Bank of America Corp. (NYSE: BAC) shares fell by 2.5 percent on Wednesday after the bank reported better than expected fourth quarter financial results, but missed analysts’ estimates in adjusted revenue.
For the fourth quarter, Bank of America reported adjusted revenue of $21.4 billion, falling short of estimates of $21.5 billion. The bank reported an EPS of $0.47, beating analysts’ estimates of $0.45. Net interest income rose 11 percent to $11.5 billion.
Consumer banking revenue increased 10 percent to $9 billion year over year. Digital banking increased by 12 percent year over year to 24.2 million users, as the bank is pushing to transition into its digital platform.
Bank of America, along with many other banks, took a hit from the newly passed tax reform. The bank reported approximately a $2.9 billion charge from revaluing tax assets, meeting its expectations.
The bank’s net charge-offs rose to $1.2 billion from $880 million, primarily driven by a single client charge-off of $292 million.
“Responsible growth delivered solid results in 2017,” said Brian Moynihan, Chief Executive Officer of Bank of America, “Pretax earnings rose 17 percent, 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.”
Bank of America faced a $2.4 billion charge due to the tax cut, but took a lower hit compared to its competitors such as Citigroup, taking a $19 billion charge. Goldmans Sachs took a $4.4 billion charge and Morgan Stanley projects a $1.25 billion charge. Morgan Stanley will report its fourth quarter financial results on Thursday before market open.