VersaBank Q3 2025 Earnings Report

VersaBank EPS Results

• Actual EPS: $0.22
• Consensus EPS: $0.20
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: N/A

VersaBank Revenue Results

• Actual Revenue: $22.81 million
• Expected Revenue: $24.01 million
• Beat/Miss: Missed by -$1.20 million
• YoY Revenue Growth: N/A

VersaBank Announcement Details

• Quarter: Q3 2025
• Date: 9/4/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, September 4, 2025
• Conference Call Time: 9:00AM ET

VersaBank (NASDAQ:VBNK) 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. On the deposit side, VersaBank provides high-interest savings accounts, guaranteed investment certificates (GICs) and business demand deposit accounts. The bank also securitizes pools of loans to institutional investors, supporting both liquidity management and balance-sheet optimization.

Central to VersaBank’s strategy is its technology arm, which develops and licenses a patented digital vault solution for secure record-keeping and transactional verification. This digital vault not only underpins the bank’s own operations but is also made available to other financial institutions, allowing for encrypted storage and rapid retrieval of critical documents without reliance on paper records.

Founded in the early 1980s and publicly traded on the Nasdaq under the ticker VBNK, VersaBank is led by President and Chief Executive Officer Thomas C. Caldwell. The bank’s leadership team focuses on innovation in digital banking, aiming to expand its product suite while maintaining a strong capital base and adhering to regulatory requirements in the markets it serves.

VersaBank Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Adjusted net income rose to C$9.7 million (C$0.30 EPS), and record consolidated revenue of C$31.6 million drove strong core earnings with net interest margins at improved levels.
• Positive Sentiment: Credit assets grew 18% year-over-year and 6% sequentially to a new high of C$4.78 billion, fueled by the ramp-up of the U.S. receivable purchase program and resilient Canadian credit growth.
• Negative Sentiment: Q3 results included C$4.2 million of transitory corporate realignment costs, reducing reported net income and reflecting one-time expenses to align to a U.S. bank framework.
• Positive Sentiment: The launch of a securitized financing solution for the receivable purchase program in both Canada and the U.S. offers AAA-rated tranches, lower risk weighting, and higher return on common equity potential.
• Positive Sentiment: The U.S. pilot for digital deposit receipts (tokenized, interest-bearing, FDIC-insured deposits on blockchain) is underway, positioning the bank to capitalize on cross-border payment and FX opportunities.

Presentation

[Operator]

Morning, ladies and gentlemen, and welcome to VersaBank's Third Quarter Fiscal twenty twenty five Financial Results Conference Call. Earlier today, VersaBank issued a news release reporting its financial results for the third quarter ended 07/31/2025. That news release, along with VersaBank's financial statements and MD and A, are available on VersaBank's website in the Investor Relations section. Please note, VersaBank is webcasting this conference call live over the Internet. The webcast is listen only.

[Operator]

If you are listening to the webcast, but wish to ask a question in the Q and A session following management's prepared remarks, please dial into the conference lines, the details of which are included on the current slide of the presentation as well as in the morning's news release and on VersaBank's website. For those participating in today's call by telephone, the accompanying slide presentation is available as a stand alone file on VersaBank's website. Please note that today's call is being 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 the statements about future events made on this call are forward looking in nature and are based on certain assumptions and analysis made by VersaBank management.

[Operator]

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. And now I would like to turn the call over to David Taylor, President and Founder of Bursa Bank. Please go ahead, mister Taylor.

[David Taylor, Director & President at VersaBank]

Good morning, everyone. I'm calling you today from Raymond James Banking Conference in the Windy City, Chicago, And thank you for joining us for today's call. With me is our Chief Financial Officer, John Aspin. Before I begin, I do want to remind you that our financial results for the third quarter and year to date reflect the costs associated with our plan to realign our corporate structure to that of a standard U. S.

[David Taylor, Director & President at VersaBank]

Bank framework. Those costs amount to 4,200,000.0 As the vast majority of those costs are transitory, that being they will be incurred by the fiscal year end, my comments this morning will focus on adjusted or core earnings as well as adjusted numbers for any metrics that are derived from earnings as those are more accurate reflection of the performance of our business going forward. In fact, I discussed on our last call, we believe this realignment will enhance shareholder value through further risk mitigation, reducing corporate costs and eligibility for certain stock indices. Onto our financial results. The third quarter unfolded very much in line with our expectations and are indicative of the momentum in our business.

