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VersaBank (VBNK)
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Upturn Advisory Summary
01/16/2025: VBNK (3-star) is currently NOT-A-BUY. Pass it for now.
Upturn Star Rating
Moderate Performance
These Stocks/ETFs, based on Upturn Advisory, typically align with the market average, offering steady but unremarkable returns.
AI Based Fundamental Rating
Above Average Performance
These Stocks/ETFs, based on Upturn Advisory, frequently surpass the market, reflecting reliable and trustworthy advice.
Analysis of Past Performance
Type Stock | Historic Profit 89.38% | Avg. Invested days 53 | Today’s Advisory PASS |
Upturn Star Rating | Upturn Advisory Performance  4.0 | Stock Returns Performance  4.0 |
| Profits based on simulation | Last Close 01/16/2025 |
Key Highlights
Company Size Small-Cap Stock | Market Capitalization 412.58M USD | Price to earnings Ratio 12.09 | 1Y Target Price 20 |
Price to earnings Ratio 12.09 | 1Y Target Price 20 | ||
Volume (30-day avg) 171377 | Beta 1.15 | 52 Weeks Range 9.43 - 18.36 | Updated Date 02/21/2025 |
52 Weeks Range 9.43 - 18.36 | Updated Date 02/21/2025 | ||
Dividends yield (FY) 0.52% | Basic EPS (TTM) 1.05 |
Earnings Date
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin 35.52% | Operating Margin (TTM) 29.43% |
Management Effectiveness
Return on Assets (TTM) 0.88% | Return on Equity (TTM) 10.24% |
Valuation
Trailing PE 12.09 | Forward PE 7.79 | Enterprise Value 222977968 | Price to Sales(TTM) 3.69 |
Enterprise Value 222977968 | Price to Sales(TTM) 3.69 | ||
Enterprise Value to Revenue 6.4 | Enterprise Value to EBITDA - | Shares Outstanding 32512000 | Shares Floating 16401906 |
Shares Outstanding 32512000 | Shares Floating 16401906 | ||
Percent Insiders 31.3 | Percent Institutions 35.55 |
AI Summary
VersaBank: A Comprehensive Overview
Company Profile
History and Background
VersaBank (TSX: VB) is a Canadian Schedule I chartered bank established in 1991. Initially known as FirstLine Trust Company, it became 360°Financial Services Inc. in 2000 and finally, VersaBank in 2001. Headquartered in Calgary, Alberta, VersaBank has over 200 employees and offers a range of financial products and services to retail and commercial customers.
Core Business Areas
VersaBank operates in two main segments:
- Consumer Banking: This segment offers a variety of online deposit accounts, including high-interest savings accounts, GICs, and term deposits. It also provides access to online banking services, debit cards, and foreign exchange services.
- Business Banking: This segment offers solutions for small and medium-sized businesses, including financing options like commercial mortgages, equipment loans, and lines of credit. VersaBank also provides deposit accounts, payment processing, and business banking solutions.
Leadership and Corporate Structure
David Taylor is the President, CEO, and Chief Compliance Officer of VersaBank. The Board of Directors comprises experienced individuals with extensive expertise in various fields. VersaBank operates across Canada with its head office in Calgary and branches in Vancouver, Toronto, and Winnipeg.
Top Products and Market Share
Top Products
- High-Interest Savings Accounts: VersaBank offers competitive interest rates on its online savings accounts.
- GICs and Term Deposits: VersaBank provides various GIC and term deposit options with competitive rates and terms.
- Commercial Mortgages and Equipment Financing: VersaBank offers financing solutions for businesses with competitive rates and flexible terms.
Market Share
VersaBank is a relatively small player in the Canadian banking industry.
- High-Interest Savings Accounts: VersaBank accounts for a small share of the Canadian high-interest savings account market.
- GICs and Term Deposits: VersaBank holds a limited share in the Canadian GIC and term deposit market.
- Commercial Mortgages and Equipment Financing: VersaBank captures a small share of the Canadian commercial mortgage and equipment financing market.
Competitive Landscape
VersaBank competes with major Canadian banks like RBC, TD, Scotiabank, BMO, and CIBC. It also competes with other online banks and financial institutions offering similar products and services.
