Is it time to buy VersaBank stock?

Roth Capital Partners analyst Craig Irwin says VersaBank (VersaBank Stock Quote, Chart, News, Analysts, Financials NASDAQ:VBNK) is nearing a potential launch of tokenized digital deposits.

In a recent update following investor meetings with management, Irwin reiterated his “Buy” rating and US$28.00 target on VersaBank.

VersaBank is waiting for regulatory clearance to launch tokenized deposits, which management believes could come soon.

The internally developed product is a digital version of an FDIC-insured bank deposit issued on public blockchains.

Irwin believes the product could appeal to holders of U.S.-dollar-pegged stablecoins by offering insurance and yield, along with stablecoin-like functionality.

VersaBank plans to invest deposits raised through the product in U.S. Treasuries and earn a spread over any interest paid to holders.

The bank is also exploring licensing the technology to other banks for a fee. Management said the platform does not require incremental investment to scale.

Irwin argued that new secured receivable purchase partner announcements and the tokenized deposit launch are near-term catalysts.

VersaBank’s recently launched real-time SRP program provides funding to originating partners within 10 minutes, compared with the traditional 60-to-90-day batch process.

Management expects demand for the product to support more than 60% loan growth in fiscal 2027, including US$3-billion of U.S. loan growth and $3-billion of Canadian loan growth.

VersaBank shareholders approved the company’s restructuring as a U.S.-domiciled bank holding company on Sept. 16. Management expects regulatory approval by the end of October.

Irwin said the reorganization is expected to generate more than $8-million of annualized savings.

“Cost reductions should be realized just a few months after regulatory approval, where the elimination of overlapping roles and continued AI-driven efficiencies should deliver savings,” Irwin said.

VersaBank is also seeking lower risk weighting for SRP loans, which Irwin said would reduce capital requirements and leave more room for growth.

Irwin’s US$28.00 target is based on 14 times his fiscal 2027 adjusted EPS estimate of US$2.00.

“The multiple reflects growth potential from new products, an improved corporate structure post-reorg, and future opportunities from digital initiatives,” he said.

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