Banker & Tradesman photo / file

Berkshire Bank expects to see double digit loan growth despite economic uncertainties in the year ahead.

The bank’s outlook for average loan growth in 2023 is 11 percent to13 percent. In response to an analyst’s question during the bank’s fourth quarter earnings call on Thursday about Berkshire’s comfort with growing loans that much during a deteriorating economic environment, Berkshire CEO Nitin Mhatre pointed to the bank’s nearly two-year-old strategy to turn around its financial performance. The strategy included hiring loan officers.

“The momentum that we’ve seen is really a reflection of the investment that we started making in 2021 in terms of the producers and the productivity measures and the incentive plans,” Mhatre said.

He added that the Berkshire’s delinquent and criticized loans have reached historic loans, and the bank has maintained and even tightened some of its credit marks.

Berkshire Bank’s total loans were $8.33 billion at the end of the fourth quarter, up from $7.94 billion at the end of the third quarter and $6.82 billion at the end of 2021. The bank said in its earnings statement that fourth quarter loan growth included a $231 million increase in commercial loans and a $183 million increase in residential mortgages.

Mhatre said he expects loan growth in both the commercial and residential portfolios this year, with the share of the commercial portfolio remaining in a range around the low 60 percent.

Berkshire Bank’s fourth quarter net income was $30.5 million, or $0.69 per diluted share, compared to $20.25 million, $0.42 per diluted share, in the fourth quarter of 2021. The bank said the per share earnings of $0.69 marked a record for the bank.

The full-year 2022 net income was $92.5 million, or $2.02 per diluted share, compared to 2021 net income of $118.66 million, or $2.39 per diluted share.

Total deposits at the end of 2022 were $10.33 billion compared to $10.07 billion at the end of 2021. The bank’s fourth quarter cost of deposits increased year-over-year to 0.69 percent from 0.19 percent.

Berkshire’s total assets were $11.66 billion compared to $11.55 billion at the end of 2021.

The bank’s recent executive hires included Jim Brown, formerly with Boston Private, as its new head of commercial banking. In response to an analyst’s question, Mhatre said the bank could see more opportunities for lending, including with not-for-profits, entities sponsored by private equity or venture capital, and family business.

“On the margin, yes, there will be some new areas, but otherwise we remain consistent with the strategy of going after high-quality clients and, more importantly, addressing the needs of the existing clients, which is where about 60 percent of our business comes from,” Mhatre said.