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VersaBank Provides Notice of Conversion Right on its Series 1 Preferred Shares

(London, Ontario) – VersaBank (TSX: VB) provides notice that in accordance with the Short Form Prospectus dated October 22, 2014 (the “Prospectus”), the holders of non-cumulative 5-year rate reset preferred shares, series 1 (the “Series 1 Preferred Shares”) of VersaBank (the “Bank”) have the right, at their option, to convert any or all of their Series 1 Preferred Shares into an equal number of non-cumulative floating rate preferred shares, series 2 of the Bank (the “Series 2 Preferred Shares”), subject to certain conditions, on October 31, 2019 (the “Series 1 Conversion Date”). The conversion of Series 1 Preferred Shares may be effected upon notice in writing (“Election Notice”) given not earlier than October 1, 2019, but not later than 5:00 p.m. (Toronto time) on October 16, 2019, during usual business hours at any office of Computershare Investor Services Inc. (“Computershare”). Once received by the Bank, an Election Notice is irrevocable. If the Bank does not receive an Election Notice from a holder of Series 1 Preferred Shares during the time fixed therefor, then the Series 1 Preferred Shares will be deemed not to have been converted.

Holders of Series 1 Preferred Shares will not be entitled to convert their shares into Series 2 Preferred Shares if the Bank determines that there would remain outstanding on the Series 1 Conversion Date less than 200,000 Series 2 Preferred Shares, after having taken into account all Series 1 Preferred Shares tendered for conversion into Series 2 Preferred Shares. The Bank will give notice in writing thereof to all registered holders of Series 1 Preferred Shares by October 24, 2019. Furthermore, if the Bank determines that there would remain outstanding on the Series 1 Conversion Date less than 200,000 Series 1 Preferred Shares, after having taken into account all Series 1 Preferred Shares tendered for conversion into Series 2 Preferred Shares, then, all, but not part, of the remaining outstanding Series 1 Preferred Shares will automatically be converted into Series 2 Preferred Shares on the basis of one Series 2 Preferred Share for each Series 1 Preferred Share on the Series 1 Conversion Date and the Bank will give notice in writing thereof to the then registered holders of such remaining Series 1 Preferred Shares by October 24, 2019.

Upon exercise by the holder of this right to convert Series 1 Preferred Shares into Series 2 Preferred Shares, the Bank reserves the right not to issue Series 2 Preferred Shares to any person whose address is in, or whom the Bank or Computershare has reason to believe is a resident of the United States, its territories or possessions or other jurisdiction (other than Canada) the laws of which would require the Bank to comply with the registration, prospectus, filing or other similar requirements under the applicable securities laws of such jurisdiction.

About VersaBank

VersaBank adopted an electronic branchless model in 1993, becoming the world’s first branchless financial institution. It holds a Canadian Schedule I chartered bank license and obtains its deposits,
and the majority of its loans and leases, electronically. 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. Visit VersaBank’s website at: https://www.versabank.com.

Contact:

VersaBank: Wade MacBain, Investor Relations, 800-244-1509 [email protected]