I'll call the informal part of the meeting to order. I'm very pleased to be here today at the bank's Innovation Center of Excellence in London, Ontario, for our shareholder vote on the proposed plan to realign the bank's corporate structure to that of a standard U.S. bank framework, which we have broadly referred to as the reorganization. Following the formal portion of this meeting, I'll return for some concluding comments as well as to answer some questions. I now have the pleasure of turning the podium over to our Chairman, the Honorable Judge Frank Newbould of the Board of Directors of VersaBank. Frank, to proceed with the formal portion of the meeting.
Thank you, David. Now formally, I will open the meeting, and in accordance with the bylaws, I will act as Chair of today's meeting, and Stacey Stokley will be Secretary of the meeting. With the consent of the meeting, I appoint Arlene Agnew, representative of Odyssey Trust Company, who's joining us today as scrutineer. The Secretary has confirmed that notice of this meeting was duly given in accordance with the Bank Act, and the scrutineers have reported that the requisite quorum of shareholders as prescribed by the bank's bylaws are present in person or by proxy. I therefore declare the meeting to be properly constituted for the transaction of business and call the meeting to order.
I further direct that a copy of the notice of the meeting, together with proof of mailing, be kept by the Secretary with records of the meeting and that scrutineers report be annexed to the minutes. This is a very special and historic day for our bank. In no small measure due to the work of our Founder and President, David Taylor, and I want to thank David for all he's done. We have several Directors here attending the meeting and management. I will now move to the agenda. Today, we'll consider the matters of business set out in the management information proxy circular dated August 4, 2026, which I'll refer to as a circular, and the notice of the meeting is called the circular, and the former proxy was sent to registered and non-registered shareholders on or around August 24, 2026.
Unless there's an objection, I'll dispense with the reading of the notice of meeting. Specific individuals have been asked to move and second the resolutions. I would like to comment on the voting procedure with respect to the reorganization, which I will refer to as a special resolution. Each holder of common shares of the bank is entitled to one vote per common share. Only registered shareholders appearing on the bank's register of shareholders, as provided by the transfer agent, and those persons who are authorized proxy holders are eligible to vote at today's meeting, or this meeting has proposed to conduct a vote on the special resolution by a show of hands. Please note that any registered shareholder or proxy holder present in person is entitled to demand that a ballot be conducted either before or after the vote by show of hands.
If a ballot's required, then there will be a further procedure. The resolution. The meeting's been called in connection with the reorganization of VersaBank. In particular, our shareholders have been asked to consider, and have thought advisable, to pass a special resolution in order to approve a reorganization of VersaBank, whereby, among other things, Versa Bancorp, a Delaware corporation, will become a holding company that will succeed VersaBank as the publicly traded company in which existing shareholders hold their equity interests. The special resolution that the shareholders are being asked to pass is attached as an Annex A to the management information circular. After careful consideration, the board unanimously recommends that shareholders vote for the special resolution. It must be approved by not less than 66 and two-thirds percent of the votes cast at this meeting.
I'll now ask Tammie Ashton to move the special resolution and Shawn Clarke to second the motion. Tammie.
I move that it be resolved that the special resolution attached as Annex A to the management information circular be hereby passed in its entirety as a resolution of the bank.
A seconder?
I second the motion.
Thank you, Shawn. It is now open for discussion. Is there any discussion on the motion? There being no further discussion, it must be approved by an affirmative vote of not less than two-thirds of the votes cast by shareholders present in person or by proxy. All those in favor of the resolution, please signify by raising your hand. Contrary-minded, if any. I declare the resolution carried. Is there any further business? As no one has any further business, this concludes the formal business of the meeting, and I ask Tammie Ashton to move the final resolution.
Mr. Chair, I move that the formal business of the meeting be terminated.
Thank you. That motion has been accepted, and I declare the formal business of the meeting terminated. Now I am going to ask our Founder and President David Taylor for a few remarks.
Thank you to our shareholders for this overwhelming confidence of the historic initiative that will be critical to VersaBank achieving its full potential on both sides of the border. With 99.7% of you voting in favor, with more than 68% of the outstanding shares having voted, that is a very clear endorsement to the reorganization and the numerous value-driving benefits we believe will be driven by our plan in both sides of the border, U.S. and Canada. I have spoken a lot recently about the opportunity in the U.S. However, especially with the recent introduction of our real-time structured Receivable Program, we are both very confident and excited about the significant renewed growth potential for our bank right here in Canada, where it all began.
