Investor Presentation VersaBank Q3 F2019

August 28, 2019 Advisory

The Bank occasionally makes forward-looking statements about its objectives, operations and targeted financial results. These statements may be written or verbal and may be included in such things as press releases, corporate presentations, annual reports and other disclosure documents and communications. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, many of which are out of the Bank’s control. Risks exist that predictions, forecasts, projections and other forward-looking statements will not be achieved. Readers or users of this information are cautioned not to place undue reliance on these forward-looking statements as a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the strength of the Canadian economy in general and the strength of the local economies within Canada in which the Bank conducts operations; the effects of changes in monetary and fiscal policy, including changes in interest rate policies of the Bank of Canada; global commodity prices, the effects of competition in the markets in which the Bank operates; inflation; capital market fluctuations; the timely development and introduction of new products in receptive markets; the impact of changes in the laws and regulations regulating financial services; changes in tax laws; technological changes; unexpected judicial or regulatory proceedings; unexpected changes in consumer spending and savings habits; and the Bank’s anticipation of and success in managing the risks implicated by the foregoing. The Bank makes no undertaking to update any forward-looking statement that is made from time to time by the Bank.

2 David Taylor, President & CEO Q3 F2019 Performance Review

3 Q3 2019 Results Summary

Q3 results attributable to: • Strong growth in eCommerce banking; • Industry leading NIM expansion; • Low provisions for credit losses (PCL).

Q3 Net Income Q3 EPS YTD Net Income YTD EPS CET1 $5.0 million $0.21 $14.8 million $0.62 12.71%

6% yoy 5% yoy 15% yoy 17% yoy 16% yoy

On a year to date basis: • NIM improved to 3.0%; • Efficiency improved to 50.21%; • EPS up 17%.

4 Q3 2019 – Financial Highlights

Revenue • Q/Q growth of 10.4% attributable ($CDN 000s except YTD primarily to higher interest income Q3 2018 Q2 2019 Q3 2019 • Y/Y (YTD) growth of 6.4% attributable to for EPS) 2019 higher interest income and recovery of credit losses, partially offset by higher Revenue $12,982 $12,747 $14,078 $40,284 NIE Non-Interest Expenses (NIE) Non-Interest Expenses 6,408 6,411 6,860 20,225 • Q/Q and Y/Y (YTD) increase of 7.0% and 1.6% respectively attributable primarily Provision (Recovery) to business development costs and 128 (411) 381 (319) for Credit Losses higher salaries & benefits expense; Provision for Credit Losses (PCL) Net Income 4,678 4,896 4,963 14,791 • Q/Q increase primarily reflects higher ECL on stage 3 facility, and asset growth Core Cash Earnings 6,446 6,747 6,837 20,378 in eCommerce portfolio • Y/Y (YTD) decline attributable to changes in balance sheet mix, lower duration of Basic/Diluted EPS $0.20 $0.21 $0.21 $0.62 segments of the Bank’s lending portfolio, and remeasurements of ECL amounts Leverage Ratio 10.38% 11.43% 11.90% 11.90% under IFRS 9 CET1 Ratio 10.95% 12.17% 12.71% 12.71% Net Income • Q/Q growth of 1.4% attributable primarily to higher interest income Total Capital Ratio 13.13% 14.42% 14.99% 14.99% • Y/Y (YTD) growth of 14.6% attributable primarily to higher interest income and lower PCL partially offset by higher NIE

5 Capital & Leverage Position

Common Equity Tier 1 Ratio CET 1 Ratio • CET1 ratio of 12.71% +16 bps 12.71% • Q/Q increase of 54 bps • Attributable to retained +38 bps earnings growth, lower risk weighted assets and deferred tax asset recoveries

Leverage Ratio 12.17% • Leverage ratio of 11.90% • Q/Q increase of 47 bps • Attributable to higher Tier Q2 2019 Internal Capital Risk Weighted Q3 2019 1 capital and decreased Generation Assets balance sheet exposures

