Cross-border acquisition of Minnesota lender by VersaBank receives final approval
VersaBank Expands US Operations with Stearns Bank Acquisition
VersaBank, a Canadian digital bank, is set to make a significant move in the United States with the acquisition of Stearns Bank Holdingford. The deal, which was proposed in June 2022, is scheduled to close by August 30, 2023, subject to customary closing conditions.
The acquisition marks a transformational next step in VersaBank's growth strategy and will provide the bank with a U.S. banking charter. This move comes after the bank received regulatory approval from the Federal Reserve, the Office of the Comptroller of the Currency, and OSFI in the last three weeks.
David Taylor, CEO of VersaBank, expressed his excitement about the acquisition, stating that being granted an OCC bank charter in the United States is a tremendous honor. He further added that the acquisition is a testament to the diligence and integrity of VersaBank's management team and the strength of their banking model.
The acquisition of Stearns Bank Holdingford will also enable VersaBank to expand its Receivable Purchase Program (RPP) in the U.S. and Canada. The RPP, which was launched in the U.S. on a limited basis in April 2022, involves investing in AAA-rated securitized credit assets and establishing platforms for securitization.
The market response to the limited initial rollout of VersaBank's RPP solution in the U.S. has been very favorable, with a long list of potential partners waiting for a broader rollout. The RPP offering is considered unique and an attractive alternative to existing sources of funding for partners.
Kelly Skalicky, CEO of Stearns Financial, believes that the acquisition will provide VersaBank the opportunity to bring successful solutions and positively contribute to local communities and the larger U.S. financing sector. Heather Plumski, president of Stearns Bank Holdingford, reiterated that the VersaBank team shares their values and culture and is committed to continuing Stearns Bank's legacy as a vital contributor to and supporter of the local economy.
VersaBank has pledged to maintain Holdingford's brick-and-mortar footprint in the U.S. market. The bank aims for a wider rollout of the RPP in the U.S. this fall, targeting the largest point-of-sale financing market in the world.
However, details about the terms and conditions for VersaBank to purchase licensing rights in the U.S. are not publicly available at this time. If you are referring to a specific licensing deal, this information may be confidential, proprietary, or not publicly disclosed in these press releases or financial announcements.
For precise terms and conditions, you would typically need access to official VersaBank filings with regulatory bodies, specific licensing agreement documents, or direct corporate disclosures or investor relations communications beyond these summarized press releases. If needed, I can help monitor for updates closer to the bank’s upcoming Q3 earnings call on September 4, 2025, where more details about U.S. operations might be disclosed.
VersaBank's commitment to risk mitigation throughout their organization has enabled them to lead the Canadian banking industry in terms of credit risk and achieve a 30-year track record of no material loan losses. This commitment is expected to continue as VersaBank embarks on its U.S. expansion journey.
In conclusion, the acquisition of Stearns Bank Holdingford is a significant step for VersaBank as it looks to expand its operations in the U.S. market. The deal is expected to close by August 30, 2023, and will provide VersaBank with a U.S. banking charter, enabling it to bring its unique RPP solution to the largest point-of-sale financing market in the world.
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