6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of March 2025

Commission File Number: 001-40805

VersaBank

(Exact name of registrant as specified in its charter)

140 Fullarton Street, Suite 2002

London, Ontario N6A 5P2

Canada

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☐ Form 40-F ☒

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On March 5, 2025, VersaBank issued Interim Consolidated Financial Statements for the three months ended January 31, 2025 and 2024, Management’s Discussion and Analysis of Operations and Financial Condition for the three months ended January 31, 2025, a press release, dated March 5, 2025, titled VERSABANK FIRST QUARTER 2025 RESULTS CONTINUE TO DEMONSTRATE STRENGTH OF BUSINESS MODEL AS BANK RAMPS UP PROVEN RPP SOLUTION IN US MARKET, a press release, dated March 5, 2025, titled VersaBank Declares Dividends, Form 52-109F2 certificate of interim filings by CEO and Form 52-109F2 certificate of interim filings by CFO, copies of which are furnished as Exhibit 99.1, Exhibit 99.2, Exhibit 99.3, Exhibit 99.4, Exhibit 99.5 and Exhibit 99.6, respectively, to this Report of Foreign Private Issuer on Form 6-K

The information in this Form 6-K (including Exhibit 99.1, Exhibit 99.2, Exhibit 99.3, Exhibit 99.4, Exhibit 99.5 and Exhibit 99.6) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	VERSABANK
Date: March 5, 2025	By:	/s/ John Asma
		Name: John Asma
		Title: Chief Financial Officer

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EXHIBIT INDEX

Exhibit<br> <br>No.	Description
99.1	Interim Consolidated Financial Statements for the three months ended January 31, 2025 and 2024.
99.2	Management’s Discussion and Analysis of Operations and Financial Condition for the three months ended January 31, 2025.
99.3	Press Release, dated March 5, 2025, titled VERSABANK FIRST QUARTER 2025 RESULTS CONTINUE TO DEMONSTRATE STRENGTH OF BUSINESS MODEL AS BANK RAMPS UP PROVEN RPP SOLUTION IN US MARKET.
99.4	Press Release, dated March 5, 2025, titled VersaBank Declares Dividends.
99.5	VersaBank—Form 52-109F2 certificate of interim filings by CEO.
99.6	VersaBank—Form 52-109F2 certificate of interim filings by CFO.

ex_784674.htm

Exhibit 99.1

Interim Consolidated Financial Statements

January 31, 2025

(Unaudited)

1

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VERSABANK

Consolidated Balance Sheets

(Unaudited)

(thousands of Canadian dollars)
	January 31			October 31			January 31
As at	2025			2024			2024
Assets	****	****	****	****	****	****	****	****
Cash	$	386,693		$	225,254		$	127,509
Securities (note 4)		158,546			299,300			133,005
Credit assets, net of allowance for credit losses (note 5)		4,346,748			4,236,116			3,984,281
Property and equipment		25,107			23,885			24,180
Goodwill		12,301			12,301			5,754
Intangible assets		11,714			12,054			2,692
Other assets (note 6)		30,623			29,574			32,214
	$	4,971,732		$	4,838,484		$	4,309,635
Liabilities and Shareholders' Equity	****	****	****	****	****	****	****	****
Deposits	$	4,133,438		$	4,144,673		$	3,638,656
Subordinated notes payable (note 7)		106,824			102,503			103,355
Other liabilities (note 8)		210,175			192,105			178,590
		4,450,437			4,439,281			3,920,601
Shareholders' equity:
Share capital (note 9)		330,489			215,610			228,471
Contributed surplus		2,540			2,485			2,645
Retained earnings		188,568			181,238			157,845
Accumulated other comprehensive income (loss)		(302	)		(130	)		73
		521,295			399,203			389,034
	$	4,971,732		$	4,838,484		$	4,309,635

The accompanying notes are an integral part of these interim Consolidated Financial Statements.

2

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VERSABANK

Consolidated Statements of Income and Comprehensive Income

(Unaudited)

(thousands of Canadian dollars, except per share amounts)
	for the three months ended
	January 31			January 31
	2025			2024
Interest income:
Credit assets	$	66,959		$	65,076
Other		6,287			4,216
		73,246			69,292
Interest expense:
Deposits and other		46,130			41,271
Subordinated notes		1,392			1,453
		47,522			42,724
Net interest income		25,724			26,568
Non-interest income		2,103			2,283
Total revenue		27,827			28,851
Provision for (recovery of) credit losses (note 5)		1,024			(127	)
		26,803			28,978
Non-interest expenses:
Salaries and benefits		8,614			6,538
General and administrative		5,489			4,333
Premises and equipment		1,596			1,153
		15,699			12,024
Income before income taxes		11,104			16,954
Income tax provision (note 10)		2,961			4,255
Net income		8,143			12,699
Other comprehensive income (loss):
Item that may subsequently be reclassified to net income:
Foreign exchange gain (loss) on translation of foreign operations		(172	)		(58	)
Comprehensive income	$	7,971		$	12,641
Basic and diluted income per common share (note 11)	$	0.28		$	0.48

The accompanying notes are an integral part of these interim Consolidated Financial Statements.

