AnnualFirst Quarter Meeting of2019 Shareholders VersaBankVersaBank April 24, 2019 State-of-the-art Financial Technology Serving Lucrative Niche Markets

2 Board of Directors

Honourable Thomas A. Hockin Chairman

David Taylor President & CEO

Robbert-Jan Brabander Director

David Bratton Director

R.W. (Dick) Carter Director

Arnold Hillier Director

Colin Litton Director

Susan McGovern Director

Paul Oliver Director

Avery Pennarun Director

3 Senior Management

David Taylor President & Jean-Paul Beker Vice President, Chief Executive Officer Real Estate Lending Shawn Clarke Chief Financial Officer & Steve Creery Vice President, Corporate Secretary Nick Kristo Chief Credit Officer Joanne Johnston Chief Internal Auditor

Michael Dixon Executive Head & Wooi Koay Vice President, SVP, eCommerce Information Technology

Ross Duggan Executive Head & Aly Lalani Chief Risk Officer & Treasurer SVP, Commercial Lending Jonathan Taylor Executive Head & Andy Min Vice President, Finance & SVP, Deposit Services & Corporate Accounting Chief HR Officer Scott Mizzen Vice President, Real Estate Lending Tel Matrundola Executive Head VersaBank Innovation Centre of Excellence David Thoms Vice President, Structured & Corporate Finance Gurpreet Sahota Chief Architect, Cyber-Security

4 Auditors

5 State-of-the-art Financial Technology Serving Lucrative Niche Markets

6 Appointment of Auditors

7 Director Nominees

Honourable Thomas A. Hockin

David Taylor

Gabrielle Bochynek

Robbert-Jan Brabander

David Bratton

R.W. (Dick) Carter

Colin Litton

Susan McGovern

Paul Oliver

Avery Pennarun

8 State-of-the-art Financial Technology Serving Lucrative Niche Markets

9 Advisory The 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 in which the Bank conducts operations; the effects of changes in monetary and fiscal policy, including changes in interest rate policies of the ; 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.

10 Management Presentation

David Taylor, President & CEO

Introduction & Performance Review: ▪ F2018 Business Line Performance ▪ Bank Financial Performance

Strategic Review: ▪ The Way Ahead ▪ Key Growth Drivers

11 Vision We aspire to be the preferred provider of innovative financial solutions to our select clients operating in niche markets across Canada.

Mission To provide our clients with ideally suited financial products, services and solutions n order to deliver a competitive and sustainable industry leading rate of return to our shareholders.

12 Strategic Priorities

Leverage existing financial product distribution channels to minimize Investment in physical infrastructure and human $ 1.8 Billion Total Assets resources. Borrower Accounts (~ 128,000), Depositor Accounts (~ 25,000). Maintain state-of-the-art custom banking business and administration software to maximize transaction capacity, Deposit & Loan velocity and efficiency. Origination Partners in order to(~255) maximize transaction capacity, velocity and operational efficiency and Leverage digital technology to further the Bank’s operational delivery new products and financial Independence. Employee’ s (86)

Ensure that our risk management framework, policies and procedures continue to evolve at a pace that is congruent VB with our business growth and complexity.

13 2018 Results

$1.8 $1.8B $1.4B $223M $18.1M $1.19

ASSETS DEPOSITS SHAREHOLDERS’ NET INCOME CORE CASH EPS EQUITY

14 Diversified Funding

▪ Personal deposits ▪ Commercial deposits ▪ Cash holdbacks

15 National Deposit Networks

113 Deposit Brokers Insolvency Industry and Financial Institutions

Deposits are sourced through a well-established and diversified national network consisting of 113 Deposit Brokerage Firms and 96 Insolvency Offices.

