– Quarter Highlighted by Another Record
Loan Portfolio, Led by 51% Growth in Canadian Point-of-Sale
Financing Business –
|
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 second quarter 2022 ("Q2 2022") unaudited Interim Consolidated
Financial Statements for the period ended April 30, 2022 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, June 1, 2022 /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 second quarter of 2022 ended April
30, 2022. 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 six
months ended
|
|
|
|
|
|
April
30
|
January
31
|
|
April
30
|
|
|
April
30
|
April
30
|
|
|
(thousands of Canadian
dollars except per share amounts)
|
2022
|
2022
|
Change
|
2021
|
Change
|
|
2022
|
2021
|
Change
|
|
Financial
results
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$
18,635
|
$
18,266
|
2%
|
$
15,970
|
17%
|
|
$
36,901
|
$
31,392
|
18%
|
|
Cost of
funds(1)
|
|
1.38%
|
1.29%
|
7%
|
1.28%
|
8%
|
|
1.30%
|
1.35%
|
(4%)
|
|
Net interest
margin(1)
|
|
2.77%
|
2.77%
|
0%
|
2.96%
|
(6%)
|
|
2.69%
|
2.91%
|
(8%)
|
|
Net interest margin on
loans(1)
|
3.11%
|
3.22%
|
(3%)
|
3.55%
|
(12%)
|
|
3.14%
|
3.55%
|
(12%)
|
|
Net
income
|
|
|
4,943
|
5,566
|
(11%)
|
5,744
|
(14%)
|
|
10,509
|
11,034
|
(5%)
|
|
Net income per common
share basic and diluted
|
0.17
|
0.19
|
(11%)
|
0.25
|
(32%)
|
|
0.36
|
0.47
|
(23%)
|
|
Balance sheet and
capital ratios
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
2,692,146
|
$
2,415,346
|
11%
|
$
2,139,757
|
26%
|
|
$
2,692,146
|
$
2,139,757
|
26%
|
|
Book value per common
share(1)
|
11.94
|
11.78
|
1%
|
11.06
|
8%
|
|
11.94
|
11.06
|
8%
|
|
Common Equity Tier 1
(CET1) capital ratio
|
13.66%
|
14.83%
|
(8%)
|
12.52%
|
9%
|
|
13.66%
|
12.52%
|
9%
|
|
Total capital
ratio
|
|
18.68%
|
20.34%
|
(8%)
|
18.89%
|
(1%)
|
|
18.68%
|
18.89%
|
(1%)
|
|
Leverage
ratio
|
|
11.63%
|
12.69%
|
(8%)
|
10.46%
|
11%
|
|
11.63%
|
10.46%
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See definitions
under 'Non-GAAP and Other Financial Measures' in the Q2 2022
Management's Discussion and Analysis.
|
|
|
|
|
|
(thousands of Canadian
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
for the three months
ended
|
April 30,
2022
|
January 31,
2022
|
April 30,
2021
|
|
|
|
|
Digital
Banking
|
DRTC
|
Eliminations/
|
Consolidated
|
Digital
Banking
|
DRTC
|
Eliminations/
|
Consolidated
|
Digital
Banking
|
DRTC
|
Eliminations/
|
Consolidated
|
|
|
|
|
|
|
Adjustments
|
|
|
|
Adjustments
|
|
|
|
Adjustments
|
|
|
Net interest
income
|
|
$
17,242
|
$
-
|
$
-
|
$
17,242
|
$
16,885
|
$
-
|
$
-
|
$
16,885
|
$
15,095
|
$
-
|
$
-
|
$
15,095
|
|
Non-interest
income
|
|
1
|
1,434
|
(42)
|
1,393
|
-
|
1,422
|
(41)
|
1,381
|
1
|
915
|
(41)
|
875
|
|
Total
revenue
|
|
|
17,243
|
1,434
|
(42)
|
18,635
|
16,885
|
1,422
|
(41)
|
18,266
|
15,096
|
915
|
(41)
|
15,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (recovery
of) credit losses
