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PBCO Financial Corporation (PBCO) announced a repositioning strategy for its investment securities portfolio, resulting in an after-tax loss of approximately $5.1 million. The company sold $49.4 million in investment securities to rebalance the bank's balance sheet, aiming to enhance net interest income. The repositioning is expected to be neutral to tangible book value per share and is intended to improve the company's balance sheet position and earnings going forward.
Positive
Repositioning strategy to enhance net interest income
Strong capital ratios as of September 30, 2023
Negative
After-tax loss of approximately $5.1 million
Net loss for the fourth quarter of 2023
MEDFORD, Ore.--(BUSINESS WIRE)--
PBCO Financial Corporation (OTCPK: “PBCO”), the holding company (Company) for People’s Bank of Commerce (Bank), announced today that the Bank completed a repositioning strategy for our investment securities portfolio. The Bank sold approximately $49.4 million in market value of investment securities classified as available-for-sale with an average yield of 1.42% for an estimated after-tax loss of approximately $5.1 million. This sale will cause the Company to report a net loss for the fourth quarter of 2023. The Company will use the net proceeds to rebalance the composition of the Bank’s balance sheet. The Company anticipates this repositioning will enhance net interest income and will be neutral to tangible book value per share.
Julia Beattie, President & Chief Executive Officer of PBCO Financial Corporation commented, “This is a prudent step to improve our balance sheet position and enhance our earnings going forward, while preserving our liquidity and capital strength.”
The Bank had strong capital ratios as of September 30, 2023, and subsequent to this transaction will continue to exceed the well-capitalized regulatory capital guidelines.
What is the recent announcement from PBCO Financial Corporation (PBCO)?
PBCO announced a repositioning strategy for its investment securities portfolio, resulting in an after-tax loss of approximately $5.1 million.
What is the impact of the repositioning strategy on the company's financials?
The company sold $49.4 million in investment securities, causing a net loss for the fourth quarter of 2023.
How does PBCO Financial Corporation (PBCO) plan to use the net proceeds from the sale?
The company will use the net proceeds to rebalance the bank's balance sheet, aiming to enhance net interest income.
What is the expected outcome of the repositioning strategy?
The repositioning is expected to be neutral to tangible book value per share and is intended to improve the company's balance sheet position and earnings going forward.
What are the positive aspects of PBCO Financial Corporation's recent performance?
The company has strong capital ratios as of September 30, 2023.
What are the negative financial implications of the repositioning strategy for PBCO Financial Corporation?
The repositioning resulted in an after-tax loss of approximately $5.1 million and caused a net loss for the fourth quarter of 2023.
