Bank of McKenney reported net income of $448,000, or $0.24 per diluted share, in the first quarter of 2010. The company earned net income of $278,000, or $0.24 per diluted share, in the same quarter of 2009.

The management of Bank of McKenney attributed the strong increase in net income to a deliberate strategy by the bank to lower duration in its investment portfolio in anticipation of a tightening in monetary policy.

“This has been an exceptionally profitable quarter for the Bank. In 2007 and 2008, we implemented an investment strategy focused on the unrealistically high yields available in the financial and municipal sectors. This past quarter, we quite profitably unwound many of these longer investments to position ourselves for higher rates,” said Richard M. Liles, the CEO of Bank of McKenney.

Bank of McKenney saw limited growth in assets on a sequential basis from the last quarter of 2009. The bank reported total assets of $185.0 million at the end of the first quarter of 2010, compared to $183.9 million at 12/31/2009.

Bank of McKenney is a community bank headquartered in Virginia, and has six branches in the state with total deposits of $161 million.