Accessibility StatementSkip Navigation LONDON, ON, Nov. 7, 2025 /PRNewswire/ - VersaBank ("VersaBank" or the "Bank") (TSX: VBNK) (NASDAQ: VBNK), a North American leader in business-to-business digital banking, as well as technology solutions for cybersecurity, today announced management will participate in the KBW Fintech Payments Conference in New York City to be held on November 11-13, 2025. VersaBank management will participate in one-on-one meetings throughout the conference. About VersaBank VersaBank ...

Core Insights - VersaBank has entered into an agreement with its largest US Receivable Purchase Program (RPP) partner to utilize its core RPP in the United States [1][3] - The initial funding of US$61 million has been completed, bringing total US RPP fundings in fiscal 2025 to US$310 million, exceeding the year-end target of US$290 million [2][3] Financial Performance - Total US RPP fundings in fiscal 2025 comprised US$242 million from the core RPP offering and US$68 million from the Securitized RPP offering [2] - Year-end RPP assets reached US$293 million, with US$227 million from the core RPP and US$66 million from the Securitized RPP [2] Strategic Outlook - The company anticipates expanding its US assets significantly in fiscal 2026, driven by the momentum of both core and Securitized RPP offerings [3] - The partnership is expected to enhance the attractiveness of VersaBank's RPP and foster further relationships with new partners [3] Company Overview - VersaBank operates as a branchless, digital, business-to-business bank, leveraging proprietary technology to serve underserved segments of the banking industry [4] - The bank has launched its Receivable Purchase Program funding solution in the US market, which has been successful in Canada for nearly 15 years [4] - VersaBank also owns DRT Cyber Inc., a leader in cybersecurity services, and Digital Meteor Inc., which focuses on next-generation digital assets [4]

Summary of VersaBank Conference Call Company Overview - **Company**: VersaBank - **Industry**: Banking, specifically branchless digital banking utilizing blockchain technology - **Unique Model**: Operates in a cloud environment without direct interaction with depositors or borrowers, relying on partners for deposits and loans [1][2] Key Points and Arguments - **Interest Margin**: VersaBank averages a 2.5% spread, which is significantly higher than the Canadian banking industry average by 30-40% [2] - **Loan Losses**: The bank has successfully avoided bad loans and collection departments, which is atypical in the banking sector [2] - **National Bank License**: Achieved a national bank license in the U.S., a significant milestone as it was the first in 18 years for Canada [3] - **Point-of-Sale Lending**: Focuses on point-of-sale loans, particularly in home improvement, which has shown resilience even during economic downturns [6][8] - **Growth Strategy**: Plans to expand into the U.S. market with its point-of-sale program, which is considered a new product in the U.S. [8][9] - **Securitization Product**: Launched a securitization product in the U.S. to cater to large point-of-sale companies using asset-backed securities [9] - **AI Integration**: Developed an AI model to enhance efficiency in loan adjudication, significantly speeding up the process compared to human review [10][21] Regulatory Environment - **Stable Coins**: Discussed the regulatory landscape surrounding stable coins and how VersaBank's tokenized deposits could serve as a safer alternative [11][12] - **Regulatory Support**: Gained positive attention from U.S. regulators, indicating a welcoming environment for its innovative banking solutions [17][18] Financial Outlook - **Potential Earnings**: If VersaBank captures a portion of the USDC market, it could generate significant pre-tax income by investing in U.S. Treasuries [34][35] - **Cash Management**: The bank is adjusting cash holdback requirements based on portfolio performance, indicating a proactive approach to risk management [20][21] Additional Insights - **Cybersecurity**: Established a cybersecurity firm, DRT Cyber, to enhance security measures, led by a former BlackBerry cybersecurity expert [31][32] - **Market Positioning**: Positioned as a leader in the digital banking space, with a focus on innovative products that meet regulatory standards [19][29] - **Partnerships**: Currently working with major deposit brokers in Canada and the U.S. to secure deposits and expand its market reach [26][27] Conclusion - **Investment Opportunity**: VersaBank presents a compelling investment opportunity due to its unique business model, regulatory support, and potential for significant growth in the U.S. market [19][36]

