First Quarter2019

1

Advisory

The Bank occasionally makes forward-looking statements about its objectives, operations andtargeted financial results. These statements may be written or verbal and may be included insuch things as press releases, corporate presentations, annual reports and other disclosuredocuments and communications. By their very nature, forward-looking statements involveinherent 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 ofimportant factors could cause actual results to differ materially from the plans, objectives,expectations, estimates and intentions expressed in such forward-looking statements. Thesefactors include, but are not limited to, the strength of the Canadian economy in general, and thestrength of local economies within Canada, in which we conduct operations; the effect ofchanges in interest rates; the effects of competition in the markets in which we operate; capitalmarket fluctuations; and the impact of changes in laws and regulations. When relying onforward-looking statements to make decisions, investors and others should carefully considerthese factors and other uncertainties or potential events. The Bank makes no undertaking toupdate any forward-looking statement that is made from time to time by the Bank.

2

State of the Art Financial Technologyaimed at lucrative niche markets

3

Senior Management Title

David Taylor President & Chief Executive Officer

Shawn Clarke Chief Financial Officer

Michael Dixon Executive Head & SVP, eCommerce

Ross Duggan Executive Head & SVP, Commercial Lending

Nick Kristo Chief Credit Officer & SVP

Jonathan Taylor Executive Head & SVP, Deposit Services & HR

Tel Matrundola Executive Head, VersaBank Innovation Centre of Excellence

Aly Lalani Chief Risk Officer & Treasurer

Gurpreet Sahota Chief Architect, Cyber Security

4

Senior Management

First BranchlessDigital bank whosetime has arrived!

Bank Overview

• First Digital Schedule 1 Bank, employing state of the art financial technology

• $1.74 Billion Assets

• High margin low risk lending model

• Highly scalable

• 85 Full-time employees

• Listed on TSX In 2013

5

Deposits

National Deposit BrokerNetwork of 113 Financial Institutions

National InsolvencyProfessional Network

6

Commercial Deposits # of Accounts

Commercial Deposits Balances $M

22198

8521109

2490

3369

3910 4007

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2012 2013 2014 2015 2016 2017 2018 2019 Q1

$1M

$35M

$86M

$113M

$210M

$314M

$386M $385M

$0M

$50M

$100M

$150M

$200M

$250M

$300M

$350M

$400M

2012 2013 2014 2015 2016 2017 2018 2019 Q1

Mill

ion

s

Apr 2012 VersaBank launches Web based chequing accounts

Jan 2019 96 Trustee Offices with over 4007 Accounts and $385.22M on Deposit

Low Cost Commercial Deposits7

Cost of Funds Trend8

0.35%

0.85%

1.35%

1.85%

2.35%

2.85%

Jan

-12

Ap

r-1

2

Jul-

12

Oct

-12

Jan

-13

Ap

r-1

3

Jul-

13

Oct

-13

Jan

-14

Ap

r-1

4

Jul-

14

Oct

-14

Jan

-15

Ap

r-1

5

Jul-

15

Oct

-15

Jan

-16

Ap

r-1

6

Jul-

16

Oct

-16

Jan

-17

Ap

r-1

7

Jul-

17

Oct

-17

Jan

-18

Ap

r-1

8

Jul-

18

Oct

-18

Jan

-19

COFs GOC 2 yr Benchmark Bond Yield

Lending

• Commercial Banking• eCommerce

9

COMMERCIAL BANKING – REAL ESTATE

Lending10

eCOMMERCE – RECEIVABLE PURCHASE PROGRAM

Lending11

eCOMMERCEA variety of consumer and small business loan and lease receivables purchasedelectronically from partners operating throughout Canada

