Digital native Axos Bank will acquire Cincinnati-based equipment leasing company Verdant Commercial Capital for $43.5 million, the bank announced Monday.
Verdant, which lends to the industrial and manufacturing sectors, has roughly $1.1 billion in loans and leases on its balance sheet. It originates equipment finance leases, conditional sale leases, fair market value leases, and terminal rental adjustment clause leases between $50,000 and $5 million.
“This acquisition provides us with more scale and enhances our existing equipment leasing business with good risk-adjusted returns,” said Greg Garrabrants, CEO of Axos Bank’s parent company, Axos Financial.
In 2016, Axos entered the equipment leasing space by purchasing Salt Lake City, Utah-based Pacific Western Equipment Finance.
Verdant also serves the golf and sport, renewables and energy efficiency, specialty vehicles and technology and office automation verticals.
“We like Verdant’s specialization in vendor-based equipment leasing and believe we can scale this business profitably,” Garrabrants said. “Additionally, we see opportunities to cross-sell commercial deposits and floorplan lending to manufacturers and dealers in several industry verticals such as specialty vehicles, golf, sports and entertainment.”
Garrabrants said he expects the transaction to be accretive to earnings per share by roughly 2% to 3% in fiscal 2026 and 5% to 6% in fiscal 2027.
Johnny Lai, Axos’ vice president of corporate development and investor relations, told Banking Dive the San Diego challenger bank expects to grow Verdant’s business over time to be more profitable, since the bank has access to lower-cost funding than the previous owner, a family office in Cincinnati, had.
Axos will pay a 10% premium on the lender’s book value at closing. The seller can earn incremental performance-based cash considerations for four years after the deal closes if Verdant generates a return surpassing 15%. Earn-out is capped at $50 million, according to the announcement.
The transaction is expected to close Sept. 30.
The deal marks Axos Bank’s first purchase since December 2023, when it bought two loan pools from the Federal Deposit Insurance Corp., totaling $1.25 billion, originally owed by Signature Bank. Signature collapsed earlier that year amid the regional banking crisis.
In August 2023, Axos Bank also acquired marine lender LaVictoire Finance from Eagle Financial Services subsidiary Bank of Clarke for an undisclosed sum.
