Community Heritage Financial in Middletown, Md., has sold underperforming securities.
The company said in a press release that it sold lower-yielding securities with a $73.3 million book value at a $3.9 million after-tax loss. The company plans to use the net proceeds to buy higher-yielding securities, with a projected earnback period between three and four years.
The bank’s regulatory capital will decline by about $3.9 million as a result of the sale.
“Management and the board … chose to allocate capital to reposition the investment securities portfolio as we believe the initial loss is recovered over a reasonable period of time and the accretive impact to earnings will meaningfully enhance future shareholder value,” BJ Goetz Jr., the company’s president and CEO, said in the release.