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Image source: The Motley Fool. Thursday, Sept. 3, 2026 at 9:00 a.m. ET Founder and President - David Taylor Global Chief Financial Officer - Nicolas Ospina Global Senior Vice President, investor and stakeholder relations - Lawrence Chamberlain Need a quote from a Motley Fool analyst? Email [email protected] Operator: Good morning, ladies and gentlemen. Welcome to VersaBank's third quarter fiscal 2026 financial results conference call. This morning, VersaBank issued a news release reporting its financial results for the third quarter ended July 31st, 2026. That news release, along with the bank's financial statements, MD&A, and supplemental financial information, are available on the bank's website in the investor relations section, as well as on SEDAR+ and EDGAR. Please note, in addition to the telephone dial-in, VersaBank is webcasting this morning's conference call. The webcast is listen only. If you are listening to the webcast but wish to ask a question in the Q&A session following Mr. Taylor's presentation, please dial into the conference line, the details of which are included in this morning's news release and on the bank's website. For those participating in today's call by telephone, the accompanying slide presentation is available on the bank's website. Also, today's call will be archived for replay both by telephone and via the internet, beginning approximately one hour following completion of the call. Details on how to access the replays are available in this morning's news release. I would like to remind our listeners that statements about future events made on this call are forward-looking in nature and are based on certain assumptions and analysis made by VersaBank's management. Actual results could differ materially from our expectations due to various material risks and uncertainties associated with VersaBank's businesses. Please refer to VersaBank's forward-looking statement advisory in today's presentation. I would now like to turn the call over to David Taylor, founder and President of VersaBank. Please go ahead, Mr. Taylor. David Taylor: Good morning, everyone, and thank you for joining us for today's call. With me again is our Global Chief Financial Officer, Nicolas Ospina, and for the first time, Lawrence Chamberlain, our new Global Senior Vice President, investor and stakeholder relations, who joined us full-time in August after working for us on a consulting basis for the last six years or so. As expected, fiscal 2026 has continued to be a breakout year in terms of top-line growth. The third quarter once again saw new records for credit assets, revenue, and net interest income with a very strong year-over-year growth. This was once again driven mainly by the momentum in our Structured Receivable Program in the U.S. In fact, our U.S. operations generated nearly 25% of Q3 digital banking revenue. But notably, we have continued to see steady growth in Canada as we continue to increase business with our existing partners and expand our market share. I am very pleased to report that subsequent to quarter end, for the first time, we surpassed CAD 7 billion in total assets. In fact, as of yesterday, we were at CAD 7.2 billion. That's up nearly CAD 5 billion over the past five years for a compounded annual growth rate of more than 25%. With this year's strong growth, we are increasingly realizing the operating leverage of our cloud-based branchless business-to-business model with year-over-year increases in net income and adjusted or core net income of 53% and 27% respectively. I will once again note that we achieved these metrics with significantly higher than typical levels of liquidity at this early point to our expansion in the U.S. Although these are steadily moving back to more historic levels. That said, it was another noisy quarter in terms of costs with a number of items which total over CAD 4.6 million that are not part of our go-forward cost structure in 2027. These included non-core costs of CAD 3.1 million, which was composed mainly of an additional CAD 2.5 million in reorganization costs that we noted on our last call. There were also CAD 1.5 million in transitory core costs, that is costs that we did not adjust for, but that were specific to Q3, as well as CAD 0.8 million related to share compensation resulting from the increase in share value. Nico will go into these in more detail in a few minutes. Looking ahead, as I will discuss in a little bit, we expect the broader implementation of AI throughout our organization will not only increase our efficiency but create significant opportunities for meaningful cost savings going forward. Finally, on the Q3 results, as I have discussed in the past, our net interest margin can vary from quarter to quarter, and we saw that somewhat in the third quarter. Much of this is due to the higher than typical liquidity levels, and we therefore expect NIM to trend back to the 2.3% range going forward. Of course, we will continue to benefit from more cheaper deposits through increased activity in our insolvency professional business. In Canada, we recently saw that deposit base reach CAD 1 billion for the first time as we both expand that business and insolvencies in Canada continue to increase. More specifically, the SRP business in the United States. We continued to steadily build momentum during Q3 with increased business from our existing U.S. partners and the addition of new partners. Q3 saw another CAD 220 million in new fundings with a subsequent CAD 127 million since the end of Q3. That brings us to more than CAD 720 million in new fundings year to date as of today. Q3 saw the initial contribution from our most recently added SRP partner in the United States, another wholly owned subsidiary of ECN Capital. This latest partner is expected to contribute at least $300 million in additional U.S. SRP fundings annually. But both we and our partner believe the program could grow well beyond $500 million per year in fundings. I will note again, this quarter, the vast majority of additional fundings in the U.S. were through our original, more profitable SRP as demand for our core solutions continues to exceed our expectations. Our growth in the United States continues to prove out the efficiency of our U.S. operations with an efficiency ratio, excluding non-core write-off associated with the branch sale for Q3 of 37%. And we continue to remain on track for our year-end goal to be in the low 20s. Clearly, as expected, SRP has rapidly taken its rightful place as a uniquely attractive alternative funding option for point-of-sale finance companies in the United States. Reliable, efficient, economical, all benefits of our proprietary technology. During the quarter, we took the value proposition of our SRP to an entirely new level with the launch of an AI-enabled Real-Time SRP, which enable our partners to finance their loans with even more efficiency, cost-effectiveness with lower risk. Instead of our partners having to accumulate, warehouse, and batch their loans over a period of time, typically as much as 30 days or more, these loans can now be funded individually as they are made. This effectively eliminates the need for our partners to warehouse multiple receivables over a period of time. That is, they can finance individual loans within just hours, reducing the overall financing cost and the need for warehouse financing. The cost savings and lower equity requirements are significant, and it eliminates the interest rate risk that our partners are exposed to during the warehousing period. During the quarter, following a successful pilot program, one of our largest SRP partners, Financeit, became the first to implement our Real-Time SRP in Canada. I am pleased to report that earlier this week, ECN Capital, one of our first U.S. SRP partners, became the first to implement real-time program in the United States. Feedback on our real-time solution has been overwhelmingly positive, and we are seeing considerable incremental demand from both existing and prospective new partners, including in Canada, where we believe it will generate significant incremental growth to the solid performance we are achieving this year. To ensure we are fully maximizing this opportunity and doing so rapidly as possible, we are privileged to have point-of-sale financing industry veteran, Moe Danis, rejoin VersaBank as part of our SRP team with a particular focus on specialized large partner opportunities for our Real-Time SRP in the United States market. Moe has had a very busy first month and a half and has initiated discussions with numerous new prospect partners. With that, I would now like to turn the call over to Nico to review our financial results in detail. Nico? Nicolas Ospina: Thanks, David. Before I begin, I will remind you that our full financial statements and MD&A for the third quarter are available in our website under the investor section, as well as on SEDAR and EDGAR. All the following numbers are reported in CAD as per our financial statements, unless otherwise noted. Starting with our balance sheet. Total asset at the end of the third quarter of fiscal 2026 grew 26% year-over-year and 7% sequentially to a new high of just under CAD 6.9 billion. Cash and securities was CAD 624 million or 9% of total assets, down slightly compared to the end of Q2 2026. I will reiterate here David's earlier comment about this number still being higher than our historical levels of around 7% as a result of our entering to the United States. Book value per share increased to another record of CAD 17.45. Our CET1 ratio was 11.5% and our leverage ratio was 7.6%, both down meaningfully year-over-year and remaining comfortably above our internal targets. The year-over-year change is mainly due to putting capital to work for growth in the U.S. SRP portfolio following our capital raise in December 2024. Our strong growth in assets drove total consolidated revenue to a record of CAD 38.8 million, up 23% year-over-year and 1% sequentially. Non-interest expenses, or NIEs, for Q3 were CAD 25.2 million. As David noted, NIEs for Q3 included CAD 3.1 million in non-core expenses, CAD 2.5 million of additional costs related to a reorganization project, and CAD 0.6 million for the write-off of capitalized software costs following the sale of our sole physical branch on May 1st of this year. Consolidated NIEs, excluding the one-time cost, were CAD 22.1 million, compared to CAD 17.4 million in Q3 last year and CAD 20.8 million for Q2. As David also noted, Q3 included approximately CAD 2.3 million pre-tax in additional transitory costs that are now a part of our run rate cost structure. This was composed of CAD 0.8 million in share-based long-term incentive award, driven by the bank's strong share price performance during the quarter, as well as CAD 1.5 million in other transitory costs that were specific to the quarter and the bank does not expect to recur. As a reminder, DRTC cyber expenses are included in the consolidated NIEs and totaled CAD 2.6 million in Q3, more or less in line with last year. Reported net income was CAD 10.1 million, a year-over-year increase of 53% from CAD 6.6 million for the third quarter last year. Consolidated earnings per share was CAD 0.31 compared to CAD 0.20 last year. Excluding the CAD 3.1 million non-core NIEs I mentioned earlier, consolidated adjusted net income was CAD 12.3 million, or CAD 0.38 per share, with adjusted net income increasing 27% year-over-year. Again, that number includes CAD 0.8 million pre-tax in share-based compensation resulting from our share appreciation and other transitory cost of CAD 1.5 million pre-tax. Looking at our income statement on a segmented basis, revenue for the Canadian digital banking operation was CAD 27.6 million, up 4% year-over-year. I will remind you that our bank corporate expenses flow to our Canadian banking segment and, as a result, reported net income include those reorganizational costs. Canadian banking net income for Q3 was CAD 6.6 million. However, that number is dampened by the CAD 1.8 million after-tax impact of the one-time cost associated with the reorganization. Revenue for our U.S. banking operations was CAD 9.3 million, up 18% sequentially and 199% year-over-year, primarily due to a ramp up in the U.S. SRP. That drove a 10% increase in net income sequentially and an 803% increase year-over-year to CAD 3.9 million as we see the U.S. operating leverage take effect. Q3 net income was impacted by CAD 400,000 after-tax costs related to a software write-off resulting from the sale of the branch I described earlier. Digital Meteor net income was CAD 114,000 compared with net income of CAD 23,000 for the third quarter last year and net income of CAD 351,000 for the second quarter of 2026. Within DRTC, the cybersecurity service component generated revenue of CAD 1.9 million with net loss of CAD 578,000, pretty much in line with last quarter. Our credit asset portfolio grew a new record just shy of CAD 6.2 billion at the end of Q3, driven once again by our Structured Receivable Program, which increased 40% year-over-year and 11% sequentially to CAD 5.2 billion. Our SRP portfolio represented 85% of our total credit assets at the end of Q3, up from 82% in Q2. Our multifamily residential loans and other portfolio decreased 10% year-over-year and 5% sequentially to CAD 934 million as we continue to strategically transition some of our higher yield, higher risk-weighted uninsured loans to lower yield, lower risk-weighted insured loans. As a reminder, our MRO portfolio is primary business-to-business mortgages and construction loans for residential properties. We have almost no exposure to commercial use properties. Turning to the income statement for our digital banking operations, net interest margin on credit assets, that is excluding cash and securities, was 2.44%. That represented a decrease of 11 basis points year-over-year and 27 basis points sequentially. I will remind you that our Q2 NIM is typically the highest of the year due to normal seasonality. The increase in NIM reflect higher than typical GIC term deposit rates relative to Government of Canada bond yields, the replacement of retail deposit with broker deposit resulting from the sale of the bank only physical branch in the U.S., as well as our decision to maintain greater liquidity amidst a challenging Canadian economy. It also reflects lower credit asset yields in Canada due to a shift in our credit asset mix, resulting from the continued growth in our SRP portfolio, as well as our strategic shift in our MRO loans I just mentioned. Overall NIM, including the impact of cash, securities, and other assets, was 2.19%, a decrease of six basis points year-over-year and 14 basis points sequentially for the same reason I noted above. Our