Three top U.S. banks, including Citigroup Inc., posted lower first-quarter profits on Monday due to loan and investment losses in the slowing U.S. economy, but some smaller regional banks' profits rose as interest rate cuts spurred loan growth.

Citigroup, the largest U.S. financial-services company, and Bank of America, the No. 3 U.S. bank holding company, posted earnings declines for the period, as did Charlotte, N.C.-based First Union Corp., which also announced plans to buy rival Wachovia Corp. in an effort to boost profits and cut costs in a tough market.

Meanwhile, smaller regional banks — Bank of New York Corp., Fifth Third Bancorp. and North Fork Bancorp —  reported higher first-quarter profits on Monday, partly on loan growth. These banks also have fewer Wall Street-type businesses that hurt larger banks' results.

Profits at private bank and money management firm Northern Trust Corp. rose as well.

The U.S. economic slowdown hurt many big banks in the first quarter. Stock markets slumped, the value of banks' investment portfolios tumbled and the lucrative business of advising companies on selling stock to the public evaporated. Some large companies, struggling to eke out profits in challenging markets, also missed loan payments, hurting banks.

``It is clear ... that the increasingly weak economic environment is making it difficult for our efforts to show up on the bottom line,'' Bank of America Chairman and Chief Executive Hugh McColl Jr. said in a statement.

The first quarter was also the slowest for new stock offerings in more than a decade, curtailing banks' fees from this business.

But regional banks with smaller Wall Street-type operations fared better in the quarter after a series of interest rate cuts by the Federal Reserve fueled demand for loans. The Fed lowered rates to revive economic growth.

Citigroup Profits Down 7 Percent

At Citigroup, operating profits fell 7 percent to $3.66 billion, or 71 cents a share, in the first quarter as investment losses and weak revenues from advising companies on new stock offerings offset growth at its consumer operations.

Wall Street had expected Citigroup to earn between 66 cents and 73 cents a share in the quarter, with an average estimate of 70 cents, according to research firm Thomson Financial/First Call.

Bank of America said its profits fell to $1.87 billion, or $1.15 a share, in the first quarter, compared with $2.24 billion, or $1.33 a share, a year earlier.

A $415 million increase in its provisions to guard against bad loans, as well as a $416 million drop in equity investment gains hurt Bank of America in the quarter, the Charlotte, N.C., company said.

At First Union, earnings fell 30 percent, in line with expectations, because of lower profits in its main lending business and drops in brokerage and money management fees.

The company, which would become the nation's No. 4 bank after buying Winston-Salem, N.C.-based Wachovia for $13.4 billion in stock, reported $584 million in net income, or 59 cents a share, in the quarter, compared with $840 million, or 85 cents a share, a year earlier.

Wachovia, for its part, said its first-quarter earnings before nonrecurring charges fell to $252.2 million, or $1.22 a share, from $257.4 million, or $1.17 a share, a year earlier because the bank put aside more money to deal with bad loans.

Profits Up At Smaller Banks

Northern Trust, a Chicago firm that makes much of its money from offering banking services to wealthy people, earned $127.2 million, or 55 cents a share, in the quarter, compared with $113.3 million, or 49 cents a share, a year earlier. Its money management fees rose.

Another Midwest bank, Fifth Third, said its profits rose 18 percent in the quarter $244.3 million, or 51 cents a share, helped by loan growth and stable credit quality.

At Bank of New York, the parent of one of the oldest U.S. commercial banks, first-quarter earnings rose 14 percent as fees from securities servicing operations increased. Its earnings were $384 million, or 52 cents a diluted share, compared with $338 million, or 46 cents, a year earlier.

North Fork, based in Melville, N.Y., said its profits rose 22 percent to $78.4 million, or 49 cents a share, as lower interest rates led its customers to borrow more money.