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A Berkshire Bank storefront branch in Boston’s Brighton neighborhood. The bank is twinning a major small business lending push with updates to its banking services. Photo by James Sanna | Banker & Tradesman Staff
Berkshire Bank executives reported a growing loan portfolio in this morning’s third-quarter earnings call, driven by residential mortgages at a time when the housing sector was hitting turbulent waters.
The Boston-based bank closed out the third quarter with a $1.93 billion balance in residential mortgages, up 17 percent over the second quarter and 29 percent year-over-year, according to its earnings presentation.
Overall, its total loan balance was up 5 percent quarter-over-quarter and 13 percent year-over-year. Commercial real estate loan balance totaled $3.93 billion and were also up 2 percent quarter-over-quarter, while commercial and industrial loans sat at $1.45 billion were flat compared to the second quarter and up 6 percent year-on-year.
Chief Accounting Officer Brett Brbovic told analysts on an earnings call Thursday morning that the bank’s recent hiring of several loan originators helped drive the residential loan growth.
The bank also saw its net interest margin increase, to 3.48 percent, for the second quarter in a row.
Overall, revenue was up 11 percent year-over-year to $108.3 million, but down 25 percent year-over-year. Expenses hit $81.7 million, up 19 percent quarter-over-quarter and 18 percent year-over-year, but the bank still managed to shrink its efficiency ratio from 66.6 percent to 62 percent.
The bank reported a jump in net charge-offs, at $6 million, which executives said was driven by a few select, troubled borrowers and was not representative of larger challenges in individual sectors. Total delinquencies and non-performing loans were down 16 percent quarter-over-quarter and flat year-over-year, and allowance for credit losses also declined over the second quarter.
“Berkshire posted strong revenue growth in the third quarter and achieved the highest adjusted per share earnings since 2019,” CEO Nitin Mhatre said in a statement released along with the bank’s earnings report. “We’re ahead of our BEST strategic transformation plan targets for performance improvement and accelerating our progress towards our vision of becoming a high-performing, leading socially responsible community bank.”
