The parent company of Berkshire Bank is planning to sell off one of its mortgage subsidiaries and exit other non-strategic, non-relationship types of lending, as part of a broader strategic review the company began earlier this year.

The roughly $12.2 billion-asset company said it plans to sell First Choice Loan Services, which it got when it acquired New Jersey-based First Choice Bancorp in 2016 in an all-stock deal for nearly $112 million.

Berkshire noted in an investor presentation that while First Choice generates significant fee revenue, it is an inherently volatile, higher efficiency ratio business. The bank said it has already engaged several parties that might be interested in acquiring the national lending platform.

Berkshire executives also said they are planning to wind down their $500 million indirect auto lending portfolio and sell the assets in their $175 million aircraft loan portfolio. In total, the sale of First Choice and exit of the two loan portfolios would result in a $1.1 billion reduction of the balance sheet.

“We view 2019 as a transition year that generally maintains profitability levels of 2019 with a higher-quality, sustainable earnings stream, while setting the stage for improving profitability and controlled balance sheet growth in 2020 and beyond,” Berkshire President and CEO Richard Marotta said on a recent earnings call.

Marotta began the strategic review shortly after taking the reins from former President and CEO Michael Daly, who resigned from the bank under uncertain circumstances including anonymous employee complaints of a toxic workplace culture.

As part of the review, Berkshire’s board of directors established a corporate responsibility and culture committee to work closely with senior management, as the bank expands and deepens its commitment to diversity, inclusion and belonging across all aspects of the company.

The strategic review also included a number of other financial components and cost reduction measures.

In addition to selling First Choice and exiting certain lines of business, Berkshire plans to reduce its investment portfolio by roughly $450 million and non-interest expenses by $12 million to $15 million by the end of the year.

The reduction in non-interest expenses will be achieved through several initiatives including potential layoffs and branch consolidation. The bank consolidated six branches in the first quarter and expects to consolidate another four to six branches by the end of the year.

The goal of the strategic plan includes helping Berkshire realize a return on assets of more than 1 percent in 2019 and an efficiency ratio in the mid-50s. It also puts more of an emphasis on earnings opposed to growth.

Marotta all but ruled out any further M&A activity after the company completes its acquisition of Willimantic, Connecticut-based Savings Institute Bank & Trust, which is expected to be fully integrated by October.

“It’s not even in my mind or anyone’s mind,” he said, referring to M&A. “We are 100 percent focused on driving profitability through the independent company we are now.”

In the first quarter of the year, Berkshire reported net income of $24 million, or $0.51 per share, down $1.2 million from the first quarter of 2018. Net interest income for the quarter was roughly $85.5 million, up slightly from the first quarter of last year. The margin settled at 3.17 percent, down 19 basis points year-over-year.

Total assets increased $721 million year-over-year, while total loans increased about $685 million on an annual basis, led by increases in the residential real estate portfolio.

The provision for loan losses in the quarter was roughly $4 million, down more than $1.5 million from the first quarter of 2018. Non-performing assets as a percentage of total assets in the first quarter was .26 percent, down one basis point from the year prior.