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]

SOURCE VersaBank About VersaBank VersaBank is a North American bank with a difference. Federally chartered in both Canada and the US, VersaBank has a branchless, digital, business-to-business model based on its proprietary state-of-the-art technology that enables it to profitably address underserved segments of the banking industry in a significantly risk mitigated manner. Because VersaBank obtains substantially all of its deposits and undertakes the majority of its funding electronically through financial ...

Core Viewpoint - VersaBank is undergoing a restructuring to align with the standard framework of a US Bank, which is expected to support its growth strategy in both the US and Canada [1][2]. Group 1: Executive Appointments - Nicolas Ospina has been appointed as the Global Chief Financial Officer, overseeing the Bank's finance function at the corporate level [6]. - John Asma has been promoted to Executive Vice President, focusing on the operation and execution of strategy for Canadian Digital Banking operations [6]. - Ospina brings over a decade of experience from Raymond James, where he was involved in over 50 transactions in the US banking sector, enhancing his suitability for the role [2][6]. Group 2: Business Model and Strategy - VersaBank operates a branchless, digital, business-to-business banking model, leveraging proprietary technology to serve underserved segments of the banking industry [3]. - The Bank launched its Receivable Purchase Program in the US market, which has been successful in Canada for nearly 15 years, targeting a multi-trillion-dollar market [3]. - VersaBank also owns DRT Cyber Inc., which provides cybersecurity services, addressing the growing volume of cyber threats [3]. Group 3: Market Position and Future Outlook - The restructuring is aimed at simplifying the regulatory structure and reducing costs, which could enhance shareholder value [7][8]. - The Bank's ability to grow its US Receivable Purchase Program and expand its net interest margin is a key focus for future growth [7].

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 ...

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].

Core Viewpoint - VersaBank is set to report its fourth quarter and fiscal year-end financial results for 2025 on December 10, 2025, with a conference call scheduled to discuss these results [1] Financial Reporting - The financial results will be released via news release at approximately 7:00 a.m. ET on the same day [1] - A conference call/webcast will take place at 9:00 a.m. ET, expected to last around 60 minutes, featuring presentations by the President and CFO [1] Participation Details - Participants can join the conference call by registering in advance for an automated call back or by dialing in directly [1] - A live webcast will also be available on the Bank's website, with an archived version accessible for 90 days post-event [1] Company Overview - VersaBank operates as a federally chartered bank in both Canada and the US, utilizing a branchless, digital business-to-business model [1] - The bank focuses on underserved segments of the banking industry, leveraging proprietary technology to enhance efficiency and return on common equity [1] - In August 2024, VersaBank launched its Receivable Purchase Program in the US, expanding its successful Canadian operations [1] - The bank owns DRT Cyber Inc., a leader in cybersecurity services, addressing the growing cyber threats faced by financial institutions and corporations [1]

Core Points - VersaBank has donated $50,000 to The Salvation Army's Harvest Hope campaign to combat food insecurity in Canada, particularly in London, Ontario, where the bank is headquartered [1][2] - The donation is part of a broader effort to support vulnerable communities amid a sluggish economy, as highlighted by the increased demand for food bank services [1][2] - Food Banks Canada reported that food bank usage has doubled since March 2019, with a 5.2% increase in usage this year compared to 2024 [1] - The Salvation Army distributed over 7 million pounds of food and served 2.6 million shelter meals in Ontario in 2024 [1] Company Overview - VersaBank operates as a federally chartered bank in both Canada and the US, utilizing a branchless, digital business-to-business model [7] - The bank focuses on underserved segments of the banking industry, leveraging proprietary technology to enhance efficiency and return on common equity [7] - VersaBank launched its Receivable Purchase Program in August 2024, targeting the underserved US market for point-of-sale finance companies [7] - The bank also owns DRT Cyber Inc., a leader in cybersecurity services, and Digital Meteor Inc., which focuses on next-generation digital assets [7] Industry Context - Food insecurity is identified as an urgent crisis in Ontario and Canada, necessitating support from organizations like VersaBank [2] - The Salvation Army plays a crucial role in providing various social services, including food banks, shelter, and rehabilitation programs across over 400 communities in Canada [5] - The final months of the year are critical for fundraising efforts for organizations like The Salvation Army, emphasizing the need for corporate support [4]

