VERSABANK REPORTS STRONG FIRST QUARTER RESULTS: ACCELERATED U.S. GROWTH DRIVES 31% YEAR-OVER-YEAR INCREASE IN REVENUE, 36% YEAR-OVER-YEAR GROWTH IN NET INCOME, 49% YEAR-OVER-YEAR GROWTH IN ADJUSTED 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 first quarter 2026 ("Q1 2026") unaudited Interim Consolidated Financial Statements for the period ended January 31, 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, March 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 first quarter ended January 31, 2026. All figures are in Canadian dollars unless otherwise stated.

CONSOLIDATED FINANCIAL SUMMARY

(unaudited)

As at or for the three months ended

January 31

October 31

January 31

(thousands of Canadian dollars except per share amounts)

2026

2025

Change

2025

Change

Financial results

Total revenue

$ 36,514

$ 35,092

4 %

$ 27,827

31 %

Cost of funds*

3.14 %

3.15 %

(0 %)

3.84 %

(18 %)

Net interest margin*

2.25 %

2.29 %

(2 %)

2.08 %

8 %

Net interest margin on credit assets*

2.64 %

2.65 %

(0 %)

2.36 %

12 %

Return on average common equity*

8.16 %

3.89 %

110 %

7.02 %

16 %

Adjusted return on average common equity*

8.95 %

7.81 %

15 %

7.02 %

27 %

Net income

11,069

5,204

113 %

8,143

36 %

Adjusted net income*

12,162

10,549

15 %

8,143

49 %

Net income per common share basic and diluted

0.35

0.16

119 %

0.28

25 %

Adjusted net income per common share basic and diluted*

0.38

0.33

15 %

0.28

36 %

Balance sheet and capital ratios**

Total assets

$ 6,146,010

$ 5,808,475

6 %

$ 4,971,732

24 %

Book value per common share*

16.93

16.67

2 %

16.03

6 %

Common Equity Tier 1 (CET1) capital ratio

12.82 %

12.92 %

(1 %)

14.61 %

(12 %)

Total capital ratio

15.47 %

15.72 %

(2 %)

17.91 %

(14 %)

Leverage ratio

8.17 %

8.47 %

(4 %)

9.67 %

(16 %)

* See definitions under 'Non-GAAP and Other Financial Measures' in the Q1 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

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

October 31, 2025

Digital Banking

Digital Meteor

DRTC

Eliminations/

Consolidated

Canada

USA

Adjustments

Net interest income

$ 27,399

$ 5,234

$ -

$ 32,633

Non-interest income

250

(15)

673

1,898

(347)

2,459

Total revenue

27,649

5,219

673

1,898

(347)

35,092

Provision for (recovery of) credit losses

1,365

(46)

1,319

26,284

5,265

673

1,898

(347)

33,773

Non-interest expenses:

Salaries and benefits

7,446

1,213

130

1,327

10,116

General and administrative

10,941

924

140

143

(347)

11,801

Premises and equipment

929

323

276

426

1,954

19,316

2,460

546

1,896

(347)

23,871

Income (loss) before income taxes

6,968

2,805

127

9,902

Income tax provision

3,840

806

4,698

Net income (loss)

$ 3,128

$ 1,999

$ 94

$ (17)

$ -

$ 5,204

Total assets

$ 5,050,922

$ 759,733

$ 10,207

$ 24,538

$ (36,925)

$ 5,808,475

Total liabilities

$ 4,777,508

$ 498,822

$ 8,006

$ 28,319

$ (36,853)

$ 5,275,802

for the three months ended

January 31, 2025

Digital Banking

Digital Meteor

DRTC

Eliminations/

Consolidated

Canada

USA

Adjustments

Net interest income

$ 23,685

$ 2,039

$ -

$ 25,724

Non-interest income

125

342

1,989

(354)

2,103

Total revenue

23,810

2,040

342

1,989

(354)

27,827

Provision for (recovery of) credit losses

1,033

(9)

