Financial Data and Key Metrics Changes - Total assets grew 24% year-over-year and 6% sequentially to over CAD 6.1 billion [7] - Total consolidated revenue reached a record of CAD 36.5 million, up 31% year-over-year and 4% sequentially [8] - Reported net income was CAD 11.1 million, with consolidated earnings per share at CAD 0.35, while adjusted net income increased 49% year-over-year and 15% sequentially to CAD 12.2 million or CAD 0.38 per share [9][10] Business Line Data and Key Metrics Changes - Revenue for Canadian banking operations was CAD 27.6 million, up 16% year-over-year and level sequentially [9] - U.S. banking operations revenue was CAD 6.8 million, a 30% sequential increase, primarily due to the ramp-up of the U.S. Structured Receivable Program (SRP) [10] - The credit asset portfolio grew to CAD 5.33 billion, driven by the SRP, which increased 29% year-over-year and 9% sequentially to CAD 4.4 billion [11] Market Data and Key Metrics Changes - The U.S. operations showed greater efficiency compared to Canadian banking operations, benefiting from less expensive deposit funding and a smaller management team [6] - The multifamily residential loans and other portfolio decreased 1% year-over-year and 8% sequentially to CAD 0.9 billion as part of a strategy to transition to lower risk-weighted credit assets [12] Company Strategy and Development Direction - The company aims to add at least CAD 1 billion in fundings in fiscal 2026, a more than threefold increase from 2025, while cultivating new partnerships [7] - The reorganization to a standard U.S. bank framework is ongoing, with expected costs of CAD 4 million to CAD 4.5 million in Q2, but anticipated benefits in shareholder value creation [16] - The company is advancing its digital asset strategy, focusing on proprietary Real Bank Tokenized Deposits and custody services for stablecoins [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong growth in core digital banking operations, particularly in the U.S., where operating leverage is significantly greater [14] - The company expects net interest margin to remain relatively flat with some upside potential, while non-interest expenses are anticipated to be flat with opportunities for cost savings [15] - Management noted that the U.S. market is expected to grow larger than Canada, driven by a higher propensity to finance at the point of sale [90] Other Important Information - The company reported a net interest margin of 2.25%, an increase of 17 basis points year-over-year, despite higher cash balances [13] - The provision for credit losses in Q1 was at 5 basis points, down from 11 basis points in Q4 2025 [14] Q&A Session Summary Question: Update on Stablecorp and coin launch expectations - Management indicated that the full-blown launch is imminent, with strong industry partnerships in place [25][26] Question: Monetization strategy for Stablecorp partnership - Initial revenue will come from traditional net interest margin on deposits, estimated around 50 basis points [27] Question: Pipeline and mix for U.S. Structured Receivable Program - The mix was about 85% on-balance sheet securitized receivables, with strong demand expected to continue [49][50] Question: Concerns about AI in cybersecurity - Management acknowledged the importance of AI in cybersecurity and emphasized the strength of their DRT Cyber team [51] Question: Canadian insolvency deposits and expectations - Management noted a slight decline in insolvency deposits, indicating ongoing economic challenges in Canada [57]

Core Perspective - The partnership between Canada Stablecorp Inc. and VersaBank for custody services is a significant step in enhancing the institutional readiness for QCAD, Canada's first regulatory compliant Canadian-dollar stablecoin [1][7][6] Group 1: Custody Agreement - VersaBank will provide custody services for the QCAD Digital Trust using its proprietary VersaVault solution, earning fees based on the value of QCAD assets held and a spread on QCAD deposits [4][7] - The custody agreement is designed to support the scaled adoption of tokenized Canadian dollars, reinforcing the institutional-grade infrastructure behind QCAD [7][8] Group 2: Institutional Readiness - Regulated custody of reserve assets is viewed as a foundational requirement for stablecoin scale, particularly as stablecoins transition into mainstream financial workflows [5][9] - The collaboration with a federally regulated Schedule I bank is seen as a milestone for modernizing Canada's financial infrastructure and establishing a new standard for the digital asset industry [6][8] Group 3: Strategic Focus - DeFi Technologies aims to scale QCAD across three core areas: product development, liquidity and market access, and security as adoption grows [9] - The milestone aligns with DeFi Technologies' strategy of supporting category-defining digital asset infrastructure and commercialization through its integrated platform [8][9]

