Good morning. My name is Tom Hockin. I am the chair of VersaBank's board. I've been a director of the bank since 2014. It's my privilege this morning to welcome all of you here. I can't guarantee you an exciting morning. Thank you for being here. The annual and special meeting of the shareholders of VersaBank will now come to order. In accordance with the bylaws of the bank, I shall preside as chair of the meeting. Brent Hodge, our Senior Vice President, General Counsel, and Corporate Secretary of VersaBank, will act as Secretary of the meeting. Today's meeting is held in person at the TMX Market Center in Toronto and made available by live video webcast. Before commencing the formal business of the meeting, I would like to introduce the other directors of VersaBank who are with us here today.
Please stand as I introduce you. Gabrielle Bochynek. Gabrielle. She's from Toronto and currently resides in Stratford. She has been a director of the bank since 2019. Excuse my Louis Armstrong voice. Sorry. Robbert-Jan Brabander. Robbert-Jan is from Richmond Hill and has been a director of the bank since 2009. Peter Irwin. Peter is from Toronto and has been a director of the bank since 2021. Richard Jankura. Richard is from London, Ontario, and has been a director of the bank since May 2022. Arthur Linton. Arthur's from Kitchener and has been a director of the bank since 2020. Susan McGovern. Susan is from Aurora and has been a director of the bank since 2011. She's also vice chair of the bank. Paul G. Oliver.
Paul is from Markham and has been a director of the bank since 2005. David Taylor. David is from Alderton and has been a director of the bank since 1993. David is also the President and Chief Executive Officer of VersaBank. Absent from the meeting today is David Bratton. David is from London, Ontario, and has been a director of the bank since 1993. We're also pleased to have many of the other officers of the bank here today, and I would like to ask them to stand as I call them by name. Tammie Ashton, Chief Risk Officer. Shawn Clarke, Chief Financial Officer. Garry Clement, Chief Anti-Money Laundering Officer. Mike Dixon, Senior Vice President, Point of Sale Financing. Jim Gardner, Real Estate Credit Officer. Brent Hodge, Senior Vice President, General Counsel, Corporate Secretary, and Chief Compliance Officer. Brent. Joanne Johnston, Chief Internal Auditor.
Wooi Koay, Chief Information Officer. Nick Krystal, Chief Credit Officer. Tel Matrundola, Executive Vice President. Nancy McCutcheon, Vice President, TIB Business Development. Rick Smyth, Senior Vice President, Real Estate Lending. Jonathan Taylor, Chief Human Resources Officer. Barbara Todres, Vice President Deposit Services. Absent from the meeting today are John Asma, Andy Min, Saad Inam, David Toms, and Deborah Savage. I'd also like to introduce Lawrence Chamberlain, our Director of Investor Relations, who just stood up and sat down there. Gurpreet Sahota, Chief Operating Officer, DRT Cyber Inc. Ernst & Young will be posted. The shareholders' proposed auditors, Ernst & Young LLP, is represented here today by Andrea Feddema. Thank you. And Sivan Ilenko.
In order to make the best use of our time, certain individuals have been asked to move and second the resolutions, which are set out in the notice of meeting. I will call on them at the appropriate time. Moving to scrutineers. Laura Stone of Computershare Investor Services will act as scrutineer of this meeting to report on the shareholders present in person and by proxy at this meeting to compute the vote, votes cast by ballot, if any, and to report to me on these matters. Prior to the commencement of this meeting, the scrutineer has reported that based on the registration of shareholders this morning and the proxies submitted, a quorum has been reached. In accord with the bylaws of the bank, I declare the meeting therefore regularly called and properly constituted for the transaction of business.
I direct that the scrutineer's report be annexed to the minutes of the meeting. Notice of the meeting. The notice calling this meeting and the accompanying material have been mailed to all shareholders of the bank who were shareholders of record on February 24th, 2023. The secretary of the meeting has provided the proof of mailing of such material. The reading of the notice of meeting will be dispensed with, and a copy of the notice with proof of mailing will be kept with the secretary of the meeting. I propose that we now proceed with the business of the meeting. The financial statements of the bank for the year ended October 31st, 2022, together with the report of the auditors thereof, have been mailed to the shareholders of the bank. It is not proposed to ask shareholders to approve the financial statements.
