VERSABANK REPORTS STRONG SECOND QUARTER RESULTS: STRONG US SRP GROWTH DRIVES 27% YEAR-OVER-YEAR INCREASE IN REVENUE AND NET INTEREST INCOME, 45% YEAR-OVER-YEAR GROWTH IN ADJUSTED (CORE) NET INCOME

VERSABANK REPORTS STRONG SECOND QUARTER RESULTS: STRONG US SRP GROWTH DRIVES 27% YEAR-OVER-YEAR INCREASE IN REVENUE AND NET INTEREST INCOME, 45% YEAR-OVER-YEAR GROWTH IN ADJUSTED (CORE) NET INCOME 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 second quarter 2026 ("Q2 2026") unaudited Interim Consolidated Financial Statements for the period ended April 30, 2026 and Management's Discussion and Analysis ("MD&A"), are available online at www.versabank.com/investor-relations, SEDAR at www.sedarplus.ca and EDGAR at www.sec.gov/edgar. Supplementary Financial Information will also be available on our website at www.versabank.com/investor-relations.

LONDON, ON, June 3, 2026 /PRNewswire/ - VersaBank (or the "Bank") (TSX: VBNK (NASDAQ: VBNK), a North American leader in business-to-business digital banking, as well as technology solutions for cybersecurity, today reported its results for the second quarter ended April 30, 2026. All figures are in Canadian dollars unless otherwise stated.

NOTE REGARDING SECOND QUARTER FISCAL 2026 FINANCIAL RESULTS

VersaBank's financial results for the second quarter of fiscal 2026 reflect non-core non-interest expenses in the amount of $6.7 million. The non-core non-interest expenses included $4.5 million related to the project costs associated with the Reorganization (see Reorganization note below). Subsequent to the end of the second quarter, the Bank publicly filed a Form S-4 registration statement (the "Registration Statement") with the U.S. Securities and Exchange Commission (the "SEC") in connection with the Reorganization. The Reorganization is intended to enhance shareholder value, mitigate risk and reduce corporate costs over the long term. The Bank expects that the anticipated benefits of the Reorganization will exceed the associated investment however, these expected benefits are subject to various assumptions and uncertainties. As of the end of the second quarter of fiscal 2026, the Bank believes it has incurred the majority of the total costs associated with the Reorganization and expects the Reorganization to be completed in fiscal 2026. Non-core non-interest expenses also included a $2.2 million write-down of an intangible asset related to the customer deposit base of the Bank's sole physical branch, which received regulatory approval for sale in the second quarter, requiring the Bank to record the write-down in the same quarter. The branch was sold on May 1, 2026.

The Bank's second quarter fiscal 2026 results also included $0.6 million in non-interest expenses specifically related to costs related to the commercialization of its Real Bank Tokenized Deposits™ (RBTD™s), which were not classified as non-core.

CONSOLIDATED FINANCIAL SUMMARY

(unaudited)

As at or for the three months ended

As at or for the six months ended

April 30

January 31

April 30

(thousands of Canadian dollars, except per share amounts)

2026

Change

2025

Change

2026

2025

Change

Financial results

Total revenue

$ 38,293

$ 36,514

5 %

$ 30,139

27 %

$ 74,807

$ 57,966

29 %

Cost of funds*

3.09 %

3.14 %

(2 %)

3.52 %

(12 %)

3.12 %

3.69 %

(15 %)

Net interest margin*

2.33 %

2.25 %

4 %

2.29 %

2 %

2.29 %

2.19 %

5 %

Net interest margin on credit assets*

2.71 %

2.64 %

3 %

2.59 %

5 %

2.65 %

2.44 %

9 %

Return on average common equity*

5.64 %

8.16 %

(31 %)

6.67 %

(15 %)

6.91 %

7.25 %

(5 %)

Adjusted (Core) return on average common equity*

9.23 %

8.95 %

3 %

6.67 %

38 %

9.07 %

7.25 %

25 %

Net income

7,525

11,069

(32 %)

8,529

(12 %)

18,594

16,672

12 %

Adjusted (Core) net income*

12,378

12,162

2 %

8,529

45 %

24,540

16,672

47 %

Income per common share basic and diluted

0.23

0.35

(34 %)

0.26

(12 %)

