10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2003	Commission File Number 1-10294
HIBERNIA CORPORATION (Exact name of registrant as specified in its charter)
Louisiana             (State or other jurisdiction of incorporation or organization)	72-0724532             (I.R.S. Employer Identification Number)
313 Carondelet Street, New Orleans, Louisiana 70130 (Address of principal executive offices and zip code)
Registrant's telephone number, including area code (504) 533-2831
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES   X          NO ____
Indicate by check mark whether the Registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange Act).
YES   X          NO ____
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class                       Class A Common Stock, no par value	Outstanding at July 31, 2003                       156,067,839 Shares

HIBERNIA CORPORATION
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets	***
Consolidated Income Statements	***
Consolidated Statements of Changes in
Shareholders' Equity	***
Consolidated Statements of Cash Flows	***
Notes to Consolidated Financial
Statements	***
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations	***
Item 3. Quantitative and Qualitative Disclosures about Market Risk	***
Item 4. Controls and Procedures	***
Part II. Other Information
Item 2. Changes in Securities and Use of Proceeds	***
Item 4. Submission of Matters to a Vote of Security Holders	***
Item 6. Exhibits and Reports on Form 8-K	***

Consolidated Balance Sheets
Hibernia Corporation and Subsidiaries Unaudited ($ in thousands)		June 30 2003			December 31 2002			June 30 2002
Assets
Cash and cash equivalents	$	782,967		$	1,103,694		$	647,950
Trading account assets		6,586			8,561			12,390
Securities available for sale		3,779,385			3,511,153			3,077,831
Securities held to maturity (estimated fair value of $96,646, $146,369
and $208,109 at June 30, 2003, December 31, 2002 and
June 30, 2002, respectively)		93,911			140,525			202,538
Mortgage loans held for sale		530,427			526,288			381,476
Loans, net of unearned income		11,852,018			11,492,212			11,345,488
Reserve for loan losses		(213,153	)		(212,765	)		(212,343	)
Loans, net		11,638,865			11,279,447			11,133,145
Bank premises and equipment		208,222			209,974			205,104
Customers' acceptance liability		118			--			52
Goodwill		209,114			209,114			209,114
Other intangible assets		103,482			131,915			133,209
Other assets		567,368			271,990			282,869
Total assets	$	17,920,445		$	17,392,661		$	16,285,678
Liabilities
Deposits:
Noninterest-bearing	$	3,068,521		$	2,867,307		$	2,401,198
Interest-bearing		10,632,431			10,613,715			10,380,266
Total deposits		13,700,952			13,481,022			12,781,464
Short-term borrowings		684,446			575,448			628,286
Liability on acceptances		118			--			52
Other liabilities		419,305			553,088			218,840
Federal Home Loan Bank advances		1,401,996			1,102,241			1,042,593
Total liabilities		16,206,817			15,711,799			14,671,235
Shareholders' equity
Class A Common Stock, no par value:
Authorized - 300,000,000 shares; issued - 166,851,362,
166,252,171 and 165,744,139 at June 30, 2003,
December 31, 2002 and June 30, 2002, respectively		320,354			319,204			318,229
Surplus		497,148			490,057			481,428
Retained earnings		1,081,624			1,010,710			927,801
Treasury stock at cost: 10,955,168, 8,840,005 and
6,828,805 shares at June 30, 2003, December 31, 2002
and June 30, 2002, respectively		(182,687	)		(142,931	)		(104,086	)
Accumulated other comprehensive income		18,754			25,387			17,554
Unearned compensation		(21,565	)		(21,565	)		(26,483	)
Total shareholders' equity		1,713,628			1,680,862			1,614,443
Total liabilities and shareholders' equity	$	17,920,445		$	17,392,661		$	16,285,678
See notes to consolidated financial statements.

Consolidated Income Statements
Hibernia Corporation and Subsidiaries	Three Months Ended June 30						Six Months Ended June 30
Unaudited ($ in thousands, except per-share data)		2003			2002			2003			2002
Interest income
Interest and fees on loans	$	183,822		$	196,050		$	366,897		$	390,927
Interest on securities available for sale		38,614			40,672			77,643			81,567
Interest on securities held to maturity		1,434			3,157			3,232			6,658
Interest on short-term investments		674			2,069			2,051			3,604
Interest on mortgage loans held for sale		6,942			5,546			12,421			10,977
Total interest income		231,486			247,494			462,244			493,733
Interest expense
Interest on deposits		41,612			57,096			84,932			116,640
Interest on short-term borrowings		1,733			2,371			3,233			4,917
Interest on Federal Home Loan Bank advances		14,324			13,296			28,531			26,527
Total interest expense		57,669			72,763			116,696			148,084
Net interest income		173,817			174,731			345,548			345,649
Provision for loan losses		13,000			20,000			30,750			47,500
Net interest income after provision for loan losses		160,817			154,731			314,798			298,149
Noninterest income
Service charges on deposits		38,394			34,051			74,255			65,715
Card-related fees		12,651			9,980			23,727			18,769
Mortgage banking		(13,921	)		5,356			(18,864	)		16,601
Retail investment fees		7,142			8,171			13,662			16,260
Trust fees		5,556			6,331			11,624			12,674
Insurance		4,573			3,929			9,327			7,988
Investment banking		3,614			5,763			6,445			8,759
Other service, collection and exchange charges		4,918			5,086			9,938			10,270
Other operating income		3,542			4,670			8,824			9,308
Securities gains (losses), net		10,191			(6,563	)		10,200			(9,971	)
Total noninterest income		76,660			76,774			149,138			156,373
Noninterest expense
Salaries and employee benefits		78,245			73,501			152,851			144,059
Occupancy expense, net		9,792			8,980			19,111			18,175
Equipment expense		8,352			7,994			16,281			15,843
Data processing expense		8,895			8,476			18,313			16,856
Advertising and promotional expense		5,478			5,078			12,440			10,399
Amortization of intangibles		1,285			1,513			2,624			3,097
Foreclosed property expense, net		(29	)		219			57			239
Other operating expense		30,745			29,684			61,249			58,521
Total noninterest expense		142,763			135,445			282,926			267,189
Income before income taxes		94,714			96,060			181,010			187,333
Income tax expense		33,333			33,525			63,429			65,562
Net income	$	61,381		$	62,535		$	117,581		$	121,771
Net income per common share	$	0.40		$	0.40		$	0.76		$	0.77
Net income per common share - assuming dilution	$	0.39		$	0.39		$	0.75		$	0.76

See notes to consolidated financial statements.

Consolidated Statements of Changes in Shareholders' Equity
Hibernia Corporation and Subsidiaries Unaudited ($ in thousands, except per-share data)
		Common Stock		Surplus			Retained Earnings		Accumulated Other Comprehensive Income			Other		Comprehensive Income
Balances at December 31, 2002	$	319,204	$	490,057		$	1,010,710		$     25,387		$	(164,496	)
Net income		--		--			117,581		--			--		$     117,581
Change in unrealized gains (losses) on
securities, net of reclassification
adjustments		--		--			--		(7,651	)		--		(7,651	)
Change in accumulated gains (losses)
on cash flow hedges, net of
reclassification adjustments		--		--			--		1,018			--		1,018
Comprehensive income														$     110,948
Issuance of common stock:
Stock option plans		1,076		5,258			--		--			--
Restricted stock awards		38		331			--		--			--
Directors' compensation		--		337			--		--			464
Cash dividends declared on
common ($.30 per share)		--		--			(46,667	)	--			--
Acquisition of treasury stock		--		--			--		--			(40,220	)
Net tax benefit related to stock option plans
and ESOP		--		1,258			--		--			--
Other		36		(93	)		--		--			--
Balances at June 30, 2003	$	320,354	$	497,148		$	1,081,624		$     18,754		$	(204,252	)
		Common Stock		Surplus			Retained Earnings		Accumulated Other Comprehensive Income			Other		Comprehensive Income
Balances at December 31, 2001	$	311,715	$	446,900		$	850,295		$     13,279		$	(62,410	)
Net income		--		--			121,771		--			--		$     121,771
Change in unrealized gains (losses) on
securities, net of reclassification
adjustments		--		--			--		11,543			--		11,543
Change in accumulated gains (losses)
on cash flow hedges, net of
reclassification adjustments		--		--			--		(7,268	)		--		(7,268	)
Comprehensive income														$     126,046
Issuance of common stock:
Stock option plans		6,379		23,311			--		--			--
Restricted stock awards		135		551			--		--			--
Cash dividends declared on
common ($.28 per share)		--		--			(44,265	)	--			--
Acquisition of treasury stock		--		--			--		--			(68,159	)
Net tax benefit related to stock option plans
and ESOP		--		11,003			--		--			--
Other		--		(337	)		--		--			--
Balances at June 30, 2002	$	318,229	$	481,428		$	927,801		$     17,554		$	(130,569	)

See notes to consolidated financial statements.

Consolidated Statements of Cash Flows
Hibernia Corporation and Subsidiaries
Six Months Ended June 30 Unaudited ($ in thousands)		2003			2002
Operating activities
Net income	$	117,581		$	121,771
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses		30,750			47,500
Amortization of intangibles and deferred charges		71,567			15,460
Depreciation and amortization		16,415			15,334
Non-cash derivative instruments gains, net		(1,299	)		(469	)
Premium amortization, net		12,670			220
Realized securities losses (gains), net		(10,200	)		9,971
Gains on sales of assets, net		(4,887	)		(430	)
Provision for losses on foreclosed and other assets		1,852			527
Decrease (increase) in mortgage loans held for sale		(2,448	)		200,544
Increase in deferred income tax asset		(87	)		(93	)
Net tax benefit related to stock option plans and ESOP		1,258			11,003
Increase in interest receivable and other assets		(31,104	)		(18,462	)
Increase in interest payable and other liabilities		4,851			10,835
Net cash provided by operating activities		206,919			413,711
Investing activities
Purchases of securities available for sale		(1,867,410	)		(3,873,889	)
Proceeds from maturities and principal repayments of securities available for sale		977,415			3,811,312
Proceeds from maturities and principal repayments of securities held to maturity		46,519			47,244
Proceeds from sales of securities available for sale		196,634			104,951
Net decrease (increase) in loans		(310,147	)		10,236
Proceeds from sales of loans		151,108			10,135
Purchases of loans		(231,239	)		(158,523	)
Purchases of premises, equipment and other assets		(42,909	)		(37,659	)
Proceeds from sales of foreclosed assets and excess bank-owned property		3,981			2,598
Proceeds from sales of premises, equipment and other assets		272			818
Acquisition, net of cash acquired of $36		--			(2,464	)
Net cash used by investing activities		(1,075,776	)		(85,241	)
Financing activities
Net increase (decrease) in deposits		219,930			(171,648	)
Net increase (decrease) in short-term borrowings		108,998			(124,461	)
Proceeds from Federal Home Loan Bank advances		300,000			--
Payments on Federal Home Loan Bank advances		(245	)		(390	)
Proceeds from issuance of common stock		6,334			29,690
Dividends paid		(46,667	)		(44,265	)
Acquisition of treasury stock		(40,220	)		(68,159	)
Net cash provided (used) by financing activities		548,130			(379,233	)
Decrease in cash and cash equivalents		(320,727	)		(50,763	)
Cash and cash equivalents at beginning of period		1,103,694			698,713
Cash and cash equivalents at end of period	$	782,967		$	647,950

See notes to consolidated financial statements.

Notes to Consolidated Financial Statements

Hibernia Corporation and Subsidiaries
Unaudited

Note 1
Basis of Presentation

        The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles. In the opinion of management, all adjustments (consisting of normal accruals) considered necessary for a fair presentation have been included. For further information, refer to the audited consolidated financial statements and notes included in Hibernia Corporation’s Annual Report on Form 10-K for the year ended December 31, 2002.

Note 2
Goodwill and Other Intangible Assets

        Effective January 1, 2002 the Company adopted the requirements of Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets.” Under the new rules, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests in accordance with the provisions of SFAS No. 142. Other intangible assets continue to be amortized over their useful lives. The Company applied the new rules regarding accounting for goodwill and other intangible assets beginning in the first quarter of 2002.

        The Company performed the first of the required impairment tests of goodwill as of January 1, 2002 and its annual impairment tests as of September 30, 2002. The results of these tests did not indicate impairment of the Company’s recorded goodwill. The carrying amount of goodwill not subject to amortization totaled $206,625,000 at January 1, 2002, which was net of accumulated amortization of $66,914,000. On April 1, 2002, goodwill of $2,489,000 was recorded and added to the Consumer segment as a result of the purchase of Friedler/LaRocca Financial Partners, L.L.C. At June 30, 2003, goodwill totaled $209,114,000 and is included in the Company’s reportable segments as follows: Consumer — $102,490,000; Small Business — $48,340,000; Commercial — $58,276,000 and Investments and Public Funds — $8,000.

        The Company records purchase accounting intangible assets that consist of core deposit intangibles, trust intangibles and insurance customer lists intangibles, which are subject to amortization. These include both contractual and noncontractual customer relationships. The core deposit and trust intangibles reflect the value of deposit and trust customer relationships which arose from the purchases of financial institutions. The insurance customer lists intangibles represent the purchase of customer lists and contracts from individual insurance agencies. The following table summarizes the Company’s purchase accounting intangible assets subject to amortization.

(in thousands)	June 30, 2003				June 30, 2002
Purchase Accounting Intangibles		Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount		Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount
Core deposit		$ 36,151	$ 30,792	$  5,359		$ 36,151	$ 27,908	$  8,243
Trust		17,059	10,618	6,441		17,059	8,472	8,587
Insurance customer lists		4,408	1,165	3,243		3,884	728	3,156
Total		$ 57,618	$ 42,575	$ 15,043		$ 57,094	$ 37,108	$ 19,986

        The amortization expense of the purchase accounting intangibles for the three months ended June 30, 2003 and 2002 was $1,285,000 and $1,513,000, respectively and for the six months ended June 30, 2003 and 2002 was $2,624,000 and $3,097,000, respectively. Amortization expense for the remainder of 2003 is estimated to be $2,430,000. Estimated future amortization expense is as follows: 2004 — $4,387,000; 2005 — $3,794,000; 2006 — $2,270,000; 2007 -$771,000; 2008 — $605,000 and thereafter — $786,000. These estimates do not assume the addition of any new purchase accounting intangibles.

        Also included in intangible assets are capitalized mortgage servicing rights with net carrying amounts of $88,439,000 and $113,223,000 at June 30, 2003 and 2002, respectively. The carrying amounts are net of a reserve for temporary impairment of $61,072,000 and $17,001,000 at June 30, 2003 and 2002, respectively. Amortization expense of mortgage servicing rights totaled $14,350,000 and $5,519,000 for the three months ended June 30, 2003 and 2002, respectively and $26,454,000 and $10,674,000 for the six months ended June 30, 2003 and 2002, respectively. The provision for temporary impairment of mortgage servicing rights totaled $28,000,000 and $1,700,000 for the three months ended June 30, 2003 and 2002, respectively, and $42,500,000 and $1,700,000 for the six months ended June 30, 2003 and 2002, respectively. In the second quarter of 2003, $19.9 million of mortgage servicing rights impairment was reclassified from temporary to permanent.

Note 3
Employee Benefit Plans

        The Company’s stock option plans provide incentive and nonqualified 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. Until October 1997, options granted to non-employee directors were granted under the 1987 Stock Option Plan; after October 1997 through January 2003, those options were granted under the 1993 Directors’ Stock Option Plan. Under those plans, 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. 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. In the first quarter of 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.

        Options granted to employees and directors under the plans described above generally become immediately exercisable if the holder of the option dies while the option is outstanding. Options granted under the 1987 Stock Option Plan generally expire 10 years from the date granted unless the holder leaves the employ of the Company other than through retirement, death or disability, in which case the options expire at the date of termination. Options granted under the Long-Term Incentive Plan and the 1993 Directors’ Stock Option Plan generally expire 10 years from the date of grant, although they may expire earlier if the holder dies, retires, becomes permanently disabled or leaves the employ of the Company (in which case the options expire at various times ranging from 90 days to 12 months).

        In the second quarter of 2003, shareholders approved the 2003 Long-Term Incentive Compensation Plan (2003 Plan). The 2003 Plan supercedes and replaces the Company’s Long-Term Incentive Plan and replaces the 1993 Directors’ Stock Option Plan. Existing options granted under these plans remain outstanding under the original terms of the plans. Options granted under the 2003 Plan to employees generally are exercisable in the same increments as those issued under the Long-Term Incentive Plan, although they may vest earlier in the event of termination of employment as a result of death, disability or retirement or in the event of a change in control of the Company. Options issued under the 2003 Plan generally expire 10 years from the date of grant, although they may expire earlier if (i) the holder leaves the employ or service of the Company other than through retirement, death or disability, in which case vested options expire in 90 days (or at original expiration date, if earlier), or (ii) the holder retires, dies or becomes disabled, in which case vested options expire in 3 years (or at the original expiration date, if earlier). Unvested options are forfeited upon termination.

        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 date of 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 tables summarize the option activity in the plans during the second quarter of 2003. In the first quarter of 2003, the 1993 Directors’ Stock Option Plan was terminated in accordance with the terms of the plan. During 1997, the 1987 Stock Option Plan was terminated in accordance with the terms of the plan. At June 30, 2003, there are no shares available for grant under the 1987 Stock Option Plan, the Long-Term Incentive Plan, the 1993 Directors’ Stock Option Plan and the 2001 Nonqualified Stock Option Plan. All options outstanding at June 30, 2003 are nonqualified.

	Options		Weighted Average Exercise Price
1987 Stock Option Plan:
Outstanding, March 31, 2003	20,000		$	8	.31
Exercised	(5,000	)		8	.75
Outstanding, June 30, 2003	15,000		$	8	.17
Exercisable, June 30, 2003	15,000		$	8	.17
Long-Term Incentive Plan:
Outstanding, March 31, 2003	14,452,459		$	15	.39
Granted (weighted-average fair value $3.69 per share)	5,000			17	.15
Cancelled	(332,147	)		16	.65
Exercised	(351,160	)		11	.47
Outstanding, June 30, 2003	13,774,152		$	15	.46
Exercisable, June 30, 2003	6,622,683		$	13	.93
1993 Directors' Stock Option Plan:
Outstanding, March 31, 2003	428,750		$	14	.39
Exercised	(12,500	)		9	.94
Outstanding, June 30, 2003	416,250		$	14	.52
Exercisable, June 30, 2003	341,250		$	13	.89
2001 Nonqualified Stock Option Plan:
Outstanding, March 31, 2003	250,000		$	13	.84
Outstanding, June 30, 2003	250,000		$	13	.84
Exercisable, June 30, 2003	250,000		$	13	.84
2003 Long-Term Incentive Compensation Plan:
Granted (weighted-average fair value $4.01 per share)	59,250		$	18	.33
Outstanding, June 30, 2003	59,250		$	18	.33
Exercisable, June 30, 2003	50,000		$	18	.23
Available for grant, June 30, 2003	9,716,956

        In addition to the above option activity in the plans, 9,000 shares of restricted stock were awarded under the 2003 Plan during the second quarter of 2003.

        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 the Black-Scholes option valuation model.

        The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, 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 the 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)	Three Months Ended June 30						Six Months Ended June 30
	2003			2002			2003			2002
Reported net income	$	61,381		$	62,535		$	117,581		$	121,771
Deduct: Stock option compensation expense under
the fair value method, net of related tax effect		(1,366	)		(1,538	)		(2,971	)		(3,089	)
Pro forma net income	$	60,015		$	60,997		$	114,610		$	118,682
Reported net income per common share	$	0.40		$	0.40		$	0.76		$	0.77
Pro forma net income per common share	$	0.39		$	0.39		$	0.74		$	0.75
Reported net income per common share - assuming dilution	$	0.39		$	0.39		$	0.75		$	0.76
Pro forma net income per common share - assuming dilution	$	0.38		$	0.38		$	0.73		$	0.74

Note 4
Net Income Per Common Share

        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)	Three Months Ended June 30				Six Months Ended June 30
	2003		2002		2003		2002
Numerator:
Net income - Numerator for net income
per common share		$   61,381		$   62,535		$  117,581		$  121,771
Effect of dilutive securities		--		--		--		--
Numerator for net income per common
share - assuming dilution		$   61,381		$   62,535		$  117,581		$  121,771
Denominator:
Denominator for net income per common
share (weighted average shares outstanding)		154,874,767		157,548,449		155,140,694		157,578,855
Effect of dilutive securities:
Stock options		1,684,805		2,662,978		1,822,224		3,223,722
Restricted stock awards		75,609		92,508		75,609		92,508
Purchase warrants		222,284		266,268		222,782		245,247
Denominator for net income per common
share - assuming dilution		156,857,465		160,570,203		157,261,309		161,140,332
Net income per common share		$       0.40		$       0.40		$       0.76		$       0.77
Net income per common share - assuming dilution		$       0.39		$       0.39		$       0.75		$       0.76

        Weighted average shares outstanding exclude average common shares held by the Company’s Employee Stock Ownership Plan which have not been committed to be released. These shares totaled 1,648,629 and 1,991,672 for the three months ended June 30, 2003 and 2002, respectively and 1,676,205 and 2,030,204 for the six months ended June 30, 2003 and 2002, respectively.

        Options with an exercise price greater than the average market price of the Company’s Class A Common Stock for the periods presented are antidilutive and, therefore, are not included in the computation of net income per common share — assuming dilution. During the three months ended June 30, 2003 and 2002 there were 4,307,444 antidilutive options outstanding (which had exercise prices ranging from $18.28 to $21.72 per option share), and 135,000 antidilutive options outstanding (which had exercise prices ranging from $19.80 to $21.72 per option share), respectively. During the six months ended June 30, 2003 and 2002 there were 4,307,444 antidilutive options outstanding (which had exercise prices ranging from $18.28 to $21.72 per option share) and 218,500 antidilutive options outstanding (which had exercise prices ranging from $19.50 to $21.72 per option share), respectively.

Note 5
Segment Information

        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 basis of segmentation and the accounting policies used by each segment are consistent with those described in the December 31, 2002 Annual Report to Shareholders and “Segment Results” in Management’s Discussion and Analysis. There are no significant intersegment revenues.

        The following table presents selected financial information for each segment.