|
78
|
-
|
-
|
78
|
2
|
-
|
-
|
2
|
(312)
|
-
|
-
|
(312)
|
|
|
|
|
17,165
|
1,434
|
(42)
|
18,557
|
16,883
|
1,422
|
(41)
|
18,264
|
15,408
|
915
|
(41)
|
16,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and
benefits
|
|
5,586
|
1,140
|
-
|
6,726
|
5,440
|
643
|
-
|
6,083
|
4,525
|
428
|
-
|
4,953
|
|
General and
administrative
|
3,761
|
300
|
(42)
|
4,019
|
3,482
|
183
|
(41)
|
3,624
|
2,237
|
187
|
(41)
|
2,383
|
|
Premises and
equipment
|
659
|
363
|
-
|
1,022
|
582
|
347
|
-
|
929
|
598
|
408
|
-
|
1,006
|
|
|
|
|
10,006
|
1,803
|
(42)
|
11,767
|
9,504
|
1,173
|
(41)
|
10,636
|
7,360
|
1,023
|
(41)
|
8,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
7,159
|
(369)
|
-
|
6,790
|
7,379
|
249
|
-
|
7,628
|
8,048
|
(108)
|
-
|
7,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
1,744
|
103
|
-
|
1,847
|
1,961
|
101
|
-
|
2,062
|
2,153
|
43
|
-
|
2,196
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
5,415
|
$
(472)
|
$
-
|
$
4,943
|
$
5,418
|
$
148
|
$
-
|
$
5,566
|
$
5,895
|
$
(151)
|
$
-
|
$
5,744
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
2,692,510
|
$
21,386
|
$
(21,750)
|
$
2,692,146
|
$
2,412,167
|
$
23,767
|
$
(20,588)
|
$
2,415,346
|
$
2,139,974
|
$
17,777
|
$
(17,994)
|
$
2,139,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
$
2,347,610
|
$
23,727
|
$
(20,605)
|
$
2,350,732
|
$
2,072,691
|
$
25,147
|
$
(19,443)
|
$
2,078,395
|
$
1,888,732
|
$
20,508
|
$
(16,849)
|
$
1,892,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HIGHLIGHTS FOR THE SECOND QUARTER OF 2022
Consolidated
- Consolidated revenue increased 17% year-over-year and 2%
sequentially, to $18.6 million, due
to higher net interest income in the Digital Banking operations
(driven primarily by strong loan growth of 34% year-over-year and
11% sequentially), as well as higher non-interest income, the
latter being generated by DRT Cyber Inc., ("DRTC") VersaBank's
Cybersecurity Services and Banking and Financial Technology
Development operating segment;
- Net income decreased 14% year-over-year and decreased 11%
sequentially to $4.9 million,
attributable to costs related to investment in specific growth
initiatives (including, but not limited to, the U.S. Point-of-Sale
Loan and Lease Receivable, ("POS Financing") roll out and
preparation for commercial launch of the Canadian-dollar version of
VersaBank's Digital Deposit Receipts (branded as VCAD)), as well as
higher salary and benefits costs, and higher office expense
resulting from the implementation of VersaBank's return-to-work
strategy; and,
- EPS was $0.17, a decrease of 32%
year-over-year and 11% sequentially. The year-over-year trend was
amplified due to a higher number of shares outstanding following
the issuance of 6.3 million common shares via the Bank's US IPO on
the Nasdaq in September, 2021 (the "Common Share Offering") in
advance of deploying the capital raised into interest generating
loans.
