Bank of America reported its net income dropped in the final quarter of 2017 due to expenses from tax reform, however without these expenses, its earnings surged 17%.
The company reported net income of $2.4 billion in the fourth quarter of 2017. This is down 47% from the company’s net income of $4.5 billion in the fourth quarter of 2016. It is also a decrease from the third quarter, where the bank reported a net income of $5.4 billion.
But the company explained this decrease was not due to poor performance, but rather, a one-time adjustment made after the passage of the Tax Cuts and Jobs Act. Without that adjustment, the company’s earnings actually increased in the fourth quarter.
“Responsible growth delivered solid results in 2017,” Bank of America CEO Brian Moynihan said. “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,” Moynihan said. “We also shared our success with stakeholders through our high level of funding philanthropic initiatives, our 2 million employee volunteer hours, and our commitment to long-term shareholder value by returning nearly $17 billion in capital through common stock repurchases and dividends.”
Excluding the tax impact, net income for the fourth quarter came in at $5.3 billion, and $.047 per diluted common share.
Total revenue also shows a slight increase after excluding the tax impact at $21.4 billion in the fourth quarter, up from $20.4 billion when including the tax reform impact. Even after tax impact, revenue increased 2% from last year’s $20 billion.
However, noninterest income decreased $724 million or 7% to $9 billion in the fourth quarter, driven by the impact of tax reform and lower mortgage banking income.