Chesapeake Financial Shares Inc. (OTCQX:CPKF) CEO Jeffrey Szyperski said a first-quarter net loss was a deliberate step toward strengthening future earnings, as the company repositioned $75 million of its investment portfolio into higher-yielding assets.
"The first quarter loss was a proactive move by us to reposition approximately $75 million of investment securities into much higher yields,” Szyperski said in a statement on Tuesday.
“This is a one-time loss of approximately $8 million (post tax) in order to enhance the long-term yield of our investment portfolio.
“We strongly feel these moves will greatly enhance long-term shareholder value.”
The parent company of Chesapeake Bank and Chesapeake Wealth Management reported a net loss of $4.45 million, or $0.942 per diluted share, compared with earnings of $0.583 in the same period last year.
Alongside the investment shift, Chesapeake closed on $25 million in subordinated debt to support future earnings and fund a stock buyback initiative of up to $4 million.
Total assets rose 5.4% from year-end to $1.61 billion. Nonperforming assets increased to 0.472% of total assets, up from 0.328% as of the end of 2024.
Despite the quarterly loss, the company’s board declared a $0.16 per share quarterly dividend, extending Chesapeake’s 32-year streak of dividend increases.
The stock currently yields 3.33%.