However, we would be pleased to deal with the relevant questions concerning the statements during the general question period, which follows the formal business of the meeting. Matters to be voted upon. First, appointment of auditors. The next item of business is the appointment of auditors for the current year and the authorization of the directors to fix the remuneration of the auditors. Following a rigorous and thorough process carried out by the bank's Auditor Selection Committee, the Committee recommended to the board of directors the appointment of Ernst & Young LLP as auditors for the bank. On December 5, 2022, the board approved the appointment subject to shareholder approval at today's meeting. A notice of change of auditors was delivered to the former and proposed new auditors, and responses were received together with the reporting package and subsequently filed on SEDAR.
The reporting package is attached as Exhibit A to the management of proxy circular, which was mailed to the shareholders of the bank in connection with this meeting. In respect of voting on the appointment of auditors, each holder of common shares of the bank is entitled to 1 vote for each share held by him or her. Please note, therefore, that only those who are registered shareholders and appear on the registered shareholder list, as provided by our transfer agent, and those persons who are authorized proxy holders are eligible to vote for today's meeting. I propose to conduct the as vote on the matter of the appointment of auditors by a show of hands.
Please note that each registered shareholder or proxyholder present in person at this meeting has the right to demand that a ballot be conducted either before the show of hands or following that vote. When a ballot is conducted on a resolution, I will vote by ballot all proxies submitted to me as proxyholder as required. I will now ask Shawn Clarke to move the resolution appointing the auditors for the current year and Mike Dixon to second the motion. Shawn Clarke.
Mr. Chairman, I move that it be resolved that Ernst & Young LLP, Chartered Accountants, are auditors of the bank to hold office to the close of the next annual meeting of shareholders or until their successors are duly appointed, and the directors of the bank be authorized to fix the remuneration of the auditors for the current year at such amount as they may in the administration determine.
May I have the motion seconded?
Second the motion.
Thank you, Mike. The motion is now open for discussion. You have now heard the motion, and that as there is no further discussion, I now put the resolution to the meeting. For this resolution to be passed, it must be approved by the affirmative vote of not less than a majority of the votes cast in respect thereof by shareholders present at the meeting in person or represented by proxy. All those in favor of the resolution, please so signify by raising your hand. Wonderful. Contrary, if any. I declare the resolution carried. Moving to the election of directors.
In respect of voting for the election of directors, which is to proceed by way of cumulative voting, each holder of common shares of the bank has the right to cast the number of votes equal to the number of votes attached to the shares held by the shareholder, multiplied by the number of directors to be elected. The shareholder May cast all such votes in favor of one candidate or distribute them among candidates in any manner. If a shareholder has voted for more than one candidate without specifying the distribution of the votes among the candidates, the shareholder is deemed to have distributed the votes equally among the candidates for whom the shareholder voted.
If the number of candidates nominated for director exceeds the number of positions to be filled, the candidate who received the least number of votes will be eliminated until the number of candidates remaining equals the number of positions to be filled. To comply with the provisions of the Bank Act, the election of directors will be decided by a vote by ballot, where a ballot is conducted on a resolution will vote by ballot all of the proxies submitted to me as proxyholder as required by law. Please note that only those who are registered shareholders and appear on our registered shareholder list that's provided by our transfer agent and those persons who are authorized proxyholders are eligible to vote at today's meeting. We will now proceed with the election of directors.
The number of directors of the bank is fixed at 10. It is necessary for such a number to be elected. I now declare the meeting open for nominations for the election of 10 directors to hold office for the ensuing year or until their successors are elected or appointed. Jonathan Taylor will now nominate each of the individuals listed in the management proxy circular for election as directors for the coming year, each of whom has agreed to serve as a director if elected. I will ask Mike Dixon again to second the nominations. John.
I nominate each of the Honorable Thomas Hockin, David Taylor, Gabrielle Bochynek, Robbert-Jan Brabander, David Bratton, Peter Irwin, Richard Jankura, Art Linton, Susan McGovern, and Paul Oliver for election as a director of the bank for the ensuing year or until a successor is elected or appointed.
May I have each of the nominations seconded?
I second each of the nominations.
Thank you. Are there any further nominations? Well, I declare nominations closed. Jonathan Taylor will now move the confirming resolution, and Mike Dixon will second the motion.
