– Acquisition Will Enable VersaBank to
Broadly Launch its Unique and Highly Successful
Receivable Purchase Program Financing Solution in the United States –
LONDON,
ON, June 14, 2024 /CNW/ - VersaBank (TSX:
VBNK) (NASDAQ: VBNK), a North American leader in
business-to-business digital banking, as well as technology
solutions for cybersecurity, today announced that it has received
approval from the Office of the Comptroller of the Currency (the
"OCC"), the primary regulator of banks chartered under the United
States National Bank Act, to proceed with its proposed acquisition
of Minnesota-based Stearns Bank
Holdingford N.A. ("Stearns Holdingford"). Stearns Holdingford
is an independent OCC-chartered national bank with US$79 million in assets located in Holdingford, Minnesota that is wholly owned by
Stearns Financial Services, Inc. ("Stearns Financial").
The OCC approval is the second and final U.S. regulatory
approval required for VersaBank to proceed with the Stearns
Holdingford acquisition. VersaBank will now seek approval for the
Stearns Holdingford acquisition from its Canadian regulator, the
Office of the Superintendent of Financial Institutions (OSFI).
Upon VersaBank's receipt of OSFI approval, it will proceed to
close the Stearns Holdingford acquisition as soon as possible.
Stearns Financial, a multi-bank holding company owning two
additional and separate national bank charters, Stearns Bank Upsala
National Association and Stearns Financial's flagship and largest
national bank, Stearns Bank National Association (headquartered in
St. Cloud, Minnesota), is not part
of the VersaBank transaction and will continue to exist and operate
independently.
"OCC approval of our proposed acquisition of Stearns Holdingford
is a critical milestone in the process of taking our unique and
highly successful Receivable Purchase Program (RPP) to the largest
financing market in the world," said David
Taylor, President and Chief Executive Officer, VersaBank.
"Having proven out the value of our innovative and
proprietary RPP financing solution in Canada, our acquisition of Stearns
Holdingford, a national, federally licensed U.S. bank, will enable
us to pursue a methodical, phased roll out of this solution across
the U.S. There is simply no equivalent to this type of funding
mechanism for point-of-sale finance companies anywhere in
North America. The very favourable
market response to the limited initial roll out of our RPP solution
in the U.S. to date, as well as the long list of potential partners
waiting on our ability to broadly roll out our program, has
confirmed our belief that our offering is both one-of-a-kind and an
attractive alternative to the existing sources of funding for our
partners. It gives us great confidence in our ability to replicate
the success of our Canadian solution in the U.S. market."
Mr. Taylor added, "Importantly, in our expansion into the U.S.,
we will maintain our steadfast commitment to risk mitigation
throughout our organization, which has enabled us to lead the
Canadian banking industry in terms of credit risk and achieve a
30-year track record of no material loan losses. Our RPP
opportunity in the U.S., combined with the expected continued
growth in our RPP portfolio in Canada, will enable VersaBank to drive strong,
sustainable growth in our loan portfolio for years to come and
increasingly capitalize on the significant operating leverage in
our business model, driving outsized improvements in efficiency and
growth in profitability and return on common equity that is
unmatched in the North American banking industry."
Mr. Taylor added, "As we capitalize on the significant
opportunity this acquisition affords us, we look forward to
continuing to serve the community of Holdingford, providing the same level of
service and support that its customers have come to know for many
decades."
"On behalf of the entire team at Stearns Financial and all of
the communities we serve, I would like to congratulate VersaBank on
this monumental achievement and welcome VersaBank with open arms,"
said Kelly Skalicky, President and
CEO of Stearns Financial. "It is a testament to the diligence and
integrity of the VersaBank management team and the strength
and soundness of their banking model that VersaBank's acquisition
of Stearns Holdingford was approved by both the OCC and the Fed,
providing VersaBank the opportunity to bring successful solutions
and positively contribute to our local communities and the larger
U.S. financing sector by delivering their well-established, proven
Receivable Purchase Program and innovative financing offerings. We
look forward to being able to proceed with the closing of the
Stearns Holdingford transaction and continuing to work with
VersaBank on additional future opportunities as they emerge."
"It speaks volumes that our Canadian neighbor, VersaBank, has
chosen Holdingford as its home
base for entry into the U.S. market," said Heather Plumski, President of Stearns Bank
Holdingford. "The VersaBank team shares our values and culture and
is committed to continuing Stearns
Bank's legacy as a vital contributor to and supporter of the
local economy."
About VersaBank's Receivables Purchase Program
VersaBank's Receivable Purchase Program is an innovative and
highly attractive digital funding solution for finance companies
who lend money to consumers and small businesses for what are
typically "big ticket" purchases (e.g. consumer home
improvement/HVAC projects and a wide variety of commercial
equipment). It was specifically designed to address an unmet need
in the market for consistently available, readily accessible,
economically attractive capital using VersaBank's proprietary,
state-of-the-art banking technology. Consistent with its
branchless, business-to-business, partner-based digital banking
strategy, VersaBank's RPP enables it to access the massive and
growing consumer and small business financing market in an
indirect, efficient and highly risk-mitigated manner.
