Lately all we can read about these days are banks failing everywhere! Are we in a financial crisis? Now some worry Will Bank of America Collapse? And many others worry whether or not there is a Hawaii Bank Run? And of course, many others worry about the more local establishments. These unrealized losses are NOT reflected in profits or a deduct to equity via Other Comprehensive Income (OCI) – only in the footnotes! Moreover, we don’t find these losses reflected in stress tests or measures of capital adequacy.įurthermore a 25 bp (1/4 of 1 percent) increase in rates for a 10-year security causes approximately 2 points in losses (100 par to 98 to reflect yield discount). Let’s take a look at the broader US Banking industry as well and their health! Below we have a chart showing unrealized depreciation on Hold to Maturity Securities (HTM) for top 100 banks versus equity. But according to Bloomberg, traders think the deal fails to close. Now First Horizon’s stock drops from $25 to $14 and depositors worry!Įven though the bank is under acquisition by TD Bank, now it sits 38% Below the TD Bid. Banks are dropping like flies it seems, now, Silicon Valley, Signature Bank, who is next? Many find themselves worried about their bank accounts these days. Is First Horizon Bank In Trouble? First Horizon National Corporation logo, as of 2020
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