($ in thousands)	Consumer		Small Business		Commercial		Investments and Public Funds			Other			Segment Total
Six months ended June 30, 2003
Average loans	$	6,231,700	$	2,482,000	$	2,865,300	$	300		$	1,200		$	11,580,500
Average assets	$	9,127,800	$	2,502,000	$	2,966,900	$	4,037,500		$	667,600		$	19,301,800
Average deposits	$	7,678,200	$	1,893,500	$	1,189,800	$	2,384,900		$	19,300		$	13,165,700
Net interest income	$	194,465	$	83,939	$	57,104	$	23,434		$	(11,565	)	$	347,377
Noninterest income	$	124,908	$	16,977	$	37,386	$	(31,147	)	$	1,014		$	149,138
Net income	$	83,445	$	21,486	$	22,165	$	(9,680	)	$	(1,150	)	$	116,266
Six months ended June 30, 2002
Average loans	$	5,862,400	$	2,446,700	$	2,838,100	$	1,300		$	13,100		$	11,161,600
Average assets	$	8,647,300	$	2,452,600	$	2,920,000	$	3,525,100		$	654,200		$	18,199,200
Average deposits	$	7,349,300	$	1,880,100	$	1,060,800	$	2,122,100		$	13,300		$	12,425,600
Net interest income	$	163,998	$	82,847	$	54,361	$	56,706		$	(10,172	)	$	347,740
Noninterest income	$	108,256	$	15,963	$	28,237	$	(93	)	$	4,010		$	156,373
Net income	$	60,291	$	19,378	$	10,105	$	32,339		$	(1,669	)	$	120,444

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

($ in thousands)	Average Loans		Average Assets			Average Deposits		Net Interest Income			Noninterest Income		Net Income
Six months ended June 30, 2003
Segment total	$	11,580,500	$	19,301,800		$	13,165,700	$	347,377		$	149,138	$	116,266
Excess funds invested		--		(2,108,100	)		--		--			--		--
Reclassification of cash items
in process of collection		--		368,000			368,000		--			--		--
Taxable-equivalent adjustment on
tax exempt loans		--		--			--		(1,829	)		--		--
Income tax expense		--		--			--		--			--		1,315
Consolidated total	$	11,580,500	$	17,561,700		$	13,533,700	$	345,548		$	149,138	$	117,581
Six months ended June 30, 2002
Segment total	$	11,161,600	$	18,199,200		$	12,425,600	$	347,740		$	156,373	$	120,444
Excess funds invested		--		(2,142,900	)		--		--			--		--
Reclassification of cash items
in process of collection		--		344,400			344,400		--			--		--
Taxable-equivalent adjustment on
tax exempt loans		--		--			--		(2,091	)		--		--
Income tax expense		--		--			--		--			--		1,327
Consolidated total	$	11,161,600	$	16,400,700		$	12,770,000	$	345,649		$	156,373	$	121,771

Note 6
Impact of Recently Issued Accounting Standards

        In November 2002, the Financial Accounting Standards Board (FASB) issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” This interpretation requires additional disclosure of obligations under certain guarantees and requires the guarantor to recognize, at inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The disclosure requirements were effective for financial statements for the periods ending after December 15, 2002. The recognition and measurement provisions of the interpretation were applicable on a prospective basis to guarantees issued or modified after December 31, 2002, and were applied beginning January 1, 2003.

        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. Some letters of credit result in the recording of customer acceptance liabilities. Customer acceptance liabilities are recorded when funds are payable to another financial institution on behalf of the Company’s customer. At the time the amount is determined to be payable (due to a triggering event such as delivery of goods), a liability is recorded to reflect the amount payable, offset with a receivable from the customer. Prior to the triggering event, the contractual amount of the agreement is included in the letters of credit amounts. Collateral requirements are similar to those for funded transactions and are established based on management’s credit assessment of the customer. Management conducts regular reviews of all outstanding standby letters of credit and customer acceptances, and the results of these reviews are considered in assessing the adequacy of the Company’s reserve for loan losses. The Company had contractual amounts of standby letters of credit of $499,761,000 and $355,772,000 and customer acceptance liabilities of $118,000 and $52,000 at June 30, 2003 and 2002, respectively. The fair value of the liability undertaken in issuing guarantees since January 1, 2003 was $1,859,000 at June 30, 2003 and is included in other liabilities. At June 30, 2003, standby letters of credit had expiration dates ranging from 2003 through 2010.

        In January 2003, the FASB issued Interpretation No. 46 (FIN 46), “Consolidation of Variable Interest Entities”. This interpretation addresses consolidation by business enterprises of certain variable interest entities in which they have controlling financial interests. This interpretation applied immediately to any variable interest entities created after January 31, 2003, and was effective July 1, 2003 for variable interests acquired prior to February 1, 2003. FIN 46 is not expected to have a material impact on the financial condition or operating results of the Company.

        In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. This statement amends and clarifies financial accounting and reporting for derivative instruments and for hedging activities under SFAS No. 133. This statement is effective for contracts entered into or modified and for hedging relationships designated after June 30, 2003. Application of this statement is not expected to have a material impact on the financial condition or operating results of the Company.

        In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. This statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. This statement is effective July 1, 2003 and is not expected to have a material impact on the financial condition or operating results of the Company.

CONSOLIDATED SUMMARY OF INCOME AND SELECTED FINANCIAL DATA (1)
Hibernia Corporation and Subsidiaries
	Three Months Ended									Six Months Ended
($ in thousands, except per-share data)		June 30 2003			March 31 2003			June 30 2002			June 30 2003			June 30 2002
Interest income	$	231,486		$	230,758		$	247,494		$	462,244		$	493,733
Interest expense		57,669			59,027			72,763			116,696			148,084
Net interest income		173,817			171,731			174,731			345,548			345,649
Provision for loan losses		13,000			17,750			20,000			30,750			47,500
Net interest income after
provision for loan losses		160,817			153,981			154,731			314,798			298,149
Noninterest income:
Noninterest income		66,469			72,469			83,337			138,938			166,344
Securities gains (losses), net		10,191			9			(6,563	)		10,200			(9,971	)
Noninterest income		76,660			72,478			76,774			149,138			156,373
Noninterest expense		142,763			140,163			135,445			282,926			267,189
Income before taxes		94,714			86,296			96,060			181,010			187,333
Income tax expense		33,333			30,096			33,525			63,429			65,562
Net income	$	61,381		$	56,200		$	62,535		$	117,581		$	121,771
Per common share information:
Net income	$	0.40		$	0.36		$	0.40		$	0.76		$	0.77
Net income - assuming dilution	$	0.39		$	0.36		$	0.39		$	0.75		$	0.76
Cash dividends declared	$	0.15		$	0.15		$	0.14		$	0.30		$	0.28
Average shares outstanding (000s)		154,875			155,410			157,548			155,141			157,579
Average shares outstanding - assuming dilution (000s)		156,857			157,416			160,570			157,261			161,140
Dividend payout ratio		37.50%			41.67%			35.00%			39.47%			36.36%
Selected quarter-end balances (in millions)
Loans	$	11,852	.0	$	11,550	.0	$	11,345	.5
Deposits	$	13,700	.9	$	13,796	.5	$	12,781	.5
Federal Home Loan Bank advances	$	1,402	.0	$	1,202	.1	$	1,042	.6
Equity	$	1,713	.6	$	1,704	.4	$	1,614	.4
Total assets	$	17,920	.4	$	17,652	.2	$	16,285	.7
Selected average balances (in millions)
Loans	$	11,686	.9	$	11,472	.7	$	11,189	.1	$	11,580	.5	$	11,161	.6
Deposits	$	13,663	.1	$	13,402	.9	$	12,834	.6	$	13,533	.7	$	12,770	.0
Federal Home Loan Bank advances	$	1,215	.2	$	1,193	.3	$	1,042	.7	$	1,204	.3	$	1,042	.7
Equity	$	1,722	.0	$	1,698	.5	$	1,602	.7	$	1,710	.3	$	1,594	.4
Total assets	$	17,661	.9	$	17,460	.4	$	16,423	.4	$	17,561	.7	$	16,400	.7
Selected ratios
Net interest margin (taxable-equivalent)		4.32%			4.42%			4.66%			4.37%			4.65%
Return on assets		1.39%			1.29%			1.52%			1.34%			1.48%
Return on equity		14.26%			13.24%			15.61%			13.75%			15.28%
Efficiency ratio		59.00%			56.97%			52.07%			57.98%			51.76%
Average equity/average assets		9.75%			9.73%			9.76%			9.74%			9.72%
Tier 1 risk-based capital ratio		10.35%			10.56%			10.61%
Total risk-based capital ratio		11.60%			11.82%			11.87%
Leverage ratio		8.39%			8.34%			8.37%

    ⁽¹⁾        Prior periods have been conformed to current-period presentation.

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.

SECOND-QUARTER 2003 HIGHLIGHTS

A strong and growing balance sheet characterizes Hibernia Corporation’s financial condition for the second quarter of 2003.

• Net income for the second quarter of 2003 totaled $61.4 million ($.40 per common share), down 2% compared to $62.5 million ($.40 per common share) for the second quarter of 2002. Earnings per common share assuming dilution for the second quarter of 2003 were $0.39, equal to a year ago. Net income for the six months ended June 30, 2003 totaled $117.6 million ($.76 per common share) down 3% compared to $121.8 million ($.77 per common share) for the first six months of 2002.

• Results for the second quarter 2003 were significantly impacted by a $28.0 million non-cash expense for the temporary impairment of mortgage servicing rights, which represents an after-tax per-share charge of $0.12. Also included in the results for the second quarter 2003 was a $10.2 million gain from the sale of investment securities ($.04 per share after tax), a $5.3 million gain from the sale of loans from the mortgage portfolio ($.02 per share after tax) and approximately $6.1 million in charges associated with a previously announced reduction in workforce ($.03 per share after tax).

• Noninterest income for the second quarter of 2003 totaled $76.7 million compared to the second quarter 2002 level of $76.8 million. Included in noninterest income is a $28.0 million provision for the temporary impairment of mortgage servicing rights recorded in the second quarter of 2003, compared to $1.7 million in the second quarter of 2002. Also included in the results for the second quarter 2003 was a $10.2 million gain from the sale of investment securities, compared to securities losses of $6.6 million in the second quarter of 2002, and a $5.3 million gain from the sale of loans from the mortgage portfolio.

• The provision for loan losses for the three months ended June 30, 2003 totaled $13.0 million, down 35% from $20.0 million for the same period in 2002. The provision for loan losses for the six months ended June 30, 2003 totaled $30.8 million, down 35% from $47.5 million for the six months ended June 30, 2002. At June 30, 2003, reserves as a percentage of nonperforming loans were 373% compared to 335% at June 30, 2002.

• Nonperforming assets at June 30, 2003 were down $6.1 million (9%) to $64.7 million from $70.8 million at June 30, 2002. Nonperforming loans were down $6.2 million (10%) to $57.2 million from $63.4 million at June 30, 2002. The nonperforming asset ratio improved to 0.55% from the June 30, 2002 level of 0.62%. The nonperforming loan ratio improved to 0.48% from the June 30, 2002 level of 0.56%.

• Total deposits grew $919.4 million (7%) from June 30, 2002 to $13.7 billion at June 30, 2003. Noninterest-bearing deposits at June 30, 2003 were up $667.3 million (28%) compared to June 30, 2002. Contributing to the increase in non-interest bearing deposits was an increase in mortgage-related demand deposits and the continued success of the Company’s Completely Free Checking^SM program.

• Total loans at June 30, 2003 were up $506.5 million (4%) to $11.9 billion from $11.3 billion at June 30 2002. This increase was across all three loan categories, with consumer up 6%, commercial up 4% and small business up 2%.

• Total assets at June 30, 2003 were $17.9 billion, up $1.6 billion (10%) from $16.3 billion at June 30, 2002.

• During the second quarter of 2003, Hibernia repurchased approximately 1.4 million shares of its common stock under a 12-month buyback plan authorized by the Board of Directors in October 2002. Approximately 2.9 million shares have been repurchased under this plan. In July 2003, the Board of Directors authorized the Company to begin another buyback program of up to 3.5 million shares of its common stock through mid-July 2004.

• Hibernia’s capital remains strong with a leverage ratio of 8.39% at June 30, 2003, compared to 8.37% at June 30, 2002.

• In July 2003, Hibernia’s Board of Directors declared a quarterly cash dividend of 15 cents per common share, a 7% increase from 14 cents per common share declared in July 2002.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

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

        The reserve for loan losses is maintained to provide for probable credit losses related to specifically identified loans and for losses inherent in the loan portfolio that have been incurred as of the balance sheet date. The reserve is comprised of three components: specific reserves on certain problem loans, general reserves determined from historical loss allocation factors applied to pools of loans and an unallocated portion for exposures arising from factors which are not addressed by the general and specific reserves. The reserve is calculated using both objective and subjective information. The provision for loan losses is a charge to earnings to maintain the reserve for loan losses at a level consistent with management’s assessment of the loan portfolio in light of current economic conditions and market trends. For further discussion on this calculation and assumptions and methods used, see the “Reserve and Provision for Loan Losses” section of this analysis.

        The Company is required to perform valuations of assets in accordance with various generally accepted accounting principles. Impairment testing of goodwill requires the Company to determine its fair value by reporting unit. Impairment testing is a two step process that first compares the fair value of a reporting unit with its carrying amount, and second, if necessary, measures impairment loss by comparing the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. The Company’s reporting units are operating segments as defined by Statement of Financial Accounting Standards (SFAS) No. 131, “Disclosure about Segments of an Enterprise and Related Information.” The Company’s reporting units are based on lines of business. Assets and liabilities are allocated to reporting units using the Company’s internal management reporting system. Goodwill is allocated directly to these reporting units, when applicable, or based on the allocation of loans to the reporting segments for each region in which the goodwill originated. When quoted market prices are not available for assets and liabilities, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. However, management uses assumptions that it considers to be appropriate in its impairment testing. The Company has recorded no impairment of goodwill in 2002 or 2003.

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

        The Company has elected to account for its stock-based compensation plans under the intrinsic value method of Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” which is allowed by SFAS No. 123, “Accounting for Stock-Based Compensation.” In accordance with APB Opinion No. 25, compensation expense relating to stock options is not reflected in net income provided the exercise price of the stock options granted equals or exceeds the market value of the underlying common stock at the date of grant. The Company’s practice has been to grant options at no less than the fair market value of the stock at the date of grant. If the Company had elected to apply the fair value recognition provisions of SFAS No. 123 for stock options, net income would have been reduced by $1.4 million ($0.01 per common share) and $1.5 million ($0.01 per common share) for the second quarter of 2003 and 2002, respectively. The year-to-date net income would have been reduced by $3.0 million ($0.02 per common share) and $3.1 million ($0.02 per common share) for the periods ended June 30, 2003 and 2002, respectively. Compensation expense under the fair value method was calculated using the Black-Scholes option valuation model.

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

        The Company’s management has discussed the development and selection of these critical accounting policies with the Audit Committee of the Company’s Board of Directors and the Audit Committee has reviewed the Company’s disclosure relating to these policies.

FINANCIAL CONDITION:

EARNING ASSETS

        Earning assets averaged $16.3 billion in the second quarter of 2003, a $1.1 billion (7%) increase from the second-quarter 2002 average of $15.2 billion. Year-to-date average earning assets at June 30, 2003 totaled $16.1 billion, up $941.9 million (6%) from $15.1 billion at June 30, 2002. The increases in second quarter and year-to-date 2003 average earning assets are primarily due to increases in securities available for sale and consumer loans, discussed below.

        Beginning first quarter 2003, securities that have been purchased but are not yet settled (trade-date securities purchased) were reclassified as noninterest-earning assets. Trade-date securities purchased were previously classified as securities in interest-earning assets. Securities that have been sold but are not yet settled (trade-date securities sold) remain classified as interest-earning assets until settlement. Previously, trade-date securities sold reduced earning assets at the trade date. Prior periods have been restated to conform to the current presentation.

    Loans.        Average loans for the second quarter of 2003 of $11.7 billion were up $497.8 million (4%) compared to the second quarter of 2002. For the first six months of 2003 compared to the same period in 2002, average loans were up $418.9 million (4%) to $11.6 billion.

        Table 1 presents Hibernia’s commercial and small business loans classified by repayment source and consumer loans classified by type at June 30, 2003, March 31, 2003 and June 30, 2002. Total loans increased $302.0 million (3%) at June 30, 2003 compared to March 31, 2003 and $506.5 million (4%) compared to June 30, 2002. Loan growth is expected to continue at a modest level, led by the consumer portfolio. In recent months, loan demand has improved despite the continuing soft economy.

        Consumer loans increased $159.6 million (3%) and $344.6 million (6%) compared to March 31, 2003 and June 30, 2002, respectively. The increase from the same period a year ago reflects growth in indirect loans of $387.5 million (22%) and secured revolving credit of $128.0 million (27%), partially offset by a $193.7 million (7%) decrease in residential first mortgage loans. The decline in residential first mortgage loans is partially due to the sale of $137.8 million portfolio loans in the second quarter of 2003.

        Small business loans increased $66.5 million (3%) compared to March 31, 2003 and increased $56.6 million (2%) compared to June 30, 2002. The small business portfolio, although still impacted by slow demand for loans as a result of the soft economy, showed growth in the real estate portfolio, partially offset by a continued decrease in commercial and industrial loans.

        Commercial loans increased $75.9 million (3%) compared to March 31, 2003 and increased $105.3 million (4%) compared to June 30, 2002. Although the commercial portfolio continues to be impacted by lower demand for credit in light of current economic conditions, the energy and commercial and industrial sectors have shown growth from the same period last year. Management’s strategy to maintain the granularity of the commercial portfolio continues by its practice of retaining smaller exposures to individual credits. Shared national credits were down 5% and 6% from the first quarter 2003 and the same period last year, respectively. The Company’s strategy related to shared national credits focuses on lending to customers who operate in Hibernia’s markets, particularly those who use other Company services. Commercial loans are expected to grow at a modest rate for the remainder of 2003.

TABLE 1 - COMPOSITION OF LOAN PORTFOLIO
	June 30, 2003						March 31, 2003						June 30, 2002
($ in millions)	Loans			Percent			Loans			Percent			Loans			Percent
Commercial:
Commercial and industrial	$	1,042	.1		8	.8 %	$	1,059	.4		9	.2 %	$	1,021	.1		9	.0 %
Services industry		621	.2		5	.2		607	.2		5	.3		610	.3		5	.4
Real estate		452	.5		3	.8		419	.0		3	.6		466	.1		4	.1
Health care		237	.5		2	.0		234	.9		2	.0		243	.1		2	.1
Transportation, communications
and utilities		149	.0		1	.3		133	.1		1	.2		149	.7		1	.3
Energy		343	.9		2	.9		315	.7		2	.7		277	.4		2	.5
Other		108	.5		0	.9		109	.5		0	.9		81	.7		0	.7
Total commercial		2,954	.7		24	.9		2,878	.8		24	.9		2,849	.4		25	.1
Small Business:
Commercial and industrial		748	.0		6	.3		720	.0		6	.2		772	.1		6	.8
Services industry		631	.6		5	.3		620	.3		5	.4		628	.2		5	.5
Real estate		519	.8		4	.4		496	.8		4	.3		437	.4		3	.9
Health care		172	.9		1	.5		162	.6		1	.4		154	.6		1	.4
Transportation, communications
and utilities		101	.4		0	.9		99	.1		0	.9		108	.3		1	.0
Energy		27	.3		0	.2		27	.5		0	.2		26	.5		0	.2
Other		358	.4		3	.0		366	.6		3	.2		375	.7		3	.3
Total small business		2,559	.4		21	.6		2,492	.9		21	.6		2,502	.8		22	.1
Consumer:
Residential mortgages:
First mortgages		2,419	.3		20	.4		2,385	.5		20	.7		2,613	.0		23	.0
Junior liens		573	.6		4	.8		555	.9		4	.8		528	.7		4	.7
Indirect		2,121	.0		17	.9		2,050	.7		17	.7		1,733	.5		15	.3
Revolving credit:
Secured		606	.4		5	.1		574	.3		5	.0		478	.4		4	.2
Unsecured		103	.7		0	.9		103	.1		0	.9		103	.9		0	.9
Other:
Secured		351	.6		3	.0		357	.6		3	.1		397	.3		3	.5
Unsecured		162	.3		1	.4		151	.2		1	.3		138	.5		1	.2
Total consumer		6,337	.9		53	.5		6,178	.3		53	.5		5,993	.3		52	.8
Total loans	$	11,852	.0		100	.0 %	$	11,550	.0		100	.0 %	$	11,345	.5		100	.0 %

        Securities Available for Sale. Average securities available for sale increased $688.1 million (22%) in the second quarter of 2003 compared to the second quarter of 2002, and were up $531.6 million (17%) for the first six months of 2003 compared to the same period in 2002. These increases were partially due to purchases of securities required to collateralize certain public fund deposits and repurchase agreements. Further, as the Company continued to experience higher deposit growth and increased borrowings compared to loan growth, additional purchases of securities available for sale helped to increase income on earning assets. The securities purchased generally have relatively short average lives which exhibit limited extension risk should interest rates begin to rise. These purchases were partially offset by the sale of $293.7 million of mortgage-backed and collateral mortgage obligation securities late in June 2003.

        Securities available for sale primarily consist of mortgage-backed and U.S. government agency securities. Most securities held by the Company qualify as securities that may be pledged and are used for customer repurchase agreements and to collateralize public or trust deposits. A repurchase agreement, primarily used as an overnight investment vehicle, is a contractual transaction in which an investor and a bank exchange cash for temporary ownership or control of securities or collateral and include an agreement that the bank repurchase the securities on a future date. Public fund deposits are monies of various governmental units of the state, counties, municipalities and other public entities deposited in financial institutions. Deposits of this type are required by state law to be collateralized for collected balances in excess of applicable deposit insurance.

        Exclusive of any other change to the Company’s balance sheet, Hibernia plans to continue to maintain its securities portfolio at its current level and will continue to reinvest runoff.

        Securities Held to Maturity. Hibernia’s held to maturity securities are comprised of U.S. government agency mortgage-backed securities. Average securities held to maturity in the second quarter of 2003 totaled $106.6 million, down $108.6 million (50%) from the second quarter of 2002. Average securities held to maturity for the first six months of 2003 totaled $118.5 million, down $108.1 million (48%) from the same period in 2002. These decreases are due to payments and increased prepayments on mortgage-backed securities.

        Short-Term Investments. Short-term investments consist primarily of federal funds sold, securities purchased under agreements to resell (reverse repurchase agreements) and an interest-only strip receivable resulting from a securitization of indirect auto loans in the second quarter of 2001. The interest-only strip receivable, which totaled $5.3 million and $12.3 million at June 30, 2003, and 2002, respectively, is classified as a trading account asset. All other short-term investments are considered to be cash equivalents.

        Average short-term investments for the three months ended June 30, 2003 totaled $142.6 million, down $203.3 million (59%) compared to $345.9 million in the second quarter of 2002. The decrease in short-term investments from the second quarter of 2002 is due to an increase in the securities available for sale portfolio and loan growth, resulting in a lower level of federal funds sold. For the first six months of 2003 compared to the same period in 2002, average short-term investments decreased $42.8 million (14%) to $262.5 million.

        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. 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. Average mortgage loans held for sale for the second quarter of 2003 increased $213.4 million (64%) compared to the second quarter of 2002, and increased $142.3 million (42%) for the first six months of 2003 compared to the same period in 2002. As a result of lower interest rates in the second quarter of 2003, the Company experienced an increase in the volume of fixed-rate mortgage loans originated as compared to the same period in 2002. Generally, Hibernia retains adjustable-rate mortgage loans and sells fixed-rate mortgage loans, while retaining the associated servicing rights.

        Mortgage activity continues to be at record levels. Hibernia’s mortgage pipeline totaled a record $1.6 billion at the end of the second quarter of 2003, approximately three-quarters of which are fixed-rate mortgage loans, which generally will be held for sale.