NIM still remains amongst the highest of the publicly traded Canadian federally licensed banks. Finally, our provision for credit losses in Q3 continued to be de minimis as a percentage of our credit assets, and in fact, was negative at 0.02%, meaning we had a recovery of credit losses during the quarter. This compares to a positive 0.03% from Q2, with the recovery primarily due to a sale of the branch assets to Stearns Bank National Association and updates in the forward-looking information used by the bank in its credit risk models. I would now like to turn the call back to David for some closing remarks. David? David Taylor: Thanks, Nico. As I noted earlier, fiscal 2026 has been a breakout year in terms of top-line growth, which is expected to further accelerate next year based on both the continued expansion of our SRP in the United States, as well as this year's introduction of our revolutionary Real-Time SRP. Fiscal 2027, however, will be the year when the true power of our model in terms of both growth and operating leverage comes into focus for our investors. In fact, we are seeing so much near-term demand for our core SRP that during the third quarter, we made the decision to, at least in the short term, limit the amount of fundings through our lower spread purchased securitized SRP. It is simply a more efficient and more profitable use of capital. You'll recall that on the fourth quarter call last year, we estimated that fiscal 2026 SRP fundings in the U.S. would be composed of roughly 60% of our profitable core SRP and 40% would be of our lower spread purchased securitized SRP. As of today, that ratio stands at 90% core SRP and just 10% securitized SRP. That translates to around CAD 650 million in core SRP year to date, with well in excess of the CAD 600 million represented by our 60% of our target CAD 1 billion. As a result of limiting our purchased securitized SRP, we now anticipate that we will reach our CAD 1 billion target of additional fundings since October of last year, sometime before the calendar year end. This positions us very well for our new U.S. SRP target, at least US$3 billion in additional fundings in the U.S. in fiscal 2027. That's the equivalent of more than CAD 4 billion and alone represents 60% growth in our credit asset portfolio. Two important points here. One, we believe there is significant potential upside to our target of US$3 billion in additional U.S. fundings. The demand there, especially with the addition of our Real-Time SRP enhancement. Two, we believe our Real-Time SRP enhancement will accelerate growth in Canada through both additional business with our existing partners and the addition of new partners. In fact, we believe that the growth in our Canadian operations will continue to lead the Canadian banking industry and significantly outpace growth this year. The operating leverage benefits of this growth are enormous, of course. The other side of the operating leverage equation is cost. Like Q3, fiscal 2026 on whole has been a noisy year in this respect. Not only have we had costs associated with the reorganization, as I noted earlier, we have incurred significant costs during the transition that we do not expect to repeat going forward. Even with this expected growth at most, we think our core non-interest expenses will be in line with this year, excluding the CAD 10 million cost associated with the portion of DRTC we plan to divest. To even further capitalize on our operating leverage, we are undertaking numerous AI-based initiatives across the broader organizations to drive even greater efficiency as we grow while further strengthening our risk profile. As a fully digital bank with our own proprietary core banking software, we are well-positioned to realize significant benefits from increased implementation of AI. Our opportunities in the rapidly developing digital asset industry continue to come into focus. Both stablecoins and bank-issued tokenized deposits are gaining widespread acceptance, and the ecosystem is taking shape. At this early stage for the industry, we are being deliberately thoughtful and prudent in our approach to these opportunities with a focus on long-term value. With our unique and proprietary technology that has been consistently validated by other leaders in the industry, further strengthened by our status as a federally licensed bank in both the U.S. and Canada, we are very well-positioned to capitalize on this revolution in the banking and payment systems. Before I open the call to questions, a quick update on our reorganization. The week after next, we will hold a special meeting of our shareholders to vote on and approve the reorg, for which our board has unanimously recommended shareholders vote in favor. The materials associated with the special meeting are available on our website. In parallel, we are preparing to request the requisite regulatory approvals, specifically from the Fed in the U.S. and the Department of Finance Canada. Our target, subject to these approvals, is to have the reorganization completed by the end of October 2026. I will note here that we expect to incur an additional roughly CAD 4 million in non-core costs related to the reorganization in the fourth quarter of this year. We expect the realignment of our corporate structure to a standard U.S. bank framework to drive meaningful additional value for our shareholders as we align our structure and financial reporting to those with which global investment community are more familiar. Potential future stock index inclusion and improved access to capital if needed to further accelerate our growth as well as significant cost savings. Finally, on the topic of divestiture of cybersecurity business, we had been looking at some additional potential alternatives to meet the Fed's requirement that we divest this business by September of this year. Last quarter, we asked the Fed for an extension that was granted last week, such that we have now until August 30th of next year to exit. We are proceeding accordingly. With that, I would like to open the call to questions. Operator? Operator: If you would like to ask a question, please press star followed by the number 1 on your telephone keypad. To withdraw any questions, please press star 1 again. Our first question comes from Joseph Yanchunis from Raymond James. Please go ahead. Your line is open. Joe Yanchunis: Good morning. David Taylor: Good morning, Joe. Nicolas Ospina: Good morning, Joe. Joe Yanchunis: In your prepared remarks, you said the NIM should trend back towards 2.3% kind of range as liquidity normalizes. What do you need to have happen for that to occur, and how much of that recovery is driven by lower liquidity, better deposit mix, or stronger SRP yields? Are you expecting the NIM to return to those levels in the fourth quarter? David Taylor: Yes, Joe, the liquidity we've been maintaining, of course, was partly due to beginning operations in the U.S., so we just thought prudent to maintain a lot more cash. With some anomaly happening in Canada, with our deposit rates increasing to about 70 basis points over the same term Government of Canada bond, that means the liquidity actually costs us a few basis points, maybe 10, 15 negative. Now that we're well established in the U.S., we can bring our liquidity levels back down to around 5%-5.5%, which means we won't be losing money on liquidity. In the past, we didn't actually lose money on liquidity. We actually made a few basis points. It's important for us to get it down. With respect to timing, gee, we're growing so rapidly now. We put on about CAD 300 million since the end of the quarter, July 31st. We are up to CAD 7.2 billion right now from what it was CAD 6.9 or so, Nico? Nicolas Ospina: That is right. David Taylor: It is coming on fast and furious. Those are high yielding traditional SRP rather than the purchased ones where we only made maybe 80, 90 basis points. On our homegrown SRPs, we make about 250 or so. I would say NIM will get back to around 230 for next quarter and the rest of the year. For the Canadian listeners, we are still about 50% better NIM than the entire banking industry in Canada, and it is even better than that in that most of the banking industry, well, all the banking industry is providing extraordinary expected loss provisions. You might note that ours is averaging close to zero. I think it was 2 basis points the last quarter. Not only do we have the widest margin in the country by far, but we give nothing back for loan losses either. While we are obsessing on NIM, a space that we are incredible at in the country where most of our assets are situated. It gets better in the States because that anomaly over risk-free rate in the States is only 10, 15 basis points over U.S. Treasuries. As we start booking assets in the States, as we are predicting at least US$3 billion more going on soon, gee whiz, it just gets better and better. It is sort of amazing. One of the markets kind of missed it, but we have revolutionized the US$1 trillion asset-backed security market by bringing out this Real-Time SRP, where not only do our clients get their money back right away, not have to wait 60, 90 days to package up and pay accountants and investment bankers and lawyers. They also run a huge interest rate risk while they are doing this. Rates move up, that means their portfolio dropped. With us, they get to lock the rate in virtually in 10 minutes. One big firm said to me, "Once a day would be great, Dave." I kind of find it odd that we're obsessing on a few basis points in March, and we just brought something out that renders the traditional asset-backed security method obsolete. Interesting that seems to be missed. However, it's always the case where you're an innovator, you bring something out brand new and folks take a while to catch on. When I came out with a branchless bank model in 1993, everybody told me that was impossible and couldn't be done and everything else. Here we are again with the adoption of AI to this traditional ABS market and revolutionizing it, which you'd think that's what people would be looking at. I guess it's when the horse and buggy came out. Horse and buggies were means of transportation. Someone came out with an automobile. It was still folks that needed to have horses and buy hay and stuff like that to keep going until it caught on. Sorry about the long-winded one there, Joe, but, you're- Joe Yanchunis: That's all right. I appreciate the color there. I just wanted to drill down on the expected growth in fiscal 2027. So you're expecting at least US$3 billion of growth in the U.S., which would effectively take you to US$4 billion exiting the next fiscal year. So how much of that target is already effectively spoken for through existing partners like Financeit and ECN, and how much is still dependent on signing new partners? David Taylor: I'd say about half through the existing and the other half are prospects that we're already talking to. I've doubled the size of the team in the U.S., the SRP team, with the addition of Moe Danis and Luke. So, more hands at the pump. I may add another two to it. Also, it's a huge market in the U.S., and the sooner we get on the books, the better. But if you look at US$3 billion to, say, 250 basis point spread and use an effective tax rate of about 25%, that's about a US$1.75 a share increase in U.S. dollars that we just put out there. Joe Yanchunis: Yeah. David Taylor: That's just the U.S. And Canada might be able to do the same. Let's hedge my bet, call it CAD, because our existing partners in Canada, including Financeit and some of the huge ones, they're signing up as fast as they can to get Real-Time SRP working for them. They're saying they don't want to run interest rate risk. Why should you? They like to get their money back right away. Because they're not borrowing, they don't have to have an onerous debt to equity ratio to contend with. They can get their capital back faster. Their ROE goes through the roof. They eliminate interest rates. When I say revolutionary, that's what Moe Danis said when I was receiving this undeserved award for Canadian Financial Executive of the Year. Moe said, "This is a revolution to the industry." I say, "Yeah, you're coming back on board, right, Moe?" Yeah, it's great. I may bring another team in too. Mark in $3 billion in the U.S. additional and maybe another CAD 3 billion, just from our existing partners. There's a few more just signed up. I think two or three more just signed up in Canada, too. Joe Yanchunis: You're talking about truly explosive growth here. At what point does additional capital become necessary to support this runway? David Taylor: Well, if we get our dream come true, we'll be risk weighting our homegrown asset-backed securities, the same as if we had purchased them under the new Basel III rules, which is 20%. If we can get that done, I've hired a guy to make that happen. Chiaki used to be with Bank of Canada, so KBW has come on board for that mission. If we can get that put to bed, which is quite realistic, considering Basel III allows for it, why would your homegrown ABSs be risk weighted different than the ones you just purchased from somebody else or the ones we sold to somebody else? Then we're at 20% risk weighted, and then there's no need for any more capital. At that point, we're generating capital at a fast and furious rate, and we'd self-fund. Sorry, investment bankers. Although, it is a trillion-CAD market, so even with that, maybe we will be back. We are only looking at 1% of a trillion-CAD market in the near future with CAD 10 billion. I cannot see anybody using anything else other than what we have got on the table. Why run those monster risks with interest rates? Why not get your money back in your pocket? Why not give your shareholders some of their money back? You do not need all the equity that you got supporting a business anymore. That would be dreaming in Technicolor, but I have hired the guy, and we are underway with that. Basel III did change that and did allow for it. It makes sense. Why would a regulator let you risk weight your asset at 20% just because you bought it from somebody else when it is identical to the one you have homegrown? Joe Yanchunis: All right. Well, I appreciate the color and thank you for those thorough answers. I will hop back in the queue. David Taylor: All righty. Well, thanks, Joe. Operator: Our next question comes from Tim Switzer from KBW. Please go ahead. Your line is open. Tim Switzer: Hey, good morning. Thank you for taking my questions. David Taylor: Well, go ahead, Tim. We are here in the fog in Canada here. I have Nico beside me here. He traveled all the way up from St. Pete to find it just as foggy and steamy and hot here in Canada. Tim Switzer: Lucky you, Nico. A quick follow-up on your comment about