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Versabank
(TSX:VBNK)
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Rating:73Outperform
Price Target:
C$35.00
â–²(28.16% Upside)
Action:Upgraded
Date:09/15/26
The score is driven primarily by solid financial health (growth and conservative leverage) and supportive price momentum. The latest earnings call adds upside via strong growth targets and improving outlook for NIM, but the overall result is held back by compressed profitability/cash-flow volatility and a relatively expensive valuation (high P/E and low yield).
Positive Factors
Sustained asset and revenue growth
Rapid expansion in credit assets, revenue, and total assets indicates strong demand for VersaBank’s lending platform and growing market reach. Continued scale can support recurring net interest income, improve operating leverage, and strengthen the bank’s competitive position over the next several quarters.
Negative Factors
Compressed profitability and margin pressure
Profit conversion has weakened from prior peak levels, while lower NIM directly pressures the spread-based earnings model. Even if management expects NIM to recover toward 2.3%, funding costs, liquidity, and portfolio mix remain important constraints on sustainable returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained asset and revenue growth
Rapid expansion in credit assets, revenue, and total assets indicates strong demand for VersaBank’s lending platform and growing market reach. Continued scale can support recurring net interest income, improve operating leverage, and strengthen the bank’s competitive position over the next several quarters.
Read all positive factors
Versabank (VBNK) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$999.16M
Dividend Yield0.32%
Average Volume (3M)37.88K
Price to Earnings (P/E)29.4
Beta (1Y)1.38
Revenue Growth13.80%
EPS Growth11.27%
CountryCA
Employees131
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.05
Shares Outstanding32,419,080
10 Day Avg. Volume40,861
30 Day Avg. Volume37,876
Financial Highlights & Ratios
PEG Ratio-0.47
Price to Book (P/B)0.99
Price to Sales (P/S)1.73
P/FCF Ratio3.53
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$34.15Price Target Upside25.03% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)2.52
Revenue Forecast (FY)C$203.57M
Versabank Business Overview & Revenue Model
Company Description
VersaBank operates as a Schedule I chartered bank in Canada, offering a comprehensive suite of financial products and services. Its diverse deposit solutions include guaranteed investment certificates (GICs), registered retirement savings plans (R...
How the Company Makes Money
VersaBank primarily makes money through net interest income—earning interest on its loan portfolio and interest-bearing assets and paying interest on deposits and other funding sources—capturing the spread between those rates. A key component of i...
Versabank Earnings Call Summary
Earnings Call Date:Sep 03, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Dec 16, 2026
Earnings Call Sentiment Positive
The call was strongly optimistic, led by record revenue, net income, credit assets, rapid U.S. SRP growth, the launch and early adoption of Real-Time SRP, and expectations for substantial fiscal 2027 growth with operating leverage. The main negative factors were lower NIM, elevated liquidity, unusually high Q3 and upcoming reorganization costs, the cybersecurity divestiture requirement, and declines in the MRO portfolio and capital ratios. Overall, the highlights significantly outweighed the lowlights.Positive Updates
Record Assets and Strong Top-Line Growth
Fiscal 2026 continued to be described as a breakout year. VersaBank reported new records for credit assets, revenue, and net interest income, and total assets surpassed CAD 7 billion after quarter-end, reaching CAD 7.2 billion as of the day before the call. Assets were up nearly CAD 5 billion over five years, representing a compounded annual growth rate of more than 25%.
Negative Updates
Higher Than Typical Liquidity Weighed on Margins
Management said liquidity remained significantly higher than typical because of the U.S. expansion, although levels were steadily moving back toward historic levels. Cash and securities were CAD 624 million, or 9% of total assets, versus historical levels of around 7%. Management expects liquidity to decline toward approximately 5%-5.5%.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Assets and Strong Top-Line Growth
Fiscal 2026 continued to be described as a breakout year. VersaBank reported new records for credit assets, revenue, and net interest income, and total assets surpassed CAD 7 billion after quarter-end, reaching CAD 7.2 billion as of the day before the call. Assets were up nearly CAD 5 billion over five years, representing a compounded annual growth rate of more than 25%.