[David Taylor, Director & President at VersaBank]

They reflect the ramp up of our receivable purchase program in The United States alongside better than expected growth in our credit assets in Canada as well as net interest margins consistent with the improved levels we saw last quarter. These combined to drive revenue to another record with a very healthy sequential increase in adjusted net income. As founder and president as well as shareholder, there are a number of important takeaways for me when I look at Q3 results. The first is that credit assets continue to grow 18% year over year and 6% sequentially. And with that, so does our book value.

[David Taylor, Director & President at VersaBank]

And this is despite a slower than expected third quarter for US funding, which as I will discuss later on, has since accelerated and is now growing as per our plan toward $290,000,000 fiscal year target. The second is that net interest margin grew year over year despite higher than typical liquidity in preparation for U. S. Credit asset growth. The third is that amidst the continuing uncertainties around tariffs and trade and what continues to be lackluster overall economy, consumer spending in Canada has been more resilient than expected.

[David Taylor, Director & President at VersaBank]

As we announced yesterday, we added two new partners in Canada to support continued growth there. And we continue to see solid growth in our insolvency deposit business. Fourth, and perhaps most importantly, the results for our Canadian digital banking operations continue to demonstrate the potential of our US operations as we ramp up credit assets there and achieve scale. As a reminder, under our current corporate structure, the vast majority of our corporate costs are included in financials for the Canadian digital banking operations. So the reported efficiency ratio on return on common equity of this segment is significantly understated even after excluding the corporate realignment expenses I discussed earlier.

[David Taylor, Director & President at VersaBank]

With a smaller cost structure, less expensive deposits, and significant greater scale potential, we expect The US metrics to be even better than Canada. Again, as a shareholder, it's how I'm thinking about the future of the business. Finally, I will note that our results are prior to the contribution of the additional new growth initiatives that we have recently announced. One of these announcements was the expansion of our receivable purchase program in both The United States and Canada through the launch of a securitized financing solution for our partners. As we steadily ramp up the RPP in The United States, it has become clear, especially in the current credit market, that there is a significant additional opportunity to further growth our assets by providing securitized financing to our target market, especially in the current market environment where securitized financings are inexpensive.

[David Taylor, Director & President at VersaBank]

Our securitized RPP financing have the benefit of being favorably risk weighted as low as 20% or one fifth that of our standard RPP financing. While generating a lower spread, they'll provide much larger contribution to return on common equity. Importantly, we expect that they will be an entry point to new partner relationships by offering one stop shop to these partners for attractive, readily available financing in any interest rate environment. I want to be clear here that these securitized RPP financings are investments in senior level tranches, typically AAA rated and subject to our normal credit approval process, and as a result, are even lower risk than our core RPP financings. As we announced yesterday, we have already added our first partner under the securitized RPP offering in Canada and expect to begin adding partners in The US shortly.

[David Taylor, Director & President at VersaBank]

We also plan to establish our own platform offering securitization of assets originated and owned by its financing partner to further enhance profitability here. But we believe there is enough opportunity here that we created a new leadership position to head up this initiative and appointed capital markets veteran Tim Kaminski to the role. Tim has specific senior level experience in developing and managing financial products as well as underwriting strategy and portfolio management. We already are seeing the value of Tim's expertise. I will note that this is our strategy to further expand the target market for our RPP solution through additional enhancements and are working on other innovations to this end.

[David Taylor, Director & President at VersaBank]

I would now like to turn the call over to John to review our financial results in detail.

[John Asma, CFO at VersaBank]

Thanks, David. Before I begin, I will remind you that our full financial statements and MD and A for the third quarter are available on our website under the Investors section as well as on SEDAR and EDGAR. All of the following numbers are reported in Canadian dollars as per our financial statements unless otherwise noted. Starting with the balance sheet, total assets at the end of the 2025 grew 21% year over year and 9% sequentially to a new high of just shy of 5,500,000,000.0 Cash and securities were $620,000,000 or 11% of total assets, up from 9% at the end of Q2.

[John Asma, CFO at VersaBank]

Book value per share increased to a record $16.42 Our CET1 ratio increased to 13.56% and our leverage ratio was 8.9% with both remaining above our internal targets. Total consolidated revenue was a record $31,600,000 up 17% year over year and 5% sequentially. The increases were driven primarily by continued growth in our credit assets. Consolidated non interest expense was $21,600,000 compared with $13,500,000 in Q3 last year and $17,500,000 in Q2 of this year. As David discussed, Q3 non interest expenses included $4,200,000 related to the ongoing costs associated with the bank's structural realignment.

