---
title: "Held-to-Maturity Securities: definition, formula, and thresholds"
description: "Held-to-maturity (HTM) securities are bonds a bank intends and is able to hold until they mature. They are carried at amortized cost (not fair value) so unrealized price changes do not flow through earnings or capital while the bank holds them."
canonical_url: https://www.bankregreports.com/glossary/htm-securities/
source: BankRegReports
category: "Securities & Investments"
units: "$"
schedule: "Schedule RC-B"
---

# Held-to-Maturity Securities

> Held-to-maturity (HTM) securities are bonds a bank intends and is able to hold until they mature. They are carried at amortized cost (not fair value) so unrealized price changes do not flow through earnings or capital while the bank holds them.

## Formula

```
HTM Securities (carrying value) = Amortized Cost of bonds classified as held-to-maturity
```

Schedule RC-B reports securities by classification. HTM securities sit at amortized cost regardless of current market value; the gap between that book value and fair value is disclosed but not recognized on the balance sheet.

## Why it matters

The HTM classification shields reported capital from interest-rate-driven price swings. But the economic loss is still real. Silicon Valley Bank's 2023 failure made HTM accounting front-page news: large unrecognized HTM losses meant book capital overstated the bank's true loss-absorbing capacity.

## How to read it

A large HTM book is not a problem by itself; the question is the size of the unrecognized loss inside it relative to capital, and whether the bank could be forced to sell (which would crystallize the loss). Read HTM securities alongside HTM unrealized losses and the bank's liquidity position.

## Thresholds

| Range | Reading | What it means |
|---|---|---|
| Small / short-duration | Benign | Limited rate exposure; little hidden loss. |
| Moderate | Normal | Typical HTM holdings with manageable unrecognized loss. |
| Large vs. capital | Watch | Sizable HTM book; check the embedded unrealized loss. |
| Loss > capital cushion | Concern | Unrecognized HTM loss could overwhelm capital if realized. |


## Worked example

Banks shifted hundreds of billions of dollars of securities into the HTM category as rates rose in 2022, precisely because HTM classification keeps unrealized losses out of AOCI and reported capital. The losses did not disappear. They simply stopped being marked on the balance sheet.

## Questions

### What is the difference between HTM and AFS securities?

Available-for-sale (AFS) securities are carried at fair value, with unrealized gains and losses flowing through AOCI and affecting equity. Held-to-maturity (HTM) securities are carried at amortized cost, so their unrealized losses are disclosed but not recognized on the balance sheet.

### Can a bank freely move securities into HTM?

Reclassifying to HTM is allowed but consequential: selling HTM securities before maturity (outside narrow exceptions) can 'taint' the whole HTM portfolio and force fair-value accounting on all of it.

## Sources

- [FFIEC Call Report Schedule RC-B (Securities)](https://www.ffiec.gov/sites/default/files/data/reporting-forms/FFIEC031_FFIEC041_202606_i.pdf) (PDF)

## Related metrics

- [Available-for-Sale Securities](https://www.bankregreports.com/glossary/afs-securities/): Available-for-sale (AFS) securities are bonds a bank may sell before maturity for liquidity or balance-sheet management. They are carried at fair value, and their unrealized gains and losses flow through accumulated other comprehensive income (AOCI) into equity.
- [HTM Unrealized Losses](https://www.bankregreports.com/glossary/htm-unrealized-losses/): HTM unrealized losses are the gap between the amortized-cost carrying value of a bank's held-to-maturity securities and their lower current market value. The loss is disclosed but not recognized on the balance sheet, a hidden hit to economic capital.
- [Total Securities](https://www.bankregreports.com/glossary/total-securities/): Total securities is a bank's entire investment portfolio, held-to-maturity bonds at amortized cost plus available-for-sale bonds at fair value. It is typically the second-largest asset after loans and the bank's main liquidity reserve and interest-rate-risk position.
- [AOCI Burden](https://www.bankregreports.com/glossary/aoci-burden/): AOCI Burden measures unrealized losses on available-for-sale and held-to-maturity securities relative to a bank's total equity capital. It quantifies the gap between book equity and 'mark-to-market' economic equity, the issue that brought down Silicon Valley Bank in 2023.

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