As of April 30, 2024, VersaBank's
Receivable Purchase Program portfolio was in excess of C$3.1 billion (US$2.3
billion), growing at compounded annual rate of more than 26%
over the last five years (fiscal year ended October 31). Since the Bank's RPP was first
launched in Canada in 2010 and
launched on a limited basis in the U.S. in April 2022, VersaBank has provided more than
C$9 billion (more than US$6.5 billion) in funding to North American
finance companies.
About Stearns Financial Services, Inc.
Stearns Financial Services Inc. (SFSI) is a well-capitalized,
$3.3 billion independent financial
holding company based in St. Cloud,
MN. It is the holding company for Stearns Bank N.A. and Stearns Bank Upsala, N.A.,
as well as Stearns Bank Holdingford N.A., which has been approved
by U.S. regulators for acquisition by VersaBank. Recognized as one
of the nation's top-performing banks by both American Banker and
Independent Banker magazines, Stearns Bank N.A. specializes in
affordable housing, construction finance, small business lending,
and equipment financing. Driven by a passion to help others achieve
their greatest ambitions, Stearns
Bank gets the job done! For more information, visit
StearnsBank.com.
About VersaBank
VersaBank is a Canadian Schedule I chartered (federally
licensed) bank with a difference. VersaBank became the world's
first fully digital financial institution when it adopted its
highly efficient business-to-business model in 1993 using its
proprietary state-of-the-art financial technology to profitably
address underserved segments of the Canadian banking market in the
pursuit of superior net interest margins while mitigating risk.
VersaBank obtains all of its deposits and provides the majority of
its loans and leases electronically, with innovative deposit and
lending solutions for financial intermediaries that allow them to
excel in their core businesses. In addition, leveraging its
internally developed IT security software and capabilities,
VersaBank established wholly owned, Washington, DC-based subsidiary, DRT Cyber
Inc. to pursue significant large-market opportunities in cyber
security and develop innovative solutions to address the rapidly
growing volume of cyber threats challenging financial institutions,
multi-national corporations and government entities on a daily
basis.
VersaBank's Common Shares trade on the Toronto Stock Exchange
("TSX") and Nasdaq under the symbol VBNK. Its Series 1 Preferred
Shares trade on the TSX under the symbol VBNK.PR.A.
Forward-Looking Statements
VersaBank's public communications often include written or oral
forward-looking statements. Statements of this type are included in
this document, and may be included in other filings and with
Canadian securities regulators or the U.S. Securities and Exchange
Commission, or in other communications. All such statements are
made pursuant to the "safe harbor" provisions of, and are intended
to be forward-looking statements under, the United States Private
Securities Litigation Reform Act of 1995 and any applicable
Canadian securities legislation. The statements in this press
release that relate to the future are forward-looking statements.
By their very nature, forward-looking statements involve inherent
risks and uncertainties, both general and specific, many of which
are out of our control. Risks exist that predictions, forecasts,
projections, and other forward-looking statements will not be
achieved. Readers are cautioned not to place undue reliance on
these forward-looking statements as several important factors could
cause actual results to differ materially from the plans,
objectives, expectations, estimates and intentions expressed in
such forward-looking statements. These factors include, but are not
limited to, the strength of the Canadian and U.S. economy in
general and the strength of the local economies within Canada and U.S. in which we conduct
operations; the effects of changes in monetary and fiscal policy,
including changes in interest rate policies of the Bank of
Canada and the U.S. Federal
Reserve; changing global commodity prices; the effects of
competition in the markets in which we operate; inflation; capital
market fluctuations; the timely development and introduction of new
products in receptive markets; the impact of changes in the laws
and regulations pertaining to financial services; changes in tax
laws; technological changes; unexpected judicial or regulatory
proceedings; unexpected changes in consumer spending and savings
habits; the impact of wars or conflicts including the crisis in
Ukraine and the impact of the
crisis on global supply chains; the impact of new variants of
COVID-19 and the Bank's anticipation of and success in managing the
risks implicated by the foregoing. For a detailed discussion of
certain key factors that may affect our future results, please see
our annual MD&A for the year ended October 31, 2022.
The foregoing list of important factors is not exhaustive. When
relying on forward-looking statements to make decisions, investors
and others should carefully consider the foregoing factors and
other uncertainties and potential events. The forward-looking
information contained in this document and the related management's
discussion and analysis is presented to assist our shareholders and
others in understanding our financial position and may not be
appropriate for any other purposes. Except as required by
securities law, we do not undertake to update any forward-looking
statement that is contained in this document and the related
management's discussion and analysis or made from time to time by
the Bank or on its behalf.
Visit our website at: www.versabank.com
Follow VersaBank on Facebook, Instagram, LinkedIn and
Twitter
View original content to download
multimedia:https://www.prnewswire.com/news-releases/versabank-receives-final-us-approval-for-us-bank-acquisiton-302172777.html
SOURCE VersaBank