Bank of America Corp. said Wednesday that its fourth-quarter profit fell from a year ago, hurt by a $2.9 billion charge related to the tax bill, even as the bank ended a year that put its crisis-era issues firmly in the past.
The Charlotte, N.C.-based bank reported a profit of $2.37 billion, or 20 cents a share. The charge for the tax bill removed 27 cents a share in the latest quarter.
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Analysts polled by Thomson Reuters had expected earnings of 44 cents a share, on an adjusted basis.
Investors are expected to look past the one-time charges because they are likely to be outweighed by the new tax law's longer-term benefits. Starting this year, a lower corporate tax rate is expected to boost Bank of America's profit by 16%, according to Bernstein analysts.
As recently as 2014, Bank of America's results were dogged by tens of billions of dollars in penalties over financial-crisis era issues. Since then, the company's legal problems have eased, and it has made a concerted effort to cut costs and focus on safer businesses such as lending to consumers with good credit.
The bank also has had the help of rising interest rates, which are boosting profits.
The lender's improving fortunes helped lift its stock above $30 a share for the first time since 2008 earlier this year. Shares are up 84% since the 2016 presidential election, when hopes for deregulation, tax cuts and rate increases sent stocks in the sector higher.
Still, the bank had to issue so many new shares to deal with its crisis-era problems that per-share profits remain far below pre-2008 levels. And the bank still trades at a lower valuation than some competitors like JPMorgan Chase & Co.
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(END) Dow Jones Newswires
January 17, 2018 07:13 ET (12:13 GMT)