PNC equipment lease financing rises 6.2% YoY
Equipment lease financing charge-offs declined 50% YoY
PNC Financial Services’ equipment lease financing portfolio grew during the fourth quarter as equipment market conditions showed signs of strength.
Pittsburgh-based PNC’s equipment lease financing portfolio reached $7.2 billion in Q4, up 4% quarter over quarter and 6.2% year over year, according to today’s earnings supplement. The company’s commercial and industrial portfolio totaled $195.7 billion, up 2.9% QoQ and 11.3% YoY.
The increase in equipment leasing and overall commercial and industrial portfolio performance comes as tariff-related pressures eased in many parts of the United States, according to the Federal Reserve’s Beige Book released Jan. 14.
Cost increases caused by tariffs began to stabilize or even ease due to price negotiations and shifts to domestic suppliers, according to manufacturers in the Federal Reserve’s Cleveland region, which includes Pittsburgh as well as other parts of Western Pennsylvania, eastern Kentucky, the northern panhandle of West Virginia and all of Ohio.
Contacts in the Cleveland region also reported a modest rebound in manufacturing demand, as data center buildouts, orders for light vehicles and agricultural equipment, as well as optimism around farm payments, contributed to a stronger market.
PNC’s equipment credit performance
Meanwhile, PNC’s equipment lease financing allowance for loan and lease losses, as a percentage of total loans, finished at 1.2% in Q4, down 5 basis points (bps) QoQ and 29 bps YoY, according to the earnings supplement. The lender’s commercial and industrial allowance for credit losses, as a percentage of its portfolio, was 1%, down 4 bps QoQ but up 8% YoY.
PNC had net charge-offs of $2 million in Q4, compared with net recoveries of $1 million in the third quarter and net charge-offs of $4 million in Q4 2024, according to the earnings supplement. Additionally, the lender’s commercial and industrial portfolio charge-offs decreased 16.7% QoQ but increased 28.2% YoY to $50 million.
Nonperforming equipment finance assets remained at 5.6% QoQ despite a 153.3% YoY increase to $38 million to end Q4.
Shares of PNC Financial [NYSE: PNC] were trading at $223.18 at market close today, up 3.79% or $8.14 compared to market open. PNC has a market capitalization of $84.3 billion.
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