Third Quarter 2018 1 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, and risks exist that predictions, forecasts, projections and other forward-looking statements will not be achieved. 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 local economies within , in which we conduct operations; the effect of changes in interest rates; the effects of competition in the markets in which we operate; capital market fluctuations; and the impact of changes in laws and regulations. When relying on forward-looking statements to make decisions, investors and others should carefully consider these factors and other uncertainties or potential events. The Bank makes no undertaking to update any forward-looking statement that is made from time to time by the Bank.

Advisory

2 State of the Art Financial Technology aimed at lucrative niche markets

3 Senior Management Title

David Taylor President & Chief Executive Officer

Shawn Clarke Chief Financial Officer

Michael Dixon Executive Head & SVP, E-Commerce

Ross Duggan Executive Head & SVP, Commercial Lending

Nick Kristo Chief Risk Officer & SVP

Jonathan Taylor Executive Head & SVP, Deposit Services & HR

Tel Matrundola Executive Head, VersaBank Innovation Centre of Excellence

Cameron Mitchell General Counsel & Corporate Secretary & VP Senior Management

4 First• First Branchless Digital Schedule 1 Bank, Digitalemploying bank state of the art financialwhose technology time has • arrived!$1.81 Billion Assets

• High margin low risk lending model

• Highly scalable

• 81 Full-time employees

• Listed on TSX In 2013

Bank Overview

5 National Insolvency Professional Network

National Deposit Broker Network of 111 Financial Institutions

Deposits

6 Insolvency Professional Commercial Deposit Balances Number of Accounts $Millions

4500 $400M $372M 4000 3788 Millions $350M $314M 3500 3369 $300M

3000 $250M 2490 2500 $210M $200M 2000 $150M 1500 $113M 1109 $100M $86M 1000 852

500 $50M $35M 198 22 $1M 0 $0M 2012 2013 2014 2015 2016 2017 2018 - Q3 2012 2013 2014 2015 2016 2017 2018 - Q3

April 2012 VersaBank launches Web based chequing accounts July 2018 89 Trustee Offices and over 3700 Accounts and $372M on Deposit Low Cost Commercial Deposits

7 2.85%

2.35%

1.85%

1.35%

0.85%

0.35%

Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18

Jan-17 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-18

Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17

Apr-17 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-18

COFs GOC 2 yr Benchmark Bond Yield Cost of Funds Trend

8 • Commercial Banking • E-Commerce Lending

9 COMMERCIAL BANKING – REAL ESTATE

Lending

10 E-COMMERCE - RECEIVABLES PURCHASE PROGRAM

Lending

11 E-COMMERCE A variety of consumer and small business loan and lease receivables purchased electronically from partners operating throughout Canada

Lending – Receivable Purchase Program

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

$Millions 1000

900

800

700

600

500 894 400 784 811 300 608 200 392 100 187 109 0 2012 2013 2014 2015 2016 2017 2018 - Q3 Loan & Lease Receivable Portfolio

13 NIM for Q3 F18 2.88% up from 2.53% in Q3 F17

Construction Construction Loans Loans $259 $215 Other Assets Other Assets Commercial Commercial $58 $63 13% 14% Banking Banking $479 4% $498 3% Liquid Assets 29% Liquid Assets 27% $104 6% $125 7%

48% 49%

E-Commerce E-Commerce $894 $804 July 31, 2017 July 31, 2018 Total Assets $1,684 MM Total Assets $1,815 MM

Balance Sheet Mix

14 $M NIM - 5yr CAGR 15 % 50 3.50% 45 2.57% 2.88% 3.00% 40 2.31% 35 2.21% 2.50% 1.96% 30 1.74% 2.00% Big 5 Bank 25 Average NIM 20 1.50% approx. 1.76% 44 15 26 28 34 39 38 1.00% 10 0.50% 5 0 0.00% 2013 2014 2015 2016 2017 2018 YTD Q3 Net Interest Income (NII) Net Interest Margin (NIM ) Compound Annual Growth Rate (CAGR)