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, foreclosed assets and excess bank-owned property, in addition to their related ratios.

        Table 2 shows loan delinquencies and delinquencies as a percentage of their related portfolio segment and in total for each of the last five quarters. Total managed delinquencies increased $2.9 million (5%) from June 30, 2002 and $3.2 million (6%) from March 31, 2003. Loans past due 90 days or more in the held portfolio are primarily consumer loans aggregating $5.7 million at June 30, 2003, compared to $6.6 million at June 30, 2002 and $8.5 million at March 31, 2003. These 90 days or more past due loans, included in Table 2, are still in accrual status and are not included in total nonperforming loans in Table 3.

TABLE 2 - LOAN DELINQUENCIES
($ in millions)	June 30      2003			March 31     2003			Dec. 31      2002			Sept. 30      2002			June 30      2002
Days past due:
30 to 89 days	$	48	.4	$	42	.9	$	46	.9	$	51	.3	$	42	.0
90 days or more		5	.8		8	.5		10	.8		9	.1		7	.8
Total delinquencies		54	.2		51	.4		57	.7		60	.4		49	.8
Securitized indirect auto delinquencies		2	.8		2	.4		3	.4		4	.1		4	.3
Total managed delinquencies	$	57	.0	$	53	.8	$	61	.1	$	64	.5	$	54	.1
Total delinquencies as a percentage of loans:
Commercial		0	.06 %		0	.06 %		0	.05 %		0	.11 %		0	.05 %
Small business		0	.37 %		0	.35 %		0	.41 %		0	.54 %		0	.36 %
Consumer:
Residential mortgage		0	.53 %		0	.58 %		0	.58 %		0	.49 %		0	.43 %
Indirect		0	.84 %		0	.78 %		0	.93 %		0	.97 %		0	.97 %
Other consumer		0	.75 %		0	.67 %		0	.90 %		0	.93 %		0	.82 %
Total consumer		0	.68 %		0	.66 %		0	.75 %		0	.72 %		0	.66 %
Total held loans		0	.46 %		0	.45 %		0	.50 %		0	.53 %		0	.44 %
Managed consumer		0	.70 %		0	.68 %		0	.78 %		0	.75 %		0	.69 %
Total managed loans		0	.47 %		0	.46 %		0	.52 %		0	.55 %		0	.46 %

        Managed consumer delinquencies include delinquencies related to indirect auto loans securitized. Total managed delinquencies as a percentage of total managed loans at June 30, 2003 were 0.47%, up from 0.46% a year ago and 0.46% at March 31, 2003. Delinquencies as a percentage of held loans at June 30, 2003 were 0.46%, up from 0.44% at June 30, 2002 and 0.45% at March 31, 2003. Indirect automobile delinquencies were down from a year ago, but up from the prior quarter, which was lower than the expected run-rate for this portfolio in the current economic conditions. While residential mortgage delinquencies increased from a year ago, the secured nature of these loans results in low levels of charge-offs in this portfolio. Other consumer delinquencies were down from a year ago, but up from the prior quarter due to increases in the secured lending portfolio in the current quarter.

TABLE 3 - NONPERFORMING ASSETS
($ in thousands)	June 30 2003			March 31 2003			Dec. 31 2002			Sept. 30 2002			June 30 2002
Nonaccrual loans:
Commercial		$    17,587			$    12,115			$    15,905			$    16,133			$    20,941
Small business		26,921			28,514			28,668			32,481			32,274
Consumer
Residential mortgage		10,872			9,374			8,554			8,651			8,979
Other consumer		1,822			1,975			1,753			1,619			1,214
Total nonperforming loans		57,202			51,978			54,880			58,884			63,408
Foreclosed assets		6,981			6,671			5,919			5,470			6,406
Excess bank-owned property		481			902			902			978			978
Total nonperforming assets		$    64,664			$    59,551			$    61,701			$    65,332			$    70,792
Reserve for loan losses		$  213,153			$  212,882			$  212,765			$  212,343			$  212,343
Nonperforming loan ratio:
Commercial loans		0.60	%		0.42	%		0.55	%		0.58	%		0.73	%
Small business loans		1.05	%		1.14	%		1.14	%		1.28	%		1.29	%
Consumer loans
Residential mortgage		0.36	%		0.32	%		0.29	%		0.28	%		0.29	%
Other consumer		0.05	%		0.06	%		0.06	%		0.05	%		0.04	%
Total consumer		0.20	%		0.18	%		0.17	%		0.17	%		0.17	%
Total loans		0.48	%		0.45	%		0.48	%		0.52	%		0.56	%
Nonperforming asset ratio		0.55	%		0.52	%		0.54	%		0.57	%		0.62	%
Reserve for loan losses as a
percentage of nonperforming loans		372.63	%		409.56	%		387.69	%		360.61	%		334.88	%

        Nonperforming loans consist of nonaccrual loans (loans on which interest income is not currently recognized) and restructured loans (loans with below-market rates or other concessions due to the deteriorated financial condition of the borrower). Nonperforming loans totaled $57.2 million at June 30, 2003, down from $63.4 million at June 30, 2002 and up from $52.0 million at March 31, 2003. Commercial and small business nonperforming loans declined from June 30, 2002 as a result of payments, charge offs, and other reductions which more than offset new additions. The increase in commercial nonperforming loans from the prior quarter included the addition of a $10.5 million loan to a local private company. This increase in commercial nonperforming loans was partially offset by payments and charge-offs. Residential mortgage consumer nonperforming loans increased from the prior year and the prior quarter, however no significant losses are expected in this portfolio due to the secured nature of these loans.

        Foreclosed assets (assets to which title has been assumed in satisfaction of debt) totaled $7.0 million at June 30, 2003, up $0.6 million from a year earlier and up $0.3 million from March 31, 2003. Excess bank-owned property at June 30, 2003 was down $0.5 million from June 30, 2002, and down $0.4 million from March 31, 2003.

        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 June 30, 2003 the Company’s nonperforming asset ratio was 0.55%, down from 0.62% at June 30, 2002 and up from 0.52% at March 31, 2003.

        The composition of nonperforming loans, foreclosed assets and excess bank-owned property as well as certain asset quality ratios for the past five quarters are set forth in Table 3.

        At June 30, 2003 the recorded investment in loans considered impaired under Statement of Financial Accounting Standards (SFAS) No. 114 was $44.5 million. The related portion of the reserve for loan losses was $5.9 million. The comparable amounts at June 30, 2002 were $53.2 million and $4.6 million, respectively. These loans are included in nonaccrual loans in Table 3.

        Table 4 presents a summary of changes in nonperforming loans for the last five quarters. Loans totaling $22.7 million were added to nonperforming loans during the second quarter of 2003, up from $14.3 million in the prior quarter. These inflows were led by additions of $10.8 million in the commercial portfolio and $7.1 million in the small business portfolio. These inflows were partially offset by charge offs and payments which reduced nonperforming loans by $13.9 million. To the extent nonaccrual loans that have been charged-off are recovered in subsequent periods, the recoveries would be reflected in the reserve for loan losses in Table 5 and not as a component of nonperforming loan activity.

TABLE 4 - SUMMARY OF NONPERFORMING LOAN ACTIVITY
	2003						2002
($ in thousands)	Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter
Nonperforming loans
at beginning of period		$   51,978			$   54,880			$   58,884			$   63,408			$   72,142
Additions		22,672			14,288			11,377			12,591			9,725
Charge-offs, gross		(3,760	)		(5,811	)		(2,675	)		(8,044	)		(7,059	)
Transfers to foreclosed assets		(2,183	)		(2,217	)		(2,509	)		(1,741	)		(1,749	)
Returns to performing status		(1,357	)		(1,000	)		(642	)		(950	)		(580	)
Payments		(10,148	)		(5,868	)		(8,929	)		(6,335	)		(8,685	)
Sales		--			(2,294	)		(626	)		(45	)		(386	)
Nonperforming loans
at end of period		$   57,202			$   51,978			$   54,880			$   58,884			$   63,408

        In addition to the nonperforming loans discussed above, other commercial and small business loans that are subject to potential future classification as nonperforming or past due 90 days and still accruing totaled $29.4 million at June 30, 2003.

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 risk of loss in the loan portfolio in light of current risk management strategies, economic conditions and market trends. The Company recorded a $13.0 million provision for loan losses in the second quarter of 2003 compared to $20.0 million in the second quarter of 2002, and $17.8 million in the prior quarter.

        Net charge-offs totaled $12.7 million in the second quarter of 2003 compared to $12.9 million in the second quarter of 2002 and $17.6 million in the prior quarter. As a percentage of average loans, annualized net charge-offs were 0.44% in the second quarter of 2003, down from 0.46% in the second quarter of 2002, and 0.61% in the first quarter of 2003. The commercial portfolio had a net recovery of $0.2 million in the second quarter of 2003 compared with net charge-offs of $0.8 million in the same period of 2002, and $2.7 million in the first quarter of 2003. The prior year’s quarter included a recovery of $2.2 million on a previously charged off loan. Net charge-offs of $4.2 million in the small business portfolio for the second quarter of 2003 decreased from $5.5 million in the second quarter of 2002, and $4.4 million in the first quarter of 2003. Small business net charge-offs in the current quarter include $1.0 million of net charge-offs related to the factoring portfolio, a business unit which the Company is in the process of exiting. Consumer net charge-offs of $8.7 million in the second quarter of 2003 increased from $6.6 million in the second quarter of 2002 and decreased from $10.6 million in the prior quarter. The current quarter’s net charge-offs reflect lower levels of repossessions related to the indirect automobile portfolio than in prior quarters. It is considered unlikely that this low level is sustainable and therefore net charge-offs are expected to increase from the current level in subsequent quarters.

        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 (based on historical loss factors) and an unallocated reserve for exposures arising from factors which are not addressed by the general and specific reserves.

        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. As part of the evaluation of the unallocated reserve, management 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, management 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 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. 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.

        There were no significant changes in the composition of the loan portfolio from the second quarter of 2002 except as previously discussed. The Company continued to proactively manage its exposure to credit risk in the second quarter of 2003. The reserve coverage of total loans at June 30, 2003 was virtually unchanged from the prior quarter and from a year ago. This reflects management’s assessment of reserve adequacy after consideration of the risk profile of the portfolio as indicated by the Company’s internal risk rating and credit evaluation systems and based on consistent application of the Company’s reserve methodology.

        The basic assumptions and methodologies used in allocating the reserve were unchanged during the quarter, however refinements to the existing methodology continue to be made as evolving risk trends are identified. The allocations to the commercial portfolio were relatively unchanged from the prior quarter and declined from a year ago. The allocations to the consumer portfolio increased for the quarter and from a year ago in line with recent higher losses experienced in this portfolio. The allocations to the small business portfolio were virtually unchanged from the first quarter of 2003 and modestly increased from a year ago. The unallocated reserves decreased from the prior quarter and a year ago offsetting the increase in the allocation to the consumer portfolio. These allocations are consistent with management’s expectations and the loan loss methodology which weights recent history more heavily and also reflects the current risk profile of the loan portfolio.

        The reserve coverage of annualized net charge-offs was 419% at June 30, 2003 compared to 302% at March 31, 2003 and 412% at June 30, 2002. 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 is not necessarily an appropriate measure of reserve adequacy, since the timing of charge-offs and recoveries impacts these ratios.

        Table 5 presents an analysis of the activity in the reserve for loan losses for the last five quarters.

TABLE 5 - RESERVE FOR LOAN LOSSES ACTIVITY
	2003					2002
($ in thousands)	Second Quarter			First Quarter		Fourth Quarter		Third Quarter		Second Quarter
Balance at beginning of period		$  212,882		$  212,765		$  212,343		$  212,343		$  205,237
Loans charged off:
Commercial		(841	)	(3,245	)	--		(3,400	)	(3,261	)
Small business		(5,245	)	(5,790	)	(5,864	)	(7,257	)	(6,780	)
Consumer:
Residential mortgage		(747	)	(1,031	)	(733	)	(772	)	(852	)
Indirect		(6,445	)	(7,789	)	(6,968	)	(6,715	)	(5,314	)
Other consumer		(3,144	)	(3,350	)	(3,938	)	(3,779	)	(2,907	)
Recoveries:
Commercial		1,085		541		160		339		2,441
Small business		1,012		1,425		1,026		1,261		1,298
Consumer:
Residential mortgage		108		89		69		224		156
Indirect		856		892		1,055		1,283		1,517
Other consumer		632		625		615		691		808
Net loans charged off		(12,729	)	(17,633	)	(14,578	)	(18,125	)	(12,894	)
Provision for loan losses		13,000		17,750		15,000		18,125		20,000
Balance at end of period		$  213,153		$  212,882		$  212,765		$  212,343		$  212,343
Reserve for loan losses
as a percentage of loans		1.80	%	1.84	%	1.85	%	1.86	%	1.87	%
Annualized net charge-offs as a
percentage of average loans:
Commercial		(0.03	) %	0.38	%	(0.02	) %	0.44	%	0.12	%
Small business		0.67	%	0.70	%	0.76	%	0.95	%	0.89	%
Consumer:
Residential mortgage		0.08	%	0.13	%	0.09	%	0.07	%	0.09	%
Indirect		1.07	%	1.37	%	1.24	%	1.23	%	0.90	%
Other consumer		0.83	%	0.92	%	1.14	%	1.07	%	0.76	%
Total consumer		0.55	%	0.69	%	0.65	%	0.60	%	0.45	%
Total loans		0.44	%	0.61	%	0.51	%	0.64	%	0.46	%

        The reserve for loan losses totaled $213.2 million, or 1.80% of total loans at June 30, 2003, compared to $212.3 million, or 1.87% of total loans at June 30, 2002 and $212.9 million, or 1.84% of total loans at March 31, 2003. The reserve for loan losses as a percentage of nonperforming loans was 373% at June 30, 2003, compared to 335% at June 30, 2002 and 410% at March 31, 2003. The present level of the reserve for loan losses is considered adequate to absorb probable loan losses inherent in the portfolio considering the level and mix of the loan portfolio, the level of delinquent and nonperforming loans, the Company’s risk management strategies, and current expectations with respect to economic conditions and market trends. Current forecasts for the overall U.S. economy for 2003 predict continued weak economic conditions as a result of continued slow demand and weak investor confidence with the potential for modest strengthening of the economy as the year progresses. The Company will continue to evaluate these trends and their impact on credit quality and provide for losses accordingly.

FUNDING SOURCES:

DEPOSITS

        Average deposits totaled $13.7 billion in the second quarter of 2003, an $828.5 million (6%) increase from the second quarter of 2002. For the first six months of 2003 compared to the same period in 2002, average deposits increased $763.7 million (6%) to $13.5 billion. Table 6 presents the composition of average deposits for the periods presented.

TABLE 6 - DEPOSIT COMPOSITION
	Second Quarter 2003						First Quarter 2003						Second Quarter 2002
($ in millions)	Average Balances			% of     Deposits			Average Balances			% of     Deposits			Average Balances			% of     Deposits
Noninterest-bearing	$	2,909	.0		21	.3%	$	2,693	.0		20	.1%	$	2,417	.7		18	.8%
NOW accounts		404	.5		3	.0		399	.0		3	.0		321	.8		2	.5
Money market deposit accounts		3,080	.9		22	.6		2,961	.9		22	.1		2,544	.9		19	.8
Savings accounts		2,546	.4		18	.6		2,580	.6		19	.3		2,623	.8		20	.5
Other consumer time deposits		2,335	.4		17	.1		2,392	.8		17	.8		2,557	.2		19	.9
Total core deposits		11,276	.2		82	.6		11,027	.3		82	.3		10,465	.4		81	.5
Public fund certificates of
deposit of $100,000 or more		905	.4		6	.6		916	.3		6	.8		955	.8		7	.5
Certificates of deposit of
$100,000 or more		930	.3		6	.8		929	.0		6	.9		872	.4		6	.8
Foreign time deposits		551	.2		4	.0		530	.3		4	.0		541	.0		4	.2
Total deposits	$	13,663	.1		100	.0%	$	13,402	.9		100	.0%	$	12,834	.6		100	.0%

        Average core deposits totaled $11.3 billion in the second quarter of 2003, an $810.8 million (8%) increase from the second quarter of 2002. Average noninterest-bearing deposits grew $491.3 million and average savings deposits decreased $77.4 million in the second quarter of 2003 compared to the second quarter of 2002. NOW account average balances were up $82.7 million and average money market deposit accounts were up $536.0 million in the second quarter of 2003 compared to the second quarter of 2002. Excluding the effect of the Reserve Money Manager Sweep, average NOW account balances were up $761.2 million and average money market deposit accounts were down $142.5 million. Contributing to the increase in average noninterest-bearing deposits was an increase in mortgage-related demand deposits as a result of the high level of refinancing activity. Increases in average noninterest-bearing and NOW account balances also resulted from the introduction and marketing of Hibernia’s Completely Free Checking^SM program, discussed below. Average consumer time deposits decreased $221.8 million in the second quarter of 2003 compared to the second quarter of 2002. The decrease in consumer time deposits was primarily the result of the movement of longer-term deposits into more liquid deposit products as interest rates remained low in 2003.

        In March 2002, Hibernia launched a high performance checking campaign, a simplified consumer-checking program that includes Hibernia’s Completely Free Checking^SM product. This program offers gifts to customers who open new personal checking accounts or refer prospects who then open new personal checking accounts. Following the successful introduction of the free checking program for consumers, Hibernia launched Completely Free Small Business Checking^SM in August of 2002. The Completely Free Small Business Checking^SM program, much like the consumer version, eliminates monthly cycle service charges, offers free gifts for new accounts and buys back unused checks and banking cards. The goal of both programs is to grow lower-cost deposits and increase revenues through cross-selling opportunities. These programs include extensive advertising and marketing that continue today and are focused on Hibernia’s Completely Free Checking^SM product and Hibernia’s Completely Free Small Business Checking^SM product as well as other high performance checking products. These programs continue to substantially increase the number of new account openings, with new consumer checking account openings for the year up more than 14% and new small business checking account openings for the year up more than 59% when compared to the same period last year. The high performance checking products are anticipated to continue to grow core deposits in 2003 and beyond.

        Average noncore deposits were up $17.7 million from the second quarter of 2002 to $2.4 billion or 17% of total deposits. Average large denomination certificates of deposit increased $7.5 million compared to the second quarter of 2002. Average foreign time deposits increased $10.2 million from second quarter 2002.

        Total deposits at June 30, 2003 were $13.7 billion, up $919.5 million (7%) from June 30, 2002. Total noninterest-bearing deposits at June 30, 2003 were $3.1 billion, up $667.3 million (28%) from June 30, 2002. Contributing to this increase in noninterest-bearing deposits was a 185% increase in mortgage demand deposit account balances in second quarter 2003 compared to a year ago.

BORROWINGS

        Average borrowings — which include federal funds purchased; securities sold under agreements to repurchase; treasury, tax and loan accounts; and Federal Home Loan Bank (FHLB) advances – increased $168.4 million (10%) to $1.9 billion for the second quarter of 2003 compared to the second quarter of 2002. For the first six months of 2003 compared to the first six months of 2002, average borrowings increased $84.5 million (5%) to $1.8 billion. This increase in borrowings is due to increased FHLB advances in anticipation of future loan growth. Borrowings at June 30, 2003, totaled $2.1 billion, up 25% from a year ago.

        Average FHLB advances for the second quarter of 2003 totaled $1.2 billion, up from $1.0 billion in the second quarter of 2002. FHLB advances at June 30, 2003 were $1.4 billion, up $359.4 million (34%) compared to $1.0 billion at June 30, 2002. The increase results from the funding of advances in June 2003, totaling $200 million and additional advances in January 2003 and December 2002, each totaling $100 million. These advances were partially offset by the maturity of a $40 million advance in September 2002.

        The FHLB may demand payment of $400 million in callable advances at quarterly intervals. If called prior to maturity, replacement funding will be offered by the FHLB at a then-current rate.

        Of the FHLB advances outstanding at June 30, 2003 and 2002, $1.0 billion and $640 million, respectively, accrue interest at variable rates. Hibernia instituted hedges against the effect of rising interest rates on a portion of its variable rate debt by entering into interest rate swap agreements. These interest rate swap agreements enable Hibernia to receive quarterly variable rate (LIBOR) payments and pay fixed rates. The maturities of these interest rate swap agreements match the maturities of the underlying debt. The Company had interest rate swap agreements with notional amounts of $700 million and $600 million at June 30, 2003 and 2002, respectively. The estimated negative fair value of these interest rate swap agreements totaled $34.8 million and $22.2 million at June 30, 2003 and 2002, respectively, and are recorded on the balance sheet as liabilities, with the corresponding offset, net of income taxes, recorded in other comprehensive income. Net settlements on the swap agreements are accrued monthly and effectively convert the hedged FHLB advances from variable to fixed rates.

        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

        The primary objective of asset/liability management is controlling interest rate risk. On a continuing basis, management monitors the sensitivity of net interest income to changes in interest rates through methods that include simulation models and Gap reports. Management uses simulation models to estimate the effects of changing interest rates and various balance sheet strategies on the level of the Company’s net income and capital. Gap reports measure the net amount of assets or liabilities that reprice in the same time period over the remaining lives of those assets and liabilities. Using these tools, management attempts to optimize the asset/liability mix to minimize the impact of significant rate movements within a broad range of interest rate scenarios. Management may alter the mix of floating- and fixed-rate assets and liabilities, change pricing schedules, adjust maturities through the sale and purchase of securities available for sale, and enter into derivative contracts as a means of minimizing interest rate risk.

        Hibernia routinely runs various interest rate scenarios in order to measure and control the impact on earnings of changes in interest rates. The Company develops scenarios to simulate immediate and sustained parallel interest rate shocks and compares the resulting net interest income to the results of a flat rate scenario. Policy limits the after tax changes in net interest income to 15% of projected 12-month net income. Based on the results of a simulation of a 200-basis-point increase in interest rates at June 30, 2003, the Company would expect an increase in after-tax net interest income of $14.7 million. In the event of a 100-basis-point decrease (utilized in place of a 200-basis-point drop scenario due to the current low interest rate environment) after-tax net interest income would decrease $27.2 million. This projected decline in net interest income results from the limited flexibility to further reduce rates on interest-bearing liabilities, in the current low interest rate environment, should rates continue to decline. Results of both scenarios are within the limits of Hibernia’s policy objective. In addition, the Company projects an increase in after-tax net interest income of $2.1 million and a decrease of $7.2 million if interest rates gradually increase or decrease, respectively, by 100 basis points over the next year.

        Based on the results of the simulation models at June 30, 2002, the Company would have expected an increase in after-tax net interest income of $1.2 million in the event of an immediate and sustained 200-basis point parallel interest rate increase, and a decrease in after-tax net interest income of $2.4 million in the event of an immediate and sustained 100-basis point parallel interest rate decrease (utilized in place of a 200-basis-point drop scenario due to the low interest rate environment experienced in 2002). At June 30, 2002, the Company projected a decrease in after-tax net interest income of $1.2 million and an increase of $0.3 million if interest rates gradually increased or decreased, respectively, by 100 basis points over the next year.