I move that it be resolved that each of the Honorable Thomas Hockin, David Taylor, Gabrielle Bochynek, Robbert-Jan Brabander, David Bratton, Peter Irwin, Richard Jankura, Art Linton, Susan McGovern, Paul Oliver be elected as a director of the bank for the ensuing year or until a successor is duly elected or appointed.
Okay, may I have the motion in respect of the election of each director seconded?
I second the motion.
Thank you. The scrutineers have distributed a form of ballot to all registered shareholders and authorized proxyholders present. Each registered shareholder or proxyholder should record his or her vote in respect of the resolution, which has been put to the meeting in the usual manner by indicating whether they are voting for all nominees or withholding in respect of all nominees or withholding in respect of one or several nominees. Each registered shareholder or proxyholder should then sign his or her name on the ballot. I would also ask each registered shareholder or proxyholder to print his or her name on the ballot. The scrutineers will then collect the ballots. I would ask the scrutineer to deliver the report to the secretary of the meeting as promptly as possible. I understand that the report on the ballot from the scrutineer has been received.
The scrutineer reports that the resolution with respect to the election of directors has been duly carried by a majority of the votes cast, both in advance and at this meeting. Accordingly, I declare the resolution carried. If any registered shareholder or proxyholder is interested in the exact number of votes cast in respect to the resolution which has been voted upon by ballot, he or she may obtain these particulars after the meeting on inquiry to the secretary of the meeting. Move now to further business. Is there any further business? Well, I thank you for being so patient and listening so carefully, but this concludes the formal business of this annual and special meeting of shareholders. I would now ask Shawn Clarke to move the final resolution.
Mr. Chair, I move the formal business of the meeting.
The motion has been accepted, I declare the formal business of the meeting terminated. Thank you very much. I will now ask the President and CEO of the bank, David Taylor, to make his remarks concerning the bank. David?
Good to see you all again. Another year has gone by, and a lot of changes in the world, with central banks trying to dampen enthusiasm, particularly for U.S. banks. Not filling a great big monster-sized term is quite understandable that banks are maybe not in favor. Our particular Bank, of course, is designed to be somewhat countercyclical to these times, and I think you'll be quite impressed about what I'm about to show you. Before I get into that, I often get asked a question of why I haven't retired yet. You know, I've put four more years behind me like the Edmund Fitzgerald would have done if it paint Whitefish Bay, and I'll have a half century of being a banker.
I've already hit the record of the longest serving bank CEO in, I guess, Canadian history, maybe world history. What more records do I wanna hit? With this warning I've got here, pay particular attention to the forward-looking side of it. To answer that question, well, there's a few records, of course, last year, record after record. These are numbers that are not often seen by banks. This is sort of the numbers you see with biotechs or racy fintech type companies that are roaring ahead. 42% growth in our loan portfolio. Wow, 74% in our key point of sale business. Record revenue, record interest income, record net income, strong profitable cybersecurity business.
There's the other characteristics that our bank has that others don't seem to be able to do. No loan losses, lots of liquidity, lots of capital, and about to enter the world's largest market for a point of sale. That's why I'm here, still here. There's just too much fun. There's too many more records to hit. Looking back in F 2022, what did we accomplish? Well, we moved well along the way to acquiring a U.S. bank license. That would be an OCC, Office of the Comptroller of the Currency, bank license. It's been slowed down a little. We were hopeful it would have taken place, we'd have got the license a little bit earlier.
Now we're looking to the summer of this year, and the slowdown isn't having to do with us. I think the regulators in the U.S. have never seen a bank that presented as we did, i.e. without losses and capital and liquidity and growth and all those things. They spent a lot of time looking at that like, "How can that be? You've got no losses. Something must be up." I think generally speaking, they started to smile and then ran out of questions to ask us some time ago. We're optimistic at that, during the summer, hopefully, we're blessed with the opportunity to take our proven point of sale model into the United States, south of the border, where market might be 100 times bigger.
You'll still, as last year, you're still seeing us invest in new technology. We think you can't rest on your laurels in this world, particularly in the banking world. We like to improve what we're doing all the time, make it better and better, more and more efficient. You're gonna see that this year coming, and you did see that last year. Looking at this slide again, what needs to be said, those are big numbers, and they're all pointing in the right direction. The next slide illustrates the sort of leverage that this bank has. We're at a sort of an inflection point when we should be able to turn some maybe never seen in the banking industry before, return on equity type figures, and it's driven by assets.