Read all positive updates
Company Guidance
Management expects NIM to trend back to the 2.3% range going forward, with liquidity levels brought back down to around 5%-5.5%, and David said NIM will get back to around 230 for next quarter and the rest of the year. VersaBank anticipates reaching its CAD 1 billion target of additional fundings since October of last year sometime before the calendar year end and has set a new U.S. SRP target of at least US$3 billion in additional fundings in fiscal 2027, equivalent to more than CAD 4 billion and representing 60% growth in its credit asset portfolio; it also expects Canadian operations to significantly outpace growth this year and described CAD 3 billion Canadian as realistic. Core non-interest expenses are expected to be in line with this year, excluding the CAD 10 million cost associated with the portion of DRTC it plans to divest, with a CAD 19.8 run rate and CAD 80 million annualized, while management said it does not see any increase in NIEs with the volume increase; an additional roughly CAD 4 million in non-core reorganization costs is expected in the fourth quarter, the reorganization is targeted for completion by the end of October 2026 subject to regulatory approvals, and DRTC must be exited by August 30th of next year.Versabank Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
80
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 341.23M | 304.15M | 294.40M | 237.92M | 132.54M | 94.69M |
| Gross Profit | 146.49M | 120.23M | 111.63M | 108.03M | 81.94M | 65.80M |
| EBITDA | 52.21M | 44.59M | 57.43M | 59.43M | 34.49M | 32.52M |
| Net Income | 33.86M | 28.46M | 39.75M | 42.16M | 22.66M | 22.38M |
Balance Sheet | ||||||
| Total Assets | 6.88B | 5.81B | 4.84B | 4.20B | 3.27B | 2.42B |
| Cash, Cash Equivalents and Short-Term Investments | 490.05M | 582.66M | 226.21M | 133.19M | 89.53M | 271.52M |
| Total Debt | 107.24M | 108.51M | 108.58M | 110.62M | 109.42M | 100.39M |
| Total Liabilities | 6.31B | 5.28B | 4.44B | 3.82B | 2.92B | 2.08B |
| Stockholders Equity | 565.57M | 532.67M | 399.20M | 377.16M | 350.68M | 332.11M |
Cash Flow | ||||||
| Free Cash Flow | 103.07M | 149.44M | 254.13M | 94.36M | -33.23M | -108.32M |
| Operating Cash Flow | 109.19M | 150.40M | 272.70M | 94.72M | -32.65M | -108.31M |
| Investing Cash Flow | -1.07B | 212.26M | -157.58M | -28.14M | -141.61M | -8.44M |
| Financing Cash Flow | 1.05B | 102.04M | -23.33M | -17.31M | -6.30M | 131.40M |
Versabank Technical Analysis
Positive
27.31
Price Trends
30.59
Positive
29.46
Positive
25.94
Positive
Market Momentum
0.26
Positive
50.74
Neutral
11.84
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:VBNK, the sentiment is Positive. The current price of 27.31 is below the 20-day moving average (MA) of 31.75, below the 50-day MA of 30.59, and above the 200-day MA of 25.94, indicating a neutral trend. The MACD of 0.26 indicates Positive momentum. The RSI at 50.74 is Neutral, neither overbought nor oversold. The STOCH value of 11.84 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:VBNK.
Versabank Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$999.16M | 29.35 | 6.17% | 0.32% | 13.80% | 11.27% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | C$537.61M | 11.23 | 9.06% | 9.26% | -10.85% | -5.88% | |
63 Neutral | C$897.86M | 10.45 | 13.08% | 7.71% | 13.67% | 24.33% | |
62 Neutral | C$422.04M | 16.66 | 3.85% | 13.53% | -5.01% | -41.36% | |
52 Neutral | C$5.07B | -566.67 | -0.07% | 2.02% | -3.80% | -102.38% | |
44 Neutral | C$1.81B | -80.44 | -0.30% | 4.65% | -7.16% | -116.37% |
* Financial Sector Average
TSE:VBNK
Versabank
30.82
14.15
84.84%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.