– Digital Banking
Operations Increasingly Benefitting from
Operating Leverage with Continued Strong Growth
in Loan Portfolio –
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 2023 ("Q3 2023") unaudited Interim Consolidated
Financial Statements for the period ended July 31, 2023 and
Management's Discussion and Analysis ("MD&A"), are available
online at www.versabank.com/investor-relations, SEDAR at
www.sedar.com and EDGAR at www.sec.gov/edgar.shtml. Supplementary
Financial Information will also be available on our website at
www.versabank.com/investor-relations.
|
LONDON,
ON, Aug. 30, 2023 /PRNewswire/
- VersaBank ("VersaBank" or the "Bank") (TSX: VBNK) (NASDAQ:
VBNK), 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 of fiscal 2023 ended
July 31, 2023. All figures are in
Canadian dollars unless otherwise stated.
Consolidated and Segmented Financial Summary
(unaudited)
|
|
|
As at or for the three months
ended
|
|
As at or for the nine months
ended
|
|
|
|
|
|
July 31
|
April 30
|
|
July 31
|
|
|
July 31
|
July 31
|
|
(thousands of Canadian
dollars, except per share amounts)
|
2023
|
2023
|
Change
|
2022
|
Change
|
|
2023
|
2022
|
Change
|
Financial results
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
|
$
26,859
|
$
26,685
|
1 %
|
$
21,239
|
26 %
|
|
$
79,462
|
$
58,140
|
37 %
|
|
Cost of
funds(1)
|
|
3.62 %
|
3.27 %
|
11 %
|
1.94 %
|
87 %
|
|
3.30 %
|
1.49 %
|
121 %
|
|
Net interest
margin(1)
|
|
2.57 %
|
2.78 %
|
(8 %)
|
2.76 %
|
(7 %)
|
|
2.72 %
|
2.64 %
|
3 %
|
|
Net interest margin on
loans(1)
|
2.69 %
|
2.99 %
|
(10 %)
|
3.07 %
|
(12 %)
|
|
2.89 %
|
3.04 %
|
(5 %)
|
|
Net income
|
|
|
10,003
|
10,263
|
(3 %)
|
5,720
|
75 %
|
|
29,683
|
16,229
|
83 %
|
|
Net income per common
share basic and diluted
|
0.38
|
0.38
|
0 %
|
0.20
|
90 %
|
|
1.10
|
0.56
|
96 %
|
Balance sheet and capital
ratios
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
3,980,845
|
$
3,729,393
|
7 %
|
$
3,075,343
|
29 %
|
|
$
3,980,845
|
$
3,075,343
|
29 %
|
|
Book value per common
share(1)
|
13.55
|
13.19
|
3 %
|
12.14
|
12 %
|
|
13.55
|
12.14
|
12 %
|
|
Common Equity Tier 1
(CET1) capital ratio
|
11.15 %
|
11.21 %
|
(1 %)
|
12.51 %
|
(11 %)
|
|
11.15 %
|
12.51 %
|
(11 %)
|
|
Total capital
ratio
|
|
15.10 %
|
15.37 %
|
(2 %)
|
17.05 %
|
(11 %)
|
|
15.10 %
|
17.05 %
|
(11 %)
|
|
Leverage
ratio
|
|
8.53 %
|
8.83 %
|
(3 %)
|
10.38 %
|
(18 %)
|
|
8.53 %
|
10.38 %
|
(18 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See definitions
under 'Non-GAAP and Other Financial Measures' in the Q3 2023
Management's Discussion and Analysis.
