I am the Founder and CEO of VersaBank, and it was a bank that I decided to create back in the early 1990s. It was a long uphill struggle. It's one of those endeavors that you get to the top of a mountain, you look down and say, "Holy smokes, did I come all the way up there? Could you hear me okay? Hi, can you hear me better now? Of course. I'm going to tell you briefly the story, and then I'm going to talk about the tremendous opportunity that's sitting in front of us as the world's first branchless digital bank that is now endorsing the latest in technology, that being distributed ledger blockchain technology. Clicking forward, all righty. The bank is unique and different than any bank you probably have ever heard of in that it operates in a cloud environment without actual interaction with the depositors or the borrowers. We use partners for that model. It's a partner-based model. We just simply sit in the middle, receiving our deposits from our partners, both, and receiving our loans from our partners, and happily earning a 2.5% spread. That's what we've been averaging lately. If you're familiar with banks, 2.5% might be 30%, 40% more than the industry is able to earn here in Canada. The other thing that sort of makes us somewhat remarkable and unique and is worth boasting about, I guess, is almost every bank you'll see gives some of that net interest margin back for bad loans. The way we've structured ourselves over the years, we've been able to avoid bad loans, avoid collection departments, and all that pesky, pesky stuff. This is a nice little map that shows where we're situated. These are tech centers. I hail from the University of Saskatchewan. We've got one of our tech facilities at the Innovation Center at the University of Saskatchewan. People ask me, particularly in the United States, why would I be in the middle of Saskatoon, Saskatchewan? I say it's centrally located, and it is indeed. We have an office in Minneapolis now, and we managed to do what most have found impossible in the last 35 years, and that's obtain a national bank license in the United States. It was particularly a challenge because at the time I was in Washington, D.C., pitching the idea to the Federal Reserve Bank. TD was scoring the world's largest fine for some indiscretions in the AML area, but I managed to pull it off. While we're on that topic, when we did get our license in Canada, national license in Canada, it was the first in 18 years. When I was pioneering the idea of branchless digital banks, regulators hadn't seen that before. It did take me a little while. August 1, 2002 was the time that we got it. Sort of London, Ontario at the airport. If you're ever in London, come and say hello at the airport. We also have a tech center there too. They came right along. You're probably saying to yourselves, how could they possibly be making loans, and especially through other parties and not having loan losses? That's got to be, you know, it's got to be a trick here. You can't hear me? You know what? That was the most important part too. Here's what we do. It's analogous to how we raise deposits. We raise deposits through deposit brokers, and they would be the firms that you would know: RBC Dominion, Scotiabank, McLeod, BMO Nesbitt. They send us the deposit. What I was looking for was something on the other side of the balance sheet, a mirror image of that. In fact, the software that we created to do it, DMS, Deposit Management System, we reflected and called it Asset Management System. What we did is we went to point-of-sale lenders. These are the lenders who lend for motorcycles and cars and hot tubs and mainly home improvement nowadays. We said to them, if you can send us those loans and leases as you're generating them, they can reside on our balance sheet unless they go in arrears, 90 days in arrears, and then you got to take them back. That relieved us of that really unpleasant part of banking where you have to dial up Mrs. Jones and say, "Mrs. Jones, how come you're not paying?" "My husband left me, the cat died." No, you don't have to hear that sort of thing. The model we set up is to receive the loans and leases that are generated at the point of sale, sent to us, reside on our balance sheet, and then when they inevitably go into arrears, we put them back at debit to their cash deposits with us. I think I've got air conditioners up on the screen here. Home improvement tends to be a large part of this business. Even in the recession here in Canada, there isn't a recession. If it was a recession, getting close. We've still managed to grow about 15% year-over-year because the home improvement business just keeps churning along. I think folks quite rightly are trying to save on their energy bills and getting new hot water heaters and new furnaces. Moving along. Here we are growing rather rapidly. A little bit of slowdown during the COVID times. This little timeline shows what we've been up to lately. It was a really big deal, as I was