Shares of Hibernia Corp. strengthened Tuesday on the company's announcement that it would report $4 million in operating earnings for the third quarter, after a $25.1 million loss a year earlier.

But analysts warned that the gain - 50 cents by late afternoon, to $5.625 a share - might not be sustainable if the New Orleans-based company makes an expected rights offering that would raise needed capital but probably be dilutive to existing shareholders.

"We think the price is kind of getting ahead of itself," said Frank Anderson of Stephens Inc. in Little Rock, Ark.

Net Loss Expected

Hibernia said nonrecurring and extraordinary items would cause a net loss in the third quarter, but the company was unable to calculate the precise amount Monday.

It said it expects to report a loss of about $5.2 million for the first nine months, excluding extraordinary items, compared with a $108.2 million loss in the year-ago period.

Hibernia also said Monday that it would receive $58 million from the sale of its Texas bank to Comerica Inc., Detroit. The price was $5 million less than announced in July to reflect lower loans outstanding and Comerica's due diligence.

Second Phase of Plan

The sale of the Texas bank, expected to close in the fourth quarter, marks the completion of the second phase of Hibernia's three-stage plan to regain financial health. The first phase was the recent restructuring of $99 million in bank debt.

The final phase will the proposed rights offering, expected in late October, which would raise about $80 million.

Hibernia's leverage capital ratio, currently 3.65%, needs to reach 5.50% by yearend, according to an agreement with federal regulators.

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