Versabank Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Joseph Yanchunis - Raymond James & Associates, Inc. - Analyst : Good morning. So it looks like momentum is really building in your US RPP program with a couple of partners added since the start of 4Q. Can you talk about your partner pipeline? And are you able to reach your $1 billion fiscal year-end '26 target with your current partner base?

Question: Joseph Yanchunis - Raymond James & Associates, Inc. - Analyst : Got it. And then in your prepared remarks and then as well as in some of your materials, you talked about your custody solution being consistent with planned regulation in Canada. Are you able to flesh out that opportunity a little more?

Question: Joseph Yanchunis - Raymond James & Associates, Inc. - Analyst : Got it. Then just a couple more for me here. Can you provide an update around the DRT Cyber sales process, which, from my chair, seems to be taking a little longer than expected.

Question: Joseph Yanchunis - Raymond James & Associates, Inc. - Analyst : And do you have a sense when the quality of earnings report will be completed?

Question: Joseph Yanchunis - Raymond James & Associates, Inc. - Analyst : Got it. And then just one kind of last housekeeping question for me. It looks like in your prepared remarks, you mentioned that the realignment onetime costs were $4.3 million, and I'm seeing $5.7 million in some of your printed materials. Is there something that I'm missing here? Can you help me bridge that gap?

Question: Joseph Yanchunis - Raymond James & Associates, Inc. - Analyst : Okay, great. Thanks for taking questions. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, VBNK.TO - Q4 2025 Versabank Earnings Call

Question: Timothy Switzer - Keefe, Bruyette & Woods, Inc. - Analyst : Hey, good morning. Thank you. The first one I have is some clarity on the noninterest expense guide. You guys guided to flat expenses year over year. What's the number we should be using as the base for that? Is it the $78 million or so of total reported expenses, and that's what we should be using for 2026?

Question: Timothy Switzer - Keefe, Bruyette & Woods, Inc. - Analyst : Okay. Yes, if we could get some clarity, I guess, on what the actual core number is for '26, that would be helpful in addition to, I guess, the $1.5 million of expected reorg one-time costs. Where are you guys looking to invest right now in the expense base? And how much of that is part of the real bank deposit token program? And I believe there's a comment in the press release about how most of the fixed costs of the US business are already in place. So is that helping to keep a lid on costs going forward?

Question: Timothy Switzer - Keefe, Bruyette & Woods, Inc. - Analyst : Okay. Got you. And then another question I had was the elevated liquidity that's weighing on the NIM right now. It continues to kind of leak higher over the course of the year. When do you think you can deploy that? Obviously, you have really strong growth expectations, but what's like a normalized level of liquidity for you? You guys -- if you include the securities portfolio, you had $640 million on average this quarter. Like where should that go? And what's the timeline for that?

Question: Timothy Switzer - Keefe, Bruyette & Woods, Inc. - Analyst : Okay. Thank you, David. The last question I have is, can you provide some color on which verticals have been driving growth in the US RPP? Is it largely HVAC and things like that? Or is it a little bit different than the composition in Canada?

Question: Timothy Switzer - Keefe, Bruyette & Woods, Inc. - Analyst : Awesome. Thank you for taking all my questions.

Question: Timothy Switzer - Keefe, Bruyette & Woods, Inc. - Analyst : Yeah, yeah. We got our first big snow last week. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, VBNK.TO - Q4 2025 Versabank Earnings Call

Question: Timothy Switzer - Keefe, Bruyette & Woods, Inc. - Analyst : Oh yeah, building up here.

Question: Andrew Scutt - Roth Capital Partners LLC - Analyst : Good morning, guys. Thank you for taking my questions. So my first question here for you, David, you talked about NIM kind of staying stable from levels here into '26 with some potential for some upside. So could you just kind of provide us some details on the puts and takes there, because I know you'll get some incremental benefits from the US RPP portfolio, but then maybe some headwinds from the CMHC lending. So just any additional color there would be great.

Question: Andrew Scutt - Roth Capital Partners LLC - Analyst : Great. Well, I appreciate the color. And as the capital gets deployed, that will be a great benefit. Second one from me here. I feel like digital media is kind of maybe an underappreciated opportunity in the long term. I know it might take a while to get the program to ramp. But can you guys just kind of talk to what you see the opportunity over the next couple of years for the program as you expand in Canada and the States?

Question: Andrew Scutt - Roth Capital Partners LLC - Analyst : Congrats on the strong progress in the US.