VersaBank announces public offering of common shares

LONDON, ON - VersaBank (NASDAQ: VBNK) (TSX: VBNK), currently trading at $15.39 with a market capitalization of approximately $400 million, today disclosed the filing of a preliminary prospectus supplement to its base shelf prospectus dated November 22, 2024, initiating a public offering of its common shares. The offering excludes the province of Quebec but includes other Canadian provinces and territories, and has been filed with the U.S. Securities and Exchange Commission under the U.S./Canada Multijurisdictional Disclosure System.

Raymond (NS:RYMD) James & Associates, Inc. has been appointed as the sole bookrunning manager for the offering, with Keefe, Bruyette & Woods, Inc., and Roth Canada, Inc. serving as co-managers. The bank has also provided an over-allotment option, allowing underwriters to purchase up to an additional 15% of the common shares for 30 days post the final prospectus supplement.

The anticipated net proceeds from the offering are earmarked for general banking purposes and are expected to qualify as Common Equity Tier 1 capital for the bank. The successful closing of the offering hinges on several customary conditions, including the listing of the common shares on the Nasdaq and TSX and obtaining any necessary exchange approvals.

This announcement does not constitute an offer to sell or a solicitation of an offer to buy the securities, and there will be no sale of these securities in any jurisdiction where such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Investors can access the Base Shelf Prospectus and the Preliminary Supplement through SEDAR+ and EDGAR. Copies of these documents, including any amendments, are available without charge from Raymond James & Associates, Inc.

VersaBank operates as a branchless, digital, business-to-business bank leveraging proprietary technology. It focuses on underserved segments of the banking industry and operates with significant operating leverage that drives efficiency and return on common equity. The bank, which has demonstrated strong performance with a 52.91% return over the past year and revenue growth of 3.59%, also owns Washington, DC-based DRT Cyber Inc., specializing in cyber security services. According to InvestingPro, the company currently trades at a P/E ratio of 14.68 and shows signs of being slightly undervalued based on their proprietary Fair Value model.

This press release includes forward-looking statements, and actual results may differ from those expressed or implied due to various factors. The information is based on a press release statement. For deeper insights into VersaBank's financial health and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro's detailed research reports, which are available for over 1,400 US-listed companies.

In other recent news, VersaBank reported a challenging fourth fiscal quarter, significantly influenced by its recent U.S. bank acquisition, leading to increased expenses and a temporary reduction in net interest margin (NIM). Despite these short-term challenges, analysts from Keefe, Bruyette & Woods maintain an Outperform rating on the bank, expecting an improvement in performance as VersaBank continues to expand its U.S. operations. They have, however, revised the bank's financial estimates due to a slower than expected pick-up in U.S. origination activity.

VersaBank's recent acquisition of Stearns Bank Holdingsford has expanded its reach, now federally chartered in both the U.S. and Canada. This strategic move is seen as an opportunity for VersaBank to leverage its proven risk-mitigated Point of Sale lending model in the U.S. market, a perspective shared by Roth/MKM, which initiated coverage of the bank's stock with a Buy rating.

The bank's total assets have reached $4.5 billion, with an 11% year-over-year increase in its loan portfolio, and positive net income and EPS growth for the first nine months of the year. Analysts forecast EPS to reach $1.63 in FY2025. These recent developments highlight VersaBank's ongoing growth strategy, as it also finalizes its first post-transaction Receivable Purchase Program partner in the U.S. market, according to analysts from Raymond James.

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