Bill Ackman in a tweet on Friday said Bank of America is going to acquire Signature Bank on Monday, without citing the source of the information.
“I am hearing that @BankofAmerica is going to buy Signature Bank on Monday. Unless and until we can protect uninsured deposits, the cost of capital is going to rise for smaller banks pushing them to merge or be acquired by the SIBs. I don’t think this is good for America,” he said in the tweet.
Bank of America Corporation swept up more than US$ 15 billion in new deposits in a matter of days after the collapse of Silicon Valley Bank and New York-based Signature Bank. Depositors have been fleeing to the larger “TOO BIG TO FAIL” banks. In Bank of America’s debt securities portfolio for the year of 2022, they had US$ 113,539,000,000 in gross unrealized losses versus US$ 12,957,000,000 in 2021. Much of that loss was attributed to agency mortgage-backed securities and U.S. Treasury and government agencies debt. U.S. banks have seen the value of those bond portfolios decline in value as interest rates have risen since the start of 2022.
JPMorgan Chase & Co. fared better than Bank of America. In JPMorgan’s debt securities portfolio for the year of 2022, they had US$ 36,762,000,000 in gross unrealized losses versus US$ 3,189,000,000 in 2021.
