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FleetBoston Financial


said first-quarter profits fell 6% as a stock market slump cut into once lucrative underwriting and advisory fees.

Fleet posted net income of $870 million, or 79 cents a share, excluding charges, down from $927 million, or 84 cents a share, in the year-ago period. Analysts had expected it would earn 78 cents a share, according to

Thomson Financial/First Call

. Fleet said it took a $50 million after-tax charge to restructure its investment banking and brokerage businesses.

CEO Terence Murray blamed a "very tough environment" for a sharp decline in earnings from the year-ago first quarter. Earnings from principal investing, and the company's

Robertson Stephens


Quick & Reilly

units stumbled $400 million, or 36 cents a share from the prior year.

Despite the weakness in capital markets, Fleet said it saw improvements in its more traditional banking businesses including commercial finance, asset management, consumer lending and credit cards. The bank also added that with the bulk of the integration of


behind it, it will focus on its core business in the year ahead.

Fleet has adopted a defensive posture on credit quality at a time when the slowing economy has sparked an increase in bad loans. Nonetheless the bank saw a rise in nonperforming assets, those that are past due but haven't been charged off yet. In the latest quarter, nonperforming assets rose $115 million to $1.25 billion from $1.13 billion in the fourth quarter. The bank set aside $315 million for loan losses, $45 million more than it charged off. Recently the bank took the unusual and aggressive step of

packaging nearly $1 billion worth of weak loans for sale to insulate its balance sheet from deteriorating credit quality.