0.58

0.54

7 %

Adjusted (Core) income per common share basic and diluted*

0.39

0.38

3 %

0.26

50 %

0.77

0.54

43 %

Balance sheet and capital ratios**

Total assets

$ 6,440,700

$ 6,146,010

5 %

$ 5,047,133

28 %

$ 6,440,700

$ 5,047,133

28 %

Book value per common share*

17.15

16.93

1 %

16.25

6 %

17.15

16.25

6 %

Common Equity Tier 1 (CET1) capital ratio

12.32 %

12.82 %

(4 %)

14.28 %

(14 %)

12.32 %

14.28 %

(14 %)

Total capital ratio

14.74 %

15.47 %

(5 %)

17.34 %

(15 %)

14.74 %

17.34 %

(15 %)

Leverage ratio

7.94 %

8.17 %

(3 %)

9.61 %

(17 %)

7.94 %

9.61 %

(17 %)

* See definitions under 'Non-GAAP and Other Financial Measures' in the Q2 2026 Management's Discussion and Analysis.

** Capital management and leverage measures are in accordance with OSFI's Capital Adequacy Requirements and Basel III Accord.

SEGMENTED FINANCIAL SUMMARY – QUARTERLY

(thousands of Canadian dollars)

for the three months ended

April 30, 2026

Digital Banking

Digital Meteor

DRTC

Eliminations/

Consolidated

Canada

USA

Adjustments

Net interest income

$ 27,768

$ 7,911

$ -

$ 35,679

Non-interest income

373

(15)

749

1,850

(343)

2,614

Total revenue

28,141

7,896

749

1,850

(343)

38,293

Provision for (recovery of) credit losses

495

(67)

428

27,646

7,963

749

1,850

(343)

37,865

Non-interest expenses:

Salaries and benefits

7,343

2,070

172

1,617

11,202

General and administrative

13,824

515

362

(343)

14,400

Premises and equipment

947

353

530

1,884

22,114

2,938

268

2,509

(343)

27,486

Income (loss) before income taxes

5,532

5,025

481

(659)

10,379

Income tax provision

1,438

1,437

130

(151)

2,854

Net income (loss)

$ 4,094

$ 3,588

$ 351

$ (508)

$ -

$ 7,525

Total assets

$ 5,213,682

$ 1,221,182

$ 10,688

$ 15,773

$ (20,625)

$ 6,440,700

Total liabilities

$ 4,926,001

$ 961,343

$ 370

$ 28,344

$ (27,596)

$ 5,888,462

for the three months ended

January 31, 2026

Digital Banking

Digital Meteor

DRTC

Eliminations/

Consolidated

Canada

USA

Adjustments

Net interest income

$ 27,107

$ 6,774

$ -

$ 33,881

Non-interest income

476

528

1,975

(346)

2,633

Total revenue

27,583

6,774

528

1,975

(346)

36,514

Provision for (recovery of) credit losses

681

700

26,902

6,755

528

1,975

(346)

35,814

Non-interest expenses:

Salaries and benefits

6,663

1,733

206

1,781

10,383

General and administrative

7,378

799

506

(346)

8,367

Premises and equipment

925

275

548

1,796

14,966

2,807

284

2,835

(346)

20,546

Income (loss) before income taxes

11,936

3,948

244

(860)

15,268

Income tax provision

3,222

1,142

(230)

4,199

Net income (loss)

$ 8,714

$ 2,806

$ 179

$ (630)

$ -

$ 11,069

Total assets

$ 5,134,288

$ 1,009,961

$ 10,535

$ 16,139

$ (24,913)

$ 6,146,010

Total liabilities

$ 4,850,594

$ 754,775

$ 517

$ 28,263

$ (31,215)

$ 5,602,934

for the three months ended

April 30, 2025

Digital Banking

Digital Meteor

DRTC

Eliminations/

Consolidated

Canada

USA

Adjustments

Net interest income

$ 25,525

$ 2,507

$ -

$ 28,032

Non-interest income

122

(18)

569

1,789

(355)

2,107

Total revenue

25,647

2,489

569

1,789

(355)

30,139

Provision for (recovery of) credit losses

954

(65)

889

24,693

2,554

569

1,789

(355)

29,250

Non-interest expenses:

Salaries and benefits

5,836

1,464

253

1,602

9,155

General and administrative

5,267

800

343

665

(355)

6,720

Premises and equipment

947

104

123

467

1,641

12,050

2,368

719

2,734

(355)

