VERSABANK FOURTH QUARTER RESULTS DEMONSTRATE OPERATING LEVERAGE OF BUSINESS MODEL: STRONG GROWTH IN RPP ASSETS DRIVES RECORD REVENUE

Core Insights - VersaBank reported strong financial results for the fourth quarter and fiscal year ended October 31, 2025, highlighting significant growth in its Digital Banking operations and credit assets [2][10][19]. Financial Performance - Consolidated total revenue increased by 29% year-over-year to a record $35.1 million, driven by a 20% increase in credit assets [10][13]. - Consolidated net income for the fourth quarter was $5.2 million, down from $5.5 million in the same quarter last year, impacted by one-time reorganization costs [10][13]. - Adjusted net income rose by 91% year-over-year to $10.5 million, reflecting improved operational efficiency [10][13]. - Total assets reached $5.8 billion, marking a 20% increase year-over-year, primarily due to growth in the Receivable Purchase Program (RPP) [10][22]. Digital Banking Operations - Total Digital Banking credit assets increased by 20% year-over-year to a record $5.07 billion, with significant contributions from both the US and Canadian RPP portfolios [12][22]. - Digital Banking operations revenue grew by 31% year-over-year to $32.9 million, driven by the expansion of credit assets [15][22]. - The net interest margin on credit assets was 2.65%, reflecting a 13% year-over-year increase due to lower funding costs [15][22]. Strategic Initiatives - The company plans to launch the first tokenized deposit in both US and Canadian currencies, leveraging its proprietary encryption technology [10][21]. - Anticipated growth in the RPP portfolio is expected to continue, particularly in the US market, which is viewed as a significant growth opportunity [10][19]. Shareholder Actions - As of October 31, 2025, the Bank has purchased and cancelled 573,251 common shares under its Normal Course Issuer Bid, representing approximately 8.99% of its public float [10][22].