NEW YORK -- NCNB Corp. is considering making a capital injection into Hibernia, Louisiana's largest bank holding company, the Wall Street Journal reported Monday.
The newspaper said the transaction could give NCNB some rights, if it wants to exercise them, to eventually acquire Hibernia. Hibernia, based in New Orleans, has $7.27 billion in assets and is Louisiana's largest bank holding company.
Hibernia is actively seeking capital, the Journal quoted people familiar with the situation, but it wasn't immediately clear if Hibernia is also talking with other parties about capital infusions.
NCNB and Hibernia spokesmen declined to comment.
The transaction would accentuate NCNB's expansionist system, the Journal said. Last week NCBN, based in Charlotte, N.C., agreed to acquire C&S/Sovran Corp., which is based in Atlanta. and Norfolk, Va., in a stock swap valued at $4.3 billion. That would create the nation's third-largest bank holding company.
After the C&S/Sovran merger, NCNB's full-service banking market will span eight southeastern states and the District of Columbia as well as Texas.
If NCNB bought Hibernia, that would give NCNB a major presence in an important southern state and fill in the gap between NCNB's southeastern operations and Texas, the Journal said. That would also increase NCNB's market share in Texas, where it is already the largest bank.
Recently, Hibernia had been an aggressive buyer of failed banks and thrifts in Texas as part of a plan to buy low cost core deposits and find new markets for loan growth, the newspaper said.
The Journal said it wasn't clear how much NCNB is considering injecting into Hibernia. The newspaper quoted one person familiar with the situation as saying the capital injection would be substantial.
The expected capital infusion would be made through NCNB's Texas national bank operation, the Journal said.
Hibernia has seen its profits and capital eroded by a rising pile of troubled loans in real estate and highly leveraged transactions, the Journal said. For the first quarter, Hibernia had a loss of $49.5 million compared with a year earlier loss of $24.9 million.
Hibernia eliminated its dividend in April after cutting it in late 1990.
