Company: AX
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001299709-25-000184
Chunk: 30

Company: Axos Financial, Inc.
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 1
Chunk 30
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 fair value estimates used in valuing certain acquired assets and liabilities are based, in part, on inputs that are unobservable. For loans, these include, but are not limited to, forecasted future cash flows and discount rates and for equipment under operating lease arrangements, cost and market valuation approaches were utilized.The following table details the intangible assets acquired in the acquisition:(Dollars in thousands)September 30, 2025Weighted-Average Life (Years)Vendor relationships$11,200 13.6Trade name2,600 5.0Developed technologies5,100 3.0Total intangible assets acquired$18,900 9.6The following valuation approaches were utilized to estimate the acquisition-date fair value for the intangible assets acquired:•Vendor relationships: Fair value was estimated with an income approach using a multi-period excess earnings method which discounts expected future cash flows, taking into account historic customer attrition rates and contributory asset charges, among other factors.•Trade name: Fair value was estimated with an income approach using a relief-from-royalty method which considers the hypothetical royalty rate the Company would have paid if it did not own the trade name, taking into account discounted expected future cash flows, market royalty rates and expected useful life, among other factors.•Developed technologies: Fair value was estimated with a cost approach using a replacement cost methodology, taking into account replacement costs, among other factors.The following table summarizes the PCD loans and leases acquired in the acquisition:(Dollars in thousands)September 30, 2025Unpaid principal balance$211,002 Non-credit discount(342)Allowance for credit losses at acquisition(7,795)Purchase price allocated to PCD assets$202,865 Verdant’s results are included in the Company’s consolidated results from September 30, 2025. Verdant net revenue included in Company’s Condensed Consolidated Statement of Income for the three months ended September 30, 2025 was not significant and Verdant incurred a net loss of $5.8 million for the three months ended September 30, 2025, reflecting the post-acquisition provision for credit losses on the loans and leases acquired. The following table shows the Company and Verdant proforma combined net interest income, non-interest income and net income. The proforma financial information presented in the table below was computed by combining the historical financial information of the Company and Verdant along with the effects of the acquisition method of accounting for business combinations as though the