The blue bar chart there represents assets, CAD 3.53 billion. You can see that revenue is sort of directly proportionate to the increase in assets. As our assets grow, generally speaking, you're gonna see our net interest income grow by about 3% of assets. That's sort of what we budget. The good news is that our fixed costs, i.e. the cost to keep the lights on, should be plateauing as it has been CAD 49 million. Not much more of an increase in that. There'll still be a little bit, but not anywhere near the level of the growth that you'll see in the revenue figures.
It's that classic inflection point in a business where the volumes are starting to build, you end up with the outstanding return on equity type figures. That's why you're starting to see those big profitable numbers flip up as they should. Looking into United States, why we want to in effect erase the U.S. border and just bring this proven point-of-sale program that we pioneered here in Canada for the last 10 years. The market might be 100 times bigger than the Canadian market, and the propensity to finance at the point of sale in the United States seems to be a lot more than in Canada. Anyway, we Canadians can think of it this way.
We're a pretty conservative bunch, you know, when we see that Ducati motorcycle and it's $20,000, you might say, "Geez, that's a lot." The guy says, "Hey, but you can finance it." In the United States, they say, "Where do I sign?" In Canada, if it's me, I say, "Where do I sign?" Maybe somebody else might wanna ask their wife if it's a good idea to buy a motorcycle still in Canada. We're really excited about that US market and, you know, I know a lot of you are all shareholders. That's where I got a lot of our stock.
If there ever was a time to buy, like Warren Buffett says, and I think most of you know, I try to go to see the Oracle of Omaha each year cause there's nuggets of wisdom that fall from his table, and it's sort of, you buy when everybody's fearful. Sure, everybody's fearful in the world today, and you sell when everybody's greedy. The stock at 30% discount to book value, I think represents a huge bargain. With this OCC acquisition saying it looks eminent, little caveat, the U.S. regulator is quite rightly a little nervous right now with the recent failures, and that might be slowing it down.
With our particular bank, Shawn Clarke's been heading up the charge. I think they've ran out of questions, so that bodes well for us. This is a nice graph here. It sort of shows what I was talking about with the efficiency and hitting an inflection point in earnings. Just for illustration, I've put... We hope to be more than $4 billion. You know, I hope to keep on going and going in the United States, and that should take our efficiency ratio to ratios that aren't seen in our industry. I'm saying less than 35%. What that means for you non-bankers is that's the cost to earn $1 of revenue, so $0.35 to earn a buck of revenue.
It goes without saying, if your revenue's growing and your fixed costs aren't growing as quickly, that the cost to earn a dollar of revenue gets less and less. For some sort of pie-in-the-sky numbers, I use CAD 5 billion as a number, 'cause I like to see our CAD 3.6 billion or so we are today get into not too distant future into CAD 5 billion. If you use CAD 5 billion at 3% or CAD 150 million in net interest income, if your fixed costs are CAD 50 million, you've made about CAD 100 million pre-tax. If your tax rate is 70% retention, you've made CAD 70 million, and we've got about CAD 350 million shareholders' equity. You're in the 20s return on equity.
That's just taking a snapshot, 'cause by the time we get there, hopefully, we've earned a lot and our shareholders' equity is even larger than, so the denominator's got more. You see how the math works. It works really well. It really, at this point in time, is just a question of the math. The more we put on in assets, the better the numbers get. There's a little bit of uncertainty with respect to how fast those assets can be accumulated. There isn't much uncertainty in how the math works. It's a matter of time with respect to that. Now, if Gurpreet is here, he should take a bow. Well, there he is. Take a bow. Gurpreet runs our DRT cyber operations, our cybersecurity operations.
I think, probably most of you know, we have about 400 of the leading enterprises in Canada that rely on us for cybersecurity. That would include energy companies, rail lines, big retailers, police departments, some states. What we say through we shareholders, this is a free option. It's not even entering the valuation of our bank. We think it's a wonderful business because unfortunately, the world is chock-full of people trying to steal your stuff, and they're doing it digitally, and they're coming out with innovative ways to do it. Gurpreet and his team have found very good ways to prevent that from happening. As shareholders of VersaBank that happen to own DRT Cyber, we get that as a free option right now.
