Moline, Ill.-based QCR Holdings is discontinuing new leases and loans through its Waukesha, Wis.-based equipment finance business m2 Equipment Finance, LLC.
QCR acquired the business in 2005. M2 has provided equipment financing to commercial borrowers since it was founded in 1998. M2 is expected to continue servicing its existing $360 million equipment finance portfolio with fewer staff.
QCR Holdings CEO Larry Helling said the move “will improve our profitability, increase liquidity, reduce our credit losses and allow the company to allocate capital to assets with higher risk-adjusted returns. We will focus our efforts on business units with more opportunity to build client relationships with greater deposit gathering potential.
“While m2 has been an important contributor to our company over the past 19 years, market dynamics have continued to evolve, and it became clear that m2 would not achieve our expected returns over the long term,” said Helling, CEO of the $8.9 billion company. “We are extremely grateful to our m2 colleagues for their dedication to serving clients and their contribution to the overall success of QCRH.”
The majority of the m2 portfolio is expected to amortize over the next three years, according to QCR Holdings. The company expects approximately $2.1 million in one-time restructuring expenses and a $400,000 goodwill write-down will be recognized in the third quarter of this year.
