Bank of Marin Bancorp in Novato, Calif., decided to rip off the Band-Aid when it comes to its securities portfolio.
The company, which restructured its securities book at least twice in the past two years, said in a press release that it reclassified its entire held-to-maturity portfolio as available-for-sale. The plan is to book a fourth-quarter balance sheet adjustment for the difference between the market value and the book value on the date of transfer, adjusted for losses already captured.
Bank of Marin estimated that the net amount will be about $59 million, after-tax, based on Oct. 31 valuations and its statutory tax rate of 29.56%.
The company also raised $45 million through a private placement of subordinated debt.
The move “further enhances the value of our franchise by meaningfully improving our earnings power, which, in turn, allows us to continue reinvesting in the company’s growth,” Tim Myers, Bank of Marin’s president and CEO, said in the release.