the risk weighting here. What is the process like for getting a lower risk weighting on your SRP loans? Is there any timeline on when you think you can get approval for that? David Taylor: Well, I am guessing sometime mid-2027 our sort of Dime Went to Heaven program would be in place. That would be the assets that we have are risk-weighted the same as those that we would purchase. It would go through, we would make a presentation to OCC to have our assets risk-weighted in that fashion. So, I am hedging my bet a bit mid-2027. There are some phases in between where we could probably get most of that effect done a lot sooner. There are methods in Canada in particular to employ kind of an insurance policy on your assets and get a much lower risk weighting. Other banks have already done and used, so the regulators are familiar with it. Then there are some companies who have approached us that would take the B tranche on their own books, and that has already gone through the regulatory frameworks and been approved. The Dime went to heaven, the holy grail, is maybe mid-2027. I would hope it is sooner because I have a real good guy on the job. Keenan, are you listening? The other phase is the first one with the insurance. Maybe I will get that in a bit sooner, like a month or two from now. Tim Switzer: Okay. Interesting. Your comment about 2027 core expenses should be in line with this year. Just given all the one-timers and transitory costs, what is the base we should be using for 2027? If you can provide a CAD range, that would be helpful. David Taylor: Nico is sitting beside me in the room. CAD 19.8 or something like that. Nicolas Ospina: CAD 19.8 is kind of like the run rate that we have right now, Tim. Tim Switzer: Can you repeat that? David Taylor: 19. Nicolas Ospina: 19.8. David Taylor: 19.8, Tim. Tim, the other thing to keep in the back of your mind as we put it out there, we fully endorsed AI in this bank. Of course, it was real easy for us because we're all tech anyways. There's a lot of savings coming. I mean, obviously just demonstrating what we can do with AI on the Real-Time SRP, that's phenomenal. There's lots of other areas in our bank that our team is looking to using AI to make themselves much more efficient. I'll put it out there. It might take a week in the past to compose a credit application for a new SRP customer, say a week. Now that would be pushing it. That'd be our guys really working hard on that. That could be done now in less than a day with AI. Tim Switzer: Okay. If I heard you correctly, you said 19.8, so it'd be about CAD 70 million annualized? David Taylor: Yeah, that's what we're looking at. Without any improvements with AI that we have well underway here, we have what we call an aquarium, Microsoft Aquarium. All the data at the bank sits nicely, securely, and safely in this aquarium. But our staff has access to company AI to manipulate data and do statistical analysis. It's so cool. We have a data warehouse that's part of our core banking system that I invented many years ago. It gives our staff the ability to, say, ask, "How many motorcycle loans do we have in Alberta?" Not only does it give it to you, but it'll actually put in a PowerPoint presentation for you. It's fantastic. Maybe the reason why I'm so bullish on this as opposed to maybe my fellow bankers, maybe this has been missed by the market. We own our core. We created our core. It's the VersaBank core. We're not beholding to some other core provider that you may have to go into a queue and wait maybe three or four years to have some sort of innovation put through. VersaBank's core banking system was conceived to never constrain what our lenders could think of. If they put a loan together that had uneven cash flows, maybe paying some summer, not the winter, anything they could think of, different bases for Bank of Montreal Prime, CIBC Prime, bankers' acceptances, whatever. That core banking system that we put together gives a huge advantage. This is why we can do this stuff. How could you invent a Real-Time SRP and launch it? What are we doing? We announced about 60 days ago. It's now fully functional, and we're assigning our customers. I mean, just imagine if you had to contend with the rest of the banking industry with one of these archaic core providers that's struggling through it. Geez. There's no comparison. Lawrence Chamberlain: Tim- Warren here. Let me just jump in and remind that of that CAD 80 million, CAD 10 million is directly attributable to the cybersecurity business. When that gets divested, that goes away. Tim Switzer: Yep. Okay. All right. That's helpful. One last one for me. Just given the extension on the divestment there, could you provide some color on where we are in the process of a potential sale here? Is there anything else being considered, like a spinoff? In terms of a sale, there's been some nice movement upwards in cyber stocks lately. Should that help speed this process along maybe, and help with the valuation you could receive? David Taylor: Yeah, it definitely should. I mean, obviously, we live in a terrible world where cybercriminals abound. There's no end in sight to that, unfortunately. We were just thankful the Fed gave us a little longer to divest a bit. We haven't mind divesting a lot sooner than the one-year extension. It just takes the heat off us, and it's more of a human thing. We were fully deployed with this Project Optimize. It's a big project and everybody's really busy doing that. The divesture DRTC was a bit of a distraction. So now we've got a bit of time. We're engaged with a few likely purchasers, and I'm sure somebody will become the new proud owner. But we're thankful the Fed cut us a bit of slack. As they say in negotiations, he who wants it the most loses. As we certainly didn't want to be in any hurry while we've got all this other Project Optimize distracting us. Tim Switzer: Okay, great. Thank you, David. Operator: Our next question comes from. David Taylor: All right. Thanks, Tim. Operator: Andrew Scutt from ROTH Capital. Please go ahead. Your line is open. Andrew Scutt: Hey, good morning, guys. Congrats on the continued progress, and thanks for taking my questions. Just one quick two-parter for me on the expected 2027 U.S. SRP growth. Firstly, can you kind of remind us where you're funding these deposits, specifically for the U.S. business, and help us quantify any incremental spread you may be picking up growing in the U.S. versus Canada? Secondly, on the expected US$3 billion in growth in 2027, did you guys target a number in which you will keep on your balance sheet versus securitize? David Taylor: We'll keep the whole work center balance sheet, Andrew, just for a quick answer. I think it'll happen fairly quickly in that with the new team out there marketing it should go rather rapidly. Andrew Scutt: Understood. Just the first part on the NIMs across the borders. David Taylor: Oh, okay. The NIM in Canada has been unusually compressed by the margin over the risk-free rate going to a historic high of 70 basis points. In the States, it's running around 10, 15 basis points over the same term, U.S. Treasury. Our method of gathering deposits on both sides for us is the same. We go exclusively to broker deposits. We're a drop in the bucket and have no issue whatsoever raising as much money as we need, virtually instantaneously from our deposit broker partners. So that's what we've done since the beginning, 1993. I created that industry by telephone modems and IBM PCs, putting them in the offices of what I call deposit brokers, so they weren't called that then. They were financial service providers and investment bankers and such. Now, dream in Technicolor, as you know, we have got the world's first tokenized deposit up and running, ready to roll. Sooner or later, we'll roll that out. That puts FDIC-insured CDs viciously represented, as we call them, tokenized deposits, out throughout the entire United States and serves as a beautiful payment vehicle, too. With FDIC stamp of approval on it's virtually risk-free. That's coming. I think the entire banking industry is waking up to that. In the newspaper almost every day, you see some group of banks. The banks talking about stablecoins. Stablecoins, I think, are a little bit of thing of the past. They'll evolve into tokenized deposits. When my dream comes true, we'll be raising our deposits through the tokenized deposit networks and paying a lot less because our competition right now is stablecoins, which so far aren't able to pay any yields. That's the dream come true. In the meantime, it's just the traditional deposit brokers that are sending us money as we no issue whatsoever. Part of that is because we're a drop in the bucket. I think it's what, a CAD 10 trillion deposit market. Our aspiration is maybe CAD 10 billion, CAD 15 billion, CAD 20 billion. That's still a drop in the bucket. Andrew Scutt: Understood. Well, appreciate the color and congrats again on the continued progress. David Taylor: Well, thanks, Andrew. Exciting times. Operator: Our next question comes from Eli Rodney from Bullpen Research. Please go ahead. Your line is open. Eli Rodney: Morning, guys. Niko, I hope you didn't fly in yesterday with the storm we had here. David Taylor: Yeah. No, I came early in the week. Eli Rodney: Good. Starting off on that CAD 3 billion target. Given the attractiveness of the Real-Time SRP, you guys have talked about 90/10 split this year on funded volumes. I'm wondering, should we be thinking the same split for CAD 3 billion in fiscal 2027? David Taylor: Yeah. Eli, I guess right now I don't think there's any need to purchase any more. We've got so much demand for the on-balance sheet securitization that I can't see buying any more. They come in a much thinner spread, and even though they are 20% risk-weighted, now we're well underway with the homegrown SRP used in real time way. I go 100% on the homegrown. When we got the Canadian side, too, Eli, of course, because I just threw that out there for the U.S. growth. But our Canadian business is well-established, and we have 20, 25 or so partners, and every one of them would rather get their money sooner rather than later. So I expect, let's just say CAD 3 billion Canadian on our side of the border here. That's pretty realistic. We have maybe half of Financeit's business, and they have CAD 3 billion already on the books. There's a bunch more lined up. It's so attractive. It's one of those ones you don't have to market. I get all my money back right away. Theoretically, it's 10 minutes it takes us to turn it over. If it's just once a day they do a batch, comes in, that's the money back in the till, can be lent out the next day to some other guy that wants to buy a Ducati motorcycle. How much equity does the point-of-sale finance company have to have? Well, theoretically, nothing. They're just a supply chain for us. We're holding back sufficient cash to soak up what we think would be the delinquencies. Theoretically, for those who are mathematically inclined, the holdback we have is what some other lender might have in their expected loss provision. It's the same math. As long as we hold back enough, what you see hit our bottom line, our ECL, is next to nothing, and that's what you've seen over the decades, like plus or minus 2 or 3 basis points. It's a good model. We proved it out kind of doing it a clunky way by buying batches, and now we just adapted the program to AI and we built it ourselves downstairs in the tech facility here. It was constructed by our guys and put into play, and of course, as you'd expect, everybody sort of said, "Where do I sign? How come I can't have that?" That's what we hear. Geez, well, of course. Eli Rodney: Yeah. No. I imagine it's a pretty easy sales process for you guys. Maybe on that, specifically on the rollout of the Real-Time SRP, maybe a more qualitative question than anything, but could you give a sense for maybe Financeit, for example, how much of their volumes are running through the real-time versus the traditional program? I assume the idea is that everything goes over there at some point, but is it already there or is there kind of a ramp-up period to get to that point? David Taylor: I think their entire flow henceforth is going through the real-time program. As it should. Rather than send it to us and have it batched up and maybe take a month to process it, why not get it done every day? Yeah, the system's up and running well, and thankfully, our partners in the States, ECN Capital, decided to try it out too. We say, "Try it, you'll love it." I have a terrible analogy for that. It's like getting hooked. You're hooked on it. Once you're used to getting your money every day, are you going to go back to waiting for months and months and running interest rate risk? Man, that is a big deal with these point-of-sale finance companies while they are batching up, is that some central bank moves the rates up a little bit and they just lost, maybe they lost their entire profit on that batch of loans that they were batching up for a securitization. Interest rates go up a few basis points. Whoops. There goes my profit. Our system prices it immediately. This is AI doing it. Just takes the Government of Canada bond rate, click. Okay, you got it. There you are. Rate is done, like instantaneously purchased. Eli Rodney: Yeah. No, it seems, as you have described, it is a game changer for your partners. On the ECN Capital subsidiary, I feel like that is a good transition in there. If they are getting all this value from the Real-Time SRP, would you expect that I know CAD 300 million was the original target, and there is confidence in getting over CAD 500 million a year there. How quickly is this one ramping up relative to maybe some partners in the past that you have signed? Is this a type of thing where, as you said, they kind of get a taste for this program and now they are trying to push as much volume through as they can? David Taylor: Yeah, absolutely. We are up CAD 300 million in the last 30 days or so, right? We went from 6.9 to 7.2. On our daily dashboard, it showed 7.2 yesterday. Yeah, and that is just the thin edge of the wedge. Everybody is quite- For 30 years, they have been using the traditional asset-backed securities way of funding themselves, and they have got friends that are investment bankers, and they have got friends they play golf with that are accountants and lawyers. It is a traditional way of doing it, and a lot of mouths being fed in that industry. We are basically saying, "Forget those guys. They are going to go hungry." It takes a while for humans to sort of move. I use the horse and buggy thing. You got the horses out there. People liked horses. They like hay. They have their kids working in the barn, taking care of it. It was an industry. All of a