Bank of America Corp. has more work to do in refining its credit card operations, but the issuer’s first-quarter earnings suggest purchase volume and new-account growth is moving in the right direction.

Card income within BofA's recently reorganized consumer and business banking unit declined 19% for the quarter ended March 31, to $1.28 billion from $1.58 billion a year earlier.

One reason for the decline is that Charlotte, N.C.-based BofA's card loans declined following the divestiture of many of its cobranded and affinity card programs (see story).

At the end of the March, BofA's U.S. cards unit held $96.4 billion in total card loans, down 10% from $107.1 billion a year earlier. The net charge-off rate on card outstandings fell 295 basis points, to 5.44% from 8.39%.

U.S. credit card purchase volume during the quarter rose 2.1%, to $44.8 billion from $43.9 billion, while new accounts rose 19%, to 782,000 from 657,000.

BofA within the past year has altered the way it markets credit cards and has divested many cobranded affinity card operations within its portfolio, Brian Moynihan, the firm's CEO, told analysts April 19 during a conference call to discuss quarterly earnings.

"There's been a significant change in the way we open new (credit card) accounts," Moynihan said, noting BofA is leveraging its "(branch) and online networks while scaling back what we do from a direct-mail perspective."

U.S. debit card purchase volume rose 4.9%, to $62.94 billion from $60 billion.

BofA operated 17,255 ATMs as of March 31, down 3.5% from 17,886 a year earlier.

Despite having fewer ATMs, BofA is driving more efficiency from them, Moynihan told analysts.

BofA during the quarter "passed a milestone, with half the deposits of Bank of America going through our ATMs that used to go through our branch platform," he said.

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