In fact, as the market leader in the point-of-sale industry in Canada, even in the current economy, we are targeting growth next year in absolute dollar terms about the same magnitude as we are in the U.S. As it has been for many decades, London will remain the headquarters of VersaBank Canada and the home of our credit operations. We will continue to operate our deposit businesses out of Saskatoon's University of Saskatchewan's Innovation Place, which is located campus of the university of which I am a proud graduate. Our reorganization will ensure that we are able to continue to lead the Canadian banking industry in terms of innovation. In turn, continuing to support Canadian small businesses and consumer sectors by providing abundant, reliable, economical, and efficient financing, and thereby continuing to contribute in an outsized manner to the Canadian economy.
With today's shareholder vote, our proposed reorganization now proceeds to the final requisite approvals, those by the Minister of Finance in Canada and by the Fed in the U.S. We look forward to those decisions in due course. I will be now happy to take your questions. John Drake, do you have a question, sir?
In view of the fact that the U.S. Congress has decided to delay, I guess is the best word, the passage of the CLARITY Act, can you give us any sort of update on the stablecoin, which VersaBank owns and is in a pilot program with? Can you give us any information on that?
Sure.
The second question is, what about the sales growth in the U.S.? Does it meet your expectations or is there more work to do?
Two really good questions. A while back when the so-called GENIUS Act came out, I was asked to be a lunchtime speaker at the Florida Bankers Association, and I was speaking to my fellow bankers, and I referred to it as the Moron Act. I still stand by those words. I am not displeased that it has faltered. Of course, the CLARITY Act, that was just another add-on that would create more confusion. I am not unhappy that it has faltered also. We believe that only fully licensed financial institutions should be taking people's hard-earned money. As I said at that meeting, we have a cultural imperative to ensure our depositors get their money back with interest. Of course, you know that stablecoins are prohibited from paying interest, and they do not have FDIC insurance either, or CDIC insurance.
I think those reasonable heads prevailed, and now it is up to us bankers to produce stablecoins if that is what customers want. Ultimately, it will be a deposit token because it comes with interest and insurance. You will still see us a little bit doing some stablecoin business. There are some programs that we are underway, and they still have a little bit of momentum with them. Do not be surprised if you see a press release coming out sooner or later about a stablecoin initiative. I think eventually they will evolve into tokenized deposits. With respect to our growth in the U.S., it has exceeded expectations. It has been extremely well-received, particularly with the real-time purchase of receivables. That is the game changer. The biggest guys in the U.S. say that this is revolution. There is a CAD 1 trillion market of asset-backed securities, and pretty well it is rendered obsolete.
We can now buy the receivables from the point-of-sale company partners. We can do it in 10 minutes. One of the biggest partners said to me, "David, you can do it every day. That's all we need." Not only that, we're buying them, we're pricing them too. That was a big deal because they don't like being left in the wind with interest rates going up or down. Interest rates go up rapidly, and it means the receivables they're holding on to for 60, 90 days have declined the value and taken a loss. We can price instantly, basically. So it's a hell of a deal on both sides of the border. We're signing them up as fast as we can. At another meeting, I predicted we'd do about $3 billion additional U.S. dollars in the United States.
I also said, Billy, where's our Canadian guys? They're right there. They can do CAD 3 billion too. I sure hope they can. With this restructuring, it's allowed us to have access to the largest capital markets in the world by far. Last count, between the Nasdaq and the New York Stock Exchange, we're looking at 80 trillion in the U.S. That's a big cap. There's nowhere on the planet that comes close to those numbers. Of course, with these new programs, we're extremely well-received. So hey, John, long-winded way to answer the question, but it's good times.
Good answer. One of the things I understand about the Receivable Program is that the aggregators do not have to wait until they aggregate a sufficient volume of loans to then go to the bank and sell them to the bank. They no longer now need to use their own capital because the bank's capital can be used from ab initio in the process.
Absolutely. That's a huge advantage. Those that invest in point-of-sale companies can recapture some of their capital now. So just firstly, mathematically, their return on equity doubled. Then they save all the inventory expenses where they're warehousing the lines, the interests that they're spending. They save all that. It's a fantastic deal. It's a classic win-win. Win for us, we get high-quality receivables in a hurry, and win for our partners, they get the reliable economical funding that they've been dreaming of. Some people said to me in the early days, "Well, can't they punt it from the market?" I said, "Yeah, in an eight-year cycle, there's two years probably the market's frothy and they get all the money they want, but there's those two years where they can't get a nickel." Hitching their wagon to VersaBank, they know they've got funding forever more.
Right through the liquidity crisis, right through the COVID-19 times, supporting our point-of-sale people. That trickles down, of course, to Canadian small business that needed capital. We're proud to be doing that, and hopefully we can do a lot more with this restructuring. Any other good questions coming? There's one, Robert Nash.
The restructuring.
Yeah.
