Horizon Bancorp in Michigan City, Ind., repositioned its balance sheet.
The $8 billion-asset company said in a press release that it sold $382.7 million of available-for-sale securities at a $31.6 million pretax loss. The company also surrendered $112.8 million in bank-owned life insurance.
Horizon said it plans to redeploy the proceeds during the first half of 2024 into higher-yielding loans and other liquid assets. The company said the moves should add $13 million to annual net income. It should take less than three years to earn back the loss from the securities sales.
The company also said it recently formed an equipment finance division.
The moves “accelerates our communicated strategy to shift Horizon’s balance sheet towards higher-yielding assets and improves the flexibility of our funding strategies,” Thomas Prame, Horizon’s president and CEO, said in the release.
“Our local bankers have proven their ability to generate high-quality loan growth with improved yields that can leverage the liquidity provided by this transaction,” Prame added.