Berkshire Hills abandons national mortgages, indirect automobile

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Berkshire Hills Bancorp in Boston withdraws from two lines of consumer credit.

The company with $ 12.2 billion in assets said in a press release Monday that it had stopped issuing indirect auto loans and classified its national mortgage platform, First Choice Loan Services, as a discontinued activity.

Berkshire is looking to sell off the mortgage business, which has not been profitable for the past three quarters, including a loss of about $ 637,000 in the first quarter. Berkshire won the business when he bought First Choice Bank in 2017.

The company joins a growing list of banks that have announced their intention to sell or close their mortgage operations in recent months.

First Choice Loan Services will continue to operate while the sale continues.

Berkshire said its indirect auto exit should reduce its reliance on more expensive wholesale funds.

The company will also withdraw from the aircraft lending business acquired as part of the Commerce Bancshares operation. Jamie Moses, chief financial officer of Berkshire, said on the company’s earnings call that the portfolio has around 1,000 loans with an average balance of $ 170,000.

Moses said the indirect auto and aircraft portfolios have limited relationship potential, adding that the company expects to save about $ 1.5 million in non-interest charges on a rate basis. ‘execution.

Berkshire spoke to “several” parties interested in purchasing the mortgage platform. Executives said they did not have a solid estimate of restructuring costs for the exit of the company, but did not expect a large charge or receive a large bonus for the company. .

The moves come five months after Michael Daly resigned as CEO of Berkshire.

Berkshire said its first quarter profit fell 6% from a year earlier to $ 23.6 million, or 51 cents per share.

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