VersaBank (NASDAQ:VBNK) Issues Earnings Results, Beats Expectations By $0.02 EPS

VersaBank (NASDAQ:VBNK) issued its earnings results on Wednesday. The company reported $0.28 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.26 by $0.02, Zacks reports. VersaBank had a net margin of 9.34% and a return on equity of 8.41%. The firm had revenue of $28.17 million during the quarter, compared to analyst estimates of $26.86 million.

Here are the key takeaways from VersaBank’s conference call:

• VersaBank reported another strong quarter, with record revenue, record credit assets, and adjusted net income rising 35% year over year. Management said the core digital banking model is showing clear operating leverage, with U.S. operations already contributing more than 20% of total revenue.
• The company filed the S-4 for its corporate reorganization, which management described as a major milestone and one of the final steps toward creating a U.S.-domiciled holding company structure. While more SEC review remains, management believes the restructuring should create long-term shareholder value.
• Growth in the U.S. Structured Receivable Program (SRP) remained strong, with another CAD 150 million of new fundings in the quarter and management reiterating a target of at least CAD 1 billion in additional U.S. SRP additions. The bank said demand for its higher-spread, homegrown SRP continues to exceed expectations.
• VersaBank is piloting Real-Time SRP, an AI-enabled product that funds individual loans within hours rather than requiring warehousing and batching. Management said rollout is targeted for July 1 and could materially expand growth by improving economics for partners and potentially taking share from securitization markets.
• Management highlighted growing digital-asset opportunities, including RealBank tokenized deposits and stablecoin custody tied to QCAD, but acknowledged commercialization is still awaiting partner rollout and regulator non-objection in the U.S. The company also paused the DRTC divestiture process and is seeking more time from regulators, which adds some uncertainty around timing.

VersaBank Stock Down 5.4%

Shares of NASDAQ VBNK opened at $18.99 on Friday. VersaBank has a 52 week low of $10.10 and a 52 week high of $20.77. The business’s 50 day moving average price is $17.00 and its 200 day moving average price is $15.51. The firm has a market cap of $611.48 million, a P/E ratio of 27.52 and a beta of 1.10.

VersaBank Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Friday, July 31st. Stockholders of record on Friday, July 10th will be issued a $0.025 dividend. The ex-dividend date of this dividend is Friday, July 10th. This represents a $0.10 dividend on an annualized basis and a dividend yield of 0.5%. VersaBank’s dividend payout ratio is currently 10.00%.

Institutional Trading of VersaBank

Several large investors have recently made changes to their positions in VBNK. First Trust Advisors LP grew its holdings in VersaBank by 33.0% during the second quarter. First Trust Advisors LP now owns 20,753 shares of the company’s stock worth $237,000 after acquiring an additional 5,144 shares during the period. Salzhauer Michael increased its holdings in shares of VersaBank by 68.4% during the 2nd quarter. Salzhauer Michael now owns 16,843 shares of the company’s stock valued at $192,000 after purchasing an additional 6,843 shares in the last quarter. Quadrature Capital Ltd acquired a new position in shares of VersaBank in the 4th quarter valued at $201,000. Citadel Advisors LLC purchased a new stake in VersaBank during the third quarter worth $198,000. Finally, Geode Capital Management LLC acquired a new stake in VersaBank during the second quarter valued at $293,000. 56.86% of the stock is owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth

Several research firms have issued reports on VBNK. Zacks Research raised shares of VersaBank from a “strong sell” rating to a “hold” rating in a report on Monday, May 4th. Weiss Ratings raised VersaBank from a “hold (c+)” rating to a “buy (b-)” rating in a research report on Friday, May 1st. One investment analyst has rated the stock with a Buy rating and two have given a Hold rating to the company’s stock. According to MarketBeat.com, the stock currently has a consensus rating of “Hold” and an average price target of $13.00.

About VersaBank

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.