Hibernia Corp., New Orleans, disclosed on Tuesday that it sold almost $500 million in loans and said it was in "serious discussions" to sell its Texas bank.
The troubled banking company said it was not certain the sale of its Texas franchise could be struck in time to avert an Oct. 31 default on an $85 million note owed to Chase Manhattan Corp. Although the company said it had paid off recent emergency loans from the Federal Reserve Bank of Atlanta, it conceded that its problems are not yet over.
"We're confident and encouraged, but it's still going to be a rocky road," said C. Geron hargon, chief operatin officer of Hibernia's lead bank in New Orleans.
Suitors Are Scarce
Hibernia said two months ago that it was seeking a merger partner or a buyer for the entire company, but Mr. Hargon said no offers have been forthcoming. The company's stock was trading at $2.75, up 25 cents, Tuesday afternoon.
Hibernia's Texas franchise, with $1.2 billion in assets, has a book value of about $74 million. Although the unit is profitable, analysts estimated Tuesday it would only fetch $50 million to $60 million.
"Regardless of what the Texas unit is worth, Hibernia is in a disadvantageous bargaining position," said Frank Anderson, a senior analyst with Stephens Inc., Little Rock, Ark.
Hibernia, the largest banking company in Louisiana, reported an $83 million loss for the first half of the year. The company is pushing to raise capital and comply with federal enforcement orders.
Louisiana Lending Strategy
In a news conference held at its headquarters, Hibernia declared its intention to lend almost exclusively in its home state of Louisiana. It also unveiled a new management structure in which all the top officers will report to either Mr. hargon or chairman Sidney W. Lassen.
The overhaul follows the July ouster of four of Hibernia's top officers and the imposition of strict controls by federal regulators.
Mr. Hargon said Hibernia would probably restate several bank call reports at the request of federal regulators. But he said the company did not expect to restate shareholder reports.
The executive said the company sold consumer, HLT, and commercial loans during the third quarter and planned to sell an additional $125 million of loans by the end of the month. He said that, nevertheless, Hibernia would not meet all federal capital standards as of Sept. 30.