Digital Banking Operations
- Loans increased 34% year-over-year and 11% sequentially to a
record $2.45 billion, as a function
of growth in the Bank's POS Financing portfolio (51% year-over-year
and 12% sequentially) and commercial real estate ("CRE") portfolio
(10% year-over-year and 8% sequentially);
- Digital Banking revenue increased 14% year-over-year and 2%
sequentially, to $17.2 million;
- Net interest margin decreased 19 bps, or 6% year-over-year and
was unchanged sequentially, at 2.77%, and net interest margin on
loans decreased 44 bps, or 12%, year-over-year and decreased
sequentially 11 bps, or 3%, to 3.11%, primarily the result of
VersaBank's strategy to grow its POS Financing portfolio, which
generates lower average net interest margins than the CRE
portfolio, and in which VersaBank was more aggressive with pricing
in the second quarter of 2022 to capitalize on certain high-growth
opportunities; and,
- Provision for Credit Losses (PCLs) as a percentage of average
loans was 0.01%, compared with a 12-quarter average of -0.01%,
which remains amongst the lowest of the publicly traded Canadian
Schedule I (federally licensed) Banks;
- On March 28, 2022, VersaBank
announced successful completion of the independent third-party
System and Organization Controls (SOC2) – Type I audit of its
VersaVault®, VersaBank's proprietary security technology for
blockchain-based assets, which underpins the VersaBank's
revolutionary Digital Deposit Receipts; and,
- On March 31, 2022, VersaBank
announced that it entered into an agreement with its first
Point-of-Sale Finance partner in the
United States, a large, North American, commercial
transportation financing business focused on independent
owner/operators.
DRTC (Cybersecurity Services and Banking and Financial
Technology Development)
- Revenue and gross profit, which are generated entirely by
Digital Boundary Group's (DBG) Cybersecurity Services, increased
41% and 57% year-over-year and 3% and 1% sequentially, to
$2.4 million and $1.4 million, respectively; and,
- Net loss of $0.5 million compared
to net loss of $0.2 million in the
second quarter of 2021 and net income of $0.1 million in the first quarter of 2022,
attributable to higher costs related to investment in specific
growth initiatives (including preparation for commercial launch of
the Canadian-dollar version of its digital deposit receipts), as
well as higher salary and benefits expense and higher business
development costs.
MANAGEMENT COMMENTARY
"The second quarter was yet another quarter highlighted by a new
record loan portfolio in our Digital Banking operations, with our
Canadian Point-of-Sale financing business growing more than 50%
year-over-year, with that strong growth momentum continuing in
third quarter to date," said David
Taylor, President and Chief Executive Officer,
VersaBank. "The continued growth of our Point-of-Sale
business in Canada provides us
with even greater confidence in the potential for this innovative
and unique offering in the United
States, as we add additional customers throughout 2022 and
beyond."
"Despite strong year-over-year growth, net income for the second
quarter was dampened by short-term investments in a number of
initiatives that we expect will contribute to accelerated growth in
both the short- and long-terms, notably preparation and roll out of
the Point-of-Sale business in our Digital Banking operations in the
US and preparation for the commercial launch of VCAD, the
Canadian-dollar version of our revolutionary Digital Deposit
Receipts, including the SOC2 compliance audit, the majority of the
costs of which reside in DRTC. We expect net income for the
remainder of the year to be driven by continued growth in our
Canadian Point-of-Sale business, along with ramp up of the U.S.
Point-of-Sale business, as well as continued profitable growth in
the Cybersecurity Services component of DRTC."
FINANCIAL REVIEW
Consolidated
Net Income – Net income for the quarter was
$4.9 million, or $0.17 per common share (basic and diluted),
compared to $5.6 million, or
$0.19 per common share (basic and
diluted) last quarter and $5.7
million, or $0.25 per common
share (basic and diluted), for the same period a year ago. The
year-over-year and quarter-over-quarter trends were a function
primarily of higher costs related to investment in specific growth
initiatives (including, but not limited to, the U.S. POS financing
roll out and preparation for commercial launch of the
Canadian-dollar version of VersaBank's Digital Deposit Receipts),
as well as higher salary and benefits costs, and higher office
expense resulting from the implementation of VersaBank's
return-to-work strategy. The year-over-year trend reflects the
impact of a provision for credit losses in the current quarter
compared to a recovery of credit loss provisions in the amount of
$312,000 a year ago and higher
insurance premiums attributable to the Bank's listing on Nasdaq.
