Katrina Forces Down Hibernia Price

Citing damage caused by Hurricane Katrina, Capital One Financial, McLean, Va., has shaved $300 million (9%) off the price it will pay for Hibernia Corp., New Orleans, one of the largest residential lenders in Louisiana.Capital One, a credit card company, will now pay $5 billion for Hibernia, which ranks 89th nationwide among all mortgage lenders, according to figures compiled by the Quarterly Data Report. The two companies conducted diligence on the damage sustained by Hibernia, reviewing the effect on its retail branches, the bank's headquarters building in New Orleans, its loan portfolio, and its future business prospects. Hibernia said 107 of its 321 locations were "impacted" by the hurricane. Some 60 branches have yet to reopen, 21 of which have sustained significant damage. Directors at both companies approved the reduced purchase price, saying it was in the best interest of shareholders.