Bank of America Corp. (BAC) shares edged 0.6% higher to $31.42 during premarket trading after the bank reported mixed results for its fourth quarter. Here's what you need to know:
EARNINGS: Bank of America reported higher-than-expected earnings despite booking a hefty charge related to the new tax law. On an as-reported basis, the bank earned 20 cents a share, which included a 27-cents-a-share charge related to a write-down of deferred tax assets. Analysts had expected earnings of 14 cents a share, including the tax hit. On an adjusted basis, Bank of America earned 47 cents a share, compared with an estimate of 44 cents a share.
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REVENUE: Revenue increased 2% to $20.4 billion but missed analysts' expectations of $21.53 billion. Higher interest rates helped net interest income rise 11% during the quarter, but revenue growth was partially offset by a 7% decline in noninterest income driven by the impact of the Tax Cuts and Jobs Act and lower mortgage banking income.
TAX HIT: The company recorded a $2.9 billion charge related to the new tax law. Investors have shrugged off the charges at other banks because the write-downs have been anticipated and are expected to be outweighed by the benefits of corporate tax cuts taking effect this year.
RECOVERY MILESTONE: Excluding the impact of the tax charge, Bank of America reported a profit of $21.1 billion for 2017, a level not seen since 2006, before the financial crisis, when it posted a profit of $21.13 billion.
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(END) Dow Jones Newswires
January 17, 2018 08:33 ET (13:33 GMT)