        The level of interest rates also affects the prepayment assumptions used in the valuation of mortgage servicing rights. As an indication of the sensitivity of the fair value of mortgage-servicing rights, at June 30, 2003, an immediate 10% and 25% adverse change in the prepayment speed assumptions would decrease after-tax net income by $5.7 million and $9.6 million, respectively. At June 30, 2003, an immediate 10% and 25% adverse change in the discount rate assumptions would decrease after-tax net income by $0.2 million and $1.1 million, respectively. These sensitivities are hypothetical and should be used with caution. The effect of a variation in a particular assumption on the fair value of mortgage servicing rights is calculated without changing any other assumptions; in actuality, changes of one factor may result in changes in another which could magnify or counteract the sensitivities.

        On a limited basis, the Company has entered into interest rate and foreign exchange rate swap, forward and option contracts, and forward sales contracts, to hedge interest rate or foreign exchange rate risk on specific assets and liabilities on its own behalf and for customers.

        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 $432.1 million and an estimated negative fair value of $9.9 million were designated as fair value hedges at June 30, 2003. The related hedged mortgage loans held for sale had a principal balance of $432.1 million and were increased by a positive change in fair value of $9.9 million at June 30, 2003, 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 June 30, 2003 interest rate lock commitments had a notional amount of $922.3 million with a positive fair value of $8.5 million. The related forward sales contracts had a notional amount of $922.3 million and a negative fair value of $7.4 million at June 30, 2003.

        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 $2.0 billion at June 30, 2003, with positive fair values of $50.2 million and negative fair values of $45.8 million.

        Hibernia holds foreign exchange rate forward contracts that had notional amounts totaling $7.0 million at June 30, 2003, 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 $700 million. The estimated negative fair value of derivative financial instruments designated as cash flow hedges totaled $34.8 million at June 30, 2003.

RESULTS OF OPERATIONS:

NET INTEREST INCOME

        Taxable-equivalent net interest income, based on the statutory tax rate of 35%, for the second quarter of 2003 totaled $175.5 million, a $1.3 million decrease from the second quarter of 2002. Taxable-equivalent net interest income for the first six months of 2003 totaled $349.1 million, an $0.8 million decrease from the first six months of 2002.

        The decrease in net interest income for the second quarter of 2003 from the second quarter of 2002 reflects the yields on interest-earning assets decreasing more than the rates on interest-bearing liabilities. The average yield on earning assets declined 84 basis points while the average cost on interest-bearing liabilities decreased 58 basis points from the second quarter of 2002 to the same period in 2003. The decreases in the Company’s earning asset yields were caused by the continued downward repricing of loans and the decreasing yields on the investment portfolio as higher rate securities pay down or mature and are replaced by lower-yielding securities in this current low interest rate environment.

        Table 7 shows the composition of earning assets for the most recent five quarters, reflecting the change in the mix of earning assets.

TABLE 7 - INTEREST-EARNING ASSET COMPOSITION
	2003						2002
(Percentage of average balances)	Second      Quarter			First        Quarter			Fourth     Quarter			Third       Quarter			Second    Quarter
Commercial loans		17	.6 %		17	.9 %		18	.0 %		18	.5 %		18	.8 %
Small business loans		15	.5		15	.7		16	.3		16	.6		16	.2
Consumer loans		38	.7		38	.8		39	.5		39	.7		38	.6
Total loans		71	.8		72	.4		73	.8		74	.8		73	.6
Securities available for sale		23	.3		21	.8		19	.8		20	.2		20	.5
Securities held to maturity		0	.7		0	.8		1	.1		1	.3		1	.4
Total securities		24	.0		22	.6		20	.9		21	.5		21	.9
Short-term investments		0	.9		2	.4		1	.9		1	.2		2	.3
Mortgage loans held for sale		3	.3		2	.6		3	.4		2	.5		2	.2
Total interest-earning assets		100	.0 %		100	.0 %		100	.0 %		100	.0 %		100	.0 %

        The net interest margin was 4.32% for the second quarter of 2003, a decrease of 34 basis points from the second quarter of 2002 and 10 basis points from the first quarter of 2003. The decrease in the net interest margin from the second quarter of 2002 reflects a decline in interest rates, the increased rate of prepayments on mortgage-backed securities and the replacement of maturing securities with lower-yielding instruments due to the current rate environment.

        Management expects additional margin compression in the second half of 2003 as a result of continued repricing and the sale of approximately $430 million of earning assets during second quarter 2003.

        Table 8 details the net interest margin for the most recent five quarters.

TABLE 8 - NET INTEREST MARGIN (taxable-equivalent)
	2003						2002
	Second  Quarter			First    Quarter			Fourth  Quarter			Third   Quarter			Second  Quarter
Yield on earning assets		5	.74 %		5	.93 %		6	.25 %		6	.66 %		6	.58 %
Rate on interest-bearing liabilities		1	.83		1	.93		2	.12		2	.33		2	.41
Net interest spread		3	.91		4	.00		4	.13		4	.33		4	.17
Contribution of
noninterest-bearing funds		0	.41		0	.42		0	.47		0	.49		0	.49
Net interest margin		4	.32 %		4	.42 %		4	.60 %		4	.82 %		4	.66 %
Noninterest-bearing funds
supporting earning assets		22	.58 %		21	.56 %		22	.24 %		21	.09 %		20	.36 %

        Table 9 presents an analysis of changes in taxable-equivalent net interest income between the second quarter of 2003 and the first quarter of 2003 and between the second quarter of 2003 and the second quarter of 2002. The analysis of Consolidated Average Balances, Interest and Rates on pages 30 and 31 of this discussion presents the Company’s taxable-equivalent net interest income and average balances for the three months ended June 30, 2003, March 31, 2003 and June 30, 2002 and the first six months of 2003 and 2002.

TABLE 9 - CHANGES IN TAXABLE-EQUIVALENT NET INTEREST INCOME (1)
	Second Quarter 2003 Compared to:
	First Quarter 2003									Second Quarter 2002
	Increase (Decrease) Due to Change In:
($ in thousands)	Volume			Rate			Total			Volume			Rate			Total
Taxable-equivalent interest earned on:
Commercial loans		$     233			$     200			$     433			$      (73	)		$   (4,519	)		$   (4,592	)
Small business loans		503			(935	)		(432	)		960			(5,566	)		(4,606	)
Consumer loans		2,896			(2,238	)		658			8,398			(11,623	)		(3,225	)
Loans		3,632			(2,973	)		659			9,285			(21,708	)		(12,423	)
Securities available for sale		3,873			(4,337	)		(464	)		8,219			(10,459	)		(2,240	)
Securities held to maturity		(325	)		(39	)		(364	)		(1,481	)		(242	)		(1,723	)
Securities		3,548			(4,376	)		(828	)		6,738			(10,701	)		(3,963	)
Short-term investments		(1,048	)		345			(703	)		(1,028	)		(367	)		(1,395	)
Mortgage loans held for sale		1,665			(202	)		1,463			2,936			(1,540	)		1,396
Total		7,797			(7,206	)		591			17,931			(34,316	)		(16,385	)
Interest paid on:
NOW accounts		11			64			75			215			(352	)		(137	)
Money market deposit accounts		234			171			405			1,309			(2,269	)		(960	)
Savings accounts		(72	)		(314	)		(386	)		(240	)		(2,990	)		(3,230	)
Other consumer time deposits		(434	)		(689	)		(1,123	)		(2,003	)		(5,423	)		(7,426	)
Public fund certificates of
deposit of $100,000 or more		(51	)		(372	)		(423	)		(289	)		(1,570	)		(1,859	)
Certificates of deposit
of $100,000 or more		10			(235	)		(225	)		518			(1,824	)		(1,306	)
Foreign deposits		59			(90	)		(31	)		38			(604	)		(566	)
Federal funds purchased		266			27			293			315			(80	)		235
Repurchase agreements		39			(99	)		(60	)		(349	)		(524	)		(873	)
Federal Home Loan Bank advances		260			(143	)		117			2,086			(1,058	)		1,028
Total		322			(1,680	)		(1,358	)		1,600			(16,694	)		(15,094	)
Taxable-equivalent net interest income		$    7,475			$   (5,526	)		$    1,949			$   16,331			$  (17,622	)		$   (1,291	)

⁽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.

CONSOLIDATED AVERAGE BALANCES, INTEREST AND RATES
Hibernia Corporation and Subsidiaries Taxable-equivalent basis (1)	Second Quarter 2003				First Quarter 2003
(Average balances $ in millions, interest $ in thousands)	Average         Balance		Interest	Rate	Average         Balance		Interest	Rate
ASSETS
Interest-earning assets:
Commercial loans	$  2,857.7		$     32,546	4.57 %	$  2,837.1		$     32,113	4.59 %
Small business loans	2,519.6		41,131	6.55	2,489.3		41,563	6.77
Consumer loans	6,309.6		110,844	7.04	6,146.3		110,186	7.25
Total loans (2)	11,686.9		184,521	6.33	11,472.7		183,862	6.49
Securities available for sale	3,800.5		39,606	4.17	3,449.1		40,070	4.65
Securities held to maturity	106.6		1,434	5.38	130.6		1,798	5.51
Total securities	3,907.1		41,040	4.20	3,579.7		41,868	4.68
Short-term investments	142.6		674	1.90	383.7		1,377	1.46
Mortgage loans held for sale	546.8		6,942	5.08	416.2		5,479	5.27
Total interest-earning assets	16,283.4		$  233,177	5.74 %	15,852.3		$  232,586	5.93 %
Reserve for loan losses	(214.2	)			(212.9	)
Noninterest-earning assets:
Cash and due from banks	596.8				597.3
Trade-date securities available for sale	109.9				378.6
Other assets	886.0				845.1
Total noninterest-earning assets	1,592.7				1,821.0
Total assets	$  17,661.9				$  17,460.4
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts	$  404.5		$          838	0.83 %	$  399.0		$        763	0.78 %
Money market deposit accounts	3,080.9		6,113	0.80	2,961.9		5,708	0.78
Savings accounts	2,546.4		5,131	0.81	2,580.6		5,517	0.87
Other consumer time deposits	2,335.4		17,227	2.96	2,392.8		18,350	3.11
Public fund certificates of deposit
of $100,000 or more	905.4		3,871	1.71	916.3		4,294	1.90
Certificates of deposit of $100,000 or more	930.3		6,930	2.99	929.0		7,155	3.12
Foreign time deposits	551.2		1,502	1.09	530.3		1,533	1.17
Total interest-bearing deposits	10,754.1		41,612	1.55	10,709.9		43,320	1.64
Short-term borrowings:
Federal funds purchased	155.4		451	1.17	62.3		158	1.03
Repurchase agreements	482.3		1,282	1.07	468.3		1,342	1.16
Federal Home Loan Bank advances	1,215.2		14,324	4.73	1,193.3		14,207	4.83
Total interest-bearing liabilities	12,607.0		$     57,669	1.83 %	12,433.8		$     59,027	1.93 %
Noninterest-bearing liabilities:
Noninterest-bearing deposits	2,909.0				2,693.0
Other liabilities	423.9				635.1
Total noninterest-bearing liabilities	3,332.9				3,328.1
Total shareholders' equity	1,722.0				1,698.5
Total liabilities and shareholders' equity	$  17,661.9				$  17,460.4
SPREAD AND NET YIELD
Interest rate spread				3.91 %				4.00 %
Cost of funds supporting interest-earning assets				1.42 %				1.51 %
Net interest income/margin			$  175,508	4.32 %			$  173,559	4.42 %

⁽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)	Second Quarter 2002
(Average balances $ in millions, interest $ in thousands)	Average    Balance			Interest		Rate
ASSETS
Interest-earning assets:
Commercial loans		$   2,863	.3		$   37,138		5.20	%
Small business loans		2,466	.9		45,737		7.44
Consumer loans		5,858	.9		114,069		7.80
Total loans (2)		11,189	.1		196,944		7.06
Securities available for sale		3,112	.4		41,846		5.38
Securities held to maturity		215	.2		3,157		5.87
Total securities		3,327	.6		45,003		5.41
Short-term investments		345	.9		2,069		2.40
Mortgage loans held for sale		333	.4		5,546		6.65
Total interest-earning assets		15,196	.0		$  249,562		6.58	%
Reserve for loan losses		(211	.2)
Noninterest-earning assets:
Cash and due from banks		517	.6
Trade-date securities available for sale		107	.3
Other assets		813	.7
Total noninterest-earning assets		1,438	.6
Total assets		$  16,423	.4
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts		$       321	.8		$      975		1.22	%
Money market deposit accounts		2,544	.9		7,073		1.11
Savings accounts		2,623	.8		8,361		1.28
Other consumer time deposits		2,557	.2		24,653		3.87
Public fund certificates of deposit
of $100,000 or more		955	.8		5,730		2.40
Certificates of deposit of $100,000 or more		872	.4		8,236		3.79
Foreign time deposits		541	.0		2,068		1.53
Total interest-bearing deposits		10,416	.9		57,096		2.20
Short-term borrowings:
Federal funds purchased		52	.4		216		1.66
Repurchase agreements		589	.4		2,155		1.47
Federal Home Loan Bank advances		1,042	.7		13,296		5.11
Total interest-bearing liabilities		12,101	.4		$   72,763		2.41	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits		2,417	.7
Other liabilities		301	.6
Total noninterest-bearing liabilities		2,719	.3
Total shareholders' equity		1,602	.7
Total liabilities and shareholders' equity		$  16,423	.4
SPREAD AND NET YIELD
Interest rate spread							4.17	%
Cost of funds supporting interest-earning assets							1.92	%
Net interest income/margin					$  176,799		4.66	%

⁽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)	Six Months Ended June 30, 2003				Six Months Ended June 30, 2002
(Average balances $ in millions, interest $ in thousands)	Average         Balance		Interest	Rate	Average         Balance		Interest	Rate
ASSETS
Interest-earning assets:
Commercial loans	$    2,847.5		$     64,660	4.58 %	$    2,884.0		$     74,606	5.22 %
Small business loans	2,504.6		82,693	6.66	2,466.7		92,255	7.55
Consumer loans	6,228.4		221,030	7.15	5,810.9		225,903	7.83
Total loans (2)	11,580.5		368,383	6.41	11,161.6		392,764	7.09
Securities available for sale	3,625.8		79,676	4.40	3,094.2		83,995	5.43
Securities held to maturity	118.5		3,232	5.45	226.6		6,658	5.88
Total securities	3,744.3		82,908	4.43	3,320.8		90,653	5.46
Short-term investments	262.5		2,051	1.58	305.3		3,604	2.38
Mortgage loans held for sale	481.9		12,421	5.16	339.6		10,977	6.47
Total interest-earning assets	16,069.2		$  465,763	5.83 %	15,127.3		$  497,998	6.62 %
Reserve for loan losses	(213.6	)			(205.4	)
Noninterest-earning assets:
Cash and due from banks	597.0				538.3
Trade-date securities available for sale	243.5				135.5
Other assets	865.6				805.0
Total noninterest-earning assets	1,706.1				1,478.8
Total assets	$  17,561.7				$  16,400.7
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts	$       401.8		$        1,601	0.80 %	$       346.6		$      2,193	1.28 %
Money market deposit accounts	3,021.7		11,822	0.79	2,525.7		14,122	1.13
Savings accounts	2,563.4		10,647	0.84	2,651.0		17,276	1.31
Other consumer time deposits	2,363.9		35,577	3.03	2,556.4		51,082	4.03
Public fund certificates of deposit
of $100,000 or more	910.8		8,165	1.81	896.6		10,974	2.47
Certificates of deposit of $100,000 or more	929.7		14,085	3.06	856.0		16,706	3.94
Foreign time deposits	540.8		3,035	1.13	551.0		4,287	1.57
Total interest-bearing deposits	10,732.1		84,932	1.60	10,383.3		116,640	2.27
Short-term borrowings:
Federal funds purchased	109.1		609	1.13	85.6		652	1.54
Repurchase agreements	475.3		2,624	1.11	575.9		4,265	1.49
Federal Home Loan Bank advances	1,204.3		28,531	4.78	1,042.7		26,527	5.13
Total interest-bearing liabilities	12,520.8		$    116,696	1.88 %	12,087.5		$    148,084	2.47 %
Noninterest-bearing liabilities:
Noninterest-bearing deposits	2,801.6				2,386.7
Other liabilities	529.0				332.1
Total noninterest-bearing liabilities	3,330.6				2,718.8
Total shareholders' equity	1,710.3				1,594.4
Total liabilities and shareholders' equity	$  17,561.7				$  16,400.7
SPREAD AND NET YIELD
Interest rate spread				3.95 %				4.15 %
Cost of funds supporting interest-earning assets				1.46 %				1.97 %
Net interest income/margin			$  349,067	4.37 %			$  349,914	4.65 %

⁽¹⁾     Based on the statutory income tax rate of 35%.
⁽²⁾    Yield computations include nonaccrual loans in loans outstanding.

NONINTEREST INCOME

        Noninterest income for the second quarter of 2003 was $76.7 million compared to $76.8 million in the same period of 2002. For the first six months of 2003 compared to the same period in 2002, noninterest income was down $7.2 million (5%) to $149.1 million. The major categories of noninterest income for the three and six months ended June 30, 2003 and 2002 are presented in Table 10.

TABLE 10 - NONINTEREST INCOME
	Three Months Ended									Six Months Ended
($ in thousands)	June 30 2003			June 30 2002			Percentage Increase (Decrease)			June 30 2003			June 30 2002			Percentage Increase (Decrease)
Service charges on deposits		$  38,394			$  34,051			13	%		$  74,255			$  65,715			13	%
Card-related fees		12,651			9,980			27			23,727			18,769			26
Mortgage banking:
Mortgage loan origination and servicing fees		9,286			8,689			7			18,684			16,875			11
Amortization of mortgage servicing rights		(14,350	)		(5,519	)		160			(26,454	)		(10,674	)		148
Provision for temporary impairment of
mortgage servicing rights		(28,000	)		(1,700	)		N/M			(42,500	)		(1,700	)		N/M
Gain on sales of mortgage loans		19,143			3,886			393			31,406			12,100			160
Total mortgage banking		(13,921	)		5,356			(360	)		(18,864	)		16,601			(214	)
Retail investment fees		7,142			8,171			(13	)		13,662			16,260			(16	)
Trust fees		5,556			6,331			(12	)		11,624			12,674			(8	)
Insurance		4,573			3,929			16			9,327			7,988			17
Investment banking		3,614			5,763			(37	)		6,445			8,759			(26	)
Other service, collection and exchange charges		4,918			5,086			(3	)		9,938			10,270			(3	)
Other operating income:
Mortgage loan derivative income		10			23			(57	)		508			142			258
Derivative income from interest rate contracts		814			572			42			1,474			981			50
Other income		2,718			4,075			(33	)		6,842			8,185			(16	)
Total other operating income		3,542			4,670			(24	)		8,824			9,308			(5	)
Securities gains (losses), net		10,191			(6,563	)		255			10,200			(9,971	)		202
Total noninterest income		$  76,660			$  76,774			-	%		$ 149,138			$ 156,373			(5	) %

        Service charges on deposits increased $4.3 million (13%) for the second quarter and $8.5 million (13%) for the first six months of 2003 over the comparable periods in 2002. This change was the result of growth in transaction-based fees due to an increased number of accounts resulting from the high performance checking campaigns launched in 2002 and increased account related fees. Fees from treasury management products and services also increased compared to the prior year. These increases were partially offset by declines in fees as a result of new deposit products featuring no service charges.

        Card-related fees increased $2.7 million (27%) for the second quarter and $5.0 million (26%) for the first six months of 2003 over the same periods in 2002. These increases resulted from fees generated by Hibernia’s debit and credit cards and annual card fees from the consumer and small business high performance checking campaigns launched in 2002.

        Effective in the first quarter of 2003, mortgage loan origination and servicing fees, gain on sales of mortgage loans, amortization of mortgage servicing rights and the provision for temporary impairment of mortgage servicing rights are listed collectively in noninterest income under “mortgage banking.” In previous financial statements, amortization of mortgage servicing rights and the provision for temporary impairment of mortgage servicing rights were classified in “amortization of other intangibles” in noninterest expense. The reclassification is consistent with industry practice and did not affect net income. Prior periods have been reclassified to conform to the new presentation.

        Total mortgage banking decreased $19.3 million (360%) in the second quarter and $35.5 million (214%) for the first six months of 2003 compared to the same periods in 2002.

        Mortgage loan origination and servicing fees increased $0.6 million (7%) in the second quarter and $1.8 million (11%) for the first six months of 2003 compared to the same periods in 2002. The increase in these mortgage fees resulted from increased mortgage activity due to favorable interest rates during the second quarter of 2003. In the second quarter of 2003, Hibernia originated $2.1 billion in residential first mortgages compared to $1.1 billion in the second quarter of 2002. The volume of mortgage loans serviced for third parties increased to $9.8 billion at June 30, 2003 compared to $8.0 billion at June 30, 2002.

        Amortization of mortgage servicing rights, a non-cash expense, increased $8.8 million (160%) to $14.4 million in the second quarter and $15.8 million (148%) to $26.5 million for the first six months of 2003 from the same periods in 2002. The increase is the result of increased assumed future prepayments and a higher volume of mortgage loans serviced. A $28.0 million non-cash expense for temporary impairment for mortgage servicing rights was recorded in the second quarter of 2003. The year-to-date charge totaled $42.5 million. The provision for temporary impairment of mortgage servicing rights totaled $1.7 million for the second quarter and first six months of 2002. These non-cash provisions are due to increases in the actual and expected speed of mortgage loan prepayments resulting from the low interest rate environment. In the second quarter of 2003, the Company reclassified $19.9 million of mortgage servicing rights impairment from temporary to permanent, which reduced the impairment reserve and the mortgage servicing rights balance. At June 30, 2003, the impairment reserve totaled $61.1 million. Future increases in interest rates and/or slower than expected prepayment speeds could result in a reversal of the temporary impairment reserve. Conversely, future decreases in interest rates and/or faster than expected prepayment speeds could necessitate an increase in the temporary impairment reserve and could result in additional permanent impairment.

        Amortization of mortgage servicing rights and the provision for temporary impairment of mortgage servicing rights are calculated using the present value of expected future cash flows. This cash flow analysis is performed using various assumptions including estimated and future prepayment speeds, discount rates and servicing costs. The Company uses national prepayment speed assumptions and adjusts these assumptions to approximate actual prepayment behavior of its own portfolio with information obtained from an independent third party. Table 11 provides selected third party mortgage servicing portfolio data for the most recent five quarters.

