VersaBank, a North American company in business-to-business digital banking, as well as technology solutions for cybersecurity, received approval from the Office of the Comptroller of the Currency (OCC), the primary regulator of banks chartered under the United States National Bank Act, to proceed with its proposed acquisition of Minnesota-based Stearns Bank Holdingford, an independent OCC-chartered national bank with $79 million in assets located in Holdingford, Minnesota that is wholly owned by Stearns Financial Services. The OCC approval is the second and final U.S. regulatory approval required for VersaBank to proceed with the Stearns Holdingford acquisition. VersaBank will now seek approval for the Stearns Holdingford acquisition from its Canadian regulator, the Office of the Superintendent of Financial Institutions (OSFI). Upon VersaBank’s receipt of OSFI approval, it will proceed to close the Stearns Holdingford acquisition as soon as possible.
Stearns Financial, a multi-bank holding company owning two additional and separate national bank charters, Stearns Bank Upsala and Stearns Financial’s flagship and largest national bank, Stearns Bank (headquartered in St. Cloud, Minnesota), is not part of the VersaBank transaction and will continue to exist and operate independently.
“OCC approval of our proposed acquisition of Stearns Holdingford is a critical milestone in the process of taking our unique and highly successful Receivable Purchase Program (RPP) to the largest financing market in the world,” David Taylor, president and CEO of VersaBank, said. “Having proven out the value of our innovative and proprietary RPP financing solution in Canada, our acquisition of Stearns Holdingford, a national, federally licensed U.S. bank, will enable us to pursue a methodical, phased roll out of this solution across the U.S. There is simply no equivalent to this type of funding mechanism for point-of-sale finance companies anywhere in North America. The very favorable market response to the limited initial roll out of our RPP solution in the U.S. to date, as well as the long list of potential partners waiting on our ability to broadly roll out our program, has confirmed our belief that our offering is both one-of-a-kind and an attractive alternative to the existing sources of funding for our partners. It gives us great confidence in our ability to replicate the success of our Canadian solution in the U.S. market.”
“Importantly, in our expansion into the U.S., we will maintain our steadfast commitment to risk mitigation throughout our organization, which has enabled us to lead the Canadian banking industry in terms of credit risk and achieve a 30-year track record of no material loan losses. Our RPP opportunity in the U.S., combined with the expected continued growth in our RPP portfolio in Canada, will enable VersaBank to drive strong, sustainable growth in our loan portfolio for years to come and increasingly capitalize on the significant operating leverage in our business model, driving outsized improvements in efficiency and growth in profitability and return on common equity that is unmatched in the North American banking industry,” Taylor said. “As we capitalize on the significant opportunity this acquisition affords us, we look forward to continuing to serve the community of Holdingford, providing the same level of service and support that its customers have come to know for many decades.”
“On behalf of the entire team at Stearns Financial and all of the communities we serve, I would like to congratulate VersaBank on this monumental achievement and welcome VersaBank with open arms,” Kelly Skalicky, president and CEO of Stearns Financial, said. “It is a testament to the diligence and integrity of the VersaBank management team and the strength and soundness of their banking model that VersaBank’s acquisition of Stearns Holdingford was approved by both the OCC and the Fed, providing VersaBank the opportunity to bring successful solutions and positively contribute to our local communities and the larger U.S. financing sector by delivering their well-established, proven Receivable Purchase Program and innovative financing offerings. We look forward to being able to proceed with the closing of the Stearns Holdingford transaction and continuing to work with VersaBank on additional future opportunities as they emerge.”
“It speaks volumes that our Canadian neighbor, VersaBank, has chosen Holdingford as its home base for entry into the U.S. market,” Heather Plumski, president of Stearns Bank Holdingford, said. “The VersaBank team shares our values and culture and is committed to continuing Stearns Bank’s legacy as a vital contributor to and supporter of the local economy.”