Why would Warren Buffett wanna buy our stock? Why hasn't Warren Buffett bought our stock?
Too small.
Yeah, maybe we're too small. Well, we're, as I said, we're at the inflection point. Obviously, you know, you have to do a lot of work to build all this out, and we did that work. Now you're starting to see the outrageous profit figures taking place that I hope I'll be able to say in a few years, that's another record that not only am I the longest serving CEO in banking history, but I also got the best numbers ever seen in the banking history. That's my goal. The proposed acquisition, you know, that's got to be a catalyst. I would say some people might think that's a miracle nowadays if you're able to complete the acquisition of a U.S. bank giving the regulatory nervousness.
You know, if you do want a new bank in United States, this is the one you want. One that won't present you with any embarrassments. For those that are listening, if you're thinking about liquidity, 98% of our deposits are CDIC insured. All of our wealth deposits are term deposits, i.e., they have a term. We don't boast about an award-winning website where you can go in and play with your daily interest, high rate daily interest savings accounts, and if you get a little nervous, take your money right away that afternoon, as you've seen happen. We don't have such award-winning websites. When you make a deposit with us, it's a term deposit, so it stays to the maturity.
I designed this bank, and I in that almost 50 years, I've seen a lot of failures, a lot of troubles, a lot of things. Having the opportunity to design a bank from a whiteboard, all those things that I saw the bank suffer with, I made sure that this bank wasn't vulnerable. I also, strangely enough, did away with you folks, you pesky humans, I call them, or bio units. Our bank has virtually no inter-interface with the actual end customers, the depositors or the guys that bought the motorcycle. That's all handled by our partners and our on our software solution.
With respect to risk, as I was saying earlier, this bank is actually does a little better in a recession in that we have extremely low risk appetite. Nick Crystal makes sure that's the case. His job is to preside over those things. I thought when I created the bank, there was no need to take a lot of risk as long as you could be super efficient and gather your deposits without paying too much for them. You didn't have to reach for yield and take on risk. That was the original thesis, and that's what we've stuck to. It particularly serves us well in times of a recession when the rest of the banking industry is sort of worried about their credit portfolio cracks.
Some are doing better than others, some are doing terrible. Our low risk strategy means that our credit portfolio is always in very good shape. I thought, you know, back in 1993 that a small bank shouldn't be taking a lot of risk. We ain't got a whole lot of capital. We haven't been designated too big to fail either. We haven't got that special designation that our large bank colleagues do. We really have to look after ourselves. Taking on a lot of risk was certainly not in my list of things to do. Yeah, current valuation, super. All I can say there is that we're caught in the waterfalls with all the other banks going down.
We're a good little salmon, though, and we're swimming as hard as we can. Hopefully, we can get our head above water, too, and again, the free option. Our time's arrived. Strangely enough, in a recession, it's even better. Questions? You got a question there? Something else.
Well,
Yes, sir.
I've got a question to you or two, if I may.
Absolutely.
This is the joy of annual general meetings, that you get an opportunity to see your management and directors and whatnot. My name is Ian Miller. We have spoken before.
Absolutely, Ian. Yes.
We were supposed to have lunch. That was about three years ago, I think, before the COVID.
You know what, Ian, there's no COVID now, so we're good for lunch.
We'll have to get that organized. In any event, a few things. One, with regard to the U.S. banking acquisition, what has happened with their performance, with their deposit base post Silicon Valley fallout, et cetera, et cetera? Is there an opportunity, if need be, to renegotiate that arrangement if their performance or their deposit base, for example, shrinks?
To answer it this way, we're not really buying much of a bank. The Holdingford Bank may have $60 million-$70 million in loans. Maybe they book maybe 12 loans a year. They have a tiny little premises in the village of Holdingford. And that hasn't changed. The metrics that we agreed upon, nothing's changed. There, if there is anything, the Stearns, the parent, tends to still gather deposits as it did in the past. Don't change the metrics. It was really us trying to gain access to the U.S. market and utilize the systems we have in Canada to serve it. It's still the same deal as it was before.
It's still a kind of a curiosity in our world in that it's actually got a premises with real life people in it and tellers. The rest of Canada, and we are servicing some clients in the States. It's all serviced from Canada to two tech centers. We have 1 in the University of Saskatchewan's campus and the other one at the airport.
