LONDON, ON, April 7, 2021
/PRNewswire/ - VersaBank ("VersaBank" or the "Bank") (TSX:
VB), a leader in digital banking and cyber security solutions,
today announced that it has received the following investment-grade
credit ratings from Egan-Jones Ratings Company, a US Nationally
Recognized Statistical Rating Organization (NRSRO) and US National
Association of Insurance Commissioners (NAIC)-recognized Credit
Rating Provider:
- "A" rating for the Bank overall; and,
- "A-" rating for the current subordinated debt issue up to
US$100 million.
VersaBank's overall "A" credit rating is comparable to that of
several of the "Big Six" Canadian Schedule I Banks.
"This is a truly transformational event for VersaBank that will
significantly expand our universe of depositors and open up a new,
low-risk lending channel, providing the opportunity to further
accelerate our growth by means that were not previously available
to us," said David Taylor, President
and Chief Executive Officer, VersaBank. "Moreover, the Bank's
investment-grade ratings are an external affirmation of our
low-risk digital banking model, which is a fundamental component of
our ability to drive earnings growth and shareholder value."
"Importantly, the "A-" investment-grade rating for VersaBank's
subordinated debt provides the Bank with a new option for
significantly lower-cost, non-dilutive, tax efficient capital that
was previously not available to us to fuel our growth – especially
beneficial during this current period of record loan growth.
These new ratings are especially valuable as we explore the
potential to launch our innovative digital banking services in new
geographic markets beyond Canada,
where we see significant unmet needs similar to those that have
driven the Bank's strong, steady growth."
VersaBank's Overall "A" Rating Enables New Low-Cost
Deposit Channel, Significantly Expanding Universe of Depositors in
Canada and the U.S.
The overall "A" rating for VersaBank by a National Association
of Insurance Commissioners (NAIC)-recognized ratings agency
significantly expands VersaBank's universe of potential depositors,
allowing the Bank to offer a very attractive deposit alternative to
institutions such as insurance companies and named municipalities,
among others, in Canada and
internationally, who typically hold deposits for longer terms and
are restricted to holding deposits with investment-grade rated
financial institutions.
"The foundation of VersaBank's low-risk, superior profitability
proposition is our ability to source low-cost deposits, enabling us
to achieve industry leading net interest margins," said Mr. Taylor.
"We recently achieved a new record low for its cost of funds at
1.34% and the Bank's new investment-grade credit rating now enables
large, long-term depositors, providing a significant additional
source of low-cost funds."
ABOUT VERSABANK
VersaBank is a Canadian Schedule I chartered bank with a
difference. VersaBank became the world's first fully digital
financial institution when it adopted its highly efficient
business-to-business model using its proprietary state-of-the art
financial technology to profitably address underserved segments of
the Canadian banking market in the pursuit of superior net interest
margins while mitigating risk. VersaBank obtains all of its
deposits and provides the majority of its loans and leases
electronically, with innovative deposit and lending solutions for
financial intermediaries that allow them to excel in their core
businesses. In addition, leveraging its internally developed IT
security software and capabilities, VersaBank established wholly
owned, Washington, DC-based
subsidiary, DRT Cyber Inc. to pursue significant large-market
opportunities in cyber security and develop innovative solutions to
address the rapidly growing volume of cyber threats challenging
financial institutions, multi-national corporations and government
entities on a daily basis.
VersaBank's Common Shares trade on the Toronto Stock Exchange
under the symbol VB and its Series 1 Preferred Shares and Series 3
Preferred Shares trade under the symbols VB.PR.A and VB.PR.B
respectively.
Visit our website at: www.versabank.com
Follow VersaBank on Facebook, Instagram, LinkedIn and
Twitter.
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SOURCE VersaBank