The Bank Exit Wave

Of the 756 banks reporting non-zero Lease Fin Rec balances in Q4 2023:

  • Still active Q4 2025: 631 banks (83.5% retention of starting cohort)
  • True exits: 90 banks (still file FDIC Call Reports, lease balance went to zero)
  • M&A consolidations: 35 banks (no longer in FDIC dataset, charters absorbed)
  • Total cohort departures: 125 banks (16.5% attrition)
  • New entrants Q4 2025: 61 banks (active in Q4 2025, not in Q4 2023 cohort)
  • Net change Q4 2023 to Q4 2025: -64 banks (-8.5%)

Quarterly attrition has run 15 to 25 banks per quarter through every period observed. Q1 2026 data shows the trend continuing: 678 active participants, down another 14 from Q4 2025.

Named Departures and Their Magnitudes

Verified Q4 2023 to Q4 2025 changes in Lease Fin Rec balance for the most-cited public exits:

  • The Bank of New York Mellon: $599.0M to $92.0M (-84.6%)
  • Midland States Bank: $473.4M to $51.0M (-89.2%) — portfolio sold, strategic exit
  • Flagstar Bank: $3.19B to $1.66B (-48.0%)
  • KeyBank: $3.52B to $2.27B (-35.6%)
  • BMO Bank: $1.25B to $840.4M (-32.8%)
  • Truist Bank: $1.92B to $1.32B (-31.2%)

Comerica Bank carried $800.0M in Lease Fin Rec at Q4 2023 and $755.0M at Q4 2025, then disappeared from the FDIC dataset in Q1 2026 via M&A consolidation. Cadence Bank ($107.6M) and Synovus Bank ($21.2M) followed similar M&A exit paths in early 2026.

Volume Held While Participation Declined

Aggregate bank-channel Lease Fin Rec balances across the full FDIC universe:

  • Q4 2023 total: $117.40 billion
  • Q4 2025 total: $122.72 billion
  • Net change 24 months: +$5.32 billion (+4.5%)
  • Q1 2026 total: $120.48 billion (slight pullback)
  • Per-bank average Q4 2023: $155.3 million (across 756 banks)
  • Per-bank average Q4 2025: $177.3 million (across 692 banks, +14.2% per institution)

The bank channel is concentrating. Volume is consolidating into fewer, larger lessors.

Two Deals Quantify the Migration Direction

Two acquisitions completed in 2025 expose the gap between FDIC-tracked bank-channel activity and segment activity, in opposite directions.

Axos Bank Acquires Verdant Commercial Capital

Closed September 30, 2025:

  • Verdant receivables at acquisition: ~$1.1 billion (~$750M securitized, ~$350M direct loans/leases)
  • Industry verticals: Six specialty industry verticals
  • Lease ticket range: $50,000 to $5 million
  • Deal terms: $43.5M cash at closing (10% premium to book), plus up to $50M four-year earn-out tied to 15% ROE hurdle
  • Strategic rationale: Vendor-based specialization and cross-selling commercial deposits and floorplan lending to manufacturers and dealers

Before the deal, Verdant filed nowhere a bank-data framework would track. After the deal, $1.1 billion in receivables began appearing on Axos Bank's Call Report. The economics of the underlying receivables did not change. Their visibility to bank-data tracking changed because their owner did.

Elevex Capital Acquires BancLeasing

Closed 2025, terms undisclosed:

  • BancLeasing AUM at acquisition: ~$83 million
  • Operating model: Outsourced leasing platform serving 27 community and regional banks across 21 states
  • Vintage: Operating since 1998
  • Combined Elevex/BancLeasing AUM post-close: ~$200 million
  • Acquirer status: Independent, not bank

Twenty-seven community banks were participating in equipment finance through BancLeasing's origination, structuring, and servicing capability. The infrastructure for that participation now sits inside another independent.

Three Channels and What FDIC Data Sees

  • Direct bank lessor: Bank originates, books, and services its own equipment loans and leases. Visible in FDIC Call Report Schedule RC-C as Lease Fin Rec.
  • Pure independent lessor: Non-bank entity originates and holds receivables. Files with the SEC, OSFI, or as private financial statements. Not visible in any FDIC-tracked dataset.
  • Bank-via-platform: Bank brand on the customer relationship; independent provides origination, structuring, and servicing. Partial to fully invisible in FDIC data depending on which entity holds the paper.

The 756 to 692 figure tracks only the first row. Verdant before the Axos deal was the second row. BancLeasing's 27 partner banks were the third row.

What This Means

For credit analysts

The peer set for benchmarking bank equipment finance exposures is shrinking. A 692-bank universe is materially less representative of the segment than a 756-bank universe, and the 125 departures over 24 months were skewed toward institutions where equipment finance was a marginal product line rather than a strategic priority. The remaining cohort is more concentrated, more specialized, and on average 14% larger per institution by lease balance.

For competitive positioning

The 64-bank departure is not banks losing share to other banks. It is banks losing share to a different organizational form: SEC-filing captive finance arms, independent commercial lessors, BDCs, and private credit funds. The cost-of-capital and regulatory-capital differential between bank-owned and non-bank lessors has structural causes that do not reverse with the next interest-rate cycle.

For regulators

The supervised channel is consolidating while segment activity at non-supervised participants is not visible in FDIC data. Whether that creates a perimeter problem depends on whether equipment finance is judged to create systemic risk warranting bank-style supervision. The supervised data is now measuring a smaller share of the segment than it was 24 months ago.

The Gap

Trade press has covered individual bank exits as point news. KeyBank's decision was a story. Truist's was a story. BNY Mellon's was a story. BMO's was a story. None of those stories asked whether the dealer relationships, OEM contracts, and customer applications served by those banks have routed to lessors who do not file with the FDIC. None aggregated the question of whether the data investors, analysts, and regulators use to gauge segment health is still measuring the segment.

Inference: The combination of bank-channel consolidation into fewer larger participants, the Verdant deal moving $1.1 billion of previously-invisible receivables onto a bank's balance sheet, and the Elevex/BancLeasing platform consolidation pattern is consistent with specialty non-bank lessors absorbing dealer relationships and platform infrastructure from departing bank participants. FDIC Call Report data alone cannot tell you whether the segment is growing or shrinking outside the bank channel.

The framework that uses FDIC bank lease data as a proxy for equipment finance segment health was built for an industry shape that no longer matches reality.

What to Watch

  • Q2 2026 FDIC data: Whether matched-cohort participation drops below 660 and whether aggregate volume continues the Q1 2026 pullback
  • Captive 10-K disclosures: Caterpillar Financial Services, Deere Capital, PACCAR Financial, CNH Industrial Capital fiscal year 2025 filings will indicate whether volume the bank channel is shedding is showing up at SEC-filing specialists
  • Additional platform deals: ECS Financial, SLR Equipment Finance, North Mill Equipment Finance, and Channel Partners Capital sit in BancLeasing's structural position. More deals would confirm whether platform consolidation is industry-level or deal-specific.
  • Reverse migration deals: Bank acquires specialist independent the way Axos acquired Verdant. Would indicate whether other banks are reaching the same buy-versus-build conclusion.

The 64-bank exit is real and verified. The conclusion that equipment finance is shrinking is not what the data supports.