The Data
Federal call report data filed with the FDIC for the fourth quarter of 2024 shows measurable stress in commercial equipment loan portfolios at regional banks with assets between $1 billion and $10 billion.
Key findings from Schedule RC-C of the Consolidated Reports of Condition and Income:
- Net charge-off rate on C&I loans: 0.48% annualized in Q4 2024
- Prior year comparison: 0.31% in Q4 2023
- Prior peak: 0.61% in Q2 2020 (pandemic era)
- Trend: Highest reading since the pandemic-era peak
Where the Stress Is Concentrated
The trend is not uniform across equipment types:
- Transportation equipment: Driving the majority of the deterioration
- Construction equipment: Also elevated
- Agricultural equipment: Relatively stable, supported by elevated commodity prices that have kept farm income above historical averages
What the Data Cannot Tell You
FDIC Schedule RC-C does not require banks to break out vendor-finance or broker-sourced volume from direct bank originations. That gap in transparency is itself a story worth watching.
For independent equipment finance companies and brokers, the practical implication is direct: bank funding partners that showed flexibility on credit structure in 2022 and 2023 are now tightening. Several mid-market bank programs have quietly raised minimum FICO floors and reduced advance rates on soft-cost components over the past two quarters. The call report data explains why.