Wachovia ( WB), the nation's fourth largest bank, reported a 24% increase in first-quarter profits on the strength of continued vigor in consumer lending and a drop in bad commercial loans. The Charlotte-based bank earned $1.25 billion, or 94 cents a share, compared with $1 billion, or 76 cents a share, a year ago. Total revenue rose 22% to $5.7 billion, a quarterly record. On an operating basis, which excluded certain merger-related expenses, the bank earned 98 cents a share, which beat the Thomson First Call consensus estimate by 8 cents. Wachovia, with $410 billion in assets, posted strong results in all four of its major businesses: general banking, asset management, private banking and investment banking. "These results demonstrate the power of our balanced business model, which we believe provides us with exceptional stability in core earnings and great upside potential in improving markets," said Wachovia Chairman and Chief Executive Officer Ken Thompson, in a prepared statement. Revenue at Wachovia's retail and commercial bank rose 5% to $2.46 billion, despite a 63% slide in mortgage-related income. The revenue gains mainly came from higher fees and an increase in customer deposits. Banks rely on customer deposits to make investments on their own behalf. The bank's asset management and brokerage division, benefiting from the stock-market rebound, posted a 90% gain in revenue to $1.46 billion, up from $765 million a year ago. But a good deal of Wachovia's success in the first quarter stemmed from the continuing improvement in the level of bad commercial loans in its portfolio. In the quarter, the bank slashed its provision for loan losses by 80% to $44 million due to better credit quality. First-quarter net charge-offs for bad loans and other assets fell 73% from a year ago to $52 million. Like many banks, Wachovia saw few signs of a pickup in commercial borrowing. While average loan balances increased by $1.2 billion to $159 billion in the quarter, much of that was due to more borrowing by consumers. In its press release, the bank said loan balances were "dampened by continued lower corporate loan demand."