Midland, Banc of California shrink equipment finance portfolios in 2024
PNC equipment lease charge-offs rose 90% in 2024
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.
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