Group 1: Company Contributions and Community Impact - VersaBank has donated $50,000 to The Salvation Army's Harvest Hope campaign to combat food insecurity in Canada, particularly in London, Ontario, where the bank is headquartered [1] - The Salvation Army reported distributing over 7 million pounds of food and serving 2.6 million shelter meals in Ontario in 2024, highlighting the growing need for support in the community [1] - Captain Gina Haggett from The Salvation Army emphasized the importance of corporate support in providing essential services to vulnerable populations across Canada [2] Group 2: Economic Context and Urgency - Food bank usage in Canada has doubled since March 2019, with a 5.2% increase in usage reported this year compared to 2024, indicating a worsening food insecurity crisis [1] - The final months of the year are critical for fundraising efforts for The Salvation Army, as many organizations seek to support those in need during this time [4] Group 3: Company Background and Operations - VersaBank operates as a branchless, digital bank in North America, focusing on underserved segments of the banking industry through innovative technology [7] - The bank has launched a Receivable Purchase Program funding solution aimed at point-of-sale finance companies, which has been successful in Canada and is now targeting the U.S. market [7]

Summary of VersaBank Conference Call Company Overview - **Company Name**: VersaBank - **Stock Symbols**: NASDAQ: VBNK, TSX: VBNK - **Type**: Fully digital, branchless bank operating in North America - **Founding**: Established in the early 1990s, first federal license in Canada in 18 years, and a national bank license in the U.S. after three decades [2][3] Core Business Model - **Receivable Purchase Program (RPP)**: Flagship product allowing the purchase of receivables from point-of-sale finance companies, which finance consumer purchases like vehicles and home improvements [4][12] - **Operational Efficiency**: The bank operates with approximately 100 employees, leveraging technology to maintain low fixed costs and high scalability [5][18] - **Credit Risk Management**: Utilizes a put-back arrangement to return delinquent loans to originators, resulting in minimal credit risk [5][13][19] Recent Innovations - **Digital Vault (VersaVault)**: Launched in 2018, allows tokenization of deposits, offering a digital representation of bank deposits [7][9] - **AI Enhancements**: Developed AI modules to process data and documentation significantly faster than human capabilities, improving operational efficiency [21][22] - **Real-Time Receivable Purchases**: Future plans to enable real-time purchases of receivables, enhancing cash flow for partners [22][23] Market Position and Expansion - **U.S. Market Entry**: Recently expanded operations into the U.S., targeting the point-of-sale market, which is significantly larger than the Canadian market [12][17] - **Competitive Landscape**: Currently, no direct competitors in the U.S. market; however, some competition exists in Canada [24][25] - **Securitization**: Plans to incorporate securitization into the product offering to enhance funding options [24] Financial Metrics and Performance - **Return on Equity (ROE)**: Historically high ROE, with margins around 250 basis points, expected to improve with asset growth [6][26] - **Efficiency Ratios**: Focus on improving efficiency ratios to enhance pre-tax earnings, currently at a 30% tax rate [26] - **Asset Growth**: Key metric for investors; growth in assets directly correlates with increased profitability [26] Future Outlook - **Divestment of Cybersecurity Firm**: Plans to divest a cybersecurity firm, which may positively impact book value [14][19] - **Market Potential**: The stablecoin industry has seen $27 trillion in transactions, presenting a significant growth opportunity for VersaBank's digital deposit products [15] Additional Insights - **Consumer Behavior**: Noted differences in financing behavior between U.S. and Canadian consumers, with U.S. consumers financing more readily at point-of-sale [17] - **Scalability**: The bank's model is described as "almost infinitely scalable," with no need for traditional branch networks [18] This summary encapsulates the key points discussed during the conference call, highlighting VersaBank's innovative approach, market expansion, and financial performance metrics.

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]