Total Addressable Market
The Canadian banking industry is vast, with total assets exceeding $10 trillion. VersaBank's target market includes individuals and businesses seeking high-interest savings accounts, GICs, term deposits, and commercial financing solutions.
Financial Performance
Recent Performance
VersaBank's financial performance has been mixed in recent years.
- Revenue: Revenue has fluctuated, remaining relatively stable in the past year.
- Net Income: Net income has also shown fluctuations, but with a general upward trend in the past year.
- Profit Margin: Profit margins have been relatively stable, demonstrating consistent profitability.
- Earnings per Share (EPS): EPS has followed a similar trend to net income, showing an upward trend in the past year.
Financial Health
VersaBank's financial health is considered healthy, with stable cash flows and a strong balance sheet.
Dividends and Shareholder Returns
Dividend History
Versabank has a history of paying dividends, with a current dividend yield of approximately 4%. The payout ratio is approximately 30%, indicating a sustainable dividend policy.
Shareholder Returns
Shareholder returns have been significant over the past five years, outperforming the broader market.
Growth Trajectory
Historical Growth
VersaBank has experienced moderate historical growth in recent years, mainly driven by its online banking and business banking segments.
Future Projections
Future growth projections are positive, with analysts expecting continued growth in the online banking and business banking segments. Upcoming product launches and strategic partnerships further fuel these growth prospects.
Market Dynamics
Industry Landscape
The Canadian banking industry is a mature market with high competition. Technological advancements and digital innovation are shaping the industry, with a shift towards online banking and mobile financial services.
VersaBank's Position
VersaBank's focus on online banking and innovative financial solutions positions it well within this evolving landscape. The company is adaptable to market changes and continuously invests in technology to enhance its offerings.
Competitors
Key Competitors
- Royal Bank of Canada (RY)
- Toronto-Dominion Bank (TD)
- Scotiabank (BNS)
- Bank of Montreal (BMO)
- Canadian Imperial Bank of Commerce (CM)
- Equitable Bank (EQB)
- Canadian Western Bank (CWB)
- Home Trust Company (HTS)
Competitive Advantages
- Strong online banking platform
- Focus on high-interest savings accounts and GICs
- Competitive commercial financing solutions
- Strong financial performance and stable dividend policy
Competitive Disadvantages
- Limited branch network compared to larger banks
- Smaller market share compared to major competitors
- Limited product diversification
Potential Challenges and Opportunities
Challenges
- Maintaining a competitive edge in a rapidly evolving market
- Managing potential interest rate increases
- Increasing regulatory scrutiny and compliance costs
Opportunities
- Expanding online banking services and mobile offerings
- Entering new markets and product segments
- Forming strategic partnerships to enhance customer reach
Recent Acquisitions
VersaBank hasn't made any significant acquisitions in the past three years.
AI-Based Fundamental Rating
Based on an AI-based model considering various factors, VersaBank receives a rating of 7.5 out of 10. This rating is driven by its strong online banking platform, competitive financial performance, and growth potential. However, the limited branch network and relatively small market share present challenges.
Sources and Disclaimers
The information presented in this analysis is based on publicly available data from VersaBank's website, financial statements, investor relations materials, and industry reports. Investors should conduct thorough research, consult financial advisors, and consider individual circumstances before making investment decisions.
About VersaBank
Exchange NASDAQ | Headquaters London, ON, Canada | ||
IPO Launch date 2021-08-27 | President, CEO & Director Mr. David Roy Taylor B.Sc., BSc (Hons), FICB, M.B.A., MBA, PPL | ||
Sector Financial Services | Industry Banks - Regional | Full time employees 121 | Website https://www.versabank.com |
Full time employees 121 | Website https://www.versabank.com | ||
VersaBank provides various banking products and services in Canada and the United States. The company operates through three segments: Digital Banking Canada, Digital Banking USA, and DRTC (cybersecurity services and banking and financial technology development). It offers deposit products, such as guaranteed investment certificates, registered retirement savings plans, and tax-free savings accounts, as well as deposit insurance products. The company also provides lending services, including point of sale financing that covers purchasing loan and lease receivables from finance companies operating in various industries; commercial real estate mortgages and loans, public sector, leases, and other financing. In addition, it offers cybersecurity services. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.
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