Financial Data and Key Metrics Changes - Total assets grew 21% year over year and 9% sequentially to just shy of CAD 5.5 billion [13] - Consolidated revenue reached a record CAD 31.6 million, up 17% year over year and 5% sequentially [14] - Reported net income was CAD 6.6 million, with adjusted net income of CAD 9.7 million excluding restructuring costs [15] Business Line Data and Key Metrics Changes - Revenue for Canadian Banking operations was CAD 26.6 million, up 4% sequentially [15] - U.S. Banking operations revenue was CAD 3.1 million, a 25% sequential increase [16] - The credit asset portfolio grew to a record CAD 4.78 billion, with the receivable purchase program increasing 15% year over year [18] Market Data and Key Metrics Changes - Canadian consumer spending showed resilience despite economic uncertainties, contributing to growth in credit assets [7] - The Canadian insolvency deposit business remained stable, with expectations of increased deposits due to economic conditions [35] Company Strategy and Development Direction - The company is realigning its corporate structure to that of a standard U.S. bank, which is expected to enhance shareholder value and reduce corporate costs [5][22] - Expansion of the receivable purchase program in both the U.S. and Canada is a key focus, with the introduction of a securitized financing solution [10][21] - The company is advancing its digital deposit receipt initiative, which aims to provide interest-bearing stable coins that are federally insured [23][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a fiscal year-end target of CAD 290 million for U.S. RPP funding [21] - The outlook for Canadian RPP business is improving with the addition of securitization capabilities [21] - The company anticipates a breakout year in 2026, driven by growth in U.S. operations and digital deposit initiatives [20] Other Important Information - Non-interest expenses for Q3 included CAD 4.2 million related to corporate realignment, with expectations of similar charges in Q4 [15][56] - The net interest margin on credit assets was 2.55%, reflecting a 6% year-over-year increase [19] Q&A Session Summary Question: What were balances at quarter end for the US RPP program? - The balance was approximately CAD 125 million [29] Question: How many partners are generating loans currently? - Currently, only WaterCrest is funding loans, but there are several partners expected to enter the securitization program soon [30][31] Question: How will the securitized financing offering impact growth? - The securitized financing offering is expected to drive the majority of growth in the near term, with enhancements planned for the traditional RPP program [32] Question: What is the outlook for Canadian insolvency deposits? - The company expects an increase in insolvency deposits due to a decline in GDP, which may lead to more insolvencies [35] Question: Can you provide insight on the NIM trajectory going forward? - The company anticipates a flat net interest margin for the current quarter, with potential for slight increases in the future [45]

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]

Group 1 - VersaBank has added two new partners to its Receivable Purchase Program (RPP) in Canada, including its first partner under the newly expanded RPP to include a securitized financing offering [1][2] - The first funding transaction for the RPP Securitization partner has been completed, with funding for the other new partner expected to commence soon [1][2] - The addition of these partners enhances VersaBank's position in Canada and is expected to significantly expand its addressable market in both Canada and the United States [2] Group 2 - VersaBank's RPP Securitized Financing strategy will focus on investment in senior-level tranches of target securitized credit assets, typically AAA-rated, and will establish a platform for securitization of assets from financing partners [2] - The strategy aims to meet the current demand from larger financing companies for lower-cost securitized financing in the existing interest rate environment [2] Group 3 - VersaBank operates a branchless, digital, business-to-business banking model, leveraging proprietary technology to serve underserved segments of the banking industry [3] - The bank has successfully launched its Receivable Purchase Program funding solution for point-of-sale finance companies in the US market, building on nearly 15 years of success in Canada [3] - VersaBank also owns DRT Cyber Inc., a leader in cybersecurity services, and Digital Meteor Inc., which focuses on next-generation digital assets for the banking and financial community [3]

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].