LONDON,
ON, June 14, 2022 /CNW/ - VersaBank
("VersaBank" or the "Bank") (TSX: VBNK) (NASDAQ: VBNK), a leader in
digital banking and cyber security solutions, today announced that,
through its wholly owned U.S. subsidiary, VersaHoldings US Corp.,
it has signed a definitive agreement to acquire Minnesota-based Stearns Bank Holdingford, N.A.
("SBH"), a privately held, wholly owned subsidiary of Stearns
Financial Services Inc. ("SFSI") based in St.
Cloud, Minnesota, for an estimated US$13.5million (CA$17.4 million) (subject to
adjustment at closing). SBH is a fully operational national bank,
OCC (Office of the Comptroller of the Currency)-chartered Bank,
focused on small business lending, which is expected to add
approximately US$60 million in total
assets to VersaBank, subject to any adjustments at closing. Upon
closing, SBH will be renamed VersaBank USA National Association. SFSI and its other
subsidiaries (Stearns Bank N.A.
($2.2 billion in assets) and Stearns
Bank Upsala, N.A. ($75 million in
assets)) will continue to operate as usual.
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HIGHLIGHTS OF VERSABANK'S
ACQUISITION
- Provides VersaBank with access to U.S. deposits to fuel the
growth of its Receivable Purchase Program business, which VersaBank
recently launched in the U.S. following a period of significant
growth and success in Canada;
- Expected to be accretive to VersaBank's earnings per share
within the first year after closing; and,
- VersaBank USA is expected to
be well capitalized on closing with a Total Capital ratio in excess
of 10%.
"This acquisition represents a transformational next step in
VersaBank's long-term growth strategy," said David Taylor, President and Chief Executive
Officer, VersaBank. "We have built a tremendously successful
digital banking operation in Canada, providing innovative, technology-based
solutions to serve unmet needs, which has driven outsized earnings
growth. Now, with the acquisition of U.S.-based SBH, we will have a
platform from which to replicate that success in the Western
world's largest banking market, in particular, through acceleration
of the roll out of our innovative and highly differentiated
Receivable Purchase Program solution, which has been very
successful in Canada, in the
US$1.8 trillion and growing U.S.
consumer and small business point-of-sale financing market."
Mr. Taylor added, "It has been a pleasure working with the team
at SFSI and we look forward to exploring future opportunities for
collaborations to our mutual benefit."
"For over forty-five years, Stearns
Bank has proudly served the strong and vibrant Holdingford community, and we are excited to
continue to do so in our partnership with VersaBank," said
Heather Plumski, President of
Stearns Bank Holdingford N.A. "It speaks volumes that our Canadian
neighbor, VersaBank, has chosen Holdingford as the best location to launch its
U.S.-based banking and financing. VersaBank shares our values and
culture, and we're confident VersaBank will be welcomed with open
arms in Holdingford when the
community gets to know our Canadian partner."
Kelly Skalicky, President and CEO
of Stearns Financial Services, Inc. expressed her enthusiasm for
the partnership with VersaBank, "Congratulations to Holdingford on its continued growth and for
attracting VersaBank for its U.S. expansion plan. David and
the VersaBank team are terrific and proving to be a perfect partner
– together, we will deliver even more to our local communities and
beyond."
Closing of the acquisition, expected before the end of
VersaBank's fiscal year (October 31,
2022), is subject to regulatory approval in both the U.S.
and Canada.
Raymond James & Associates,
Inc. served as financial advisor, Davis
Polk & Wardwell LLP served as legal counsel, and Chain
Bridge Partners, LLC acted as regulatory advisor to VersaBank in
the transaction.
ABOUT STEARNS FINANCIAL SERVICES
INC.
Stearns Financial Services Inc. (SFSI) is a well-capitalized,
$2.4 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.
Recognized as one of the nation's top-performing banks by both
American Banker and Independent Banker magazines, Stearns Bank specializes in nationwide
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 bank with a
difference. VersaBank became the world's first fully digital
financial institution when it adopted its highly efficient
business-to-business model 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 on Nasdaq under the symbol VBNK. Its Series 1 Preferred
Shares trade on the TSX under the symbol VBNK.PR.A.
Visit our website at: www.versabank.com
Follow VersaBank on Facebook, Instagram, LinkedIn and
Twitter.
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SOURCE VersaBank