Centura Banks Inc., which is preparing for its sale this summer to Royal Bank of Canada, reported first-quarter earnings that continued to hold up despite the slowing southeastern economy.
The Rocky Mount, N.C., company said Thursday that profits rose 342% in the quarter, to $35.5 million, from the year earlier when Centura took one-time, merger-related charges. Excluding the impact of the charges, profits fell 1.3% in this year's first quarter, compared with last year.
Earnings per share of 89 cents were in line with the expectations of Wall Street analysts.
"Centura continued to perform in line with our expectations during the first quarter," said Cecil Sewell, chief executive officer, in a statement. "Our overall performance is consistent and encouraging despite the slowdown in the economy."
The company's asset quality remained solid, despite an increase in the provision for loan losses, Mr. Sewell said. Centura had $7.1 million in its provision for loan losses during the first quarter, 20% more than the $5.9 million the year earlier.
Fee income grew 60%, to $45.1 million, driven by a 48% gain in mortgage income, to $5.4 million. Noninterest income included a gain of $2.8 million from the sale of a private company in which Centura held an interest.
The first-quarter earnings should have no impact on the company's pending merger with Royal Bank of Canada, an industry observer said. The Toronto bank has agreed to pay $2.3 billion for Centura. "In general the numbers are as expected," said Robert Patten, an analyst at UBS Warburg. "The numbers were a little softer, but that is part of the slowing economy."
Officials at Royal Bank declined to comment on Centura's performance, saying they would not talk about the company until the deal has closed. Royal Bank announced the deal in January. Bank executives said the acquisition of Centura, with $12 billion of assets and 240 branches in Virginia and the Carolinas, would fit with Royal Bank's goal of expanding in the United States.