Stearns Bank acquires Holdingford, MN, branch from VersaBank USA

St. Cloud, MN (March 24, 2025)—VersaBank USA (or the “Bank”) (TSX: VBNK; NASDAQ: VBNK), a North American leader in business-to-business digital banking, as well as technology solutions for cybersecurity, today announced that the Bank has entered into a definitive agreement for the sale of certain assets associated with its only bank branch in Holdingford, Minnesota to Stearns Bank National Association (“Stearns”) (the “Holdingford Sale”). The Holdingford Sale has been approved by the Office of the Comptroller of the Currency (“OCC”).

“The sale of our only retail bank branch back to Stearns is consistent with our highly efficient branchless, partner-based, digital banking model and the resulting cost savings will contribute to our operating leverage as we continue to steadily ramp up our Structured Receivable Program business in the U.S.” said David Taylor, Founder and President, VersaBank USA. “The efficiency of our U.S. operations has already surpassed that of our Canadian operations. As a cloud-based bank with one of the most unique operating models in North America, we are well positioned to continue to drive an enhanced efficiency ratio to industry leading levels.”

“We are privileged and proud to have had the opportunity to serve our Holdingford customers over the past twenty months. We thank you for the opportunity to be part of the community and look forward to a seamless transition back to the incredible team at Stearns Bank.”

“It has continued to be a great pleasure to work with the VersaBank USA team! The Stearns team has remained with the team in Holdingford across the transition and are grateful to have the opportunity to carry on the strength in the community that Versa has generated over the past 20 months. Stearns and Versa continue to share important core values and we at Stearns continue to look forward to additional opportunities and collaboration between the two unusual banks, both of which are truly making a difference." – Heather Plumski, President of Stearns Bank

The Holdingford Sale will have de minimis impact on VersaBank USA's tangible book value and is expected to result in a one-time, non-cash intangible asset write-off of approximately $1.7 million in the second quarter of fiscal 2026. Otherwise, the transaction, which is anticipated to close in April, is expected to have de minimis financial implications for the bank beyond the contribution to efficiency.

About VersaBank USA

VersaBank USA is a North American bank with a difference. Federally chartered in both Canada and the U.S., VersaBank USA has a branchless, digital, business-to-business model based on its proprietary state-of-the-art technology that enables it to profitably address underserved segments of the banking industry in a significantly risk mitigated manner. Because VersaBank USA obtains substantially all of its deposits and undertakes the majority of its funding activities electronically through financial intermediary partners, it benefits from significant operating leverage that drives efficiency and return on common equity. In August 2024, VersaBank USA launched its unique Structured Receivable Program funding solution for point-of-sale finance companies, which has been highly successful in Canada for over 15 years, to the underserved multi-trillion-dollar US market. VersaBank USA also owns Minnesota-based DRT Cyber Inc., a North America leader in the provision of cyber security services to address the rapidly growing volume of cyber threats challenging financial institutions, multi-national corporations and government entities. Through DRT Cyber Inc., VersaBank USA owns proprietary intellectual property and technology to enable the next generation of digital assets for the banking and financial community, including the Bank’s revolutionary and proprietary Real Bank Tokenized Deposits™.

VersaBank USA’s Common Shares trade on the Toronto Stock Exchange and NASDAQ under the symbol VBNK.

About Stearns Bank

Stearns Bank is Unusual. Stearns Bank National Association is a majority women-owned and governed financial services institution committed to empowering people, entrepreneurs, small businesses, and local communities to reach their full financial potential. As a privately held, employee-owned entity, Stearns Bank offers a wide array of national products and services including consumer and small business banking, affordable housing financing, USDA and SBA lending, and equipment and small business financing. Headquartered in Minnesota, the well-capitalized institution has branch locations in Minnesota, Florida, and Arizona. Guided by a commitment to fostering a diverse, inclusive, and equitable workplace, Stearns Bank is regularly recognized as one of the nation’s highest performing banks and ‘Best Banks to Work For’ by American Banker. Member FDIC. Equal Housing Lender. Learn more at www.StearnsBank.com.

Media Contact
Marlice Johnson
Marlice.Johnson@StearnsBank.com
C: 320-910-8457