Several lenders shrunk their equipment finance and leasing portfolios in 2024 while grappling with increased charge-offs, highlighting challenges facing some heavy-equipment sectors.
While equipment lending activity declined for some companies last year, lower interest rates and expectations of loosened regulations could ignite growth in 2025. Of roughly 600 businesses, 42% plan to increase their equipment and software acquisitions this year, according to the Equipment Leasing and Finance Foundation. Among those businesses, 44% expect to ramp up investment by 51% or more.
Midland States Bancorp originations down 21.5%
Effingham, Ill.-based Midland States Bancorp reported $417 million in equipment finance loans at yearend, down 21.5% year over year, according to its Jan. 23 earnings statement.
The company’s equipment leases fell 17.3% YoY to $391.4 million. Midland’s total equipment leasing and finance portfolio declined 19.5% YoY to $808.4 million in 2024, an intentional decision as the company looks to pursue other commercial lending opportunities, primarily in real estate, according to its earnings presentation.
Equipment finance charge-offs nearly tripled quarter over quarter in the fourth quarter to $15.3 million, which the company attributed to repossessions and nonperforming assets in the commercial trucking sector.
Banc of California portfolio down $15.5%
Banc of California’s equipment finance portfolio totaled $622 million at yearend, down 15.5% YoY, according to its Jan. 23 earnings presentation.
The Los Angeles-based company reported $307.2 million in equipment leases, down 10.8% from 2023. Equipment lease income dropped 10.8% YoY to $51.1 million in 2024, while falling 37.5% QoQ in Q4 to $10.7 million, which was largely due to “lower gains from early lease terminations and sale of leased assets,” Banc of California stated in its earnings release.
PNC lease financing up 2%
Pittsburgh-based PNC Financial Services’ equipment lease financing portfolio reached $6.6 billion at yearend, up 2.1% YoY, according to its Jan. 16 earnings supplement.
The company’s net charge-offs for equipment lease financing rose $88.9% YoY in 2024 to $17 million. Nonperforming equipment finance assets increased 15.4% YoY to $15 million at yearend.
The third annual Equipment Finance Connect at the JW Marriott Nashville in Nashville, Tenn., on May 14-15, 2025, is the only event that brings together equipment dealers and lenders to share insights, attend discussions on crucial industry topics and network with peers. Learn more about the event and register here.