|
(thousands of Canadian
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
for the three months
ended
|
July 31,
2023
|
April 30,
2023
|
July 31,
2022
|
|
|
|
|
Digital
|
DRTC
|
Eliminations/
|
Consolidated
|
Digital
|
DRTC
|
Eliminations/
|
Consolidated
|
Digital
|
DRTC
|
Eliminations/
|
Consolidated
|
|
|
|
|
Banking
|
|
Adjustments
|
|
Banking
|
|
Adjustments
|
|
Banking
|
|
Adjustments
|
|
Net interest
income
|
|
$
24,929
|
$
-
|
$
-
|
$
24,929
|
$
24,609
|
$
-
|
$
-
|
$
24,609
|
$
20,062
|
$
-
|
$
-
|
$
20,062
|
Non-interest
income
|
|
101
|
2,020
|
(191)
|
1,930
|
122
|
2,146
|
(192)
|
2,076
|
12
|
1,206
|
(41)
|
1,177
|
Total
revenue
|
|
|
25,030
|
2,020
|
(191)
|
26,859
|
24,731
|
2,146
|
(192)
|
26,685
|
20,074
|
1,206
|
(41)
|
21,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (recovery
of) credit losses
|
171
|
-
|
-
|
171
|
237
|
-
|
-
|
237
|
166
|
-
|
-
|
166
|
|
|
|
|
24,859
|
2,020
|
(191)
|
26,688
|
24,494
|
2,146
|
(192)
|
26,448
|
19,908
|
1,206
|
(41)
|
21,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and
benefits
|
|
5,891
|
1,562
|
-
|
7,453
|
6,930
|
1,499
|
-
|
8,429
|
5,600
|
1,168
|
-
|
6,768
|
|
General and
administrative
|
4,257
|
380
|
(191)
|
4,446
|
3,131
|
377
|
(192)
|
3,316
|
5,217
|
343
|
(41)
|
5,519
|
|
Premises and
equipment
|
610
|
370
|
-
|
980
|
612
|
369
|
-
|
981
|
610
|
319
|
-
|
929
|
|
|
|
|
10,758
|
2,312
|
(191)
|
12,879
|
10,673
|
2,245
|
(192)
|
12,726
|
11,427
|
1,830
|
(41)
|
13,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
14,101
|
(292)
|
-
|
13,809
|
13,821
|
(99)
|
-
|
13,722
|
8,481
|
(624)
|
-
|
7,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
3,999
|
(193)
|
-
|
3,806
|
3,991
|
(532)
|
-
|
3,459
|
2,099
|
38
|
-
|
2,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
10,102
|
$
(99)
|
$
-
|
$
10,003
|
$
9,830
|
$
433
|
$
-
|
$
10,263
|
$
6,382
|
$
(662)
|
$
-
|
$
5,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
3,971,781
|
$
25,485
|
$
(16,421)
|
$
3,980,845
|
$
3,719,592
|
$
25,559
|
$
(15,758)
|
$
3,729,393
|
$
3,076,611
|
$
21,796
|
$
(23,064)
|
$
3,075,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
$
3,609,832
|
$
29,123
|
$
(23,153)
|
$
3,615,802
|
$
3,366,614
|
$
29,057
|
$
(22,797)
|
$
3,372,874
|
$
2,725,820
|
$
24,794
|
$
(21,919)
|
$
2,728,695
|
Highlights for the THIRD Quarter of Fiscal 2023
Consolidated
- Consolidated total revenue increased 26% year-over-year and 1%
sequentially to a record $26.9
million, driven by higher net interest income resulting
primarily from continuing strong loan growth and increased
contribution from DRT Cyber Inc. ("DRTC") year-over-year;
- Consolidated net income increased 75% year-over-year and
decreased 3% sequentially to $10.0
million. The year-over-year increase was primarily due to
higher revenue, which was driven primarily by strong loan growth
(30%) as non-interest expenses declined (3%), as well as an
increased contribution from DRTC. The sequential decrease was
primarily due to temporary compression of net interest margin
resulting from higher rates paid on term deposits during the
quarter amidst temporarily elevated rates in the term deposit
market in Canada, which were
impacted by the period of liquidity concerns related to the US
banking sector, as well as a smaller recognition of a deferred tax
asset related to DRT Cyber compared to the outsized amount in the
second quarter of 2023;
- Consolidated earnings per share increased 90% year-over-year to
$0.38 due to higher net income, as
well as the positive impact of the purchase and cancellation of
VersaBank's common shares through its Normal Course Issuer Bid
("NCIB"). Consolidated earnings per share was unchanged
sequentially;
- The Bank purchased and cancelled 79,562 common shares under its
NCIB in the current quarter, bringing the total number of common
shares purchased through the NCIB as at July
31, 2023 to 1,516,658; and,
- The Bank continues to advance the process seeking approval of
its proposed acquisition of OCC-chartered US bank, Stearns Bank
Holdingford N.A., and expects a decision with respect to approval
of its application from US regulators during autumn 2023. If
favourable, the Bank will proceed toward completion of the
acquisition as soon as possible, subject to Canadian regulatory
(OSFI) approval.
