Slide 1: Q4 2022 Conference Call Presentation
Q4 2022 Conference Call Presentation December 7, 2022 Follow us
Slide 2: Post Conference Call Q&A
2 Post Conference Call Q&A For those wishing to ask questions during the Q&A, please access today’s call through the telephone dial-in: Toll-free: 1 (888) 664-6392 (Canada/US) Local: (416) 764-8659
Slide 3: Advisory
3 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 an
Slide 4: David Taylor, President & Chief Executive Officer
4 David Taylor President & Chief Executive Officer
Slide 5: Q4 2022 & FY2022
5 Q4 2022 & FY2022 42% YoY growth in loan Strong, profitable growth portfolio to record $2.99 B in Cybersecurity Services 74% YoY growth in POS Execution on multiple Loans & Leases strategic growth initiatives Record revenue expected to contribute to Record net interest income profitability in fisca
Slide 6: Q4 2022 Key Metrics & Highlights: Record Results
6 Q4 2022 Key Metrics & Highlights: Record Results Consolidated Digital Banking: Strong loan portfolio growth to YoY Sequential another record: $2.99B Total Revenue 33% 14% Record quarterly revenue, net interest income and Net Income 9% 12% net income EPS 4% 15% Net income dampened by: Net Interest
Slide 7: FY 2022 Key Metrics & Highlights: Record Results
7 FY 2022 Key Metrics & Highlights: Record Results Consolidated Digital Banking: Strong loan portfolio growth to Change another record: $2.99B Total Revenue 26% Record quarterly revenue, net interest income and Net Income 1% net income EPS 18% Net income dampened by: Net Interest Margin 7 bps Digita
Slide 8: Acquisition of OCC-Chartered, National US Bank: Transformational Next Step
Acquisition of OCC-Chartered, National US Bank: 8 Transformational Next Step in Long-Term Growth Strategy June 2022: Definitive • Provides access to U.S. deposits to fuel growth of the Agreement to Acquire U.S. Receivable Purchase Program business (recently Minnesota-based Stearns launched in the U.
Slide 9: U.S. Receivables Purchase Program: A New Financing Solution
U.S. Receivables Purchase Program: A New Financing 9 Solution for the Underserved U.S. Market Launched in U.S. on a Limited Basis in April 2022 Supporting an Emerging, High-Growth Industry Full Roll Out to Commence Upon Closing of U.S. Bank Acquisition With a massive millennial consumer base and an
Slide 10: Revolutionary Digital Deposit Receipts (DDRs)
Significant New Low-Cost Deposit Opportunity: 10 Revolutionary Digital Deposit Receipts (DDRs) • Actual fiat currency on deposit with VersaBank (1:1) Highly-Encrypted • Highest level of stability and security Digital Deposit Receipt • Addresses key concerns of global regulators (DDR) Representing •
Slide 11: Shawn Clarke, Chief Financial Officer
11 Shawn Clarke Chief Financial Officer
Slide 12: Q4 2022: Continued Strong Financial Performance – Balance Sheet
12 Q4 2022: Continued Strong Financial Performance Balance Sheet At October 31 2022 2021 YoY Change Sequential Change Total Assets $3.27 B $2.42 B 35% 6% Book Value per $12.37 $11.61 7% 2% Common Share CET1 Ratio 12.00% 15.18% -318bps -51bps Leverage Ratio 9.84% 12.60% -276bps -54bps Both CET1 and l
Slide 13: Q4 2022: Consolidated Income Statement
Q4 2022: Continued Strong Financial Performance 13 Consolidated Consolidated Income Statement 3 Months Ended 12 Months Ended October 31 October 31 Sequenti YoY 2022 2021 al 2022 2021 Change Change Change Revenue 24,252 18,236 33% 14% 82,392 65,357 26% Net Income 6,429 5,910 9% 12% 22,658 22,380 1% E
Slide 14: Digital Banking Operations – Record Loan Portfolio: $2.99 B
Q4 2022: Continued Strong Financial Performance 14 Digital Banking Operations – Record Loan Portfolio: $2.99 B Q3 2022 Q4 2022 Total: $2.81 B Total: $2.99 B Point-of-Sale Loans/ Leases Point-of-Sale Loans/ Leases $2.0B Public Sector/ $2.2B Public Sector/ 71% Other Financing 75% Other Financing $36M
Slide 15: Digital Banking Operations: Income Statement
Q4 2022: Continued Strong Financial Performance 15 Digital Banking Operations Digital Banking Operations: Income Statement 3 Months Ended 12 Months Ended October 31 October 31 YoY Seq 2022 2021 2022 2021 Change Change Change Cost of Funds 2.45% 1.31% +114 bps +51 bps 1.77% 1.35% 42 bps Net Interest
Slide 16: Cost of Funds
16 Cost of Funds Personal Deposits Q4 2022 cost of funds: 1.77% • Increased 114 bps (87%) vs Q4 2021 • Increased 51 bps (26%) vs Q3 2022 $2,059M $1,108M $1,203M $1,150M $1,052M $1,041M $960M $1,059M $1,213M Increase in cost of funds 2014 2015 2016 2017 2018 2019 2020 2021 2022 significantly less tha
Slide 17: PCL as a % of Average Loans
17 Top Tier Asset Quality & Prudent Approach to Risk Mitigation Average Provision for Credit Losses as a % of Average Loans PCL as a % of Average Loans 0.12% 0.00% (Trailing 12-Quarters) 0.08% 0.06% 0.03% 0.02% (0.01%) (0.02%) (0.02%) (0.02%) 2014 2015 2016 2017 2018 2019 2020 2021 2022 VB PCLs
Slide 18: DRTC: Income Statement
Q4 2022: Continued Strong Financial Performance 18 DRTC DRTC: Income Statement 3 Months 12 Months Ended Ended October October 31 31 YoY Sequential 2022 2021 2022 2021 Change Change Change Revenue 2.9 3.2 (8%) 33% 10.0 8.7 14% Gross Profit 1.8 2.1 (18%) 47% 5.8 5.4 8% Net Income (486) 490 n/a n/a (1,
Slide 19: David Taylor, President & Chief Executive Officer
19 David Taylor President & Chief Executive Officer
Slide 20: Digital Banking Growth Strategy: Momentum for the Future
20 Digital Banking Growth Strategy: Momentum for the Future 1 2 3 Further Reduce Grow Loan Portfolio Pursue Accretive Acquisitions Cost of Funding via New Near-Term Opportunities to Leverage Scalability of to Expand Net Interest Margin and Existing Offerings Platform & Enter New Markets Generate cap
Slide 21: Q&A Session
Q&A Session Toll Free Dial In (Canada/US): 1 (888) 664-6392 Local Dial In: (416) 764-8659
Slide 22: Our Time Has Arrived!
22 Our Time Has Arrived! Follow us