Profit at Washington Mutual ( WM) rose 22% in the fourth quarter, fueled by the sale of its mutual fund subsidiary and the repositioning of its loan portfolio. In the fourth quarter, the $346 billion-asset bank made $1.06 billion, or $1.10 a share compared to $865 million or 85 cents a share a year earlier. Profit for the year rose just 3.7%, to $3.56 billion, or $3.64 a share. WaMu earned $640 million from continuing operations, or 66 cents a share in the fourth quarter. WaMu beat the average analyst earnings estimate of 88 cents a share, but revenue fell short of the $3.7 billion estimate. The bank's total revenue fell 4.7% in the quarter, to $3.6 billion. During the quarter, WaMu had an after-tax gain of $415 million from the sale of WM Advisors, its retail mutual fund and asset management company, to Principal Financial on Dec. 31. The gain offset tax charges of $202 million during 2006 that were related to the company's ongoing efficiency initiative. It also offset after tax charges of $137 million related to the sale of WaMu's mortgage servicing platform. WaMu recategorized sold $17.8 billion of adjustable-rate loans to held-for-sale during the quarter and recognized a gain of $74 million related to the transfer of these assets. In addition, the company also sold $4.73 billion of mortgage-backed securities.