TABLE 11 - THIRD PARTY MORTGAGE SERVICING PORTFOLIO DATA
	2003				2002
($ in thousands)	Second            Quarter		First             Quarter		Fourth           Quarter		Third             Quarter		Second           Quarter
Third party servicing portfolio	$ 9,810,180		$ 9,370,907		$ 8,971,247		$ 8,476,363		$ 8,031,779
Weighted average annual note rate	6.37	%	6.56	%	6.80	%	6.87	%	6.91	%
Capitalized mortgage servicing rights, net	$      88,439		$    106,610		$    114,403		$    109,414		$    113,223
Mortgage servicing rights as a percentage
of servicing portfolio	0.90	%	1.14	%	1.28	%	1.29	%	1.41	%
Average annual servicing fee (basis points)	27.7		27.8		28.0		28.1		28.2
Mortgage servicing rights as a multiple
of average annual servicing fee	3.25	x	4.09	x	4.55	x	4.59	x	5.00	x
Weighted average annual
constant prepayment rate	35.2	%	29.1	%	26.0	%	19.9	%	14.3	%
Weighted average annual discount rate	9.3	%	9.3	%	9.3	%	9.9	%	9.9	%
Weighted average life (months)	33		39		44		58		78

        In measuring the impairment of mortgage servicing rights, loans in Hibernia’s servicing portfolio are grouped in tranches stratified on the basis of certain risk characteristics, including loan type, rate type (fixed vs. adjustable) and interest rate. Impairment is measured by estimating the fair value of each tranche. An impairment allowance for a tranche is recorded when, and in the amount by which, its fair value is less that its carrying value. Table 12 details the stratification of mortgage servicing rights, including the related prepayment speed assumptions, at June 30, 2003.

TABLE 12 - STRATIFICATION OF MORTGAGE SERVICING RIGHTS
($ in thousands)	June 30, 2003
											Weighted Average
							Estimated		Weighted		Annual Constant
		Gross		Impairment			Fair		Average		Prepayment
Loan type	Rate Band	Book Value		Reserve			Value		Life (months)		Rate
Adjustable	All loans	$	1,489	$	(209	)	$	1,280		39		26	.5%
Conventional	6.75% and lower		96,918		(34,945	)		61,973		37		32	.9%
Conventional	6.76% to 8.25%		33,380		(19,084	)		14,296		22		44	.4%
Conventional	8.26% and higher		546		(86	)		460		27		33	.5%
Governmental	6.75% and lower		6,478		(1,593	)		4,885		41		29	.4%
Governmental	6.76% to 8.25%		10,023		(4,983	)		5,040		26		37	.6%
Governmental	8.26% and higher		677		(172	)		505		31		31	.1%
		$	149,511	$	(61,072	)	$	88,439		33		35	.2%

        Table 13 presents a sensitivity analysis of the fair value of mortgage servicing rights of an immediate 10% and 25% adverse change in key assumptions. These sensitivities are hypothetical and should be used with caution. The effect of a variation in a particular assumption on the fair value of mortgage servicing rights is calculated without changing any other assumptions; in actuality, changes of one factor may result in changes in another which could magnify or counteract the sensitivities.

TABLE 13 - SENSITIVITY ANALYSIS OF MORTGAGE SERVICING RIGHTS
($ in thousands)	June 30, 2003
Fair value of mortgage servicing rights		$	88,439
Weighted average life (months)			33
Weighted average annual constant prepayment rate assumption			35.2	%
Weighted average annual discount rate			9.3	%
Impact on fair value of 10% adverse change in prepayment rate assumptions		$	(8,703	)
Impact on fair value of 25% adverse change in prepayment rate assumptions		$	(14,819	)
Impact on fair value of 10% adverse change in discount rate assumptions		$	(353	)
Impact on fair value of 25% adverse change in discount rate assumptions		$	(1,643	)

        Gain on sales of mortgage loans increased $15.3 million (393%) in the second quarter and $19.3 million (160%) for the first six months of 2003 compared to the same periods in 2002. Gains recorded in the second quarter of 2003 include a $5.3 million gain on loans sold from the mortgage portfolio. The remaining increases were due to the declining interest rate environment, resulting in an increase in fixed-rate loans, which are generally sold with servicing rights retained.

        Retail investment service fees decreased $1.0 million (13%) in the second quarter and $2.6 million (16%) for the first six months of 2003 over the comparable periods in 2002. The decrease was due to market conditions which resulted in a reduction in the sales of fixed annuities, mutual funds and discount brokerage services.

        Trust fees decreased $0.8 million (12%) in the second quarter and $1.1 million (8%) for the first six months of 2003 compared to the same periods in 2002. These decreases were due to fluctuations in stock market indices which directly affect trust account values and the associated asset management fees. To remain competitive in the marketplace, certain trust fees were also reduced in 2003.

        Hibernia National Bank manages mutual funds and, through a wholly-owned subsidiary, act as a broker in providing access to mutual funds and variable annuities, but does not underwrite annuitites. Through an insurance subsidary of Hibernia Corporation, the Company also provides access to fixed annuities. Income from the sale and servicing of mutual funds and annuities totaled $6.9 million for the second quarter and $13.1 million for the first six months of 2003, a decrease of $0.8 million (10%) from the second quarter of 2002 and a $2.3 million (15%) decrease from the first six months of 2002. These commissions and fees are included in retail investment and trust fees, discussed above.

        Fees from insurance increased $0.6 million (16%) in the second quarter and $1.3 million (17%) for the first six months of 2003 compared to the same periods in 2002. These increases were due to increased property and casualty commissions, as well as higher life and health commission income in 2003.

        Investment banking income decreased $2.1 million (37%) in the second quarter and $2.3 million (26%) for the first six months of 2003 compared to the same periods in 2002. These decreases were due to lower levels of commission income and decreased investment banking transactions in 2003, partially offset by an increase in corporate underwriting bond income of $1.1 million for the quarter and year.

        Other operating income decreased $1.1 million (24%) in the second quarter and $0.5 (5%) million for the first six months of 2003 compared to the same periods in 2002. The decrease in the second quarter 2003 compared to 2002 is due to losses on premises and equipment of $0.9 million resulting from the reduction in force and an $0.8 million accrual for residual value losses on the leased auto portfolio.

        Net securities gains totaled $10.2 million in the second quarter and for the first six months of 2003, compared to net securities losses of $6.6 million for the second quarter and $10.0 million for the first six months of 2002. The net securities gains in 2003 were due to net gains of $10.3 million, offset by the writedown for permanent impairment of private equity securities of $0.1 million for the quarter and year-to-date. Included in the gain is $9.9 million related to the sale of $293.7 million mortgage-backed and collateral mortgage obligation securities in June 2003. The losses in 2002 were due to writedowns for permanent impairment of private-equity investments totaling $7.1 million for the quarter and $10.6 million year-to-date, offset by net gains of $0.5 million for the quarter and $0.6 million year-to-date.

        The private-equity portfolio totaled $21.9 million at June 30, 2003, of which $14.4 million was energy-related. These investments are valued at current fair value as determined by the Company’s management. In establishing these values, the Company’s management considers, among other factors, the cost of the investment to the Company, developments since the acquisition of the investment, the financial condition and operating results of the investee, the long-term potential of the business of the investee, the quoted price of securities that are publicly traded, recent arm’s-length transactions involving similar securities, and expected initial public offering prices. On investments for which there is no public market, the Company, in making its valuations, has relied on financial data of the investees and, in many instances, on estimates by the Board of Directors and management of the investee companies as to the potential effect of future developments. Because of the inherent uncertainty in these valuations, those estimated fair values may differ significantly from the values that would have been derived had a ready market for the portfolio securities existed.

        While the Company does not plan any new direct private equity investments, there will be instances when additional funding of existing investments is required. The Company has current commitments for existing private-equity investments totaling $4.8 million and also anticipates additional funding of the energy-related investment ranging from $2.0 million to $3.0 million in 2003, based on a cash flow analysis from a third party consultant. For the six months ended June 30, 2003 and 2002, the Company funded $2.7 million and $3.0 million, respectively, to these existing private equity investments.

NONINTEREST EXPENSE

        For the second quarter of 2003, noninterest expense totaled $142.8 million, a $7.3 million (5%) increase from the second quarter of 2002. For the first six months of 2003 compared to the same period in 2002, noninterest expense was up $15.7 million (6%) to $282.9 million. Included in noninterest expense for the quarter and year-to-date is $5.2 million related to the reduction in force announced in April 2003. Noninterest expense for the three months and six months ended June 30, 2003 and 2002 is presented by major category in Table 14.

        Staff costs, which represent the largest component of noninterest expense, increased $4.7 million (6%) in the second quarter and $8.8 million (6%) for the first six months of 2003 as compared to the same periods a year ago. Included in these increases were non-recurring expenses associated with the workforce reduction in second-quarter 2003, which totaled $5.1 million. Additional factors attributable to these increases were annual wage increases, which contributed to the increase for the quarter and year-to-date, and higher medical insurance expense, which contributed to the year-to-date increase.

        Occupancy and equipment expenses increased $1.2 million (7%) to $18.1 million for the second quarter and $1.4 million (4%) to $35.4 million for the first six months of 2003 compared to the same periods in 2002. Occupancy and equipment costs were higher in 2003 due to increased depreciation, utilities and maintenance expenses.

        Data processing expenses increased $0.4 million (5%) to $8.9 million for the second quarter and $1.5 million (9%) to $18.3 million for the first six months of 2003 compared to the same periods in 2002. These increases are due to higher outside data processing expenses and increased software maintenance expenses in 2003 as compared to the year ago periods.

        Advertising and promotional expenses increased $0.4 million (8%) to $5.5 million for the second quarter and $2.0 million (20%) to $12.4 million for the first six months of 2003 compared to the same periods in 2002. The increases from the prior year were due to increased marketing expenses associated with the promotion of the high performance checking products.

        State taxes on equity increased $0.5 million (13%) for the second quarter and $1.0 million (14%) for the first six months of 2003 compared to the same periods of 2002, due to the Company’s increased level of equity.

TABLE 14 - NONINTEREST EXPENSE
	Three Months Ended									Six Months Ended
($ in thousands)	June 30 2003			June 30 2002			Percentage Increase (Decrease)			June 30 2003			June 30 2002			Percentage Increase (Decrease)
Salaries		$  65,550			$  61,558			6	%		$ 126,151			$ 119,661			5	%
Benefits		12,695			11,943			6			26,700			24,398			9
Total staff costs		78,245			73,501			6			152,851			144,059			6
Occupancy, net		9,792			8,980			9			19,111			18,175			5
Equipment		8,352			7,994			4			16,281			15,843			3
Total occupancy and equipment		18,144			16,974			7			35,392			34,018			4
Data processing		8,895			8,476			5			18,313			16,856			9
Advertising and promotional expenses		5,478			5,078			8			12,440			10,399			20
Amortization of intangibles		1,285			1,513			(15	)		2,624			3,097			(15	)
Foreclosed property expense, net		(29	)		219			(113	)		57			239			(76	)
Telecommunications		2,320			2,241			4			4,627			4,526			2
Postage		1,938			1,852			5			3,987			3,751			6
Stationery and supplies		1,960			2,133			(8	)		4,278			4,195			2
Professional fees		2,164			1,993			9			4,346			4,673			(7	)
State taxes on equity		4,380			3,867			13			8,675			7,629			14
Regulatory expense		1,064			1,048			2			2,125			2,118			--
Loan collection expense		2,383			2,568			(7	)		4,628			4,602			1
Other		14,536			13,982			4			28,583			27,027			6
Total noninterest expense		$ 142,763			$ 135,445			5	%		$ 282,926			$ 267,189			6	%
Efficiency ratio (1)		59.00	%		52.07	%					57.98	%		51.76	%

⁽¹⁾     Noninterest expense as a percentage of taxable-equivalent net interest income plus noninterest income (excluding securities transactions).

        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 a key measure used to evaluate the success of efforts to control costs while generating revenue efficiently. The efficiency ratio for the second quarter of 2003 was 59.00% compared to 52.07% for the second quarter of 2002. The ratio for the first six months of 2003 was 57.98% compared to 51.76% for the first six months of 2002. The increase in the efficiency ratio is the result of the $28.0 million and $42.5 million charges for the temporary impairment of mortgage servicing rights in the second quarter and first six months of 2003, respectively. Also contributing to the increase are the non-recurring charges totaling $6.1 million relating to the workforce reduction in second-quarter 2003. As discussed earlier, effective in the first quarter of 2003, amortization of mortgage servicing rights and the provision for temporary impairment of mortgage servicing rights were reclassified from noninterest expense to noninterest income. While the reclassification of prior periods did not affect net income, it did have a positive effect on the efficiency ratio.

        Hibernia implemented expense initiatives designed to reduce spending levels across the Company beginning in the second quarter of 2003. First among these initiatives was a company-wide reduction in workforce implemented in the second quarter of 2003. In addition, other cost saving measures have been implemented targeting employee-related expenses, marketing, hardware and software, incentives that are not directly related to sales and many other expenses. Hibernia remains focused on controlling expenses and plans to limit growth in noninterest expense to approximately 2% for this year as compared to the previous year.

INCOME TAXES

        The Company recorded $33.3 million in income tax expense in the second quarter of 2003, a $0.2 million (1%) decrease from $33.5 million in the second quarter of 2002. For the first six months of 2003, income tax expense totaled $63.4 million, a $2.1 million (3%) decrease from $65.6 million for the first six months of 2002. The Company’s effective tax rate for the second quarter of 2003 was 35.2% as compared to 34.9% for the second quarter of 2002. For the first six months of 2003 the Company’s effective tax rate was 35.0%, equal to the effective tax rate for the same period of 2002.

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

SEGMENT RESULTS

        The Company’s segment information is presented by line of business with each line providing various products and services to groups of customers who share certain characteristics. The reportable operating segments are Consumer, Small Business, Commercial, and Investments and Public Funds. The Consumer segment provides individuals with comprehensive products and services, including mortgage and other loans, deposit accounts, trust and investment management, brokerage, and life and health insurance. The Small Business and Commercial segments provide business entities with comprehensive products and services, including loans, deposit accounts, leasing, treasury management, investment banking, property and casualty insurance and private equity investments. The Small Business segment provides products and services to mid-size and smaller business entities and the Commercial segment provides products and services to larger business entities. The Investments and Public Funds segment includes the management of public entity deposits and provides the treasury function for the Company by managing the investment portfolio, interest rate risk, and liquidity and funding positions. The Other segment includes the areas of support services and facilities management. Segment net income for the first six months of 2003 and 2002 is presented in Table 15.

TABLE 15 - SEGMENT RESULTS
	Six Months Ended
							Percentage
	June 30			June 30			Increase
($ in thousands)	2003			2002			(Decrease)
Consumer		$   83,445			$   60,291			38	%
Small Business		21,486			19,378			11
Commercial		22,165			10,105			119
Investments and Public Funds		(9,680	)		32,339			(130	)
Other		(1,150	)		(1,669	)		31
Segment total		116,266			120,444			(3	)
Reconciling items(1)		1,315			1,327			(1	)
Total net income		$  117,581			$  121,771			(3	)%

⁽¹⁾For a discussion of reconciling items refer to Note 5 of the consolidated financial statements.

        Net income for the Consumer segment was $83.4 million for the first six months of 2003, up $23.2 million (38%) from $60.3 million for the first six months of 2002. The increase in the Consumer segment net income is primarily due to increases in the indirect, retail and mortgage areas. The indirect area has experienced substantial loan growth with strong net interest income. The retail banking area benefited from growth in transaction-based fees related to the new high performance checking campaign. The mortgage area has benefited from the lower interest rate environment. The $42.5 million provision for temporary impairment of mortgage servicing rights is a function of interest rate risk and is included in the Investments and Public funds segment, not the Consumer segment. The Small Business segment net income was up $2.1 million (11%) to $21.5 million for the first six months of 2003 from $19.4 million for the same period in 2002. The Commercial segment net income increased $12.1 million (119%) to $22.2 million for the first six months of 2003 from $10.1 million for the same period of 2002. The increases in the Small Business and Commercial segments were due to reductions in the provision for loan losses resulting from improved asset quality. Lower private equity losses were also partly responsible for the increase in net income in the Commercial segment. The Investments and Public Funds segment net income was down $42.0 million (130%) for the first six months of 2003 from $32.3 million for the same period in 2002. This segment was negatively impacted by the provision for temporary impairment of mortgage servicing rights, discussed earlier. The decrease in net income for this segment is also due to a decline in net interest income as the Company experienced margin compression in the low interest rate environment. Other segment net losses totaled $1.2 million for the first six months of 2003 compared to $1.7 million in 2002.

CAPITAL

        Shareholders’ equity totaled $1,713.6 million at June 30, 2003 compared to $1,614.4 million a year earlier. The increase is primarily the result of net income over the most recent 12 months totaling $245.7 million and the issuance of $13.7 million of common stock, partially offset by the declaration of $91.8 million in dividends on common stock and the acquisition of $79.1 million of treasury stock.

        Risk-based capital and leverage ratios exceed the ratios required for designation as a “well-capitalized” institution under regulatory guidelines. Table 16 presents Hibernia’s ratios along with selected components of the capital ratio calculations for the most recent five quarters.

TABLE 16 - CAPITAL
($ in millions)	June 30    2003			March 31  2003			Dec. 31    2002			Sept. 30    2002			June 30    2002
Risk-based capital:
Tier 1	$	1,459.8		$	1,434.7		$	1,412.3		$	1,376.5		$	1,353.6
Total		1,636.7			1,605.1			1,580.0			1,538.5			1,513.8
Assets:
Quarterly average assets (1)		17,398.9			17,192.9			16,715.3			16,187.4			16,169.1
Net risk-adjusted assets		14,111.3			13,584.3			13,367.1			12,903.7			12,756.1
Ratios:
Tier 1 risk-based capital		10.35	%		10.56	%		10.57	%		10.67	%		10.61	%
Total risk-based capital		11.60	%		11.82	%		11.82	%		11.92	%		11.87	%
Leverage		8.39	%		8.34	%		8.45	%		8.50	%		8.37	%

⁽¹⁾     Excluding the adjustment for accumulated other comprehensive income and disallowed assets.

        In the second quarter of 2003, the Company repurchased 1.4 million shares of its common stock at a cumulative weighted average price of $18.86 under a plan announced in October 2002 that authorized the buyback of up to 3.5 million shares over twelve months. A total of 2.9 million shares have been repurchased under that plan.

        In July 2003, Hibernia’s Board of Directors authorized the Company to begin another buyback program under terms that allow for the repurchase of up to 3.5 million additional shares of its common stock over the next 12 months. The remaining 0.6 million shares from the buyback program initiated in October 2002 will be purchased before beginning the buyback program authorized in July 2003.

        Hibernia’s dividend payout ratio for the second quarter of 2003 was 37.5%. The Company will continue to evaluate its dividend payout policy as part of its capital management. Hibernia’s current dividend payout ratio is targeted between 30 and 40 percent.

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, increasing borrowings and raising new capital. To minimize funding risks, management monitors liquidity through periodic reviews of maturity profiles, yield and rate behaviors, and loan and deposit forecasts.

        Attracting and retaining core deposits are the Company’s primary sources of liquidity. Core deposits totaled $11.3 billion at June 30, 2003, a $954.8 million (9%) increase from June 30, 2002. This increase is the result of Hibernia’s extensive banking office network, aided by the promotion of the new high performance deposit products, discussed earlier. Management expects the volume of core deposits to increase further in 2003 as a result of the continued promotion of these products. In addition, Hibernia has a large base of treasury management-related repurchase agreements and foreign deposits as part of total customer relationships. Because of the nature of the relationships, these 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 quarter.

        The loan-to-deposit ratio, one measure of liquidity, was 86.5% at June 30, 2003, 83.7% at March 31, 2003, and 88.8% at June 30, 2002. Another indicator of liquidity is the large-liability dependence ratio, which measures reliance on short-term borrowings and other large liabilities (including large-denomination and public fund certificates of deposit and foreign deposits). Based on average balances, 17.9% of Hibernia’s loans and securities were funded by net large liabilities (total large liabilities less short-term investments) in the second quarter of 2003, up from 16.3% in the first quarter of 2003 and equal to the second quarter of 2002. The level of large-liability dependence is within limits established by management to maintain liquidity and soundness.

        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 additional retail brokered certificates of deposit and the ability to sell or securitize a substantial portion of the Company’s $2.4 billion residential first mortgage portfolio and $2.1 billion indirect consumer portfolio. The Company also has available a federal funds line of credit totaling $2.1 billion at June 30, 2003, and its membership in the FHLB which provides additional lines totaling $1.1 billion to further augment liquidity by providing a readily accessible source of funds at competitive rates.

        Statements in this report that are not historical facts should be considered forward-looking statements with respect to Hibernia. Forward-looking statements of this type speak only as of the date of this report. By nature, forward-looking statements involve inherent risk and uncertainties. Various factors, including, but not limited to, unforeseen local, regional, national or global events, economic conditions, asset quality, interest rates, prepayment speeds, loan demand, changes in business or consumer spending, borrowing or savings habits, competition, stock price volatility, government monetary policy, expense reductions at anticipated levels, changes in laws and regulations, the level of success of the Company’s asset/liability management strategies as well as its marketing, product development, sales and other strategies, the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as the Financial Accounting Standards Board and other accounting standard setters, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation 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.

Item 3.      Quantitative and Qualitative Disclosures about Market Risk

        Reference is made to page 26 “Interest Rate Sensitivity” included in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 4.      Controls and Procedures

        As of June 30, 2003, an evaluation was carried out under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2003. There have been no changes in the Company’s internal controls over financial reporting made during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 2.      Changes in Securities and Use of Proceeds

                 Recent Sales of Unregistered Securities. Under the Hibernia Corporation 2003 Long-Term Incentive Compensation Plan which became effective on April 23, 2003 following approval by the shareholders of the Company, nonemployee directors may elect to take all or a portion of their annual retainer for service as a member of the Board of Directors in common stock of the Company, rather than in cash. The issuance of the stock to the directors who had made the election to receive stock in lieu of cash for all or a portion of their retainer fee as of April 23, 2003 was not registered by the Company (as the shares were issued prior to the Company’s registration of shares to be issued under to the 2003 Plan). No underwriters or other securities dealers were used in this transaction, and no funds were paid to the Company from the directors in exchange for the shares. The shares were issued in exchange for the directors’ services as outside directors to the Company.

        On April 24, 2003, an aggregate of 7,850 shares of Class A Common Stock were issued from the Company’s treasury to the six directors of the Company who had elected to receive stock in lieu of all or a portion of cash retainer. This transaction was exempt under Section 4(2) of the Securities Act of 1933, as amended, as a private offering from the Company to its ten nonemployee directors.

        On February 26, 2003, the Board of Directors terminated the retirement stock award policy that allowed nonemployee directors who had served as a director of the Company or a financial institution acquired by the Company or as a city board director during the period between January 1, 1973 and December 31, 1993 to a stock award upon retirement. In connection with that termination, the directors who would have been entitled to a stock award under the retirement policy were issued a stock award equal to the number of shares they would have received upon retirement, and a cash tax gross up payment, in lieu of any award upon retirement. The issuance of the stock to the directors who qualified to receive shares was not registered by the Company. No underwriters or other securities dealers were used in this transaction, and no funds were paid to the Company from the directors in exchange for the shares. The shares were issued in exchange for the directors’ agreement to forego any stock award upon retirement and to terminate the retirement policy.

