BMO's Q2 earnings show no improvement in credit conditions for trucking
The improvement in trucking credit conditions seen in the first-quarter earnings of Canada-based bank BMO came to a halt in the second quarter, with only a few signs of a strengthening market alongside other numbers pointing to more deterioration.
BMO (NYSE: BMO), the former Bank of Montreal, is a major lender to the trucking industry. Its quarterly earnings break out results for various sectors, including transportation, which is believed to be more than 90% lending to trucking companies. Its credit results are seen as a sign of broader lending conditions in the trucking sector.
BMO's fiscal year begins Nov. 1. The latest report is for the second quarter, ended April 30.One of the more notable statistics in the report was the figure for gross loans and acceptances in the transportation group. That is the size of the bank's book of business in the sector before deducting loan loss reserves.
That number fell to $14.06 billion, down from almost $14.9 billion in the prior quarter. It's the lowest figure since the fiscal first quarter of 2023, when it was less than $14 billion. It could be a one-quarter aberration or may signal a reluctance to lend on the part of the bank, which does not comment on the results, except occasionally on earnings calls with analysts.
The contrast between the latest gross loans figure for BMO's transportation sector is particularly stark in comparison to the more than $15.6 billion it posted in the fourth fiscal quarter of 2023.
The biggest number suggesting conditions are not improving in trucking were that gross impaired loans and acceptances soared to $503 million, up from $410 million. This is easily the largest figure in the history of BMO data, which dates back to when the bank acquired the transportation lending operations of GE Capital in late 2015.To illustrate the contrast between current conditions and the peak of the post-pandemic trucking boom, gross impaired loans in the third fiscal quarter of 2022, which ended in July 2022, were $72 million.
An impaired loan has been defined as one for which a lender is unlikely to collect all the monies due, including principal and interest.
After reserves are accounted for, net loans and acceptances for the transportation sector was just under $14 billion, down from $14.82 billion in the prior quarter.
There were small areas of improvement. Allowances for credit losses were $57 million in the quarter, down from $61 million one quarter earlier and $68 million the quarter before that. A year ago, in 2024's second fiscal quarter, allowances were $24 million.
Provisions for credit losses rose to $45 million from $44 million. Provisions showed a significant improvement in the first quarter, declining to $44 million from $85 million. A year ago, they were $56 million.
Allowances and provisions are charges taken by a bank to reflect loans with performance issues. Allowances hit a bank's earnings, while provisions are charged against its balance sheet.
Net write-offs were $41 million, down from $46 million. The recent peak was $63 million in the fourth quarter of fiscal 2024.
More articles by John KingstonGeorgia tort reform aims to change practices in judicial 'hell hole'
Double whammy for Wabash: 2 key agencies cut debt rating on trailer builder
Despite red ink at Heartland, Morgan Stanley report relatively upbeat
The post BMO's Q2 earnings show no improvement in credit conditions for trucking appeared first on FreightWaves.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Danielle Smith touts Alberta supremacy at Rotary International Convention in Calgary
Premier Danielle Smith welcomed thousands of Rotary International delegates to Calgary on Sunday, using the stage to tout Alberta's economic strength, energy ambitions and approach to addiction recovery. More than 15,000 Rotary members from more than 120 countries are expected to gather in Calgary this week for the Rotary International Convention, a five-day event that runs through Wednesday at Stampede Park. Speaking at the official opening ceremony at the Scotiabank Saddledome, Smith — a former Rotarian herself — described Alberta as 'Canada's economic engine,' pointing to the province's population growth, economic climate and natural resource wealth. 'I want to take this opportunity to do just a little bit of bragging about this beautiful province,' she said. 'That is one of the perks of my job. I get to be the lead cheerleader for my favorite place in the world.' Peace pole, House of Friendship and more: What to know about the Rotary International Convention in Calgary Rotary convention kicks off at Stampede Park with House of Friendship grand opening Smith cited recent Statistics Canada data showing that Alberta led the country in population growth during the first quarter of 2025, gaining more new residents than the rest of Canada combined. Between Jan. 1 and April 1, Alberta's population grew by 20,562, while four provinces and one territory saw population declines, including record quarterly losses in Ontario and British Columbia. Alberta also had the highest net gain from interprovincial migration during that time. Smith attributed the growth to economic opportunity and a 'welcoming and free society,' drawing people to the province. 'Alberta has drawn in people from near and far for a few very good reasons,' she said. 'Investors see our low corporate taxes, our skilled workforce, and our business-friendly climate as an increasingly attractive package and our tech sector is growing as a result.' Smith also highlighted her government's efforts to expand mental health and addiction services, referring to the so-called 'Alberta recovery model.' 'Since 2019, our government has added around 10,000 addiction treatment spaces, including detox treatment and long-term recovery spaces,' she said. 'We recognize that we have a lot more work to do, but the Alberta recovery model is showing early signs of success, and we're very proud of what we have accomplished so far.' Much of her speech focused on promoting Alberta's energy sector. Smith praised the province's level of oil and gas production — currently averaging about four million barrels a day — and said the government intends to double that output. 'Over the years this industry has delivered extraordinary prosperity to our province and to the rest of Canada, and Alberta is proud to be one of the world's foremost producers of oil and natural gas, and we are proud of what that energy means for the world.' Smith also noted industry efforts to move toward a lower-carbon future, citing net-zero commitments and the province's leadership in carbon capture and hydrogen production. 'If, as we know, the world will need more oil and gas for decades to come, then our trading partners might as well buy it from a supplier that cares about human rights, a supplier that protects the environment and reduces emissions even as it increases production,' she said. While Rotary International is not a political organization, the international convention comes at a time of global geopolitical tension. Rotary International president Stephanie Urchick also addressed the audience, emphasizing the organization's mission to build unity across borders. 'The world right now can feel divided, but Rotary brings together people from every corner of the globe, not to erase our differences, but to celebrate them,' she said. 'That's how we spread peace, because peace is more than the absence of conflict, it's the presence of understanding.' Rotary International is a global service organization that boasts more than a million volunteer members focused on community and humanitarian efforts. The convention is expected to pump $81 million into Calgary's economy.
