VersaBank Q3 2025 Earnings Call Highlights: Record Revenue and Strategic Expansion

VersaBank reported record total consolidated revenue of $31.6 million, up 17% YoY and 5% sequentially. Credit assets grew 18% YoY and 6% sequentially, contributing to an increase in book value. The net interest margin grew YoY despite higher liquidity, indicating efficient asset management. The Canadian digital banking operations showed strong potential, with expectations for even better metrics in the US as operations scale.

VersaBank (NASDAQ: VBNK) reported its third-quarter (Q3) 2025 financial results, highlighting robust growth and strategic expansion plans. The bank's total consolidated revenue reached a record $31.6 million, an impressive 17% year-over-year (YoY) increase and a 5% sequential growth [1]. This performance was driven by the expansion of its Receivable Purchase Program (RPP) in both the US and Canada.

The bank's total assets grew 21% YoY to $5.5 billion, with credit assets increasing 18% YoY and 6% sequentially, contributing to a significant increase in book value [1]. The net interest margin grew YoY despite higher liquidity, indicating efficient asset management. Notably, the bank's digital banking operations showed strong potential, with expectations for even better metrics as operations scale in the US.

VersaBank reported net income of $6.6 million ($0.20 per share), including $4.2 million in planned expenses related to corporate structure realignment. Adjusted net income, excluding these costs, was $9.7 million ($0.30 per share), demonstrating strong operational momentum [1]. The bank's net interest margin on credit assets of 2.55% increased 6% YoY but decreased slightly sequentially, remaining among the highest of Canadian Schedule I banks.

The bank's credit quality remains exceptionally strong, with provisions for credit losses at just 0.10% of average credit assets, compared to a 12-quarter average of 0.03% [1]. This reflects VersaBank's disciplined risk management approach, even during its rapid growth phase.

Strategically, VersaBank is expanding its RPP program to include securitization options in both the US and Canada, adding two new RPP partners in Canada, and launching a tokenized deposit pilot program in the United States through its Digital Deposit Receipts (DDRs) [1]. These initiatives position the bank for future growth in digital commerce.

VersaBank's continued share repurchases under its NCIB (351,142 shares purchased and cancelled thus far) signal management's confidence in the business model and commitment to creating shareholder value [1].

References:
[1] https://www.stocktitan.net/news/VBNK/versabank-third-quarter-results-continue-to-demonstrate-strength-of-ssbdr33bcv1m.html
[2] https://www.sharewise.com/us/news_articles/VersaBank_VBNK_Q3_Earnings_Beat_Estimates_Zacks_20250904_1415