VersaBank

Q1 fiscal 2026 total assets were over $6.1 billion, up 24% year over year and 6% sequentially. Revenue was a record $36.5 million, up 31% year over year and 4% sequentially. Reported net income was $11.1 million and EPS was $0.35; adjusted net income was $12.2 million, or $0.38 per share, up 49% year over year and 15% sequentially. Noninterest expenses were $20.5 million versus $15.7 million a year ago and $23.9 million in Q4, including $1.5 million before tax of reorganization costs in Q1 and $2.8 million of DRTC cyber expenses. Credit assets were $5.33 billion, up 23% year over year, with the structured receivable portfolio at $4.4 billion, up 29% year over year and 9% sequentially. Net interest margin on credit assets was 2.64%, up 28 bps year over year; overall NIM was 2.25%, up 17 bps year over year. Provision for credit losses was 5 bps of average credit assets. Guidance: management reiterated it is on track to add at least USD 1 billion in U.S. fundings in fiscal 2026, expects U.S. efficiency to move into the low 20% range by year-end, and said Q2 will include an additional $4 million to $4.5 million of reorganization costs. It also expects NIM to be relatively flat to higher levels of last year, noninterest expense to be relatively flat to last year, and meaningful capital from the cybersecurity divestiture once completed.

David Taylor framed the quarter as a strong start to what should be the company’s most profitable year, citing operating leverage from the U.S. expansion and continued momentum in core digital banking. He emphasized that U.S. structured receivable growth is accelerating, the $1 billion annual funding target is still intact, and additional partnerships could create upside beyond that goal. His tone was upbeat and confident, but he repeatedly noted that regulatory approvals remain the gating item for the digital deposit and tokenized deposit initiatives.

Nicolas Ospina highlighted record financial results and balance sheet growth, including total assets above $6.1 billion, revenue of $36.5 million, adjusted EPS of $0.38, and book value per share of $16.93. He pointed to strong capital ratios, with CET1 at 12.8% and leverage at 8.2%, and noted cash and securities were $729 million, or 12% of total assets, above historical levels because of the U.S. expansion. He also broke out segment performance: Canadian banking revenue of $27.6 million, U.S. banking revenue of $6.8 million, DRTC cybersecurity revenue of $2 million, and Digital Meteor revenue of $528,000, while credit losses remained de minimis at 5 bps.

Analysts focused mainly on the U.S. structured receivable program, asking about partner pipeline, the mix between core on-balance-sheet and securitized funding, and whether quarterly growth would accelerate toward the USD 1 billion target. Management said the mix was about 85% on-balance-sheet securitized receivables in Q1, expects more purchase securitizations in coming quarters, and said the pipeline is strong enough that full-year funding could exceed USD 1 billion. Questions also centered on Stablecorp/QCAD and tokenized deposits; management said the stablecoin launch is imminent, monetization will initially come mainly from net interest margin, and that regulators in Canada and the U.S. are the key next step before broader commercialization.