VersaBank price target lowered to $15 from $18 at Raymond James

Raymond James analyst Joseph Yanchunis lowered the firm’s price target on VersaBank (VBNK) to $15 from $18 and keeps an Outperform rating on the shares. VersaBank’s Q1 results were below Street estimates, with shares trading down meaningfully due to higher noninterest expense forward run-rate, a change in its credit risk model to reflect a more unstable credit environment, and the potential for slower growth in Canada should the current trade war persist, the analyst tells investors in a research note. The story remains largely intact as despite the higher provision expense the bank is expected to continue to report zero/minimal losses as its Canadian partners remain strong, the U.S. regional price parities growth outlook is unchanged and the built-in hedge with its Canada insolvency business is expected to perform as expected and help lower its funding cost, the firm says.