Nonperforming assets and loans are rising for equipment finance lenders, based on second-quarter earnings reports.
Brookline Bancorp
Brookline Bancorp’s equipment finance loans increased 6% year over year to $1.4 billion in the second quarter, according to its July 25 earnings presentation.
Boston-based Brookline announced this month that it is winding down its specialty vehicles and equipment funding group, but will continue to service its existing portfolio. The decision came as the bank shifts its focus to its core commercial financing solutions, according to a July 9 release. The specialty vehicles and equipment funding group financed vehicles and equipment in the towing and recovery, pupil transportation, emergency medical transit, shredding, asphalt paving and livery industries, according to the company website.
Brookline reported $4.6 million in commercial and industrial charge-offs as well as an $800,000 restructuring charge in Q2.
The charge-offs were mainly related to specialty vehicle equipment financing, Paul Perrault, Brookline Bancorp chairman and chief executive, said in a July 25 earnings call.
High origination expenses led to Brookline’s exit from specialty finance, Perrault said in the call.
“It was good while it lasted,” he said. “It’s something we get into about 10 years ago and we were sticking with mostly larger operators for a while.”
Midland Equipment Finance
Clayton, Miss.-based Midland Equipment Finance’s loan portfolio dropped $461.4 million in Q2, down 24.9% year over year and 6.6% quarter over quarter, according to parent company Midland States Bancorp’s July 25 earnings presentation.
Equipment leases also were down, falling 14.4% YoY and 6% QoQ to $428.7 million.
The shift is a “continued intentional reduction,” according to the earnings presentation.
Nonperforming loans for Midland States Bancorp rose to $112.1 million — including $4.7 million in equipment loans — up from $105 million in Q1.
M2 Equipment Finance
Waukesha, Wis.-based m2 Equipment Finance assets rose to $359 million in Q2, up from $322.9 million in Q2 2023, according to a July 25 earnings release from parent company QCR Holdings.
Loans and leases rose to $363.9 million in Q2, from last year’s $328.48 million.
Allowance for credit losses rose to 3.9% in Q2, up from 3.5% in Q2 2023.
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