Thanks in part to the tax cuts taking effect this year, banks insured by the Federal Deposit Insurance Corporation reported record earnings of $56 billion for the first quarter of 2018. That represents a $12.1 billion, or 27.5 percent, increase from a year ago.
More than 70 percent of the 5,606 commercial banks and savings institutions reporting to the FDIC recorded an increase in earnings on a year-over-year basis.
The tax cuts weren’t the only source of increased profitability – the FDIC report also cites higher net operating revenue as a contributor – but the reduction of the top corporate tax rate from 35 percent to 21 percent made a big difference. Without the tax cut, writes American Banker, “net income would have been below $50 billion.”