Digital Banking Operations
- Loans increased 30% year-over-year and 7% sequentially to a
record $3.66 billion, driven
primarily by growth in the Bank's Point-of-Sale ("POS") Financing
portfolio, which increased 39% year-over-year and 9%
sequentially;
- Total revenue increased 25% year-over-year and 1% sequentially
to a record $25.0 million, driven
primarily by growth of the POS Financing portfolio, which was
offset by the temporary compression of net interest margin as
described below;
- Net interest margin on loans decreased 38 bps, or 12%,
year-over-year and decreased 30 bps, or 10%, sequentially to 2.69%.
Net interest margin on loans was dampened by higher rates paid on
term deposits during the quarter amidst temporarily elevated rates
in the term deposit market in Canada, which were impacted by the period of
liquidity concerns related to the US banking sector;
- Net interest margin decreased 19 bps year-over-year, or 7%, and
decreased 21 bps, or 8%, sequentially to 2.57%;
- Provision for credit losses as a percentage of average loans
remained negligible at 0.02%, compared with a 12-quarter average of
-0.01%, which remains among the lowest of the publicly traded
Canadian Schedule I (federally licensed) Banks; and,
- Efficiency ratio (excluding DRTC) improved year-over-year to
43% (down from 57%) attributable to revenue growth (25%) and a
decline non-interest expense (6%) over the same period. On a
sequential basis, efficiency ratio was unchanged.
DRTC's Cybersecurity Services Operations (Digital Boundary
Group)
- Revenue for the Cybersecurity Services component of DRTC
(Digital Boundary Group, or DBG) increased 10% year-over-year to
$2.4 million due to higher service
engagements, while gross profit increased 52% to $1.8 million due to improved operational
efficiency. Sequentially, however, revenue and gross profit
for Digital Boundary Group decreased 8% and 6%, respectively, due
to lower service engagements. DBG's gross profit amounts are
included in DRTC's consolidated revenue which is reflected in
non-interest income in VersaBank's consolidated statements of
income and comprehensive income. DBG remained profitable on a
standalone basis within DRTC.
Management Commentary
"The third quarter of fiscal 2023 was once again
highlighted by strong growth in profitability as we increasingly
benefited from the operating leverage in our business with the
steady expansion of our loan portfolio," said David Taylor, President and Chief Executive
Officer, VersaBank. "30% year-over-year growth in our loan
portfolio, driven predominantly by expansion of our innovative
Point-of-Sale Financing portfolio, generated 75% year-over-year
growth in net income, which, with our continued participation in
our share buyback program, drove a 90% year-over-year increase in
earnings per share for the quarter, and a 96% year-over-year
increase for the year to date."
"VersaBank's unique branchless, partner-based, digital banking
model continues to prove itself in terms of operating leverage,
efficiency, return on common equity and risk mitigation that remain
unmatched in the North American banking industry. As we
continue to experience strong and steady growth in our Canadian
loan portfolio, we look forward to the significant additional
upside from the broad launch of our innovative Receivable Purchase
Program in the United States
should we receive approval for our proposed acquisition of a
national, OCC-chartered bank. We continue to progress towards a
decision by US regulators, which we are optimistic will be received
during autumn of this year. And we continue to be encouraged
by the receptiveness of the market to our unique financing
alternative by both current and prospective US partners under our
initial limited roll out."
