Northwest Bancshares in Columbus, Ohio, plans to reposition its securities portfolio.
The $14.5 billion-asset company said in a press release that it will sell up to 15% of its investment securities portfolio. Northwest expects to recognize a $40 million pretax loss from the sales.
Proceeds will initially be used to lower borrowings while also reinvesting into securities with similar risk, maturity and duration characteristics.
The company said it expects a yield pickup of 375 to 400 basis points from the repositioning. It will look to manage the payback period so that it will be about three years.
“By executing this strategic securities transaction, we will significantly improve the company’s future earnings potential while simultaneously maintaining our robust capital levels and liquidity,” Louis Torchio, the company’s president and CEO, said in the release.
“This strategic move aligns with our commitment to long-term financial stability and growth, ensuring that we are well-positioned to capitalize on future opportunities and navigate any potential challenges in the market,” he added.