Securities

Bank of Marin Bancorp in Novato has sold a big chunk of low-yielding securities, replacing them with investments that should produce significantly more income.

The Fairmont, West Virginia, bank is taking a $7.6 million hit to rid itself of $73 million in long-duration, low-yielding securities, though the sale of its payments subsidiary the week before cushions the blow.

Horizon Bancorp said it will raise about $200 million in capital to fund a major balance-sheet restructuring. The move would dilute existing shareholders, and the company's stock price dipped on Thursday.

Small lenders beset by the fallout from high interest rates took losses in the fourth quarter when they unloaded underperforming securities and loans. But they are reinvesting the proceeds into higher-yielding assets.

Arrow Financial in Glens Falls kept busy in December, consolidating its two subsidiary banks, expanding its board and restructuring its securities portfolio.

The Honolulu-based bank is taking a $19.7 million pretax loss to rid its balance sheet of low-yielding investments. It joined a parade of banks that have made similar moves.

The Green Bay, Wisconsin-based bank will record a fourth-quarter loss after agreeing to sell $3 billion of low-yield loans and mortgages. The moves leave the bank well-positioned for 2025, CEO Andy Harmening said.

Industry observers say the U.S. securities industry's migration to next-day settlement in May 2024 was a technology success story, which has encouraged the U.K. and the EU to follow suit.

Berkshire Hills Bancorp declined to detail the savings it expects from the downsizing, though one analyst estimated it could shave $3 million from the company's annual noninterest expenses.

The proposal's plan for addressing securities financing transactions will lead to negative unintended consequences for multiple financial entities.

The Michigan City company, part of a growing list of banks announcing similar overhauls, aims to sell nearly $400 million of securities and reinvest the proceeds in higher-yielding loans.

Equity, based in Wichita, Kansas, has agreed to buy the parent company of the Bank of Kirksville. The combined company would have $5.4 billion of assets and 74 branches, including 23 in Missouri.

The top five have more than $2.6 trillion in combined securities as of March 31, 2023.

Regulators are looking into practices within JPMorgan's securities arm and investigating parts of its trading operations, according to a regulatory filing by America's largest bank.

The Security Traders Association conference in D.C. led a panel about the SEC's proposal to scale back robo-advisors and AI in markets.

The bank has joined with four other financial giants — including Barclays, BNP Paribas and HSBC — to launch Endoxa, which will enable the firms to use technology to standardize their approaches to compliance.

Broker-dealers, investors and clearing companies, among others, will have to upgrade their operations and technology to meet SEC regulations.