The Canadian Office of the Superintendent of Financial Institutions has approved VersaBank’s acquisition of Minnesota-based Stearns Bank Holdings, giving it the final regulatory approval needed for the cross-border alliance, the London, Ontario-based bank announced this week.
The Canadian bank said in a press release on Tuesday that it aims to complete the transaction by Aug. 30.
The transaction received approval from three regulatory agencies in just a few weeks: from the Federal Reserve on June 6, the Office of the Comptroller of the Currency on June 14, and OSFI on June 25. This is in stark contrast to the two years that VerthaBank and Holdingsford waited to complete their proposed merger in June 2022.
“It is a tremendous honor to be granted the authority to operate as an OCC bank across the United States.” VersaBank CEO David Taylor told American Banker this week.
In a press release Tuesday, Taylor called the deal with Holdingford, a single-branch, $79 million in assets, “a transformational next step in our growth strategy.”
This allows VersaBank to not only obtain a U.S. banking license, but also to operate as a lender. Purchase loans and leases from point-of-sale lenders across a wider area in the south of his native country.
The bank’s accounts receivable purchasing program launched in Canada in 2010 and has developed partnerships with roughly 275 lenders, providing more than $6.5 billion in financing to finance companies in North America, the company said.
Taylor said VersaBank launched RPP “on a limited basis” in the U.S. in April 2022, but aims to roll it out more broadly this fall across “the world’s largest point-of-sale financing market.”
“The extremely positive market response to the limited initial rollout of our RPP solution in the U.S., along with the long list of potential partners awaiting a broader rollout of our program, supports our belief that our services are unique and provide our partners with an attractive alternative to existing funding sources,” Taylor said in a press release June 14. “As we expand into the U.S., we maintain our steadfast commitment to risk mitigation across our organization, which has enabled us to lead the Canadian banking industry in terms of credit risk and achieve a 30-year track record with no significant loan losses.”
VersaBank does not have any branches in Canada, but has committed to maintaining its brick-and-mortar store in Holdingford.
“It speaks volumes that our Canadian neighbor, Versabank, has chosen Holdingford as the base for its entry into the U.S. market,” Stearns Bank Holdingford President Heather Plumsky said in a statement June 14, effectively reiterating comments she made when the acquisition was announced in 2022. “The Versabank team shares our values and culture and is committed to continuing Stearns Bank’s tradition as a key contributor and supporter of the local economy.”
Stearns Financial CEO Kelly Skalicki called the regulatory approval “a testament to the hard work and integrity of VersaBank’s management team and the strength and soundness of its banking model,” and said the transaction was “a great opportunity for us to build a strong, thriving, and successful bank.”[e] VersaBank has the opportunity to deliver winning solutions and make a positive contribution to our local communities and the U.S. financial sector as a whole.”
