VERSABANK TO SELL ITS ONLY BANK BRANCH IN HOLDINGFORD, MINNESOTA, TO STEARNS BANK

Rhea-AI Summary

VersaBank (TSX: VBNK, NASDAQ: VBNK) has agreed to sell assets tied to its only U.S. retail branch in Holdingford, Minnesota, to Stearns Bank, with the transaction approved by the OCC and expected to close in Q2 2026.

The sale supports VersaBank's branchless, partner-based, digital banking model, is expected to boost operating leverage via cost savings, and will cause a one-time, non-cash intangible asset write-off of approximately $1.7 million in Q2 fiscal 2026 while having de minimis impact on tangible book value.

Positive

• OCC approval obtained for Holdingford sale
• Sale aligns with branchless, partner-based model
• Expected operating leverage and cost savings
• Transaction expected to close in Q2 2026

Negative

• One-time non-cash intangible write-off ~$1.7M in Q2 fiscal 2026
• Sale removes VersaBank's only U.S. retail branch

News Market Reaction – VBNK

+1.24%

+1.24% Session close to close

In the Mar 24 session, VBNK gained 1.24%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Market Context

This announcement details the sale of VersaBank’s only Holdingford, Minnesota branch back to Stearns...

Analysis

This announcement details the sale of VersaBank’s only Holdingford, Minnesota branch back to Stearns Bank, aligning with its branchless, partner-based digital strategy. Management highlights a de minimis impact on tangible book value and a one-time non-cash intangible asset write-off of about $1.7M in Q2 fiscal 2026. Investors may focus on how this divestiture supports U.S. Structured Receivable Program growth and the bank’s stated drive toward an improved efficiency ratio over time.

Key Figures

Intangible asset write-off: $1.7 million Branch count affected: 1 branch Service duration: 20 months

3 metrics

Intangible asset write-off $1.7 million Expected one-time non-cash charge in Q2 fiscal 2026

Branch count affected 1 branch Only retail bank branch in Holdingford, Minnesota being sold

Service duration 20 months Period VersaBank served Holdingford customers before sale

Historical Context

5 past events · Latest: Mar 17 (Positive)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Mar 17	Tokenized deposits update	Positive	-1.1%	Enhanced FX functionality for Real Bank Tokenized Deposits pilots.
Mar 04	Dividend declaration	Positive	-7.6%	Announced quarterly cash dividend on common shares.
Mar 04	Q1 2026 earnings	Positive	-7.6%	Reported strong Q1 2026 growth in revenue and net income.
Mar 03	Q1 2026 earnings	Positive	-7.6%	Detailed record Q1 results and U.S. SRP growth targets.
Feb 24	Earnings call notice	Neutral	+0.7%	Scheduled Q1 2026 results release and conference call.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Recent positive operational and earnings news often saw negative next-day price reactions, indicating a tendency toward divergence between fundamentals and short-term trading.

Recent Company History

Over the past month, VersaBank reported record Q1 2026 results, with strong revenue and net income growth, declared a quarterly dividend of CAD $0.025, and advanced its Real Bank Tokenized Deposits™ initiative. Despite these generally positive developments, the stock declined after several of these announcements. The current branch-sale news, framed as efficiency enhancing with de minimis financial impact aside from a $1.7M write-off, fits the broader theme of operational streamlining and U.S. growth.

Key Terms

tangible book value, intangible asset, operating leverage, efficiency ratio, +1 more

5 terms

tangible book value financial

"will have de minimis impact on VersaBank's tangible book value"

Tangible book value is the accounting measure of a company’s net worth after removing intangible items like goodwill, patents and trademarks, leaving only physical and financial assets minus liabilities. For investors it offers a clearer view of the company’s hard-asset backing per share—like estimating the cash you could get by selling the furniture, machinery and cash in a house—helping gauge downside risk and whether a stock may be cheaply valued.

View in glossary

intangible asset financial

"expected to result in a one-time, non-cash intangible asset write off"

Non-physical assets such as patents, trademarks, software, customer relationships, brand reputation or goodwill that provide future economic benefit. Investors care because these unseen resources can drive revenue, reduce costs or create competitive advantage, but they are harder to value and sell than physical assets, so they influence company valuation, risk and prospects much like an invisible engine that powers growth yet can be difficult to measure or replace.

operating leverage financial

"cost savings will contribute to our operating leverage as we continue"

Operating leverage measures how much a company's profits are affected by changes in sales volume. When a business has high operating leverage, small increases in sales can lead to much larger increases in profit, much like a lever amplifies force. It matters to investors because it indicates how sensitive a company's earnings are to fluctuations in sales, affecting risk and potential returns.

