Bank of America's Unrealized Loss Soars to $131.6 Billion on Securities

Concerns are mounting over Bank of America's unrealized losses on its securities portfolio. NEW YORK, Oct 17 (Reuters) - Bank of America reported unrealized losses of $131.6 billion on securities held until maturity in the third quarter, growing from nearly $106 billion in paper losses reported in the previous quarter. This significant increase highlights the challenges banks face in a volatile interest rate environment.

The situation is not unique to Bank of America. Aggregate securities losses across all FDIC-insured depositories reached their highest levels in Q3 2025. As of Decem, bank depositories’ aggregated losses pose a systemic risk to the banking sector. Higher interest rates have diminished the value of fixed-income securities held by many institutions.

Analysts are closely watching how these unrealized losses will impact the banking sector. U.S. banks could be grappling with at least $650 billion of unrealized losses in their securities portfolios, according to an estimate from Moody's after prospects of interest rate hikes by the Federal Reserve. The potential for further rate increases adds to the uncertainty.

Despite the substantial unrealized losses, Bank of America maintains that it doesn't anticipate any issues with its securities portfolio. Bank of America reported unrealized losses of $131.6 billion on securities in the third quarter, growing from the second quarter, but the bank does not expect the portfolio to pose a significant threat to its financial stability. The bank plans to hold these securities until maturity, mitigating the need to realize the losses.

However, the magnitude of the unrealized losses remains a key point of focus for investors and regulators. The stability of the banking system relies on effectively managing these risks and adapting to the changing economic landscape.