On September 22, 2025, Axos Financial (NYSE: AX), headquartered in San Diego, California, announced its acquisition of Verdant Commercial Capital, a nationwide vendor-based equipment finance platform based in Cincinnati, Ohio. It is one of the first bank–leasing acquisitions since late 2022 — a period when higher rates, tighter credit, several notable bank failures, and election-year uncertainty kept many banks on the sidelines. The transaction matters for two reasons: it shows why a well-positioned bank is entering the equipment finance market now, and it illustrates why banks with $10 to $50 billion in assets, as a group, are poised to follow. [1]

Before I get to the specifics of this, I would first like to congratulate the Verdant and Axos teams. You both made a good move for different reasons, I suspect, but for the same shared long-term vision. To be perfectly transparent, this is a research piece based solely on publicly available data, my experience (including two bank exits), and my opinion. I made no contact with anyone at either Verdant or Axos. Additionally, I have included citations at the end of this article. Having said that, I must also acknowledge that Verdant has, at times, been a client of Rinaldi Advisory Services. Moreover, Mike Rooney was one of my three founding partners at ILC (now PNC Equipment Finance) and one of my dearest friends in the world. I worked alongside Verdant’s founding team (Mike, John Merritt, and Chris Kelly) for decades prior to Verdant.

Why This Deal Made Sense for Axos

Axos’ balance sheet and earnings profile created both the ability and the need to act. Reported loan growth since early 2022 is partly explained by the fact that a meaningful portion of 2024’s increase came from a one-time purchase of two performing loan portfolios from the FDIC. Adjusted for this extraordinary event, organic loan growth over the 2022–mid-2025 window was comparatively muted. The Verdant acquisition replaces episodic growth with a consistent and predictable origination engine in the C&I/non-CRE asset class. [2]

Funding and capital are also aligned. Axos has operated with a comparatively low loan-to-deposit ratio, signaling underutilized deposits — a ready source of low-cost financing to replace Verdant’s higher-cost warehouse/securitization stack. The bank’s strong Tier 1 capital, built through years of retained earnings, left it underleveraged by regulatory standards — meaning the transaction could be absorbed without straining capital, while still being EPS-accretive, according to the company’s guidance. [1]

Risk diversification is the third leg. With CRE concentrations elevated across much of the banking industry, boards and examiners are pushing for balance. Verdant’s small- and mid-ticket equipment finance adds granular, amortizing exposures that are structurally different from non-owner-occupied CRE. That helps address concentration risk.

The $10 to $50B Cohort Mirrors Axos’ Pressures — and Its Opportunity

Axos is emblematic of a much larger group. Banks with $10 to $50 billion in assets are the prime acquirer cohort for equipment finance platforms. Loan and asset growth have been flat since 2022, while system-wide growth has been buoyed by the very largest institutions. That divergence explains why mid-sized community and regional banks are seeking new, repeatable sources of earning assets.

Funding capacity is available: Many $10 to $50 billion banks have lower loan-to-deposit ratios than their larger peers, implying underutilized deposit funding that can be immediately leveraged to improve economics when swapped in for warehouse or securitization funding at an acquired platform. [3]

Capital capacity is also present: Tier 1 ratios in this size band tend to be healthy, reflecting retained earnings and a cautious stance during the 2022–2023 rate shock. In other words, many of these institutions are underleveraged relative to their regulatory capital — they have dry powder, the feedstock needed to make acquisitions.

Regulatory headroom is thinner: CRE concentrations at many $10 to $50 billion institutions sit near the interagency screening thresholds (e.g., total CRE loans at or above 300% of total risk-based capital, or construction loans above 100%), which increases the urgency to add non-CRE earning assets. [4]

When you map funding capacity against CRE headroom, a clear bull’s-eye appears: banks with both slack deposits and positive headroom are positioned to be the next buyers. Axos sits squarely inside that quadrant — and many $10 to $50 billion banks do as well.

Taken together, the same structural forces that prompted Axos to act — muted organic growth, excess deposits, ample capital, and CRE constraints — are present across the $10 to $50 billion cohort. That’s why this deal matters beyond Axos.

Why This Deal Could Signal More to Come

The Axos–Verdant transaction is more than a case study — it could be the opening move in a broader shift. For nearly three years, banks with assets of $10–$50 billion have been on the sidelines of equipment finance M&A. Rising rates, tighter credit, and regulatory scrutiny have kept activity muted. Now, however, the need for diversification and sustainable origination pipelines is spreading across the cohort. As balance sheets strain under CRE concentration and muted organic growth, turnkey equipment finance platforms look increasingly like the logical solution. With this deal closing in late September, the timing underscores that conditions are ripe for renewed bank entry into the equipment finance sector.

Why Verdant Could Be Bought: ‘Bank-Ready’ in Practice

Bank M&A only works when the target looks turnkey on Day One. In practical terms, that means four key aspects: structure and governance, platform and scalability, risk and compliance rigor, and a reporting discipline that can withstand regulatory scrutiny. Verdant’s vendor-based model, scalable processes, and robust data/reporting made integration feasible for a bank that did not already operate a complete equipment finance platform. Verdant has been active in the ABS market, and you cannot participate there unless your tech stack can deliver the required ABS-grade reporting. The seller’s readiness was an essential counterpart to the buyer’s balance-sheet readiness.

A Practical Path for Buyers and Sellers

For banks in the $10 to$50 billion cohort: quantify funding and capital capacity; measure CRE headroom; and identify equipment finance verticals that best fit your deposit base and risk appetite.

For independents: Build the bank-ready disciplines — governance, controls, and data transparency — that reduce integration friction and regulatory risk. Deals close quickly—and successfully—when both sides are ready.

Conclusion

Axos did not buy growth for the sake of growth. It acquired a platform that converts under-deployed funding and capital into recurring, non-CRE earning assets — and it did so at a moment when organic loan growth had slowed and CRE concentrations demanded balance. That playbook is available to many banks with assets of $10 to $50 billion. Expect many more to follow in the quarters ahead.