Sun Bancorp in Selinsgrove, Pa., said it expects earnings to take a $2.1 million hit this quarter from the sale of a portion of its mortgage securities portfolio.
The $715 million-asset company decided to take advantage of higher interest rates by cashing out mortgage securities yielding 6.5% and buying Ginnie Maes with a 7.5% return. The restructuring would "improve yield and liquidity," said Robert J. McCormack, president and chief operating officer.
Sun earned $1.8 million in the first quarter.
Richard D. Weiss of Janney Montgomery Scott LLC in Philadelphia said the restructuring makes sense for the well-capitalized bank. Sun is "better off in the long run to take [its] lumps" now, he said.
