VersaBank (VB) Q3 2026 earnings summary

Executive summary

• Achieved record growth in credit assets and revenue, with total assets reaching $6.9 billion, up 26% year-over-year and 7% sequentially, driven by strong U.S. and Canadian SRP momentum.

• Net income rose 53% year-over-year to $10.1 million, with adjusted net income up 27% to $12.3 million, reflecting strong digital banking momentum.

• U.S. operations contributed over 25% of Q3 digital banking revenue, with more than $720 million in new SRP fundings and significant partner additions.

• Launched AI-enabled Real-Time SRP, enhancing efficiency and reducing risk for partners in both Canada and the U.S.

• Operating leverage improved as the digital, branchless model scaled, with efficiency ratio at 65% and adjusted efficiency ratio at 57%.

Financial highlights

• Total assets grew 26% year-over-year to just under $6.9 billion at Q3 end; book value per share reached $17.45.

• Consolidated revenue reached a record $38.8 million, up 23% year-over-year and 1% sequentially.

• Net interest income was $36.8 million, up from $29.8 million a year ago; net interest margin on credit assets was 2.44%, down 11 bps year-over-year.

• Adjusted EPS was $0.38, up 27% year-over-year; reported EPS was $0.31, up 55% year-over-year.

• Provision for credit losses was negligible at -0.02%, indicating a recovery.

Outlook and guidance

• Fiscal 2027 targets at least $3 billion (over CAD 4 billion) in additional U.S. SRP fundings, representing 60% credit asset portfolio growth.

• Real-time SRP ramp-up and broader AI implementation expected to accelerate growth and efficiency in both U.S. and Canada.

• Anticipates NIM to return to 2.3% as liquidity normalizes and higher-yielding SRP assets grow.

• Core non-interest expenses projected to remain in line with 2026, excluding $10 million from divested cybersecurity business.

• Realignment to a U.S. bank holding company structure expected to drive additional shareholder value and cost savings.