[John Asma, CFO at VersaBank]

Excluding these costs, NIEs for Q3 were 17,400,000.0 Otherwise, the year over year increase is primarily due to the addition of the VersaBank USA operations and costs associated with the launch and ramp up for the RPP program in The United States. As a reminder, DRT Cyber expenses are included in consolidated NIEs and totaled $2,100,000 for the fourth quarter. Reported net income was $6,600,000 and consolidated earnings per share were $0.20 Excluding the costs associated with the proposed realignment of the corporate structure, consolidated net income was $9,700,000 and consolidated earnings per share was $0.30 Looking at the income statement on a segmented basis, revenue for the Canadian Banking operations was $26,600,000 up 4% sequentially from Q2. As the corporate expenses flow through Canadian Digital Banking, net income and earnings per share were negatively impacted by costs associated with the proposed realignment to corporate structure. Net income was $6,500,000 and earnings per share was $0.20 However, that number is impacted by the $4,200,000 from the corporate realignment.

[John Asma, CFO at VersaBank]

Revenue for U. S. Banking operations was $3,100,000 a 25% increase sequentially, primarily due to the ramp up in The U. S. RPP.

[John Asma, CFO at VersaBank]

And net income for The U. S. Banking operation was $437,000 a 229% increase sequentially. Within DRTC, the cybersecurity component generated revenue of $1,600,000 up from $1,400,000 in Q3 of last year. Net loss was $398,000 impacted by higher operating expenses related to the onboarding support costs for the new cybersecurity offering.

[John Asma, CFO at VersaBank]

Within DRTC, Digital Media revenue was $622,000 with a net income of $23,000 Our credit asset portfolio grew to a new record of $4,780,000,000 at the end of Q3, driven once again by our receivable purchase program, which increased 15% year over year and 5% sequentially to $3,700,000,000 Our RPP portfolio represented 78% of our total credit asset portfolio at the end of Q3, down slightly from the end of Q2. Our multifamily residential loan and other portfolio grew 30% year over year and 9% sequentially to $1,040,000,000 as we steadily draw down on our CMHC insured loan commitments. As a reminder, our multifamily residential loans and other portfolio is primarily business to business mortgages and construction loans for residential purposes. We have very little 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 2.55%.

[John Asma, CFO at VersaBank]

That was 14 basis points or 6% higher on a year over year basis and down very slightly sequentially. Net interest margin overall, including the impact of cash, securities and other assets was 2.25%, an increase of 2% year over year and also down slightly from Q2, which was primarily due to the higher than typical liquidity. Our net interest margin still remained among the highest of the publicly traded Canadian federally licensed banks. Our provision for credit losses in Q3 continued to be de minimis as a percentage of average credit assets at 0.1%. This was up slightly from Q2 and reflects the forward looking information used in our credit models.

[John Asma, CFO at VersaBank]

I'd like to turn the call back to David for some closing remarks. David?

[David Taylor, Director & President at VersaBank]

Thanks, John. Our progress and growth to date in fiscal twenty twenty five set us up for a breakout year in 2026. One, our U.

[David Taylor, Director & President at VersaBank]

S. RPP is steadily ramping up. We are now funding our first U. S. RPP partner, Watercrest, at a regular pace of approximately $20,000,000 a month.

[David Taylor, Director & President at VersaBank]

We are continuing to progress towards signing up our next partners. And with very little investment, we have enhanced our technology to enable securitized RPP financing, which significantly expands our target market. All of this continues to give us confidence in our ability to achieve our $290,000,000 target for fiscal year end. Two, we are seeing an improved outlook for our Canadian RPP business through the addition of securitization capability, which will enable us to expand our business with our existing partners and expand our reach to potential new partners that would have been too large for our core RPP offering. Also in Canada, we are nearing our target of 1,000,000,000 in CMHC commitments and are now seeing a steady pace of drawdowns which we expect to continue over the next year and a half or so.

[David Taylor, Director & President at VersaBank]

Three, the process to realign our corporate structure with that of a standard US bank is moving forward as planned. With completion, including the requisite shareholder vote and regulatory approvals targeted for early calendar twenty twenty six, we expect to benefit in our next fiscal year. Four, we are also steadily advancing the process to divest our DRT cybersecurity business. Completion of the sales process is expected to generate cash proceeds providing additional regulatory and growth capital support our forward trajectory. Finally, the potential for our digital deposit receipt initiative is quickly coming into focus.

