VBNK · VersaBank

VersaBank's second quarter fiscal 2026 results underscore the continued success of its branchless, business-to-business digital banking model, particularly the ramp-up of its Structured Receivable Program (SRP) in both Canada and the United States. Total revenue increased 27% year-over-year to a record $38.3 million, driven by growth in net interest income as credit assets expanded 25% to $5.68 billion. The net interest margin improved 4 bps to 2.33%, benefiting from lower deposit renewal costs and a normalizing yield curve, though partially offset by a shift toward lower-yielding SRP assets. The Bank's provision for credit losses remained very low at $428,000 (0.03% of average credit assets), reflecting strong portfolio performance and updated forward-looking assumptions. Non-interest expenses rose to $27.5 million, including $6.7 million in non-core charges: $4.5 million in project costs related to the proposed corporate reorganization (to a US holding company structure) and a $2.2 million write-down on the deposit base of the Bank's sole physical branch, which was sold on May 1, 2026. Excluding these items, core expenses were $20.8 million, up from $17.5 million a year ago, driven by higher staffing and technology investments to support growth. On an adjusted core basis, net income rose 45% to $12.4 million, and core EPS grew to $0.39. The US operations continued to scale, with US SRP assets reaching US$605 million, well on the way to the full-year target of US$1 billion in additional fundings. The Bank also advanced its digital asset strategy, launching a pilot for its Real-Time SRP and adding foreign exchange functionality to its RBTD platform. While the reorganization and branch sale introduced near-term expenses, management expects these moves to enhance long-term efficiency and shareholder value. The Bank's capital position remained robust, with a CET1 ratio of 12.32% and leverage ratio of 7.94%.