Bank of America 1Q profits rise to record $6.9 billion

Posted: Updated:
(AP Photo/Mark Lennihan, File). FILE- In this Nov. 6, 2017, file photo, people walk by a branch office of Bank of America in New York. Bank of America Corp. reports earnings Monday, April 16, 2018. (AP Photo/Mark Lennihan, File). FILE- In this Nov. 6, 2017, file photo, people walk by a branch office of Bank of America in New York. Bank of America Corp. reports earnings Monday, April 16, 2018.

By KEN SWEET
AP Business Writer

NEW YORK (AP) - Bank of America's profits rose to a record $6.9 billion last quarter thanks in part to the new tax law and higher interest rates.

The consumer banking giant earned $6.92 billion, or 62 cents per share, up from $5.34 billion, or 45 cents a share, from the same period a year ago. Analysts had been expecting a per-share profit of 59 cents, according to FactSet.

Like its competitors JPMorgan Chase and Citigroup, Bank of America reported a sharp drop in its tax bill Monday, which helped boost profits. While the bank's pretax income rose by roughly $1 billion, the amount it paid in taxes fell by roughly $500 million in the quarter. The Charlotte, North Carolina, bank estimates that the tax law cut its effective tax rate by 9 percentage points.

This first-quarter earnings season will give investors and the public their first good look into how President Donald Trump's tax law is impacting corporate America. Banks are among the first to report results at the beginning of each quarter.

Higher interest rates benefited the bank as well. The Federal Reserve has steadily raised interest rates, allowing banks to charge customers more to borrow. In Bank of America's consumer banking division, its largest business by revenue and profit, net interest income rose 13 percent from a year earlier. The bank also grew loans and deposits in the quarter.

While higher interest rates should translate into better interest rates for savers, most of the benefits have gone to the banks, not account holders. Bank of America paid just an average of 0.30 percent on its interest-earning deposits last quarter, up from 0.09 percent a year earlier.

Total revenue for Bank of America in the quarter was $23.13 billion, up from $22.25 billion in the same period a year earlier.

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

sorry to interrupt
your first 20 are free
Access to News 12 is free for Optimum, Comcast®, Spectrum Networks® and Service ElectricSM customers.
Please enjoy 20 complimentary views of articles, photos, and videos during the next 30 days.
you have reached your 20 view limit
Access to News 12 is free for Optimum, Comcast®, Spectrum Networks® and Service ElectricSM customers.
Please login or create an account to continue enjoying News12.
Our sign-up page is undergoing maintenance and is not currently available. However, you will be given direct access to news12.com while we complete our upgrade.
When we are back up and running you will be prompted at that time to complete your sign in. Until then, enjoy the local news, weather, traffic and more that's "as local as local news gets."