Financial Review
Consolidated
Net Income – Net income for the third quarter of fiscal
2023 was $10.0 million, or
$0.38 per common share (basic and
diluted), compared with $10.3
million, or $0.38 per common
share (basic and diluted) last quarter and $5.7 million, or $0.20 per common share (basic and diluted), for
the same period of fiscal 2022. The year-over-year increase was due
primarily to higher revenue, which was driven by strong loan
growth, increased contribution from DRTC, as well as lower
non-interest expense attributable to various cost control
activities. Net income for the third quarter was dampened by
compression of net interest margin during the quarter resulting
from higher rates paid on term deposits during the quarter amidst
temporarily elevated rates in the term deposit market in
Canada, which were impacted by the
period of liquidity concerns related to the US banking
sector. In addition to lower net interest margin, the slight
sequential decrease in net income was also due to the smaller
recognition of a deferred tax asset related to DRTC compared to the
outsized amount in the second quarter of 2023.
Capital – At July 31, 2023,
VersaBank's total regulatory capital was $460 million compared with $455 million last quarter and $438 million a year ago. The Bank's total capital
ratio at July 31, 2023 was 15.10%,
compared 15.37% last quarter and 17.05% a year ago, due primarily
to growth in the Bank's loan portfolio as it deployed excess
capital into income generating assets.
Digital Banking Operations
Net Interest Margin – Net interest margin (or spread) for
the quarter was 2.57% compared to 2.78% last quarter and 2.76% for
the same period of fiscal 2022. The year-over-year and sequential
decreases were due primarily to the temporary compression of net
interest margin on loans due to higher rates paid on term deposits
during the quarter amidst temporarily elevated rates in the term
deposit market in Canada, which
were impacted by the period of liquidity concerns related to the US
banking sector. The year-over-year decrease was also impacted by a
shift in the Bank's funding mix.
Net Interest Margin on Loans – Net interest margin on
loans for the quarter was 2.69% compared to 2.99% last quarter, and
3.07% for the same period of fiscal 2022. The year-over-year and
sequential decreases were due primarily to the variables discussed
in the Net Interest Margin section above. Year-to-date net interest
margin on loans was 2.89% compared to 3.04% for the same period a
year ago.
Net Interest Income – Net interest income for the quarter
increased to a record $24.9 million
from $24.6 million last quarter and
$20.1 million for the same period of
fiscal 2022. The increases were due primarily to higher net
interest income earned on higher lending assets and the
redeployment of available cash into higher-yielding, low-risk
securities offset, partially by higher interest expense
attributable to higher deposit balances.
Non-Interest Expenses – Non-interest expenses for the
quarter were $10.8 million compared
with $10.7 million last quarter and
$11.4 million for the same period of
fiscal 2022. The year-over-year decrease was due primarily to lower
capital tax expense attributable to a shift in the provincial
allocation of the Bank's loan and deposit originations and lower
insurance premiums relative to the premiums paid during the
comparative period attributable to VersaBank's listing on the
Nasdaq in September 2021, offset
partially by higher salary and benefits expense attributable to
higher staffing levels to support expanded business activity across
VersaBank and higher costs attributable to the continuing
regulatory approval process associated with VersaBank's acquisition
of a US bank. The slight sequential increase was due primarily to
higher professional fees attributable to the continuing regulatory
approval process associated with VersaBank's acquisition of a US
bank and seasonal corporate activities specific to the quarter,
offset partially by lower salary and benefits amounts attributable
to lower estimates related to performance-based obligations.
Provision for/Recovery of Credit Losses – Provision for
credit losses for the quarter was $171,000 compared to a provision for credit
losses of $237,000 last quarter and a
provision for credit losses of $166,000 for the same period of fiscal 2022. The
sequential decrease was due primarily to changes in the
forward-looking information used by the Bank in its credit risk
models and changes in the Bank's lending asset mix, offset
partially by higher lending asset balances. The
year-over-year increase was due primarily to higher lending asset
balances and changes in the forward-looking information used by the
Bank in its credit risk models, offset partially by and changes in
the Bank's lending asset mix. Provision for credit losses as
a percentage of average loans was 0.02%, compared with a 12-quarter
average of -0.01%.