[David Taylor, Director & President at VersaBank]

This is a rapidly evolving space and with the favorable stance of our US administration and publicly announced intentions of a who's who in the banking payment providers and other financial businesses to adopt blockchain based digital assets, it is something we, as a leader in the development and testing of this technology, are rightly getting many questions about. So a few clarifying points before I open the call to questions. First and foremost, our digital deposit receipts are our own internally developed proprietary version of what are more broadly known in the industry as tokenized deposits. Very simply, these are the same digital deposits we have offered for years, but with even greater security and the additional utility of programmability by being issued on the blockchain. But in contrast to stablecoins regulated by the Genius Act, because they are issued by a licensed bank, they are legally entitled to bear interest and are federally insured just like conventional deposits.

[David Taylor, Director & President at VersaBank]

And for banks themselves, they reside on the balance sheet, meaning they can fund lending activities which of course is the lifeblood of a bank. For these reasons, we believe our digital deposit receipts have significant advantages over stablecoin. They address a significant problem for today's banks, what's known as deposit flight, the trend of younger generations to hold their cash and transact payments outside conventional banks. However, we believe our discussions with third parties confirm this, that our digital deposit receipts can be better option than stablecoins for payment providers and their financial businesses. Those that have been following VersaBank for a while will remember that we completed a pilot program in Canada for our digital deposit receipts a few years back that successfully validated their security processes, procedures and protocols.

[David Taylor, Director & President at VersaBank]

And last week we announced that we have initiated a pilot in The United States to do the same thing in US dollar environment. The pilot for the USDVBs, as they are referred to in US, is expected to be completed by the end of the calendar year with commercial launch to occur as soon as possible thereafter. Commercial launch will be subject to non objection from our US regulator. It is still early days for this next generation of digital assets, but there is a huge momentum in this sector. We have significant head start with a proven market ready technology, And importantly, we have multiple paths to monetize this asset that cost us very little to develop.

[David Taylor, Director & President at VersaBank]

With that, I'd like to open up the call to questions. Operator?

[Operator]

Thank you, sir. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touch tone phone. You will then hear a prompt that your hand has been raised. And should wish to decline from the polling process, please press star followed by 2. And if you're using a speakerphone, you will need to lift the handset first before pressing any keys.

[Operator]

Please go ahead and press star one now should you have any questions. First, we will hear from Joe Yantunis at Raymond James. Please go ahead, Joe.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

Good morning. Good morning, Joe. So I was hoping to dig a little more into the USRPP program. And perhaps I missed this in the materials, but what were balances at quarter end?

[David Taylor, Director & President at VersaBank]

About 125,000,000 US.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

125. Okay. And then how many partners are you generating loans for this point? Is it just, WaterCrest? And then additionally, can you just track, you know, the partner pipeline?

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

It it is just, WaterCrest. I think on the prior quarter call, you mentioned there was a couple other partners that were ramping at this point. Do you still expect those to you you know, would that worry do you expect you'll be able to fund those loans, or will they kinda move to the securitization financing offering route?

[David Taylor, Director & President at VersaBank]

There's one that should fund within the next few days, and they're just going to honor our traditional RPP program. But there's there's quite a quite a few that will go into the securitization program. So we're looking for a really strong fourth quarter with the with the securitization program and the the one that's pending the next two days and there's another one after that.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

So it would be fair to say the securitized financing offering will drive the majority of the growth from here on out?

[David Taylor, Director & President at VersaBank]

It will for this this quarter, the fourth quarter. Thereafter, the I expect the RPP will get more will become more popular. We also have some enhancements in mind that will may make it more attractive than the securitization program.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

Got it. Okay. And then shifting gears here. You know, as you had mentioned, you have a lot of optionality with your tokenized deposits. And assuming the pilot program runs smoothly and you get the regulatory green light to proceed, how are you thinking about the best course of action to capitalize on this opportunity?

[David Taylor, Director & President at VersaBank]

Well, right off the bat, offering the holders of USDC to redeem their notes and swap them into our USDVBs, I think, could be a a good start in that our our digital deposit receipts bear interest, of course, and as a deposit, like all the policy banks are FDIC insured. So for the holders of of the the other stable coins like USDC, say for example, that are looking the holders looking for an interest bearing stable coin issued by a bank, we'll we'll offer that out. And I I'd expect that some portion of the 60,000,000,000 will come our way.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

Got it. And then last one for me here. Kinda given the economic backdrop, I was a bit surprised to see the Canadian insolvency deposits were relatively flattish. Do you think there's room to increase, these deposits in the near term?