Year-to-date net income and EPS were $10.5
million and $0.36
respectively, compared to $11.0
million and $0.47 for the same
period a year ago. The year-over-year trends were a function of the
same variables driving the quarterly trends as well as the impact
of a provision for credit losses of $78,000 in the current period compared to a
recovery of credit loss provisions in the amount of $255,000 in the comparative period and higher
insurance premiums attributable to the Bank's listing on Nasdaq.
The magnitude of the EPS trend was affected notably by the impact
of dilution attributable to the Common Share Offering.
Digital Banking Operations
Net Interest Margin – Net interest margin (or
spread) for the quarter was 2.77% compared to 2.77% last quarter
and 2.96% for the same period a year ago. Year-to-date net interest
margin was 2.69% compared to 2.91% for the same period a year
ago. The trends are primarily the result of VersaBank's
strategy to grow its POS Financing portfolio, which generates lower
average net interest margins than the CRE portfolio, and in which
VersaBank was more aggressive with pricing in the second quarter of
2022 to capitalize on certain high-growth opportunities
Net Interest Margin on Loans – Net interest margin on
loans is calculated as net interest income net of the impact of
cash and other assets, divided by average gross loans. Net
interest margin on loans for the quarter was 3.11% compared to
3.22% last quarter and 3.55% for the same period a year ago.
Year-to-date net interest margin on loans was 3.14% compared to
3.55% for the same period a year ago. The trends are
primarily the result of VersaBank's strategy to grow its POS
Financing portfolio, which generates lower average net interest
margins than the CRE portfolio, and in which VersaBank was more
aggressive with pricing in the second quarter of 2022 to capitalize
on certain high-growth opportunities.
Net Interest Income – Net interest income for the
quarter was $17.2 million compared to
$16.9 million last quarter and
$15.1 million for the same period a
year ago. The quarter-over-quarter and year-over year trends
were a function primarily of higher interest income earned on
higher lending assets, offset partially by lower fees earned on the
Bank's CRE mortgage portfolio and higher interest expense
attributable to higher deposit balances. The year-over year trend
also reflects higher interest expense in the current quarter
attributable to the issuance of USD $75
million principal amount of subordinated notes payable on
April 30, 2021. Year-to-date net
interest income was $34.1 million
compared to $29.5 million for the
same period a year ago.
Non-Interest Expenses – Non-interest expenses for
the quarter were $11.8 million
compared to $10.6 million last
quarter and $8.3 million for the same
period a year ago. The quarter-over-quarter and year-over-year
trends were a function primarily of higher costs related to
investment in specific growth initiatives, including, but not
limited to the U.S. POS financing roll out and preparation for
commercial launch of the Canadian-dollar version of its Digital
Deposit Receipts, higher salary and benefits expense attributable
to higher staffing levels to support expanded business activity
across the Bank, higher costs associated with employee
retention, and higher office and facility related costs
attributable to implementation of the Bank's return-to-work
strategy. The year-over-year trend also reflects higher insurance
premiums attributable to the Bank's listing on Nasdaq.
Year-to-date non-interest expenses were $22.4 million compared to $16.4 million for the same period a year ago. The
year-over-year trend was a function primarily of the items set out
above and the current period including six months of operating
expenses of Digital Boundary Group ("DBG") compared to five months
of operating expenses included in the comparative period due to the
timing of the Bank's acquisition of DBG on November 30, 2020.
Provision for/Recovery of Credit Losses – The Bank
recognized a provision for credit losses in the current
quarter in the amount of $78,000
compared to a provision for credit losses in the amount of
$2,000 last quarter and a
recovery of credit loss provisions in the amount of $312,000 for the same period a year ago. The
quarter-over-quarter and year-over-year trends were a function
primarily of higher lending asset balances, offset partially by
changes in the Bank's lending asset portfolio mix and changes
in the forward-looking information used by the Bank in its credit
risk models in the current quarter. Year-to-date, the Bank
recognized a provision for credit losses in the current period in
the amount of $80,000 compared to a
recovery of credit loss provisions in the amount of $255,000 for the same period a year ago.
