Note 25 - Operating Segments

12 Months Ended

Oct. 31, 2023

Statement Line Items [Line Items]

Disclosure of entity's operating segments [text block]

25. Operating segments:

The Bank has established two reportable operating segments, those being Digital Banking and DRTC. The two operating segments are strategic business operations providing distinct products and services to different markets and are separately managed as a function of the distinction in the nature of each business. The following summarizes the operations of each of the reportable segments:

Digital Banking – The Bank employs a business-to-business model using its proprietary financial technology to address underserved segments in the Canadian and US banking markets. VersaBank obtains its deposits and provides the majority of its loans and leases electronically via innovative deposit and lending solutions for financial intermediaries.

DRTC (cybersecurity services and banking and financial technology development) - Leveraging its internally developed IT security software and capabilities, VersaBank established a wholly-owned subsidiary, DRTC, to pursue significant large-market opportunities in cybersecurity and to develop innovative solutions to address the rapidly growing volume of cyber threats challenging financial institutions, multi-national corporations and government entities.

The basis for the determination of the reportable segments is a function primarily of the systematic, consistent process employed by our chief operating decision maker, the Chief Executive Officer, and the Chief Financial Officer in reviewing and interpreting the operations and performance of each segment. The accounting policies applied to these segments are consistent with those employed in the preparation of our consolidated financial statements, as disclosed in note 3b - Segment reporting.

Performance is measured based on segment net income, as included in the Bank’s internal management reporting. Management has determined that this measure is the most relevant in evaluating segment results and in the allocation of resources.

Following is information regarding the results of each reportable operating segment as at and for the year ended October 31, 2023 and 2022:

(thousands of Canadian dollars)
for the year ended	October 31, 2023										October 31, 2022
	Digital		DRTC			Eliminations/			Consolidated		Digital		DRTC			Eliminations/			Consolidated
	Banking					Adjustments					Banking					Adjustments
Net interest income	$	100,051	$	-		$	-		$	100,051	$	76,666	$	-		$	-		$	76,666
Non-interest income		540		9,698			(1,654	)		8,584		52		5,839			(165	)		5,726
Total revenue		100,591		9,698			(1,654	)		108,635		76,718		5,839			(165	)		82,392
Provision for (recovery of) credit losses		609		-			-			609		451		-			-			451
		99,982		9,698			(1,654	)		108,026		76,267		5,839			(165	)		81,941
Non-interest expenses:
Salaries and benefits		25,382		6,046			-			31,428		22,303		4,493			-			26,796
General and administrative		15,140		1,565			(1,654	)		15,051		17,614		1,283			(165	)		18,732
Premises and equipment		2,462		1,440			-			3,902		2,475		1,390			-			3,865
		42,984		9,051			(1,654	)		50,381		42,392		7,166			(165	)		49,393
Income (loss) before income taxes		56,998		647			-			57,645		33,875		(1,327	)		-			32,548
Income tax provision		15,867		(384	)		-			15,483		9,744		146			-			9,890
Net income (loss)	$	41,131	$	1,031		$	-		$	42,162	$	24,131	$	(1,473	)	$	-		$	22,658
Total assets	$	4,190,876	$	26,443		$	(15,709	)	$	4,201,610	$	3,267,479	$	22,345		$	(23,826	)	$	3,265,998
Total liabilities	$	3,818,412	$	28,788		$	(22,748	)	$	3,824,452	$	2,912,249	$	25,755		$	(22,681	)	$	2,915,323