VersaBank Achieves Milestone with Successful Common Share Offering

On December 18, 2024, VersaBank, a prominent North American bank known for its unique digital banking model, announced the successful completion of its public offering of common shares. This offering was announced earlier and saw substantial interest from investors, resulting in the sale of 5,660,378 shares at a public price of $13.25, equivalent to approximately CAD$18.95. The total gross proceeds from this sale reached around $75 million (approximately CAD$107 million), excluding underwriting discounts and costs associated with the offering.

The public offering has been a significant step for VersaBank, as it aims to use the net proceeds for general banking purposes. This capital infusion is expected to qualify as Common Equity Tier 1 (CET1) capital, which is crucial for maintaining the bank's solvency and supporting its ongoing operations.

Underwriters and Future Options

The offering was managed by Raymond James & Associates, Inc., which served as the sole bookrunning manager. Keefe, Bruyette & Woods, a Stifel Company, along with Roth Canada, Inc. acted as co-managers for the offering. Moreover, an over-allotment option has been granted to the underwriters, allowing them to purchase up to an additional 15% of the common shares for a limited time, until January 15, 2025. This option further demonstrates the confidence from underwriters in the market's response to VersaBank's offering.

Regulatory Compliance and Access to Documentation

The common shares were offered via a prospectus supplement dated December 16, 2024, which complements the Bank’s base shelf prospectus filed on November 22, 2024. These documents, which provide detailed information regarding the offering, comply with securities regulations in multiple provinces across Canada except Quebec, and have also been filed with the U.S. Securities and Exchange Commission (SEC).

Investors can access these documents through SEDAR+ and EDGAR, where they can find additional information and amendments related to the offering. Contact details for further access have been provided for ease of inquiry.

About VersaBank

VersaBank is a federally chartered bank in both Canada and the United States, distinguishing itself with a branchless digital model that enables it to profitably service underserved segments of the banking sector. The bank's operations rely heavily on technology, allowing efficient handling of deposits and lending activities through electronic means in partnership with financial intermediaries.

In 2022, VersaBank launched its Receivable Purchase Program (RPP), targeting the U.S. market for point-of-sale finance solutions. This innovative approach has already proven successful in Canada for nearly 15 years. Furthermore, VersaBank owns DRT Cyber Inc., a leading cybersecurity service provider that addresses the growing challenges of cyber threats faced by financial institutions and corporations.

Looking Ahead

While the offering represents a significant milestone for VersaBank, the bank acknowledges that forward-looking statements regarding the use of proceeds come with inherent risks and uncertainties. The bank's expectations may adjust based on various market and economic factors, including changes in monetary policy and economic conditions that could impact operations. Nonetheless, this move positions VersaBank better within the competitive financial landscape as they continue to build upon their mental and technological edge in the digital banking sector.

In conclusion, the successful offering of common shares marks a promising chapter for VersaBank as it advances its strategic goals in enhancing operations and increasing its capital base. Investors and stakeholders are eager to see how this will evolve in the coming months and years, as the landscape of banking continues to shift.