alluding to earlier, to manage to convince the U.S. regulators that we should be able to take this wonderful point-of-sale program that we developed in Canada into the States. Somebody asked me today, they said, you know, why didn't you just start doing some other business in Canada instead of going into the U.S. market? That was a good question. I said, because the point-of-sale business is such a wonderful business, lack of losses, great big fat spreads, we thought rather than diversify into some other area of banking and face stiff competition in Canada, why not go to the United States where this is basically a new product for the U.S. market? Arguably, it might be the largest point-of-sale market in the world. It was just sitting south of the border. The trick was getting the U.S. regulator to agree that we should be allowed to go into their country with this product. That's what we did. Moving along on the timeline here, we also launched this year a securitization product. When we were in the States, a lot of the very large point-of-sale companies are using asset-backed securities as a funding source. Rather than try to convince them they should adopt our new program, which arguably is much better, we said, if you're doing asset-backed securities, we can do that too for you. We launched that in the States also. Let's click along here. This chart here just shows you what kind of efficiency our bank is capable of producing as it scales up in assets. Yeah, it's extremely scalable. We only have about 15 people in the United States. The model works on software. In fact, it became even more efficient recently because our new AI model that we developed in-house became fully functional. It actually reviews the loan and lease data as it comes in and then very rapidly adjudicates it and says, "This isn't going to fit." Out she goes, "This one is." The humans took a lot longer to do it. Yep. What's the size of your loan? Very small. We're only about, we just started and we're, say, $250 million right now, something like that. We just started this year. It's growing. All righty. I can talk to you more offline on that. This is a revolution in the banking industry, and thankfully, it's something that we're leading the way on. I'm sure you're all familiar with the hoopla surrounding the so-called stable coins. If you don't know what a stable coin is, the idea is it's a cryptocurrency that is secured supposedly by an asset that someone's holding. Most recently in the United States, they passed a, I call it a light touch regulation act called the Genius Act to give some sort of framework of regulation for these stable coins to operate. What I thought, and thankfully, I thought about this in 2018, so I was well ahead of them, I thought that if a bank could tokenize its deposits, its deposit receipts—if you're all familiar with GICs in Canada, in the States, they call them CDs—if you could tokenize those and list them on various blockchains, in our case, Algorand, Stellar, and Ethereum, you would have the ultimate stable coin in that it's not representing an asset secured in the case of Tether in Hong Kong somewhere, or in the case of USDC in Larry Fink's fund, which I think is a pretty good place for it. It actually represents a real deposit with a real bank. As a real deposit with a real bank, it comes with all those bells and whistles that our bank depositors like, and that is insurance and interest. Stable coins are precluded from paying interest by virtue of the Genius Act. It has that tremendous oversight and regulation that we banks endure throughout North America. We created this right here in Canada. We piloted it in Canada. We have our digital facility outside Montreal, and we ran it through the system and actually got an external party to give us what's called SOC 2 Type 1 audit. When I was applying for the U.S. license, the U.S. regulator said to me quite rightly, "You might want to be quiet about that right now, David," because it was the crypto winter at that time. Sam Bankman-Fried just got a cell with Diddy, I guess, his roommate. I didn't want to be confused as his uncle. We took their good advice and we kept quiet about it. Fairly recently, when Trump was elected, the very same regulator, that being the OCC, came to me and said, "You know, you might want to get that going now because there's a digital flood coming." Thankfully, we are well ahead of the industry on this because we built it here in Canada, tests all out. If you look at the news now, you're going to see that we're refreshing it in Canada and we're piloting it in the United States. This is ahead of the world by maybe a year or two or maybe longer in that we're both sides of the border, both currencies. We've got a USDVB and we've got a CADVB. Wonderful if you're a foreign exchange trader and a wonderful way to pay your friends or pay whatever. That's sort of a big deal. I don't think it gets any bigger deal in our industry. That's what I was talking about there. All