        On February 26, 2003, an aggregate of 36,750 shares of Class A Common Stock were issued from the Company’s treasury to the nine directors of the Company who were entitled to a stock award in connection with the termination of the retirement stock award policy. This transaction was exempt under Section 4(2) of the Securities Act of 1933, as amended, as a private offering from the Company to the nine eligible directors.

        From July 7, 2003 through July 21, 2003, a total of 206,814 shares of Class A Common Stock were issued from the Company’s treasury in private transactions to two warrantholders pursuant to their exercise of warrants acquired by them in connection with the Company’s acquisition of the Rosenthal Agency in 2000. The exercise price of the warrants was $13.12 for each share of stock issued under the warrants. The exercise price for 50,000 shares was paid in cash, for a total cash payment of $656,000. The exercise price for 500,000 shares was paid as a net issuance pursuant to which shares which otherwise would have been issued in connection with the exercise were used to pay the purchase price. An aggregate of 343,186 shares were used to pay the purchase price in such net issuances, and an aggregate of 156,814 shares were issued. No underwriters or other securities dealers were used in these transactions. These transactions were exempt under Section 4(2) of the Securities Act of 1933, as amended, as a private offering.

Item 4.      Submission of Matters to a Vote of Security Holders.

                The Company held its Annual Meeting of Shareholders on April 23, 2003. Three items were submitted to a vote of the shareholders at that meeting:
•    Election of four persons to serve as directors of the Company until the 2006 Annual Meeting of Shareholders and until their successors are elected and qualified;
•   Approval of a 2003 Long-Term Incentive Compensation Plan for the Company; and
•   Ratification of the appointment of Ernst & Young LLP as independent auditors for the Company for 2003.

       The vote on these matters was as follows:

1.     Election of Directors

		Shares as to Which Authority
Name of Director	Shares Voted For	to Vote was Withheld
J. Herbert Boydstun	134,364,476	1,158,398
Dick H. Hearin	132,052,330	3,470,544
William C. O'Malley	132,104,732	3,418,142
Robert T. Ratcliff	131,941,549	3,581,325
2.    Approval of the 2003 Long-Term Incentive Compensation Plan for the Company
Shares Voted For	Shares Voted Against	Shares Abstained	Broker Nonvotes
82,721,966	21,225,857	1,477,260	30,127,791
3.    Ratification of the Appointment of Ernst & Young LLP as independent auditors
Shares Voted For	Shares Voted Against	Shares Abstained
130,849,938	4,071,436	601,499

All of the director nominees were elected, and the other two proposals were approved by the shareholders.

Item 6.      Exhibits and Reports on Form 8-K

                       (a)        Exhibits

EXHIBIT DESCRIPTION

3.1 Exhibit 3.1 to the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1998, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Articles of Incorporation of the Registrant, as amended to date)

3.2 Exhibit 3.2 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2000, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (By-Laws of the Registrant, as amended to date)

10.13 Exhibit 10.13 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1998, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Deferred Compensation Plan for Outside Directors of Hibernia Corporation and its Subsidiaries, as amended to date)

10.16 Exhibit B to the Registrant’s definitive proxy statement dated August 17, 1992, relating to its 1992 Annual Meeting of Shareholders, filed by the Registrant with the Commission is hereby incorporated by reference (Hibernia Corporation 1987 Stock Option Plan, as amended to date)

10.34 Exhibit C to the Registrant’s definitive proxy statement dated August 17, 1992, relating to its 1992 Annual Meeting of Shareholders, filed by the Registrant with the Commission is hereby incorporated by reference (Long-Term Incentive Plan of Hibernia Corporation, amended as described in Registrant’s definitive proxy statement dated March 19, 1997, relating to its 1997 Annual Meeting of Shareholders filed by the Registrant with the Commission)

10.35 Exhibit 10.35 to the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2000, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (1993 Director Stock Option Plan of Hibernia Corporation, as amended to date)

10.40 Exhibit 10.40 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Split-Dollar Life Insurance Plan of Hibernia Corporation effective as of July 1996, amended in certain limited respects as described in Appendix A to Contract Buyout and Separation Agreement referenced in Exhibit 10.46)

10.41 Exhibit 10.41 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Nonqualified Deferred Compensation Plan for Key Management Employees of Hibernia Corporation effective as of July 1996)

10.42 Exhibit 10.42 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Supplemental Stock Compensation Plan for Key Management Employees effective as of July 1996)

10.43 Exhibit 10.43 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Nonqualified Target Benefit (Deferred Award) Plan of Hibernia Corporation effective as of July 1996)

10.44 Exhibit 10.44 to the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Form of Change of Control Employment Agreement for Certain Senior Officers of the Registrant, as amended to date)

10.46 Exhibit 10.46 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2000, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Contract Buyout and Separation Agreement by and between Hibernia Corporation, Hibernia National Bank and Stephen A. Hansel)

10.47 Exhibit 10.47 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2000, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Hibernia Corporation 2001 Nonqualified Stock Option Agreement by and between Hibernia Corporation and Stephen A. Hansel (the form of which is included as Appendix C to the Contract Buyout and Separation Agreement referenced in Exhibit 10.46))

10.49 Exhibit 10.49 to the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2002, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Form of Change of Control Agreement for Executive and Certain Senior Officers of the Registrant)

10.51 Exhibit 10.51 to the Annual Report on Form 10-K (as amended) for the fiscal year ended December 31, 2002, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Forms of Indemnification Agreements by and between Hibernia Corporation and the directors of Hibernia Corporation)

10.52 Exhibit 10.52 to the Annual Report on Form 10-K (as amended) for the fiscal year ended December 31, 2002, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Amendment No. 1 to the Hibernia Corporation Deferred Compensation Plan for Key Management Employees effective as of October 22, 2002)

10.53 Exhibit 10.53 to the Annual Report on Form 10-K (as amended) for the fiscal year ended December 31, 2002, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Amendment No. 1 to the Hibernia Corporation Supplemental Stock Compensation Plan for Key Management Employees effective as of October 22, 2002)

10.54 Exhibit 10.54 to the Annual Report on Form 10-K (as amended) for the fiscal year ended December 31, 2002, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Amendment No. 1 to the Hibernia Corporation Deferred Award Plan effective as of October 22, 2002)

10.55 Exhibit 10.55 to the Annual Report on Form 10-K (as amended) for the fiscal year ended December 31, 2002, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Employment Agreement by and among J. Herbert Boydstun, Hibernia Corporation and Hibernia National Bank effective as of December 1, 2002)

10.56 Exhibit 10.56 to the Annual Report on Form 10-K (as amended) for the fiscal year ended December 31, 2002, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Amendment to the Hibernia Corporation Long-Term Incentive Plan effective as of November 19, 2002)

10.57 Exhibit 10.57 to the Annual Report on Form 10-K (as amended) for the fiscal year ended December 31, 2002, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Amendment to the Hibernia Corporation Long-Term Incentive Plan effective as of February 26, 2003)

10.59 Appendix A to the Registrant’s definitive proxy statement dated March 17, 2003, relating to its 2003 Annual Meeting of Shareholders, filed by the Registrant with the Commission, is hereby incorporated by reference (Hibernia Corporation 2003 Long-Term Incentive Compensation Plan)

10.60 Early Retirement Agreement executed as of June 3, 2003, by and among Richard G. Wright, Hibernia Corporation and Hibernia National Bank

10.61 Business Protection Agreement executed as of June 3, 2003, by and among Richard G. Wright, Hibernia Corporation and Hibernia National Bank (the form of which is included as Appendix A to the Early Retirement Agreement referenced in Exhibit 10.60)

10.62 Status Change Agreement and Status Change Agreement Acknowledgment and Acceptance dated May 27, 2003, by Hibernia Corporation and Hibernia National Bank and K. Kirk Domingos III.

13 Exhibit 13 to the Annual Report on Form 10-K (as amended) for the fiscal year ended December 31, 2002, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (2002 Annual Report to security holders of Hibernia Corporation (excluding the portions thereof not incorporated by reference in this report))

21 Exhibit 21 to the Annual Report on Form 10-K (as amended) for the fiscal year ended December 31, 2002, filed with the Commission by the Registrant (Commission File No. 1-10294) is hereby incorporated by reference (Subsidiaries of the Registrant)

31 Certifications Pursuant to Rule 13a-14(a)/15d-14(a) (as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

32 Certifications Pursuant to 18 U.S.C. Section 1350 (as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

99.1 Exhibit 99.1 to the Annual Report on Form 10-K (as amended) dated June 25, 2003, filed with the Commission, is hereby incorporated by reference (Annual Report of the Retirement Security Plan for the fiscal year ended December 31, 2002)

99.2 Exhibit 99.2 to the Annual Report on Form 10-K (as amended) dated June 25, 2003, filed with the Commission, is hereby incorporated by reference (Annual Report of the Employee Stock Ownership Plan and Trust for the fiscal year ended December 31, 2002)

                       (b)        Reports on Form 8-K

The following reports on Form 8-K were furnished:

A report on Form 8-K dated April 17, 2003 reporting Item 7(c) Exhibits, Item 9 Regulation FD Disclosure and Item 12 Results of Operations and Financial Condition.

A report on Form 8-K dated May 5, 2003 reporting Item 7(c) Exhibits and Item 9 Regulation FD Disclosure.

A report on Form 8-K dated July 17, 2003 reporting Item 7(c) Exhibits, Item 9 Regulation FD Disclosure and Item 12 Results of Operations and Financial Condition.

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

HIBERNIA CORPORATION                    
(Registrant)

Date:   August 13, 2003             By: /s/ Jan M. Macaluso            
Jan M. Macaluso
Executive Vice President and Controller
Chief Accounting Officer
(in her capacity as a duly authorized officer
of the Registrant and in his capacity as
Chief Accounting Officer)

EX-10.60

EXHIBIT 10.60

HIBERNIA CORPORATION
EARLY RETIREMENT AGREEMENT

        THIS EARLY RETIREMENT AGREEMENT (the “Agreement”) is made and executed as of the 3rd day of June, 2003 (the “Effective Date”), by and among Richard G. Wright, an individual of the full age of majority (the “Officer”), Hibernia Corporation, a Louisiana corporation, and Hibernia National Bank, a national banking association organized and existing under the laws of the United States (Hibernia Corporation and Hibernia National Bank, together with its and their direct and indirect subsidiaries, are collectively referred to herein as “Hibernia”).

        WHEREAS, Hibernia and Officer have agreed that as of May 6, 2003, Officer will voluntarily resign and take early retirement (the “Separation Date”); and

        WHEREAS, Hibernia and Officer intend the terms and conditions of this Agreement to govern all issues related to Officer’s employment with and retirement from Hibernia; and

        WHEREAS, Hibernia has advised Officer to consult with a lawyer before signing this Agreement;

        NOW, THEREFORE, in consideration of the premises and the mutual promises herein contained, the parties hereto agree as follows:

        1.        Cessation of Employment. As of the Separation Date, the parties hereby acknowledge and agree that Officer shall take early retirement and his employment with Hibernia shall voluntarily terminate. As of the Separation Date, Officer voluntarily resigns and relinquishes his positions with Hibernia, including, but not limited to, his position and duties as Senior Executive Vice President of Hibernia Corporation and Hibernia National Bank, and he voluntarily resigns as a director, officer and/or manager of any and all subsidiaries of Hibernia Corporation and/or Hibernia National Bank. Officer acknowledges and agrees that, as of the Separation Date, he will no longer have any authority to act on behalf of Hibernia or to sign any documents binding Hibernia and will be entitled only to those payments and benefits specifically set forth in this Agreement.

        2.        Payments. Hibernia agrees to pay Officer an aggregate amount equal to Two Hundred Seventy-Four Thousand, Ninety-Two and NO/100 ($274,092.00) Dollars, as described below:

    (a) Two Hundred Thirty One Thousand, Three Hundred and NO/100 ($231,300.00) Dollars (an amount equal to Officer’s annual base pay), which amount shall be in consideration for the agreements of Officer contained herein other than the agreements contained in paragraph 8 (Release) hereof, and

    (b) The sum of Thirty-Two Thousand, Three Hundred Eighty Two and NO/100 ($32,382.00) Dollars (an amount equal to 70% of Officer’s target bonus of 60% of annual base pay for four months) and Ten Thousand Four Hundred Ten and NO/100 ($10,410.00) Dollars (an amount equal to the cost of group medical coverage in accordance with the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”)), which amount shall be in consideration for the agreements of Officer contained in paragraph 8 (Release) hereof.

        Such amount shall be payable in a single payment subject to federal and state income and employment taxes (using, for federal tax withholding, the supplemental 25% rate), such payment to be made within ten (10) days after the last to occur of: (i) the full execution of this Agreement, (ii) the Separation Date or (iii) the end of the revocation period referred to in Section 15(c) of this Agreement (the last to occur of items (i), (ii) and (iii) referred to as the “Payment Trigger Date”).

        Officer acknowledges and agrees that approximately one-half of the amount payable to him under paragraph 2(a) and that the entire amount payable to him under paragraph 2(b) hereof are in excess of any amount that Officer might be eligible to receive under Hibernia’s regular severance pay policy or program and are in excess of any amount to which Officer may be entitled on account of his employment with Hibernia or for services he performs for Hibernia. Officer acknowledges and agrees that he has no agreement with Hibernia that gives him any right or claim to such excess without the execution of this Agreement. Officer acknowledges and agrees that the consideration under paragraph 2(b) hereof is sufficient compensation for the agreements set forth in paragraph 8 (Release) hereof and that the excess consideration under paragraph 2(a) hereof is sufficient compensation for the other agreements of Officer contained in this Agreement.

        3.        Payment for Unused Vacation. Hibernia further agrees to pay Officer the amount of Fourteen Thousand Two Hundred Thirty Four and NO/100 ($14,234.00) Dollars in vacation pay, subject to federal and state income and employment taxes, to be paid within ten (10) days after the Payment Trigger Date (or such earlier time as may be required by law), representing payment in full of Officer’s accrued but unused vacation.

        4.        Outplacement Services and Use Agreement. (a) As further consideration for the agreements of Officer contained herein other than the agreements contained in paragraph 8 (Release) hereof, Hibernia agrees to pay, directly to Drake Beam Morin, the reasonable fees and expenses (not to exceed $10,000 in the aggregate) for up to six continuous months of outplacement services to be provided to Officer, such services to commence within forty-five (45) days after the Payment Trigger Date. Such services shall cease when the time period or cost described above is reached or, if earlier, when Officer obtains employment. Officer agrees to notify Hibernia promptly upon commencing outplacement services and upon obtaining employment.

        (b)        Hibernia agrees that Officer may use Hibernia’s membership at English Turn Country Club at Officer’s expense for a period to end at the earlier of twenty-four (24) months following the Separation Date or the date Officer obtains employment, provided that nothing herein shall be construed to require Hibernia to maintain such membership during such period and provided further that Hibernia may terminate the arrangement provided for in this paragraph 4(b) at any time upon ten days notice to Officer, in which case the arrangement shall cease at the later of (i) the end of the monthly period for which Officer has already paid as of the date of the notice of termination of the arrangement or (ii) ten days from the date notice of termination of the arrangement is given (as described in paragraph 21) to Officer.

        5.        No Additional Benefits. Officer acknowledges and agrees that the payments expressly provided for in paragraphs 2 and 3 above and the benefits expressly provided for in paragraph 4 above (together with benefits accrued prior to the Separation Date under the terms of any plan maintained by Hibernia in which Officer participated as of such date and any other benefits described in this paragraph 5) constitute the only payments and benefits to which Officer is entitled, that such payments and benefits are in lieu of any other severance or separation arrangements provided for by Hibernia and that Officer’s coverage under any benefit plan, program, policy or arrangement sponsored or maintained by Hibernia shall cease as of the Separation Date.

        Officer acknowledges and agrees that as of the Separation Date, Hibernia shall cease, whether directly or indirectly, to pay premiums for any policy of insurance with respect to which Officer is named as the insured and any such policy shall lapse, be canceled or otherwise disposed of in accordance with its terms and the terms of any ancillary or collateral documents related thereto. Officer agrees to cooperate with reasonable requests made by Hibernia with respect to the disposition of any such insurance. Officer acknowledges and agrees that no characterization by the parties of Officer’s cessation of employment as early retirement shall make him eligible for retirement benefits for which he does not otherwise qualify under the terms of any other benefit plans or compensation practices. Officer further acknowledges and agrees that no payment made by Hibernia pursuant hereto is subject to any employer matching obligation or any other employer contribution under any benefit or deferred compensation plan, whether or not any such payment is characterized as salary continuation, wages or compensation.

        6.        No Relinquishment of Certain Rights. Notwithstanding the foregoing paragraph 5 or the provisions of paragraph 8, Officer shall not be deemed to have relinquished any of the following: (i) claims for the payment or distribution of benefits accrued prior to the Separation Date under any employee benefit plans maintained by Hibernia in which Officer participated as of such date, (ii) any claim for indemnification as an officer of Hibernia under any applicable law or Hibernia’s Articles of Incorporation, Articles of Association or By-Laws in effect while Officer was an officer of Hibernia to the extent such law or provisions apply to former officers and apply to Officer, (iii) any claim to receive or be defended under insurance coverage in effect as of the Separation Date that covered Officer prior to the Separation Date and that applies to former officers of Hibernia (but only to the extent that such coverage remains in effect without the purchase by Hibernia of any additional or tail coverage) or (iv) any rights accorded Officer by law under COBRA.

        7.        Option Agreements. Officer acknowledges that, as of the Separation Date, he holds the following stock options under the Company’s Long-Term Incentive Plan (“LTIP”): (i) an option granted on March 25, 1994 to purchase an aggregate of 15,000 shares of Hibernia Common Stock at an exercise price of $7.9375 per share; (ii) an option granted on January 23, 1995 to purchase an aggregate of 30,000 shares of Hibernia Common Stock at an exercise price of $6.9375 per share; (iii) an option granted on March 18, 1996 to purchase an aggregate of 35,000 shares of Hibernia Common Stock at an exercise price of $10.1875 per share; (iv) an option granted on May 21, 1996 to purchase an aggregate of 5,000 shares of Hibernia Common Stock at an exercise price of $10.4375 per share; (v) an option granted on January 27, 1997 to purchase an aggregate of 45,000 shares of Hibernia Common Stock at an exercise price of $13.4375 per share; (vi) an option granted on January 27, 1998 to purchase an aggregate of 50,000 shares of Hibernia Common Stock at an exercise price of $18.2813 per share; (vii) an option granted on January 26, 1999 to purchase an aggregate of 45,000 shares of Hibernia Common Stock at an exercise price of $16.0938 per share; (viii) an option granted on January 25, 2000 to purchase an aggregate of 52,200 shares of Hibernia Common Stock at an exercise price of $9.9063 per share (only 39,150 of which are exercisable as of the Separation Date); (ix) an option granted on January 23, 2001 to purchase an aggregate of 20,000 shares of Hibernia Common Stock at an exercise price of $13.47 per share (only 10,000 of which are exercisable as of the Separation Date); (x) an option granted on November 20, 2001 to purchase an aggregate of 10,000 shares of Hibernia Common Stock at an exercise price of $16.79 per share (none of which are exercisable as of the Separation Date); (xi) an option granted on January 28, 2002 to purchase an aggregate of 30,000 shares of Hibernia Common Stock at an exercise price of $17.955 per share (none of which are exercisable as of the Separation Date); and (xii) an option granted on January 27, 2003 to purchase an aggregate of 40,000 shares of Hibernia Common Stock at an exercise price of $18.525 per share (none of which are exercisable as of the Separation Date). Officer acknowledges that, under the terms of the options held by him, the options issued under the LTIP will expire, unless earlier exercised, on May 6, 2004, which is one year after the Separation Date, and only the options that are vested as of the Separation Date may be exercised. Officer further acknowledges that no additional options will vest after the Separation Date. Officer agrees that amounts treated as compensation upon exercise of any of the foregoing options shall be subject to withholding as supplemental wage payments for federal and state income tax purposes and for employment tax purposes.

        8.        Release. Subject to the provisions of paragraph 15(a) hereof, as of the date of execution of this Agreement, Officer hereby irrevocably and unconditionally, knowingly and voluntarily, waives, releases, discharges, covenants not to sue, and to discontinue with prejudice, all actions, liabilities, demands, claims, actions, causes of action and/or suits whatsoever, known or unknown, which Officer or anyone acting on his behalf has against Hibernia, its or their present and/or former directors, officers, agents, administrators, direct or indirect subsidiaries, parents, divisions, affiliates, related companies or entities, employee benefit plans, insurers, stockholders, employees and/or other persons acting on behalf of each of them, together with their predecessors, successors and assigns (hereafter collectively referred to as the “Releasees”) in any way relating to or arising directly or indirectly out of or in connection with Officer’s employment by or with and/or termination of employment from Hibernia and/or as a result of any matter arising on or before the date of Officer’s execution of this Agreement, including without limitation any and all rights and claims for any alleged violations or alleged causes of action which could be alleged under or in: (i) any labor, equal employment opportunity, employee benefit, contract, tort, civil rights or other federal, state or local constitution, law, statute, ordinance, order, rule or regulation, including, without limitation, any claims arising under the Older Workers Benefit Protection Act of 1990 (“OWBPA”), the Civil Rights Acts of 1964 and 1991, as amended, the Americans with Disabilities Act or the federal Age Discrimination in Employment Act (“ADEA”) (as any of such acts may be amended from time to time), (ii) any section or portion of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the rules and regulations thereunder, except claims for the payment or distribution of vested benefits arising under the employee benefit plans maintained by Hibernia in which Officer participated prior to the Separation Date and (iii) any other theory of law seeking damages, attorneys’ fees or other rights against Hibernia or any of the other Releasees, including, without limitation, any claims of discrimination with respect to any of the foregoing, any claims for breach of express or implied contract, personal injury, harm, wrongful discharge, tort, defamation, intentional infliction of emotional distress, invasion of privacy or negligence, any claims arising from any legal restrictions on Hibernia’s right to terminate its employees and any claims for wages or other compensation (except claims for the payment or distribution of vested benefits arising under the employee benefit plans maintained by Hibernia in which Officer participated prior to the Separation Date). Notwithstanding the foregoing, this paragraph 8 does not release any claim for rights arising under this Agreement.

