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

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

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 Price Performance

NASDAQ:VBNK opened at $18.99 on Friday. VersaBank has a fifty-two week low of $10.10 and a fifty-two week high of $20.77. The stock has a market capitalization of $611.48 million, a PE ratio of 27.52 and a beta of 1.10. The business’s 50-day simple moving average is $17.00 and its 200-day simple moving average is $15.51.

VersaBank Announces Dividend

The firm 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 dividend of $0.025 per share. This represents a $0.10 annualized dividend and a dividend yield of 0.5%. The ex-dividend date is Friday, July 10th. VersaBank’s payout ratio is 10.00%.

Hedge Funds Weigh In On VersaBank

Several institutional investors have recently modified their holdings of VBNK. Pembroke Management LTD lifted its holdings in shares of VersaBank by 40.7% during the 4th quarter. Pembroke Management LTD now owns 736,222 shares of the company’s stock valued at $11,029,000 after purchasing an additional 213,037 shares in the last quarter. Mudita Advisors LLP bought a new stake in VersaBank in the 4th quarter valued at approximately $1,462,000. Alliancebernstein L.P. lifted its stake in VersaBank by 2.7% in the 3rd quarter. Alliancebernstein L.P. now owns 2,915,984 shares of the company’s stock valued at $35,604,000 after acquiring an additional 75,358 shares in the last quarter. Kennedy Capital Management LLC lifted its stake in VersaBank by 18.9% in the 3rd quarter. Kennedy Capital Management LLC now owns 354,642 shares of the company’s stock valued at $4,330,000 after acquiring an additional 56,422 shares in the last quarter. Finally, Two Sigma Investments LP bought a new stake in VersaBank in the 3rd quarter valued at approximately $642,000. Institutional investors own 56.86% of the company’s stock.

Wall Street Analysts Forecast Growth

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

VersaBank Company Profile

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.