16 Low Cost Commercial Deposits

Commercial Deposits (No. of Accounts) Commercial Deposit Balances

$386M $385M 3910 4007

3369 $314M

2490 $210M

$113M 1109 852 $86M

$35M 198 22 $1M

2012 2013 2014 2015 2016 2017 2018 2019 Q1 2012 2013 2014 2015 2016 2017 2018 2019 Q1

Apr 2012 VersaBank launches Web based chequing accounts Jan 2019 96 Trustee Offices with over 4007 Accounts and $385MM on Deposit

17 Cost of Funds Trend

2.85%

2.35%

1.85%

1.35%

0.85%

0.35%

COFs GOC 2 yr Benchmark Bond Yield

18 Lending

▪ Commercial Banking ▪ eCommerce

19 Commercial Banking – Real Estate

20 eCommerce - Receivables Purchase Program

21 eCommerce - Receivables Purchase Program

A variety of consumer and small business loan and lease receivables purchased electronically from origination partners operating throughout Canada

22 Loan & Lease Receivable Portfolio

$921M $895M

$811M $784M

$608M

$392M

$187M $109M

2012 2013 2014 2015 2016 2017 2018 2019 Q1

Our Receivable Purchase Program continues to grow as we establish new relationships and increase our portfolio from 20 existing partners.

23 Balance Sheet Mix

Q118 Q119 33% 33% 8% Commerial Real Estate 8% Treasury and Other 3% 6% Assets 3% Non-Commercial Real 4% Estate Corporate and Public Sector Structured Finance

49% 53%

Total Assets $1,707 MM Total Assets $1,746 MM NIM 2.87% NIM 3.00%

24 Key Performance Trends

$60 4.00% Millions $50

Big 5 Bank 3.00% 3.00% Average NIM 2.91% $40 approx. 1.76% 2.57% 2.31% $30 2.21% 2.00% 1.96% $51 $44 $20 $39 $34 $28 1.00% $10 $13

$- 0.00% 2014 2015 2016 2017 2018 2019 Q1 NII($) NIM(%)

25 Credit Quality

Provision for Credit Losses Trend 0.35% 0.35%

Big Bank Average, 0.28%

0.25% 0.25%

0.15% 0.15% PCL(%) 0.12%

0.08% 0.05% 0.06% 0.05% 0.04% 0.02% -0.02% 2013 2014 2015 2016 2017 2018 2019 Q1 -0.05% -0.05% PCL(%) Big Bank Average

26 Core Cash Earnings Trend

$30 Millions $25 $25

$20 CCE - 5 yr. CAGR 48 % $18 $15

$13 $10 $9 $7 $5 $5 $4 $- 2013 2014 2015 2016 2017 2018 2019 Q1 Core Cash Earnings = pre-tax earnings adjusted for non-core operating income/expenses

27 Comparative Capital Ratios

CET1 (%) October 31, 2018

13.50%

12.26% 12.00% 11.50% 11.40% 11.40% 11.20% 11.10%

9.10% 8.90%

28 Comparative Leverage

Leverage (%) October 31, 2018

11.56%

8.50%

5.00% 4.50% 4.40% 4.30% 4.20% 4.20% 4.10% 4.10%

29 CCROCE vs. P/BV for CDN 2.1

1.9 RBC

TD Bank 1.7 National Bank

1.5 Bank of Nova Scotia CIBC

1.3 P/B P/B

1.1 Canadian Western

0.9 Laurentian Bank Versabank 0.7

0.5 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0% Annualized CCROCE – Q1 2019

30 Financial Overview

Common Shares: Preferred Shares: Preferred Shares: VB:TSX $7.56 VB.PR.A:TSX VB.PR.B:TSX

Issued Shares: 21,123,559 $10.00 (yield 7.0%) $10.00 (yield 7.0%)

Based on Recent Share Price of Non-cumulative 5-year rate Non-cumulative 6-year rate $7.56, Market Capitalization was preferred shares, series 1. reset preferred shares, series 3. $159,694,106. Issued Shares 1,461,460 Issued Shares 1,681,320 YTD Average trading volume/day 25,662 shares. Based on recent share price of Based on recent share price of $10.00 Market Capitalization $10.00 Market Capitalization was $14,614,600. was $16,813,200.

Reset date – Oct 31, 2019 Reset date – April 30, 2021

Reset rate – 543 Basis Points Reset rate – 569 Basis Points

31 In the Works:

• VersaVault Technology Licensing; • Prepaid and Secured Credit Cards; • Operating Deposit Accounts; • Enhancements to Receivable Purchase Program.

32 Summary

▪ Highly scalable model ▪ High growth rate

▪ Common share dividend ▪ Core Cash Earnings 5yr CAGR increased by 50% in Q1 F19 of 48% (October 31, 2018)

▪ Leverage digital technology ▪ High net interest margins, to serve niche markets low loan losses • Exciting new initiatives

33 State-of-the-art Financial Technology Serving Lucrative Niche Markets

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