Versabank · TSX:VBNK
Versabank — Investor Presentation (March 2023)
18 slides from Versabank's investor presentation, March 2023
Slide 1: Banking on the Future!
TSX: VBNK NASDAQ: VBNK Investor Presentation March 2023 Banking on the Future!
Slide 2: Advisory
2 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 3: Proprietary Software & Technology Capabilities for Two High-Growth Opportunities
Proprietary Software & Technology Capabilities 3 for Two High-Growth Opportunities State-of-the art software platform for 1 2 banking operations and IT security Expert team of ~65 software developers A Leading A North American (>50% of workforce) North American Leader in Track record of rapid Digita
Slide 4: Value-Add Solutions for Depositors and Lenders Drives Industry Leading Net Interest Margin
4 Value-Add Solutions for Depositors and Lenders Drives Industry Leading Net Interest Margin Proprietary 2023 technology to provide Loans @ 5.78% Deposits @ 2.95% innovative deposit and lending solutions for financial intermediaries Industry Leading Net Interest Margin (Canada)1: 2.83% that allow th
Slide 5: Software Platform Enables a Highly Efficient, Low-Risk Branchless Partnership Model
Software Platform Enables a Highly Efficient, 5 Low-Risk Branchless Partnership Model Deposits Loans ~52,000 Depositors Through ~160,000 Borrowers Through >220 Partners >275 Partners Insolvency Professionals (>100 Offices) Point-of-Sale Financing (Loans and Leases) Wealth Management (>120 Partners)
Slide 6: Proven History of Addressing Unmet Market Needs: Insolvency Professional Deposit Business
Proven History of Addressing Unmet Market Needs: 6 Insolvency Professional Deposit Business Market Need: Canada’s insolvency professionals were • Proprietary software solution developed being underserved by entirely in-house to seamlessly integrate generic “big bank” with industry’s most commonly us
Slide 7: Low-Cost Deposit Model Contributes to Industry Leading Net Interest Margins
Low-Cost Deposit Model Contributes to Industry Leading 7 Net Interest Margins Historical Deposit Composition • Federal License in Canada provides US$99M access to low-cost CDIC-insured C$133M deposits US92M C$126M US$439M C$586M • Insolvency professional deposits US$438M C$598M provided at very low
Slide 8: Proven Track Record of Profitably Addressing Underserved Banking Opportunities – Lending
Proven Track Record of Profitably Addressing Underserved Banking 8 Opportunities – Lending Solution: Point-of-Sale Loans & Lease Market Need: Financing In the wake of the • Proprietary software solution 2007/2008 financial developed entirely in-house in crisis, Canada’s “big under a year ticket” poi
Slide 9: Growing Higher Margin, Lower Risk-Weighted Point of Sale Loans and Leases
Growing Higher Margin, Lower Risk-Weighted 9 Point of Sale Loans and Leases Rapid Growth in Point-of-Sale Financing Loan Portfolio Breakdown (at Jan. 31/22) C$3,532M US$2.65B C$2,980M US$2.39B C$1,045M C$1,118M US$837M Point-of-Sale C$2,415M US$766M Loans/ Cash & Other US$1.95B Leases $2.4B C$1,809M
Slide 10: Outstanding Credit Performance
10 Outstanding Credit Performance Organization-Wide Average Provision for Credit Focus on Risk Mitigation Losses as a % of Average Loans • Technology-based 0.00% C$6.3M PCL as a % of Average Loans approach to risk US$4.9M analysis/ monitoring (Trailing 12-Quarters) 0.12% • Rigorous, multi-step, mult
Slide 11: Momentum in Profitability and Long-Term Earnings Capacity
11 Momentum in Profitability and Long-Term Earnings Capacity Earnings Per Share Tangible Book Value Per Share 14% 7% Growth since 2014 CAGR (2016 – 2022) CAGR (2016 – 2022) driven mainly by: 2023 Run Rate Based on Q1 • Lower COF C $01.36 attributable largely C$0.962 US$0.70 to the introduction C $0.
Slide 12: Q1 2023 Key Metrics & Highlights: Record Results
12 Q1 2023 Key Metrics & Highlights: Record Results Consolidated YoY Sequential Digital Banking: Strong loan portfolio growth Total Revenue 42% 7% to another record: $3.24B Net Income 69% 46% Record quarterly revenue, net interest income, EPS 79% 48% net income and EPS Net Interest Margin 6 bps 2 bp
Slide 13: Digital Banking Growth Strategy: Momentum for the Future
13 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 14: U.S. Receivables Purchase Program: A New Financing Solution for the Underserved U.S. Market
U.S. Receivables Purchase Program: A New Financing 14 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 15: Acquisition of OCC-Chartered, National US Bank: Transformational Next Step in Long-Term Growth Strategy
Acquisition of OCC-Chartered, National US Bank: 15 Transformational Next Step in Long-Term Growth Strategy June 2022: Definitive Platform for significant growth in the United States Agreement to Acquire • Provides access to U.S. deposits to fuel growth of the Minnesota-based Stearns U.S. Receivable
Slide 16: DRT Cyber: One of North America's Premiere IT Security Assurance Services Firms
DRT Cyber: One of North America’s Premiere 16 IT Security Assurance Services Firms Comprehensive Suite of Services: • External network, web and mobile app penetration testing • Physical social engineering engagements • Supervisory control and data acquisition (SCADA) system assessments • Various asp
Slide 17: Capitalizing on the Significant Operating Leverage in Our Core Digital Banking Operations
Capitalizing on the Significant Operating Leverage in Our 17 Core Digital Banking Operations $3.24 $2.99 75% 70% 10.29% $1.59 $2.10 11.60% 65% $1.63 8.20% 62% 9.30% $1.56 8.68% 6.77% $1.45 8.28% $1.22 $1.65 $1.52 55% 52% 50% 49% 4.17% 4.50% 4.15% 47% 42% 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 18: Banking on the Future!
18 Banking on the Future! VersaBank Choice Through Innovation