VERSABANK FIRST QUARTER 2025 RESULTS CONTINUE TO DEMONSTRATE STRENGTH OF BUSINESS MODEL AS BANK RAMPS UP PROVEN RPP SOLUTION IN US MARKET

Core Insights - VersaBank reported its first quarter results for fiscal 2025, highlighting a total revenue of CAD 27.8 million, a 4% decrease year-over-year but a 2% increase sequentially [2][10] - The bank's net income for the quarter was CAD 8.1 million, up 48% from CAD 5.5 million in the previous quarter but down from CAD 12.7 million in the same quarter last year [10] - Total assets reached a record CAD 5.0 billion, reflecting a 15% year-over-year increase and a 3% sequential increase, primarily driven by growth in the Receivable Purchase Program (RPP) portfolio [10] Financial Performance - Total revenue for the quarter was CAD 27,827,000, compared to CAD 27,285,000 in the previous quarter and CAD 28,851,000 in the same quarter last year [3][9] - Net interest income was CAD 25,724,000, showing a slight increase from CAD 24,901,000 in the previous quarter but a decrease from CAD 26,568,000 year-over-year [9] - Non-interest income was CAD 2,103,000, down from CAD 2,384,000 in the previous quarter and CAD 2,283,000 year-over-year [9] Key Ratios - The cost of funds decreased to 3.84% from 4.11% in the previous quarter and 3.99% year-over-year [3][9] - The net interest margin was 2.08%, down from 2.12% in the previous quarter and 2.48% year-over-year [3][9] - Return on average common equity improved to 7.02%, compared to 5.28% in the previous quarter and 13.41% year-over-year [3][9] Operational Highlights - The bank's Canadian Digital Banking operations reported a net income of CAD 8.8 million, up from CAD 5.0 million in the previous quarter but down from CAD 12.3 million year-over-year [10] - The U.S. Digital Banking operations reported a net income of CAD 103,000, down from CAD 465,000 in the previous quarter [10] - The bank successfully completed an equity offering for gross proceeds of approximately CAD 124.2 million, enhancing its balance sheet capacity [10] Strategic Initiatives - The bank is expanding its U.S. Receivable Purchase Program, having entered into a partnership with Watercress Financial Group LLC [10][4] - The transition of key executive team members to support U.S. operations is expected to drive growth in the RPP [10][4] - The bank is pursuing opportunities for its Digital Deposit Receipts (DDRs), which leverage blockchain technology for enhanced security and efficiency [4][10]