VERSABANK THIRD QUARTER RESULTS CONTINUE TO DEMONSTRATE STRENGTH OF BUSINESS MODEL AS US RPP PORTFOLIO RAMPS UP

Core Insights - VersaBank reported its third quarter results for fiscal 2025, highlighting significant growth in its digital banking operations and the expansion of its Receivable Purchase Program (RPP) in both the US and Canada [2][8][9] Financial Performance - Total revenue for Q3 2025 reached $31.6 million, a 17% increase year-over-year and a 5% increase sequentially [4][13] - Consolidated net income was $6.6 million, down from $9.7 million in Q3 2024 and $8.5 million in Q2 2025, impacted by $4.2 million in non-interest expenses related to the Proposed Realignment of Corporate Structure [4][13][18] - Adjusted net income, excluding the aforementioned costs, was $9.7 million, unchanged year-over-year and up 11% sequentially [4][13][18] Asset Growth - Total assets increased by 21% year-over-year and 9% sequentially to a record $5.5 billion, primarily driven by growth in credit portfolios, particularly the RPP [4][13] - Total Digital Banking operations credit assets rose 18% year-over-year and 6% sequentially to $4.78 billion, with the RPP portfolio increasing by 15% year-over-year and 5% sequentially [4][13][18] Operational Developments - The company added two new partners to its RPP in Canada, including its first securitization partner, which is expected to enhance asset and earnings growth [9][14] - A pilot program for tokenized deposits in the US is underway, which could provide a competitive edge in the digital banking space [9][10] Strategic Initiatives - The Proposed Realignment of Corporate Structure aims to align with a standard US bank framework, expected to create additional shareholder value and reduce corporate costs [3][8][9] - The company is focusing on enhancing its digital banking efficiency and profitability, particularly in the US market, as it continues to grow its RPP [8][9][10]