Blue Hills Bancorp Inc., the holding company of Blue Hills Bank, saw net income of $3.9 million, up $2.5 million from this time last year, as the company moves to reduce the amount of and change the composition of securities it manages.

Earnings-per-share for the $2.5 billion asset bank were $.16 per diluted share, up from $.05 per diluted share year-over-year, but down from the first quarter of 2017 when earnings-per-share were $.31 per diluted share.

The first quarter of 2017 included a pre-tax gain of $5.9 million from the company’s investment in Northeast Retirement Services, Inc., which was acquired by Community Bank System Inc.

Net interest income for the quarter was $16.4 million, up 23 percent from the second quarter of 2016.

During the quarter, Blue Hill executives implemented an earlier decision to switch its strategy and liquidated its externally managed available-for-sale debt securities portfolio, valued at $164.6 million, and re-invested approximately $100 million from the proceeds into its internally-managed fixed income securities portfolio.

Part of Blue Hills’ reasoning for the transition was that continued rising interest rates would likely negatively impact the returns of this portfolio, which largely consists of corporate debt securities, over time.

“The first half of 2017 was an important period in the continued transformation of our bank,” Blue Hills Bancorp President and CEO William Parent said in a statement. “We took some key steps to restructure our securities portfolio by selling our portfolio of mutual fund investments in the first quarter and restructuring of the remaining portfolio of available-for-sale debt securities in the second quarter.”

“These actions will reduce volatility in our quarterly financial statements and, together with the expansion of our loan portfolio over the past several years, have reduced the level of investment securities to just 12 percent of total assets at June 30, 2017,”  Parent added. “As recently as the end of 2013, investment securities comprised approximately one-third of the company’s total assets.”

Non-interest income was $4.5 million in the second quarter, but included a $928,000 gain on the sale of the company’s remaining available-for-sale debt securities portfolio. Non-interest income for the second quarter of 2016 was $2.8 million.

Total loans at the end of the second quarter topped $2 billion, up more than $300 million from a year ago, spurred largely by growth in commercial business, commercial real estate and family residential loans.

The company’s efficiency ratio, however, dropped to 67 percent from 80 percent one year ago.