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Investor Presentation March 2025 NASDAQ: VBNK | TSX: VBNK Authorized for Landing: U.S. Entry Provides A Transformational Opportunity
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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, 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 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; the impact of the COVID-19 pandemic and the Bank’s anticipation of and success in managing the risks implicated by the foregoing. When relying on forward-looking statements to make decisions, investors and others should carefully consider these factors and other uncertainties or potential events. For a detailed discussion of certain key factors that may affect our future results, please see our MD&A for the quarter ended January 31, 2025. The Bank makes no undertaking to update any forward- looking statement that is made from time to time by the Bank.
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A Better Bank Model Founded on Technology Excessive lending risk Loan losses / collections Deposit / liquidity risk Economic exposure Interest rate exposure Physical infrastructure Inefficiency 3
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A North American Leader in Cybersecurity Solutions • Operating leverage of a technology company with the intrinsic value of a bank • Highly risk-mitigated model: Very sticky deposits/No material loan losses • Track record of strong earnings growth • Planned divestiture of Cybersecurity Services subsidiary represents significant unrealized value Poised for outsized long-term growth through ramp up of proven Receivables Purchase Program in U.S. market Fully Digital North American Bank Highly Efficient: Branchless, Partner (B2B) model Innovative, Value-Added Deposit & Lending Solutions for Underserved Markets 4
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Cloud-Based, Branchless, Partner (B2B) Model Using VersaBank’s Proprietary Banking Technology 5 Deposit Partners Lending Partners Significant operating leverage derived from scalability of technology platform & partner model Proprietary, state-of-the-art software based out of two technology centres • All deposits/credit assets managed digitally • No direct interaction with end users • Very high asset-to- employee ratio Saskatoon, SK London, ON
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• Brokered Deposits: 100% term deposit receipts – Depositors have no direct access to deposits • Insolvency Professionals: Long-term relationships based on unique, high-value add, integrated technology • 98% insured (All Brokered Deposits insured) 6Proprietary Technology Enables Ultra Low-Risk Digital Model Organization-Wide Focus on Risk Mitigation • Technology-based approach to risk analysis/monitoring • Rigorous, multi-step, multi- executive approval process • Continuous, real-time monitoring of credit performance • Top-tier asset quality • High-liquidity ratio & access to vast supply of low-cost funds • Low operational risk: branchless, digital model & industry leading security (0.01%) 0.02% (0.02%) (0.02%) (0.02%) 0.02% 0.02% (0.01%) 2017 2018 2019 2020 2021 2022 2023 2024 PCL as a % of Average Credit Assets Average Provision for Credit Losses as a % of Average Credit Assets 0.02% (Trailing 12-Quarters) Very Sticky Deposits 30+ Years with No Material Credit Asset Losses 6
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Deposits: Unlimited Low-Cost, Very Stable Sources >220 Partners Provide Access to Millions of Depositors 7 Deposit Brokers (>120 Partners) • Extensive network of providing exposure to vast majority of Canadian depositors • All broker deposits are term deposits • Competitively positioned for inexpensive deposits as a federally licensed bank Licensed Insolvency Trustee Firms(>100 Offices) • Proprietary, high-value add, technology-based solution • Grown to >100 partners & C$782M/US$540M in <10 years • Objective to minimize cost of deposit funding • Very “sticky” deposit base 7 US$730M C$970M US$796M C$1,059M US$1,007M C$1,274M US$1,509M C$2,059M US$2,101M C$2,914M US$2,444M C$3,401M US$2,314M C$3,351MUS$334M C$440M US$382M C$508M US$489M C$606M US$438M C$598M US$446M C$619M US$534M C$744M US$540M C$782M 2019 2020 2021 2022 2023 2024 Q1 2025 Deposit Brokers Licensed Insolvency Trustee firms Deposit Composition: Q1 2025 81% Deposit Brokers 19% Licensed Insolvency Trustees
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Credit Assets: Very Low Risk Lending Channels 8 8 US$756M C$995M US$736M C$981M US$1,000M C$1,238M US$1,627M C$2,221M US$2,076M C$2,879M US$2,283M C$3,307M US$2,348M C$3,401MUS$421M C$554M US$474M C$632M US$633M C$784M US$530M C$724M US$647M C$898M US$628M C$910M US$641M C$928M 2019 2020 2021 2022 2023 2024 Q1 2025 Receivable Purchase Program Credit Assets Multi-Family Residential Credit Assets 30 Partners Provide Access to Hundreds of Millions of Borrowers Credit Asset Composition: Q1 2025 79% Receivable Purchase Program 21% Multi-Family Residential and Other • Low-cost deposits enable low-risk lending • 30-year history of virtually no credit asset losses Receivable Purchase Program • Reliable, attractive alternative financing option for POS lenders, providing convenience for their consumers • Very low-risk: • Default risk resides substantially with partner • Only partner with established POS lenders • Dominant position in Canada Multi-Family Residential and Other • Highly profitable opportunistic legacy business • De minimis commercial real estate exposure