17,516

Income (loss) before income taxes

12,643

186

(150)

(945)

11,734

Income tax provision

3,443

(293)

3,205

Net income (loss)

$ 9,200

$ 133

$ (152)

$ (652)

$ -

$ 8,529

Total assets

$ 4,761,444

$ 281,153

$ 11,086

$ 25,224

$ (31,774)

$ 5,047,133

Total liabilities

$ 4,386,758

$ 144,517

$ 9,029

$ 19,708

$ (41,185)

$ 4,518,827

NOTE REGARDING THE CHANGE IN NAME OF "RECEIVABLE PURCHASE PROGRAM" ("RPP") TO "STRUCTURED RECEIVABLE PROGRAM" ("SRP")

As part of its previously announced Reorganization (see note below), VersaBank has changed the name of its Receivable Purchase Program ("RPP") to Structured Receivable Program ("SRP"). The underlying business model of the SRP has not changed in any way.

MANAGEMENT COMMENTARY

"The second quarter once again saw the Bank achieve new records for credit assets, revenue, net interest income and book value, driven by the continued momentum in the ramp up of our Structured Receivable Program portfolio in the United States, which saw 28% sequential growth, alongside better than expected growth in Canada, and continued strength in our net interest margin," said David Taylor, Founder and President, VersaBank. "Year-over-year growth in adjusted (core) net income of 38% significantly outpaced very healthy credit asset growth of 25% as we increasingly benefit from the operating leverage inherent in our business model. Importantly, with each quarter we are seeing the increasing efficiency of our US operations as we progress towards our target of 20%."

"Feedback from our US SRP partners continues to validate the attractiveness and value of our unique funding solution for point-of-sale financing companies and the continued strong pace of funding has us firmly on track to achieve our target of adding at least $1 billion in US SRP fundings in fiscal 2026. Again, this quarter, the vast majority of additional fundings in the U.S. were through our original, higher-spread SRP as demand continues to exceed our expectations."

The planned launch of our game-changing AI-enabled, real-time funding capability within our SRP in the coming months will significantly expand the addressable market in both the United States and Canada. In Canada, we expect the launch of our Real-Time SRP to enable us to win additional financing business with our existing partners while enabling us to acquire new partners with more specialized financing needs that we were previously unable to address."

"As our core Digital Banking operations continue to deliver strong growth and we increasingly benefit our operating leverage, we are now starting to monetize our Digital Asset opportunity based on our proven, proprietary VersaVault technology. We are generating incremental revenue from our Stablecoin Custody Services in Canada as our additional, multiple paths for commercialization come into focus and new, potential paths emerge through our discussions with leaders in the sectors. We have developed our technology and formulated commercial strategies in the context of the evolving regulatory environment and, as a national, federally licensed bank in both the United States and Canada with market-ready technology, we are uniquely positioned to capitalize."

NOTE RE. REORGANIZATION (PREVIOUSLY REFERRED TO AS THE PROPOSED CORPORATE REALIGNMENT)

Subsequent to the end of the second quarter, the Bank publicly filed a Form S-4 registration statement (the "Registration Statement") with the U.S. Securities and Exchange Commission (the "SEC") in connection with the Bank's proposed plan to realign its corporate structure to a standard US bank framework (the "Reorganization"). Specifically, the Reorganization, among other things, will cause Versa Bancorp, a new Delaware corporation (the "Parent") to become the holding company of VersaBank and VersaBank USA National Association. The Registration Statement has been confidentially reviewed and remains subject to additional review by the SEC prior to being declared effective. As a result, the information contained therein is subject to change. Upon the Registration Statement being declared effective by the SEC, the Bank will be at liberty to convene a special meeting of shareholders at which it would seek approval of the Reorganization. In addition to the approval of shareholders, the completion of the Reorganization remains subject to various regulatory approvals, including approval by the Office of the Superintendent of Financial Institutions and Ministry of Finance in Canada and the Federal Reserve Board in the United States. VersaBank intends to proceed with the shareholder matters, expeditiously, and in tandem with the other regulatory processes.

KEY OPERATIONAL DEVELOPMENTS

HIGHLIGHTS FOR THE SECOND QUARTER OF FISCAL 2026

Consolidated (Canadian and US Digital Banking Operations, Digital Meteor and DRTC)

Digital Banking (Combined Canada and US)

Digital Banking Canada

Note: The financial results for Digital Banking Canada contain certain non-interest expenses for general corporate administrative costs.