1,024

22,777

2,049

342

1,989

(354)

26,803

Non-interest expenses:

Salaries and benefits

5,289

1,164

217

1,944

8,614

General and administrative

4,716

597

486

(354)

5,489

Premises and equipment

903

109

536

1,596

10,908

1,870

309

2,966

(354)

15,699

Income (loss) before income taxes

11,869

179

(977)

11,104

Income tax provision

3,105

(220)

2,961

Net income (loss)

$ 8,764

$ 103

$ 33

$ (757)

$ -

$ 8,143

Total assets

$ 4,707,062

$ 256,627

$ 11,236

$ 25,340

$ (28,533)

$ 4,971,732

Total liabilities

$ 4,350,601

$ 115,351

$ 8,922

$ 21,548

$ (45,985)

$ 4,450,437

NOTE REGARDING THE CHANGE IN NAME OF "RECEIVABLE PURCHASE PROGRAM" ("RPP") TO "STRUCTURED RECEIVEABLE 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 first quarter of 2026 saw the acceleration of our Structured Receivable Program, or SRP (previously known as our Receivable Purchase Program) in the United States, which, combined with steady growth in Canada and a strengthened net interest margin, contributed to 31% year-over-year growth in revenue," said David Taylor, Founder and President, VersaBank. "Per our strategy, we are increasingly benefitting from the operating leverage in our business model. Our investment over the past several years in establishing and ramping up our U.S. business is yielding results in terms of improved operating leverage, with net income up 36% and adjusted net income up 49%, year-over-year. Notably, adjusted net income grew 15% sequentially."

"After surpassing our fiscal 2025 target, during the first quarter of fiscal 2026 we grew our U.S. SRP 55% sequentially. Our pace of funding has us firmly on track to achieve our target of growing our US SRP fundings by at least $1 billion in fiscal 2026. Notably, the efficiency of our U.S. banking operations has already surpassed that of our Canadian banking operations and, with substantially all of our U.S. cost structure in place, will expand meaningfully as we grow our U.S. portfolio."

"In addition to the expected continued strong growth in our core Digital Banking business, we are increasingly encouraged by the opportunity for our Real Bank Tokenized Deposits™ (RBTD™s) as digital assets gain adoption by the mainstream financial industry amidst a favourable regulatory environment. During the quarter, we continued to advance our RBTD™s towards commercialization, with a specific focus on ensuring we position ourselves to fully capitalize on their specific advantage in the marketplace."

"The first quarter was also highlighted by our extension of our custody services to the stablecoin market and, subsequent to quarter end, we announced our first customer, Stablecorp Digital Currencies, for which the Bank will serve as the custodian for Stablecorp's QCAD stablecoin -- Canada's first regulatory compliant Canadian-dollar stablecoin. Stablecorp has an impressive list of investors including Coinbase, Circle, DeFi Technologies and FTP Ventures."

"We continue to make steady progress on our reorganization with the goal of including our shareholder vote on the matter as apart of our annual shareholders meeting in early April, subject to the timing of review of the required filings and approval by the requisite regulators. We continue to expect the benefits of the reorganization to meaningfully outweigh the investment in the process and allow the Bank to fully capitalize on its US SRP opportunity, as well as our Tokenized Deposit and Stablecoin Custody Services opportunities."

KEY OPERATIONAL DEVELOPMENTS

HIGHLIGHTS FOR THE FIRST 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

Reorganization (previously referred to as the Proposed Corporate Realignment)

