Core Insights - VersaBank is positioning itself at the forefront of the digital asset revolution, particularly in the areas of tokenized deposits and payments, as it faces deposit pressures from generational wealth transfers to non-bank alternatives like crypto and stablecoins [1][6] Group 1: Digital Assets and Tokenized Banking - VersaBank distinguishes tokenized deposits as "one-to-one" representations of actual bank deposits, which are recorded on the bank's ledger and mirrored onto blockchains [1] - The bank has been working in the digital asset space for nearly a decade and has tested working deposit tokens since 2021, with plans for an integrated cross-border pilot [7][12] - The bank aims to serve as a custodian for third-party stablecoins, projecting that stablecoins in circulation could grow to $4 trillion by 2030, which would create a low-cost revenue stream [13] Group 2: U.S. Market Expansion - VersaBank's U.S. rollout of its receivable purchase program gained traction quickly, achieving a year-end target of $290 million in program value [3] - The bank has experienced asset growth at an average compounded rate of 27% over the past three years, reaching nearly CAD 6 billion [4] - The bank is piloting tokenized deposits in both Canada and the U.S., with expected announcements on regulatory discussions in the near future [9] Group 3: Strategic Partnerships and Technology - VersaBank is signing additional partners to enhance its product offerings, including an AI-driven capability for instant purchase of receivables [2] - The bank plans to license deposit-token technology to community banks, allowing them to issue their own tokens while VersaBank provides the necessary infrastructure [11] - Taylor emphasized that the bank's deposit tokens would be supported by the same liquidity and regulatory framework as traditional bank deposits, with potential eligibility for deposit insurance [8][15] Group 4: Market Opportunities - Cross-border payments are highlighted as a significant use case, with U.S.-Canada trade activity valued at $1.3 trillion, presenting opportunities for billions in low-cost deposits [10] - The bank's cloud-based, branchless model allows for significant operating leverage as it grows, particularly following its entry into the U.S. market [4][16]

NASDAQ: VBNK | TSX: VBNK Dial-In to Ask Questions For those wishing to ask questions during the Q&A, please access today's call through the telephone dial-in: Toll-free: 1-888-699-1199 (Canada/US) Local: 416-945-7677 Advisory The Bank occasionally makes forward-looking statements about its objectives, operations and targeted financial results. These statements may be written or verbal and may be included in such things as press releases, corporate presentations, annual reports and other disclosure documents ...

Financial Performance - Total assets reached $5.48 billion, a 21% increase year-over-year[6, 11] - Credit assets totaled $4.78 billion, up 18% year-over-year and 6% sequentially[6, 7, 11, 18] - Total revenue was $31.6 million, representing a 17% year-over-year increase and a 5% sequential increase[6, 14, 15] - Adjusted net income was $9.7 million, consistent with the previous year and up 11% sequentially[6, 14] - Adjusted EPS was $0.30, a 17% decrease year-over-year but a 7% increase sequentially[6, 14] Balance Sheet Strength - Cash and securities increased to $0.62 billion, a 55% increase year-over-year[11] - Book value per common share increased to $16.42, an 8% increase year-over-year[11] - CET1 ratio stood at 13.56%, an increase of 181 bps year-over-year[11] - Leverage ratio was 8.90%, an increase of 36 bps year-over-year[11] Segment Performance - Digital Banking Canada revenue was $26.619 million, a 6% increase year-over-year and a 4% sequential increase[15] - Digital Banking USA revenue was $3.116 million, a 25% sequential increase[15]