Core Insights - VersaBank has entered into an agreement with Thrive Financial Inc. to utilize its Receivable Purchase Program (RPP) for point-of-sale financing in home improvement projects, marking a significant step in expanding its digital banking solutions in the U.S. market [1][2] - The partnership is expected to enhance the growth of VersaBank's RPP business, which is already a major growth driver due to its economic resiliency, with a target portfolio of US$290 million [2] Company Overview - VersaBank operates as a branchless, digital, business-to-business bank in North America, focusing on underserved segments of the banking industry through proprietary technology [4] - The bank has successfully launched its RPP funding solution in the U.S., which has been effective in Canada for nearly 15 years, targeting the multi-trillion-dollar U.S. market [4] - VersaBank also owns DRT Cyber Inc., a leader in cybersecurity services, and Digital Meteor Inc., which focuses on next-generation digital assets [4] Thrive Financial Inc. - Thrive Financial is a technology platform that connects merchants, consumers, and financial institutions, providing home improvement merchants with access to a comprehensive suite of financing products [3] - The partnership with VersaBank aims to enhance Thrive's ability to offer competitive loan products and scale its platform efficiently [2][3]

Summary of VersaBank Conference Call Company Overview - **Company Name**: VersaBank - **Stock Symbols**: NASDAQ: VBNK, TSX: VBNK - **Type**: Fully digital, branchless bank operating in North America - **Founding**: Established in the early 1990s, first federal license in Canada in 18 years, and a national bank license in the U.S. after three decades [2][3] Core Business Model - **Receivable Purchase Program (RPP)**: Flagship product allowing the purchase of receivables from point-of-sale finance companies, which finance consumer purchases like vehicles and home improvements [4][12] - **Operational Efficiency**: The bank operates with approximately 100 employees, leveraging technology to maintain low fixed costs and high scalability [5][18] - **Credit Risk Management**: Utilizes a put-back arrangement to return delinquent loans to originators, resulting in minimal credit risk [5][13][19] Recent Innovations - **Digital Vault (VersaVault)**: Launched in 2018, allows tokenization of deposits, offering a digital representation of bank deposits [7][9] - **AI Enhancements**: Developed AI modules to process data and documentation significantly faster than human capabilities, improving operational efficiency [21][22] - **Real-Time Receivable Purchases**: Future plans to enable real-time purchases of receivables, enhancing cash flow for partners [22][23] Market Position and Expansion - **U.S. Market Entry**: Recently expanded operations into the U.S., targeting the point-of-sale market, which is significantly larger than the Canadian market [12][17] - **Competitive Landscape**: Currently, no direct competitors in the U.S. market; however, some competition exists in Canada [24][25] - **Securitization**: Plans to incorporate securitization into the product offering to enhance funding options [24] Financial Metrics and Performance - **Return on Equity (ROE)**: Historically high ROE, with margins around 250 basis points, expected to improve with asset growth [6][26] - **Efficiency Ratios**: Focus on improving efficiency ratios to enhance pre-tax earnings, currently at a 30% tax rate [26] - **Asset Growth**: Key metric for investors; growth in assets directly correlates with increased profitability [26] Future Outlook - **Divestment of Cybersecurity Firm**: Plans to divest a cybersecurity firm, which may positively impact book value [14][19] - **Market Potential**: The stablecoin industry has seen $27 trillion in transactions, presenting a significant growth opportunity for VersaBank's digital deposit products [15] Additional Insights - **Consumer Behavior**: Noted differences in financing behavior between U.S. and Canadian consumers, with U.S. consumers financing more readily at point-of-sale [17] - **Scalability**: The bank's model is described as "almost infinitely scalable," with no need for traditional branch networks [18] This summary encapsulates the key points discussed during the conference call, highlighting VersaBank's innovative approach, market expansion, and financial performance metrics.

