Subject: The cover in todays Barron's, banks,
' Bank of America's are the largest. The bank had a paper loss of $109 billion at year end on a $632 billion portfolio of mostly federal agency mortgage securities with maturities of over 10 years. They are carried using held-to-maturity accounting. The bank intends to hold its hold-to-maturity securities to maturity. Those bonds carry an average rate of just 2%, way below current market rates on securities of 5%.

Given the accounting treatment, the paper losses don't depress the bank's capital. But the losses are significant relative to Bank of America's $175 billion of tangible equity at year-end 2022.

JPMorgan was showing an unrealized loss of $36 billion on bond holdings at the end of 2022, compared with Wells Fargo at $41 billion, and Citigroup at $25 billion.''