The Canadian online loan provider VersaBank has agreed to pay Stearns Financial Services $13.5 million for a single-branch bank in Holdingford, Minnesota.
The acquisition of the St. Cloud, Minnesota, company's Stearns Bank Holdingford, which has a federal charter from the Office of the Comptroller of the Currency, would mark VersaBank’s official entrance into the U.S. market, according to a spokesperson for the digital-only bank.
VersaBank said in a statement announcing the deal that purchasing the Holdingford subsidiary of Stearns will “fuel the growth” of the company’s receivable purchases business. The $2.1 billion-asset company has developed financial technology to “profitably address underserved segments” of the Canadian banking market and plans to expand in the U.S., the statement said.
“We have built a tremendously successful digital banking operation in Canada, providing innovative, technology-based solutions to serve unmet needs,” VersaBank CEO David Taylor said in the statement. The Holdingford acquisition, Taylor said, gives the London, Ontario, company “a platform from which to replicate that success in the Western world’s largest banking market.”
VersaBank said that Stearns Bank Holdingford will be renamed VersaBank USA National Association and that the deal is expected to close by October, with the rebranded company’s total capital ratio exceeding 10%. The acquisition is expected to add about $60 million of assets to VersaBank, the Canadian company said.
In 2019, VersaBank made its first foray into the U.S. market with the launch of DRT Cyber, a financial cybersecurity company based in Washington, D.C.
Fintechs have made small community banks acquisition targets in recent years because their national charters provide access to customer bases across the U.S. The deals offer startup lenders a fast-track to federal depository approval by switching from de novo applications to a change of control application with the OCC.
The fintech and the Minnesota bank it acquired last week, renamed Mid-Central National Bank, intend to pioneer a new method of storing and moving money for consumers.
In 2020, the fintech startup Jiko
