VERSABANK SECOND QUARTER RESULTS CONTINUE TO DEMONSTRATE STRENGTH OF BUSINESS MODEL AS US RPP PORTFOLIO EXPERIENCES STRONG GROWTH

Core Viewpoint - VersaBank reported strong financial results for Q2 2025, with record total revenue and significant growth in credit assets, driven by its Receivable Purchase Program and digital banking operations [2][12][19]. Financial Performance - Total revenue for Q2 2025 reached CAD 30.1 million, a 6% increase year-over-year and an 8% increase sequentially [12][18]. - Net income for Q2 2025 was CAD 8.5 million, compared to CAD 8.1 million in Q1 2025 and CAD 11.8 million in Q2 2024 [12][18]. - Earnings per share for Q2 2025 were CAD 0.26, down from CAD 0.28 in Q1 2025 and CAD 0.45 in Q2 2024 [12][18]. Asset Growth - Total assets increased by 15% year-over-year and 2% sequentially to a record CAD 5.0 billion, primarily due to growth in credit portfolios [12][20]. - Total credit assets reached CAD 4.52 billion, marking a 13% year-over-year increase and a 4% sequential increase [11][12]. Digital Banking Operations - Digital Banking operations generated total revenue of CAD 28.1 million, a 6% increase year-over-year and a 9% increase sequentially [15]. - The net interest margin on credit assets for Digital Banking operations increased to 2.59%, reflecting a 3% year-over-year increase and a 10% sequential increase [15][12]. Strategic Initiatives - The company is pursuing a structural realignment to align with a standard US bank framework, which is expected to enhance shareholder value and reduce costs [9][12]. - The Receivable Purchase Program in the US is on track to reach at least USD 290 million by fiscal year-end [8][19]. Market Position - VersaBank operates a branchless, digital business-to-business model, leveraging technology to address underserved segments in the banking industry [22]. - The bank's cybersecurity subsidiary, DRT Cyber Inc., positions it as a leader in addressing the growing volume of cyber threats [22].