sudden comes out Henry Ford with the automobile and say, "Those things are smelly, and they make a lot of noise and whatever." Well, you know it is going to change. It has to change because of the factors, that we talked about, fixing your rate, getting your money back early, dropping your equity requirement. Jesus. Of course, they are going to do it. Eli Rodney: Yeah, correct. David Taylor: It is just the stickiness of our fellow humans who take a while to adopt to things. I lived that in Canada when I came up with this branchless banking model. I was the first guy in 18 years to get a federal bank license. People lectured me that I needed buildings. One guy, a senior federal government guy in Canada, told me, "It has to have pillars, too." I said, "Things are" I will not say his name. He knows who he is. I said, "Things are going to change. This is a different way of doing business." "Oh, no. People like to walk down to a branch and wait in line to get the loan to buy their motorcycle." I said, "No, they do not. The new generation does not want to do that. They want to throw their leg over that bike right now and drive away with a Ducati." Like me, it is a Ducati. Anyway, Eli, yeah, it is exciting times. I have staffed up a little bit. I got Moe Danis and Luke on the job, too, so it is double in the U.S. We could probably do more. In banking, it is kind of more hands at the pump, the more deals you get. Eli Rodney: Yes. David Taylor: There is still a human factor, even though we are using AI. You make the phone calls. You got to see the people. It is still a fair amount of human interaction to get somebody on board. So I might need a few more humans interface. Eli Rodney: Makes sense. Given the CAD 3 billion target, if I heard you correctly earlier, half of that would be coming from potential new partner wins. David Taylor: Yes. Eli Rodney: So maybe on that piece specifically, what you guys are seeing in your pipeline there, I do not know if you can quantify, but you look at the CAD 300 million from the ECN deal, potential for CAD 500 million. As far as size of what is in your pipeline, in terms of funding potential, I am sure it varies, but are there more chunky ones like that? Are there more deals that could be a real step change in volumes as soon as they are signed, or is it a larger number of smaller deals? David Taylor: No, they are all big ones. That is the difference between the Canadian and U.S. market, that they are all big. Every one of them is as big as Financeit in the States. They all use the asset-backed securities as their traditional, their go-to way of funding. Whereas in Canada, they are all kind of small, and they were not using ABS. So ABS was not a competition for us in Canada. But in the States, it is. So when we came up with this change, being able to buy instantly, that hit the ABS market right in the heart. So yeah, they are all big guys. There is nobody little in the States. Everybody is as big as Financeit. They are all using ABS, and our new product is aimed right at the heart of ABS. It renders ABS obsolete. Whereas in Canada, they are little ones. So yeah, they like the idea to get their money back faster. But if they did not have that wait time like the big guys do in the States to get their money, they are borrowing a line of credit or something. Some Canadian bank gave him a line of credit margined against the receivables. So it is a way bigger market in the States. I would say every single one of the ones we are talking to are at least as big as Financeit. Eli Rodney: Wow, okay. Somewhere you got CAD 300 million-CAD 500 million a pop, CAD 1.5 billion coming from new deals. It really only takes 3-5 deals to get there. Okay, great. David Taylor: Yeah. Eli Rodney: The last one for me, just on maybe framing up 2027, is obviously some non-core costs coming through 2026 that should largely be in the rearview for 2027. Then you are talking about some really large numbers on the asset growth side. Internally, do you guys have a frame for how you are thinking about ROE targets for 2027, or is it just a range that you are expecting to land in? David Taylor: I think we have it on our website. At CAD 10 billion, do not we get about 20% already? Something like that, maybe? We have got a model up on our website, Eli. Eli Rodney: Okay. David Taylor: It goes 10, 20, 30 or something in asset size and shows it. Bottom line is, it seems being quite aggressive saying this, but I do not see any increase in NIEs with the volume increase because even though we may be adding some more humans, we are making a lot of savings using AI in every aspect of our business now. That is the offset. We will need some more specialized help, maybe more account managers in this space, like I say, maybe another team, but the processing of the credit applications is so much faster than it used to be, and the analysis is so much better. You can ask Claude. In Canada, we call it Claude, of course, not Claude. Claude can do the stats. Back in the early days when I used to be doing analysis for fish populations using Fortran, that could have been a good afternoon trying to do the stats on the population. You can ask Claude to do the stats, give it all the data, and say, "I would like to be 95% confident that we've taken enough cash holdback to offset the inevitable delinquencies." I think you talk in a minute to analyze the data, and this is the entire data stream. Make 10 years through the cycle. We've signed up for the huge database that the U.S., all the lenders use. Holy smokes, we're way more precise in what we're holding back, and we're getting the math done super fast. Yeah, it's a new world. I'm just looking at incremental revenue from the assets. I use rough math, 250 basis points, CAD 3.075 billion of incremental pre-tax earnings, and we got about a 25% tax rate. You got a buck 75 a share right there, USD. And incremental. Eli Rodney: Yeah. Exciting times. I'll pass the line. David Taylor: Thank you. Thank you, Eli. Good luck in the fog. You're in Toronto right now, right? Operator: For additional questions, please press star followed by one. We have no further questions. I would like to turn the call back to David Taylor for closing remarks. David Taylor: Well, thank you, operator, and thanks again for everybody for joining us today. I look forward to speaking to you at the time of our third quarter results. If you have any other questions that come to mind, do not hesitate to give me a call. We are familiar with Teams. We use Teams regularly here and can answer further questions should you have any. It is certainly exciting times VersaBank. I have been doing it for almost half a century. Started when posting machines were humanly powered with great huge levers. Then thankfully, seeing the industry evolve and evolve and evolve to where we are today, where, holy smokes, it is just wonderful to be able to analyze our portfolios with such precision using the AI and to be able to deliver these new products to our clients, which in effect, trickles down to consumers. This is the altruistic, Dave, that maybe most bankers you do not hear say. Bottom line is, what it means is the consumers and small businesses that rely on these point-of-sale finance companies for their capital, so they can do their thing, well, they should theoretically be able to provide those services at better rates because we are going to give their money cheaper, better, faster. That should trickle down to the economy and help folks out. Thank you again, ladies and gentlemen. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Before you buy stock in VersaBank, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and VersaBank wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. VersaBank (VBNK) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Total Assets: Reached a new high of just under $6.9 billion at the end of Q3 fiscal 2026, up 26% year-over-year and 7% sequentially; surpassed $7 billion subsequent to quarter end. Total Consolidated Revenue: Record $38.8 million, up 23% year-over-year and 1% sequentially. Net Income: Reported net income was $10.1 million, a 53% increase year-over-year; adjusted net income was $12.3 million, up 27% year-over-year. Earnings Per Share (EPS): Consolidated EPS was $0.31, compared to $0.20 in the prior year; adjusted EPS was $0.38. Noninterest Expenses (NIEs): Totaled $25.2 million for Q3, including $3.1 million in noncore expenses; excluding one-time costs, NIEs were $22.1 million. Net Interest Margin (NIM): NIM on credit assets was 2.44%, a decrease of 11 basis points year-over-year; overall NIM, including cash and securities, was 2.9%. Credit Asset Portfolio: Grew to a record just shy of $6.2 billion, driven by the structured receivable program (SRP), which increased 40% year-over-year to $5.2 billion. Canadian Banking Revenue: $27.6 million, up 4% year-over-year; net income was $6.6 million. US Banking Revenue: $9.3 million, up 199% year-over-year and 18% sequentially; net income increased 803% year-over-year to $3.9 million. Book Value Per Share: Increased to a record $17.45. Provision for Credit Losses: Negative at 0.02% of credit assets, reflecting a recovery of credit losses during the quarter. Warning! GuruFocus has detected 6 Warning Signs with VBNK. Is VBNK fairly valued? Test your thesis with our free DCF calculator. Release Date: September 03, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. VersaBank (NASDAQ:VBNK) achieved record-breaking top-line growth in Q3 fiscal 2026, with total assets surpassing $7 billion for the first time, driven by a 40% year-over-year increase in its structured receivable program (SRP). The launch of its AI-enabled real-time SRP is a game-changer, allowing partners to finance loans individually within hours, eliminating warehousing costs, interest rate risk, and reducing equity requirements, with strong demand from both existing and prospective partners. US operations are scaling efficiently, generating nearly 25% of Q3 digital banking revenue and posting an 803% year-over-year increase in net income, with the efficiency ratio improving to 37%. Management has set an ambitious fiscal 2027 target of at least USD 3 billion in additional US SRP fundings, which alone represents 60% growth in the credit asset portfolio, with significant potential upside. The bank's credit performance remains exceptionally strong, with a negative provision for credit losses (a recovery) of 0.02% in Q3, reflecting the high quality and low risk of its portfolio. VersaBank (NASDAQ:VBNK) is strategically leveraging AI across its organization to drive future efficiency and cost savings, building on its proprietary core banking system to maintain a competitive edge. Net interest margin (NIM) decreased sequentially by 27 basis points to 2.44% on credit assets, impacted by higher-than-typical liquidity levels, elevated GIC deposit rates, and a strategic shift in asset mix. The quarter was burdened by over $4.6 million in non-core and transitory costs, including $2.5 million in reorganization costs and $1.5 million in other one-time expenses, which dampened reported earnings. The company's CET1 ratio declined meaningfully year-over-year to 11.5%, reflecting the capital-intensive nature of its rapid asset growth, which may necessitate future capital raises if growth targets are met. Management has decided to limit funding through its lower-spread purchased securitized SRP, which, while more profitable, could constrain overall volume growth and market share expansion in the near term. The divestiture of its DRTC cybersecurity business remains an overhang, with the Federal Reserve granting an extension until August 2027, creating ongoing strategic and operational uncertainty. The reorganization into a standard US bank holding company framework is expected to incur an additional $4 million in non-core costs in Q4, adding to the already noisy expense environment. Q: What is the expected growth target for fiscal 2027, and how much of it is already secured through existing partners?A: David Taylor, President, stated that VersaBank is targeting at least USD3 billion in additional fundings in the United States for fiscal 2027, which is equivalent to more than CAD4 billion and represents 60% growth in the credit asset portfolio. He noted that approximately half of this target is expected to come from existing partners, with the other half from prospects already in discussions. He emphasized that the demand is so strong that the bank has decided to limit funding through its lower-spread purchased securitized SRP, with the current mix at 90% core SRP and just 10% securitized SRP. Q: Can you elaborate on the new AI-enabled real-time SRP program and its impact on the business?A: David Taylor, President, explained that the launch of the AI-enabled real-time SRP is a revolutionary development that allows partners to finance individual loans within hours rather than accumulating and warehousing them for up to 30 days or more. This eliminates the need for warehouse financing, reduces financing costs and equity requirements, and removes interest rate risk for partners. He noted that following a successful pilot, one of the largest SRP partners in Canada implemented the program, and ECN Capital became the first to implement it in the United States. The feedback has been overwhelmingly positive, generating considerable incremental demand from both existing and prospective partners. Q: What is the timeline and process for achieving a lower risk weighting on the homegrown SRP loans?A: David Taylor, President, indicated that the bank is working towards having its homegrown SRP assets risk-weighted at 20% under new Basel III rules, similar to purchased securitized assets. He estimated this "Holy Grail" could be achieved by mid-2027, with a presentation to the OCC. He noted that there are interim phases, such as employing insurance policies on assets, which could provide most of the benefit sooner. The bank has hired a specialist to lead this initiative, and if successful, it would eliminate the need for additional capital as the bank generates capital internally at a rapid pace. Q: What is the expected run rate for core noninterest expenses going into fiscal 2027?A: Nicolas Ospina, Global CFO, stated that the current run rate for core noninterest expenses is approximately CAD19.8 million per quarter, which translates to about CAD70 million annualized. David Taylor, President, added that the bank expects core noninterest expenses in fiscal 2027 to be in line with this year, excluding the CAD10 million costs associated with the portion of DRTC planned for divestiture. He emphasized that the bank is undertaking numerous AI-based initiatives to drive greater efficiency and cost savings, which will offset any increases from growth. Q: Can you provide an