6 Lending Assets

Net Interest Income YTD ($CDN 000s) Q3 2018 Q2 2019 Q3 2019 • Q/Q and Y/Y (YTD) increase of 2019 10.3% and 6.5% respectively attributable primarily to higher Net Interest Income $12,965 $12,743 $14,059 $40,242 average earning assets and income earned on impaired assets partially Non-Interest Expenses 6,408 6,411 6,860 20,225 offset by higher cost of funds Provision (Recovery) Net Interest Margin (NIM) 128 (411) 381 (319) for Credit Losses • Q/Q and Y/Y (YTD) increase of 17 bps and 15 bps respectively Net Income $4,678 $4,896 $4,963 $14,791 attributable primarily to higher average yields earned on lending & treasury assets, partially offset by higher cost of funds Net Income Trend ($CDN 000s) NIM Trend 3.12% 3.00% 3.00% 2.95% 2.88% 5,164 4,932 4,896 4,963 4,678

Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19

7 Risk Review For the Third Quarter Ended July 31, 2019 Provision for Credit Losses (PCL)

YTD Provision for Credit Losses ($CDN 000s) Q3 2018 Q2 2019 Q3 2019 2019 • Q/Q increase reflecting higher ECL Commercial Real Estate on stage 3 facility, and asset growth $164 $(207) $165 $125 in eCommerce portfolio Non-Commercial Real Estate (60) (49) (11) (931) • Y/Y (YTD) decline attributable to changes in balance sheet mix, lower Corporate and Public Finance - (6) 214 728 duration of segments of the Bank’s Structured Finance lending portfolio, and 24 (149) 13 (241) remeasurements of ECL amounts Total PCL $128 $(411) $381 $(319) under IFRS 9

Expected Credit Losses Expected Loss Rate (%) ($CDN 000s) 0.17% 0.16% 0.15% 0.15%

2,759 2,568 2,364 0.12% 1,953 2,334

Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19

9 9 Gross Impaired Loans (GIL)

Gross Impaired Loans ($CDN MMs) Q3 2018 Q2 2019 Q3 2019 • GIL ratio consistent Q/Q and up Corporate and Public Finance $0.6 $0.6 $0.6 153 bps Y/Y Commercial Real Estate - $24.9 $24.9 • Y/Y increase due to commencement of recovery Total GIL ($) $0.6 $25.5 $25.5 process on well secured real estate loans

Gross Impaired Loans ($) GIL (%) (Impaired Loans/Total Loans) 1.58% $26MM $26MM 1.57% 1.22% $20MM

0.04% $0.6MM $0.6MM 0.04%

Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19

10 Loan Portfolio Overview

Loans ($) Geographic Distribution of Loans

$877MM

$642MM $966MM Commercial eCommerce Banking 60% 40% $260MM $192MM $188MM $91MM

Ontario Alberta B.C. Quebec Other

11 Volume Growth

Average Gross Loans Funding Mix

$94MM $93MM $95MM $382MM $405MM $422MM $1,621MM

$1,616MM

$1,069MM $1,020MM $977MM $1,607MM

Q3 '18 Q2 '19 Q3 '19 Q3 '18 Q2 '19 Q3 '19 Personal Commercial Holdbacks • Higher average loans contributed • Q/Q decrease attributable to lower funding to Q/Q increase in interest income requirements due to anticipated loan repayments late in the current quarter

12 VersaVault

VersaVault Inc. (“VV”) is a wholly owned subsidiary of the Bank and was formed to develop and provide cyber-security services to commercial entities.

VersaVault has recently announced it has entered into an exclusive licence agreement with Chairmans Financial B.V. (“Chairmans”).

The agreement permits Chairmans to use the VersaVault name and brand, and to offer global clients secure storage of digital assets, encryption, authentication and related services. The licenced technology and services are to be used by Chairmans in connection with a digital asset security business.

13 CCROCE vs. P/BV for CDN Banks

2.1

1.9 RBC

1.7 TD Bank National Bank

1.5

Bank of Montreal Bank of Nova Scotia

1.3 CIBC P/B P/B

1.1 Canadian Western

0.9 Laurentian Bank

0.7 Versabank

0.5 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0%

Annualized CCROCE - F19

14 VersaBank State-of-the-art Financial Technology Serving Lucrative Niche Markets

15