Is there a break fee if you, decide for some reason-
I think there is a little break fee. We'd never do that. This is like the opportunity of a lifetime.
You referred to DRT Cyber as one of the premier IT sort of security firms. I'm surprised the growth hasn't sort of reflected that outsized growth. Can you talk a little bit about why that hasn't occurred yet?
Yeah. When we say the premier service for a cybersecurity firm, it's one particular arm of DRT Cyber. It's like... We call it penetration testing. That came to us through the acquisition of Digital Boundary Group, and that is the company that provides the most of that 400 clients service. Our plan was to cross-sell the other cybersecurity products that Gurpreet's team had built to these various clients. Some of those cybersecurity solutions have been taking some time to finish up. One in particular is done now. It's a compliance with anti-spam legislation. We call it Raven. That we're having quite a bit of progress on that. As the quarters progress, we've segmented these numbers out.
You'll be able to see that, DRT Cyber's revenues will start to grow pretty rapidly because now we're deploying these new products to hopefully entice the existing client base to use them.
In terms of grow rapidly, are you in terms of 25% annually?
That's the kind of number I would hope is a baseline for growth with DRT Cyber. I mean, Last year, it had about $10 million in revenue. I mean, I'd like to see $30 million-$40 million in revenue. United States is a tremendous market, and we think our products are ideally suited. kind of the challenge we have is getting the products out there, the marketing of the products, so we are working on that aspect of it.
One of the webcasts that you had some quarters ago, I think the comment was sort of muted, maybe by you as well, that down the road, you might look at spinning off some part of that.
Yes.
Is that still the plan?
It is the plan. It's actually mandatory. When we obtain the U.S. bank, the U.S. regulator would like that cybersecurity sub spun off in, say, a two-year timeframe, possibly longer. We're targeting two years afterwards after getting the approval from the Fed and the OCC.
The whole thing sold off or can you just maintain an interest?
Well, we could maintain interest. I think the rule is we have to sell off the controlling interest.
I see.
If DRT Cyber has a contract with the bank to provide its cybersecurity type services.
Right.
We're, you know, obviously we're hoping that within a two-year period of time, as you were hoping, that DRT Cyber's revenues are gonna be way up.
Yeah.
Those new products that we're bringing out are well accepted, and it's a nice viable standalone company.
As an option that isn't recognized in the market, as you say, what sort of number? I mean, you paid $10 million or whatever for part of the business.
Some analysts have... One analyst back in the heady days a few years ago when tech companies were getting huge multiples said it might be worth more than your bank. I would say, at this juncture, it might be $30 million-$40 million, something like that, given the revenues increase, the technology we've developed, and all that sort of thing.
You didn't talk about the sort of the instant mortgage. Is that coming along?
It is indeed. I suppose there's a lot of things we've got in the. We call them skunk works. The instant mortgages is coming along quite nicely. There's quite an opportunity, better opportunity now in that field than there was before. That's that, the spread that we can earn at interest margin on a conventional mortgage has increased from almost nothing to maybe 200 basis points. Conventional mortgages have a 35% risk weighting on them. If you run the math of investing $3.50 and getting back $2, those are enormous return on equity figures. The trick is we have to source the mortgages directly using an instant mortgage app. We're in the stages of building a department to support that.
I would say early in the new year, fiscal year, it'll be on. It'll be on.
Okay. Another item you mentioned on previous calls, some focus on sort of the North, the indigenous lending program, where does that stand? Is that, is that kind of kicked in the higher gear or?
Well, it hasn't. It's going really slowly, which is kind of disappointing 'cause, in the past, that used to be a very good business for us. We have two indigenous people on staff, and they're working on those projects. They're trying to work with the federal government with respect to sort of helping out. It's just a slow go. Most recently, I saw an indigenous group has advertised. They've done a deal with CMHC on housing. That bodes well. We're not really on... Although we would do housing projects, we're more inclined to do hospitals, school boards, rec centers, facilities in the Arctic. It has been disappointing. It has been very slow.
Back in the early days when I used to fly my little airplane out there, we'd be doing deals every month. Everybody was really happy about that too. It's just a terrible shame that we had to curtail that, thanks to our federal government.
