VersaBank (VBNK) intends, subject to shareholder, regulatory and other approvals, to realign its corporate structure with the standard framework of a US bank, under which the holding company parent would be domiciled in the U.S. The proposed Structural Realignment is intended to realize additional shareholder value, further mitigate risk and reduce corporate costs. Key elements of the proposed Structural Realignment are expected to be as follows: existing shares of VersaBank, the current parent, will be exchanged for new shares of VersaHoldings US Corp., the new parent, which is an existing US-domiciled entity originally established to hold VersaBank’s US subsidiaries; the new shares of VersaHoldings will be listed on the Nasdaq and the TSX in place of the current VersaBank shares; VersaBank’s Canadian operations will become VersaBank Canada, which will be headquartered in Canada, and will become a wholly owned subsidiary of VersaHoldings, along with VersaBank USA and VersaFinance US Corp; VersaBank Canada will continue to be overseen by a majority independent board of directors in compliance with the Bank Act Canada and applicable guidelines of the Office of the Superintendent of Financial Institutions; the Board of Governors of the Federal Reserve will continue to regulate VersaHoldings as a US Bank Holding Company; regulation and supervision of the subsidiaries of the VersaHoldings group of subsidiaries will be the responsibility of the Federal Reserve; and a new board of directors will be constituted for VersaHoldings in accordance with SEC and other applicable requirements. Estimated costs associated with the proposed Structural Realignment are expected to be approximately C$8M, the vast majority of which is expected to be incurred in Q3 and Q4 FY25, with some preliminary costs having been incurred in Q2 FY25. To facilitate the implementation, David Taylor, current Chair, President and CEO of VersaHoldings, would relinquish his title as CEO, VersaBank, while continuing in his role as President, VersaBank, as well as in his roles as Chair, President and CEO, VersaHoldings and Director and Chair, VersaBank USA. Susan McGovern, vice-chair of the board of directors of VersaBank, would be appointed interim CEO, VersaBank until the proposed Structural Realignment is completed.
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