Hibernia Corp.'s nonperforming assets are expected to increase in the fourth quarter, and the forecast is raising doubts among some observers that the New Orleans-based bank has its credit problems behind it.

David Trone, an analyst for Credit Suisse First Boston, predicted that Hibernia's nonperforming loans will increase in the fourth quarter by anywhere from $10 million to $30 million, primarily as a result of souring loans made to private companies. Neither he nor other analysts knew the identity of the loans or why the company's troubled assets continued to grow. Rumors circulated on Friday that Hibernia's nonperforming assets would rise in the fourth quarter, and its stock fell 1.6% while most other bank stocks rose strongly. In response, Mr. Trone called the banking company, which affirmed that NPAs would rise in the fourth quarter.

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