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Times have been hard for Wall Street banks lately, what with record amounts of cash pouring in and causing all kinds of bookkeeping headaches.

The Four Biggest U.S. Banks Made $2.3 Billion From Tax Law - in One Quarter

Big banks just cashed in the first installment of benefits corporate America will reap from the new federal tax law.

The haul: more than $2.3 billion.

That is how much the combined earnings of the four major national banks— JPMorgan Chase, Wells Fargo. Citigroup, and Bank of America, — increased in the first quarter because of the lower corporate rates under the tax-overhaul law enacted in December, according to an analysis of the banks’ results by The Wall Street Journal.

That amount is only a modest-size chunk of the banks’ total first-quarter earnings—less than 10% of their combined net income applicable to common shareholders. But it comprises a major chunk of their year-over-year earnings growth.

Without the tax savings resulting from the new lower corporate tax rate, Wells Fargo’s earnings would have declined from a year ago instead of increasing, and much of the year-over-year growth at Citigroup and Bank of America would be gone. At JPMorgan, losing the tax bump would have cut its earnings growth to 28% from 35%.

The $2.3 billion boost isn’t the entire story. For one thing, other provisions of the tax law prompted some of the same banks and many other companies to take big charges against their earnings in the fourth quarter. From that perspective, the first-quarter boosts merely help even things out.

The Journal’s analysis calculated what each bank’s results for the latest first quarter would have been if the effective tax rate from last year’s first quarter was still in effect.

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