Digital Banking Operations (Canada and U.S.)

   -- Loans increased 10% year-over-year to a record $4.24 billion, driven 
      primarily by continued growth in the Bank's POS/RPP portfolio, which 
      increased 15% year-over-year; 
 
   -- Total revenue increased 3% year-over-year to $103.4 million; 
 
   -- Net interest margin on loans decreased 33 bps, or 12%, year-over-year to 
      2.52%; 
 
   -- Net interest margin decreased 41 bps, or 15%, year-over-year to 2.27%, 
      and remained among the highest of the publicly traded Canadian Schedule I 
      banks; 
 
   -- Provision for credit losses as a percentage of average loans remained 
      negligible at -0.01%, compared with a 12-quarter average of 0.01%, which 
      remains among the lowest of the publicly traded Canadian Schedule I 
      banks; 
 
   -- Net income was $39.6 million; 
 
   -- Net income excluding the aforementioned one-time items was $44.8 million; 
 
   -- Earnings per share $1.48; 
 
   -- Earnings per share excluding the aforementioned one-time items was $1.69; 
 
   -- Efficiency ratio (excluding DRTC) based on net income excluding the 
      aforementioned one-time items was 44%, and, 
 
   -- Return on common equity (excluding DRTC) based on net income excluding 
      the aforementioned one-time items was 11.48%. 

Digital Banking Operations Canada

   -- Canadian Digital Banking operations net income excluding the 
      aforementioned one-time items was $44.3 million; 
 
   -- Canadian Digital Banking Operations efficiency ratio based on net income 
      excluding the aforementioned one-time items during the year was 44%; and, 
 
   -- Canadian Digital Banking Operations return on common equity (excluding 
      DRTC) based on net income aforementioned one-time items was 11.36%. 

Digital Banking Operations U.S.

   -- U.S. Digital Banking operations net income was $0.5 million and U.S. 
      Digital Banking operations earnings per share was $0.02. U.S. Digital 
      Banking operations include expenses which are being incurred ahead of 
      asset growth and revenue generated by the launch of the RPP in the U.S. 

DRTC's Cybersecurity Services Operations

   -- DRTC's revenue, excluding intercompany transactions  increased 7% to 
      $11.6 million. DRTC's gross margin increased 3% to $8.3 million due to 
      increase in client engagements and improved operational efficiency. 
      DRTC's gross margin is reflected in non-interest income in VersaBank's 
      consolidated statements of income and comprehensive income. DBG remained 
      profitable on a standalone basis within DRTC. 

FINANCIAL SUMMARY

 
(unaudited)           for the three months      for the year ended 
                      ended 
                      October 31   October 31   October 31   October 31 
($CDN thousands       2024         2023         2024         2023 
except per share 
amounts) 
Results of 
operations 
 Interest income         $ 73,238     $ 66,089    $ 285,419    $ 229,334 
 Net interest 
  income                   24,901       26,239      102,655      100,051 
 Non-interest 
  income                    2,384        2,934        8,978        8,584 
 Total revenue             27,285       29,173      111,633      108,635 
 Provision for 
  (recovery of) 
  credit losses             (156)        (184)        (268)          609 
 Non-interest 
  expenses                 19,365       12,441       57,108       50,381 
  Digital banking          17,119       11,384       49,046       42,984 
  DRTC                      2,587        2,137        9,421        9,051 
 Net income                 5,516       12,479       39,748       42,162 
 Income per common 
 share: 
  Basic                    $ 0.20       $ 0.47       $ 1.49       $ 1.57 
  Diluted                  $ 0.20       $ 0.47       $ 1.49       $ 1.57 
 Dividends paid on 
  preferred shares          $ 247        $ 247        $ 988        $ 988 
 Dividends paid on 
  common shares             $ 650        $ 650      $ 2,600      $ 2,612 
 Yield*                    6.23 %       6.40 %       6.31 %       6.14 % 
 Cost of funds*            4.11 %       3.86 %       4.04 %       3.46 % 
 Net interest 
  margin*                  2.12 %       2.54 %       2.27 %       2.68 % 
 Net interest margin 
  on loans*                2.34 %       2.69 %       2.52 %       2.85 % 
 Return on average 
  common equity*           5.28 %      13.58 %      10.16 %      11.75 % 
 Book value per 
  common share*           $ 15.35      $ 14.00      $ 15.35      $ 14.00 
 Efficiency ratio*           71 %         43 %         51 %         46 % 
 Efficiency ratio - 
  Digital banking*           70 %         45 %         48 %         43 % 
 Return on average 
  total assets*            0.45 %       1.19 %       0.86 %       1.10 % 
 Provision for 
  (recovery of) 
  credit losses as a 
 
  % of average 
  loans*                 (0.01 %)     (0.02 %)     (0.01 %)       0.02 % 
                                                                   as at 
Balance Sheet 
Summary 
 Cash                   $ 225,254    $ 132,242    $ 225,254    $ 132,242 
 Securities               299,300      167,940      299,300      167,940 
 Loans, net of 
  allowance for 
  credit losses         4,236,116    3,850,404    4,236,116    3,850,404 
 Average loans          4,142,783    3,756,038    4,043,260    3,421,541 
 Total assets           4,838,484    4,201,610    4,838,484    4,201,610 
 Deposits               4,144,673    3,533,366    4,144,673    3,533,366 
 Subordinated notes 
  payable                 102,503      106,850      102,503      106,850 
 Shareholders' 
  equity                  399,203      377,158      399,203      377,158 
Capital ratios** 
 Risk-weighted 
  assets              $ 3,323,595  $ 3,095,092  $ 3,323,595  $ 3,095,092 
 Common Equity Tier 
  1 capital               373,503      350,812      373,503      350,812 
 Total regulatory 
  capital                 481,176      476,005      481,176      476,005 
 Common Equity Tier 
  1 (CET1) capital 
  ratio                   11.24 %      11.33 %      11.24 %      11.33 % 
 Tier 1 capital 
  ratio                   11.24 %      11.78 %      11.24 %      11.78 % 
 Total capital 
  ratio                   14.48 %      15.38 %      14.48 %      15.38 % 
 Leverage ratio            7.38 %       8.30 %       7.38 %       8.30 % 
 
 
* See definition under 'Non-GAAP and Other Financial 
Measures' in the Annual 2024 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 2024 annual audited Consolidated Financial Statements and MD&A, which will be filed on SEDAR+ (www.sedarplus.ca) and EDGAR (www.sec.gov/edgar.shtml), and will be available at www.versabank.com.

About VersaBank

VersaBank is a North American bank (federally chartered in Canada and the US) with a difference. 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 lending 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 (RPP) funding solution for point-of-sale finance companies, which has been highly successful in Canada for nearly 15 years, to the underserved multi-trillion-dollar US market. VersaBank also owns Washington, DC-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.

VersaBank's Common Shares trade on the Toronto Stock Exchange ("TSX") and Nasdaq under the symbol VBNK.

Forward-Looking Statements

VersaBank's public communications often include written or oral forward-looking statements. 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 management's discussion and analysis 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

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