Securities & Investments

Held-to-Maturity Securities

Also known as HTM 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 interpret

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	Label	Interpretation
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.

Frequently asked

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.

Direction: Lower is betterUnits: $Call report: Schedule RC-BBrowse banks

Sources

FFIEC Call Report Schedule RC-B (Securities)

See HTM Securities across 4,335 US banks

BankRegReports ranks every FDIC-insured institution by HTM Securities, refreshed quarterly within 48 hours of FFIEC release.

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