Credit Quality – The Bank's allowance for expected credit
losses, ("ECL") at July 31, 2023 was
$2.7 million compared with
$2.5 million last quarter and
$1.7 million a year ago. The
sequential and year-over-year increases were due primarily to the
factors set out in the Provision for/Recovery of Credit
Losses section above. VersaBank's Provision for Credit Losses
ratio continues to be one of the lowest in the Canadian banking
industry, reflecting the very low risk profile of the Bank's
lending portfolio, enabling it to generate superior net interest
margins by offering innovative, high-value deposit and lending
solutions that address unmet needs in the banking industry through
a highly efficient partner model. Given that the vast
majority of the Bank's CRE portfolio is composed of loans and
mortgages for residential use properties, it has very limited
exposure to the commercial real estate market.
Lending Operations: POS Financing – POS Financing
portfolio balances for the quarter increased 9% sequentially and
39% year-over-year to $2.8 billion
due primarily to continued strong demand for home improvement/HVAC
and transportation equipment receivable financing.
Lending Operations: Commercial Lending – The
Commercial Lending portfolio for the quarter increased 1%
sequentially and 8% year-over-year to $870
million.
Deposit Funding – Cost of funds for the third quarter was
3.62%, an increase of 35 bps sequentially and 168 bps
year-over-year due primarily to higher rates paid on term deposits
during the quarter with the year-over-year increase also impacted
by a shift in the Bank's funding mix. Management expects that
commercial deposit volumes raised via VersaBank's Trustee
Integrated Banking program will continue to grow over the remainder
of fiscal 2023 due to increased volumes of consumer and commercial
bankruptcy and proposal restructuring proceedings, due primarily to
the impact of a higher interest rate environment. In
addition, VersaBank continues to pursue growth and expansion of its
well-established, diverse deposit broker network through which it
sources personal deposits, consisting primarily of guaranteed
investment certificates (term deposits). The Bank's current deposit
channels remain an efficient, reliable and diversified source of
funding providing ample access to reasonably priced deposits in
volumes that comfortably support the Bank's liquidity requirements.
Substantially all of the Bank's deposit volumes raised through
these channels are eligible for CDIC insurance.
DRTC (Cybersecurity Services and Banking and Financial
Technology Development)
DRTC revenue (including that from services provided to the
Digital Banking operations) decreased 6% sequentially and increased
67% year-over-year to $2.0 million,
due primarily to the timing of service engagements. DRTC recorded a
net loss of $99,000 compared to net
income of $433,000 last quarter and a
net loss of $662,000 a year ago. The
year-over-year improvement was due primarily to higher revenues
attributable to higher gross profit from DBG, which was partially
offset by higher non-interest expenses attributable to higher
salary and benefits expense due to higher staffing levels
established to support expanded business activity. The sequential
decrease was due primarily to the recognition of an outsized
$530,000 deferred tax asset in the
comparative period associated with DRTC's non-capital loss carry
forwards which are anticipated to be applied to future taxable
earnings.
DBG revenue decreased 8% sequentially while gross profit
decreased 6% due to lower service engagements in the current
quarter. DRTC's DBG revenue increased 10% year-over-year to
$2.4 million due to higher service
engagements, while gross profit increased 52% to $1.8 million due to improved operational
efficiency in the current quarter. DBG's gross profit amounts are
included in DRTC's consolidated revenue which is reflected in
non-interest income in VersaBank's consolidated statements of
income and comprehensive income.
