Note 25 - Operating Segments

12 Months Ended

Oct. 31, 2025

Statement Line Items [Line Items]

Disclosure of entity's operating segments [text block]

25. Operating segments:

Effective as of the transfer of the Bank’s Real Bank Deposit Token™ (RBDT™) (previously known as Digital Deposit Receipt, or (“DDR”) technology to an existing, wholly owned subsidiary (DBG Inc.) of DRT Cyber Inc., the Bank has established four reportable operating segments: Digital Banking Canada, Digital Banking USA, DRTC, and Digital Meteor (DBG Inc.). These four operating segments represent strategic business operations that provide distinct products and services to different markets. They are separately managed due to the differences in the nature of each business. The following summarizes the operations of each of the reportable segments:

Digital Banking Canada - The Bank employs a business-to-business model using its proprietary financial technology to address underserved segments in the Canadian banking market. VersaBank obtains its deposits and invests in the majority of its credit assets electronically via innovative deposit and lending solutions for financial intermediaries.

Digital Banking USA - The Bank has adopted a business-to-business model, leveraging its proprietary financial technology to address underserved segments of the US banking market. VersaBank USA obtains the majority of its deposits and invests in the majority of its credit assets electronically through via innovative deposit and lending solutions tailored for financial intermediaries.

DRTC (cybersecurity services and banking and financial technology development) - Leveraging its internally developed IT security software and capabilities, VersaBank has a 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.

Digital Meteor -Through its wholly owned subsidiary, DBG Inc. , VersaBank owns proprietary intellectual property and technology to enable the next generation of digital assets by the banking and financial community, including the Bank’s revolutionary Real Bank Deposit Tokens™ (RBDTs™) (previously known as Digital Deposit Receipts, or “DDR”s).

The basis for the determination of the reportable segments is a function primarily of the systematic, consistent process employed by the Bank’s chief operating decision maker, the President, 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 the Bank’s Consolidated Financial Statements, as disclosed in note 3 of the Bank’s 2025 audited Consolidated Financial Statements.

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, 2025 and 2024:

(thousands of Canadian dollars)
for the year ended	October 31, 2025
	Digital Banking		Digital Banking			Digital Meteor			DRTC			Eliminations/			Consolidated
	Canada		USA									Adjustments
Net interest income	$	103,265	$	12,903		$	-		$	-		$	-		$	116,168
Non-interest income		460		(39	)		2,206			7,245			(1,399	)		8,473
Total revenue		103,725		12,864			2,206			7,245			(1,399	)		124,641
Provision for (recovery of) credit losses		4,553		(140	)		-			-			-			4,413
		99,172		13,004			2,206			7,245			(1,399	)		120,228
Non-interest expenses:
Salaries and benefits		25,785		5,015			814			6,370			-			37,984
General and administrative		29,560		3,484			574			1,508			(1,399	)		33,727
Premises and equipment		3,677		722			820			1,805			-			7,024
		59,022		9,221			2,208			9,683			(1,399	)		78,735
Income (loss) before income taxes		40,150		3,783			(2	)		(2,438	)		-			41,493
Income tax provision		12,538		1,111			-			(614	)		-			13,035
Net income (loss)	$	27,612	$	2,672		$	(2	)	$	(1,824	)	$	-		$	28,458
Total assets	$	5,050,922	$	759,733		$	10,207		$	24,538		$	(36,925	)	$	5,808,475
Total liabilities	$	4,777,508	$	498,822		$	8,006		$	28,319		$	(36,853	)	$	5,275,802

for the year ended	October 31, 2024
	Digital Banking			Digital Banking			Digital Meteor		DRTC			Eliminations/			Consolidated
	Canada			USA								Adjustments
Net interest income	$	101,263		$	1,392		$	-	$	-		$	-		$	102,655
Non-interest income		698			1			1,183		8,455			(1,359	)		8,978
Total revenue		101,961			1,393			1,183		8,455			(1,359	)		111,633
Provision for (recovery of) credit losses		(134	)		(134	)		-		-			-			(268	)
		102,095			1,527			1,183		8,455			(1,359	)		111,901
Non-interest expenses:
Salaries and benefits		26,523			437			526		5,298			-			32,784
General and administrative		18,324			365			242		1,597			(1,359	)		19,169
Premises and equipment		3,292			105			120		1,638			-			5,155
		48,139			907			888		8,533			(1,359	)		57,108
Income (loss) before income taxes		53,956			620			295		(78	)		-			54,793
Income tax provision		14,860			155			41		(11	)		-			15,045
Net income (loss)	$	39,096		$	465		$	254	$	(67	)	$	-		$	39,748
Total assets	$	4,602,360		$	226,319		$	3,434	$	23,564		$	(17,193	)	$	4,838,484
Total liabilities	$	4,343,878		$	90,716		$	1,371	$	28,894		$	(25,578	)	$	4,439,281

Prior to the year ended October 31, 2024, substantially all of the Digital Banking’s operations were based in Canada.