VersaBank(US:VBNK)2024-06-05 11:10Financial Performance - Net income for the six months ended April 30, 2024, was CAD 24,527 thousand, an increase of 24.5% compared to CAD 19,680 thousand for the same period in 2023[4] - Net income for the three months ended April 30, 2024, was CAD 11,828,000, compared to CAD 10,263,000 for the same period in 2023, reflecting a year-over-year increase of 15.3%[76] - Interest income for the three months ended April 30, 2024, was CAD 71,243 thousand, up 32.9% from CAD 53,595 thousand in the same period last year[4] - Total revenue for the three months ended April 30, 2024, was CAD 28,501 thousand, a 6.8% increase from CAD 26,685 thousand in the prior year[4] - Net interest income for the six months ended April 30, 2024, was CAD 52,810, representing an increase of 8.0% compared to CAD 48,883 for the same period in 2023[77] - Non-interest income for the three months ended April 30, 2024, was CAD 2,259, a 5.9% increase from CAD 2,076 in the prior year[76] Asset and Liability Growth - Total assets increased to CAD 4,388,320 thousand as of April 30, 2024, up from CAD 4,201,610 thousand as of October 31, 2023, representing a growth of 4.5%[2] - Total liabilities as of April 30, 2024, were CAD 3,988,217, compared to CAD 3,372,874 in the same period of 2023[77] - Deposits rose to CAD 3,693,495 thousand, reflecting a 4.5% increase from CAD 3,533,366 thousand as of October 31, 2023[2] - Loan commitments increased to CAD 438,177,000 as of April 30, 2024, from CAD 405,426,000 as of October 31, 2023, representing an increase of 8.9%[53] Shareholder Equity and Earnings - Shareholders' equity increased to CAD 400,103 thousand as of April 30, 2024, up from CAD 356,519 thousand a year earlier, representing a growth of 12.2%[5] - Basic and diluted income per common share increased to CAD 0.45 for the three months ended April 30, 2024, compared to CAD 0.38 in the same period last year, marking a growth of 18.4%[4] - The Bank's retained earnings increased to CAD 168,776,000 as of April 30, 2024, from CAD 146,043,000 as of October 31, 2023, indicating strong internal capital generation[63] Credit Risk and Allowance - The allowance for expected credit losses (ECL) as of April 30, 2024, was CAD 2,402 thousand, a decrease of 4.4% from CAD 2,513 thousand as of October 31, 2023[20] - The provision for credit losses for the three months ended April 30, 2024, was CAD 16, a significant decrease from CAD 237 in the same period of 2023[76] - The total ECL allowance at the end of the period for April 30, 2024, is CAD 2,402,000, compared to CAD 2,526,000 for the same period in 2023, reflecting a decrease of approximately 4.9%[26][28] - The provision for credit losses for commercial real estate mortgages was CAD (280,000), reflecting a net remeasurement of loss allowance of CAD (217,000) for the six months ended April 30, 2024[30] Economic Outlook - The Bank anticipates modest growth in the Canadian economy by late 2024, with inflation approaching target levels by Q3 2024[23] - Key macroeconomic indicators influencing the Bank's credit risk modeling include real GDP, national unemployment rate, and long-term interest rates[22] Operational Segments - The Digital Banking segment focuses on a branchless business-to-business model, utilizing proprietary financial technology to serve underserved markets in Canada and the US[71] - The DRTC segment is dedicated to cybersecurity services, leveraging internally developed IT security software to address the growing volume of cyber threats faced by financial institutions and corporations[72] Capital Management - The Bank's Tier 1 capital ratio is reported at 12.06% as of April 30, 2024, compared to 11.78% as of October 31, 2023, demonstrating improved capital strength[63] - The leverage ratio as of April 30, 2024, is 8.55%, an increase from 8.30% as of October 31, 2023, well above the Basel III minimum requirement of 3.0%[65] - The Bank's regulatory capital management policies are regularly reviewed and approved by the Board of Directors, ensuring compliance with OSFI requirements and Basel III standards[58]