this tells you is that we're well underway with it. I'm pretty popular in the United States in that the Deputy Comptroller of Currency asked to see me, and now he said, "Would you mind meeting my boss in Washington? That guy's name's Jonathan Gould." I said, "Certainly, I can do that for you." I'm showing up next week. I've already met with the Federal Reserve Bank and just give you an idea how popular I am. I was on the street in Washington waiting to get into the Federal Reserve Bank. Of course, it's pretty well guarded. You have policemen on the street. You've got National Guards on the corner. I gave them my green card. Thankfully, they gave me a green card. I didn't have to pay the $100,000 or whatever I said they're looking for. The guy said, "Wait, right here." I was waiting and he came back out, kind of smiles and chuckles and said, "Oh, come on in." They had this X-ray machine and machine for testing metals and, you know, if you had a gun on you or something like that. I was taking my cell phone out and they said, "Oh, you don't have to worry about that, Mr. Taylor. You can just come on in." We really have made ourselves well known in the U.S. regulatory world with this particular product for the banks. You might say, "Why are they, why would the regulatory industry, particularly in the United States and in Canada to a certain degree, why are they welcoming something like this?" Here's the reason. This is safe harbor. If the stablecoin industry falls flat in its face, which I expect it will, as any time you're handing your hard-earned money over to folks that have light touch regulation or no regulation, usually it ends badly. We were presenting a safe harbor for those that would like this type of instrument to be able to come to quickly when the inevitable unhappy event takes place. That's why we're probably being welcomed in by the regulators on both sides of the border. In fact, even Tiff Macklem wants me to sit next week next to him in a, what's it called, a fireside chat. It's a very popular thing and we're bringing it out here in Canada and in the United States. This says, "Why should you invest in VersaBank?" I'm probably saying it's got to be too good to be true. You know, that's what I hear all the time. These are the reasons why you're obviously at an inflection point. Our core business just entering the United States, biggest market in the world with a better mousetrap, is just good business. Bringing out this digital, I can't say it, digital deposit receipts is what I used to call them. They have to call them tokens because apparently our New York securities lawyers told us deposit receipt has some other meaning in the United States. We call, they're called deposit tokens now. It's given us a lot of excitement and opportunity to make a fortune. If you're interested in how you'd make a fortune, USDC doesn't pay any interest and is required to put the proceeds in a fund, and they're in BlackRock's fund, earning about 4.5%. With us being a bank, the U.S. Treasury is beyond our balance sheet, earning 4.5% interest. We get the big fat spread rather than somebody else. That's why it's such a wonderful thing for a bank. All righty, why don't I stop there and field questions? Yes, sir. That's a really good question. Some of the portfolios that we're involved with are very low risk. Let's just say hot water heaters or our insurance premiums, almost nothing. In those cases, we only require a little bit of cash to be held back. Some are really risky, like subprime auto. We might have a requirement for, say, 20%, 30% of the loan value held back in cash. We're always reviewing that amount of cash holdback based on the portfolio's performance. Right now, actually, we're asking for more cash holdbacks because both sides of the border, the arrears are growing. We need to make sure that we always have sufficient cash to offset those inevitable losses as they go through the system. It's a dynamic thing. Yes. To answer your question about efficiency, when we introduce the AI model to do that, it can do it a gazillion times faster than our humans can do it. It actually audits 90% of the cash flows coming in versus the humans, who are doing a sample set of 20%, which is statistically significant, of course. AI is just that much better and it enables us to scale and be even more accurate on what we're requiring for the holdback. Yes, sir. We're checking the end buyer, but we're leaving the credit adjudication to our partner. We give them a credit box to operate in. Basically, we say, these are the credit parameters and this is where we want you to be. As the data is flowing in, our AI is checking to make sure they're staying in the box. It's also checking the documentation to make sure they've got it signed or, you know, all the things that you would do if you bought a loan. You have to make sure that the document's correct and they haven't strayed from their credit box. The other thing we're checking is the actual performance