        9.        Non-Solicitation Agreement. For the period commencing on the Separation Date and ending on May 6, 2005 (the second anniversary of the Separation Date), Officer agrees that he will not, directly or indirectly, for himself or on behalf of any other person, firm, partnership, corporation or other entity, solicit, induce, recruit, encourage, advise or counsel any customer of Hibernia within the Restricted Area (as defined below) to do business with another person or entity that engages in all or part of the business in which Hibernia engages as of the Separation Date or otherwise to take away such customer or attempt to do any of the foregoing. The parties acknowledge and agree that the business in which Hibernia engages as of the Separation Date is the banking and financial services business (including but not limited to the commercial, retail, consumer and small business banking, trust, insurance and securities business and including but not limited to developing, providing, offering, selling, marketing, arranging or brokering banking or financial products or services or providing advice with respect to banking or financial products or services, which products or services include but are not limited to credit, leasing, capital markets, interest rate, agency, risk management, treasury management or syndication advice, products or services). For the period commencing on the Separation Date and ending on May 6, 2005 (the second anniversary of the Separation Date), Officer agrees that he will not, directly or indirectly, for himself or on behalf of any other person, firm, partnership, corporation or other entity, employ, solicit, induce, recruit, encourage, advise or counsel any employee or agent of Hibernia to leave their employment, or take away such employees or agents or attempt to solicit, induce, recruit, encourage or take away such employees or agents. The parties agree that each of the foregoing prohibitions in this paragraph 9 is intended to constitute a separate restriction. Accordingly, should any such prohibition be declared invalid, illegal or unenforceable for any reason, such prohibition shall be deemed severable from and shall not affect the remainder thereof. The parties further agree that the foregoing restrictions are reasonable in both time and geographic scope. For purposes of this Agreement, the Restricted Area shall mean all of the following parishes and counties in the States of Louisiana and Texas: (i) the following parishes in the State of Louisiana: Allen, Ascension, Assumption, Avoyelles, Bossier, Caddo, Calcasieu, Cameron, Claiborne, De Soto, East Baton Rouge, East Carroll, Iberia, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Madison, Morehouse, Orleans, Ouachita, Rapides, St. Bernard, St. Charles, St. John the Baptist, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, Webster and West Carroll and (ii) the following counties in the State of Texas: Anderson, Angelina, Bowie, Camp, Cass, Cherokee, Colin, Dallas, Denton, Gregg, Harris, Harrison, Jefferson, Lamar, Nacogdoches, Orange, Smith, Travis and Wood.

        10.        Return of Property. Officer agrees that on or reasonably promptly after the Separation Date, he shall deliver to Hibernia (and not retain, keep copies of or destroy) any and all property of Hibernia, including, but not limited to, keys, credit and identification cards, phone cards, cellular phones, computers, files, contact information for clients and customers, policies and procedures, handbooks, mailing lists and customer lists and all other files and documents relating to Hibernia, its plans, its business or its affairs, together with all written or recorded materials, documents, computer discs, plans, records, notes or other papers belonging to Hibernia.

        11.        Confidentiality. Officer agrees to hold all “Confidential Information” and “Trade Secrets” (both as defined below) of Hibernia and its customers in trust and in the strictest confidence, except as may be required by court order, subpoena, judicial process or, in the written opinion of counsel to Officer, required by law; and, in any event, if such disclosure is requested or required, Officer agrees to promptly notify Hibernia and permit Hibernia to take any such action it may deem appropriate to protect the information from disclosure. For purposes of this Agreement, “Confidential Information” includes all information relating to Hibernia and its customers’ business practices, products, services, finances, management, strategy, profits and overhead, which Officer learned or which were made available to Officer as a result of his employment with Hibernia, provided that, “Confidential Information” does not include any such information which, at the time of disclosure, is in the public domain through no breach by Officer of his obligation of confidentiality. For purposes of this Agreement, “Trade Secrets” are all information regarding Hibernia and its customers which (i) derives any economic value from being not generally known or readily ascertainable by others who can obtain economic value from its disclosure or use and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or (iii) has the meaning assigned by Louisiana’s Uniform Trade Secrets Act, La. Rev. Stat. Sections 51:1431 et seq.

        12.        Business Reputation. Officer agrees to refrain from performing any act, engaging in any conduct or course of action or making or publishing any statements, claims, allegations or assertions which have or may reasonably have the effect of demeaning or disparaging the name or business reputation of Hibernia or any of its employees, officers, directors, agents or advisors or which adversely affects (or may reasonably be expected adversely to affect) the business, operations, prospects, goodwill, reputation and/or best interests (economic or otherwise) of any of them, except (i) where such action is required by law, court order, subpoena, other judicial process or is authorized by the Chief Executive Officer of Hibernia and (ii) sufficient written notice of such action is given so that appropriate steps may be taken to protect the business, operations, prospects, goodwill, reputation and/or best interests of Hibernia. Hibernia agrees to refrain from making or publishing any statements, claims, allegations or assertions which it believes have or may reasonably be expected to have the effect of demeaning or disparaging the name or business reputation of the Officer except (i) where such action is required by law, court order, subpoena, other judicial process or is authorized by the Officer and (ii) sufficient written notice of such action is given so that appropriate steps may be taken to protect the prospects, goodwill, reputation and/or best interests of the Officer.

        13.        Cooperation. With respect to any claim asserted by or brought against Hibernia and/or against Officer in his former capacity as an employee or officer of Hibernia, Officer, upon reasonable notice and at the written request of an authorized officer of Hibernia, and without requiring a court order or other compulsion, agrees to make himself and any necessary records or documents in his possession reasonably available to Hibernia for reasonable time periods to prosecute or defend any such claim; and Officer will use his best efforts to cooperate with Hibernia in prosecuting or defending any such claim. Officer further agrees to cooperate with reasonable requests made by Hibernia to effectuate the provisions of this Agreement. In any case where Officer, at the express request of an executive officer of Hibernia, is required to travel pursuant to the provisions of this paragraph 13 (excluding any instance where Hibernia and Officer are on opposite sides of the litigation, are in any other opposing position or are in possible adverse positions), Officer shall be entitled to receive reimbursement of reasonable travel costs incurred by Officer in connection therewith and shall also be entitled to receive reimbursement of other reasonable out-of-pocket expenses incurred by Officer and pre-approved by Hibernia in connection therewith.

        14.        Remedies. In the event of a breach or threatened breach by Officer of any of the provisions of paragraphs 9, 10, 11, 12 and/or 13 hereof, Officer agrees that Hibernia shall be entitled to a temporary restraining order or a preliminary injunction (without the necessity of posting bond in connection therewith). Nothing herein shall be construed to prohibit Hibernia from pursuing any other remedy available to it for any breach or threatened breach, including the recovery of damages from Officer.

        15.        Disclosure and Waiver. Officer understands and acknowledges that the payment to him of the amount provided for in paragraph 2(b) hereof is in excess of any amount to which he is otherwise entitled with respect to his employment or the cessation thereof and that such amount is sufficient to support the release and waiver contained herein. Officer understands and agrees that his receipt of the amount provided for in paragraph 2(b) of this Agreement is conditioned upon his signing this Agreement, which includes the following specific provisions and waivers which he acknowledges are entered into by him knowingly and voluntarily:

(a) The parties acknowledge that the Equal Employment Opportunity Commission (“EEOC”) has issued a “Guidance on Waivers Under Civil Rights Laws,” in which the EEOC asserts that an employer cannot interfere with an employee’s right to file charges of discrimination under federal civil rights laws and that an employer cannot interfere with an employee’s right to testify, assist or participate in any EEOC proceeding. The parties acknowledge that nothing contained in this Agreement is intended to extract a promise not to file a charge or appear in an EEOC proceeding, but rather to waive Officer’s right to recovery in any lawsuit brought by the EEOC or involving any claim otherwise waived herein.

(b) In order to comply with OWBPA, Officer has been advised of the legal requirements of and rights and claims arising under that Act and agrees to the following additional provisions and waivers pursuant to that Act:

(i) Officer understands and agrees that he is not waiving any rights or claims that may arise after the date on which he signs this Agreement and waiver;

(ii) Officer understands and has been advised of his right to consult with an attorney prior to executing this Agreement and waiver;

(iii) Officer understands and acknowledges that the payment to him of the amounts provided for herein will constitute receipt by him of consideration beyond anything of value to which he may otherwise be entitled and that the payments described herein are sufficient to support the terms of this Agreement;

(iv) Officer understands and acknowledges that he has at least twenty-one (21) days from the date on which this Agreement was provided to him (which was May 2, 2003) within which to consider this Agreement and if Officer executes this Agreement prior to the end of such twenty-one (21) day period, he will be deemed to have waived the balance of the period;

(v) Officer understands that if the terms of this Agreement are modified, any such modification shall not extend or otherwise modify the twenty-one (21) day period provided above; and

(vi) Officer understands and acknowledges that he is waiving any rights and claims he may have under the ADEA and OWBPA.

(c) Officer understands that he has the right to revoke this Agreement within seven (7) days after signing it, that this Agreement shall not become effective or enforceable until such seven (7) day period has expired and that, as a result, Officer will not receive any amounts provided for hereunder until that period has expired. Any revocation must be delivered to Hibernia at the following address: Michael S. Zainey, Human Resources Director, Hibernia Corporation, 225 Baronne Street, 26th Floor, New Orleans, LA 70112.

        16.        Business Protection Agreement. Officer agrees that contemporaneously with the execution of this Agreement, he shall enter into a separate Business Protection Agreement, attached hereto as Exhibit A.

        17.        Amendment; Waivers. This Agreement may only be amended or modified by an agreement in writing among the parties hereto. The failure by any party to enforce any of its rights hereunder shall not be deemed to be a waiver of such rights, unless such waiver is an express written waiver which has been signed by the waiving party. Waiver of any one breach shall not be deemed to be a waiver of any other breach of the same or any other provision hereof.

        18.        Governing Law. This Agreement shall be governed by, and interpreted in accordance with, applicable provisions of federal law, including the ADEA and the OWBPA. To the extent that federal law does not apply, this Agreement shall be governed by and interpreted in accordance with the laws of the State of Louisiana applicable to agreements made and entirely to be performed within such State without reference to conflicts of laws principles.

        19.        Expenses. Each party hereto will bear all expenses incurred by him or it in connection with this Agreement, including the fees, expenses and disbursements of his or its counsel and advisors.

        20.        No Assignment. Except by operation of law, neither party hereto may assign any of his or its rights or obligations under this Agreement to any other person without the prior written consent of the other party.

        21.        Notices. All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if delivered personally, if sent by registered or certified mail, postage prepaid, or if sent by a nationally recognized overnight delivery service to the addresses listed below and shall be deemed to have been given as of the date so personally delivered or three days after being so mailed or as of the date delivered by an overnight delivery service: If to Hibernia: Michael S. Zainey, Human Resources Director, Hibernia National Bank, 225 Baronne Street, 26th Floor, New Orleans, LA 70112; and if to Officer: [address]. Either party may change the address to which notice shall be given by providing notice of such change in accordance with the provisions of this paragraph 21.

        22.        Arbitration. Subject to the provisions of paragraph 14 hereof, in the event that any dispute arises in connection with, relating to, or concerning this Agreement, or in the event of any claim for breach or violation of any provision of this Agreement, in accordance with the Federal Arbitration Act, the parties agree that such dispute or claim will be resolved exclusively by arbitration. Any arbitration proceeding related to this Agreement will be conducted in accordance with the rules of the American Arbitration Association (“AAA”). Hibernia and Officer agree that any such dispute or claim will be presented to a single arbitrator selected by mutual agreement of the parties (or, if the parties cannot mutually agree on an arbitrator, the arbitrator will be selected in accordance with the rules of the AAA). All determinations of the arbitrator will be final and binding in accordance with applicable law. The venue for any arbitration proceeding under this paragraph 22 and the venue for any judicial proceeding related to this arbitration provision (including a judicial proceeding to enforce this provision) will be in New Orleans, Louisiana.

        23.        Headings. The headings in this Agreement are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

        24.        Severability. In the event any provision of this Agreement shall be held to be illegal, invalid or unenforceable for any reason, the illegality, invalidity or unenforceability thereof shall not affect the remaining provisions hereof, but such illegal, invalid or unenforceable provision shall be fully severable and this Agreement shall be construed and enforced as if the illegal, invalid or unenforceable provision had never been included herein.

        25.        Entire Agreement. This Agreement, together with the Business Protection Agreement between the parties to be executed contemporaneously herewith and attached hereto as Exhibit A, supersede any and all oral or written agreements and understandings heretofore made relating to the subject matter of such Agreements and contain the entire agreement of the parties relating to the subject matter of such Agreements. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto, and their respective successors. Nothing in this Agreement is intended to or shall be construed to confer upon or to give any person other than the parties hereto and the Releasees any rights, remedies, obligations or liabilities under or by reason of this Agreement except as expressly provided herein. This Agreement may be executed in counterparts, each of which shall be deemed to constitute an original and all of which together shall constitute one agreement.

        26.        Status of Agreement. Officer acknowledges that payments hereunder shall be made from the general assets of Hibernia and that the terms of the Agreement are not intended to create a trust or other fiduciary relationship.

        Officer further acknowledges and agrees that he has not been designated by Hibernia as eligible to receive benefits under the Hibernia Corporation 2003 Special Severance Pay Plan (the “Plan”), that he is not a participant in that Plan and that he is not entitled to any benefits under that Plan.

        Officer further acknowledges that this Agreement is intended to be an unfunded deferred compensation arrangement for the benefit of key management employees of Hibernia, within the meaning of ERISA. As such, this Plan is not intended to constitute an employee benefit plan under ERISA, which is subject to the provisions of Parts 2, 3 and 4 of Title I of ERISA. In accordance with such intent, any obligation of Hibernia to pay benefits hereunder shall be deemed to be an unsecured promise, and any right of Officer to enforce such obligation shall be solely as a general creditor of Hibernia.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the Effective Date set forth above.

HIBERNIA CORPORATION	HIBERNIA NATIONAL BANK
By:  /s/ Russell S Hoadley	By:   /s/ Russell S. Hoadley
Name:   Russell S. Hoadley	Name:  Russell S. Hoadley
Title:  EVP/Public Affairs	Title:   EVP/Public Affairs
Date:  June 3, 2003	Date:   June 3, 2003
	Officer:
	/s/ Richard G. Wright
	Richard G. Wright
	Date: June 3, 2003

EX-10.61

HIBERNIA CORPORATION
EARLY RETIREMENT AGREEMENT

EXHIBIT A
BUSINESS PROTECTION AGREEMENT

        THIS BUSINESS PROTECTION AGREEMENT (the “Protection Agreement”) is made and executed as of the 3rd day of June, 2003 (the “Effective Date”), by and among Richard G. Wright, an individual of the full age of majority (the “Officer”), Hibernia Corporation, a Louisiana corporation, and Hibernia National Bank, a national banking association organized and existing under the laws of the United States (Hibernia Corporation and Hibernia National Bank, together with its and their direct and indirect subsidiaries, are collectively referred to herein as “Hibernia”). The Protection Agreement constitutes the Exhibit “A” referenced in that certain Early Retirement Agreement made and executed as of the 3rd day of June, 2003 among Officer and Hibernia (the “Retirement Agreement”).

        WHEREAS, pursuant to the Retirement Agreement, Hibernia and Officer have agreed that as of May 6, 2003, Officer will voluntarily resign and take early retirement (the “Separation Date”); and

        WHEREAS, in connection with such retirement, Hibernia and Officer wish to enter into this Protection Agreement;

        NOW, THEREFORE, in consideration of the premises and the mutual promises herein contained, the parties hereto agree as follows:

        1.        Payment. In the event that Officer does not accept or commence employment directly or indirectly (as an employee, agent, independent contractor, consultant (except as provided below), partner, licensor or otherwise) with a financial institution or financial services company with one or more banking offices in the Restricted Area (as defined below) between the Separation Date and the first anniversary of the Separation Date, on the first anniversary of the Separation Date Hibernia will pay to Officer (or to Officer’s estate or beneficiary in the event of the death of Officer) the amount of Two Hundred Thirty One Thousand, Three Hundred and NO/100 ($231,300.00) Dollars, payable in a single payment subject to federal and state income and employment taxes (using, for federal tax withholding, the then current federal supplemental tax withholding rate). No payment under this Protection Agreement shall be due if Officer accepts or commences employment directly or indirectly (as an employee, agent, independent contractor, consultant (except as provided below), partner, licensor or otherwise) with a financial institution or financial services company with one or more banking offices in the Restricted Area (as defined below) between the Separation Date and the first anniversary of the Separation Date. Notwithstanding the foregoing, consulting arrangements that satisfy each and every one of the following conditions are not covered by the term “employment” for purposes of the two preceding sentences: (i) no consulting arrangement lasts for a period of more than 90 days with a single company (or its parent, subsidiaries or affiliates) during the time period covered by the two preceding sentences, (ii) no consulting arrangement is entered into with any company with consolidated assets of $1 billion or more (or with any parent, subsidiaries or affiliates of such company), (iii) no consulting arrangement is entered into with any company listed on Appendix A to this Protection Agreement (or with any of their parents, subsidiaries or affiliates), (iv) any consulting arrangement relates only to credit policy and practice generally and no consulting arrangement relates to or requires advice with respect to any specific credit relationships or potential credit relationships, (v) no consulting arrangement requires the Officer directly or indirectly to assist any company in soliciting, obtaining, arranging for or making any loan (or to advise any company with respect thereto) and the Officer will not directly or indirectly assist any company in soliciting, obtaining, arranging for or making any loan (or advise any company with respect thereto) and (vi) no consulting arrangement involves Officer’s solicitation, inducement, recruitment, encouragement, advice or counsel to any customer of Hibernia to do business with another entity or the Officer’s employment, solicitation, inducement, recruitment, encouragement, advice or counsel to any employee or agent of Hibernia to leave their employment.

        2.        Restricted Area. For purposes of this Protection Agreement, the Restricted Area shall be defined to mean all of the following parishes and counties in the States of Louisiana and Texas: (i) the following parishes in the State of Louisiana: Allen, Ascension, Assumption, Avoyelles, Bossier, Caddo, Calcasieu, Cameron, Claiborne, De Soto, East Baton Rouge, East Carroll, Iberia, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Madison, Morehouse, Orleans, Ouachita, Rapides, St. Bernard, St. Charles, St. John the Baptist, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, Webster and West Carroll and (ii) the following counties in the State of Texas: Anderson, Angelina, Bowie, Camp, Cass, Cherokee, Colin, Dallas, Denton, Gregg, Harris, Harrison, Jefferson, Lamar, Nacogdoches, Orange, Smith, Travis and Wood.

        3.        Amendment; Waivers. This Protection Agreement may only be amended or modified by an agreement in writing among the parties hereto. The failure by any party to enforce any of its rights hereunder shall not be deemed to be a waiver of such rights, unless such waiver is an express written waiver which has been signed by the waiving party. Waiver of any one breach shall not be deemed to be a waiver of any other breach of the same or any other provision hereof.

        4.        Governing Law. This Protection Agreement shall be governed by, and interpreted in accordance with the laws of the State of Louisiana applicable to agreements made and entirely to be performed within such State without reference to conflicts of laws principles.

        5.        Expenses. Each party hereto will bear all expenses incurred by him or it in connection with this Protection Agreement, including the fees, expenses and disbursements of his or its counsel and advisors.

        6.        No Assignment. Except by operation of law, neither party hereto may assign any of his or its rights or obligations under this Protection Agreement to any other person without the prior written consent of the other party.

        7.        Notices. All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if delivered personally, if sent by registered or certified mail, postage prepaid, or if sent by a nationally recognized overnight delivery service to the addresses listed below and shall be deemed to have been given as of the date so personally delivered or three days after being so mailed or as of the date delivered by an overnight delivery service: If to Hibernia: Michael S. Zainey, Human Resources Director, Hibernia National Bank, 225 Baronne Street, 26th Floor, New Orleans, LA 70112; and if to Officer: [address]. Either party may change the address to which notice shall be given by providing notice of such change in accordance with the provisions of this paragraph 7.

        8.        Arbitration. In the event that any dispute arises in connection with, relating to, or concerning this Protection Agreement, or in the event of any claim for breach or violation of any provision of this Protection Agreement, in accordance with the Federal Arbitration Act, the parties agree that such dispute or claim will be resolved exclusively by arbitration. Any arbitration proceeding related to this Protection Agreement will be conducted in accordance with the rules of the American Arbitration Association (“AAA”). Hibernia and Officer agree that any such dispute or claim will be presented to a single arbitrator selected by mutual agreement of the parties (or, if the parties cannot mutually agree on an arbitrator, the arbitrator will be selected in accordance with the rules of the AAA). All determinations of the arbitrator will be final and binding in accordance with applicable law. The venue for any arbitration proceeding under this paragraph 8 and the venue for any judicial proceeding related to this arbitration provision (including a judicial proceeding to enforce this provision) will be in New Orleans, Louisiana.

        9.        Headings. The headings in this Protection Agreement are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Protection Agreement.

        10.        Severability. In the event any provision of this Protection Agreement shall be held to be illegal, invalid or unenforceable for any reason, the illegality, invalidity or unenforceability thereof shall not affect the remaining provisions hereof, but such illegal, invalid or unenforceable provision shall be fully severable and this Protection Agreement shall be construed and enforced as if the illegal, invalid or unenforceable provision had never been included herein.

        11.        Entire Agreement. This Protection Agreement and the Retirement Agreement referred to herein supersede any and all oral or written agreements and understandings heretofore made relating to the subject matter of such Agreements and contain the entire agreement of the parties relating to the subject matter of such Agreements. The terms and conditions of this Protection Agreement shall inure to the benefit of and be binding upon the parties hereto, and their respective successors. Nothing in this Protection Agreement is intended to or shall be construed to confer upon or to give any person other than the parties hereto any rights, remedies, obligations or liabilities under or by reason of this Protection Agreement except as expressly provided herein. This Protection Agreement may be executed in counterparts, each of which shall be deemed to constitute an original and all of which together shall constitute one agreement.

        IN WITNESS WHEREOF, the parties hereto have executed this Protection Agreement effective as of the Effective Date set forth above.

HIBERNIA CORPORATION	HIBERNIA NATIONAL BANK
By:________________________	By:________________________
Name:______________________	Name:______________________
Title:_____________________	Title:_____________________
Date:______________________	Date:______________________
	Officer:
	________________________
	Richard G. Wright
	Date:___________________

         APPENDIX A TO BUSINESS PROTECTION AGREEMENT

        The companies referred to in Section 1, subpart (iii) of the Business Protection Agreement executed as of June 3, 2003 by and among Richard G. Wright, Hibernia Corporation and Hibernia National Bank are as follows: AmSouth Bancorporation, Bank of America Corporation, Bank One Corporation, Citigroup Inc., Compass Bancshares, Inc., Hancock Holding Company, JP Morgan Chase & Co., Regions Financial Corporation, SouthTrust Corporation, Union Planters Corporation or Wells Fargo & Company.

EX-10.62

EXHIBIT 10.62

HIBERNIA CORPORATION/HIBERNIA NATIONAL BANK

STATUS CHANGE AGREEMENT

        This Status Change Agreement (the “Agreement”) is made and entered into by Hibernia Corporation and Hibernia National Bank (collectively referred to herein as “Hibernia”) and the employee named on the attached Acknowledgment and Acceptance (the “Employee”) (the “Acceptance”), which Acceptance shall be deemed to form a part of this Agreement by this reference.

Section 1.      Employment:

        1.1      Term.  Unless earlier terminated under Section 3, the term of this Agreement begins on the effective date designated in the Acceptance (the “Effective Date”) and ends as of the last day of the calendar month in which the Employee’s 65th birthday occurs, at which time the Employee will Retire as defined in the option agreements held by the Employee.

        1.2      Capacity.  Hibernia and the Employee agree that as of the Effective Date, the Employee shall be an on call employee. As such, the Employee shall perform such services for the benefit of Hibernia as Hibernia may reasonably request (and as may be more fully described in Appendix A to this Agreement), from time to time, but generally not in excess of 80 hours each month. Services shall be performed on the premises of Hibernia or at such other locations as Hibernia and the Employee may mutually agree upon. In connection with the performance of services, the Employee shall:

a. Maintain time records, if requested by Hibernia; and

b. Comply with all applicable Hibernia policies and procedures.

