– Acquisition Will Enable VersaBank
to Broadly Launch its Unique and Highly Successful Receivable
Purchase Program (RPP) Financing Solution in the United States –
LONDON,
ON, June 25, 2024 /PRNewswire/
- 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 its Canadian regulator, the Office of
the Superintendent of Financial Institutions (OSFI), to proceed
with VersaBank's acquisition of Minnesota-based Stearns Bank Holdingford N.A.
("Stearns Holdingford") (the "U.S. Bank Acquisition"). OSFI's
approval follows approvals by U.S. regulators and is the final
approval required to enable VersaBank to complete the U.S.
Bank Acquisition. VersaBank is targeting close of the U.S.
Bank Acquisition for August 30,
2024.
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"). 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.
"OSFI's approval of our U.S. bank acquisition – the final
regulatory hurdle for this transformational next step in our growth
strategy – paves the way for the launch of our unique and highly
successful Receivable Purchase Program (RPP) to the largest
point-of-sale financing market in the world," said David Taylor, President and Chief Executive
Officer, VersaBank. "Building on more than a decade of very
strong growth in our RPP portfolio in Canada and the very favourable response to our
RPP pilot program in the U.S., we are actively working toward
broadly launching our RPP solution this autumn to address the
significant demand that has developed since first announcing
our intention to enter the U.S. market."
Mr. Taylor added, "We are actively working with the Stearns team toward closing of the Stearns
Holdingford acquisition, ensuring a smooth transition and
integration, and continuing the outstanding legacy of Stearns
Holdingford in serving the local community."
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 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, 2023.
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
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SOURCE VersaBank