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08/08/2024

The Reality of Long-Term Assets on Your Bank’s Value

Directors should understand how the declining value of their banks’ fixed-rate, long-term assets can pressure capital and future earnings, along with their potential options.

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Written by
Kiah Lau Haslett Writer

Kiah Lau Haslett was the Banking & Fintech Editor for Bank Director.

Kiah Lau Haslett
Writer
Directors at institutions with a concentration of long-duration, underwater assets will face difficult choices in the quarters ahead. Longer-term assets — securities and loans that will mature in three years or more — made up 36.1% of all bank assets in the first quarter of 2024, according to the Federal Deposit Insurance Corp.’s Quarterly Banking Profile. At community banks, that figure was 49.6%. Unrealized losses on available-for-sale and held-to-maturity securities portfolios increased to $517 billion in the first quarter, up $39 billion from the quarter prior, according to the FDIC. While much of the attention on unrealized losses has focused…

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WRITTEN BY

Kiah Lau Haslett

Writer

Kiah Lau Haslett was the Banking & Fintech Editor for Bank Director.