VersaBank and Watercress Financial: A Powerful Partnership in US Home Improvement Financing

VersaBank (TSX: VBNK) (NASDAQ: VBNK), a North American leader in business-to-business digital banking and technology solutions for cybersecurity, has announced a strategic partnership with Watercress Financial Group LLC ("Watercress"), a rapidly growing point-of-sale originator of home improvement loans in the US. This collaboration marks a significant step in VersaBank's expansion into the largest point-of-sale financing market in the world, leveraging its innovative Receivable Purchase Program (RPP) to fund a portion of Watercress' originations. Funding has commenced immediately, signaling the beginning of a mutually beneficial relationship.

Watercress Financial, with its proven track record of originating high-quality consumer loans through its expanding nationwide network of contractors, has found an ideal partner in VersaBank. The latter's RPP, an innovative and highly attractive digital funding solution for finance companies, was specifically designed to address an unmet need in the market for consistently available, readily accessible, economically attractive capital using VersaBank's proprietary, state-of-the-art banking technology. This partnership enables both companies to access new opportunities and grow their respective businesses.

VersaBank's RPP has a proven track record of success in Canada, with a portfolio in excess of CAD$3.1 billion (US$2.3 billion) as of April 30, 2024, growing at a compounded annual rate of more than 26% over the last five years. Since its launch in 2010, VersaBank has provided more than CAD$9 billion (US$6.5 billion) in funding to North American finance companies. This successful model is now being rolled out in the US, with Watercress Financial as its first American partner.

The partnership between VersaBank and Watercress Financial brings several unique advantages to both parties. For VersaBank, it provides access to a larger customer base and the opportunity to increase its RPP portfolio. For Watercress Financial, it allows for the expansion and diversification of funding sources, supporting its accelerating growth. Additionally, the partnership enables both companies to collaborate and leverage each other's strengths, fostering a strong, mutually beneficial relationship.

In conclusion, the partnership between VersaBank and Watercress Financial is a powerful alliance that combines the strengths of two innovative and successful companies in the home improvement financing market. This collaboration is expected to bring long-term benefits to both parties, as they work together to expand their reach and grow their respective businesses.