Thank you. The restructuring. It's really exciting because you go down to the U.S. Could you just sort of explain, we've got VersaBank Canada, is that a subsidiary and OSFI is happy with that, the way you've structured? Then the U.S. and then the wonderful stuff that you're doing with the tokens and everything. If you just-
Yeah. Well, VersaBank Canada will become a wholly-owned subsidiary of Versa Bancorp, which is a publicly Nasdaq-listed company. VersaBank Canada will still stay at 140 Fullarton Street. It'll be headed up by John Asma sitting right behind you. It'll do what it always has done, and it will have access to a lot more capital, which is always a strength for a bank that's growing rapidly. I think we're the fastest bank in the country by far. As banks grow, they need more capital. So VersaBank Canada stays right where it is. VersaBank USA is headquartered in Minneapolis, and it stays where it is. The holding company is very classic modern company. It's cloud operated. I live in Florida half the year, here half the year. Some of our people live deeper in Florida, some live all over. We're sort of a non-traditional location.
Theoretically, the address will be in Florida. A little bit on the stablecoins. This facility here is our tech center, and we have a similar one in Saskatchewan that looks after deposits. But this facility you can be proud of because it's leading edge in the world for providing those stablecoins, the custodies, and the state of the art, which is the tokenized deposit. There's Jeff Wagman.
It's been a while.
That's why I recognize him. Jeff.
Not a problem. Just a question now with the restructuring. VersaBank shares trade on Toronto and on Nasdaq.
Yeah.
How will the new share structure look? Will you keep a Toronto listing? Where will the liquidity be?
Well, good question. Your VBNK shares likely will be swapped into the symbol I'm looking at is VRSA. So likely, your VBNKs will become VRSAs, and VRSAs will be listed on the TSX and on the Nasdaq. So for those of you that like trading on the Toronto Stock Exchange, the difference will be you've got a different symbol. You're still basically owning the same bank you had before. It's just the structure's different. Presently, the Canadian bank owns the subsidiaries in sort of a totem pole structure. The new structure is the holding company. This is your classic U.S. banking structure, holds the banks individually so that each bank can operate in its regulatory environment very efficiently because they're different. The regulatory environment in the States is different than the regulatory environment in Canada. Almost the same. Who knows, I might dream of a U.K. bank.
Who knows? I was with the governors of the Bank of England not so long ago, and I was dreaming about my Barclays heritage, talking about when they shipped me off to London, Ontario to open a branch for Barclays there, which some of you are very good customers of. If life unfolds as it should, I'll have recreated the international bank with the U.K. There'll be a subsidiary of it. Of course, regulatory approval is required. The model we have is very compelling for countries. Trickling down reliable economical capital to small businesses and consumers is what everybody dreams of. That's what they want, and our model does that. So I'd expect there'll be other countries, U.K., I think, might be the next one that would like to see this too.
We're in early stages, but it's one of those things that governors and regulators sort of dream of. Capital to the masses at economical prices stimulates economies. Some economies need stimulating. Well, we're very ambitious. I'm thinking before the end of October. Tammie's passed out in the background there. You can do it, Tammie. Yeah, sometime fairly soon. We need those two regulatory approvals and its Minister of Finance in Ottawa, and then we need the Fed to approve. I'm actually seeing both of those wonderful people fairly soon, next week, in D.C., and of course, in Ottawa. It looks to me that they're both fully endorsing the program and that it means good things for both countries.
More capital for the Canadian bank to do more of what it's already been doing and more in the States that very much wants to see this new revolutionary method of financing point-of-sale companies come to be. Yes.
What about the Russell 2000?
Chances are very high. The cut-off date for the Russell 2000 is October 31, and you go on, I think December 15, something around there. All being well, we'll be a Russell 2000 company, which is a big deal. You've arrived when you're Russell 2000. Another big deal that I was mentioning to Richard and Matthew right there, just a little historical milestones. When I started this thing with CAD 0.5 million, that was the book value of Pacific & Western Trust. Now today, I think it's CAD 1 billion. So we've gone up 2,000 times during that period of time, which isn't a record. Elon Musk has got a little better than that. Jeff Bezos has done a little better. Warren hasn't done quite that well. But for those of you who know, I mentioned I'm a pilot with these airplanes around here.
We've got something in common with Elon Musk. Both of us have experienced unscheduled catastrophic disassembly. But I'm hoping to have something more in common, to join the billion club. Today, we're at market cap CAD 1 billion. Canadian, though. Next step is U.S. All righty. No more questions? Well, thank you very much. It's wonderful. This is a milestone event, of course. It's just the evolution of the bank, and it means good things for we shareholders and good things for the countries we operate in, too. Because as we know, everybody needs capital for small businesses, particularly in Canada, and that's what we do. In the States, they're lapping it up, too. Thank you.