View in glossary

efficiency ratio financial

"well positioned to continue to drive an enhanced efficiency ratio"

A measure of how much a company spends to produce each dollar of revenue, usually shown as operating expenses divided by revenue and expressed as a percentage. Think of it as a household’s budget: a lower percentage means more of each dollar earned stays as profit, while a higher number means costs are eating into returns. Investors use it to judge cost control and compare how efficiently companies turn revenue into earnings, especially in banks and financial firms.

office of the comptroller of the currency regulatory

"The Holdingford Sale has been approved by the Office of the Comptroller"

A U.S. federal regulator that oversees and enforces rules for nationally chartered banks and federal savings associations, acting like a referee to make sure those institutions operate safely and follow banking laws. Investors care because the agency’s supervision, rule changes, or enforcement actions can affect a bank’s safety, profitability, lending ability and legal risks — all of which influence the value and stability of bank stocks and related financial assets.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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– Sale Consistent with Highly Efficient Branchless, Partner-Based, Digital Banking Model; Will Contribute to Overall Efficiency of the Bank –

LONDON, ON, March 24, 2026 /PRNewswire/ - VersaBank (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 Bank") (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 Bank 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. "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 been a continued pleasure working with the VersaBank team. We are proud of the Holdingford team for their stability and commitment throughout this transition, maintaining a strong community presence over the past 20 months. Our organizations share core values, and we look forward to continued collaboration between our two banks, both of which are committed to making a meaningful difference."  Heather Plumski, President, Stearns Bank.

The Holdingford Sale will have de minimis impact on VersaBank'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 Q226, is expected to have de minimis financial implications for the Bank beyond the contribution to efficiency.

About VersaBank

VersaBank is a North American bank with a difference. Federally chartered in both Canada and the U.S., VersaBank 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 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 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 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 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's common shares trade on the Toronto Stock Exchange and NASDAQ under the symbol VBNK.

Forward-Looking Statements 

VersaBank's public communications often include written or oral forward-looking statements. Statements of this type are included in this press release and may also be included in other securities filings or in other communications. All such statements are made pursuant to the "safe harbor" provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. The statements in this press release that relate to future events or future performance are forward-looking statements.  

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, many of which are beyond VersaBank's control. There is a risk that predictions, forecasts, projections and other forward-looking statements will not be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements, as a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such statements. These factors include, but are not limited to: the strength of the Canadian and US economies in general and the local economies within in which VersaBank operates; the effects of changes in monetary and fiscal policy, including changes in interest rate policies of the Bank of Canada and the US Federal Reserve; global commodity prices; the effects of competition in the markets in which VersaBank operates; inflation; capital market fluctuations; the timely development and introduction of new products in receptive markets; the impact of changes in laws, including trade laws and tariffs, and regulations applicable to financial services; changes in tax laws; technological changes; unexpected judicial or regulatory proceedings; unexpected changes in consumer spending and savings habits; the impact of wars or conflicts and related effects on global supply chains and markets; the impact of outbreaks of disease or illness affecting local, national or international economies; the possible effects of terrorist activities; natural disasters and disruptions to public infrastructure (including transportation, communications, power or water supply); and VersaBank's ability to anticipate and manage the risks associated with these factors.  

The foregoing list of important factors is not exhaustive. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors as well as other uncertainties and potential events. The forward-looking information contained in this press release is presented to assist VersaBank shareholders and others in understanding VersaBank's financial position and may not be appropriate for any other purposes. Except as required by applicable securities laws, VersaBank does not undertake to update any forward-looking statement contained in this press release or made from time to time by VersaBank or on its behalf. 

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.

Visit our website at:  www.versabank.com
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SOURCE VersaBank

FAQ

What did VersaBank (VBNK) announce on March 24, 2026 about the Holdingford branch?

VersaBank announced the sale of assets tied to its sole Holdingford, Minnesota branch to Stearns Bank. According to the company, the transaction has OCC approval and is expected to close in Q2 2026.

How will the Holdingford sale affect VersaBank's (VBNK) financials in Q2 2026?

The sale will trigger a one-time, non-cash intangible write-off of about $1.7 million in Q2 fiscal 2026. According to the company, the impact on tangible book value is expected to be de minimis.

Why is VersaBank (VBNK) selling its only U.S. retail branch in Holdingford?

VersaBank said the sale supports its highly efficient, branchless and partner-based digital banking model. According to the company, the move will contribute to operating leverage through cost savings.

When is the Holdingford branch transaction for VersaBank (VBNK) expected to close?

The Holdingford sale is anticipated to close in the second quarter of 2026. According to the company, required regulatory approval from the OCC has been obtained.

What does the Holdingford sale mean for VersaBank's U.S. operations and strategy (VBNK)?

VersaBank indicated the sale aligns with its digital, cloud-based banking approach and will enhance efficiency. According to the company, U.S. operations have already surpassed Canadian operations in efficiency.