LONDON, ON - VersaBank (TSX: VBNK) (NASDAQ: VBNK), a pioneer in digital banking and cybersecurity solutions, today announced its financial results for the first quarter of fiscal 2024, which ended on April 30, 2024. The Bank reported robust growth in earnings and revenue, exceeding analyst expectations.
For the first quarter, VersaBank posted earnings per share (EPS) of C$0.45, which, while showing a 6% decrease from the previous quarter's C$0.48, still represents an 18% increase from the C$0.38 reported in the same quarter last year.
The Bank's revenue saw a 7% year-over-year (YoY) increase to C$28.5 million, up from C$26.68 million in the first quarter and surpassing the consensus estimate of C$21.78 million. However, revenue did experience a slight 1% sequential decline from C$28.85 million.
David Taylor, President and CEO of VersaBank, attributed the strong performance to the Bank's efficient digital banking model and risk mitigation strategies. "We achieved a new record efficiency ratio of 38% as we continued to see strong year-over-year growth in our Point-of-Sale Financing Portfolio, while reducing our fixed costs," Taylor said.
The Bank's total assets grew by an impressive 18% YoY to a record C$4.4 billion, driven primarily by the growth in its Digital Banking Operations' Point of Sale Receivable Purchase Program (POS/RPP) portfolio. Net income also saw a significant increase, rising 15% YoY to C$11.8 million.
VersaBank's return on average common equity improved YoY to 12.36% from 12.07%, although it marked an 8% sequential decrease from 13.41%. The Bank also reported a net interest margin on loans of 2.52%, a decrease from the previous year's 2.99%.
Looking ahead, VersaBank expects growth in its Point-of-Sale Financing portfolio and a ramp-up in loan originations in the CMHC-insured finance facilities in its Real Estate portfolio. However, the Bank noted that softness in consumer spending could impact the timing of reaching its next total asset milestone of C$5 billion.
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