update on the divestiture of the cybersecurity business (DRTC) and the extension granted by the Fed?A: David Taylor, President, confirmed that the Federal Reserve granted an extension, giving the bank until August 30 of next year to exit the cybersecurity business. He noted that the bank is engaged with a few likely purchasers and is thankful for the additional time, as the team has been fully deployed on the reorganization project. He mentioned that the recent upward movement in cybersecurity stocks should help with the process and valuation, but the bank is not in a hurry and wants to ensure the best outcome. Q: How is the bank funding the expected growth in the US SRP portfolio, and what is the incremental spread benefit?A: David Taylor, President, explained that the bank funds its growth exclusively through broker deposits, which it can raise instantaneously without issue. He noted that the net interest margin in Canada has been compressed due to deposit rates running about 70 basis points over government of Canada bond yields, while in the US, the margin over US treasuries is only 10-15 basis points. He also mentioned the bank's pioneering work on tokenized deposits, which could provide even cheaper funding in the future. The bank plans to keep the entire USD3 billion in additional fundings on its balance sheet. Q: What is the expected split between core SRP and purchased securitized SRP for the fiscal 2027 growth?A: David Taylor, President, stated that the bank does not see a need to purchase any more securitized SRP given the strong demand for its traditional on-balance sheet product. He indicated that the growth would be 100% core SRP, as the purchased product comes in at a much thinner spread. He also noted that the Canadian business is expected to contribute significantly, with a realistic target of CAD3 billion in additional fundings from existing partners, as the real-time program is rolled out across its 225 or so partners. Q: How quickly is the new ECN Capital subsidiary ramping up, and what is the size of the pipeline for new partners?A: David Taylor, President, reported that the bank has seen significant momentum, with USD300 million in new fundings in the last 30 days, bringing total assets to USD7.2 billion. He noted that the ECN Capital subsidiary is expected to contribute at least USD300 million annually, with potential to exceed USD500 million. Regarding the pipeline, he emphasized that all prospective partners in the US are large, with every one of them at least as big as finance it in Canada. He stated that the bank has doubled the size of its US SRP team with the addition of industry veteran Moe Danis, and the new real-time product is aimed directly at disrupting the traditional ABS market. Q: What are the internal targets for return on equity (ROE) as the bank scales towards USD10 billion in assets?A: David Taylor, President, referenced the bank's website model, which shows approximately 20% ROE at USD10 billion in assets. He expressed confidence that the bank can achieve this without significant increases in noninterest expenses, as AI-driven efficiencies will offset any additional human resources needed. He calculated that the incremental USD3 billion in US fundings at roughly 150 basis points spread would generate approximately USD45 million in incremental pretax earnings, translating to about USD1.75 per share in incremental earnings. Q: Can you provide more detail on the rollout of the real-time program with existing partners like finance it?A: David Taylor, President, confirmed that the entire flow from finance it is now going through the real-time program, as it eliminates the need to wait for batches to accumulate. He noted that For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in VersaBank? Here are five stocks we like better. Record results and rapid growth: VersaBank’s third-quarter revenue rose 23% year over year to C$38.8 million, while net income increased 53% to C$10.1 million. Total assets reached nearly C$6.9 billion at quarter-end and subsequently surpassed C$7 billion. U.S. SRP expansion drove performance: The U.S. Structured Receivable Program portfolio grew 40% year over year to C$5.2 billion, accounting for 85% of credit assets. Management expects at least US$3 billion in additional U.S. SRP fundings during fiscal 2027, supported by existing and prospective partners. Margins and corporate actions remain key considerations: Net interest margin declined amid higher deposit costs and elevated liquidity, though management expects it to recover to about 2.3% in the fourth quarter. VersaBank is also pursuing the divestiture of its cybersecurity business and expects to complete a broader reorganization by October 2026, subject to regulatory approval. VersaBank (NASDAQ:VBNK) reported record third-quarter fiscal 2026 revenue, credit assets and net interest income, as growth in its U.S. Structured Receivable Program, or SRP, continued to accelerate. For the quarter ended July 31, 2026, total assets rose 26% from a year earlier and 7% sequentially to just under C$6.9 billion. Founder and President David Taylor said assets subsequently surpassed C$7 billion, reaching C$7.2 billion as of the day before the earnings call. → Boarding Call: EHang Secures First-Mover Altitude “Fiscal 2026 has continued to be a breakout year in terms of top-line growth,” Taylor said, attributing the performance primarily to momentum in the company’s U.S. SRP operations. U.S. operations accounted for nearly 25% of digital banking revenue in the third quarter, he said. Consolidated revenue reached a record C$38.8 million, up 23% year over year and 1% from the preceding quarter. Reported net income increased 53% to C$10.1 million, or C$0.31 per share, compared with C$6.6 million, or C$0.20 per share, a year earlier. → Medtronic’s Stars Are Aligning for a Price Recovery Adjusted net income, excluding C$3.1 million of non-core non-interest expenses, was C$12.3 million, or C$0.38 per share. That represented a 27% year-over-year increase. Global CFO Nicolas Ospina said third-quarter non-interest expenses totaled C$25.2 million and included C$2.5 million in reorganization costs and a C$600,000 write-off of capitalized software costs following the May 1 sale of the company’s sole physical branch. Excluding one-time costs, consolidated expenses were C$22.1 million, up from C$17.4 million a year earlier and C$20.8 million in the second quarter. → Dutch Bros Sell-Off Creates a Growth Opportunity The quarter also included about C$2.3 million of pre-tax transitory costs. Those included C$800,000 in share-based long-term incentive expenses tied to share-price appreciation and C$1.5 million in costs that management said were specific to the quarter and are not expected to recur. Canadian digital banking revenue was C$27.6 million, up 4% year over year. U.S. banking revenue was C$9.3 million, up 18% sequentially and 199% year over year. U.S. banking net income rose 10% sequentially and 803% year over year to C$3.9 million. Digital Meteor net income was C$114,000, compared with C$23,000 a year earlier. VersaBank’s credit asset portfolio reached just under C$6.2 billion at quarter-end. Its SRP portfolio increased 40% year over year and 11% sequentially to C$5.2 billion, representing 85% of total credit assets, compared with 82% in the previous quarter. Taylor said the company recorded C$220 million in new U.S. SRP fundings during the third quarter and another C$127 million after quarter-end, bringing year-to-date new fundings to more than C$720 million. A newly added U.S. partner, a wholly owned subsidiary of ECN Capital, is expected to contribute at least C$300 million in annual U.S. SRP fundings, with potential to exceed C$500 million, according to Taylor. During the quarter, the bank launched an AI-enabled Real-Time SRP product that allows partners to finance individual loans as they are originated rather than warehousing loans and funding them in batches. Taylor said Financeit was the first partner to implement the product in Canada after a pilot program, while ECN Capital became the first U.S. partner to adopt it following quarter-end. Management said the product is intended to reduce partners’ financing costs, equity requirements and interest-rate exposure. Taylor said the company is seeing incremental interest from existing and prospective partners, including in Canada. Net interest margin on credit assets was 2.44%, down 11 basis points year over year and 27 basis points sequentially. Overall net interest margin, including cash, securities and other assets, was 2.19%, down 6 basis points from a year earlier and 14 basis points from the second quarter. Ospina cited relatively high liquidity, higher deposit costs, the replacement of retail deposits with broker deposits after the branch sale, and changes in the asset mix as factors affecting margin. Cash and securities totaled C$624 million, or 9% of total assets, above the bank’s historical level of about 7%. Taylor said management expects liquidity to move closer to 5% to 5.5% of assets as U.S. operations become more established. He said net interest margin should return to approximately 2.3% in the fourth quarter and remain around that level thereafter. The bank’s provision for credit losses was negative 0.02% of credit assets in the third quarter, reflecting a recovery. Ospina said the recovery was primarily related to the sale of branch assets to Stearns Bank National Association and updates to forward-looking information used in the company’s credit-risk models. VersaBank’s CET1 ratio was 11.5% and leverage ratio was 7.6%, both lower year over year as the company deployed capital to support U.S. SRP growth, but still above internal targets, Ospina said. Management expects to reach its target of C$1 billion in additional U.S. SRP fundings since October 2025 before the end of calendar 2026. Taylor said the mix of U.S. funding has shifted toward the higher-spread core SRP offering: approximately 90% of year-to-date fundings were core SRP and 10% were purchased securitized SRP, compared with the company’s earlier expectation of a 60%-40% mix. For fiscal 2027, VersaBank is targeting at least US$3 billion in additional U.S. SRP fundings. Taylor said roughly half of that goal is expected to come from existing partners and half from prospective partners already in discussion with the company. He said the bank expects to retain the targeted growth on its balance sheet rather than securitize it. Management said core non-interest expenses in fiscal 2027 are expected to be in line with the current year, excluding roughly C$10 million tied to the cybersecurity business that VersaBank plans to divest. Ospina identified C$19.8 million as the current quarterly run rate. Taylor said the company is pursuing AI-based initiatives to improve efficiency and strengthen risk management. The company also expects about C$4 million in additional non-core reorganization costs in the fourth quarter. VersaBank plans to hold a shareholder meeting to approve the reorganization and is targeting completion by the end of October 2026, subject to approvals from the Federal Reserve and Canada’s Department of Finance. Separately, Taylor said the Federal Reserve extended the deadline for divesting VersaBank’s cybersecurity business to Aug. 30, 2027. The company said it is engaged with several potential buyers. VersaBank is a Canadian Schedule I chartered bank that operates as a fully digital institution, offering a range of deposit and lending solutions through its proprietary technology platform. Headquartered in London, Ontario, the bank has chosen to forego a traditional branch network in favor of online and digital distribution, enabling it to serve clients across Canada and the United States with efficiency and lower overhead. The bank’s primary business activities include the origination and securitization of commercial loans, equipment financing, residential mortgages and construction loans. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "VersaBank Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

- Bank Targets Adding at Least US$3 Billion in US SRP in Fiscal 2027 and Accelerated Growth in Canada - - Bank Expects to Drive Further Efficiency Through Broader Implementation of AI - All amounts are unaudited and in Canadian dollars and are based on financial statements prepared in compliance with International Accounting Standard 34 Interim Financial Reporting, unless otherwise noted. Our third quarter 2026 ("Q3 2026") unaudited Interim Consolidated Financial Statements for the period ended July 31, 2026 and Management's Discussion and Analysis ("MD&A"), are available online at www.versabank.com/investor-relations, SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar. Supplementary Financial Information will also be available on our website at www.versabank.com/investor-relations. London, Ontario--(Newsfile Corp. - September 3, 2026) - VersaBank (TSX: VBNK) (NASDAQ: VBNK) (or the "Bank"), a North American leader in business-to-business digital banking, as well as technology solutions for cybersecurity, today reported its results for the third quarter ended July 31, 2026. All figures are in Canadian dollars unless otherwise stated. NOTE REGARDING THIRD QUARTER FISCAL 2026 FINANCIAL RESULTS VersaBank's financial results for the third quarter of fiscal 2026 reflect non-core non-interest expenses in the amount of $3.1 million. The non-core non-interest expenses are related to $2.5 million of project costs associated with the proposed Reorganization (see Reorganization note below) and $600,000 related to write-off of capitalized software costs associated with the sale of the US branch assets and deposits on May 1, 2026. In the same quarter, the Bank publicly filed a Form S-4 registration statement (the "Registration Statement") with the US Securities and Exchange Commission (the "SEC") in connection with the Reorganization, which was subsequently declared effective by the SEC. Specifically, the Reorganization, among other things, will cause Versa Bancorp, a new Delaware corporation (the "Parent") to become the holding company of VersaBank and VersaBank USA National Association. The Reorganization is intended to enhance shareholder value, mitigate risk and reduce corporate costs over the long term. The completion of the Reorganization remains subject to shareholder and regulatory approval. The Bank expects that the anticipated benefits of the Reorganization will exceed the associated investment, however, these expected benefits are subject to various assumptions and uncertainties. As of the end of the third quarter of fiscal 2026, the Bank believes it has incurred the majority of the total costs associated with the Reorganization and expects the Reorganization to be completed in fiscal 2026. CONSOLIDATED