updated 4/20/2006 9:10:31 AM ET 2006-04-20T13:10:31

Bank of America Corp.’s first-quarter profit rose 14 percent on growth in lending from consumers to corporations, revenue from newly acquired credit card company MBNA Corp. and higher interest rates, the nation’s largest retail bank said Thursday.

Profit rose to $4.99 billion, or $1.07 per share in the quarter ended March 31, from $4.39 billion, or $1.07 per share, in the same period last year.

Analysts polled by Thomson Financial had forecast earnings of $1 a share on revenue of $16.79 billion, a 31 percent increase.

Charlotte-based Bank of America said it would have posted earnings of $5.05 billion, or $1.08 per share, without charges related to the MBNA acquisition. Merger and restructuring charges of $112 million during the first quarter of 2005 reduced per-share earnings by 2 cents.

On a pro forma basis, as if MBNA had been part of Bank of America’s operations for the year-ago quarter, revenue rose 10 percent.

“We have strong momentum in all our businesses as the benefits from continued execution in our consumer businesses were accompanied this quarter by a rebound in trading and good performance in investment banking and wealth management,” chairman and chief executive officer Ken Lewis said in a statement.

Results included expenses of $320 million, or 5 cents per share, as the bank accounted for stock options granted to employees. Bank of America also said it terminated some derivatives used as part of its hedging strategy, reducing earnings per share by $175 million, or 2 cents per share.

Profit from income was $9.04 billion, compared to $7.71 billion the previous year.

Since closing on its for $35 billion purchase of MBNA on Jan. 1, Bank of America said it has trimmed costs by $163 million and cut about a third of the expected 6,000 job cuts planned from the merger. Most of the job cuts have come through attrition since the deal was announced last June 30, the company said. The merger is on track to meet projected savings targets, Bank of America said.

The bank had to write off fewer bad loans than the year-ago quarter and the fourth quarter of 2005, when there was a national spike in bankruptcies ahead of changes in federal law which made it harder to discharge debts.

The company reported bad debt of $822 million, or 0.54 percent of average loans and leases, in the first quarter. That compared to $1.65 billion, or 1.16 percent, in the fourth quarter and $889 million, or 0.69 percent, in the year-ago quarter.

The company said it set aside $1.27 billion for credit losses, down from $1.4 billion in the fourth quarter, but more than double from $580 million a year ago. Bank of America said it set its provision expense due in part to the addition of MBNA.

The company added 603,000 new checking accounts and more than 480,000 new savings accounts in the first quarter, driven by customer referrals and bank’s “keep the change” savings program.

Since its launch six months ago, the “keep the change” program has drawn 2 million participants who have put aside about $60 million in savings, the bank said. Consumers enrolled in “keep the change” round up purchases to the nearest whole dollar when using their Bank of America debit cards. The difference is transferred from their checking account into an interest-earning saving account daily. The bank matches up to $250 a year in purchases.

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