Business Insider
an hour ago
- Business Insider
Coterra Energy (CTRA) Receives a Buy from Wells Fargo
Wells Fargo analyst Roger Read maintained a Buy rating on Coterra Energy (CTRA – Research Report) on June 20 and set a price target of $31.00. The company's shares closed last Friday at $26.97. Confident Investing Starts Here: According to TipRanks, Read is a 3-star analyst with an average return of 1.7% and a 53.80% success rate. Read covers the Energy sector, focusing on stocks such as Valero Energy, EOG Resources, and Phillips 66. In addition to Wells Fargo, Coterra Energy also received a Buy from Piper Sandler's Mark Lear in a report issued on June 16. However, on June 9, Morgan Stanley maintained a Hold rating on Coterra Energy (NYSE: CTRA). Based on Coterra Energy's latest earnings release for the quarter ending March 31, the company reported a quarterly revenue of $924 million and a net profit of $516 million. In comparison, last year the company earned a revenue of $1.37 billion and had a net profit of $352 million Based on the recent corporate insider activity of 39 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CTRA in relation to earlier this year. Last month, Stephen Bell, the EVP – Business Development of CTRA sold 100,000.00 shares for a total of $2,525,000.00.
Business Wire
2 hours ago
- Business Wire
2025 Travelers Championship Generates More Than $4 Million for Charity
HARTFORD, Conn.--(BUSINESS WIRE)--The Travelers Companies, Inc. (NYSE: TRV) today announced that the 2025 Travelers Championship – a PGA TOUR Signature Event – generated more than $4 million for over 215 nonprofits, both record highs. Travelers also set a record this year as the longest-running title sponsor in the tournament's history. In the 19 years the company has been title sponsor, the Travelers Championship has generated tens of millions of dollars for charity. Alan Schnitzer, Chairman and Chief Executive Officer of Travelers, said, 'This week truly captured what makes the Travelers Championship so special – world-class golf played before an enthusiastic crowd, all united by a shared purpose. It is a formula that led to a great week of golf and more money raised for charity than ever before. For 19 years, we have been honored to bring the PGA TOUR to Connecticut, and every year I am inspired by the passion of the players, the dedication of our fans and the incredible support from volunteers and partners who rally around our mission to give back. In addition to supporting vital charitable causes, we are proud that the tournament also generates significant economic activity for the state of Connecticut. Congratulations to our 2025 champion, Keegan Bradley, for rising to the top of one of the strongest fields in the game. We are already looking forward to making next year's tournament even more memorable.' The Travelers Championship donates 100% of its net proceeds to nonprofits. This year's primary beneficiary is The Hole in the Wall Gang Camp, an organization based in Ashford, Connecticut, that provides a traditional summer camp experience for children with serious illnesses. Many other worthy charities – spanning arts and culture, education, health care, housing, human services, mental health, food insecurity, science and technology, and youth development – also benefit from their involvement with the Travelers Championship. Andy Bessette, Executive Vice President and Chief Administrative Officer of Travelers, said, 'The Travelers Championship extends far beyond tournament week. We have created a community of fans that spans the region, and it is because of their support that we are able to make such an impact on so many charities, the true winners of the Travelers Championship. We are so grateful to the world's best PGA TOUR players for delivering another tremendous competition that we will all remember for some time.' The 2026 Travelers Championship is scheduled to take place June 22-28 at TPC River Highlands in Cromwell, Connecticut. For more information, visit About Travelers
