TSX:VB

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

VersaBank, a schedule I chartered bank, provides banking products and services in Canada. More Details


Snowflake Analysis

Excellent balance sheet and good value.

Share Price & News

How has VersaBank's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VB is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: VB's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

6.7%

VB

3.0%

CA Banks

2.7%

CA Market


1 Year Return

0%

VB

-5.5%

CA Banks

0.5%

CA Market

Return vs Industry: VB exceeded the Canadian Banks industry which returned -5.5% over the past year.

Return vs Market: VB matched the Canadian Market which returned 0.5% over the past year.


Shareholder returns

VBIndustryMarket
7 Day6.7%3.0%2.7%
30 Day13.4%17.7%12.7%
90 Day6.3%10.3%7.5%
1 Year1.6%0%-0.5%-5.5%4.2%0.5%
3 Year25.4%21.5%10.0%-3.8%12.8%1.9%
5 Yearn/a57.6%27.2%49.7%26.8%

Long-Term Price Volatility Vs. Market

How volatile is VersaBank's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is VersaBank undervalued compared to its fair value and its price relative to the market?

14.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VB (CA$7.47) is trading below our estimate of fair value (CA$8.75)

Significantly Below Fair Value: VB is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: VB is good value based on its PE Ratio (9.2x) compared to the CA Banks industry average (12.9x).

PE vs Market: VB is good value based on its PE Ratio (9.2x) compared to the Canadian market (15.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate VB's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: VB is good value based on its PB Ratio (0.7x) compared to the CA Banks industry average (1.2x).


Next Steps

Future Growth

How is VersaBank forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

7.9%

Forecasted Banks industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as VersaBank has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has VersaBank performed over the past 5 years?

17.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VB has a high level of non-cash earnings.

Growing Profit Margin: VB's current net profit margins (31.6%) are lower than last year (33.2%).


Past Earnings Growth Analysis

Earnings Trend: VB's earnings have grown by 17.8% per year over the past 5 years.

Accelerating Growth: VB's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: VB had negative earnings growth (-4.2%) over the past year, making it difficult to compare to the Banks industry average (-14.8%).


Return on Equity

High ROE: VB's Return on Equity (7.6%) is considered low.


Next Steps

Financial Health

How is VersaBank's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: VB's Assets to Equity ratio (7.6x) is low.

Allowance for Bad Loans: VB has a low allowance for bad loans (37%).

Low Risk Liabilities: 92% of VB's liabilities are made up of primarily low risk sources of funding.

Loan Level: VB has an appropriate level of Loans to Assets ratio (85%).

Low Risk Deposits: VB's Loans to Deposits ratio (106%) is appropriate.

Level of Bad Loans: VB has an appropriate level of bad loans (0.4%).


Next Steps

Dividend

What is VersaBank current dividend yield, its reliability and sustainability?

1.34%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: VB's dividend (1.34%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.62%).

High Dividend: VB's dividend (1.34%) is low compared to the top 25% of dividend payers in the Canadian market (5.26%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, VB has been paying a dividend for less than 10 years.

Growing Dividend: VB's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (12.3%), VB's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.7yrs

Average management tenure


CEO

David Taylor (67 yo)

27.83yrs

Tenure

CA$1,872,280

Compensation

Mr. David Roy Taylor, BSc (Hons), MBA, FICB, PPL has been the President and Chief Executive Officer at VersaBank since January 18, 1993. Mr. Taylor has been the Chief Executive Officer of VersaBank since ...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD1.44M) is above average for companies of similar size in the Canadian market ($USD163.92K).

Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
David Taylor
President27.83yrsCA$1.87m4.86%
CA$ 7.7m
R. Clarke
CFO & Corporate Secretary3.83yrsCA$636.19k0.033%
CA$ 52.3k
Jonathan Francis Taylor
Senior VP of Deposits & Chief Human Resources Officerno dataCA$522.38k0.082%
CA$ 130.2k
Nikola Kristo
Chief Credit Officerno dataCA$498.07k0.021%
CA$ 33.6k
Michael Dixon
Senior Vice President of eCommerce3.67yrsCA$500.41k0.029%
CA$ 46.5k
David Thoms
Vice President of Structured & Corporate Finance4.67yrsno data0.025%
CA$ 39.6k
Wooi Koay
Chief Information Officer0.25yrno data0.013%
CA$ 20.0k
Wade MacBain
Director of Investor Relationsno datano datano data
Barbara Hale
Chief Compliance Officer & Chief Anti-Money Laundering Officer0.83yrno data0.0052%
CA$ 8.2k
Brent Hodge
General Counsel & Corporate Secretaryno datano data0.041%
CA$ 65.0k
Telemaco Matrundola
Chief Strategist3.67yrsno datano data
Joanne Johnston
Chief Internal Auditorno datano data0.058%
CA$ 91.7k

3.7yrs

Average Tenure

59.5yo

Average Age

Experienced Management: VB's management team is considered experienced (3.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
David Taylor
President27.83yrsCA$1.87m4.86%
CA$ 7.7m
Robbert-Jan Brabander
Independent Director11yrsCA$98.05k0.24%
CA$ 381.7k
David Bratton
Independent Director27.17yrsCA$68.62k0.14%
CA$ 218.6k
Thomas Hockin
Independent Chairman of the Board6.25yrsCA$153.91k0.13%
CA$ 209.9k
Paul Oliver
Independent Director15.42yrsCA$94.18k0.24%
CA$ 381.6k
Colin Litton
Independent Director10.42yrsCA$108.44k0.25%
CA$ 399.5k
Susan McGovern
Independent Director9.5yrsCA$64.47k0.13%
CA$ 201.7k
Richard Carter
Independent Director5.92yrsCA$92.51k0.16%
CA$ 246.5k
Gabrielle Bochynek
Independent Director1.58yrsCA$33.43k0.014%
CA$ 22.4k
Art Linton
Independent Director0.58yrno data0.015%
CA$ 23.2k

10.0yrs

Average Tenure

74yo

Average Age

Experienced Board: VB's board of directors are considered experienced (10 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: VB insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

VersaBank's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: VersaBank
  • Ticker: VB
  • Exchange: TSX
  • Founded: 1979
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: CA$157.793m
  • Shares outstanding: 21.12m
  • Website: https://www.versabank.com

Number of Employees


Location

  • VersaBank
  • 140 Fullarton Street
  • Suite 2002
  • London
  • Ontario
  • N6A 5P2
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VB.PRATSX (The Toronto Stock Exchange)7% 5YR PFD SER 1CACADOct 2014
VB.PRBTSX (The Toronto Stock Exchange)PFD SER 3CACADFeb 2015
VEWDB (Deutsche Boerse AG)YesCommon SharesDEEURFeb 2017
VBTSX (The Toronto Stock Exchange)YesCommon SharesCACADFeb 2017
VRRK.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDFeb 2017

Biography

VersaBank, a schedule I chartered bank, provides banking products and services in Canada. The company offers deposit products, such as guaranteed investment certificates, registered retirement savings plan...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/29 23:39
End of Day Share Price2020/11/27 00:00
Earnings2020/10/31
Annual Earnings2020/10/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.