Washington Mutual's (WM) first-quarter net income rose on strong results from the company's retail banking and financial services business.

The company said late Monday it earned $1.05 billion, or $1.18 a share, in the quarter, up from $997 million, or $1.07 a share, a year earlier.

A Thomson First Call consensus had expected the company to post a profit of $1.05 a share in the quarter.

First-quarter results included $644 million in pretax income associated with the company's former Washington Mutual Finance unit, which was sold during the quarter. This income was partially offset by restructuring charges, early retirement of several Federal Home Loan Bank borrowings and a reduction in noninterest income due to an accounting change related to mortgage loan gains.

Net interest income fell to $1.73 billion from $1.99 billion a year earlier.

Washington Mutual said earnings at its retail banking and financial services unit rose 23% to $469 million from $380 million a year earlier. In addition to strong growth in depositor and other retail banking fees, net interest income of the segment increased 32%, driven by significantly higher average loan portfolio balances. The strong growth in net interest income and noninterest income was partially offset by an increase in noninterest expense, which reflected the company's continued national expansion of its retail banking network.

As a result of what the company called its "continued strong operating performance and financial performance," Washington Mutual boosted its quarterly dividend by a penny, to 43 cents.

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