Capital – At April 30,
2022, VersaBank's Total regulatory capital was $432 million compared to $426 million last quarter and $333 million a year ago and the Bank's CET1
capital ratio was 13.66%, compared 14.83% last quarter and 12.52% a
year ago. The quarter-over-quarter capital ratio trends were a
function primarily of retained earnings growth and changes to the
Bank's risk-weighted asset balances and composition. The
year-over-year trends were a function primarily of the Common Share
Offering in September 2021, retained
earnings growth, and changes to the Bank's risk-weighted asset
balances and composition.
Credit Quality -- Gross impaired loans at
April 30, 2022 were $nil, compared to
$nil a year ago. The Bank's allowance for expected credit losses,
or ECL at April 30, 2022 was
$1.53 million compared to
$1.46 million last quarter and
$1.64 million a year ago. The
quarter-over-quarter and year-over-year ECL trends were a function
primarily of 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 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.
Lending Operations: POS Financing – Leveraging its
proprietary technology, VersaBank electronically purchases small
loan and lease receivables from its network of origination partners
who make point of sale loans and leases, primarily for big ticket
consumer purchases, throughout Canada. For the second quarter of 2022,
VersaBank's POS Financing portfolio was up 51% year-over-year and
12% sequentially to $1.6 billion as a
function primarily of continued strong demand for home finance,
auto and home improvement/HVAC receivable financing. Consumer
spending in Canada is expected to
remain strong as a function of a tight labour market and as excess
savings continue to be deployed into a range of durable goods,
including assets related to home improvements, as well as home
purchases for which VersaBank's POS loan and lease origination
partners provide financing. These trends, combined with the
anticipated addition of new origination partners, represent key
drivers of what is expected to be strong POS Financing balance
sheet growth over the course of the second half of fiscal 2022. In
addition, VersaBank entered the US lending market in the second
quarter of 2022 through the completion of a receivable purchase
transaction with its first US-based, POS Financing origination
partner, a large, North American, commercial transportation
financing business focused on independent owner/operators.
Management anticipates measured growth in its US POS Financing
portfolio over the second half of fiscal 2022 as VersaBank
continues to source and onboard new origination partners that
operate with a credit risk profile that is aligned with VersaBank's
risk appetite.
Lending Operations: Commercial Lending – Commercial
loans are originated through a well-established network of mortgage
brokers and syndication partners, as well as through direct contact
with VersaBank's staff. Most of these loans are secured by real
estate assets located in Ontario
and certain other Canadian provinces. The portfolio increased 10%
year-over-year and 8% sequentially to $832
million. VersaBank anticipates continued growth in the
commercial mortgage sector over the course of the second half of
fiscal 2022, specifically related to financing for residential
housing properties, albeit somewhat moderated relative to
management's view in the first half of fiscal 2022.
Deposit Funding -- VersaBank continues to increase
its proportion of lower-cost commercial deposits by growing its
well diversified Trustee in Bankruptcy, ("TIB") program deposit
base which currently attracts a nominal interest rate. This
low-cost diversified deposit channel provides VersaBank with a
significant cost of funds advantage, enabling it to generate
superior net interest margins while maintaining its conservative
risk profile. VersaBank's cost of funds for the second quarter of
2022 was 1.38%, up 9 bps sequentially and 10 bps year-over-year.
Management anticipates that commercial deposit volumes raised via
VersaBank's Trustee Integrated Banking ("TIB") program will grow
over the second half of fiscal 2022 as a function of an increase in
the volume of consumer bankruptcy and proposal restructuring
proceedings over the same timeframe attributable to the Bank of
Canada continuing to tighten
monetary policy over the course of the year. Further, VersaBank
continues to grow and expand its well-established, diverse deposit
broker network through which it sources personal deposits,
consisting primarily of guaranteed investment certificates.
Management expects the combination of the operational trends set
out above will mitigate the expansion of its cost of funds, despite
the anticipation of the Bank of Canada continuing to increase interest rates
over the course of the second half of the year. Commercial
deposits at April 30, 2022 were
$609 million, up 9% year-over-year
and up 2% sequentially. The year-over-year and quarter-over-quarter
trends were attributable to continued growth in the Bank's TIB
program.
