Oregon Pacific Bank in Florence repositioned its securities portfolio during the fourth quarter.
The $754 million-asset bank said in a press release that it sold $15.5 million of securities it bought in early 2021 and had a remaining weighted average life of roughly 5.4 years, at a pretax loss of $1.8 million. The securities have a 1.23% yield.
Oregon Pacific replaced those securities with $13.8 million of securities with a weighted average life of about 6.5 years. The securities have a 4.79% yield.
The bank said the strategy should create $479,000 in annual interest income, offsetting the fourth quarter securities loss in less than four years.
“This security sale strategy was possible due to the strong financial results in 2022,” Amber White, the bank’s chief financial officer, said in the release. “While 2022 profitability was impacted by the sale, the bank’s margin is better positioned for 2023 and beyond, leading to enhanced shareholder value.”
The bank’s fourth-quarter earnings fell by 24% from a year earlier, to $1.4 million.