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Eastern Bank planned to pay off wholesale borrowings after selling about 25 percent of its securities portfolio at a loss, but the bank failures just days later changed those plans.

Boston-based Eastern Bank had an after-tax loss of $280 million after selling $1.9 billion in lower-yielding, available-for-sale investment securities in early March. The bank announced the sale in its first quarter earnings statement after the market closed on April 27 that noted a $194.1 million net loss.

During the bank’s first quarter earnings call Friday morning, Eastern CEO and Chair Bob Rivers said the move was done to reposition the balance sheet to enhance liquidity and improve the bank’s earnings power going forward. Rivers said the bank’s management and board of directors were pleased with the sale.

The sale closed shortly before Silicon Valley Bank failed on March 10 and Signature Bank failed on March 12.

“We were glad to have $2 billion in cash on the balance sheet as the aftermath of those failures was playing out in our markets,” Rivers said during the call.

Eastern Bank’s chief financial officer and chief administrative officer, Jim Fitzgerald, said during the call that the bank chose to sell its lowest-yielding securities to deploy those funds in the current environment of high interest rates.

The bank still plans to use the proceeds over time to reduce its borrowings from the Federal Home Loan Bank of Boston and its brokered certificates of deposit, Fitzgerald said, but the bank for now is holding a higher cash balance in response to the bank failures.

Eastern ended the first quarter with $2.1 billion in cash, up from $170 million at the end of 2022. The securities portfolio totaled $5.2 billion, down from $7.2 billion on Dec. 31.

Fitzgerald said the bank had previously said it would reduce the size of its securities portfolio from about 30 percent of assets to 20 percent.

“This repositioning gets us to that goal,” Fitzgerald said.

In response to an analyst’s question, Fitzgerald said the bank plans to let the securities portfolio continue to run off and use that cash flow help fund loans. He said the bank is not optimistic about deposit growth at Eastern or in the industry for the next 18-24 months.

Eastern Bank ended the first quarter with $18.5 billion in deposits, down $432.8 million, or 2 percent, from the end of 2022. The decrease included a reduction in brokered certificates of deposit of $319 million.

The bank’s loans totaled $13.7 billion, up $99.7 million, or 1 percent, from Dec. 31. The bank saw commercial loans increase by $73.4 million, while residential loans increased by $36.6 million. Consumer loans, including home equity loans, were down $10.3 million during the quarter.

Eastern’s total assets were $22.72 billion at the end of the first quarter compared to $22.64 billion at the end of 2022.

The bond sale led to a first quarter net loss of $194.1 million, or a loss of $1.20 per diluted share, compared to net income of $42.3 million, or $0.26 per diluted share, in the fourth quarter of 2022 and net income of $51.5 million, or $0.30 per diluted share, in the first quarter of 2022.

Excluding the losses tied to the bond sale, Eastern had operating net income – a non-GAAP measure – of $61.1 million, or $0.38 per diluted share, compared to $49.9 million, or $0.31 per diluted share, in the fourth quarter. Rivers said the first quarter net operating income was a record for the bank.

“Notably, we received only a marginal benefit in the quarter from the securities sale,” Rivers said during the call. “The full benefit will come over the balance of the year as we have reset our earnings and provided a roadmap for earnings growth that is far greater than before the sale.”