American International Group Inc. announced Friday its quarterly earnings rose in the first quarter, but industry observers aren’t ready to declare CEO Robert Benmosche’s restoration project completed.

The company, which needed a hefty government bailout, reported a profit of $1.45 billion as a result of fewer writedowns in the quarter.

AIG owes the Federal Reserve Bank of New York about $27 billion. Last month it used some of that to repay $2.3 billion in commercial paper that matured. The New York Fed also owns $25 billion of equity in two life insurance businesses that AIG has agreed to sell to repay taxpayers. AIG also owes about $49 billion to the Treasury Department.

Analysts said AIG [AIG] still must repay the federal government and divest some of its international business. Bemosche said that the company plans to repay the government and is working so its “remaining businesses thrive."

During the quarter, the company announced plans to sell AIA Group Ltd., its largest overseas life insurance unit, to Prudential Plc, and  Alico to MetLife Inc. [MET.] AIG also sold an asset management unit to make the period its busiest for divestitures since beginning to restructure in 2008.

Despite the fact Prudential said this week that it would delay a rights offering to finance its acquisition, Bemosche said he expects to close all three deals by the end of the year. “The transactions are on track,” he said.

Chartis, AIG’s property-casualty unit that is expected to be the core of the “new” AIG when the restructuring is completed, said operating income increased 24% to $879 million. Despite AIG’s divestitures in the quarter, Charties bought a majority stake in a Japanese insurer, Fuji Fire & Marine, for $145 million. Benmosche said this acquisition indicates the company is “in business to grow through acquisitions as well.”