Bank of America's Unrealized Bond Losses Could Top $90 Billion on Surging Yields
BAC sits 27% above its 52-week low of $46.115.
Summary
Bank of America's held-to-maturity bond portfolio could see unrealized losses exceed $90 billion in Q3 2026, up from $82 billion at the end of Q2, as yields surge. The $506 billion portfolio, mostly low-rate agency mortgage securities, has been a drag on earnings and returns since 2022. While losses are unrealized and the bank plans to hold to maturity, the widening gap highlights the cost of its Covid-era bond purchases. The bank projects reinvestment of $355-390 billion from 2026-2031 as securities mature, but higher mortgage rates may slow prepayments. Q3 earnings supplement in October will disclose the actual paper losses and reinvestment outlook.
At the time of this announcement, BAC was trading at $58.36 on NYSE in the Finance sector, with a market capitalization of approximately $408.1B. The 52-week trading range was $46.12 to $65.23. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Dow Jones Newswires.