VERSABANK REPORTS STRONG SECOND QUARTER RESULTS: STRONG US SRP GROWTH DRIVES 27% YEAR-OVER-YEAR INCREASE IN REVENUE AND NET INTEREST INCOME, 45% YEAR-OVER-YEAR GROWTH IN ADJUSTED (CORE) NET INCOME

Executive Summary

• VersaBank reported Q2 2026 total revenue of $38.3M, a 27% year-over-year increase, driven by strong sequential and year-over-year growth in its US Structured Receivable Program (SRP) portfolio.
• Adjusted (core) net income rose 45% year-over-year to $12.4M, while reported net income was $7.5M due to $6.7M in non-core expenses related to corporate reorganization and a branch sale write-down.
• Total assets reached a record $6.44 billion, with US SRP credit assets growing to $604.9 million; the bank remains on track to add $1 billion in US SRP fundings in fiscal 2026.

Key Details

• Revenue & Profitability: Total revenue was $38,293k (+27% YoY, +5% QoQ); Net interest income was $35,679k; Non-interest income was $2,614k. Reported net income was $7,525k (-32% YoY, -32% QoQ). Adjusted (core) net income was $12,378k (+45% YoY, +2% QoQ).
• Per Share Metrics: Basic and diluted income per share was $0.23 (reported) and $0.39 (adjusted). Book value per common share was $17.15.
• Non-Core & One-Time Items: $6.7M in non-core non-interest expenses, comprising $4.5M for reorganization project costs and a $2.2M write-down of an intangible asset related to the sale of the sole physical branch. Additionally, $0.6M in non-interest expenses were incurred for RBTD commercialization (not classified as non-core).
• Balance Sheet & Capital: Total assets reached $6,440,700k (+28% YoY). CET1 capital ratio was 12.32%; Total capital ratio was 14.74%; Leverage ratio was 7.94%. Subordinated notes payable stood at $100,688k.
• Margins & Efficiency: Net interest margin was 2.33% (+4 bps YoY); NIM on credit assets was 2.71% (+12 bps YoY). Cost of funds was 3.09%. Efficiency ratio was 72% (54% adjusted). Return on average common equity was 5.64% (9.23% adjusted).
• Credit Assets & SRP Growth: Total Digital Banking credit assets reached $5.68B (+25% YoY, +6% QoQ). US SRP credit assets grew to $604.9M, representing 28% sequential growth. The bank is on pace to achieve its target of adding at least $1B in US SRP fundings in fiscal 2026.
• Operational & Technology Updates: Launched a pilot program with FinanceIt Canada Inc. for the AI-enabled Real-Time SRP; Enhanced VersaView blockchain interface to add foreign exchange functionality for RBTD commercialization; Began receiving QCAD deposits under a custody agreement with Stablecorp Digital Currencies Inc.
• Corporate Actions & Strategy: Filed Form S-4 with the SEC for a proposed corporate reorganization to a standard US bank framework, subject to shareholder and regulatory approvals. Sold its sole physical branch in Holdingford, MN to Stearns Bank National Association (closed May 1, 2026). Purchased and cancelled 573,251 common shares under its NCIB (authorized up to 2,000,000 shares).

Notable Quotes

• David Taylor, Founder and President: "The second quarter once again saw the Bank achieve new records for credit assets, revenue, net interest income and book value, driven by the continued momentum in the ramp up of our Structured Receivable Program portfolio in the United States, which saw 28% sequential growth, alongside better than expected growth in Canada, and continued strength in our net interest margin."
• David Taylor, Founder and President: "Feedback from our US SRP partners continues to validate the attractiveness and value of our unique funding solution for point-of-sale financing companies and the continued strong pace of funding has us firmly on track to achieve our target of adding at least $1 billion in US SRP fundings in fiscal 2026."
• David Taylor, Founder and President: "The planned launch of our game-changing AI-enabled, real-time funding capability within our SRP in the coming months will significantly expand the addressable market in both the United States and Canada."
• David Taylor, Founder and President: "As our core Digital Banking operations continue to deliver strong growth and we increasingly benefit our operating leverage, we are now starting to monetize our Digital Asset opportunity based on our proven, proprietary VersaVault technology."