Core Viewpoint - VersaBank is advancing its Digital Deposit Receipts (DDRs) pilot programs in Canada and the U.S., aiming to leverage its unique position as the only nationally licensed bank with tokenized deposit capabilities in both countries, to facilitate secure and efficient cross-border transactions [1][2][3]. Group 1: Pilot Programs - The CADVB Pilot Refresh is designed to validate the functionality, security, and compliance of DDRs with Canadian regulations, following enhancements to the bank's core technology since the initial pilot in 2022 [1][2]. - The integration of the CADVB Pilot Refresh with the USDVB Pilot Program aims to showcase the bank's capacity for high-speed, low-cost, and secure cross-border payments using DDRs as digital representations of actual deposits [2]. - Both pilot programs are expected to conclude by the end of 2025, with a commercial launch anticipated shortly thereafter, subject to regulatory requirements [2]. Group 2: Market Opportunity - Approximately CAN$1 trillion in trade occurs annually between the U.S. and Canada, presenting a significant opportunity for VersaBank to provide blockchain-secured foreign exchange transactions [3]. - DDRs offer advantages over non-bank stablecoins, including the ability to pay interest and provide deposit insurance, which are critical for businesses seeking secure digital transaction solutions [3][4]. - The bank is actively pursuing opportunities to monetize its proprietary DDR technology, which is positioned as a market-ready solution for various financial entities [3]. Group 3: Technology and Security - DDRs are bank-issued tokenized deposits that provide enhanced security, stability, and regulatory compliance compared to traditional stablecoins, combining traditional banking safety with blockchain efficiency [4][6]. - The issuance and management of CADVBs will utilize VersaBank's proprietary VersaVault platform, ensuring secure handling of sensitive data and compliance with regulatory standards [5][8]. - VersaVault is designed to manage highly sensitive digital assets and ensure end-to-end security for the lifecycle of DDRs, addressing the need for regulated custody in the digital asset space [8]. Group 4: Company Overview - VersaBank operates as a branchless, digital bank in North America, focusing on underserved segments of the banking industry through its innovative technology [9]. - The bank has successfully launched its Receivable Purchase Program in the U.S., expanding its operations into a multi-trillion-dollar market [9]. - VersaBank also owns DRT Cyber Inc., a leader in cybersecurity services, enhancing its capabilities to address the growing cyber threats faced by financial institutions [9].

Core Viewpoint - VersaBank has launched a pilot program for its proprietary Digital Deposit Receipts (DDRs) in the United States, positioning them as a secure and compliant alternative to traditional stablecoins, with the ability to pay interest and FDIC insurance [1][2][3] Group 1: Digital Deposit Receipts (DDRs) - DDRs are bank-issued tokenized deposits that represent actual cash deposits on a 1:1 basis, offering enhanced security, stability, and regulatory compliance compared to stablecoins [1][4] - The USDVB Pilot Program aims to demonstrate the functionality and operational integrity of DDRs in a US dollar environment while ensuring compliance with US banking regulations [2][3] - DDRs were developed in collaboration with law enforcement to serve as a trusted alternative for mainstream financial applications, addressing the growing trend of digital asset management [4] Group 2: Pilot Program Details - The USDVB Pilot Program will involve phased testing with thousands of transactions, starting with controlled internal testing and expanding to limited external deployment [3] - USDVBs will be issued at a rate of 1 USDVB for each US$1.00 on deposit, managed through VersaBank's proprietary digital vault platform [3][6] - The pilot program is expected to be completed by the end of 2025, with plans for commercial launch shortly thereafter [3] Group 3: Company Overview - VersaBank operates as a federally chartered bank in both Canada and the US, focusing on a digital, business-to-business banking model [7] - The bank has successfully launched a Receivable Purchase Program in the US, expanding its services to underserved markets [7] - VersaBank also owns DRT Cyber Inc., a leader in cybersecurity services, enhancing its capabilities in managing digital assets securely [7]