Key Performance Trends 15 VersaBank Provision for losses (PCL) Trend

PCL % of Avg loan Major Canadian average PCL 0.28 % 0.25%

0.20%

0.15% 0.12%

0.10% 0.08% 0.06%

0.05% 0.03% 0.01% (0.01%) 0.00% 2013 2014 2015 2016 2017 2018 - Q3

-0.05% Credit Quality

16 Core Cash Earnings* Trend $30M

$25M $25M $20M CCE - 5 yr CAGR 46 %

$15M

$10M $18M $13M $5M $9M $5M $4M $M 2013 2014 2015 2016 2017 2018*

Core Cash Earnings* = pre-tax earnings adjusted for non-core operating income/expenses * Annualized 2018 Core Cash Earnings

17 COMMON EQUITY TIER 1

14.30% 11.70% 11.60% 11.40% 11.40% 11.30% 11.10% 10.95% 9.30% 8.80%

Comparative Capital Ratios

18 10.38% 9.30%

5.40% 4.90% 4.40% 4.30% 4.20% 4.20% 4.00% 4.00%

Conservative Leverage

19 2.3

2.1 RBC TD Bank 1.9 National Bank

1.7 CIBC Bank of Nova Scotia 1.5

Canadian Western P/B P/B 1.3

1.1

0.9 Laurentian Bank VersaBank 0.7

0.5 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% CCROCE Annualized - F18

CAD Banks CCROCE vs. P/BV

20 Common Shares: Preferred Shares: Preferred Shares: VB:TSX $7.12 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 $7.12, Market Capitalization was preferred shares, series 1. reset preferred shares, series 3. $150,399,740. Issued Shares 1,461,460 Issued Shares 1,681,320 YTD Average trading volume/day 30,340 shares. Based on recent share price of Based on recent share price of $10.00 Market Capitalization was $10.00 Market Capitalization was Analyst coverage: $14,614,600. $16,813,200.

IA Securities Reset date – Oct 31, 2019 Dylan Steuart, CFA Reset date – April 30, 2021 [email protected] Reset rate – 543 Basis Points Reset rate – 569 Basis Points

Financial Overview.

21 Introducing VersaVault. The world’s first BlockChain Based safety deposit box.

The impenetrable security and absolute privacy of blockchain encryption. Managed by a chartered bank in one of the world’s most trusted financial markets. VersaVault 22 VersaVault digital box vs Traditional physical box

VersaVault Traditional physical box

• Quickly & easily expandable • Difficult to expand, large capex

• Global market • Local market

• Can only be opened by customer • Can be opened by drill if required with their own personal ‘key’ • Vulnerable to 3rd party demands

VersaVault

23 . Leverage digital technology to serve niche markets; . Common share dividends commenced in Q1 F18; . High net interest margin, low loan losses; . Highly scalable model; . High growth rate; . Core Cash Earnings 5yr CAGR of 46% (Oct 31st-2017); . Exciting new initiatives; . VersaVault, the world’s first blockchain safety deposit box;

Summary

24 VB Stock Chart - 3 Year Range

VB Stock Chart Source: VersaBank, CA:VB Quick Chart - (TOR) CA:VB, VersaBank Stock Price - BigCharts.com

25 Canadian banks - share price performance vs. peers, indices and other sectors (during 2017 and 2018 YTD)

2017 2018 YTD (to 4-SEP-2018)

-22.8% LB -2.1% LB

-11.0% BMO 4.2% US lifecos

Cdn lifeco avg 4.7% CWB -10.0%

S&P/TSX 6.0% Cdn lifeco avg -7.8%

BNS 8.5% BNS -7.3%

TD 11.2% S&P TSX -0.3%

CM 11.8% CM -0.1%

RY 13.0% RY 1.1%

US lifecos 13.5% Cdn bank avg 2.6%

Cdn bank avg 14.9% NA 3.1%

NA 15.0% US banks (KBW) 3.9%

US banks (KBW) 16.3% BMO 6.7%

VB 19.0% TD 6.9%

S&P 500 19.4% S&P 500 8.3%

CWB 29.4% VB 15.65%

-10.0% 0.0% 10.0% 20.0% 30.0% 40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0%

Canadian lifeco average calculated as a market cap-weighted average of the Canadian share price returns for GWO, IAG, MFC and SLF for each of the respective periods. Canadian bank average calculated as a market cap- weighted average of the Canadian share price returns for the top eight banks for each of the respective periods. Source: Desjardins Capital Markets, Bloomberg, VersaBank CDN Banks - Share Price Performance vs. Peers

26