabet is derived from the Etruscan and Greek alphabets and ultimately from the Phoenician alphabet.

Ireland Island in north-west Europe, 20th largest in world, politically divided into the Republic of Ireland and Northern Ireland (a part of the UK)

Ireland is an island in the North Atlantic. It is separated from Great Britain to its east by the North Channel, the Irish Sea, and St George's Channel. Ireland is the second-largest island of the British Isles, the third-largest in Europe, and the twentieth-largest on Earth.

History

In April 1870, 3 Irish businessmen co-founded the Hibernia Bank & Trust Company in New Orleans. [2] Patrick Irwin was named the first President, Hugh McCloskey, the first Vice-President, and Thomas Fitzwilliam, first Secretary. In September 1870, the bank began operations.

In 1973, the board of directors hired 38-year-old Martin C. Miler, formerly an executive at First Union, to be the bank's president and chairman. [2] In 1975, the Louisiana legislature approved multi-parish banking. By 1983, Hibernia grew to be the largest bank in the state in terms of assets. Despite its operations in Louisiana, the bank never lent heavily to the petroleum industry. [2]

First Union

First Union Corporation was a bank holding company that provided commercial and retail banking services in eleven states in the eastern U.S. First Union also provided various other financial services, including mortgage banking, credit card, investment banking, investment advisory, home equity lending, asset-based lending, leasing, insurance, international and securities brokerage services and private equity, through other subsidiaries. In September 2001, First Union completed a merger with Wachovia National Bank to become Wachovia Corporation, one of the largest financial holding companies in the US. As of the end of 2000, First Union had over $170 billion of total assets, over 70,000 employees and nearly 2,200 branches.

Petroleum industry activities linked to handling oil and gas products

The petroleum industry, also known as the oil industry or the oil patch, includes the global processes of exploration, extraction, refining, transporting, and marketing of petroleum products. The largest volume products of the industry are fuel oil and gasoline (petrol). Petroleum (oil) is also the raw material for many chemical products, including pharmaceuticals, solvents, fertilizers, pesticides, synthetic fragrances, and plastics. The extreme monetary value of oil and its products has led to it being known as "black gold". The industry is usually divided into three major components: upstream, midstream, and downstream.

In 1989, the bank entered Texas via the acquisition of First State Bank of Pflugerville, which was shut down by regulators as a result of bank failure. [3] In 1990, the bank acquired BancTexas after it also failed. [4]

Bank failure

A bank failure occurs when a bank is unable to meet its obligations to its depositors or other creditors because it has become insolvent or too illiquid to meet its liabilities. More specifically, a bank usually fails economically when the market value of its assets declines to a value that is less than the market value of its liabilities. The insolvent bank either borrows from other solvent banks or sells its assets at a lower price than its market value to generate liquid money to pay its depositors on demand. The inability of the solvent banks to lend liquid money to the insolvent bank creates a bank panic among the depositors as more depositors try to take out cash deposits from the bank. As such, the bank is unable to fulfill the demands of all of its depositors on time. Also, a bank may be taken over by the regulating government agency if Shareholders Equity are below the regulatory minimum.

The bank had positive growth every quarter from 1973 to 1990; however, in 1990, as a result of the savings and loan crisis, the bank reported a loss, eliminated its dividend and needed capital. [5]

The savings and loan crisis of the 1980s and 1990s was the failure of 1,043 out of the 3,234 savings and loan associations in the United States from 1986 to 1995: the Federal Savings and Loan Insurance Corporation (FSLIC) closed or otherwise resolved 296 institutions from 1986 to 1989 and the Resolution Trust Corporation (RTC) closed or otherwise resolved 747 institutions from 1989 to 1995.

Dividend payment made by a corporation to its shareholders, usually as a distribution of profits

A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, the corporation is able to re-invest the profit in the business and pay a proportion of the profit as a dividend to shareholders. Distribution to shareholders may be in cash or, if the corporation has a dividend reinvestment plan, the amount can be paid by the issue of further shares or share repurchase. When dividends are paid, shareholders typically must pay income taxes, and the corporation does not receive a corporate income tax deduction for the dividend payments.

In 1991, Miler retired. [4]

In 1992, the company sold its operations in Texas to Comerica for $63.1 million in cash. [6] The company also recapitalized by giving Chase Manhattan Bank a majority ownership stake in the company in exchange for debt forgiveness. [7]

In 2000, the company entered the insurance business with the acquisition of The Rosenthal Agency. [8]

In 2003, the company re-entered the Texas market with the acquisition of Coastal Bancorp. [9] The company also announced plans to open additional branches in Texas. [10]

In November 2005, Capital One acquired the company. [11] The acquisition price was re-negotiated downward after Hurricane Katrina struck New Orleans. [12]

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References

  1. ↑ "Hibernia Corporation 2004 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  2. 1 2 3 BERG, ERIC N. (August 7, 1987). "Bank Thrives in Louisiana". The New York Times .
  3. ↑ "Regulators shut down four Texas banks". United Press International . August 24, 1989.
  4. 1 2 "Hibernia seeking merger partners, chairman retires, more losses". United Press International . July 30, 1991.
  5. ↑ "Report: NCNB may put capital into Hibernia". United Press International . July 29, 1991.
  6. ↑ "Hibernia agrees to sell Texas unit". American Banker . July 20, 1992.(subscription required)
  7. ↑ "A Revamping At Hibernia". The New York Times . September 24, 1992.
  8. ↑ "HUB International to Acquire One of the Largest Louisiana-Based Insurance Brokers" (Press release). Business Wire. February 14, 2007.
  9. ↑ "Hibernia 'coasting' into Houston in big way". American City Business Journals . December 2, 2003.
  10. ↑ Higginbotham, Stacey (May 11, 2003). "Hibernia coming back". American City Business Journals .
  11. ↑ "Capital One Completes Acquisition of Hibernia Corporation" (Press release). Business Wire. November 16, 2005.
  12. ↑ "Capital One and Hibernia Corporation Renegotiate Acquisition Price" (Press release). PRNewswire. September 7, 2005.
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