Canada's VersaBank turns to M&A for U.S. bank charter

VersaBank in London, Ontario, has agreed to buy Stearns Bank Holdingford in Holdingford, Minn.

The $2.1 billion-asset Canadian bank said in a press release that it will pay $13.5 million to Stearns Financial Services for the $60 million-asset Stearns. The deal is expected to close by Oct. 31. 

Stearns Financial would retain its Stearns Bank and Stearns Bank Upsala subsidiaries.

VersaBank said that buying Stearns, a national bank regulated by the Office of the Comptroller of the Currency, would provide access to U.S. deposits and help it expand its receivable purchase program business. 

The deal is expected to be accretive to VersaBank’s earnings per share in the first year after closing.

"This acquisition represents a transformational next step in VersaBank's long-term growth strategy," David Taylor, the bank’s president and CEO, said in the release. 

“It has been a pleasure working with the team at [Stearns Financial] and we look forward to exploring future opportunities for collaborations to our mutual benefit," Taylor added. 

Raymond James & Associates; Davis Polk Wardell; and Chain Bridge Partners advised VersaBank.