FINANCIAL SUMMARY SEGMENTED FINANCIAL SUMMARY - QUARTERLY NOTE REGARDING THE CHANGE IN NAME OF "RECEIVABLE PURCHASE PROGRAM" ("RPP") TO "STRUCTURED RECEIVABLE PROGRAM" ("SRP") As part of its previously announced Reorganization (see note below), VersaBank has changed the name of its Receivable Purchase Program ("RPP") to Structured Receivable Program ("SRP"). The underlying business model of the SRP has not changed in any way. MANAGEMENT COMMENTARY "The third quarter once again saw new records for credit assets, revenue and net interest income, with strong year-over-year growth driven by the continuing strong momentum in our Structured Receivable Program in the United States, as well as steady growth in Canada," said David Taylor, Founder and President, VersaBank. "As expected, fiscal 2026 has been a breakout year in terms of top-line growth, which is expected to further accelerate next year based on both the continued acceleration of our SRP in the United States, as well as this year's introduction of our revolutionary Real-Time SRP. And subsequent to quarter end, we achieved a very noteworthy milestone, surpassing $7 billion in total assets for the first time. With this growth, we are increasingly realizing the operating leverage in our cloud-based, branchless, business-to-business model, with year-over-year increases in net income and adjusted (core) net income of 53% and 27%, respectively. "Specifically in the United States, we have set a target for fiscal 2027 to grow our SRP portfolio by at least US$3 billion (more than CAD$4 billion) in new fundings on our own balance sheet, with significant additional upside potential. The recent launch of our Real-Time SRP - a breakthrough in point-of-sale industry funding - is generating considerable incremental demand from both existing and prospective new partners, including in Canada, where we believe it will generate significant incremental growth to the solid performance we are achieving this year. "As we achieve this expected growth in credit assets and revenue in fiscal 2027, we expect to really see the benefit of the operating leverage. To even further capitalize on our operating leverage, we are undertaking numerous AI-based initiatives across the broader organization to drive even greater efficiency as we grow, while further strengthening our risk profile. As a fully digital Bank with our own proprietary banking software, we are well positioned to realize significant benefits from increased implementation of AI. "Additionally, our opportunities in the rapidly developing digital asset industry continue to come into focus. Both stablecoins and bank-issued tokenized deposits are gaining widespread acceptance, and the ecosystem is taking shape. At this still early stage for the industry, we are being deliberately thoughtful and prudent in our approach to these opportunities with a focus on long-term value. With our unique and proprietary technology that has been consistently validated by other leaders in the industry, further strengthened by our status as a federally licensed bank in both the United States and Canada, we are very well positioned to capitalize on this revolution in banking and payments. "Finally, in addition to the significant top-line growth and operating leverage anticipated in fiscal 2027 and beyond, we expect the realignment of our corporate structure to a standard US bank framework, targeted for completion by the end of October of this year, subject to requisite approvals, to drive meaningful additional value for our shareholders as we align our structure and financial reporting to those with which the global investment community is more familiar, potential future stock index inclusion, and improved access to capital, if needed, to further accelerate our growth, as well as significant cost savings." NOTE RE. REORGANIZATION (PREVIOUSLY REFERRED TO AS THE PROPOSED CORPORATE REALIGNMENT) In the third quarter, the Bank publicly filed a Form S-4 registration statement (the "Registration Statement") with the US Securities and Exchange Commission (the "SEC") in connection with the Bank's proposed plan to realign its corporate structure to a standard US bank framework (the "Reorganization"), which was subsequently declared effective by the SEC. Specifically, the Reorganization, among other things, will cause Versa Bancorp, a new Delaware corporation (the "Parent") to become the holding company of VersaBank and VersaBank USA National Association. The Bank will hold a special meeting for its shareholders ("the Meeting") to consider and vote on its proposed Reorganization. The Meeting will be held in person at 1979 Otter Place, London, Ontario on September 16, 2026, at 10:30 a.m. ET. Shareholders of record of the Bank at the close of business on August 10, 2026, will be entitled to receive notice of and to vote at the Meeting. In addition to the approval of shareholders, the completion of the Reorganization remains subject to various regulatory approvals, including approval by the Minister of Finance in Canada and the Federal Reserve Board in the United States. VersaBank intends to proceed with the shareholder matters expeditiously, and in tandem with the other regulatory processes. KEY OPERATIONAL DEVELOPMENTS The Bank continued to realize rapid expansion of its credit asset portfolio in the US through the successful ramp up of its SRP. Following the achievement of its first-year target for SRP credit assets and the signing of an agreement with its largest US SRP partner to date at the end of Q4 2025, the Bank grew its total SRP assets to US$793 million at the end of the third quarter of fiscal 2026; The Bank entered into an agreement with a wholly owned subsidiary of ECN Capital (the "ECN Subsidiary"), under which the ECN Subsidiary will utilize the Bank's core Structured Receivable Program in the United States. This is the second SRP program into which ECN Capital has entered with VersaBank in the United States. The ECN Subsidiary is expected to contribute at least US$300 million in additional US SRP fundings annually. VersaBank and ECN Capital believe the program could grow well beyond US$500 million per year in funding in the future; The Bank launched its industry breakthrough Real-Time SRP, which provides the same reliable, economically attractive funding solution as the Bank's existing SRP, with the additional benefit of eliminating the need for SRP partners to warehouse multiple receivables over a period of time (typically from five to 30 or more days). This enables the Bank's SRP partners to finance individual loans within just hours, reducing the overall financing cost and the need for warehouse financing, as well as the interest rate risk associated with the warehousing period. It also further strengthens VersaBank's exceptional risk mitigation capabilities by enabling the Bank to better leverage its own, internal AI platform through evaluation of the partner loans underlying the SRP receivables on an individual basis. The Bank expects its Real-Time SRP to enable it to obtain additional financing business with existing partners, while enabling it to acquire new partners with more specialized financing needs that it was previously unable to address. It also expects its Real-Time SRP to enable it to further capture market share from securitized financing providers. The Bank added point-of-sale financing industry veteran Moe Danis, CFA, to the Bank's Structured Receivable Program team to support business development in response to increased demand following the Bank's launch of its Real-Time SRP, with a particular focus on specialized large-partner opportunities in the US market. The Bank's sale of certain assets associated with its only physical branch, located in Holdingford, Minnesota, to Stearns Bank National Association was approved by the Office of the Comptroller of the Currency ("OCC") during the second quarter and the transaction closed on May 1, 2026. The US Federal Reserve extended the date by which the Bank is to cease or divest of certain impermissible activities, including the cybersecurity services housed within DRTC and Digital Boundary Group, required (as per the approval of its 2024 acquisition of a US bank) to August 30, 2027 from September 2026. HIGHLIGHTS FOR THE THIRD QUARTER OF FISCAL 2026Consolidated (Canadian and US Digital Banking Operations, Digital Meteor and DRTC) Total assets increased 26% year-over-year and 7% sequentially to a record $6.9 billion, with the increase driven primarily by growth of the Digital Banking operations' credit asset portfolios, in particular, the Structured Receivable Program ("SRP") portfolio, in both the US and Canada; Consolidated total revenue increased 23% year-over-year and increased 1% sequentially to a record $38.8 million, with the year-over-year and sequential increases primarily due to the continued growth in credit assets, which were up 29% year-over-year and 9% sequentially; Consolidated net income was $10.1 million compared with $6.6 million for the third quarter of last year and $7.5 million for the second quarter of fiscal 2026. Consolidated net income for the third quarter of fiscal 2026 reflects non-core non-interest expenses of $3.1 million, composed of project costs associated with the proposed Reorganization and write-off of capitalized software costs associated with the sale of branch assets and deposits in the quarter. Consolidated net income for the third quarter of fiscal 2026 also included $0.8 million in expenses related to share-based long-term incentive awards, driven by the Bank's strong share price performance during the quarter, as well as $1.5 million in other transitory costs that the Bank does not expect to recur. The prior year net income reflected $4.2 million related to the project costs associated with the Reorganization and sequential quarter reflected $6.7 million in non-core non-interest expenses, which included $4.5 million related to the project costs associated with the Reorganization and a $2.2 million write-down of an intangible asset related to the customer deposit base of the Bank's sole physical branch; Consolidated adjusted (core) net income was $12.3 million, an increase of 27% year-over-year and a decrease of 1% sequentially. The adjusted (core) net income excludes $3.1 million in non-core expense ($4.2 million a year ago and $6.7 million in the sequential quarter). Consolidated adjusted (core) net income includes $0.8 million in expenses related to share-based long-term incentive awards, driven by the Bank's strong share price performance during the quarter, as well as $1.5 million in other transitory costs that the Bank does not expect to recur; Consolidated income per common share was $0.31 compared with $0.20 for the third quarter of last year and $0.23 for the second quarter of 2026. Consolidated income per share includes $0.8 million in expenses related to share-based long-term incentive awards, driven by the Bank's strong share price performance during the quarter, as well as $1.5 million in other transitory costs that the Bank does not expect to recur; and, Consolidated adjusted (core) income per common share was $0.38 compared with $0.30 for the third quarter of 2025 and $0.39 for the second quarter of 2026. The adjusted (core) net income per common share excludes $3.1 million in non-core expense ($4.2 million a year ago and $6.7 million in the sequential quarter). Consolidated adjusted (core) income per common share includes $0.8 million in expenses related to share-based long-term incentive awards, driven by the Bank's strong share price performance during the quarter, as well as $1.5 million in other transitory costs that the Bank does not expect to recur. Digital Banking (Combined Canada and US) Total Digital Banking operations (combined Canada and US) credit assets increased 29% year-over-year and 9% sequentially to a record $6.16 billion, driven primarily by strong growth in each of the US and Canadian SRP portfolios, which, combined, increased 40% year-over-year and 11% sequentially; Total Digital Banking operations revenue increased 24% year-over-year and 2% sequentially to a record $36.9 million, with the year-over-year and sequential increases primarily due to the continued growth in credit assets; Total Digital Banking operations net interest margin on credit assets decreased 11 bps, or 4%, year-over-year, and decreased 27 bps sequentially, to 2.44%. The decreases in NIM reflect higher than typical GIC (term deposit) rates relative to Government of Canada bond yields, the replacement of retail deposits with brokered deposits resulting from the sale of the Bank's only physical branch in the US, as well as the Bank's decision to maintain greater liquidity amidst a challenging Canadian economy. The decrease in NIM also reflected lower credit asset yields in Canada due to the shift in credit asset mix resulting from the continued growth in the SRP portfolio, as well as growth in lower-risk, lower regulatory risk-weighted insured Multi-Family Residential Loans ("MROL") credit assets from higher-yielding, higher regulatory risk-weighted uninsured MROL credit assets. The Bank's NIM remains amongst the highest of the publicly traded Canadian Schedule I banks; Total Digital Banking operations overall NIM decreased 6 bps, or 3%, year-over-year and decreased 14 bps, or 6%, sequentially to 2.19%. The Bank's net interest margin remained among the highest of the publicly traded Canadian Schedule I (federally licensed) banks; Total Digital Banking operations provision for credit losses as a percentage of average credit assets remained negligible at -0.02%, compared with a 12-quarter average of 0.03%, which remains among the lowest of the publicly traded Canadian Schedule I (federally licensed) banks; Total Digital Banking operations net income was $10.5 million compared with $7.0 million for the third quarter of last year and $7.7 million for the second quarter of 2026. Net income for the third quarter of fiscal 2026 included $3.1 million (before tax) in non-core, non-interest expenses primarily related to the Reorganization and write-off of capitalized software costs, compared to a year ago of $4.2 million related to the project costs associated with the Reorganization and sequential quarter reflecting $6.7 million in non-core non-interest expenses, which included $4.5 million related to the project costs associated with the Reorganization and a $2.2 million write-down of an intangible asset related to the customer deposit base of the Bank's sole physical branch. The sequential quarter also included $600,000 in non-interest expenses specifically related to costs related to the commercialization of its Real Bank Tokenized Deposits™ (RBTD™s), which were not classified as non-core; and, Total Digital Banking operations income per common share was $0.32 compared with $0.26 