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.

Hibernia declined to comment.

While analysts agreed that Hibernia's problem loans would rise, some viewed it simply as a lagging indicator, while others said it was troubling.

In October, when the company reported its third-quarter earnings, it said its credit problems, which emerged in March, were behind it. But now some analysts are asking if the possibility of a new surge in nonperforming assets indicates a less rosy outlook.

"Investor confidence is likely to continue to be shaky, with investors wondering when NPAs will stop growing," Mr. Trone said. "Investors expected NPAs to fall from third-quarter levels," he said. "After a company says it has cleaned up its problem loans, I am not expecting things of this magnitude."

Largely because of a $33 million writeoff in the third quarter, nonperforming assets in that period declined to $76 million, from $101 million in the second quarter.

Mr. Trone said Wall Street probably would forgive an increase in nonperformers if the rise is in the neighborhood of $10 million, but if they are in the area of $20 million it would be bad news for Hibernia's stock.

Investors have been less friendly to Hibernia than other bank stocks over the past two weeks. The stock closed at $11.50 on Tuesday, down 3.7%. Since Nov. 23, its 12% decline is a far steeper drop than the 4.6% decline in the American Banker Index of the nation's 50 largest banking companies.

Still, not all analysts are worried that the company has failed to turn the corner. Some noted that Hibernia sold off about $40 million of distressed loans at a discount.

"They are addressing their problems pretty aggressively," said Jacqueline Reeves, an analyst for Putnam, Lovell, de Guardiola & Thornton Inc. "I don't expect surprises in the fourth quarter similar to the ones we saw earlier this year.

John Otis, a fixed-income analyst at Bear, Stearns & Co., also took a relatively positive view. He said any increase in nonperforming assets might reflect a time lag, and that the NPAs would hit their high point a quarter or two after Hibernia started cleaning up its portfolio.

"Sometimes you'll see a peak in NPAs long after credit begins improving," Mr. Otis said. "You may have a few lagging credits, but the vast part of the portfolio is improving."

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