Last question. Start creating, say, a 30% discount to book. You also are kind of indicating that hopefully you'll get to an ROE of 18, perhaps by a year from now. If I remember. Previously about 8%. Since you've made that comment about the 18, the stock has obviously done nothing. That must be, not only frustrating to you, but no doubt some of the other directors as well, kind of what's going on. Two things. Two parts to that question would be, what is your sense as to the reason for that? Number two, is there any suggestion of trying to gear up the purchase plan NCIB to a greater extent than you have previously taken down here over recent weeks?
Well, those are really good questions. With respect to the 18%, you know, sort of dreaming, I think we're at 11% last quarter, and it just keeps getting better and better as we add assets. It doesn't seem to count. It didn't make a bit of difference. What I mainly attribute that to is when we did our initial public offering in the United States, listed on the Nasdaq, we had about 12 investment firms come in, and it oversold by maybe a factor of two or three. It was very popular. These were investment firms that specialized in tech-enabled small FIs. I talked to them all on the video and met some of them, and they loved our business.
Their entire portfolio was our kind of bank, tech enabler, just like us. They got the stock tanked for no good reason other than they're a small tech enabled FI. We had a lot of selling for mainly for I know the people have been selling for liquidity purposes. They've been dumping. We have been buying our stock back. We bought back over 1 million shares. Now we're down from 27.2 million shares down to 26 million shares. I guess the good news was we were really popular with these firms. The firms themselves would have been really slapped hard by the environment they find themselves in. Needing liquidity, selling everything they've got. We've been buying it. We're almost running out of our capacity.
We have to go back, I've got a cap here in my hand to go see OSFI and ask for to reload. Hopefully they'll let us reload. We've got tons of capital, and there's no better another Warren Buffett statement. There's no better investment than our own company. Again, that, and that helps on my return on equity figures too, and earnings per share, of course. We're almost looking at doubling our earnings per share this year. There's another metric that you would have thought the stock would've reacted to. You know, you've seen earnings, what? CAD 0.39, CAD 0.35 this last quarter. I mean, all in this year, that run rate, we're at about CAD 0.35 versus half of that last year around.
You know, I guess bottom line, we sure as are gonna buy all we can and keep doing what we're doing. I think this will pass as it always does, and that we're gonna come out of it with some outstanding outstanding figures. Thank you. Those are good questions. I was fearful I wasn't gonna get any questions here. I'm looking at the crowd here, and a lot of them already have asked me a bunch of questions. Yes, Ian.
Ian Noble. Just a quick question. The federal government's tax policies, on banks, will that have any bearing on your results?
I would say no. The tax on buybacks of shares comes in next year. I'm not sure we'll be buying back next year if our stock has finally surfaced again. That could hurt us if we were still buying back shares. The other, we're already paying a higher tax rate, total tax rate than the other banks. We're averaging 30%, they're averaging 20%. We've got some room to move a little lower. Generally speaking, I think we're in a favorable environment from the government's perspective in that we are a bank that provides choice for consumers, i.e., the capital that we're pushing through our partners, enables consumers to get fast on the spot point-of-sale financing at more economical rates.
I think that's what our federal government wants is Canadian taxpayers to have access to maybe more appropriate financing at the point of sale. There's a little bit of a wind at our back on that front. Many years ago, it was the Liberals that gave us our license too. Thank you. Yes, sir.
Hi, David.
Ah.
Greg MacDonald.
Greg MacDonald.
There's been a lot of discussion about the funding and liquidity risk issues, not just at Credit Suisse. And some discussion on the stock and why the stock may have tainted a little from the same account as most of the other banks. One of the things I've always liked about this bank is the institutional quality of that deposit profile. And for that reason, there's by definition, a lot less volatility. Have you spoken to some of these institutional partners that you have? Are they seeing any indication of retail in their client base pulling deposits, or do you think that's maybe?
They don't see indication of deposits diminishing. We have seen a kind of a metric that indicates there's some nervousness in the deposit area in that prior to all this, we were budgeting around 50 basis points over Government of Canada, same term Government of Canada bonds for our deposit rates. Some case that's 100. I interpret that as other FIs remaining nameless, probably quite rightly are going into the term market a little more than the high rate daily interest savings accounts, because you just kinda got a lesson in California of how fast those deposits can disappear. I think some folks might think because we call ourselves a tech bank, that we might actually have award-winning websites where folks can take their money out in a heartbeat.
