Which bank will United Companies Financial Corp. bite next?

This was much on the minds of analysts last week after the subprime lender's March 1 bankruptcy filing.

Analysts are pondering the earnings impact for banking companies that had plied the Baton Rouge, La., company with loans to finance its growth. The once high-flying lender's debt includes $850 million owed to a syndicate of 22 banks.

While the fallout so far has been limited, banks' exposure to United Companies was a big enough concern for one analyst to make it the focus of his daily conference call with institutional clients.

Frank Barkocy, banking analyst at Josephthal & Co., discussed three banking companies Friday: First Union Corp., which led the April 1997 syndication and holds a $90 million slice of the loan; Fleet Financial Group, which is owed $60 million; and Hibernia Corp., which has a $25 million exposure on the syndicated loan plus $8 million to $9 million of additional loans to United Companies.

Mr. Barkocy put the earnings impact at 4 cents a share for First Union and Fleet and 8 to 9 cents a share for Hibernia. However, he left his 1999 earnings estimates for the companies unchanged at $4.05, $2.87, and $1.25 per share, respectively.

Though he said he expects First Union and Fleet to offset the losses, Mr. Barkocy said he may yet pare his estimate for Hibernia. He continued to recommend all three stocks and urged investors to seize upon any price weakness traceable to the United Companies bankruptcy.

So far, Christopher Mutascio of Legg Mason Wood Walker is the only analyst to act on the fallout. Thursday, he cut his '99 estimate for Hibernia by 6 cents, to $1.19. But others are watching closely. Among them: Eric Rothmann of Stephens Inc. and Lana Chan of CIBC Oppenheimer. On Friday, Ms. Chan said she is maintaining her "hold" rating on Hibernia.

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