Pacific Premier Bancorp in Irvine, Calif., sold nearly $1.3 billion of securities at a loss.
The $20 billion-asset company said in a press release that its sold the securities, largely consisting of lower-yielding agency and mortgage-backed debt securities, for an estimated $182.3 million after-tax loss.
Pacific Premier said it plans to deploy the net proceeds in the fourth quarter into a mix of cash and higher-yielding earning assets with an expected average yield of approximately 5%.
The moves should contribute $50.4 million in net interest income on an annualized basis. It should add $37.1 million to annual net income in 2024 and will be neutral to tangible book value per share.
“Through this securities portfolio repositioning, we have significantly improved the company’s future earnings power, while simultaneously preserving our strong capital levels and further enhancing our liquidity,” Steven Gardner, Pacific Premier’s chairman, president and CEO, said in the release.
“This is a logical step in our continued focus on optimizing our balance sheet and maintaining organizational flexibility so that we can capitalize on strategic opportunities to drive long-term shareholder value,” he added.