Digital Banking US

Digital Meteor

DRTC's Cybersecurity Services Operations

FINANCIAL SUMMARY

(unaudited)

for the three months ended

for the six months ended

April 30

(thousands of Canadian dollars, except per share amounts)

2026

2025

2026

2025

Results of operations

Interest income

$ 83,060

$ 70,976

$ 164,276

$ 144,222

Net interest income

35,679

28,032

69,560

53,756

Non-interest income

2,614

2,107

5,247

4,210

Total revenue

38,293

30,139

74,807

57,966

Provision for credit losses

428

889

1,128

1,913

Non-interest expenses

27,486

17,516

48,032

33,215

Digital Banking

25,052

14,418

42,825

27,196

DRTC

2,509

2,734

5,344

5,700

Digital Meteor

268

719

552

1,028

Net income

7,525

8,529

18,594

16,672

Adjusted (Core) net income*

12,378

8,529

24,540

16,672

Income per common share:

Basic

$ 0.23

$ 0.26

$ 0.58

$ 0.54

Diluted

$ 0.23

$ 0.26

$ 0.58

$ 0.54

Adjusted (Core) income per common share basic and diluted*

$ 0.39

$ 0.26

$ 0.77

$ 0.54

Dividends paid on common shares

$ 802

$ 813

$ 1,601

$ 1,626

Yield*

5.42 %

5.81 %

5.41 %

5.88 %

Cost of funds*

3.09 %

3.52 %

3.12 %

3.69 %

Net interest margin*

2.33 %

2.29 %

2.19 %

Net interest margin on credit assets*

2.71 %

2.59 %

2.65 %

2.44 %

Return on average common equity*

5.64 %

6.67 %

6.91 %

7.25 %

Adjusted (Core) return on average common equity*

9.23 %

6.67 %

9.07 %

7.25 %

Book value per common share*

$ 17.15

$ 16.25

$ 17.15

$ 16.25

Efficiency ratio*

72 %

58 %

64 %

57 %

Adjusted (Core) efficiency ratio*

54 %

58 %

53 %

57 %

Return on average total assets*

0.49 %

0.70 %

0.61 %

0.68 %

Provision for (recovery of) credit losses as a % of average credit

assets*

0.03 %

0.08 %

0.04 %

0.09 %

as at

Balance Sheet Summary

Cash

$ 568,161

$ 340,186

$ 568,161

$ 340,186

Securities

106,277

104,807

106,277

104,807

Credit assets, net of allowance for credit losses

5,675,879

4,523,812

5,675,879

4,523,812

Average credit assets

5,504,579

4,435,280

5,371,129

4,379,964

Total assets

6,440,700

5,047,133

6,440,700

5,047,133

Deposits

5,520,909

4,205,185

5,520,909

4,205,185

Subordinated notes payable

100,688

101,844

100,688

101,844

Shareholders' equity

552,238

528,306

552,238

528,306

Capital ratios**

Risk-weighted assets

$ 4,285,370

$ 3,551,398

$ 4,285,370

$ 3,551,398

Common Equity Tier 1 capital

527,758

507,222

527,758

507,222

Total regulatory capital

631,623

615,770

631,623

615,770

Common Equity Tier 1 (CET1) ratio

12.32 %

14.28 %

12.32 %

14.28 %

Tier 1 capital ratio

12.32 %

14.28 %

12.32 %

14.28 %

Total capital ratio

14.74 %

17.34 %

14.74 %

17.34 %

Leverage ratio

7.94 %

9.61 %

7.94 %

9.61 %

* See definitions under 'Non-GAAP and Other Financial Measures' in the Q2 2026 Management's Discussion and Analysis.

** Capital management and leverage measures are in accordance with OSFI's Capital Adequacy Requirements

and Basel III Accord.

This news release is intended to be read in conjunction with the Bank's Consolidated Financial Statements and Management's Discussion & Analysis (MD&A) for the three & six months ended April 30, 2026, which are available on VersaBank's website at www.versabank.com, SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar.

