ESB Financial Corp. of Ellwood City, Pa., said it expects to take a $2.5 million pretax loss in the fourth quarter as a result of a balance-sheet restructuring.
The $1.8 billion-asset company announced late Friday that it had sold of $64.6 million of adjustable-rate mortgage-backed securities, with a weighted average interest rate of 4.22%, and $10.2 million of fixed-rate mortgage backed securities, with a weighted average of 4.39%. The parent of ESB Bank said it bought the securities at a premium but that yields have declined as more borrowers have prepaid their mortgages.
ESB said it will use the proceeds to buy a blend of higher-yielding fixed- and adjustable-rate mortgages. ESB reported net income of $3.4 million for the quarter that ended Sept. 30, down 8% from the previous quarter. Its net interest margin fell 20 basis points, to 2.14%.
