VersaBank (NASDAQ:VBNK) executives highlighted record credit assets and revenue in the bank’s fiscal first quarter ended Jan. 31, 2026, pointing to accelerating growth in its U.S. Structured Receivable Program (SRP), improving operating leverage, and progress on both a corporate reorganization and a planned cybersecurity divestiture.
Leadership changes and reorganization costs
President David Taylor introduced Nico Ospina on his first call as the bank’s newly appointed Global Chief Financial Officer. Ospina joined from Raymond James’ U.S. Investment Banking Group. Former CFO John Asma has moved to lead Canadian banking operations.
Record assets and revenue; liquidity remained elevated
Ospina reported total assets rose 24% year-over-year and 6% sequentially to a new high of over CAD 6.1 billion. Cash and securities totaled CAD 729 million, or 12% of total assets, which management said remains above historical levels (around 7%) due to the bank’s expansion in the U.S.
Book value per share increased to a record CAD 16.93. The bank’s CET1 ratio was 12.8% and leverage ratio was 8.2%, both above internal targets, according to Ospina.
Total consolidated revenue reached a record CAD 36.5 million, up 31% year-over-year and 4% sequentially. Taylor said credit assets and credit-asset revenue set new records as well, up 23% and 31% year-over-year, respectively, with sequential growth in credit-asset revenue of 5% and 4%.
Earnings and expense details; segment performance
Consolidated non-interest expense was CAD 20.5 million, including the quarter’s reorganization costs, compared with CAD 15.7 million in the year-ago quarter and CAD 23.9 million in the prior quarter. Excluding the reorganization costs, non-interest expense was CAD 19.0 million. Ospina said DRT Cyber expenses were included in consolidated non-interest expense and totaled CAD 2.8 million for the quarter.
Reported net income was CAD 11.1 million, or CAD 0.35 per share. Excluding after-tax reorganization expenses, adjusted net income was CAD 12.2 million, or CAD 0.38 per share. Ospina said adjusted net income increased 49% year-over-year and 15% sequentially.
On a segment basis:
- Canadian banking: Revenue was CAD 27.6 million, up 16% year-over-year and flat sequentially. Net income was CAD 8.7 million, which Ospina said included a CAD 1.1 million after-tax reorganization impact flowing through that segment.
- U.S. banking: Revenue was $6.8 million, up 30% sequentially, driven by the ramp-up of the U.S. SRP. Net income rose 40% sequentially to $2.8 million, reflecting operating leverage.
- DRTC (cybersecurity): Revenue was CAD 2.0 million, flat year-over-year, with a CAD 630,000 net loss attributed to higher operating expenses tied to onboarding support for new offerings.
- Digital Meteor: Revenue was CAD 528,000, and net income was CAD 179,000, which Ospina attributed to higher client engagement and lower operating expenses.
Structured Receivable Program growth and credit quality trends
VersaBank’s credit asset portfolio grew to a record CAD 5.33 billion, driven by the SRP portfolio, which increased 29% year-over-year and 9% sequentially to CAD 4.4 billion. SRP represented 83% of total credit assets at quarter-end, up from 80% in Q4 2025.
The bank completed more than $200 million in additional U.S. fundings in Q1 after surpassing its fiscal 2025 target. Taylor said the “vast majority” of Q1 fundings were through the higher-spread core SRP, with a smaller contribution from its securitized offering. In the Q&A, Taylor added that the quarter’s mix was about 85% on-balance sheet SRP and 15% securitized purchases, calling Q1 potentially “a bit of an anomaly” and expecting securitized purchases to increase in coming quarters.
Ospina reported net interest margin (NIM) on credit assets (excluding cash and securities) was 2.64%, up 28 basis points year-over-year and flat sequentially. Overall NIM, including cash and securities, was 2.25%, up 17 basis points year-over-year but down slightly from Q4 due to higher cash balances.
Provision for credit losses was 5 basis points of average credit assets, down from 11 basis points in Q4 2025, which Ospina attributed primarily to changes in forward-looking information used in the bank’s credit models.
Meanwhile, multifamily residential loans and other declined to CAD 0.9 billion, down 1% year-over-year and 8% sequentially. Management discussed a transition toward lower risk-weighted assets, including CMHC-related lending, and said the bank has been intentionally dialing down conventional construction exposure.
Outlook themes: U.S. growth targets, divestiture timing, and digital assets
Taylor said the bank remains on track to add at least $1 billion in fundings in fiscal 2026, which he described as more than three times fiscal 2025 levels, and he characterized the pace as accelerating as new partners come online. He also said U.S. operations’ efficiency surpassed Canadian operations in the quarter, supported by cheaper deposit funding and a smaller team, and he expects meaningful efficiency gains as the year progresses.
On the reorganization, Taylor said there has been more work than initially expected by external counsel and auditors. While Q1 reorganization costs were in line with expectations, he said the bank expects an additional CAD 4.0 million to CAD 4.5 million of costs in Q2. He reiterated that management believes the shareholder value benefits will outweigh aggregate costs.
Regarding the planned divestiture of its cybersecurity business, Taylor said the process is “steadily moving forward,” with a goal to complete by the end of the summer, “hopefully earlier.” He added that a completed sale would provide additional regulatory capital to support growth and “more than absorbs” the reorganization costs.
VersaBank also discussed its digital asset strategy built on its proprietary VersaVault technology. Taylor said integrated U.S. and Canadian pilot programs for “Real Bank Tokenized Deposits” are proceeding, albeit taking longer than he initially anticipated, and that regulatory engagement is a gating item. Separately, he noted that shortly after quarter-end the bank announced its first stablecoin custody customer, Stablecorp, for QCAD, described as Canada’s first regulatory compliant stablecoin. In response to analyst questions, Taylor said monetization would initially come primarily from net interest margin on deposits, with the bank keeping funds in highly liquid securities due to limited historical experience with the deposits’ behavior.
About VersaBank (NASDAQ:VBNK)
VersaBank is a Canadian Schedule I chartered bank that operates as a fully digital institution, offering a range of deposit and lending solutions through its proprietary technology platform. Headquartered in London, Ontario, the bank has chosen to forego a traditional branch network in favor of online and digital distribution, enabling it to serve clients across Canada and the United States with efficiency and lower overhead.
The bank’s primary business activities include the origination and securitization of commercial loans, equipment financing, residential mortgages and construction loans.
