VersaBank (VBNK) PT Lowered to $27 at KBW; 'Moving Through Transitional Period Ahead of U.S. Market Penetration'

Keefe, Bruyette & Woods analyst Tim Switzer lowered the price target on VersaBank (NASDAQ: VBNK) to $27.00 (from $28.00) while maintaining a Outperform rating.

The analyst said: "VBNK reported another noisy quarter as the U.S. bank acquisition heavily impacted FQ4 results, increasing expenses and temporarily depressing the NIM due to higher cash balances. We expect performance to improve from here, but expenses will remain elevated as VBNK ramps up its investments in the U.S. business in anticipation of significant growth, and it will likely take a few quarters for volume in the U.S. to reach a meaningful level. We lowered our estimates due to the higher expense run-rate and a slower pick-up in U.S. origination activity, but VBNK’s long-term outlook and massive opportunity in the U.S. market remain very attractive. We are slightly lowering our price target but reiterate our Outperform rating."

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