of their portfolio. Say we modeled in that they're going to have 5% defaults and, son of a gun, it's 6%, 7%. Alarms come on and we say, hey, excuse me, but you're going to have to put more in the cash collateral account. That's when times are tougher nowadays, so that's what we are doing. In the past, they'd be coming to us and say, hey, look, we're already down to 3%. You don't need all that cash. Of course, then we'd say, yeah, you're probably right. It's a dynamic thing. Yes. It's a dynamic thing. We have a team of human auditors that are doing that. They're really good at it, except for they're humans, so they're really slow. We have aspirations to grow faster and faster and be bigger and bigger. The impetus was on us to come up with a better way of doing it. Thankfully, AI started to mature. We got some AI specialists. We built it ourselves, and it's fully functional. You've probably heard it draws tons of electricity. We actually have cooling systems. I said, why don't we just pipe that around our tech facility now to keep it warm in winter in Canada? Yes, sir. Greg. Yeah, about three. Yeah, the three partners can keep us really going throughout the next year on that. We've got some fairly big ones in the works. Some well-known names that you'd all know, because some of them started in Canada. A fellow said, I won't say his name yet, but he said, let's just, it's rinse and repeat, Dave. We did it once in Canada. We'll do it again. We got some big guys that are coming on. The impediment actually has been that the really big point-of-sale companies in the United States have been routinely using the asset-backed securities method of doing their financing. When we step in the door and say, this is better and it's cheaper, they've got a big machine behind them: the lawyers, the accountants, the investment bankers, everybody being fed. Even though ours might be slightly cheaper, they're reluctant to switch over. That's when we said, you know what, we'll do that too. We really are agnostic to that. We just take what we can get. It's turning out that we're mostly in home improvement now. Strangely enough, I think that's just because there's a lot of home improvement loan business going on. The last one we just did was medical equipment for doctors. I guess that's a big diversification. We just take, you know, from our perspective, as long as we can mitigate the credit risk down to close to zero, we're okay with it. Yes, sir. In Canada, we're sort of maxed out in that we've set up this deposit broker network throughout the country. They just send us all the deposits we could possibly want. We don't have branches. We have, say, RBC Dominion Securities, that, you know, if we only had RBC Dominion Securities, we'd have tons of deposits. In Canada, we think we've got the 20-odd larger firms that are sending us deposits. It means we just put our rates up about 5 basis points and we end up with a lot of deposits. In the United States, we've got two big brokers on board right now: Raymond James, one of the biggest in the United States, and the other one is Stifel. They're a big, huge one too. Right now, they send us everything we could possibly want. I would like to diversify anyways. I'd like to have six more, just because it's nice. You know, say Raymond James wakes up in the morning and says, "I really don't like Dave Taylor anymore. You know, he's been troublesome." It'd be better to have somebody else. Anything else, guys? Charles? About your efficiency rate. Whatever you're charging on your loans, if you're so efficient in terms of figuring things out and ahead of the curve, you're just a small Canadian firm. Yeah. I'm an American banking institution. Why would I bother spending money to reinvent the wheel? Why wouldn't I just buy it? Well it's always possible. Overall, I feel confident about VersaBank's outlook. Yeah. Yeah, I mean, that is always possible with a public company. What we are doing in the United States is we're reorganizing ourselves. Instead of having the typical Canadian structure where you've got the Canadian bank that owns the U.S. subsidiary, that's like our Canadian banks are set up. We've undergone quite a process to have a U.S. bank holding company, Nasdaq listed, that owns the banks independently: Canadian Bank, U.S. Bank, and our tech firm, VersaTech. The advantage of that is it's something that the U.S. investment community is used to seeing. It's also Russell index eligible, that structure. It's also easy to sell a bank that way too, because then it's a compartment of the holding company. It's possible. I think what we're seeing now is seeing is believing. I've come out with something that's outrageously ahead of the curve. The regulators have bought in. I would say the industry is sort of saying, "What? What are you talking about? How's this?" I've had that before when we've done stuff. Yes, sir. I'm here looking at, if I understand the logic correctly, it's essentially a ledger that points to sort of