Page 1

V VersaBank Choice Through Innovation For Immediate Release : September 1 , 2021 Attention : Business Editors VERSABANK REPORTS CONTINUED STRONG RESULTS FOR THIRD QUARTER 2021 - Quarter Highlighted by Continued Strong Year - over - Year Growth as Bank Achieves Another Loan Portfolio Record - All amounts are unaudited and in Canadian dollars and are based on financial statements prepared in compliance with International Accounting Standard 34 Interim Financial Reporting , unless otherwise noted . Our third quarter 2021 ( “ Q3 2021 " ) unaudited Interim Consolidated Financial Statements for the period ended July 31 , 2021 and Management's Discussion and Analysis , are available online at www.versabank.com/investor-relations and at www.sedar.com . Supplementary Financial Information will also be available on our website at www.versabank.com/investor-relations . LONDON , ON / CNW - VersaBank ( " VersaBank " or the " Bank " ) ( TSX : VB ) , a North American leader in business - to business digital banking , as well as technology solutions for cybersecurity , today reported its results for the third quarter of 2021 ended July 31 , 2021 . Financial Summary NOTE : VersaBank's financial performance for the third quarter ended July 31 , 2021 reflects the Bank's strengthening of its capital base through the issuance on April 30 , 2021 ( the last day of the preceding quarter ) of non - viability contingent capital compliant fixed to floating rate subordinated notes payable ( " the Notes " ) in the principal amount of USD $ 75.0 million . The Notes , which were issued to fund future growth in the Bank's loan portfolio , added 16 bps ( or a total of $ 1.2 million to the Bank's interest expense during the third quarter ) and generated minimal interest income as the vast majority of these funds were not deployed into interest generating loans , thereby resulting in a temporarily lower net interest margin . Adjusting for this amount the Bank's cost of funds would have been 1.25 % , down 3 bps sequentially , and net interest margin would have been 2.94 % , which is in line with recent historical net interest margin results . ( unaudited ) ( thousands of Canadian dollars except per share amounts ) Financial results Revenue Cost of funding Net interest margin Core cash earnings ( 1 ) ( 2 ) Core cash earnings per common share ( ¹ ) Net income Net income per common share basic and diluted Balance sheet and capital ratios Total assets Book value per common share ( 1 ) Common Equity Tier 1 ( CET1 ) capital ratio Total capital ratio Leverage ratio $ July 31 2021 As at or for the three months ended April 30 July 31 2021 2020 15,729 $ 1.41 % 2.61 % 7,433 0.35 5,436 0.25 11.29 11.94 % 17.93 % 9.99 % 15,970 ( 2 % ) $ 1.28 % 10 % 2.96 % ( 12 % ) 7,940 ( 6 % ) 0.38 ( 8 % ) ( 5 % ) 0 % 5,744 0.25 Change $ 2,285,771 $ 2,139,757 7 % 11.06 2 % 12.52 % ( 5 % ) 18.89 % ( 5 % ) 10.46 % ( 4 % ) 1 Change 12,392 27 % 1.59 % ( 11 % ) 2.53 % 3 % 6,026 23 % 0.29 21 % 4,369 24 % 0.18 39 % $ 1,930,256 18 % 10.52 7 % 14.11 % ( 15 % ) 16.51 % 9 % 11.99 % ( 17 % ) As at or for the nine months ended July 31 July 31 2021 2020 Change $ 47,121 $ 1.36 % 2.78 % 22,651 1.07 16,470 0.72 ( 1 ) Certain highlights include non - GAAP measures . See definitions under ' Basis of Presentation ' in the Q3 2021 Management's Discussion and Analysis . ( 2 ) Core Cash Earnings is calculated as pre - tax earnings less non - core operating income and expenses . 40,459 16 % 1.77 % ( 23 % ) 2.91 % ( 4 % ) 20,207 12 % 0.96 11 % 14,659 12 % 0.62 16 % $ 2,285,771 $ 1,930,256 18 % 11.29 10.52 7 % 11.94 % 14.11 % ( 15 % ) 17.93 % 16.51 % 9 % 9.99 % 11.99 % ( 17 % )