Conference Call

VersaBank will host a conference call and webcast today, Wednesday, June 3, 2026, at 9:00 a.m. (ET) to discuss its second quarter results, featuring a presentation by David Taylor, President & CEO and Nicolas Ospina, Global CFO, followed by a question-and-answer period. To join the conference call by telephone without operator assistance, you may register and enter your phone number in advance at: https://emportal.ink/43oWAgd to receive an instant automated call back. Alternatively, you may also dial direct and be entered into the call by an Operator at: 1-416-945-7677 or 1-888-699-1199 (toll free).

For those preferring to listen to the presentation via the Internet, a live webcast will be available at https://app.webinar.net/qA4bp4xpOXg or on the Bank's web site at: https://www.versabank.com/investor-relations/events-presentations/. The slide presentation management will use during the conference call/webcast will be available on the Bank's web site at: https://www.versabank.com/investor-relations/financial-results/.

The archived webcast presentation will be available for 90 days following the live event at https://app.webinar.net/qA4bp4xpOXg and on the Bank's web site at: https://www.versabank.com/investor-relations/events-presentations/. Replay of the teleconference will be available until June 7, 2026 by calling 289-819-1450 or 1-888-660-6345 (toll free) and the passcode is: 49445#

About VersaBank

VersaBank is a North American bank with a difference. Federally chartered in both Canada and the US, VersaBank has a branchless, digital, business-to-business model based on its proprietary state-of-the-art technology that enables it to profitably address underserved segments of the banking industry in a significantly risk mitigated manner. Because VersaBank obtains substantially all of its deposits and undertakes the majority of its funding activities electronically through financial intermediary partners, it benefits from significant operating leverage that drives efficiency and return on common equity. In August 2024, VersaBank launched its unique Receivable Purchase Program funding solution for point-of-sale finance companies, which has been highly successful in Canada for over 15 years, to the underserved multi-trillion-dollar US market. VersaBank also owns Minnesota-based DRT Cyber Inc., a North America leader in the provision of cyber security services to address the rapidly growing volume of cyber threats challenging financial institutions, multi-national corporations and government entities. Through its wholly owned subsidiary, DBG Inc., VersaBank owns proprietary intellectual property and technology to enable the next generation of digital assets for the banking and financial community, including the Bank's revolutionary and proprietary Real Bank Tokenized Deposits™).

VersaBank's Common Shares trade on the Toronto Stock Exchange and NASDAQ under the symbol VBNK.

Forward-Looking Statements

This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws ("forward-looking statements") including statements regarding the ability to obtain shareholder, regulatory and other approvals of the Reorganization; the expected realization of additional shareholder value, the simplification of the regulatory structure and the reduction of costs as a result of the Reorganization; the key elements of the Reorganization; the ability to obtain inclusion on stock indices, including the Russell 2000; the ability to continue to grow the US Structured Receivable Program; the ability to expand our net interest margin; and the ability to continue to grow the CMHC residential construction loan program. Forward-looking statements of this type are included in this document and may be included in other filings and with Canadian securities regulators or the US Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the "safe harbor" provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. 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 VersaBank's 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 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 and US economies in general and the strength of the local economies within Canada and the US in which VersaBank conducts operations; the effects of changes in monetary and fiscal policy, including changes in interest rate policies of the Bank of Canada and the US Federal Reserve; global commodity prices; the effects of competition in the markets in which VersaBank operates; changes in trade laws and tariffs; 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 wars or conflicts and the impact of both on global supply chains and markets; the impact of outbreaks of disease or illness that affect local, national or international economies; the possible effects on our business of terrorist activities; natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply; and VersaBank's anticipation of and success in managing the risks implicated by the foregoing.

Completion of VersaBank's plan to realign its corporate structure to a standard US bank framework is subject to numerous factors, many of which are beyond the Bank's control, including but not limited to, the failure to obtain required shareholder, regulatory and other approvals, and other important factors disclosed previously and from time to time in the Bank's filings with the SEC and the securities commissions or similar securities regulatory authorities in each of the provinces or territories of Canada.

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 the management's discussion and analysis is presented to assist VersaBank shareholders and others in understanding VersaBank's financial position and may not be appropriate for any other purposes.

For a detailed discussion of certain key factors that may affect VersaBank's future results, please see VersaBank's annual MD&A for the year ended October 31, 2025. Except as required by securities law, VersaBank does not undertake to update any forward-looking statement that is contained in this press release or made from time to time by VersaBank or on its behalf.

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SOURCE VersaBank