Brookline Bancorp and Banc of California shrank their equipment finance businesses in the first quarter, while First Citizens BancShares’ revved up.
Brookline Bancorp equipment loans drop 7%
Boston-based Brookline Bancorp reported $1.3 billion in equipment finance loans in the first quarter, down 6.8% year over year, according to its April 23 earnings statement.
The decline in equipment lending was largely driven by its “continued runoff of the specialty vehicle portfolio, which decreased by $29 million during the quarter to $267 million,” Co-President and Chief Financial Officer Carl Carlson said during the company’s earnings call.
Brookline’s nonperforming equipment finance assets increased 141.3% YoY to $33 million. Average yield for equipment loans was 8.1%, up from 7.83% in Q1 2024.
Equipment borrowers and manufacturers are “uneasy” about the potential impact of tariffs, Chief Executive Paul Perrault said during the call.
“And when we look at new credits, that has become part of the underwriting process,” he said. “So, it is having a dampening effect on everything as we go forward. But there’s nothing tangible yet.”
First Citizens lease, rental income jumps
Raleigh, N.C.-based First Citizens’ equipment lease operating income rose 6.4% YoY to $9.4 billion in Q1, according to its April 24 earnings statement.
Rental income on leasing equipment increased 5.9% YoY to $270 million. The net gain on sales of leasing equipment totaled $5 million, down 50% YoY.
The net charge-off ratio fell 5 basis points from the previous quarter to 0.41 and were mostly concentrated in the “general office, investor-dependent and equipment finance portfolios,” Chief Financial Officer Craig Nix said during the First Citzens earnings call.
The lender’s equipment finance portfolio is poised for continued growth as it recently formed an equipment finance joint venture, called Sixty-First Commercial Finance, which will target middle- to large-ticket transactions.
“There’s a lot of [construction] activity that requires the capital equipment that we’re going to finance the lease,” Kevin Ronan, managing director and group head at First Citizens commercial equipment finance division, previously told Equipment Finance News.
Banc of California equipment leases slide 13%
Banc of California’s equipment finance portfolio decreased 12.1% YoY to $626 million, according to its April 23 earnings presentation.
The Los Angeles-based company reported $295 million in equipment leases, down 13.2% YoY, and equipment lease income fell 8% YoY to $10.8 million.
The lender is evaluating its portfolio for direct tariff impacts, “and for the most part, our exposure is both minimal and indirect,” President and CEO Jared Wolff said during its earnings call.
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