Core Insights - VersaBank has implemented advanced artificial intelligence capabilities in its core banking technology to enhance real-time monitoring of credit asset data [1] - The new AI features aim to further mitigate risk and improve the bank's operational efficiency [1] Company Overview - VersaBank is recognized as a leader in business-to-business digital banking in North America [1] - The bank also specializes in technology solutions for cybersecurity [1]

Core Viewpoint - VersaBank is advancing its Digital Deposit Receipts (DDRs) pilot programs in Canada and the U.S., aiming to leverage its unique position as the only nationally licensed bank with tokenized deposit capabilities in both countries, to facilitate secure and efficient cross-border transactions [1][2][3]. Group 1: Pilot Programs - The CADVB Pilot Refresh is designed to validate the functionality, security, and compliance of DDRs with Canadian regulations, following enhancements to the bank's core technology since the initial pilot in 2022 [1][2]. - The integration of the CADVB Pilot Refresh with the USDVB Pilot Program aims to showcase the bank's capacity for high-speed, low-cost, and secure cross-border payments using DDRs as digital representations of actual deposits [2]. - Both pilot programs are expected to conclude by the end of 2025, with a commercial launch anticipated shortly thereafter, subject to regulatory requirements [2]. Group 2: Market Opportunity - Approximately CAN$1 trillion in trade occurs annually between the U.S. and Canada, presenting a significant opportunity for VersaBank to provide blockchain-secured foreign exchange transactions [3]. - DDRs offer advantages over non-bank stablecoins, including the ability to pay interest and provide deposit insurance, which are critical for businesses seeking secure digital transaction solutions [3][4]. - The bank is actively pursuing opportunities to monetize its proprietary DDR technology, which is positioned as a market-ready solution for various financial entities [3]. Group 3: Technology and Security - DDRs are bank-issued tokenized deposits that provide enhanced security, stability, and regulatory compliance compared to traditional stablecoins, combining traditional banking safety with blockchain efficiency [4][6]. - The issuance and management of CADVBs will utilize VersaBank's proprietary VersaVault platform, ensuring secure handling of sensitive data and compliance with regulatory standards [5][8]. - VersaVault is designed to manage highly sensitive digital assets and ensure end-to-end security for the lifecycle of DDRs, addressing the need for regulated custody in the digital asset space [8]. Group 4: Company Overview - VersaBank operates as a branchless, digital bank in North America, focusing on underserved segments of the banking industry through its innovative technology [9]. - The bank has successfully launched its Receivable Purchase Program in the U.S., expanding its operations into a multi-trillion-dollar market [9]. - VersaBank also owns DRT Cyber Inc., a leader in cybersecurity services, enhancing its capabilities to address the growing cyber threats faced by financial institutions [9].

Core Viewpoint - VersaBank (NASDAQ: VBNK) reported an earnings per share (EPS) of $0.21, exceeding estimates but showing a decline from the previous year, while revenue fell short of expectations, indicating challenges in revenue generation despite effective earnings management [2][3][6] Financial Performance - EPS of $0.21 surpassed the estimated $0.20, marking a 10% earnings surprise, but declined from $0.26 in the same quarter last year [2][6] - Revenue for the quarter was $22.98 million, missing the Zacks Consensus Estimate of $25.2 million by 0.57%, although it showed growth from $19.72 million a year ago [2][3][6] Earnings and Revenue Trends - Over the past four quarters, the company exceeded consensus EPS estimates twice but consistently fell short of revenue expectations, indicating effective earnings management but challenges in revenue generation [3][6] Financial Ratios - The price-to-earnings (P/E) ratio is approximately 16.77, reflecting the price investors are willing to pay for each dollar of earnings [4][6] - The price-to-sales ratio is about 2.13, indicating that investors are paying $2.13 for every dollar of sales [4][6] - The debt-to-equity ratio is 0.20, suggesting a relatively low level of debt compared to equity, which is favorable for investors [5][6] - The current ratio is 0.11, indicating potential liquidity concerns regarding the ability to cover short-term liabilities with short-term assets [5][6] - The earnings yield stands at 5.96%, providing insight into the earnings generated from each dollar invested [5]