We don't have such things because I thought a little bank, after watching It's A Wonderful Life when I was a little kid, watching Run a Bank, you don't you wanna keep make sure your deposit base is as sticky as possible. I would guess that some of the other FIs that have quite a reliance on high rate data interest savings accounts and accessible on the internet are probably leaning into more term deposits to offset the risk that some ridiculous statement's made on the internet, and it causes havoc. We, we know ridiculous statements are made all the time now. In our industry, that can be very troublesome if you can get your money out in a hurry.
Sort of as a correlative now, can you talk about in the U.S. why, let's say, economists or even regulators are talking about the potential for this to be a bit of an extended tail issue in the U.S. market specifically?
Yeah.
Maybe not so much in the Canadian market because we have better capital protections. Can you talk about that issue overall?
Well, the way we look at it is we have to be careful in United States. It's a huge market, so we can be cherry pickers and say, choose partners that are the very best. But generally speaking, I'm nervous about the market in the United States, and that I think their credit risk is very high. And it'll sort of start with office buildings not going into foreclosure. And then it'll spread throughout the smaller FIs that have been financing them. And then there's been, I think, a little loose credit in the consumer area, too. And that always comes home to roost. You know, we know the United States is a huge market.
We know we're bringing in the better mousetrap, we can be also quite discerning on who we bring on board. What you're saying, I think is absolutely true. You just need to go down into New York and have a look at all the empty office buildings and say, "Holy smokes, who's paying the property taxes on those buildings?" You know someone's gonna suffer soon. It's no surprise to me that Jamie Dimon is saying these workers need to come back to work. Of course, they do. They gotta get back to work fast 'cause you can't have a ghost town city with that expensive property. Some bankers finance that.
Just one last one. This is the last question. You've spoken in the past about how this might be an opportunity for you guys where, you know, since kind of-
Yes.
Since COVID, a lot of financial institutions pulled back from funding that point of sale.
Yes.
Do you see this ironically-
Yeah.
This SPV thing ironically being an opportunity?
Yeah, it is. That's why another reason why we're somewhat countercyclical in that, when the capital market funding dries up, the cheap money that should never been out there in the first place dries up. The community banks syndicates that are financing our target market are looking at their shoes wondering about their credit. It creates an opportunity for us to say to their clients, "Well, try us. You'll like us." Our marketing strategy is never to say, "We're gonna replace your business," because I know full well that those relationships that our point of sale targets have had with their community banks probably goes decades and decades. Their kids go to the same school. They golf, they golf together. Our strategy, and we did this in 2008 in Canada, we said, "Well, just try us.
You know, isn't it better to diversify your funding sources?" No one says no. We use try us, and then what happens? They get used to us, providing some of the financing and we grow that way. We really don't wanna replace the entire financing of a company. We like being partners. We believe as a bank, you should be fully diversified in your funding sources, and we believe our point of sale partners should be, too. We just wanna be one of them. It is a good time. It's a, you know, it's the happy-- What would Top Gun say? The target-rich environment.
Always take it to bring it back to you.
Oh, well. Well, if that's it for questions. One more. Robbie Nash. How are you, sir?
I'd like to congratulate you on a wonderful year. Ian, great questions. If I just might say on that, I came through the brokerage business as a stockbroker. As you know, as we all know, the game has changed so much. It is very, very difficult for small cap right now to raise money. Bloomberg, the latest even yesterday, the confidence in the stock market, even though it's bouncing back some, is the lowest since 2009. We know that, and it makes it even more difficult for a wonderful company like VersaBank. It will change. If you look at the technicals, the Russell 2000 or 5000, whatever it is, has probably bottomed and reversed.
It's probably gonna take time, and to have a company like VersaBank that can do it over time, and it's going to work out. It's extremely frustrating, a real frustrating time, which going back over the years, where you have this bank that did the right things, and it became very difficult. Look what's happened. Today it's. Yeah, very proud of you. I talk to other people, and I talk to you at length. The more you can get that out to people as a matter of degree rather than.
Well, thank you, Robbie. I guess over almost a half century, you learn a few things, right? Well, thank you very much. I look forward to seeing most of you. I think, you're gonna join us for lunch. If you have any more detailed questions, of course, staff is here, happy to answer them. We'll see you. Thanks.