By Robb M. Stewart

Canada's VersaBank is restructuring its corporate framework and planning to relocate to the U.S. in an effort to boost shareholder value, mitigate risk and cut costs.

VersaBank, which runs a branchless business-to-business banking model in Canada and the U.S., said Thursday that it plans to realign its structure with a standard framework of a U.S. bank.

That would see it operate under a parent holding company that would be domiciled in the U.S. The shift remains subject to shareholder, regulatory and other approvals.

The London, Ontario-based online bank said existing shares of the current parent company would be exchanged for new shares of VersaHoldings US, an existing U.S.-based entity that VersaBank originally set up to hold its U.S. subsidiaries. New shares of VersaHoldings will be listed on Nasdaq and the Toronto Stock Exchange in place of the current shares on the two exchanges.

VersaBank's Canadian operations will become VersaBank Canada, which will be headquartered in Canada and will be a wholly owned subsidiary of the new parent along with the company's VersaBank USA and VersaFinance US units. VersaBank Canada will continue to be overseen by a majority independent board of directors in compliance with Canada's Bank Act and industry guidelines in the country, the company said.

The bank said it plans to build a new board based on Securities and Exchange Commission and other applicable requirements.

David Taylor will give up his title as chief executive of VersaBank, but will continue in his role as president, and hold on to his positions as chairman and as CEO and president of VersaHoldings and as chair of VersaBank USA. Susan McGovern, vice-chair of the board VersaBank, will serve as interim CEO of VersaBank until the proposed changes are completed, the company said.

Taylor said the move would align VersaBank with the standard framework that U.S. and international investors are most familiar with. It also would enable eligibility for inclusion in certain stock indexes, including the Russell 2000, while simplifying the regulatory structure and reducing corporate costs, he said.

"In addition, we believe this new structure would facilitate further international expansion as the bank explores additional markets beyond Canada and the United States," Taylor said.

The bank said the total cost of this realignment is expected to be about 1.5% of its current market capitalization. It estimated the cost associated with the structural change at about 8 million Canadian dollars ($5.8 million), most of which is expected to be incurred in the third and fourth quarters of fiscal 2025.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 29, 2025 07:52 ET (11:52 GMT)

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