When Silicon Valley Bank failed, they had gross unrealized Hold to Maturity (HTM) bond losses of about $15 billion against total equity of $16.3 billion. When combined with the additional $1.8 billion loss in SVB's Available for Sale (AFS) securities portfolio, total unrealized securities losses exceeded 100% of Tier 1 capital. Also, SVB had over 40% of its assets classified as HTM, double the industry norm. At the time, sector-wide unrealized securities losses stood at $515 billion when SVB failed, peaking at $684 billion later in 2023.
Today, U. S. aggregate unrealized securities losses have declined to $395 billion (approximately) and represents 7% to 8% of Tier 1 equity. Only 16 banks report unbooked HTM losses exceeding 50% of CET1 capital, down from 24 banks in Q1'25 and 34 in Q4'24, so conditions are improving. It will really help if the Fed continues to reduce rates.
I reviewed the top 20 underperforming banks. If you want the list, PM me.
Today, U. S. aggregate unrealized securities losses have declined to $395 billion (approximately) and represents 7% to 8% of Tier 1 equity. Only 16 banks report unbooked HTM losses exceeding 50% of CET1 capital, down from 24 banks in Q1'25 and 34 in Q4'24, so conditions are improving. It will really help if the Fed continues to reduce rates.
I reviewed the top 20 underperforming banks. If you want the list, PM me.
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