VersaBank reports record Q3 growth, assets top $7 billion

VersaBank (NASDAQ: VBNK ) held its third-quarter earnings conference call on Thursday.

Below is the complete transcript from the call.

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View the webcast at Summary VersaBank reported record growth in Q3 2026 with credit assets, revenue, and net interest income showing significant year-over-year increases driven by their Structured Receivable Program (SRP) in the US.

Total assets surpassed $7 billion for the first time, reflecting a compounded annual growth rate of over 25% in the past five years.

Net income and adjusted net income increased by 53% and 27% year-over-year, despite higher non-core costs of $4.6 million due to reorganization and other transitory expenses.

The company expects broader implementation of AI to increase efficiency and achieve significant cost savings moving forward.

VersaBank is targeting $3 billion in new SRP fundings in the US for fiscal 2027, with the potential to exceed this given the high demand for their real-time SRP solution.

The company is undergoing a reorganization to align with a standard US bank framework, aiming to complete it by October 2026, with additional non-core costs expected in Q4.

VersaBank plans to divest its cybersecurity business by August 2027 following an extension from the Fed.

The company maintains a strong CET1 ratio of 11.5% and a leverage ratio of 7.6%, supporting its growth strategy without immediate need for additional capital.

Management expressed optimism about the introduction of AI-enabled real-time SRP, which has been positively received by partners and is expected to drive further growth.

Full Transcript 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 31, 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 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, President & CEO 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 SVP, 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 very strong year-over-year growth.

This was once again driven mainly by the momentum in our Structured Receivable Program in the United States.

In fact, our U.S. operations generated nearly 25% of Q3's 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.