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RPP Partner Preapproved by VersaBank to Underwrite RPP Loans VersaBank Purchases Right to Cash Flow Streams (Credit Assets) from Consumer Loan Payments Point-of-Sale Financing (Loan) Offered to Consumer By VersaBank RPP Partner at Point-of-Sales (“Big Ticket” Items) $$$$$$ Stream of Payments: + Holdback of Cash Collateral (Embedded in Purchase Price) Amount of Holdback Changes with Risk of Loan Credit Assets + Holdback of Cash Collateral Reside on VBNK Balance Sheet Point-of-Sale Receivable Purchase Program (RPP) Innovative, Unique and Efficient Digital Funding Solutions for Point-of-Sale Finance Companies 9 NO Direct Contact w/ Borrower Point-of-Sale Partner Loan Administrator with ALL Direct Contact w/ Consumer VersaBank’s proprietary banking software efficiently analyzes and ensures adherence to credit specifications Point-of-Sale • Readily accessible, reliable, economic funding, and daily loan sales (real-time sales in development) • VersaBank typically provides 100% of loan value (vs. ~75% from conventional sources) – much higher partner ROE If any loans are 90+ days in arrears, VersaBank automatically paid (and loan returned to partner) for loans 90 days in arrears 9
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A Significantly Risk Mitigated Model 10 Extensive Partner Due Diligence & Monitoring Continuous Loan monitoring Restricted to the highest quality lenders - typical 10-year track record • Annual in-person audits • "As offered" basis – Purchases at VersaBank's discretion • Pre-established "credit box" to which all loans must adhere • Real-time, technology-based monitoring • Increasingly benefitting from the use of AI • Human oversight • VersaBank automatically paid (and loan returned to partner) for loans 90 days in arrears Proven Highly Attractive & Successful in Canada • >14 years in market • >C$10B (US$7B) Total value of RPP Financings to Date1 • C$3.3B (US$2.2B) Current Value of RPP Portfolio1 • 27% 5-Year CAGR1 History of ZERO Credit Asset Losses for VersaBank 1. At October 31, 2025 10
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8.5% 8.9% 7.9% 8.5% 6.6% 11.8% 10.2% 51% 49% 51% 52% 55% 43% 48% $0 $10 $20 $30 $40 $50 $60 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 Success of Canadian POS Business Has Driven Profitability 11 $1.78B $1.80 B $1.86 B $2.42 B $3.27 B $4.20 B $4.84B $26 M $26 M $28 M $35 M $49 M $50 M $57M $18 M $20 M $19 M $22 M $28 M $42 M $40M $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 2018 2019 2020 2021 2022 2023 2024 Total Assets Non-Interest Expense Net Income Digital Banking Efficiency Ratio ROCE $ CAD (millions) 11
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VersaBank USA: Transformational Opportunity 12 High-Growth, Underserved Multi-Trillion $ Market Acquisition of National OCC licensed US bank enables launch of Receivables Purchase Program (RPP) in the US US Regulatory Approval May 2024 Canadian Regulatory Approval May 2024 Closed US Bank Acquisition Q4 2024 First post-acquisition RPP Partner and funding in US Q1 2025 Appoint VB USA Executives Jul 2024 First US Partner Signed Large Number of US Partners in Pipeline 12 Additional US RPP Partners in pipeline
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8.0% 7.0% 12.0% 11.8%52% 55% 43% 48% $0 $10 $20 $30 $40 $50 $60 $0 $2 $4 $6 $8 $10 $12 $14 Capitalizing on the Significant Operating Leverage in Our Core Digital Banking Operations Next Milestones: Total Assets >$5B >$6B >$10B Efficiency Ratio <40% <35% <25% ROCE >16.5% >20% >25% 13 $2.42 B $3.27 B $4.20 B $4.84 B $35 M $49 M $50 M $57 M $22 M $23 M $42 M $40 M $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 2021 2022 2023 2024 Total Assets Non-Interest Expense Net Income ROCE $ CAD (millions) Digital Banking Efficiency Ratio
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Market Ready Solution 14 Digital Deposit Receipt (DDR) IP, technology and other resources transferred to wholly owned digital asset focused subsidiary 14 Digital Meteor, Inc. • Highly encrypted digital assets that can represent fiat currency on deposit with the Bank – seamless conversion to/from other digital currencies (incl. Bitcoin) • SOC 2 Type I certification for the underlying VersaVault® technology • Successfully completed pilot program on Ethereum, Algorand and Stellar blockchains (first bank known to do so) • Secure and private storage of digital assets with dual chartered bank as custodian Digital Deposit Receipts (DDRs) Capitalizing on Proven Proprietary Technology Amidst Favourable Regulatory Stance of New US Administration
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DETECTION PRIVACY PROTECTION ASSESSM ENT DRT Cyber: “Free Option” on Digital Banking Valuation One of North America’s Premiere IT Security Assurance Services Firms • Comprehensive Suite of Services: – External network, web and mobile app penetration testing – Physical social engineering engagements – Supervisory control & data acquisition (SCADA) system assessments – Various aspects of training • > 400 Clients Across North America – Large retailers & financial service providers – Police service organizations – Energy, public utilities & infrastructure firms • Significant opportunities to cross-sell and up-sell 15 Profitable, with solid growth in revenue and EBITDA in fiscal 2024
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Why VersaBank? Why Now? At inflection point for operating leverage, earnings growth and ROCE generation Ramp up of recently launched U.S. Receivables Purchase Program (proven out in Canada) to an underserved multi-trillion U.S. market Highly risk-mitigated model based on structuring of both deposits and credit assets Current valuation below book value well below US peers Planned divestiture of profitable cybersecurity services will generate significant incremental value 16
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Banking on the Future! 17