In May 2025, the Bank announced its intention, subject to the approval of VersaBank's shareholders, the U.S. Federal Reserve, the Office of the Superintendent of Financial Institutions (Canada) ("OSFI"), the Minister of Finance (Canada), the Toronto Stock Exchange ("TSX"), the Nasdaq Global Select Market ("Nasdaq"), and other applicable approvals, to implement a series of transactions that would result in, among other things, a new entity (the "Parent"), a newly incorporated Delaware corporation, succeeding VersaBank as the publicly traded entity in which existing shareholders hold their equity interests, thereby domesticating that public company as a U.S. reporting issuer incorporated in Delaware (the "Reorganization"). Under the proposed terms of the Reorganization, among other things, VersaBank will adopt an amendment to its by-laws and effect certain transactions to exchange all of its outstanding common shares for shares of the Parent (the "Share Exchange"). Following the Share Exchange, VersaBank will sell all of its shares of VersaHoldings US Corp. to the Parent in exchange for a promissory note equal to the aggregate fair market value of those shares (the "Parent Note"), which will subsequently be distributed to the Parent as a return of capital.

FINANCIAL SUMMARY

(unaudited)

For the three months ended

January 31

October 31

January 31

(thousands of Canadian dollars except per share amounts)

2026

2025

Results of operations

Interest income

$ 81,216

$ 77,471

$ 73,246

Net interest income

33,881

32,633

25,724

Non-interest income

2,633

2,459

2,103

Total revenue

36,514

35,092

27,827

Provision for (recovery of) credit losses

700

1,319

1,024

Non-interest expenses

20,546

23,871

15,699

Digital Banking

17,773

21,776

12,788

DRTC

2,835

2,525

2,966

Digital Meteor

284

(83)

309

Net income

11,069

5,204

8,143

Adjusted net income*

12,162

10,549

8,143

Income per common share:

Basic

$ 0.35

$ 0.16

$ 0.28

Diluted

$ 0.35

$ 0.16

$ 0.28

Adjusted income per common share basic and diluted*

$ 0.38

$ 0.33

$ 0.28

Dividends paid on common shares

$ 799

$ 802

$ 813

Yield*

5.39 %

5.45 %

5.92 %

Cost of funds*

3.14 %

3.15 %

3.84 %

Net interest margin*

2.25 %

2.29 %

2.08 %

Net interest margin on credit assets*

2.64 %

2.65 %

2.36 %

Return on average common equity*

8.16 %

3.89 %

7.02 %

Adjusted return on average common equity*

8.95 %

7.81 %

7.02 %

Book value per common share*

$ 16.93

$ 16.67

$ 16.03

Efficiency ratio*

56 %

68 %

56 %

Adjusted efficiency ratio*

52 %

56 %

Return on average total assets*

0.73 %

0.37 %

0.66 %

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

assets*

0.05 %

0.11 %

0.09 %

As at

Balance Sheet Summary

Cash

$ 628,002

$ 581,710

$ 386,693

Securities

101,276

80,923

158,546

Credit assets, net of allowance for credit losses

5,333,279

5,066,378

4,346,748

Average credit assets

5,199,829

4,922,347

4,291,432

Total assets

6,146,010

5,808,475

4,971,732

Deposits

5,248,955

4,860,863

4,133,438

Subordinated notes payable

100,160

103,516

106,824

Shareholders' equity

543,076

532,673

521,295

Capital ratios**

Risk-weighted assets

$ 4,031,913

$ 3,943,657

$ 3,422,768

Common Equity Tier 1 capital

516,815

509,650

500,158

Total regulatory capital

623,825

619,890

613,021

Common Equity Tier 1 (CET1) capital ratio

12.82 %

12.92 %

14.61 %

Tier 1 capital ratio

12.82 %

12.92 %

14.61 %

Total capital ratio

15.47 %

15.72 %

17.91 %

Leverage ratio

8.17 %

8.47 %

9.67 %

* See definition under 'Non-GAAP and Other Financial Measures' in the Q1 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 months ended January 31, 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, March 4, 2026, at 9:00 a.m. (ET) to discuss its fourth 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/4qKHiM1 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/GjAar8prvln 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/GjAar8prvln and on the Bank's web site at: https://www.versabank.com/investor-relations/events-presentations/. Replay of the teleconference will be available until April 4, 2026 by calling 289-819-1450 or 1-888-660-6345 (toll free) and the passcode is: 79538#

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 Receive Purchase 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, 2026. 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