[David Taylor, Director & President at VersaBank]

Yeah. The Canadian economic statistics published a few days ago were I think it was 1.6 decline in GDP, which doesn't bode very well for the Canadian economy. But it does mean it does mean there'll be more insolvencies. So I think it was just maybe an anomaly in the in the growth and that sometimes you have some large payouts when when the states are are wound up. But we're still seeing, I hate to say it in his terms, a robust market for us in in accumulating deposits from those unfortunate Canadians that are having having troubles.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

Okay. Understood. I appreciate taking my questions.

[David Taylor, Director & President at VersaBank]

Well, thanks, Joe.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Next question?

[David Taylor, Director & President at VersaBank]

Are you in Chicago? I just wonder if Joe was in Chicago.

[Operator]

Oh, I'm sorry. He's already been out of the queue. I apologize.

[David Taylor, Director & President at VersaBank]

No problem.

[Operator]

Next question will be from Tim Switzer at KBW.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Hi, Tim. Hey. Good morning, guys. Good morning. Good.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Have follow-up on the security date securitizations product here. You know, it it sounds like this is a product you guys intend to offer longer term, maybe, you know, modulating it depending on market circumstances. But, you know, how is this also working as a method to kind of get your foot in the door with some of The US partners? And, you you provided some commentary on potential US partner sign ups. But should we see the securitizations first and then maybe later in 2026, we'll see some, you know, actual RPP volume with new US partners? How should we think about that?

[David Taylor, Director & President at VersaBank]

Yeah. That's it exactly. Thin edge thin edge of the tactic here. You'll probably see a lot of of assets in this category in in this quarter that we're in and towards the end of the the calendar year. This quite popular, but I'd expect long term, the the RPP partners will will sign up for the the traditional program.

[David Taylor, Director & President at VersaBank]

As I was saying on the other call, we've got some enhancements in mind that even in today's market where yields are very low, it may still be that our product is cheaper. But there's a few enhancements that we're we're working with. I'm not sure you're aware, but over the last year or two, we we developed our own AI model to enhance the RPP program, and it's fully functional now. So when we when we roll that out, I think I think an RPP partner be hard pressed to justify securitization when they when they see what we have in mind for them.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Okay. Great. That's good to hear. And then can you provide some color on the NIM trajectory going forward? There's a lot of moving parts here with I assume deposit costs should still move lower, but then you're bringing on some of these securitizations that I assume are lower yield than the typical RPP.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

And then you also have the elevated liquidity levels, like where should that normalize and what's the impact on the margin from that?

[David Taylor, Director & President at VersaBank]

Well, right now, we're looking at level quarter over quarter. Just looking at it from a high level point of view, it looks like there's more wind at our backs to increase the margins slightly than there is in our face. But in Canada, we're still looking at a flat yield curve that typically knocks off about 50 basis points. We had expected yield curve to go upward sloping, hasn't yet, but may very well be in the next while that the Bank of Canada drops the rates a bit, and that that works out to our advantage. But for the time I would just sort of budget in a flat a flat NIM for the quarter that we're in.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Okay. And how should This is

[David Taylor, Director & President at VersaBank]

still the highest in the country.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

And when should this excess liquidity run off, of the balance sheet? What is the impact on

[David Taylor, Director & President at VersaBank]

the margin right now from

[David Taylor, Director & President at VersaBank]

Well, it should run off at least about a 125,000,000 of it should be running off this quarter. And and that it's set it's there to fund these securitizations in The United States. So what we did is we moved cash into into the US Bank, to get ready for the fundings. And, while it's sitting on in in liquid securities, it it doesn't have much of a much of a NIM. But when it's put out, it's it's got a higher NIM.

[David Taylor, Director & President at VersaBank]

So generally speaking, I I budget flat though. As you say, there's a lot of moving parts. And as a bank in Canada, we're still miles ahead of the rest of the industry, maybe thirty, forty basis points better than the industry. So even though it's it's sort of flat for us, it's still miles ahead of the other guys.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Okay. Great. Thank you, David.

[David Taylor, Director & President at VersaBank]

No problem. Thanks.

[Operator]

Next, we will hear from Andrew Scott at Roth Capital Partners. Please go ahead, Andrew.

[Andrew Scutt, Equity Research Associate at Roth Capital Partners, LLC]

Good morning, and thank you for for taking my questions.