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
for the three months ended
|
|
for the nine months ended
|
|
|
|
|
|
July 31
|
July 31
|
|
July 31
|
July 31
|
(thousands of Canadian
dollars, except per share amounts)
|
2023
|
2022
|
|
2023
|
2022
|
Results of operations
|
|
|
|
|
|
|
|
Interest
income
|
|
$
60,089
|
$
34,177
|
|
$ 163,245
|
$
84,745
|
|
Net interest
income
|
|
24,929
|
20,062
|
|
73,812
|
54,189
|
|
Non-interest
income
|
|
1,930
|
1,177
|
|
5,650
|
3,951
|
|
Total
revenue
|
|
26,859
|
21,239
|
|
79,462
|
58,140
|
|
Provision for credit
losses
|
171
|
166
|
|
793
|
246
|
|
Non-interest
expenses
|
12,879
|
13,216
|
|
37,940
|
35,619
|
|
|
Digital
Banking
|
|
10,758
|
11,427
|
|
31,600
|
30,936
|
|
|
DRTC
|
|
|
2,312
|
1,830
|
|
6,914
|
4,807
|
|
Net income
|
|
|
10,003
|
5,720
|
|
29,683
|
16,229
|
|
Income per common
share:
|
|
|
|
|
|
|
|
Basic
|
|
|
$
0.38
|
$
0.20
|
|
$
1.10
|
$
0.56
|
|
|
Diluted
|
|
|
$
0.38
|
$
0.20
|
|
$
1.10
|
$
0.56
|
|
Dividends paid on
preferred shares
|
$
247
|
$
247
|
|
$
741
|
$
741
|
|
Dividends paid on
common shares
|
$
648
|
$
687
|
|
$
1,962
|
$
2,061
|
|
Yield*
|
|
|
6.19 %
|
4.70 %
|
|
6.02 %
|
4.13 %
|
|
Cost of
funds*
|
|
3.62 %
|
1.94 %
|
|
3.30 %
|
1.49 %
|
|
Net interest
margin*
|
|
2.57 %
|
2.76 %
|
|
2.72 %
|
2.64 %
|
|
Net interest margin on
loans*
|
2.69 %
|
3.07 %
|
|
2.89 %
|
3.04 %
|
|
Return on average
common equity*
|
11.15 %
|
6.57 %
|
|
11.24 %
|
6.36 %
|
|
Book value per common
share*
|
$
13.55
|
$
12.14
|
|
$
13.55
|
$
12.14
|
|
Efficiency
ratio*
|
|
48 %
|
62 %
|
|
48 %
|
61 %
|
|
Efficiency ratio -
Digital Banking*
|
43 %
|
57 %
|
|
43 %
|
57 %
|
|
Return on average total
assets*
|
1.00 %
|
0.75 %
|
|
1.07 %
|
0.75 %
|
|
Provision for credit
losses as a % of average loans*
|
0.02 %
|
0.03 %
|
|
0.03 %
|
0.01 %
|
|
|
|
|
|
as at
|
Balance Sheet Summary
|
|
|
|
|
|
|
Cash
|
|
|
$
87,726
|
$
84,214
|
|
$
87,726
|
$
84,214
|
|
Securities
|
|
|
182,944
|
133,682
|
|
182,944
|
133,682
|
|
Loans, net of allowance
for credit losses
|
3,661,672
|
2,814,121
|
|
3,661,672
|
2,814,121
|
|
Average
loans
|
|
3,540,564
|
2,632,199
|
|
3,327,175
|
2,458,586
|
|
Total assets
|
|
|
3,980,845
|
3,075,343
|
|
3,980,845
|
3,075,343
|
|
Deposits
|
|
|
3,328,017
|
2,475,063
|
|
3,328,017
|
2,475,063
|
|
Subordinated notes
payable
|
101,585
|
98,706
|
|
101,585
|
98,706
|
|
Shareholders'
equity
|
|
365,043
|
346,648
|
|
365,043
|
346,648
|
Capital ratios**
|
|
|
|
|
|
|
|
|
Risk-weighted
assets
|
|
$
3,047,172
|
$
2,568,678
|
|
$
3,047,172
|
$
2,568,678
|
|
Common Equity Tier 1
capital
|
339,894
|
321,386
|
|
339,894
|
321,386
|
|
Total regulatory
capital
|
460,065
|
437,912
|
|
460,065
|
437,912
|
|
Common Equity Tier 1
(CET1) ratio
|
11.15 %
|
12.51 %
|
|
11.15 %
|
12.51 %
|
|
Tier 1 capital
ratio
|
|
11.60 %
|
13.04 %
|
|
11.60 %
|
13.04 %
|
|
Total capital
ratio
|
|
15.10 %
|
17.05 %
|
|
15.10 %
|
17.05 %
|
|
Leverage
ratio
|
|
8.53 %
|
10.38 %
|
|
8.53 %
|
10.38 %
|
* See definitions under
'Non-GAAP and Other Financial Measures' in the Q3 2023 Management's
Discussion and Analysis.
