VersaBank Rev Lifted by Credit-Asset Growth; Profit Dented by Reorganization Costs

Dow Jones12-10

By Robb M. Stewart

VersaBank logged record revenue in the latest quarter thanks to continued growth in credit assets, though the digital bank's earnings were dented by costs associated with its planned move to become a U.S.-based lender.

VersaBank, which is focused on business-to-business banking and cybersecurity services, on Wednesday said it recorded fiscal fourth-quarter net income of 5.2 million Canadian dollars (US$3.8 million), or C$0.16 a share, down from C$5.52 million, or C$0.20 a share, a year earlier.

The result included C$5.7 million in pretax noninterest expenses tied to costs for the reorganization of its structure, as well as a higher-than-typical tax provision.

On an adjusted basis, per-share earnings rose to C$0.33.

Overall revenue jumped 29% on last year to C$35.1 million for the three months to Oct. 31. Net interest income increased to C$32.6 million from C$24.9 million last year, while noninterest income lifted modestly to C$2.5 million from C$2.38 million the year before.

The bank said its receivable purchase program in the U.S., alongside steady growth for its RPP in Canada, resulted in a 20% increase in credit assets to a new record. Combined with an expansion of its net interest margin, that drove revenue to a new all-time high, it said.

Founder and President David Taylor said momentum is expected to continue throughout fiscal 2026, driven by anticipated growth in the RPP portfolio both north and south of the border.

VersaBank booked a provision for credit losses of C$1.32 million, versus a recovery in the same quarter last year of C$156,000.

The London, Ontario-based online bank's common-equity Tier 1 capital ratio stood at 12.92% at the end of the quarter, narrowed from 13.56% the quarter before but ahead of 11.24% a year earlier.

VersaBank plans to operate under a parent holding company that would be domiciled in the U.S., a shift aimed at boosting value for shareholders, mitigating risk and cutting costs. This comes after VersaBank last year closed its$14 million acquisition of Stearns Bank Holdingford, a U.S. multibank holding company whose portfolio included its flagship Stearns Bank National Association.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

December 10, 2025 07:48 ET (12:48 GMT)

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VersaBank Rev Lifted by Credit-Asset Growth; Profit Dented by Reorganization Costs

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