PNC Financial Services Group, the regional bank that is acquiring Raleigh-based RBC Bank, saw profits decline 40 percent in the fourth-quarter, the company reported today.

The Pittsburgh-based bank, which ranks as the nation's sixth-largest bank based on assets, reported net income of $493 million, or 85 cents per share.

That was well below the $1.49 cents per share that was the average of 26 analysts that cover the company, according to Bloomberg News.

PNC reported net income of $820 million, or $1.50 per share, during the same period a year ago.

The company took a $240 million charge in the fourth quarter for foreclosure-related activities.

For the year, net income was $3.1 billion, or $5.64 per share.

CEO Jim Rohr said in a statement that the bank had a solid year given the challenging environment of low interest rates, increased regulation and overall sluggish economic growth.
 

On a conference call with analysts last week, Highwoods Properties CEO Ed Fritsch was asked what impact the pending acquisition of RBC Bank by PNC Financial Group would have on the Raleigh real estate investment trust's downtown office tower.

RBC occupies 131,000 square feet of space in its namesake tower on Fayetteville Street. The company signed a 20-year lease with Highwoods when the building opened in 2008.

The law firm Poyner Spruill, which does some work for RBC, also occupies about 75,000 square feet in the building.

Fritsch said Highwoods officials have not yet met with Jim Rohr, PNC's CEO.

But he said Poyner Spruill has indicated it doesn't expect the merger to cause it to reevaluate its space needs.

"They don't see any material impact to the way that they need and consume space," he said. "And in fact they continue to add head count to their firm."

As for PNC, Fritsch said PNC's public statements about the merger have indicated they like the presence of the RBC Tower. He also noted that PNC, which is based in Pittsburgh, does not have any existing infrastructure in the Southeast.

"There's no doubt that there's significant signage opportunities that are on display now," Fritsch said. "He [Rohr] has mentioned that that's an attraction to them."
 

Royal Bank of Canada said today that it is selling its Liberty Life Insurance Co. to Athene Holding Ltd. for $628.1 million.

Royal Bank of Canada, the parent company of RBC Bank, said it expects the transaction to close in early 2011, pending regulatory approval. The bank said it expects to incur a loss of $115 million.

The move continues an effort by RBC to reorganize its U.S. banking and insurance business. RBC Bank initiated job cuts and overhauled management last year to cut costs and improve its performance. The bank has more than 430 branches in the Southeast and has increased its local visibility as it expanded in recent years, including plastering its name on its headquarters building in downtown Raleigh and on the city's sports arena. RBC Bank has about 500 workers in the Triangle.

RBC Bank CEO Scott Custer, the executive who moved the bank's headquarters from Rocky Mount to a downtown Raleigh skyscraper, is retiring.

The Raleigh-based bank announced this morning that Custer, 51, is retiring after 25 years in the financial services industry. Custer has been CEO of the bank, which at the time was called RBC Centura, since the fall of 2004.

Custer is being succeeded as CEO by his boss, Jim Westlake, the head of international banking and insurance for the bank's corporate parent, Royal Bank of Canada, as well as the current chairman of RBC Bank. Westlake will retain those roles as well.

RBC Bank CEO Scott Custer, the executive who moved the bank's headquarters from Rocky Mount to a downtown Raleigh skyscraper, is retiring.

The Raleigh-based bank announced this morning that Custer, 51, is retiring after 25 years in the financial services industry. Custer has been CEO of the bank, which at the time was called RBC Centura, since the fall of 2004.

Custer is being succeeded as CEO by his boss, Jim Westlake, the head of international banking and insurance for the bank's corporate parent, Royal Bank of Canada, as well as the current chairman of RBC Bank.

Westlake will retain those roles as well.
"On behalf of the entire organization, I would like to thank Scott for his leadership and his commitment to helping us build our U.S. banking business," Westlake said in a prepared statement. "I look forward to working with our employees, communities and stakeholders across our markets as we focus on growing the leading relationship bank in the U.S. Southeast."

RBC Bank has 430 branches in the Southeast and more than 5,000 employees, including more than 500 in the Triangle. The bank has been revamping its management team as part of a restructuring, which has included an undisclosed number of job cuts, in an effort to return to profitability.

Royal Bank reported that its international business lost $86.5 million (in U.S. dollars) in the fiscal third quarter that ended July 31. Royal Bank includes RBC Bank in its international business and doesn't break out the performance of RBC Bank.

Still, according to data RBC Bank reported to the Federal Deposit Insurance Corp., the latest quarter marked the bank's best performance in three quarters. (The FDIC data covers different three-month periods; the latest data is for the quarter that ended June 30.)

In an interview in June, Westlake expressed confidence in Custer and said he was committed to retaining him despite the bank's losses.
"He's doing a good job...He is the guy in front leading [the restructuring]," Westlake said at the time.