Slide 1: Q3 2024 Conference Call
Q3 2024 Conference Call September 5, 2024 NASDAQ: VBNK | TSX: VBNK
Slide 2: Advisory
Advisory For those wishing to ask questions during the Q&A, please access today’s call through the telephone dial-in: Toll-free: 1-888-510-2154 (Canada/US) Local: 437-900-0527
Slide 3: Advisory
Advisory The Bank occasionally makes forward-looking statements about its objectives, operations and targeted financial results. These statements may be written or verbal and may be included in such things as press releases, corporate presentations, annual reports and other disclosure documents and
Slide 4: David Taylor, President & CEO
David Taylor President & Chief Executive Officer
Slide 5: VersaBank USA: Transformational Opportunity
VersaBank USA: Transformational Opportunity High-Growth, Underserved Multi-Trillion $ Market Acquisition of National OCC licensed US bank enables launch of Receivables Purchase Program in the US Proven Highly Attractive & Successful in Canada • >14 years in market • >C$9B (US$6.5B) Total value of PO
Slide 6: Q3 2024 Key Metrics & Highlights
Q3 2024 Key Metrics & Highlights: 6 Total Assets $4.52B Digital Banking Loan Portfolio $4.05B Efficiency Ratio 46% 300 bps (7%) YOY Loan Growth 11% YOY Total Revenue 1% YOY Ave. Return on Net Income 3% YOY Common Equity 9.63% 152 bps (14%) YOY (ROCE) EPS 5% YOY Realizing significant operating levera
Slide 7: YTD 2024 Key Metrics & Highlights: Record Results
YTD 2024 Key Metrics & Highlights: 7 Record Results1 Total Assets $4.52B Digital Banking Loan Portfolio $4.05B Efficiency Ratio 41% 200 bps (9%) YOY Loan Growth 11% YOY Total Revenue 6% YOY Ave. Return on Net Income 15% YOY Common Equity 11.79% 55 bps (5%) YOY (ROCE) EPS 17% YOY 1. In the first quar
Slide 8: John Asma, Chief Financial Officer
John Asma Chief Financial Officer
Slide 9: Q3 2024: Continued Strong Financial Performance
Q3 2024: Continued Strong Financial Performance Balance Sheet • Total loan portfolio expanded to another record balance At July 31 2024 2023 YoY Sequential • Book Value per Share Change Change increased as a function of Total Assets $4.52 B $3.98 B 13% 3% higher retained earnings (from Loan Portfoli
Slide 10: Q3 2024: Consolidated Income Statement
Q3 2024: Continued Strong Financial Performance Consolidated Consolidated Income Statement • YoY revenue growth driven by 3 Months Ended July 31 higher NII from Digital Banking operations due mainly to POS YoY Sequential (000’s) 2024 2023 Change Change portfolio growth Revenue 26,996 26,859 1% -5% •
Slide 11: Digital Banking Operations – Record Loan Portfolio: $4.05 B
Q3 2024: Continued Strong Financial Performance Digital Banking Operations – Record Loan Portfolio: $4.05 B Q2 2024 Q3 2024 Total: $4.02 B Total: $4.05 B Point-of-Sale Point-of-Sale Loans/ Leases Loans/ Leases $3.1B Public Sector/ $3.2B Public Sector/ 78% Other Financing 80% Other Financing $57M $57
Slide 12: Digital Banking Operations Income Statement
Q3 2024: Continued Strong Financial Performance Digital Banking Operations Digital Banking Operations: Income Statement • NIM temporarily dampened by lag 3 Months Ended in term deposit adjustments in July 31 declining interest rate environment, which was exacerbated by higher 2024 2023 YoY Change Se
Slide 13: Cost of Funds
Cost of Funds Q3 2024 cost of funds: 4.17% Wealth Management (Personal Deposits) • Increased 55 bps (15%) vs Q3 2023 • Decreased 4 bps (1%) vs Q2 2024 Cost of funds was impacted by typical lag $2,914 $3,114 $2,059 in term deposit adjustments in declining $1,108 $1,203 $1,150 $1,052 $1,041 $960 $1,05
Slide 14: PCL as a % of Average Loans
Top Tier Asset Quality & Prudent Approach to Risk Mitigation Average Provision for Credit Losses as a % of Average Loans 0.00% PCL as a % of Average Loans 0.12% (Trailing 12-Quarters) 0.08% 0.06% 0.02% 0.02% 0.02% 0.00% (0.01%) (0.02%) (0.02%) (0.02%) 2014 2015 2016 2017 2018 2019 2020 2021 2022 202
Slide 15: DRTC Cybersecurity Services Income Statement
Q3 2024: Continued Strong Financial Performance DRTC Cybersecurity Services (DBG): Income Statement • Revenue changes are a function 3 Months Ended of engagement activity relative July 31 to comparable periods YoY Seq 2024 2023 • Q3 is a seasonally softer quarter Change Change Revenue 2.5 2.4 8% -15
Slide 16: David Taylor, President & CEO
David Taylor President & Chief Executive Officer
Slide 17: Point-of-Sale Receivable Purchase Program (RPP)
Point-of-Sale Receivable Purchase Program (RPP) Innovative, Unique and Efficient Digital Funding Solutions for Point-of-Sale Finance Companies • Readily accessible, reliable, economic funding, and daily loan sales (real-time sales in development) • VersaBank typically provides 100% of loan value (vs
Slide 18: Capitalizing on the Significant Operating Leverage in Core Digital Banking
Capitalizing on the Significant Operating Leverage in Our Core Digital Banking Operations $ CAD (millions) $14 52% 55% $60 Next Milestones: 12.0% $12 $50 $10 43% Total Assets 8.0% $40 7.0% $4.20 B >$5B >$6B >$10B $8 $4.50 $180 $30 $6 $4.00 $160 $20 $4 $3.50 $3.27 B $140 $2 $10 Efficiency Ratio $3.00
Slide 19: Q&A Session
Q&A Session Toll-free: 1 (888) 664-6392 (Canada/US) Local: (416) 764-8659 19
Slide 20: Banking on the Future!
YW VersaBank Banking on the F xt