Bank Of America Earnings Could Soar As Interest Rates Grow Higher

boa — A Bank of America branch is pictured in New York City on May 7, 2009. REUTERS

This article originally appeared on the Motley Fool.

Analysts believe Bank of America's (NYSE:BAC) earnings will meaningfully climb in the second quarter of 2017, on the back of higher interest rates and lower expenses.

Bank of America's earnings per share are expected to increase 15% to $0.47 per share in the three months ending June 30. That's up from $0.41 per share in the first quarter of this year and the second quarter of last year.

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Higher interest rates

Higher interest rates are the most potent catalyst fueling the ongoing growth in Bank of America's bottom line.

The North Carolina-based bank estimated last year that the Federal Reserve's decision to raise rates in December, combined with the increase in long-term interest rates following the presidential election, would translate into $600 million in additional net interest income each quarter this year.

That's just about exactly what investors saw when Bank of America reported first-quarter earnings last month. Its net interest income grew on a year-over-year basis by $573 million.

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Things should continue to get better on this front, too.

The Fed raised rates again in March. It was too late to materially impact first-quarter results, but Bank of America says it should add another $150 million in quarterly net interest income going forward.

The central bank is poised to continue inching rates higher, moreover, with a majority of the members on its monetary policy committee in favor of doing so two more times this year.