Versa Bancorp’s overriding goal is to consistently and sustainably deliver growth in earnings per share by leveraging its proprietary technology to address underserved, high-growth opportunities in the digital banking and digital asset markets.

Digital Banking Operations

Through its wholly owned subsidiaries, VersaBank USA and VersaBank Canada, our cloud-based, branchless, business-to-business model provides significant operating leverage, enabling us to grow our assets and resulting revenue at a significantly faster rate than our non-interest expenses.

Our Structured Receivable Program (SRP) is an innovative and highly attractive digital funding solution for finance companies that provide loans and leases to consumers and small businesses for "big ticket" purchases (e.g. consumer home improvement/HVAC projects and a wide variety of commercial equipment). It was specifically designed to address an unmet need by point-of-sale financing companies for consistently available, readily accessible, economically attractive capital using our proprietary, state-of-the-art banking technology.

In September 2024, we launched our SRP, which has driven the vast majority of our recent growth in Canada, to the underserved multi-trillion-dollar U.S. market. We achieved our aggressive growth target in fiscal 2025, and again in 2026, supported by the roll out of the Real-Time SRP, which not only significantly enhanced the already very attractive value proposition of the SRP but offers financing partners a superior alternative to slow, costly and risky conventional securitization alternatives. As expected, our U.S. Digital Banking operations have already proven to be even more efficient that our Canadian operations, with a near-term target to be in the low-20% range.

Digital Assets (Digital Meteor)

We are also capitalizing on our leading-edge, proprietary technology that enables highly encrypted digital assets that combines the safety of traditional banking with the efficiency, cost savings, security, and flexibility of blockchain technology, providing superior security, stability, and regulatory compliance compared to conventional alternatives.

Developed by a bank, for banks, within the context of federal banking regulation, our tokenized deposit technology is a proven solution that exists today. We have initiated the commercial phase in the United States for its proprietary tokenized deposits in full compliance with U.S. federal banking regulations. Our Real Bank Tokenized Deposits (RBTDs^TM) represent a new source of inexpensive deposits, providing an additional source of incremental net income, initially through investment in zero risk-weighted U.S. treasury bills, which as zero percent risk-weighted assets are meaningfully accretive to the Bank’s return on common equity. Following an initial period of T-bill investment, our RBTDs^TM will support significant expected growth of our Structured Receivable Program in the United States.

With recent certainty around compliance with U.S. banking regulation for issuance of our own RBTDs^TM, we have entered the commercial phase our digital asset initiative in the United States, with VUSD^TM. We plan to list these interest-paying, FDIC insurance- eligible, U.S.-dollar RBTDs^TM on the most popular bona fide digital asset exchanges as soon as feasible and are expected to be the first tokenized deposits available broadly to consumers and businesses of all sizes.

Issuing our own RBTDs^TM in the U.S. will also position us to pursue its strategy to provide its proprietary, market ready, tokenized deposit technology to the thousands of community and regional banks in the U.S. challenged by the flow of deposits to alternative, non-bank-issued, blockchain-based deposit and payments alternatives. We look forward to providing our RBTD^TM technology in compliance with federal regulation to address the rapidly increasing demand by small- and medium-sized U.S. banks for a tokenized deposit, quickly, efficiently and cost-effectively, with industry leading security.

Importantly, our RBTD^TM technology is also broadly applicable to other currencies and the Versa Bancorp is positioned to similarly advance to the commercial phase in Canada when all applicable regulatory and business environments are conducive to doing so.

Cybersecurity Services

We also own DRT Cyber, which addresses the high-growth market for cybersecurity and related IT privacy services arising from the growing volume of cyber threats and privacy issues challenging businesses of all sizes across all sectors (with a specialty in financial institutions) and government entities on a daily basis. The global cost of cybercrime is projected to reach $10.5 trillion per year in 2025. DRT Cyber has established itself as a North American leader in the markets it serves, with more than 400 clients, including large financial services companies, critical infrastructure companies and indispensable government organizations such as metropolitan police departments. DRT Cyber is focused on growing revenue through offering new products
and services to existing clients and adding new clients, capitalizing on the significant expected long-term growth in the cybersecurity and privacy market globally.

We have undertaken an initiative to monetize our cybersecurity business in fiscal 2027 and deploy the proceeds to our Digital Banking operations.