Financial Data and Key Metrics Changes - Total assets grew 21% year over year and 9% sequentially to just shy of CAD 5.5 billion [13] - Consolidated revenue reached a record CAD 31.6 million, up 17% year over year and 5% sequentially [14] - Reported net income was CAD 6.6 million, with adjusted net income of CAD 9.7 million excluding restructuring costs [15] Business Line Data and Key Metrics Changes - Revenue for Canadian Banking operations was CAD 26.6 million, up 4% sequentially [15] - U.S. Banking operations revenue was CAD 3.1 million, a 25% sequential increase [16] - The credit asset portfolio grew to a record CAD 4.78 billion, with the receivable purchase program increasing 15% year over year [18] Market Data and Key Metrics Changes - Canadian consumer spending showed resilience despite economic uncertainties, contributing to growth in credit assets [7] - The Canadian insolvency deposit business remained stable, with expectations of increased deposits due to economic conditions [35] Company Strategy and Development Direction - The company is realigning its corporate structure to that of a standard U.S. bank, which is expected to enhance shareholder value and reduce corporate costs [5][22] - Expansion of the receivable purchase program in both the U.S. and Canada is a key focus, with the introduction of a securitized financing solution [10][21] - The company is advancing its digital deposit receipt initiative, which aims to provide interest-bearing stable coins that are federally insured [23][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a fiscal year-end target of CAD 290 million for U.S. RPP funding [21] - The outlook for Canadian RPP business is improving with the addition of securitization capabilities [21] - The company anticipates a breakout year in 2026, driven by growth in U.S. operations and digital deposit initiatives [20] Other Important Information - Non-interest expenses for Q3 included CAD 4.2 million related to corporate realignment, with expectations of similar charges in Q4 [15][56] - The net interest margin on credit assets was 2.55%, reflecting a 6% year-over-year increase [19] Q&A Session Summary Question: What were balances at quarter end for the US RPP program? - The balance was approximately CAD 125 million [29] Question: How many partners are generating loans currently? - Currently, only WaterCrest is funding loans, but there are several partners expected to enter the securitization program soon [30][31] Question: How will the securitized financing offering impact growth? - The securitized financing offering is expected to drive the majority of growth in the near term, with enhancements planned for the traditional RPP program [32] Question: What is the outlook for Canadian insolvency deposits? - The company expects an increase in insolvency deposits due to a decline in GDP, which may lead to more insolvencies [35] Question: Can you provide insight on the NIM trajectory going forward? - The company anticipates a flat net interest margin for the current quarter, with potential for slight increases in the future [45]

Core Viewpoint - VersaBank reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.20 per share, but down from $0.26 per share a year ago, indicating a mixed performance in earnings despite a positive surprise this quarter [1][2]. Financial Performance - The company posted revenues of $22.98 million for the quarter ended July 2025, which was below the Zacks Consensus Estimate by 0.57%, and an increase from $19.72 million year-over-year [2]. - Over the last four quarters, VersaBank has surpassed consensus EPS estimates two times but has not beaten consensus revenue estimates [2]. Stock Performance - VersaBank shares have declined approximately 18% since the beginning of the year, contrasting with the S&P 500's gain of 9.6% [3]. - The current Zacks Rank for VersaBank is 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6]. Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.25 on revenues of $24.62 million, and for the current fiscal year, it is $0.85 on revenues of $89.34 million [7]. - The trend of estimate revisions for VersaBank was mixed ahead of the earnings release, which could change following the recent report [6]. Industry Context - The Zacks Industry Rank for Banks - Foreign is currently in the top 25% of over 250 Zacks industries, indicating a favorable outlook for the industry [8].