VersaBank Announces Pricing of US$75 Million In Fixed To Floating Rate Subordinated Notes Due 2031

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New York, NY, April 21, 2021 — VersaBank (“VersaBank” or the “Bank”) today announced the pricing of US$75 million aggregate principal amount of 5.00% fixed to floating rate subordinated notes due 2031 (the “Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A and to non-U.S. persons outside of the United States in reliance on Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). In Canada, the Notes are to be offered and sold on a private placement basis in certain provinces of Canada in reliance upon one or more exemptions from prospectus requirements. The sale of the Notes to the initial purchasers is expected to settle on April 30, 2021, subject to customary closing conditions, including, but not limited to, the receipt of all necessary approvals, including approval of the Toronto Stock Exchange and receipt of a confirmation of capital quality from the Capital Division of the Office of the Superintendent of Financial Institutions (Canada). The Notes will be fixed to floating rate subordinated notes (non-viability contingent capital) of the Bank.

The Notes will pay interest semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2021, at a fixed rate of 5.00% per year, until May 1, 2026. Thereafter, if not redeemed by VersaBank, the Notes will have a floating interest rate payable at the 3-month Bankers’ Acceptance Rate plus 361 basis points, payable quarterly in arrears, on February 1, May 1, August 1 and November 1 of each year, commencing August 1, 2026, until the maturity date. The Notes will mature on May 1, 2031 unless earlier repurchased or redeemed in accordance with their terms.

On or after May 1, 2026, the Bank may, at its option, with the prior approval of the Superintendent of Financial Institutions (Canada), redeem the Notes, in whole at any time or in part from time to time on not less than 30 nor more than 60 days’ prior notice, at a redemption price which is equal to par, plus accrued and unpaid interest.

The Bank estimates that the net proceeds from the offering of Notes will be approximately US$73,875,000, after deducting the initial purchasers’ discounts and estimated offering expenses payable by the Bank. The Bank expects to use the net proceeds from the sale of the Notes for general corporate purposes.

The Notes have not been and are not expected to be registered under the Securities Act, the prospectus requirements of applicable Canadian securities laws or the securities laws of any other jurisdiction and may not be offered or sold in the United States and Canada absent registration or an applicable exemption from such registration and prospectus requirements.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Bank, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. Offers of the securities were made only by means of a private offering memorandum.

About VersaBank:

VersaBank is a Canadian Schedule I chartered bank with a difference. VersaBank became the world’s first fully digital financial institution when it adopted its highly efficient business-to-business model using its proprietary state-of-the-art financial technology to profitably address underserved segments of the Canadian banking market in the pursuit of superior net interest margins while mitigating risk. VersaBank obtains all of its deposits and provides the majority of its loans and leases electronically, with innovative deposit and lending solutions for financial intermediaries that allow them to excel in their core businesses. In addition, leveraging its internally developed IT security software and capabilities, VersaBank established wholly owned, Washington, DC-based subsidiary, DRT Cyber Inc. to pursue significant large-market opportunities in cyber security and develop innovative solutions to address the rapidly growing volume of cyber threats challenging financial institutions, multi-national corporations and government entities on a daily basis.

VersaBank’s Common Shares trade on the Toronto Stock Exchange under the symbol VB and its Series 1 Preferred Shares and Series 3 Preferred Shares trade under the symbols VB.PR.A and VB.PR.B respectively.

Special Note Regarding Forward-Looking Statements:

This press release contains statements that constitute “forward-looking statements” and “forward-looking information” within the meaning of U.S. and Canadian securities laws. Forward-looking statements give the Bank’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business, including the Bank’s expectations regarding the transactions described in this press release and the anticipated use of proceeds therefrom, and can be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements may include words such as “expect,” “anticipate,” “intend,” “believe,” “estimate,” “plan,” “target,” “strategy,” “continue,” “may,” “will,” “should,” variations of such words, or other words and terms of similar meaning. All forward-looking statements reflect the Bank’s best judgment and are based on several factors relating to its operations and business environment, all of which are difficult to predict and many of which are beyond its control. Such factors include, but are not limited to: the Bank’s inability to close the offering of the Notes; the strength of the Canadian economy in general and the strength of local economies within Canada in which VersaBank conducts operations; the impact of the COVID-19 pandemic; the effects of changes in monetary and fiscal policy, including changes in interest rate policies of the Bank of Canada; changing global commodity prices; the effects of competition in the markets in which VersaBank operates; capital market fluctuations; the timely development and introduction of new products in receptive markets; the impact of changes in laws and regulations pertaining to financial services; changes in tax laws; technological changes; unexpected judicial or regulatory proceedings; unexpected change in consumer spending and saving habits; and VersaBank’s anticipation of and success in managing the risks resulting from the foregoing. Forward-looking statements are based on information available to the Bank on the date hereof, and it does not have, and expressly disclaims, any obligation to publicly release any updates or any changes in its expectations, or any change in events, conditions, or circumstances on which any forward-looking statement is based. The Bank’s actual results and the timing of certain events could differ materially from the forward-looking statements. These forward-looking statements do not reflect the potential impact of any mergers, acquisitions, or other business combinations that had not been completed as of the date of this release.



Wade MacBain

(800) 244-1509

[email protected]

LodeRock Advisors

Lawrence Chamberlain

(416) 519-4196

[email protected]

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