for the third quarter of last year and $0.23 for the second quarter of 2026. Digital Banking Canada Note: The financial results for Digital Banking Canada contain certain non-interest expenses for general corporate administrative costs. Canadian Digital Banking operations net income was $6.6 million compared with $6.5 million for the third quarter of last year and $4.1 million for the second quarter of 2026 and was dampened by non-core non-interest expenses of $2.5 million, composed of project costs associated with the Reorganization ($4.2 million a year ago and $6.7 million in the sequential quarter); and, Canadian Digital Banking operations net income per common share was $0.20 compared with $0.20 for the third quarter of last year and $0.13 for the second quarter of 2026. Digital Banking US US Digital Banking operations net income was $3.9 million compared with $437,000 for the third quarter of last year and $3.6 million for the second quarter of 2026 and was dampened by non-core non-interest expenses of $600,000 related to the write-off of capitalized software costs. The sequential increase was primarily attributable to the strong growth in the SRP portfolio. US Digital Banking operations include expenses that are being incurred ahead of asset growth and revenue generated by the ramp up of the US SRP portfolio. Digital Meteor Digital Meteor's net income was $114,000 compared with net income of $23,000 for the third quarter of last year and net income of $351,000 for the second quarter of 2026. DRTC's Cybersecurity Services Operations DRTC's net loss was $578,000 compared with a net loss of $398,000 for the third quarter of last year and a net loss of $508,000 for the second quarter of 2026. The increased loss was primarily due to higher non-interest expense, offset partially by higher revenues from an increase in new cybersecurity offerings. FINANCIAL SUMMARY This news release is intended to be read in conjunction with the Bank's Consolidated Financial Statements and Management's Discussion & Analysis (MD&A) for the three and nine months ended July 31, 2026, which are available on VersaBank's website at www.versabank.com, SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar. CONFERENCE CALL VersaBank will host a conference call and webcast today, Thursday, September 3, 2026, at 9:00 a.m. (ET) to discuss its third quarter results, featuring a presentation by David Taylor, Founder and President, and Nicolas Ospina, Global CFO, followed by a question-and-answer period. To join the conference call by telephone you may dial direct and be entered into the call with the conference ID 1372854 by an Operator at: 647-932-3411 or 800-715-9871 (toll free). For those preferring to listen to the presentation via the Internet, a live webcast will be available at https://www.gowebcasting.com/events/versabank/2026/09/03/q3-fiscal-2026-earnings-call/play and on the Bank's web site at https://www.versabank.com/investor-relations/events-presentations/. The slide presentation management will use during the conference call/webcast will be available on the Bank's web site at: https://www.versabank.com/investor-relations/financial-results/. The archived webcast presentation will be available for 30 days following the live event at https://www.gowebcasting.com/events/versabank/2026/09/03/q3-fiscal-2026-earnings-call/play and on the Bank's web site https://www.versabank.com/investor-relations/events-presentations/. Replay of the teleconference will be available until October 3, 2026 by calling 647-932-3411 or 800-770-2030 (toll free) and using the passcode 1372854#. 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 activities electronically through financial intermediary partners, it benefits from significant operating leverage that drives efficiency and return on common equity. In August 2024, VersaBank launched its unique Structured Receivable Program funding solution for point-of-sale finance companies, which has been highly successful in Canada for over 15 years, to the underserved multi-trillion-dollar US market. VersaBank also owns Minnesota-based DRT Cyber Inc., a North American leader in the provision of cyber security services to address the rapidly growing volume of cyber threats challenging financial institutions, multi-national corporations and government entities. Through its wholly owned subsidiary, DBG Inc., VersaBank owns proprietary intellectual property and technology to enable the next generation of digital assets for the banking and financial community, including the Bank's revolutionary and proprietary Real Bank Tokenized Deposits™. VersaBank's Common Shares trade on the Toronto Stock Exchange and NASDAQ under the symbol VBNK. FORWARD-LOOKING STATEMENTS This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws ("forward-looking statements") including statements regarding the ability to obtain shareholder, regulatory and other approvals of the Reorganization; the expected realization of additional shareholder value, the simplification of the regulatory structure and the reduction of costs as a result of the Reorganization; the key elements of the Reorganization; the ability to obtain inclusion on stock indices, including the Russell 2000; the ability to continue to grow the US Structured Receivable Program; the ability to expand our net interest margin; and the ability to continue to grow the CMHC residential construction loan program. Forward-looking statements of this type are included in this document and may be included in other filings with Canadian securities regulators or the US Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the "safe harbor" provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. The statements in this press release that relate to the future are forward-looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, many of which are out of VersaBank's control. Risks exist that predictions, forecasts, projections and other forward-looking statements will not be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements as a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the strength of the Canadian and US economies in general and the strength of the local economies within Canada and the US in which VersaBank conducts operations; the effects of changes in monetary and fiscal policy, including changes in interest rate policies of the Bank of Canada and the US Federal Reserve; global commodity prices; the effects of competition in the markets in which VersaBank operates; changes in trade laws and tariffs; inflation; capital market fluctuations; the timely development and introduction of new products in receptive markets; the impact of changes in the laws and regulations pertaining to financial services; changes in tax laws; technological changes; unexpected judicial or regulatory proceedings; unexpected changes in consumer spending and savings habits; the impact of wars or conflicts and the impact of both on global supply chains and markets; the impact of outbreaks of disease or illness that affect local, national or international economies; the possible effects on our business of terrorist activities; natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply; and VersaBank's anticipation of and success in managing the risks implicated by the foregoing. Completion of VersaBank's plan to realign its corporate structure to a standard US bank framework is subject to numerous factors, many of which are beyond the Bank's control, including but not limited to, the failure to obtain required shareholder, regulatory and other approvals, and other important factors disclosed previously and from time to time in the Bank's filings with the SEC and the securities commissions or similar securities regulatory authorities in each of the provinces or territories of Canada. The foregoing list of important factors is not exhaustive. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The forward-looking information contained in the management's discussion and analysis is presented to assist VersaBank shareholders and others in understanding VersaBank's financial position and may not be appropriate for any other purposes. For a detailed discussion of certain key factors that may affect VersaBank's future results, please see VersaBank's annual MD&A for the year ended October 31, 2025. Except as required by securities law, VersaBank does not undertake to update any forward-looking statement that is contained in this press release or made from time to time by VersaBank or on its behalf. FOR FURTHER INFORMATION, PLEASE CONTACT: Lawrence ChamberlainGlobal Senior Vice President, Investor & Stakeholder Relations(416) [email protected] Visit our website at: www.versabank.com Follow VersaBank on Facebook, Instagram, LinkedIn and X (formerly Twitter) To view the source version of this press release, please visit https://www.newsfilecorp.com/release/312648

VersaBank (VBNK) came out with quarterly earnings of $0.27 per share, missing the Zacks Consensus Estimate of $0.34 per share. This compares to earnings of $0.22 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -20.59%. A quarter ago, it was expected that this company would post earnings of $0.28 per share when it actually produced earnings of $0.28, delivering no surprise. Over the last four quarters, the company has not been able to surpass consensus EPS estimates. VersaBank, which belongs to the Zacks Banks - Foreign industry, posted revenues of $27.8 million for the quarter ended July 2026, missing the Zacks Consensus Estimate by 5.44%. This compares to year-ago revenues of $22.98 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. VersaBank shares have added about 28.7% since the beginning of the year versus the S&P 500's gain of 12%. While VersaBank has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for VersaBank was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.40 on $31.49 million in revenues for the coming quarter and $1.30 on $114.73 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Foreign is currently in the top 31% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Banco Comercial Portugues S.A. Unsponsored ADR (BPCGY), is yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.19 per share in its upcoming report, which represents a year-over-year change of -24%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Banco Comercial Portugues S.A. Unsponsored ADR's revenues are expected to be $1.08 billion, up 116% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report VersaBank (VBNK) : Free Stock Analysis Report Banco Comercial Portugues S.A. Unsponsored ADR (BPCGY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Bank to Report Third Quarter Fiscal 2026 Results Thursday, September 3, 2026 at 7:00 a.m. ET LONDON, ON, Aug. 26, 2026 /CNW/ -- VersaBank (or the "Bank") (TSX: VBNK) (NASDAQ: VBNK) will report its third quarter 2026 financial results and host a conference call to discuss those results on Thursday, September 3, 2026. The conference call/webcast is scheduled for 9:00 a.m. ET and is expected to last approximately 60 minutes. The conference call/webcast will include a presentation by David Taylor, President and Nicolas Ospina, Global CFO, followed by a question-and-answer period. The Bank will report its financial results via news release at approximately 7:00 a.m. ET. To join the conference call by telephone you may dial direct and be entered into the call with the conference ID 1372854 by an Operator at: 647-932-3411 or 800-715-9871 (toll free). For those preferring to listen to the presentation via the Internet, a live webcast will be available at https://www.gowebcasting.com/events/versabank/2026/09/03/q3-fiscal-2026-earnings-call/play and on the Bank's web site at https://www.versabank.com/investor-relations/events-presentations/. The slide presentation management will use during the conference call/webcast will be available on the Bank's web site at: https://www.versabank.com/investor-relations/financial-results/. The archived webcast presentation will be available for 30 days following the live event at https://www.gowebcasting.com/events/versabank/2026/09/03/q3-fiscal-2026-earnings-call/play and on the Bank's web site https://www.versabank.com/investor-relations/events-presentations/. Replay of the teleconference will be available until October 3, 2026 by calling 647-932-3411 or 800-770-2030 (toll free) and using the passcode 1372854#. ABOUT VERSABANK VersaBank is a North American bank with a difference. Federally chartered in both Canada and the U.S., 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 activities electronically through financial intermediary partners, it benefits from significant operating leverage that drives efficiency and return on common equity. In August 2024, VersaBank launched its unique Structured Receivable Program funding solution for point-of-sale finance companies, which has been highly successful in Canada for over 15 years, to the underserved multi-trillion-dollar U.S. market. VersaBank also owns Minnesota-based DRT Cyber Inc., a North American leader in the provision of cyber security services to address the rapidly growing volume of cyber threats challenging financial institutions, multi-national corporations and government entities. Through DRT Cyber Inc., VersaBank owns proprietary intellectual property and technology to enable the next generation of digital assets for the banking and financial community, including the Bank's revolutionary and proprietary Real Bank Tokenized DepositsTM. VersaBank's Common Shares trade on the Toronto Stock Exchange and NASDAQ under the symbol VBNK. Visit our website at: www.versabank.com Follow VersaBank on Facebook, Instagram, LinkedIn and X View original content to download multimedia:https://www.prnewswire.com/news-releases/versabank-to-host-third-quarter-fiscal-2026-financial-results-conference-callwebcast-thursday-september-3-at-900-am-et-302859900.html View original content to download multimedia: http://www.newswire.ca/en/releases/archive/August2026/26/c3367.html

