Capital One Financial and several other banks have disclosed the charges they expect to record in the fourth quarter due to lower values on their deferred tax assets.
President Trump signed a tax-cut bill on Friday, lowering the corporate rate to 21% from 35%. Banks’ deferred tax assets are now worth less, since future tax deductions will be lower.
Capital One, in McLean, Va., estimated that it will record a $1.9 billion fourth-quarter charge to cover the devaluation of its deferred tax asset.
Capital One disclosed the estimate in a Tuesday regulatory filing, in which the $355 billion-asset company also announced that it had resubmitted its revised capital plan, per an earlier agreement with the Federal Reserve following this year’s annual stress tests. As part of the revised plan, Capital One reduced the size of its share-buyback plan by $850 million to $1 billion.
The $30 billion-asset Associated Banc-Corp in Green Bay, Wis., will lower the value of its deferred tax asset between $14 million and $16 million, according to a regulatory filing. Associated did not provide an estimated reduction in earnings per share.
Old National Bancorp in Evansville, Ind., will cut the value of its deferred tax asset by about $41 million, less fourth-quarter adjustments, the $15 billion-asset company said in a Friday regulatory filing. The impairment will reduce fourth-quarter earnings by 28 cents, though Old National said it may amend the figure.
Beneficial Bancorp in Philadelphia estimated that its deferred tax asset will be impaired by $14 million, according to a regulatory filing. The $6 billion-asset company will record the devaluation as additional income tax expense in its fourth-quarter earnings report.
Credit Suisse will write down the value of its U.S. deferred tax assets by about $2.3 billion, the Zurich company said in a news release. Additionally, Credit Suisse said that its U.S. corporate tax liability is expected to rise as a result of the new law’s tax on services and interest payments made to affiliated companies located outside the U.S.
However, Credit Suisse said that the new tax law “will have a positive impact on the U.S. economy and our activity levels in the U.S., in particular with regard to our investment banking activities in advisory and underwriting.”
Some 54% of small businesses said in a recent survey that elevated rates had led to higher debt payments. And in a sign that loan demand remains soft, 37% reported delaying expansion plans or capital spending.
Investing in Main Street Act has passed the House three times with overwhelming majorities but has failed to gain traction in the Senate. Backers, including banks that invest in the funds, hope to flip the script with a third version.
The head of the Consumer Financial Protection Bureau summarized his findings from a yearlong probe into the Appraisal Foundation. He says the "lawmaking body" is not accountable to the public or market forces.
False information, job losses, diminishing skills and human interaction, among other concerns, have bankers worried about deploying both generative artificial intelligence, like ChatGPT, and more long-accepted forms of AI like machine learning, according to a new survey of American Banker readers.
Despite fresh waves of online fraud and scams, czars of social media platforms, peer-to-peer networks and blockchain products have renewed ambitions to marry financial services with social apps.
Goldman Sachs is unloading the home improvement lending platform GreenSky after a misadventure in consumer finance. However, the consortium buying GreenSky plans to invest heavily in its growth, and Synovus says it's eager to deepen its partnership with the online lender.