|
** Capital management
and leverage measures are in accordance with OSFI's Capital
Adequacy Requirements
|
|
and Basel
III Accord.
|
|
|
|
|
|
|
About VersaBank
VersaBank is a Canadian Schedule I chartered (federally
licensed) bank with a difference. VersaBank became the world's
first fully digital financial institution when it adopted its
highly efficient business-to-business model in 1993 using its
proprietary state-of-the-art financial technology to profitably
address underserved segments of the Canadian banking market in the
pursuit of superior net interest margins while mitigating risk.
VersaBank obtains all of its deposits and provides the majority of
its loans and leases electronically, with innovative deposit and
lending solutions for financial intermediaries that allow them to
excel in their core businesses. In addition, leveraging its
internally developed IT security software and capabilities,
VersaBank established wholly owned, Washington, DC-based subsidiary, DRT Cyber
Inc. to pursue significant large-market opportunities in cyber
security and develop innovative solutions to address the rapidly
growing volume of cyber threats challenging financial institutions,
multi-national corporations and government entities on a daily
basis.
VersaBank's Common Shares trade on the Toronto Stock Exchange
("TSX") and Nasdaq under the symbol VBNK. Its Series 1 Preferred
Shares trade on the TSX under the symbol VBNK.PR.A.
Forward-Looking Statements
VersaBank's public communications often include written or oral
forward-looking statements. Statements of this type are included in
this document and may be included in other filings and 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
management's discussion and analysis 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 economy 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; 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 including the crisis in
Ukraine and the impact of the
crisis on global supply chains and markets; the impact of potential
new variants of COVID-19; 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. 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, 2022.
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. Except as required by
securities law, VersaBank does not undertake to update any
forward-looking statement that is contained in this management's
discussion and analysis or made from time to time by VersaBank or
on its behalf.
Conference Call
VersaBank will be hosting a conference call and webcast today,
Wednesday, August 30, 2023, at
9:00 a.m. (EDT) to discuss its third
quarter results, featuring a presentation by David Taylor, President & CEO, and other
VersaBank executives, followed by a question and answer period.
Dial-in Details
Toll-free dial-in
number:
1 (888) 664-6392 (Canada/US)
Local dial-in number:
(416) 764-8659
Please call between 8:45 a.m. and 8:55
a.m. (EDT).
To join the conference call by telephone without operator
assistance, you may register and enter your phone number in advance
at https://emportal.ink/3rLc7HG to receive an instant
automated call back.
Webcast Access: For those preferring to listen to the
conference call via the Internet, a webcast of Mr. Taylor's
presentation will be available via the internet, accessible here
https://app.webinar.net/X4D8Z7Pa7pq or from the Bank's web
site.
Instant Replay
Toll-free dial-in
number:
1 (888) 390-0541 (Canada/US)
Local dial-in number:
(416) 764-8677
Passcode:
344926#
Expiry Date:
September 30th, 2023, at
11:59 p.m. (EDT)
The archived webcast presentation will also be available via the
Internet for 90 days following the live event at
https://app.webinar.net/X4D8Z7Pa7pq and on the Bank's web site.
Visit our website at: www.versabank.com
Follow VersaBank on Facebook, Instagram, LinkedIn and X (formerly
Twitter)
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SOURCE VersaBank