Versabank · TSX:VBNK
Versabank — Investor Presentation (September 2024)
17 slides from Versabank's investor presentation, September 2024
Slide 1: Authorized for Landing: U.S. Entry Provides A Transformational Opportunity
Authorized for Landing: U.S. Entry Provides A Transformational Opportunity Investor Presentation September 2024 NASDAQ: VBNK | TSX: VBNK
Slide 2: 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 3: A Better Bank Model
Excessive lending risk Loan losses / collections Deposit / liquidity risk A Better Bank Model Economic exposure Founded on Technology Interest rate exposure Physical infrastructure Inefficiency 3
Slide 4: A North American Leader
Fully Digital Highly Efficient: Branchless, Innovative, Value-Added North American Bank Partner (B2B) model Deposit & Lending Solutions for Underserved Markets • Operating leverage of a technology company with the intrinsic value of a bank A North American Leader • Highly risk-mitigated model: Very
Slide 5: Branchless, Digital, Partner (B2B) Model Based on Proprietary Banking Technology
Branchless, Digital, Partner (B2B) Model Based on Proprietary Banking Technology Proprietary, state-of-the-art software based out of two technology centres Saskatoon, SK • All deposits/loans London, ON managed digitally • No direct interaction Deposit Partners with end users • Very high asset-to- Le
Slide 6: Proprietary Technology Enables Ultra Low-Risk Digital Model
Proprietary Technology Enables 6 Ultra Low-Risk Digital Model Organization-Wide Focus on Risk Mitigation • Technology-based approach Very Sticky Deposits 30+ Years with to risk analysis/monitoring No Material Loan Losses • Rigorous, multi-step, multi- • Wealth Management: executive approval process
Slide 7: Deposits: Unlimited Low-Cost, Very Stable Sources
Deposits: 7 Unlimited Low-Cost, Very Stable Sources • Objective to minimize cost of deposit funding >220 Partners Provide Access • Very “sticky” deposit base to Millions of Depositors Wealth Management (>120 Partners) Deposit Composition: • Extensive network of providing exposure to vast majority of
Slide 8: Loans: Very Low Risk Lending Channels
Loans: 8 Very Low Risk Lending Channels • Low-cost deposits enable low-risk lending 30 Partners Provide Access to • 30-year history of virtually no loan losses Hundreds of Millions of Borrowers Point-of-Sale Financing (Loans and Leases) Loan Composition: • Reliable, attractive alternative financing
Slide 9: 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 10: A Significantly Risk Mitigated Model
A Significantly Risk Mitigated Model Proven Highly Extensive Partner Due Continuous Attractive & Diligence & Monitoring Loan Monitoring Successful in Canada Restricted to the highest quality lenders - • Real-time, technology-based • >14 years in market typical 10-year track record monitoring • • Ann
Slide 11: Success of Canadian POS Business Has Driven Profitability
Success of Canadian POS Business Has Driven Profitability $ CAD (millions) $14 55% $60 51% 51% 52% 12.0% $12 49% $50 $10 8.5% 8.8% 43% 7.8% 8.0% $40 7.0% $8 $4.50 $4.20 B $30 $180 $6 $4.00 $160 $4 $3.50 $3.27 B $20 $140 $2 $10 $3.00 $120 $0 $2.50 $2.42 B $0 $100 $2.00 $1.8B $1.79 B $1.94 B $80 $1.50
Slide 12: Q3 YTD 2024 Key Metrics & Highlights: Record Results
Q3 YTD 2024 Key Metrics & Highlights: 12 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
Slide 13: VersaBank USA: Transformational Opportunity
VersaBank USA: Transformational Opportunity US Regulatory Appoint VB USA Start Making Executives High-Growth, Approval RPP Loans in US May 2024 Jul 2024 Sep 2024 Underserved Multi-Trillion $ Market Close US Bank Canadian Acquisition of National OCC Regulatory Acquisition licensed US bank enables lau
Slide 14: Capitalizing on the Significant Operating Leverage in Our Core Digital Banking Operations
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 15: DRT Cyber: "Free Option" on Digital Banking Valuation
DRT Cyber: “Free Option” on Digital Banking Valuation One of North America’s Premiere IT Security ETECTION Assurance Services Firms D • Comprehensive Suite of Services: – External network, web and mobile app penetration testing PR SESSMENT – Physical social engineering engagements OTECTION – Supervi
Slide 16: Why VersaBank? Why Now?
At inflection point for operating leverage, earnings growth and ROCE generation Imminent U.S. launch of Receivables Purchase Program (proven out in Canada) to an underserved Why VersaBank? multi-trillion U.S. market Why Now? Highly risk-mitigated model based on structuring of both deposits and loans
Slide 17: Banking on the Future!
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