Centura Banks Inc., which has battled rising interest rates even as it offered enticements to retain customers, revealed on Wednesday the hit it would take for those efforts, warning its profits would fall well short of expectations this year.

Centura, based in Rocky Mount, N.C., said the series of rate hikes by the Federal Reserve in recent months increased its costs of funding loans, resulting in a narrowing profit margin on the lending business.

The interest rate squeeze came just as the $11 billion-asset company was attempting to court customers from Triangle Bancorp Inc., a Raleigh company it acquired this year. Centura said the higher deposit rates and fee waivers it had offered to retain Triangle's retail customers "exacerbated" the strain on profits.

Analysts said that the announcement there would be a shortfall was not surprising but that the magnitude was. They compared it to recent warnings issued by Wachovia Corp., First Union Corp., and Pacific Century Financial Corp.

Those were at least partially related to an increase in nonperforming loans, a problem Centura said it has not yet encountered.

Still, Marni Pont O'Doherty, an analyst at Keefe, Bruyette & Woods, said that Centura, like the others, "is missing by a mile rather than an inch."

Christopher Marinac, an analyst at Robinson-Humphrey in Atlanta, said, "It may pay to make less aggressive assumptions."

The company revised its second-quarter profit estimate to a range of 71 cents to 74 cents a share, down from the consensus target of 99 cents per share.

For the year, Centura warned investors to look for profits in the range of $3.37 to $3.47 per share, as much as 20% below the consensus of $4.05.

Steven J. Goldstein, chief financial officer at Centura, declined to be more specific about Wednesday's announcement except to say that "unique events" magnified for Centura some trends that have been affecting regional banks in general.

Funding loans with deposits seems to have hit Centura the hardest. Pressure on the company's net interest margin will account for about 9 to 11 cents of the projected reduction in earnings for the second quarter, and 25 to 30 cents for the whole year.

A lot of the projected shortfall is associated with Centura's retention plan for Triangle customers. Triangle had a deposit base that was heavily loaded with higher-interest certificates of deposit. Centura, faced with the dilemma of scaring those customers away by slashing the rates on those accounts after the merger, decided that retention was more important, Mr. Goldstein said.

The plan seems to have worked for now, he said. Through May, about 98% of the desired households acquired from Triangle had stayed on with Centura. Eventually, Centura will rejigger the rates paid to former Triangle customers to be more in line with the rest of its deposit base, Mr. Goldstein said.

Centura said fee-generating businesses also contributed to the lower forecast. Declines in mortgage income are expected to account for one or two pennies of the second-quarter profit revision and 12 to 14 cents of the yearend revision.

Like several other regional banking companies that lack the scale in the business, Centura has put its $3 billion mortgage servicing portfolio on the auction block and said it plans to use the proceeds of the sale to restructure its investment portfolio.

Now is a good time to sell mortgage servicing because rising rates tend to increase the value of the portfolios, Mr. Goldstein said. "There is an opportunity now," he said.

The gain from the sale may help offset losses from the sale of investment securities as Centura restructures its balance sheet, analysts said. That balance sheet restructuring, mostly the sale of bonds inherited from Triangle's balance sheet, has been going on since the merger was completed in January.

Centura will also add $5 million to its loan-loss reserve to "align the credit risk management" strategies of Triangle with its own.

The sale of the mortgage servicing portfolio also reduces Centura's ongoing interest rate risk. "Although we have not seen any weakness in our credit quality from the first quarter or any stress on our loan portfolio, we anticipate an economy marked by higher interest rates and the potential for further slowing," said Cecil W. Sewell, Centura's chief executive officer, in a press statement.

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