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

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)

NEW YORK — 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.

Must Read

TV executive predicts 500-show bubble destined to deflate

Aug 9, 2016

Television viewers know there's a mind-boggling array of shows to attempt to watch, but FX Networks chief executive John Landgraf predicts that change is coming

Turkish, Russian officials to discuss solution for Syria

Aug 10, 2016

Turkey's foreign minister says Turkish foreign ministry, military and intelligence officials will travel to Russia for discussions on finding a solution to the Syria conflict

Germany: 2nd arrest in connection with attack plan suspect

Aug 10, 2016

German authorities have arrested a man suspected of involvement in violence in Syria, an arrest that was triggered by the detention last week of a Syrian asylum-seeker who was suspected of planning to carry out an attack

People also read these

Hearing on Johnny Depp domestic violence allegations delayed

Aug 9, 2016

A judge is briefly delaying a restraining order hearing involving Johnny Depp and his estranged wife because it is expected to span several days; depositions of both actors set

Trump ignites new firestorm: Gun backers might stop Clinton

Aug 10, 2016

Donald Trump sets off a fresh political firestorm by suggesting gun rights supporters might find a way to stop Hillary Clinton if she's elected and nominates anti-gun Supreme Court justices

4 months after Japan earthquake, final victim may be found

Aug 10, 2016

Nearly four months later, the final victim of two deadly earthquakes in southern Japan may have been found

Weather, 20 December
Houston Weather
+7

High: +11° Low: -2°

Humidity: 83%

Wind: NNE - 7 KPH

Canberra Weather
+27

High: +27° Low: +17°

Humidity: 87%

Wind: W - 20 KPH

Roissy-en-France Weather
+6

High: +6° Low: -5°

Humidity: 87%

Wind: ENE - 7 KPH

Florence Weather
+9

High: +9° Low: +6°

Humidity: 97%

Wind: ENE - 17 KPH

Parga Weather
+7

High: +16° Low: +4°

Humidity: 100%

Wind: SE - 25 KPH