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Bank One


said first-quarter earnings fell modestly as it continues to struggle with problem loans.

Bank One posted earnings of 58 cents a share, in line with the

Thomson Financial/First Call

consensus estimate and down from the year-ago's 60 cents.

Credit quality continues to be an issue at the bank. Nonperforming assets, those that are past due but haven't been charged off yet, were up $92 million to $2.67 billion. Meanwhile the bank set aside $95 million for its loan-loss provision, essentially a financial cushion to cover the cost of bad loans. Bank One's loan-loss provision sits at $4.21 billion, or 2.45% of loans, up from 2.36% in the prior quarter.

In a recent regulatory filing, the bank warned it sees

continued deterioration in credit for the next "several quarters," news that disappointed a number of analysts and investors after already having endured a number of quarters in which the bank itself called its results "messy."

"We will continue to actively and aggressively manage our loan and credit risk profile even if doing so may have a slight negative impact on earnings," said CEO Jamie Dimon. In addition to adding to its loan-loss provision, Bank One sold $599 million of commercial loans in the quarter, more than half of which were already on nonperforming status, which resulted in an after-tax writedown of $60 million.