updated 1/23/2007 7:20:15 PM ET 2007-01-24T00:20:15

Bank of America Corp. said Tuesday its fourth-quarter earnings rose 47 percent, reflecting both the addition of the MBNA credit card company and growth in most of its customer segments.

Net income at the nation’s No. 2 bank by assets climbed to $5.26 billion, or $1.16 per share, from $3.57 billion, or 88 cents per share, a year ago. Results for the fourth quarter of 2005 do not include MBNA, which was acquired on Jan. 1, 2006.

Excluding merger and restructuring charges, the company earned $5.01 billion, or $1.19 per share, in the latest quarter.

The Charlotte-based bank’s revenue grew 34 percent to $18.46 billion from $13.81 billion last year.

That was better than the $1.18 per share on revenue of $18.01 expected by analysts surveyed by Thomson Financial.

The increase in 2006 earnings was driven by growth in card income, including the bank’s $34.2 billion takeover of MBNA. The addition of MBNA’s higher-interest credit-card loans helped Bank of America fight an industrywide contraction in lending margins. Its net interest margin, the difference between what it earns from loans and pays on deposits, fell to 2.75 percent from 2.82 percent a year earlier.

But the addition of MBNA also gave the bank some deterioration in credit quality. It raised provisions for losses to $1.57 billion, up from $1.17 billion in the third quarter.

“Bank of America is successfully integrating the MBNA acquisition and applying that knowledge to other parts of the business,” said Bart Narter, a senior analyst with Celent, a Boston-based financial research and consulting firm. “The bank is certainly taking on more credit risk, which MBNA should help manage.”

Net interest income grew to $8.96 billion from $8.10 billion last year. Noninterest income rose 66 percent to $9.87 billion from $5.95 billion.

Last week, New York-based JPMorgan Chase & Co., the nation’s third-largest bank, also reported strong fourth-quarter earnings growth, as did No. 5 Wells Fargo & Co. of San Francisco, but both said there were signs of worsening credit quality among customers.

Citigroup Inc., the nation’s largest bank, last week reported fourth-quarter profits ahead of Wall Street expectations, but analysts and investors appeared concerned that the nation’s largest bank still hadn’t gotten a handle on expenses.

Citigroup, which is based in New York, on Monday announced a management shake-up apparently aimed at bolstering its cost cutting efforts.

For the year, Bank of America reported earnings of $21.13 billion, or $4.59 per share, compared to $16.47 billion, or $4.04 per share, in 2006. Revenue was $73.02 billion, up from $56.1 billion in 2005.

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