VersaBank

Good morning, ladies and gentlemen, and welcome to the VersaBank's first quarter 2022 financial results conference call. This morning, VersaBank issued a news release reporting its financial results for the first quarter ended January 31st, 2022. That news release, along with the bank's financial statements and supplement financial information, are available on the bank's website in the investor relations section, as well as on CDAR and EDGAR. Please note that in the additional addition to the telephone dial in, VersaBank is webcasting the conference call live over the internet. The webcast is listen only. If you are listening to the webcast but wish to ask a question in the Q&A session, following Mr. Taylor's presentation, please dial into the conference line. The details of which are included in this morning's news release and on the bank's website. For those participating in today's call by telephone, The company's slide presentation is available on the bank's website. Also, today's call will be archived for replay both by telephone and via the internet beginning approximately one hour following the completion of the call. Details on how to access the replays are available in this morning's news release. I would like to remind our listeners that the statements about future events made on this call are forward-looking. in nature and are based on certain assumptions and analysts made by VersaBank management. Actual results could differ materially from our expectations due to various material risks and uncertainties associated with VersaBank's businesses. Please refer to VersaBank's forward-looking statements advisory in today's presentation. I would now like to turn the call over to Mr. David Taylor, President and Chief Executive Officer of VersaBank. Please go ahead, Mr. Taylor.

Thank you, Kelsey. Good morning, everyone, and thank you for joining us for today's call. I have the pleasure of hosting this morning's call from New York City, where I'm participating in Keith Burnett and Wood's FinTech Payments Conference, and yesterday spoke on a panel entitled How Technology Can Advance Fundamental Banking. I can't think of a better panel topic to speak on. A recording of that panel will be available on our website later this week. Joining me today for today's call at our headquarters back in London, Ontario is Sean Clark, our Chief Financial Officer. The first quarter of fiscal 2022 saw the continuation of the momentum that drove a record year for VersaBank in 2021. As once again, our core banking operations delivered strong year over year growth in both loans and net income. We achieved another record loan portfolio at quarter end of just over $2.2 billion, up 24% year-on-year and 5% sequentially, while net income grew 5% year-on-year. And a quick reminder here that we report our financial results in Canadian dollars, and all amounts in today's call will be in Canadian dollars, unless otherwise stated. Some other headline results for Q1. Total revenue increased 18% year-over-year and was essentially unchanged from Q4. Cost of funds decreased 13 basis points year-over-year and two basis points sequentially to 1.29%. And net interest margin was down nine basis points year-over-year, but up four basis points sequentially to 2.77%. Notably, our cash balance has returned to historic levels in the first quarter as we continue to deploy funds to interest-generating loans. Sean will discuss the financials in more detail in a moment. Q1 also saw a number of other highlights. Most notably, we completed our closed ecosystem testing of VCAT, the bank's Canadian dollar version, of its revolutionary highly encrypted digital deposit receipts offering, with each VCAT unit representing $1 deposit with the bank. More on this in a moment. And for the first time this quarter, we are breaking out our cybersecurity business, DRT Cyber, in our financials, which delivered a year-over-year increase in revenue and gross profit of 36% and 30%. I will remind you here, gross profit amount for DRT Cyber is included in non-interest income in the bank's income statement. As noted a moment ago, we have completed our closed ecosystem testing for the first of our digital deposit receipts, the Canadian dollar-based DCAD. DCAD remains on Ethereum, Algorand, and Stellar blockchains, and we continue to transact internally but our testing has satisfied our criteria. We are now preparing for a commercial launch, which we expect upon the independent auditor's completion of the SOC 2 compliance audit. SOC 2 is a widely recognized standard intended to verify the non-financial reporting controls relating to security, availability, processing integrity, confidentiality, and privacy of the system. While the audit is taking longer than anticipated, we recognize the critical importance of such a third-party evaluation and validation in what is rapidly evolving regulatory landscape. Our DDRs were developed to be a significantly better stablecoin, a one-for-one representation of a fiat currency on deposit with our federally licensed bank, investment-grade rated bank. and the highest level of security based on our own versatile technology. In fact, we are increasingly hearing the term tokenized deposits, particularly in this town, used to describe the ideal digital currency, and that is exactly what our digital deposit receipts are. As such, they serve the dual purpose of both acting as a safe store of value and as a digital currency for a transacting business. We are very encouraged by recent trends towards regulation in North America and around the world, which we believe will put us in a firm position for our DDRs as not only a compelling digital currency for the market, but also one that will become the gold standard amidst the future regulatory requirements. We are preparing for commercial launch as soon as possible following the completion of the SOC 2 audits. Before I turn the call over to Sean, I would like to take this opportunity to publicly welcome the newest member of our leadership team, Gary Clement, who joins Bursa Bank as our new Chief Anti-Money Laundering Officer, or CAMLO for short. Gary is a financial crime prevention expert and an advocate recognized internationally in areas of money laundering, white-collar crime, organized crime, and detection of suspicious activities, including cybercrime. He brings to our bank more than 40 years of policing and financial crime prevention experience, including three decades with the RCMP, including as national director of proceeds of crime. I could go on and on, but instead we'll refer you to Gary's extensive CV, which is summarized in yesterday's press release. I don't know if there's anyone more qualified than Gary to fill this vacancy. We are extremely fortunate to have him, especially given the upcoming commercial launch of our digital deposit receipts. Gary fills a vacancy left by our longtime colleague, Barb Hale, who is retiring after 25 years with the bank. The last 20 of those in the CAMLO position. On behalf of the Board, I'd like to thank Barb for her outstanding contribution to the security and reputation of our bank during her tenure. I'd now like to turn the call over to Sean to review our financial results in detail.

Sean? Thank you, David.