$111,000,000,000 in Unrealized Losses Could Hit Bank of America As 10-Year Treasury Yield Moves Higher: Report

Unrealized losses on Bank of America’s balance sheet are ballooning amid rising bond yields, according to a new report.

Bank of America’s unrealized losses on mostly US agency mortgage-backed securities could jump to $111 billion in the fourth quarter of 2024, an increase of 29% from the previous quarter, reports Barron’s.

Bank of America’s held-to-maturity assets stood at $568 billion as of the third quarter of 2024, according to a regulatory filing, including an unrealized loss of $86 billion at the time.

The bank’s unrealized losses continue to widen as the yield on 10-year US treasuries nears 5%.

And most of Bank of America’s held-to-maturity debt securities are comprised of agency mortgage-backed securities, which are witnessing similarly rising yields.

BofA’s unrealized bond losses are the highest in the industry. By comparison, the nation’s largest bank JPMorgan Chase has about $20 billion in unrealized losses as of Q3 2024.

In its Quarterly Banking Profile report issued in December, the Federal Deposit Insurance Corporation (FDIC) said the number of US lenders on its “Problem Bank List” rose to 68 in Q3, with total unrealized losses at all major banks standing at $364 billion.

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