This news comes via Reuters:
Bank of America Corp is carrying loans on its balance sheet marked at more than $44 billion above their fair value, the company said in its annual report filed with U.S. regulators on Friday.
The bank said it ended 2008 with $886.2 billion in loans, but estimated the fair value — or market price — for these loans as $841.6 billion.
In a related Bloomberg article, an analyst from Friedman, Billings & Ramsey gets right to the point:
“That’s the heart of why these companies are trading where they are,” Friedman Billings Ramsey & Co. analyst Scott Valentin said in an interview. “Technically, if you mark-to- market the entire balance sheet, most of these banks are insolvent.”
Sources
Bank of America SEC Filings
Bank of America Loans Valued at $44 Billion Less Than Books Say – Bloomberg.com
BofA carries loans $44 billion above market value – Reuters