Hope Bancorp in Los Angeles sold underwater securities at a $40 million pretax net loss.
The company disclosed in a regulatory filing that it sold securities with a fair value of $422 million. Net proceeds from the sale were used to buy higher-yielding securities and collateralized loan obligations.
The repositioning should increase Hope’s interest income by about $12 million annually. It should take the company about three years to earn back the loss, which will be recorded in the second quarter.