$413,200,000,000 in Unrealized Losses Hit US Banks As FDIC Warns Rising Rates Adding Pressure

US banks are now saddled with $413.2 billion in unrealized losses on their balance sheets.

In its new Quarterly Banking Profile for the first quarter of 2025, the Federal Deposit Insurance Corporation (FDIC) says US banks reported a $67.5 billion decrease in unrealized losses on securities.

Although it looks like progress, the FDIC warns the decrease has likely already reversed amid extreme bond market volatility and a surging Treasury yield curve.

“Longer-term interest rates such as the 30-year mortgage rate and the 10-year Treasury rate decreased in the first quarter, increasing the value of securities reported by banks and lowering unrealized losses.

However, increases in longer-term interest rates since the end of the first quarter would likely reverse most of these improvements in unrealized losses if measured today.”

Rebel Cole, who worked in the Federal Reserve System for ten years, tells Fortune the losses represent a serious ongoing danger for lenders.

“All it takes is one bad news story about any of these banks, and we could have another banking crisis like we had in March of [2023].

I’m amazed we haven’t had one since then.”

The FDIC says banks recorded a $180.9 billion rise in domestic deposits, which is about 1, and a $3.8 billion increase in net income to $70.6 billion, with a reserve coverage ratio declining from 179.9 to 168.8.