Most banks that want to grow in a new country start by signing leases and opening branches. One Canadian lender skipped that step entirely when it went into the U.S., and early today it reported that its partner-driven approach is moving faster than planned.
VersaBank (NASDAQ: VBNK, TSX: VBNK.TO) said it surpassed its goal of $1 billion in additional U.S. Structured Receivable Program fundings during fiscal 2026, which ended October 31st. The bank had most recently expected to reach that mark by the end of the calendar year, so it arrived roughly two months early. About 94% of those fundings came through its core program, which earns higher margins.Â
To see why this matters, it helps to understand what the program does. Many purchases, from business equipment to home improvements, are paid for over time through finance companies. Those finance companies need fresh cash to keep lending, so they sell their loan and lease receivables. VersaBank buys those receivables through point-of-sale finance partners instead of lending to consumers directly. For the finance company, the arrangement turns future payments into money it can use today. For the bank, it creates a steady stream of interest income spread across many small contracts. It has run without branches since 1993 and raises its deposits digitally.Â
The U.S. door opened in 2024, when VersaBank bought Stearns Bank Holdingford, a small Minnesota bank, for about $14 million and renamed it VersaBank USA. That purchase gave it a U.S. national bank charter and access to U.S. deposits to fund the program. Because the bank runs largely in the cloud, it could enter the market with almost no spending on buildings or equipment. In fiscal 2025, the U.S. program funded $310 million, just ahead of a $290 million target. Going from that level to more than $1 billion in additional fundings one year later shows how quickly the business has scaled.Â
The growth is showing up clearly on the balance sheet. Combined U.S. and Canadian program growth is estimated to have added $687 million (C$969 million) in assets during the fourth quarter. That is more than double the previous quarterly record of $308 million (C$435 million). Total assets climbed more than 14% from July 31st to a record above $5.5 billion (C$7.8 billion) at October 31st. These are estimates, and audited figures will come with the full fourth quarter results.
Assets are the raw material of a bank’s earnings. Each dollar of receivables on the books produces interest income, so a jump of this size points to a much larger base of earning assets heading into the new fiscal year. The mix matters as well. The bank has said its U.S. business offers higher net interest margins and better operating efficiency, which means the shift toward U.S. fundings could have an outsized effect on profits. In the second quarter of this year, U.S. Digital Banking net income rose to $2.6 million (C$3.6 million) from about $94,000 (C$133,000) a year earlier.
Management has already set the next goals. VersaBank now targets a further $3 billion in U.S. fundings and $2.1 billion (C$3 billion) in Canadian fundings before the end of calendar 2027. Those are large numbers for a bank of its size, but they are also easy to follow, since each quarterly report will show how much ground has been covered. Separately, the company expects to finish moving under a new U.S. parent company, Versa Bancorp, on November 13th, after receiving final Federal Reserve approval on October 27th.Â
What stands out here is how the growth was achieved. VersaBank built a meaningful U.S. business without a branch network, relying instead on finance partners, a small acquired charter, and its own technology. The full fourth quarter results will show how much of this new asset base turns into earnings, and the 2027 targets will test whether the pace can hold.
