Cross-border acquisition of Minnesota lender by VersaBank receives final approval
In a significant move, Canadian bank VersaBank has announced its acquisition of Stearns Bank Holdingford, a U.S. community bank. The deal, expected to close by August 30, 2023, will grant VersaBank a U.S. banking charter and mark a strategic expansion for the bank.
Heather Plumski, president of Stearns Bank Holdingford, has expressed her support for the acquisition, citing shared values and culture as key factors. Kelly Skalicky, CEO of Stearns Financial, has praised the swift regulatory approvals, calling them a testament to VersaBank's management team and banking model. The three regulatory approvals were granted within three weeks of each other, coming from the Federal Reserve, the Office of the Comptroller of the Currency, and the Office of the Superintendent of Financial Institutions in Canada.
VersaBank's expansion into the U.S. market is not just about acquiring a banking charter. The bank aims to leverage this opportunity to bring successful solutions and positively contribute to local communities and the U.S. financing sector. Taylor, VersaBank's CEO, has described the acquisition as a "transformational next step in our growth strategy."
VersaBank's point-of-sale financing offerings in the U.S. are centred around its Receivable Purchase Program (RPP). The RPP was launched in Canada in 2010 and has amassed partnerships with approximately 275 lenders, providing over $6.5 billion in funding to North American finance firms. In April 2022, VersaBank launched RPP in the U.S. on a limited basis, with plans for a wider rollout this fall.
One of the key aspects of VersaBank's RPP in the U.S. is a newly launched securitized financing solution called "RPP Securitized Financing." This product targets larger point-of-sale and financing companies in the U.S. and Canada, seeking lower-cost securitized financing. The new product is expected to materially boost assets, earnings, and return on common equity.
While the exact terms and conditions of the licensing rights purchases for U.S. point-of-sale financing are not publicly disclosed, VersaBank operates on a digital, branchless, B2B model, utilizing proprietary technology to enable these financial products. The bank also plans to utilize its subsidiary and technology assets, including Digital Meteor Inc., and its proprietary intellectual property to support and advance its digital banking services.
VersaBank has pledged to maintain Holdingford's brick-and-mortar footprint, ensuring continuity for the bank's customers and the local community. The acquisition process, which has taken two years, is a testament to VersaBank's commitment to strategic growth and expansion in the U.S. market.
- The acquisition of Stearns Bank Holdingford by VersaBank will not only expand their banking charter, but also provide an opportunity to contribute positively to the U.S. business and finance industry, including the fintech sector, with their innovative point-of-sale financing solutions.
- With the launch of their new securitized financing solution, RPP Securitized Financing, VersaBank aims to serve larger point-of-sale and financing companies in both the U.S. and Canada, potentially boosting their assets, earnings, and return on common equity, while maintaining Holdingford's brick-and-mortar presence for continuity in the local community.
