updated 1/17/2007 5:33:33 PM ET 2007-01-17T22:33:33

Washington Mutual Inc., the nation’s largest savings bank, said Wednesday that its net income rose 22 percent in the fourth quarter as profits from the sale of its advisory unit helped offset a loss in its home mortgage business because of problems with subprime loans.

The nation’s largest savings and loan reported earnings of $1.06 billion, or $1.10 per share, for the three months ended Dec. 31, up from $865 million, or 85 cents per share, in the same period a year ago.

The results, released after markets closed for regular trading Wednesday, included a number of one-time items, including a $415 million after-tax gain from the previously announced sale of an asset management unit, WM Advisors Inc.

That helped offset a fourth-quarter charge of about $100 million from “ongoing efficiency initiatives,” and charges of about $137 million from the sale of mortgage servicing rights.

Revenue in the October-December period, including net interest income and noninterest income, was about $3.6 billion, compared with about $3.8 billion in the same period last year.

Analysts polled by Thomson Financial were expecting earnings of 88 cents per share on revenue of $3.65 billion.

Shares of Washington Mutual dropped 33 cents, or 0.75 percent, to close at $43.73 in Wednesday trading on the New York Stock Exchange. The stock has traded between $41.03 and $47.01 over the past year.

In after-hours trading, they were down an additional 58 cents, or 1.3 percent, at $43.15.

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