TD Bank Financial Group raised its quarterly dividend 10% even as first-quarter net profit dropped to $921 million from a year-earlier $2.3 billion.

The bank said today that diluted earnings per share for the quarter ended January 31 fell to $1.26 from a year-earlier $3.20.

However, adjusted net income rose to just over $1 billion or $1.38 a share, from $835 million or $1.15 a share.

The bank said that previous year’s earnings included a $1.67 billion gain from selling TD Waterhouse U.S.A. to Ameritrade.

“I am extremely pleased with our earnings performance in the first quarter,” CEO Ed Clark said in a news release. “Our commitment to operational and customer service excellence and an emphasis on organic growth across all our businesses, were key factors behind these excellent results.”

TD Canada Trust saw continued momentum across all its operating businesses, which led to record revenues and very strong earnings growth in the quarter. Earnings were up 14% compared with the first quarter of last year.

“Canadian Personal and Commercial Banking kept up its impressive track record with double-digit earnings growth again this quarter,” said Clark.

Wealth Management, including the bank’s equity share of TD Ameritrade, produced a very strong quarter, with a 35% increase in earnings, compared with the first quarter last year. In the first quarter, Canadian wealth management saw strong transaction volumes and asset growth across its mutual funds, discount brokerage and advice-based businesses.

TD’s U.S. Personal and Commercial Banking segment through TD Banknorth earned $64 million in the first quarter.. On Jan. 1, 2007, TD Banknorth completed the acquisition of Interchange Financial Services Corporation, which enhances TD Banknorth’s branch network and presence in northern New Jersey.

The TD Banknorth going-private transaction, subject to both shareholder and regulatory approval, is expected to close before the end of April 2007. Upon completion, TD Banknorth will become a wholly-owned subsidiary of TD Bank Financial Group.

“We are focused on TD Banknorth’s potential to grow organically and enhance value for our shareholders,” said Clark.

Wholesale Banking delivered very strong results in the first quarter, with earnings of $197 million, driven by strong trading revenues, a solid domestic franchise and strong contributions from the equity investment portfolio.

TD also announced an increase of 5¢ in the quarterly dividend to 53¢ for the quarter ended April 30.