DRTC (Cybersecurity Services and Banking and Financial
Technology Development)
For the second quarter of 2022, DRTC recorded a net loss of
$472,000 compared to net loss of
$151,000 a year ago and net income of
$148,000 sequentially. The
year-over-year and quarter-over-quarter trends were a function
primarily of higher operating expense, offset partially by higher
revenue. Year-to-date, DRTC recorded a net loss of $325,000 compared to net income of $22,000 a year ago. The year-over-year
trend was a function primarily of the items set out above as well
as the comparative period including only five months of operations
due to the timing of the Bank's acquisition of DBG on November 30, 2020.
FINANCIAL HIGHLIGHTS
|
(unaudited)
|
|
|
for the three months
ended
|
|
for the six months
ended
|
|
|
|
|
|
April
30
|
April
30
|
|
April
30
|
April
30
|
|
($CDN thousands except
per share amounts)
|
2022
|
2021
|
|
2022
|
2021
|
|
Results of
operations
|
|
|
|
|
|
|
|
Interest
income
|
|
$
25,848
|
$
21,649
|
|
$
50,568
|
$
43,164
|
|
Net interest
income
|
|
17,242
|
15,095
|
|
34,127
|
29,469
|
|
Non-interest
income
|
|
1,393
|
875
|
|
2,774
|
1,923
|
|
Total
revenue
|
|
18,635
|
15,970
|
|
36,901
|
31,392
|
|
Provision for (recovery
of) credit losses
|
78
|
(312)
|
|
80
|
(255)
|
|
Non-interest
expenses
|
11,767
|
8,342
|
|
22,403
|
16,429
|
|
|
Digital
Banking
|
|
10,006
|
7,360
|
|
19,509
|
14,690
|
|
|
DRTC
|
|
|
1,803
|
1,023
|
|
2,977
|
1,808
|
|
Net
income
|
|
|
4,943
|
5,744
|
|
10,509
|
11,034
|
|
Income per common
share:
|
|
|
|
|
|
|
|
Basic
|
|
|
$
0.17
|
$
0.25
|
|
$
0.36
|
$
0.47
|
|
|
Diluted
|
|
|
$
0.17
|
$
0.25
|
|
$
0.36
|
$
0.47
|
|
Dividends paid on
preferred shares
|
$
247
|
$
542
|
|
$
494
|
$
1,084
|
|
Dividends paid on
common shares
|
$
687
|
$
528
|
|
$
1,374
|
$
1,056
|
|
Yield*
|
|
|
4.15%
|
4.24%
|
|
3.99%
|
4.26%
|
|
Cost of
funds*
|
|
1.38%
|
1.28%
|
|
1.30%
|
1.35%
|
|
Net interest
margin*
|
|
2.77%
|
2.96%
|
|
2.69%
|
2.91%
|
|
Net interest margin on
loans*
|
3.11%
|
3.55%
|
|
3.14%
|
3.55%
|
|
Return on average
common equity*
|
5.92%
|
9.20%
|
|
6.25%
|
8.73%
|
|
Book value per common
share*
|
$
11.94
|
$
11.06
|
|
$
11.94
|
$
11.06
|
|
Efficiency
ratio*
|
|
63%
|
52%
|
|
61%
|
52%
|
|
Efficiency ratio -
Digital Banking*
|
58%
|
49%
|
|
57%
|
50%
|
|
Return on average total
assets*
|
0.75%
|
1.02%
|
|
0.79%
|
0.98%
|
|
Gross impaired loans to
total loans*
|
0.00%
|
0.00%
|
|
0.00%
|
0.00%
|
|
Provision (recovery)
for credit losses as a % of average loans*
|
0.01%
|
(0.07%)
|
|
0.01%
|
(0.03%)
|
|
|
|
|
|
as at
|
|
Balance Sheet
Summary
|
|
|
|
|
|
|
Cash
|
|
|
$
198,157
|
$
272,428
|
|
$
198,157
|
$
272,428
|
|
Loans, net of allowance
for credit losses
|
2,450,276
|
1,829,776
|
|
2,450,276
|
1,829,776
|
|
Average
loans*
|
|
2,332,957
|
1,811,750
|
|
2,276,663
|
1,742,343
|
|
Total assets
|
|
|
2,692,146
|
2,139,757
|
|
2,692,146
|
2,139,757
|
|
Deposits
|
|
|
2,124,916
|
1,679,273
|
|
2,124,916
|
1,679,273
|
|
Subordinated notes
payable
|
98,410
|
94,392
|
|
98,410
|
94,392
|
|
Shareholders'
equity
|
|
341,414
|
247,366
|
|
341,414
|
247,366
|
|
Capital
ratios**
|
|
|
|
|
|
|
|
|
Risk-weighted
assets
|
|
$
2,313,030
|
$
1,763,424
|
|
$
2,313,030
|
$
1,763,424
|
|
Common Equity Tier 1
capital
|
315,963
|
220,740
|
|
315,963
|
220,740
|
|
Total regulatory
capital
|
432,083
|
333,161
|
|
432,083
|
333,161
|
|
Common Equity Tier 1
(CET1) ratio
|
13.66%
|
12.52%
|
|
13.66%
|
12.52%
|
|