        1.3      Principal Employment; Other Limitations During Term.   During the term of this Agreement, the Employee shall not engage in other employment, without the prior consent of Hibernia which Hibernia shall not unreasonably withhold. The Employee acknowledges, however, that Hibernia shall not be required to consent to employment in the Banking Business (as defined below). The Employee further agrees that during the term of this Agreement, he shall not engage in conduct which is materially injurious to the business or reputation of Hibernia.

        1.4      Officer Positions.   As of the Effective Date, the Employee voluntarily resigns and relinquishes his officer positions with Hibernia and his positions as a director and/or officer and/or manager of any and all subsidiaries of Hibernia Corporation and/or Hibernia National Bank.

Section 2.      Compensation and Benefits:

        2.1      Compensation.   Commencing as of the Effective Date, the Employee shall be paid compensation at a rate designated on the Acceptance. Such amount shall be prorated and paid to the Employee in accordance with Hibernia’s standard payroll practices and policies.

        2.2      Medical Benefits.   During the term of this Agreement, Hibernia shall provide coverage for the Employee and his dependents under the group medical plans maintained by Hibernia for the benefit of its active employees, as the same may be amended from time to time. The Employee (including his eligible dependents) shall pay such premiums and costs with respect to such coverage as may be required from other similarly situated active employees of Hibernia.

        2.3      Severance Pay.   The Employee acknowledges that by execution of this Agreement, he shall be deemed to have forfeited all forms of severance payment under any plan, policy or program maintained by Hibernia.

        2.4      Other Benefits.   The Employee shall be entitled to receive such additional benefits and perquisites as may be made available to similarly situated on call employees of Hibernia, from time to time, if any. The parties acknowledge and agree that the Employee’s benefits under the plans listed on Appendix B hereto shall be determined in accordance with the terms and conditions of such plans. Nothing herein shall require Hibernia to refrain from changing, amending or discontinuing any of such plans.

Section 3.      Termination:

        3.1      Termination Upon Death.  If the Employee dies during the term of this Agreement, this Agreement shall immediately terminate and Hibernia’s obligations hereunder shall automatically cease.

        3.2      Termination Upon Disability.  If the Employee becomes disabled (as defined below) during the term of this Agreement, this Agreement shall terminate and Hibernia’s obligations hereunder shall automatically cease. For purposes of this Section 3.2, Employee shall be deemed “disabled” if he would be eligible to receive benefits under Hibernia’s long-term disability plan if he were covered by such plan. Notwithstanding the definition of “disabled” in the preceding sentence, the Employee acknowledges and agrees that he is not eligible for coverage and is not covered under Hibernia’s long-term disability plan.

        3.3      Termination by Hibernia for Cause.  Hibernia (acting through its Human Resources Director) may terminate this Agreement, at any time, for Cause. In the event of such termination, Hibernia shall provide to the Employee written notice of the termination, and Hibernia’s obligations hereunder shall automatically cease as of the date of such notice. The term “Cause” shall be defined as the commission of a felony; habitual intoxication, abuse of or addiction to a controlled substance; the continued gross negligence of the Employee in connection with the performance of his duties hereunder; a material breach by the Employee of this Agreement; the willful engaging by the Employee in misconduct which is materially injurious to the business or affairs of Hibernia, whether monetarily or otherwise; or the performance by the Employee of any act or making by Employee of any statement(s) that may reasonably have the effect of demeaning the name or business reputation of Hibernia or its employees, officers, directors or agents.

        3.4      Termination by Hibernia Without Cause.   Hibernia (acting through its Human Resources Director) may act to terminate this Agreement, without Cause, with 30 days prior written notice to the Employee, at which time the Employee will Retire as defined in the option agreements held by the Employee. In the event of such termination, Hibernia shall provide the following benefits to the Employee: (a) the Employee’s compensation (as defined in Section 2.1) for the remainder of the term described in Section 1.1 and (b) coverage under Hibernia’s group medical plans for the remainder of the term described in Section 1.1, such coverage to be provided in accordance with the provisions of Section 2.2 hereof. In the event that Hibernia terminates this Agreement without Cause and without the Employee having taken any action or made any statement that is or may reasonably be damaging to Hibernia’s business, reputation or prospects and without any regulatory authority with jurisdiction over Hibernia having suggested, requested or required that Hibernia terminate this Agreement, then in addition to the benefits provided in items (a) and (b) of the preceding sentence, Hibernia shall also pay to the Employee an amount equal to 50% of the estimated fair value (using the option valuation model used in Hibernia’s most recent 10-Q or 10-K filed with the Securities and Exchange Commission) of the Employee’s unvested options at the date of such termination (excluding for purposes of this determination any unvested options that by their terms will not vest prior to the end of the term of this Agreement). The assumptions used in calculating such fair value shall be determined as of the date of termination assuming an expected life of the unvested options equal to the period from the date of termination to the respective dates the options would vest by their terms if employment continued through the end of the term of this Agreement.

        3.5      Change in Control.   If the Employee is terminated without Cause within the six-month period preceding or the two-year period following a Change in Control, Hibernia (or its successor) shall provide to the Employee the compensation and the benefits described in Section 3.4 hereof. For this purpose, the term “Change in Control” is defined in Appendix C, which is made a part of this Agreement by this reference.

        3.6      Termination by Employee.   If the Employee terminates his employment with Hibernia, this Agreement shall immediately terminate and Hibernia’s obligations hereunder shall automatically cease.

        3.7      Return of Property.   Upon termination of this Agreement for any reason, the Employee shall promptly deliver and return to Hibernia all of Hibernia’s property including, but not limited to, keys, identification cards, computers, fax machines, portable telephones, printers, software, credit cards, manuals, customer lists, financial data, letters, notes, notebooks, reports, files, policies and procedures, handbooks and copies of any of the above, and any Confidential Information (as defined in Section 4) which is in the Employee’s possession or under his control.

Section 4.      Confidential Information; Other Limitations:

        4.1      Confidential Information.  The Employee recognizes and acknowledges that he has and may continue to have access to confidential and/or proprietary information about Hibernia and its affiliates, which may include, without limitation, (a) books and records relating to operations, finance, accounting, personnel and management, and other business information, (b) policies and matters relating particularly to operations such as credit standards, and customer service requirements, (c) computer software, items that have been patented or copyrighted, customer lists, information obtained on competitors, and (d) various other trade or business secrets, including business opportunities, marketing or business diversification plans, methods and processes, and financial data (collectively, the “Confidential Information”). The Employee agrees that he will not at any time, either while employed by Hibernia or afterwards, make any independent use of, or disclose to any other person or organization any Confidential Information.

        4.2      Limitations on Activities.  At all times during and after the expiration of the term of this Agreement, the Employee shall not for his own benefit or to Hibernia’s detriment:

a. Induce, advise or counsel other employees or agents of Hibernia or its operations to leave the employ of Hibernia or its affiliates; or

b. Solicit or employ the services of other employees or agents of Hibernia or its affiliates.

        4.3      Noncompetition.   The Employee agrees that during the two-year period beginning after his employment ceases hereunder for any reason, he shall not, directly or indirectly, for his own benefit or to Hibernia’s detriment:

a. Carry on or engage in the Banking Business. For purposes of this Agreement, the term “Banking Business” means the acceptance of deposits, the making of withdrawals, and the making of loans by a financial institution, whether organized under federal or state law, and such other activities as may be designated in the Acceptance; or

b. Solicit, induce or otherwise contact customers of Hibernia for any purpose or in any manner detrimental to Hibernia or its business operations.

The provisions of this Section 4.3 shall apply in the States of Louisiana, Texas and Mississippi in those parishes and counties designated in the Acceptance. The parties agree that each of the foregoing prohibitions is intended to constitute a separate restriction. Accordingly, should any such prohibition be declared invalid or unenforceable, such prohibition shall be deemed severable from and shall not affect the remainder thereof. The parties further agree that each of the foregoing restrictions is reasonable in time and geographic scope, and as to the activities constituting Banking Business hereunder.

        4.4      Injunctive Relief.  In the event of a breach or threatened breach by the Employee of the provisions of this Section 4, the Employee agrees that Hibernia shall be entitled to a temporary restraining order or a preliminary injunction (without the necessity of Hibernia posting any bond in connection therewith). Nothing herein shall be construed as prohibiting Hibernia from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of damages from the Employee.

Section 5.      Release:

        In consideration of the execution of this Agreement and the payment of compensation and benefits hereunder, the Employee releases Hibernia, including its affiliates, officers, employees, directors and representatives from all causes of action, damages, losses, claims and liabilities arising from or related to the Employee’s employment with Hibernia, including, without limitation, the Employee’s election to become an on call employee as described herein. In connection with this release:

a. The Employee understands and expressly agrees that the release extends to all claims of every kind and nature, known or unknown, past or present, arising from or attributable to any alleged unlawful employment practice of Hibernia, and that all such claims are hereby expressly settled or waived. This includes, but is not limited to, any claims arising under the Age Discrimination in Employment Act of 1967, 29 U.S.C. §621 et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq., and any other federal or state statute.

b. The Employee further states that he has carefully read this Agreement, that he has been advised to consult with an attorney before signing this Agreement, that he fully understands the final and binding effects of this Agreement, that the only promises to him to sign this Agreement are those stated above, and that he is signing this Agreement voluntarily and knowingly.

c. By entering into this Agreement, the Employee does not waive any rights or claims that may arise after the date this Agreement is executed.

d. The Employee recognizes and agrees that the amounts paid hereunder are in addition to any other wages, benefits, or other form of compensation to which the Employee is already entitled.

e. The Employee is further advised that he may have twenty-one (21) days from the date on which this Agreement was provided to him (which was May 13, 2003) within which to consider this Agreement; if the Agreement is executed prior to the expiration of the twenty-one (21) day period, the remainder of the period shall be deemed waived.

f. The Employee is further advised that if the terms of this Agreement are modified, such modification shall not extend or otherwise change the twenty-one (21) day period referred to above.

g. The Employee is further advised that after executing this Agreement, he has seven (7) days within which to revoke this Agreement.

Section 6.      Miscellaneous:

        6.1      Notice.  All notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be deemed to have been duly given when delivered in person or mailed by United States mail, postage prepaid, addressed as follows:

If to Hibernia:	Hibernia National Bank
	225 Baronne Street,26th Floor
	New Orleans, LA 70112
	Attn: Mr. Michael S. Zainey
If to the Employee:	Last Address in Human
	Resources Personnel Records

or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

        6.2      Waiver.  The failure by any party to enforce any of its rights hereunder shall not be deemed to be a waiver of such rights, unless such waiver is an express written waiver. Waiver of any one breach shall not be deemed to be waiver of any other breach of the same or any other provision hereof.

        6.3      Governing Law.  The validity of this Agreement, the construction of its terms and the determination of the rights and duties of the parties hereto shall be governed by and construed in accordance with federal laws and regulations and the internal laws of the State of Louisiana applicable to contracts made and to be performed wholly within such state.

        6.4      Integration and Amendment.  This Agreement constitutes the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes any prior agreement or understanding, whether written or oral, relating to such subject matter (and the parties acknowledge and agree that that certain Change of Control Agreement dated May 9, 2002 is terminated and is of no further force and effect). No modification or amendment to this Agreement shall be effective or binding unless in writing, specifying such modification or amendment, executed by both parties hereto.

        6.5      Severability and Interpretation.  Should any section, provision or portion of this Agreement be declared invalid or unenforceable in any jurisdiction, then such section, provision or portion shall be deemed to be (a) severable from this Agreement as to such jurisdiction (but not elsewhere) and shall not affect the remainder hereof, and (b) amended to the extent, and only to the extent, necessary to permit such section, provision or portion, as the case may be, to be valid and enforceable in such jurisdiction (but not elsewhere).

        6.6      Assignment.   This Agreement and all obligations of Hibernia hereunder shall be binding on Hibernia and on any successor to Hibernia. Hibernia, however, may not assign this Agreement, in whole or in part, without the express written consent of the Employee; provided, however, that Hibernia may assign this Agreement, without the Employee’s written consent, to any affiliate of Hibernia, if such assignment is part of a reorganization whereby substantially all of Hibernia’s business is transferred to such affiliate.

        6.7      Survival of Certain Provisions.   The rights and obligations of the parties under Sections 4 and 5 hereof and the remedies provided therein shall survive the expiration or termination of this Agreement as if the Agreement remained in effect.

        6.8      Execution.   By execution of the Acceptance, the Employee shall be deemed to have acknowledged, accepted and agreed to be bound to the terms of this Agreement, without necessity of further action.

        6.9      Lease Payment.   On or before June 10, 2003 (provided that this Agreement has become effective and the revocation period provided for in Section 5(g) has passed), Hibernia shall reimburse the Employee, under Hibernia’s expense reimbursement policy, the cost of two months of rental payments (totaling $3,150.00) on the Employee’s apartment located at 1750 St. Charles Ave., Apt. 628, New Orleans, LA 70130.

HIBERNIA CORPORATION/HIBERNIA NATIONAL BANK

STATUS CHANGE AGREEMENT

APPENDIX A
Supplement Regarding Services

        This Appendix A constitutes a part of the Status Change Agreement by and between Hibernia and K. Kirk Domingos, III (the “Agreement”).

        Pursuant to and in furtherance of the terms of Section 1.2 of the Agreement, Hibernia and the Employee agree that the services to be requested of the Employee pursuant to this Agreement shall be consistent with the Employee’s experience and ability. Further, the parties acknowledge that it is anticipated that in the first year of the Agreement, Hibernia anticipates seeking services from the Employee that would require up to approximately 50 to 70 hours each month; during the second year of this Agreement, Hibernia anticipates seeking services from the Employee that would require up to approximately 30 to 50 hours each month; and during the remainder of the term of this Agreement, Hibernia anticipates seeking services from the Employee that would require less than 30 hours each month. Notwithstanding the foregoing, however, Hibernia may request services requiring more or less time than that anticipated by the parties initially.

        Further, Hibernia expects that the services that may be requested from the Employee may include, among others, advice and consultation in connection with:

          1.     The executive management reorganization;
          2.     Various special projects;
          3.     Certain internal committees of Hibernia National Bank;
          4.     Certain subsidiaries of Hibernia Corporation and/or Hibernia National Bank;
          5.     Strategic planning and budgeting; and
          6.     Special projects.

In addition, Hibernia expects that the services that may be requested from the Employee may also include, among others, community relations, charitable and philanthropic endeavors on behalf of Hibernia.

        The parties acknowledge that only services that are reasonably requested by Hibernia in accordance with the terms of this Agreement are required hereunder.

        The parties further acknowledge that Hibernia may, but shall not be required to, provide the Employee with office space, if available, in Alexandria, Louisiana and that if Hibernia does make office space available to the Employee, it can cease providing such office space at any time.

HIBERNIA CORPORATION/HIBERNIA NATIONAL BANK

STATUS CHANGE AGREEMENT

APPENDIX B
Certain Benefit Plans

        This Appendix B constitutes a part of the Status Change Agreement by and between Hibernia and K. Kirk Domingos, III (the “Agreement”).

        Pursuant to Section 2.4 of the Agreement, the parties acknowledge and agree that the Employee’s benefits under the following plans shall be determined in accordance with the terms and conditions of such plans:

1. Hibernia Corporation Deferred Award Plan, adopted on January 22, 1996, as amended;

2. Hibernia Corporation Deferred Compensation Plan for Key Management Employees, adopted on January 22, 1996, as amended;

3. Hibernia Corporation Supplemental Stock Compensation Plan for Key Management Employees, adopted on January 22, 1996, as amended;

4. Management Security Plan of Guaranty Bank;

5. Hibernia Corporation Employee Stock Ownership Plan first effective as of April 1, 1995, as amended and restated effective as of January 1, 2002;

6. Hibernia Corporation Retirement Security Plan, amended and restated effective January 1, 2002; and

7. Hibernia Corporation’s Split Dollar Life Insurance Plan.

HIBERNIA CORPORATION/HIBERNIA NATIONAL BANK

STATUS CHANGE AGREEMENT

APPENDIX C
Change of Control

        This Appendix C constitutes a part of the Status Change Agreement by and between Hibernia and K. Kirk Domingos, III (the “Agreement”).

        For purposes of Section 3.5 of the Agreement, a “change of control” shall be deemed to occur if:

(a) A person, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (excluding Hibernia Corporation or any of its Subsidiaries, a trustee or any fiduciary holding securities under an employee benefit plan of Hibernia Corporation or any of its Subsidiaries, an underwriter temporarily holding securities pursuant to an offering of such securities or a corporation owned, directly or indirectly, by stockholders of Hibernia Corporation in substantially the same proportion as their ownership of Hibernia Corporation), becomes the beneficial owner as defined in Rule 13d-3 under the Securities Exchange Act of 1934 (other than as a result of the acquisition of shares by Hibernia Corporation or a Subsidiary of Hibernia Corporation) of shares of Hibernia Corporation having 50% or more of the then outstanding voting power of Hibernia Corporation,

(b) Hibernia Corporation shall have sold or disposed of all or substantially all of its assets or substantially all of the assets of its wholly-owned subsidiary, Hibernia National Bank, in one or a series of transactions to a party not a member of a controlled group (as defined in the Code or regulations thereunder) with Hibernia Corporation,

(c) Hibernia Corporation consummates a merger, consolidation, share exchange or similar form of corporate transaction that requires the approval of the shareholders of Hibernia Corporation, whether for such transaction or for the issuance of securities in the transaction (a “Business Combination”), unless, immediately following the Business Combination, (A) more than 50% of the total voting power of either the entity resulting from such Business Combination (the “Surviving Entity”) or, if applicable, the ultimate parent company that directly or indirectly has beneficial ownership of at least 95% of the voting securities eligible to elect directors of the Surviving Entity (the “Parent”), is represented by the voting securities of Hibernia Corporation that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such voting securities were converted pursuant to the Business Combination), and such voting power among the holders thereof is in substantially the same proportions as the voting power of Hibernia Corporation’s voting securities among the holders thereof immediately prior to such Business Combination and (B) at least a majority of the members of the board of directors of the Parent (or, if there is no Parent, the Surviving Entity) were Incumbent Directors at the time of the execution of the initial agreement, or of the action of the Board of Directors of Hibernia Corporation, providing for such Business Combination,

(d) The shareholders of Hibernia Corporation approve a plan of complete liquidation or dissolution of Hibernia Corporation, or

(e) During any period of two consecutive calendar years, the individuals who, at the beginning of such period, constitute the Board of Directors of Hibernia Corporation (the “Incumbent Directors”) cease for any reason to constitute at least a majority thereof, unless the election or the nomination for election by the shareholders of Hibernia Corporation of each new director was approved by a vote of at least a majority of the directors then still in office who were directors at the beginning of the period or persons nominated or elected by such directors (each such new director shall also be deemed to be an “Incumbent Director”).

A Change of Control shall not result from any transaction precipitated by Hibernia’s insolvency, appointment of a conservator or determination by a regulatory agency that Hibernia is insolvent.

For purposes of the foregoing definition, the term “Subsidiaries” shall mean every corporation, limited liability company, partnership or other entity of which 50% or more of the total combined voting power of all classes of voting securities or other equity interests is owned, directly or indirectly, by Hibernia Corporation and the term “Code” shall mean the Internal Revenue Code of 1986, as amended.

HIBERNIA CORPORATION/HIBERNIA NATIONAL BANK

STATUS CHANGE AGREEMENT
ACKNOWLEDGMENT AND ACCEPTANCE

Name of Employee: K. Kirk Domingos, III

Employee's Social Security Number:                                                               

Employee's Address:                                                                                          

        This Acknowledgment and Acceptance (“Acceptance” ) is a part of the Status Change Agreement by and between the employee named above (the “Employee”) and Hibernia Corporation and Hibernia National Bank (collectively, “Hibernia”) (the “Agreement”), the terms of which are incorporated in this Acceptance by this reference.

1.         Effective date.   The effective date of this Acceptance and the Agreement shall be June 1, 2003.

2.         Compensation.   As of the effective date, the Employee shall be paid annual compensation at a rate equal to 45% of his annual base compensation in effect immediately prior to such date.

3.         Noncompetition.   The Employee agrees that Section 4.3 of the Agreement shall be applicable:

      (a) in the State of Louisiana, in the following Parishes: Allen, Ascension, Assumption, Avoyelles, Bossier, Caddo, Calcasieu, Cameron, Claiborne, De Soto, East Baton Rouge, East Carroll, Iberia, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Madison, Morehouse, Orleans, Ouachita, Rapides, St. Bernard, St. Charles, St. John the Baptist, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, Webster and West Carroll; and

      (b) in the State of Texas, in the following Counties: Anderson, Angelina, Bowie, Camp, Cass, Cherokee, Colin, Dallas, Denton, Gregg, Harris, Harrison, Jefferson, Lamar, Nacogdoches, Orange, Smith, Travis and Wood; and

      (c) in the State of Mississippi, in the following Counties: Hancock and Harrison.

The Employee further agrees that in addition to the provisions of Section 4.3a of the Agreement, the term “Banking Business” shall include the following activities: The commercial, retail, consumer and small business banking, trust, insurance and securities business, including but not limited to developing, providing, offering, selling, marketing, arranging or brokering banking or financial products or services or providing advice with respect to banking or financial products or services, which products or services include but are not limited to credit, leasing, capital markets, interest rate, agency, risk management, treasury management or syndication advice, products or services.

4.         Execution and Acknowledgment.   The Employee acknowledges that his on call employment is subject to additional terms and conditions that are set forth in the Agreement. By execution of this Acceptance, the Employee shall be deemed to have received, reviewed, understood, acknowledged, and accepted the terms of the Agreement, without necessity of further action.

	HIBERNIA CORPORATION/
EMPLOYEE:	HIBERNIA NATIONAL BANK
/s/  K. Kirk Domingos III	By:  /s/ Michael S. Zainey
Date:  May 27, 2003	Name:  Michael S. Zainey
	Title:  Executive Vice President
	Date:  May 27, 2003

EX-31

EXHIBIT 31

CERTIFICATION

I, J. Herbert Boydstun, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hibernia Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:     August 11, 2003	/s/ J. Herbert Boydstun
	J. Herbert Boydstun
	President and Chief Executive Officer

CERTIFICATION

I, Marsha M. Gassan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hibernia Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:     August 11, 2003	/s/Marsha M. Gassan
	Marsha M. Gassan
	Senior Executive Vice President and
	Chief Financial Officer

EX-32

EXHIBIT 32

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

        Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Hibernia Corporation (the “Company”) certifies that to his knowledge:

1. The Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2003 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:     August 11, 2003	/s/ J. Herbert Boydstun
	J. Herbert Boydstun
	President and Chief Executive Officer

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

        Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Hibernia Corporation (the “Company”) certifies that to her knowledge:

1. The Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2003 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:     August 11, 2003	/s/Marsha M. Gassan
	Marsha M. Gassan
	Senior Executive Vice President and
	Chief Financial Officer