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VersaBank Achieves Record Loan Assets With Significantly Increased Origination Activity To Date In The First Quarter Of 2021

LONDON, ONTARIO – VersaBank (“VersaBank” or the “Bank”) (TSX: VB) today announced that its loan portfolio has surpassed $1.7 billion, a new record for the Bank. The recent growth in the loan portfolio is being driven by significantly increased origination activity in both of the Bank’s existing primary lending channels, Point-of-Sale Financing and Commercial Banking with loans primarily to residential multi-unit dwelling builders.

“VersaBank is experiencing our most rapid loan portfolio growth in our history in recent months as we redeploy our atypically high cash balances in 2020 following our cautionary stance at the beginning of the pandemic,” said David Taylor, President and Chief Executive Officer. “As a result, building on years of strong, steady growth in our lending portfolio, we have achieved a new record, as the resumption of big-ticket consumer spending and renewed residential construction activity, combined with a strengthened competitive position based on the superior financial health of our Bank through 2020, has driven strong loan origination in both our Point-of-Sale Financing and Commercial Banking lending portfolios.”

“In addition to the elevated origination activity in our two existing lending channels, we expect to begin originating loans in our third lending channel, Instant Mortgage, which will apply similar technology that has powered the significant growth in our Point-of-Sale Financing business and contributed considerably to the Bank’s 23% compounded annual growth over the past six years, to enter the $200 billion Canadian home financing market.”

Instant Mortgage is a revolutionary high-volume residential financing software app for home and condominium builders and sales brokerage firms that enables “on-the-spot” financing approvals, with a specific focus on newcomer home and condo buyers that may have significant wealth but little or no credit history in Canada. Instant Mortgage provides VersaBank’s home and condominium builder and sales brokerage partners with immediate financing options for home and condo buyers, facilitating and expediting the sales process.

VersaBank Expands Relationship with Existing Point-of-Sale Partner, Simply Group, and its Recently Acquired Subsidiaries Amidst Strong Home Improvement Loan Origination Activity

VersaBank also announced that it has expanded its relationship with the Simply Group of Companies (“Simply Group”) within the Bank’s Point-of-Sale Financing business. Following Simply Group’s recent acquisitions of SNAP Financial Group Inc. and DealNet Capital Corp., including their respective wholly-owned subsidiaries and long-time VersaBank Point-of-Sale Financing partners, SNAP Home Finance (“SNAP”) and EcoHome Financial Inc (“EcoHome”), VersaBank has renewed its receivable purchase and warehouse facilities with EcoHome including an increase to its warehouse credit availability and has also increased SNAP’s warehouse credit facility, bringing the Simply Group’s total warehouse revolving credit availability to more than $30 million. Both EcoHome and SNAP offer loans to homeowners, through an extensive dealer network, to acquire HVAC equipment and fund home improvement projects. VersaBank’s warehousing credit facilities enable its Point-of-Sale Financing partners to aggregate loans and leases prior to selling such receivables into a receivable purchase facility.

“The coming together of two long-time VersaBank Point-of-Sale Financing partners with our newest partner, Simply Group, significantly further enhances the excellent relationships we have with these groups, and we expect will create more opportunities for us to work together going forward as VersaBank continues to grow its Point-of-Sale Financing channel,” said Mr. Taylor, President and Chief Executive Officer, VersaBank. “I would like to publicly congratulate Simply Group on its recent acquisitions, which solidified its position as one of Canada’s largest non-bank suppliers of consumer credit. It’s a great time to be lending in the home improvement market as homeowners redirect spending to renovations and upgrades.”

In September 2020, VersaBank partnered with Simply Group, one of Canada’s fastest growing home energy solution, home improvement and consumer lending businesses, and provided Simply Group Financial with a warehouse and receivable purchase facility including an initial portfolio purchase of $72 million.

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.

FORWARD LOOKING STATEMENTS

The statements in this press release that relate to the future are forward-looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, many of which are out of our control. Risks exist that predictions, forecasts, projections, and other forward-looking statements will not be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements as several 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 we conduct operations; 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 we operate; inflation; capital market fluctuations; the timely development and introduction of new products in receptive markets; the impact of changes in the laws and regulations pertaining to financial services; changes in tax laws; technological changes; unexpected judicial or regulatory proceedings; unexpected changes in consumer spending and savings habits; the impact of COVID-19 pandemic and our anticipation of and success in managing the risks implicated by the foregoing. For a detailed discussion of certain key factors that may affect our future results, please see our annual management’s discussion and analysis (“MD&A”) for the year ended October 31, 2020.

The foregoing list of important factors is not exhaustive. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties
and potential events. The forward-looking information contained in this document and the related MD&A is presented to assist our shareholders in understanding our financial position and may not be appropriate for any other purposes. Except as required by securities law, we do not undertake to update any forward-looking statement that is contained in this document and related MD&A or made from time to time by the Bank or on its behalf.

FOR FURTHER INFORMATION, PLEASE CONTACT:

VersaBank

Wade MacBain

(800) 244-1509

[email protected]

LodeRock Advisors

Lawrence Chamberlain

(416) 519-4196

[email protected]

Visit our website at: www.versabank.com