Bank of America (BAC.N) reported unrealized losses of $131.6 billion on securities in the third quarter, which increased from the second quarter
However, the bank does not expect these unrealized losses to result in actual losses in the long term
Unrealized losses have become a focus for investors, particularly since a sharp loss led to the collapse of Silicon Valley Bank, causing significant industry turmoil
Bank of America is unlikely to sell these securities at a loss because it has strong liquidity with consumer deposits and higher capital, and it plans to hold them until maturity
The "held-to-maturity" designation allows banks to purchase less risky securities, offering downside protection, even in a rising interest rate environment with limited upside potential
All the unrealized losses at Bank of America are on government-guaranteed securities, which they anticipate will result in zero losses over time
In the second quarter, Bank of America had reported approximately $106 billion in paper losses
The bank had about $603 billion in held-to-maturity securities, a slight decrease from the second quarter's $614 billion
While these low-yielding assets have limited the bank's ability to make higher profits in money markets or other assets with better returns, these unrealized losses are a "non-issue" from an accounting perspective
U.S. banks, including JPMorgan Chase and Citigroup, are also facing unrealized losses in their securities portfolios, which have been amplified by a bond market rout in the third quarter