Lending – Receivable Purchase Program12

Receivable Purchase Program

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

$Millions

13

109187

392

608

784 811895 921

0

100

200

300

400

500

600

700

800

900

1000

2012 2013 2014 2015 2016 2017 2018 2019 Q1

January 31, 2018

NIM for Q1 2019 3.00% up from 2.87% in Q1 2018

14

Balance Sheet Mix

Total Assets $1,746 MM

33%8%

3%3%

53%

33%

8%

6%

4%

49%

Total Assets $1,707 MMJanuary 31, 2019

Receivable Purchase Program

Treasury and Other Assets

Corporate and Public Sector

Non-Commercial Real Estate

Commercial Real Estate

Key Performance Trends

Net Interest Income (NII)Net Interest Margin (NIM )

Compound Annual Growth Rate (CAGR)

$M NIM-5yr CAGR 15 %

Big 5 Bank Average NIM

approx. 1.76%

15

2834

39 44 51

13

1.96%2.21%

2.31%

2.57%

2.91%3.00%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

0

10

20

30

40

50

60

2014 2015 2016 2017 2018 2019 Q1

Credit Quality

VersaBank Provision for Credit losses (PCL) Trend

PCL % of Avg loan Major Canadian

banks average PCL 0.28 %

16

0.03%

0.08%

0.12%

0.06%

(0.01%)

0.02%

(0.02%)

-0.05%

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

2013 2014 2015 2016 2017 2018 2019 Q1

CCE - 5 yr CAGR 48 %

17

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

$5 $9

$13

$18

$25

$6.8

$0

$5

$10

$15

$20

$25

$30

2014 2015 2016 2017 2018 2019 Q1

Core Cash Earnings Trend

Comparative Capital Ratios

COMMON EQUITY TIER 1

18

13.50%12.26% 12.00% 11.50% 11.40% 11.40% 11.20% 11.10%

9.10% 8.90%

Comparative Leverage19

11.56%

8.50%

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

CCROCE vs. P/BV for CDN Banks

20

Bank of MontrealBank of Nova Scotia CIBC

National Bank

TD Bank

Canadian Western

RBC

VersabankLaurentian Bank

0.5

0.7

0.9

1.1

1.3

1.5

1.7

1.9

2.1

9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0%

P/B

Annualized CCROCE - F19

Financial Overview

Common Shares:VB:TSX $7.56

Issued Shares: 21,123,559

Based on Recent Share Price of $7.56, Market Capitalization was $159,694,106.

YTD Average trading volume/day 18,200 shares.

Preferred Shares: VB.PR.A:TSX

$10.00 (yield 7.0%)

Non-cumulative 5-year rate preferred shares, series 1.

Issued Shares 1,461,460

Based on recent share price of $10.00 Market Capitalization was $14,614,600.

Reset date – Oct 31, 2019

Reset rate – 543 Basis Points

Preferred Shares: VB.PR.B:TSX

$10.00 (yield 7.0%)

Non-cumulative 6-year rate reset preferred shares, series 3.

Issued Shares 1,681,320

Based on recent share price of $10.00 Market Capitalization was $16,813,200.

Reset date – April 30, 2021

Reset rate – 569 Basis Points

21

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

▪ VV recently announced the successful completion of its technology Beta-Testing with its target client base and the commencement of the commercialization

phase of the developed service offering which will be provided, initially to cryptocurrency exchanges and crypto based investment funds.

22

VersaVault

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

VersaVault digital box vs Traditional physical box

VersaVault

• Quickly & easily expandable

• Global market

• Can only be opened by customer with their own personal ‘key’

Traditional physical box

• Difficult to expand, large capex

• Local market

• Can be opened by drill if required

• Vulnerable to 3rd party demands

23

VersaVault

24

Summary

▪ Leverage digital technology to serve niche markets;

▪ Common share dividends increased by 50% in Q1 F19;

▪ High net interest margin, low loan losses;

▪ Highly scalable model;

▪ High growth rate;

▪ Core Cash Earnings 5yr CAGR of 48% (Jan 31st 2019);

▪ Exciting new initiatives;

▪ VersaVault, the world’s first blockchain safety deposit box;

25

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

VB Stock Chart - 3 Year Range