This article first appeared on GuruFocus. Total Assets: Grew 28% year over year and 5% sequentially to over $6.4 billion. Revenue: Reached a record of $38.2 million, up 27% year over year and 5% sequentially. Net Interest Margin on Credit Assets: 2.71%, up 12 basis points year over year. Net Income: Reported at $7.5 million. Adjusted Net Income: $12.4 million or $0.39 per share, increasing 35% year over year and 2% sequentially. Book Value Per Share: Increased to $17.15. CET1 Ratio: 12.3%. Leverage Ratio: 7.9%. Noninterest Expenses: $27.5 million, including reorganization and noncash expenses. Credit Asset Portfolio: Grew to nearly $5.7 billion, with SRP portfolio representing 83% of total credit assets. Provision for Credit Losses: 3 basis points, down from 5 basis points in Q1. Warning! GuruFocus has detected 8 Warning Signs with VBNK. Is VBNK fairly valued? Test your thesis with our free DCF calculator. Release Date: June 03, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. VersaBank (NASDAQ:VBNK) achieved new records for credit assets and revenue, with increases of 25% and 27% year over year, respectively. The bank's net interest margin on credit assets remained solid at 2.71%, up 12 basis points from the previous year. VersaBank (NASDAQ:VBNK) reported a significant growth in adjusted net income, which increased by 45% year over year. The bank's US operations are generating more than 20% of total revenue, showcasing successful expansion. VersaBank (NASDAQ:VBNK) is piloting a real-time Structured Receivable Program (SRP) solution, expected to drive significant growth and efficiency for partners. VersaBank (NASDAQ:VBNK) incurred $4.5 million in noncore costs related to corporate restructuring, impacting financial results. The bank faced a $2.2 million noncore cash expense due to the write-down of intangible assets from the sale of its sole physical bank branch. Legal costs related to the commercialization of digital assets amounted to $0.6 million, adding to expenses. The bank's CET1 ratio and leverage ratio have decreased year over year, though they remain above internal targets. VersaBank (NASDAQ:VBNK) anticipates additional costs of $2.5 million in Q3 related to the ongoing reorganization process. Q: Can you provide any color on the current level of QCAD deposits under the Stablecorp relationship and what milestones should we watch for over the next 6 to 12 months? A: Currently, the balances are in the CAD70,000 to CAD80,000 range. The increase in balances is expected to come from a use case for QCAD, particularly facilitating seamless foreign exchange with a US stablecoin. This is in the works and is a natural application for stablecoins, especially since we are a federal bank on both sides of the border. Q: How has the regulatory environment in the US affected the timing of commercialization for your real bank tokenized deposits? A: The regulatory environment, including the Clarity Act, does not currently impede us as we operate as a national bank in the US. The FDIC has confirmed that digital representations of deposits will be insured, which is significant. We are working with partners on the rollout, and the technology is ready. We are waiting to finalize partnerships before seeking a nonobjection letter from US regulators. Q: With the expected growth of the US SRP portfolio and the renewed share repurchase program, how are you thinking about capital deployment? A: Our current capital levels are sufficient to achieve our budget, including the target of USD1 billion in additional SRP in the US. However, the real-time purchase of receivables has generated significant interest, which could rapidly utilize our capital. We are prepared to manage this demand, potentially sharing SRPs with other banks if necessary. Q: Can you provide more quantitative guidance on noninterest expense trends for the rest of the year? A: We expect core noninterest expenses to be around $20 million, slightly less than the $21 million level. This reduction is due to branch savings and optimization initiatives that have been implemented over the last two quarters. Q: What is the status of the DRTC divestiture process, and do you expect a transaction before September 2026? A: We have tactically paused the divestiture process due to strategic reasons that are not yet public. We have requested an extension from regulators to hold onto DRTC longer, particularly for the penetration testing aspect, which is not permissible under current regulations. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in VersaBank? Here are five stocks we like better. VersaBank posted record Q2 fiscal 2026 credit assets and revenue, with credit assets up 25% year over year and revenue up 27%. Adjusted net income rose to CAD 12.4 million, helped by the bank’s digital model and growth in both Canadian and U.S. operations. The U.S. structured receivable program (SRP) remained the main growth engine, reaching CAD 4.7 billion and representing 83% of total credit assets. Management said U.S. banking revenue is already more than 20% of total revenue and reaffirmed at least CAD 1 billion in U.S. SRP additions for fiscal 2026. Management advanced its reorganization and new digital initiatives, including filing the S-4 for a U.S.-domiciled holding company and targeting July 1 for commercialization of a real-time, AI-enabled SRP platform. The quarter also included non-core costs tied to the restructuring and the sale of its only physical branch. VersaBank (NASDAQ:VBNK) reported record second-quarter fiscal 2026 credit assets and revenue, while management said results were affected by non-core costs tied to its planned corporate reorganization and the sale of its only physical bank branch. President David Taylor said the quarter was “very much a continuation of the strong performance and growth” seen in the first quarter, citing operating leverage in the bank’s digital banking model. Credit assets rose 25% year-over-year and 6% sequentially, while revenue increased 27% from a year earlier and 5% from the prior quarter. → Palantir’s Drone Tailwind Puts Its Defense AI Story Back in Focus for Investors Global Chief Financial Officer Nicolas Ospina said total assets reached a new high of more than CAD 6.4 billion at quarter-end, up 28% year-over-year and 5% sequentially. Cash and securities totaled CAD 674 million, or 10% of total assets, which management said remains above the bank’s historical level of roughly 7% due to its U.S. expansion. VersaBank reported net income of CAD 7.5 million, or CAD 0.23 per share, for the quarter. Excluding one-time costs, adjusted net income was CAD 12.4 million, or CAD 0.39 per share, up 35% year-over-year and 2% sequentially, according to Ospina. → Best Buy’s AI Laptop Boost Sparks Hope for a BBY Turnaround Taylor said second-quarter results included CAD 4.5 million before tax in incremental non-core costs associated with the bank’s plan to realign its corporate structure into a standard U.S. bank framework. The quarter also included a CAD 2.2 million non-core non-cash expense related to the write-down of intangible assets from the sale of the bank’s sole physical branch. Ospina said consolidated non-interest expenses were CAD 27.5 million including those costs. Excluding the reorganization expenses and the branch-related write-down, non-interest expenses were CAD 20.8 million, compared with CAD 16.6 million a year earlier and CAD 19 million in the first quarter. Taylor also noted CAD 600,000 in legal costs related to commercialization of the bank’s Real Bank tokenized deposits. → 3 Up-and-Coming Stocks That Could Be the Next NVIDIA Book value per share increased to CAD 17.15. VersaBank’s common equity tier 1 ratio was 12.3%, and its leverage ratio was 7.9%, which Ospina said remained above internal targets. Management pointed to continued momentum in VersaBank’s U.S. structured receivable program, or SRP, as a primary driver of credit asset growth. Taylor said the U.S. SRP generated another CAD 150 million in new fundings during the quarter, in line with the bank’s budget, while Canadian operations also contributed steady incremental growth. The credit asset portfolio rose to nearly CAD 5.7 billion. Ospina said the SRP portfolio increased 32% year-over-year and 7% sequentially to CAD 4.7 billion, representing 83% of total credit assets. The multifamily residential loan and other portfolio increased to CAD 1 billion, up 2% year-over-year and 6% sequentially. U.S. banking operations generated CAD 7.9 million in revenue, up 17% sequentially, driven primarily by the U.S. SRP ramp. Net income for the U.S. segment rose 28% sequentially to CAD 3.6 million. Taylor said U.S. banking operations are already producing more than 20% of VersaBank’s total revenue. Net interest margin on credit assets was 2.71%, up 12 basis points from a year earlier. Ospina said the second quarter is seasonally stronger because of fewer days in the period. Overall net interest margin, including cash, securities and other assets, was 2.33%, up four basis points year-over-year but dampened by elevated cash balances. Taylor highlighted a planned artificial intelligence-enabled advancement to the SRP platform that would allow partners to fund individual loans as they are made, rather than accumulating and batching loans over periods that can run up to 30 days or more. He said the capability could reduce partners’ financing costs and the need for warehouse financing while also strengthening VersaBank’s risk mitigation through loan-level evaluation in real time. The bank is piloting the real-time SRP solution with Financeit. Taylor said Financeit CEO Casper Wong called the capability a “game changer.” In response to an analyst question, Taylor said VersaBank is targeting July 1 for commercialization, initially with purchases or investments in receivables twice per day. Taylor said the real-time capability could increase VersaBank’s market share with existing partners and attract new partners. He also said the bank’s software was designed to allow SRP assets to be shared or syndicated with other banks or funds if demand exceeds VersaBank’s balance sheet capacity. VersaBank said it remains on track for at least CAD 1 billion in U.S. SRP additions in fiscal 2026. Taylor said that target was set before the real-time program became a reality and that potential demand from the new capability would be incremental. Taylor said VersaBank publicly filed its S-4 registration statement with the U.S. Securities and Exchange Commission for its planned reorganization, calling the filing a “major milestone” that marks the move into final stages of the process. The plan would create a U.S.-domiciled holding company, VersaBancorp, as the parent of the bank’s Canadian and U.S. operations. The S-4 has been confidentially reviewed and remains subject to further SEC review before becoming effective. Taylor said VersaBank intends to move forward with shareholder matters alongside other regulatory processes. He added that the bank expects to incur an additional CAD 2.5 million in reorganization costs in the third quarter. Management also discussed digital asset initiatives. Taylor said VersaBank is generating incremental revenue from stablecoin custody services for QCAD, which he described as Canada’s first regulatory compliant stablecoin, through customer Stablecorp. In the question-and-answer session, Taylor said current QCAD-related deposit balances were in the CAD 700,000 to CAD 800,000 range and that broader use cases, including foreign exchange between Canadian and U.S. stablecoins, could drive higher balances. On Real Bank tokenized deposits, Taylor said technology has been built and tested in Canada, and the bank is working with partners for a U.S. rollout. He said VersaBank would seek a regulatory non-objection when it is ready to commercialize with partners. Ospina said management expects core non-interest expenses to be below CAD 21 million, with potential savings from the branch sale and other administrative optimization initiatives. Taylor said the sold branch had carried annual costs of about US$900,000, or roughly CAD 1.2 million. Provision for credit losses remained low at three basis points of average credit assets, down from five basis points in the first quarter. Ospina attributed the decline primarily to changes in forward-looking information used in the bank’s credit risk models. Taylor said provisions are typically low because cash holdbacks supporting the SRP program generally stand ahead of expected losses. Regarding the bank’s cybersecurity business, DRTC, Taylor said VersaBank had tactically paused the divestiture process. He said certain aspects of DRTC appear permissible within the bank, while the penetration testing component appears not to be. Taylor said the bank has requested an extension from regulators but had not yet heard back. Looking ahead, Taylor said VersaBank’s outlook for the remainder of fiscal 2026 remains positive, with potential additional earnings upside. He cited continued credit asset momentum, favorable expectations for net interest margins and opportunities tied to real-time SRP, digital assets and the corporate reorganization. VersaBank is a Canadian Schedule I chartered bank that operates as a fully digital institution, offering a range of deposit and lending solutions through its proprietary technology platform. Headquartered in London, Ontario, the bank has chosen to forego a traditional branch network in favor of online and digital distribution, enabling it to serve clients across Canada and the United States with efficiency and lower overhead. The bank’s primary business activities include the origination and securitization of commercial loans, equipment financing, residential mortgages and construction loans. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "VersaBank Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for June 2026.

VersaBank (VBNK) came out with quarterly earnings of $0.28 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.18 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this company would post earnings of $0.27 per share when it actually produced earnings of $0.27, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates just once. VersaBank, which belongs to the Zacks Banks - Foreign industry, posted revenues of $27.92 million for the quarter ended April 2026, surpassing the Zacks Consensus Estimate by 4.84%. This compares to year-ago revenues of $21.21 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. VersaBank shares have added about 21% since the beginning of the year versus the S&P 500's gain of 11.2%. While VersaBank has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for VersaBank was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.33 on $28.86 million in revenues for the coming quarter and $1.27 on $113.15 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Foreign is currently in the top 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Bitcoin Depot Inc. (BTMCQ), another stock in the broader Zacks Finance sector, has yet to report results for the quarter ended March 2026. This company is expected to post quarterly loss of $0.42 per share in its upcoming report, which represents a year-over-year change of -130%. The consensus EPS estimate for the quarter has been revised 16.7% lower over the last 30 days to the current level. Bitcoin Depot Inc.'s revenues are expected to be $101.3 million, down 38.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report VersaBank (VBNK) : Free Stock Analysis Report Bitcoin Depot Inc. (BTMCQ) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research