F&M Bank in Timberville, Va., used a gain from selling its insurance agency to offset a hit from selling underperforming securities.
The company said in a press release that it recorded a $4.8 million pretax gain from selling Bearing Insurance in April.
F&M then sold $29.8 million of securities, or 8.2% of its portfolio, at a pretax loss of $3.5 million. It should take less than four years to earn back the after-tax loss.
“After a great deal of consideration, we made the decision to utilize the one-time gain to offset a one-time loss, restructuring lower-yielding securities into significantly higher-yielding investments,” CEO Mike Wilkerson said in the release. “The anticipated increases, in both earnings per share and net interest margin on an annualized basis, allow F&M to potentially accelerate our performance and support our ongoing priority of generating sufficient, sustainable profitability.”