Bank of America Q4 Earnings Hurt By Tax Legislation

Bank of America reported Q4/17 net income of $2.4 billion or $0.20 per diluted share compared to $4.5 billion or $0.39 a share a year earlier. The bank said Q4 results included a charge of $2.9 billion or $0.27 per diluted share related to the Tax Cuts and Jobs Act. Absent the impact of the Tax Act, earnings per share of $0.47 exceeded estimates of analysts polled by Thomson Reuters of $0.44 per share. Revenue, net of interest expense, increased 2% to $20.4 billion, up from $20.0 billion.

Full-year 2017 profit of $18 billion, which included the impact from the tax legislation, compared with $17.8 billion in 2016.

Net charge-offs rose to $1.2 billion from $880 million, primarily driven by a single-name, non-U.S. commercial charge-off totaling $292 million. Provision for credit losses rose to $1.0 billion from $774 million.

Brian Moynihan, CEO, said, “Responsible growth delivered solid results in 2017. Pretax earnings rose 17% and we continued to close in on our long-term return targets. We gained market share across our businesses while carefully managing credit, risk exposures and expenses. We invested in technology, client engagement and in our own team, including the $1,000 bonus we announced last month for 145,000 employees.”

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