Hibernia Completes Sale of $10 billion Mortgage Servicing Portfolio

NEW ORLEANS, LA – Hibernia (NYSE: HIB) today announced it has completed the sale of its approximately $10-billion third-party residential mortgage servicing portfolio to CitiMortgage, Inc. Transfer of mortgage files is expected to occur in first-quarter 2005, and Hibernia has agreed to service those loans until that time.

The transaction will not have a material impact on Hibernia’s third-quarter or full-year earnings.

As previously announced, Hibernia will continue to originate home loans, directing its mortgage banking efforts toward retail residential origination and releasing the servicing rights to others in the industry. Hibernia will continue to service approximately $2 billion of Hibernia-owned adjustable-rate mortgages (ARMs) and to own a portfolio of approximately $600 million that is serviced by others for Hibernia.

“The sale of the third-party residential mortgage servicing portfolio eliminates the earnings volatility associated with this asset and, as a result, Hibernia will not record charges or reversals associated with mortgage servicing rights impairment (MSR) in the third quarter or subsequent quarters,” said Herb Boydstun, Hibernia’s president and CEO. Hibernia recorded MSR impairment expenses in first-quarter 2004 and a reversal of a portion of temporary MSR impairment in the next quarter.

Hibernia is on Forbes magazine’s list of the world’s 2,000 largest companies and Fortune magazine’s list of America’s top 1,000 companies according to annual revenue. Hibernia has $21.3 billion in assets and 310 locations in 34 Louisiana parishes and 34 Texas counties. Hibernia Corporation’s common stock (HIB) is listed on the New York Stock Exchange.

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, servicing costs, loan demand, changes in business or consumer spending, borrowing or savings habits, deposit growth, adequacy of the reserve for loan losses, competition, stock price volatility, government monetary policy, anticipated expense 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, unexpected costs or issues in its expansion or acquisition plans 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 and could impact Hibernia’s ability to achieve the goals described in its mission statement. Hibernia undertakes no obligation to update or revise forward-looking statements to reflect subsequent circumstances, events or information or for any other reason.