Tier 1 capital
ratio
|
|
14.25%
|
13.29%
|
|
14.25%
|
13.29%
|
|
Total capital
ratio
|
|
18.68%
|
18.89%
|
|
18.68%
|
18.89%
|
|
Leverage
ratio
|
|
11.63%
|
10.46%
|
|
11.63%
|
10.46%
|
|
* See definitions under
'Non-GAAP and Other Financial Measures' in the Q2 2022 Management's
Discussion and Analysis.
|
|
** Capital management
and leverage measures are in accordance with OSFI's Capital
Adequacy Requirements
|
|
|
and Basel
III Accord.
|
|
|
|
|
|
|
COVID-19 Update
With public health restrictions being generally relaxed or
removed altogether over the recent months management has commenced
the implementation of the Bank's return-to-work strategy that is
anticipated to accommodate the majority of our staff transitioning
from working remotely to working in a traditional office setting
over the course of the third quarter of 2022.
Notwithstanding the above, we continue to monitor the data and
information available related to the emergence of new variants of
COVID-19 as well as attempt to anticipate the potential impact on
our community, the Canadian economy and the Bank's business
operations.
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 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
The statements in this press release 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
our 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 several 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 economy in general and the strength of the
local economies within Canada in
which we conduct operations; the effects of changes in monetary and
fiscal policy, including changes in interest rate policies of the
Bank of Canada; changing global
commodity prices; the effects of competition in the markets in
which we operate; 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 ;
the impact of new variants of COVID-19 and the Bank's anticipation
of and success in managing the risks implicated by the foregoing.
For a detailed discussion of certain key factors that may affect
our future results, please see our annual MD&A for the year
ended October 31, 2021.
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 this document and the related management's
discussion and analysis is presented to assist our shareholders and
others in understanding our financial position and may not be
appropriate for any other purposes. Except as required by
securities law, we do not undertake to update any forward-looking
statement that is contained in this document and the related
management's discussion and analysis or made from time to time by
the Bank or on its behalf.
Conference Call
VersaBank will be hosting a conference call and webcast today,
Wednesday, June 1, 2022, at
9:00 a.m. (EDT) to discuss its second
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:
Local dial-in number:
Participant passcode:
|
1 (888) 664-6392
(Canada/US)
(416) 764-8659
31237349
|
Please call between 8:45 a.m. and 8:55 a.m.
(EDT).
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://bit.ly/3LNOJi1 or from the Bank's web site.
Instant Replay
|
Toll-free dial-in
number:
Local dial-in number:
Passcode:
Expiry Date:
|
1 (888) 390-0541
(Canada/US)
(416) 764-8677
237349#
August 30th, 2022, 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://bit.ly/3LNOJi1 and on the Bank's web site.
Visit our website at: www.versabank.com
Follow VersaBank on Facebook, Instagram, LinkedIn and Twitter
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SOURCE VersaBank