Bogota Financial in Teaneck, N.J., used proceeds from a sale-leaseback transaction to offset the costs of selling underwater securities.
The $979 million-asset company said in a press release that it sold three branches to Mountainseed Real Estate Services for a $9 million pretax gain. Bogota said it will cost $1 million to rent the branches during the first year.
Bogota also realized an $8.9 million pretax loss after selling $66 million of low-yielding securities. A portion of the proceeds were reinvested into higher-yielding securities; the remaining proceeds will be used to fund loans and pay down higher-cost borrowings.
“These transactions are a key piece of our strategy to offload underperforming legacy investments and will allow us to improve future earnings and net interest margin,” Kevin Pace, Bogota’s president and CEO, said in the release.
“The sale-leaseback allowed us to accomplish this without deteriorating regulatory capital,” he added. “This strategic repositioning will provide both short- and long-term benefits by strengthening our balance sheet, allowing for future growth and adding shareholder value.”