upchain assets. How do you ensure legal entitlement, legal finality within those assets? We have a smart contract that represents the deposit with our bank. That's, and it's actually derived from our VersaVault that we created earlier in 2018 to make this all work. We're really, really sure that somebody doesn't duplicate it or change it. Long story short, I thought the very best guy in the industry to ensure the cybersecurity aspect was as good as you could get was a guy called Gurpreet Sahota. Gurpreet in this business is sort of legendary. He led BlackBerry's cybersecurity for 14 years and ensured that nobody could hack the BlackBerry. I hired Gurpreet right out of BlackBerry to set this all up. You know, I think I've got as good as you get. Secondly, I didn't mention this, we also set up a cybersecurity firm called DRT Cyber. My initial D, David Roy Taylor, just coincidence, of course. DRT Cyber looks after the cybersecurity for about 400 of the high-value companies and government entities in the United States. We're pretty good at it. I would say we're maybe the best. We were brought in by Warren Buffett, Sanji Companies, New York Police Department, in Canada, the big retailers, the big banks to do the cybersecurity. That's headed up by Gurpreet. As the CEO, I just try to hire the best guys I can. I think Gurpreet's one of the best. In fact, I'll tell you a funny kind of story about that. I was in Washington, DC with Tom Ridge, who was the former head of Homeland, the guy that created Homeland Security. We were having a private lunch with all the guys with things in their ears and keeping an eye on us. I was sitting with Tom and I was introducing Gurpreet. Tom said, "It was your BlackBerry, Gurpreet, that the only device I'd allow used in Homeland because it was impregnable." Indeed, it was and probably was the best that ever came that was ever invented. It's too bad there's still not... I love the little keyboard. Anyways, I've got really, really good people that do this kind of stuff. Is the cybersecurity company inside? Yes. Yeah, it's a wholly owned subsidiary. Now, we're probably going to sell it because it's got an... It's done its thing for us now. The mother load is the deposit tokens. The cybersecurity is pretty cool. I'm going to keep Gurpreet, of course, and some of his people. The U.S. regulator said that they didn't think having a penetration team was compatible with a bank license. I don't know. It's arguable that it is or isn't. I didn't bother arguing too much because they're giving me a license. What they mean by that is our guys would climb fences, pretend to be plumbers, they'd send drones over and jam your Wi-Fi. Our guys always get in. There's never been a case within three days that we haven't hacked into what Gurpreet refers to as the crown jewels of any organization in North America. Let's put it that way. The regulator said, you know, they see me as a bit of an entrepreneur and they think, you know, Dave, maybe you stick to banking. It might not be so bad. I'm not going to disagree with them because it looks like we've got a good thing going with them now. Hold on more. What business case do you have in case you're more willing? Business could be VersaBank. Sure. The easy, easy business case is that I walk, I just stand like I did on Nasdaq not so long ago and say, if you're holding USDC, guess what? You can swap them into USDVBs and you're going to get some interest at FDIC insurance. I expect that I'll get some portion of USDC because our digital deposit token has all the functionality of a USDC except for it has bells and whistles on it. I expect I'll get some portion. They've got $75 billion right now. Let's just say I got $10 billion, right? Because I'm paying interest and, you know, folks quite rightly should be a little nervous if they're giving their money to somebody who's not a bank. I would be. This audience here has probably lived long enough to see how things like that go badly when asset-backed securities turn out not to be worth what they were supposed to be. Let's just say we bring in $10 billion, right? We would just simply put that in U.S. Treasuries earning a little over 4%, right? Say we decide to pay 1% on those deposits. We netted 3. That'd be an additional $300 million pre-tax doing nothing. No extra people, no capital required, 0% risk-weighted, and maybe providing a service that the U.S. government really would like to see. That's the use case. After a little while, it gets to be more. You can use it as a payment vehicle. You can use the USDs and the CADs as foreign exchange tokens to facilitate foreign exchange trading. The easy case is just when I talk to the regulator, both sides of the border, here in the Canadian side, they say, "What are you going to do with it, Dave?" I say, "Government account bonds." On the U.S. side, I say, "U.S. Treasuries." Yeah, don't get any argument. All righty. It's been wonderful. I guess we've got some refreshments afterwards. Thank you.