[David Taylor, Director & President at VersaBank]

Good morning, Andrew. Are you in New York? Morning. You're the wonderful city of New

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

York today?

[Andrew Scutt, Equity Research Associate at Roth Capital Partners, LLC]

No. I'm in Philadelphia, so close close by to New York, though. Still in the Northeast. Okay. My so my first question on on the loan growth in Canada.

[Andrew Scutt, Equity Research Associate at Roth Capital Partners, LLC]

You guys kind of said that surprised the upside, strong sequential and year over year growth. Can you kind of talk about the pockets where you saw strength?

[David Taylor, Director & President at VersaBank]

Yeah. It's been home home improvement mainly. And yeah. It was a bit at the beginning of this fiscal year, I I I didn't expect much growth in Canada at all because of the trade that's going on. But consumers in the sunshine and summer look to fix up their homes and getting new HVAC and swimming pools and fences and all the things that consumer homeowners do, and that's where the growth was.

[David Taylor, Director & President at VersaBank]

So thankfully, we've seen some really good growth. It looks like it's continuing into the fourth quarter and further. Noticed in the newspaper today that that consumer resilience was noted in the face of the of the trade issues. So we benefited from that.

[Andrew Scutt, Equity Research Associate at Roth Capital Partners, LLC]

Yeah. It's great to hear. My second question here is just on kind of the non interest expenses. You guys had $4,200,000 in additional expenses this quarter, which was kind of right in line with what you guys expected. Can you just remind us again, I believe you'll probably have similar charges in the fourth quarter?

[Andrew Scutt, Equity Research Associate at Roth Capital Partners, LLC]

And then just can you kinda once again talk through the benefits this will, provide the bank moving forward?

[David Taylor, Director & President at VersaBank]

Yeah. We're expecting approximately 4.4 in in this quarter. And it's it's sort of massive realignment in that our VBH, reverse bank holdings would become the the ultimate parent NASDAQ listed eligible for for the Russell Index. And the the banks would become wholly owned subsidiaries of VBH. So that's the Canadian bank would be wholly owned sub, the US bank, and also have in mind that our technology division, that's a division of the bank, Canadian Bank, would become a a subsidiary to it.

[David Taylor, Director & President at VersaBank]

We've got the name Versa Versa Tech in mind so that it can serve the the other banks or that are owned by us and perhaps other banks that say wish to join in with the digital deposit receipt technology that we'd be happy to to license to them. It's streamlining the organizations. There's a lot of savings, that one I just mentioned with the technology not having to be duplicated in the in the two banks, and maybe sometime in the future there'd be a third bank. So there are other areas in the bank that become much more streamlined where I don't have to have duplicate staff, duplicate responsibilities. So going forward, jeez, I think we're soaking up a cup at least a million a quarter anyways in excess excess expense that that this reorg would would eliminate.

[Andrew Scutt, Equity Research Associate at Roth Capital Partners, LLC]

Great. Well, it's wonderful to hear, and thanks for taking my questions.

[David Taylor, Director & President at VersaBank]

Well, thank you, and look forward to seeing that go off. I guess I'll be in New York on the eighth, but, hopefully, we'll catch up again.

[Andrew Scutt, Equity Research Associate at Roth Capital Partners, LLC]

Perfect.

[Operator]

Thank you. And at this time, mister Taylor, we have no other questions registered. Please proceed.

[David Taylor, Director & President at VersaBank]

Perfect. Well, ladies and gentlemen, thank you for calling in. I look forward to talking to you at the end of, the fourth quarter, which is, of course, gonna be an exciting quarter. We've got a lot of deals up against the dam to to fund this quarter. So we're looking for a lot of asset growth and and progress on the digital deposit receipts both in Canada and United States.

[David Taylor, Director & President at VersaBank]

I think that's a game changer for our industry to be able to provide digital deposit receipts on both sides of the border, National Bank United States, National Bank in in Canada. These are interest bearing stable coins, of course. And somebody asked me, so what would a use case be? But one obvious one is to facilitate seamless, frictionless foreign exchange when the when our bank uniquely has digital deposit receipts in both both currencies. So hopefully, this will help with the trade between our two fine countries.

[David Taylor, Director & President at VersaBank]

Hopefully, we we can do our part. So long. Thank you. Thank

[Operator]

you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines. Have yourselves a good day.

Participants

Executives

• David Taylor, Director & President
• John Asma, CFO

Analysts

• Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial
• Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)
• Andrew Scutt, Equity Research Associate at Roth Capital Partners, LLC