3

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VERSABANK

Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

(thousands of Canadian dollars)
	for the three months ended
	January 31			January 31
	2025			2024
Common shares (note 9):
Balance, beginning of the period	$	215,610		$	214,824
Issued during the period		114,879			-
Balance, end of the period	$	330,489		$	214,824
Preferred shares (note 9):
Series 1 preferred shares
Balance, beginning and end of the period	$	-		$	13,647
Total share capital	$	330,489		$	228,471
Contributed surplus:
Balance, beginning of the period	$	2,485		$	2,513
Stock-based compensation (note 9)		55			132
Balance, end of the period	$	2,540		$	2,645
Retained earnings:
Balance, beginning of the period	$	181,238		$	146,043
Net income		8,143			12,699
Dividends paid on common and preferred shares		(813	)		(897	)
Balance, end of the period	$	188,568		$	157,845
Accumulated other comprehensive income:
Balance, beginning of the period	$	(130	)	$	131
Other comprehensive income (loss)		(172	)		(58	)
Balance, end of the period	$	(302	)	$	73
Total shareholders' equity	$	521,295		$	389,034

The accompanying notes are an integral part of these interim Consolidated Financial Statements.

4

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VERSABANK

Consolidated Statements of Cash Flows

(Unaudited)

(thousands of Canadian dollars)
	for the three months ended
	January 31			January 31
	2025			2024
Cash provided by (used in):
Operations:
Net income	$	8,143		$	12,699
Adjustments to determine net cash flows:
Items not involving cash:
Provision for (recovery of) credit losses		1,024			(127	)
Stock-based compensation		75			132
Income tax provision		2,961			4,255
Interest income		(73,246	)		(69,292	)
Interest expense		47,522			42,724
Amortization		744			574
Accretion of discount on securities		(310	)		(83	)
Foreign exchange rate change on assets and liabilities		4,285			1,859
Interest received		75,669			66,632
Interest paid		(47,726	)		(39,203	)
Income taxes paid		(3,963	)		(8,334	)
Change in operating assets and liabilities:
Credit assets		(111,793	)		(131,151	)
Deposits		(10,971	)		101,830
Change in other assets and liabilities		18,524			(628	)
		(89,062	)		(18,113	)
Investing:
Sale of securities		136,737			34,614
Purchase of property and equipment		(1,452	)		(16,002	)
		135,285			18,612
Financing:
Issuance of common shares, net of issue costs		114,879			-
Dividends paid		(813	)		(897	)
Repayment of lease obligations		(183	)		(177	)
		113,883			(1,074	)
Change in cash		160,106			(575	)
Effect of exchange rate changes on cash		1,333			(4,158	)
Cash, beginning of the period		225,254			132,242
Cash, end of the period	$	386,693		$	127,509

The accompanying notes are an integral part of these interim Consolidated Financial Statements.

5

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VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

1.	Reporting entity:

In Canada, VersaBank (the “Bank”) operates as a Schedule I bank under the Bank Act (Canada) and is regulated by the Office of the Superintendent of Financial Institutions Canada (“OSFI”). Following its acquisition of Stearns Bank Holdingford N.A. and renaming it VersaBank USA N.A. (“VersaBank USA”), on August 30, 2024, in the United States, the Bank, through its wholly owned subsidiary, VersaBank USA, holds a national Office of the Comptroller of the Currency (“OCC”) charter and is regulated by the OCC. The Bank, whose shares trade on the Toronto Stock Exchange and Nasdaq, provides primarily commercial lending and banking services to select niche markets in Canada and the United States, as well as cybersecurity services through the operations of its wholly owned subsidiary DRT Cyber Inc., (“DRTC”). The Bank is incorporated and domiciled in Canada, and maintains its registered office at Suite 2002, 140 Fullarton Street, London, Ontario, Canada, N6A 5P2.

2.	Basis of preparation:

a) Statement of compliance:

These interim Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and have been prepared in accordance with International Accounting Standard (“IAS”) 34 – Interim Financial Reporting and do not include all of the information required for full annual financial statements*.* These interim Consolidated Financial Statements should be read in conjunction with the Bank’s audited Consolidated Financial Statements for the year ended October 31, 2024.

The interim Consolidated Financial Statements for the three months ended January 31, 2025 and 2024 were approved by the Audit Committee of the Bank’s Board of Directors on March 3, 2025.

b) Basis of measurement:

These interim Consolidated Financial Statements have been prepared on the historical cost basis except securities (note 4), the investment in Canada Stablecorp Inc. (note 6) and derivative instruments (note 12), which are measured at fair value in the Consolidated Balance Sheets.

c) Functional and presentation currency:

These interim **** Consolidated Financial Statements are presented in Canadian dollars, which is the Bank’s functional currency. Functional currency is also determined for each of the Bank’s subsidiaries, and items included in the interim financial statements of the subsidiaries are measured using their functional currency.

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

d) Use of estimates and judgements:

In preparing these interim **** Consolidated Financial Statements, management has exercised judgement and developed estimates in applying accounting policies and generating reported amounts of assets and liabilities at the date of the financial statements and income and expenses during the reporting periods. Areas where judgement was applied include assessing significant changes in credit risk on credit assets and in the selection of relevant forward-looking information in assessing the Bank’s allowance for expected credit losses on its credit assets as described in note 5 – Credit assets. Estimates are applied in the determination of the allowance for expected credit losses on credit assets, the fair value of stock options granted as described in note 9, the fair value of derivatives, the fair value of the investment in Canada Stablecorp Inc. as described in note 6, the impairment test applied to intangible assets and goodwill, the measurement of deferred income taxes and the revaluation of property and equipment. It is reasonably possible, on the basis of existing knowledge, that actual results may vary from those expected in the development of these estimates. This could result in material adjustments to the carrying amounts of assets and/or liabilities affected in the future.

Estimates and their underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are applied prospectively once they are known.

3.	Material Accounting Policy Information and future accounting changes:

The accounting policies applied by the Bank in these interim Consolidated Financial Statements are the same as those applied by the Bank as at and for the year ended October 31, 2024 and are detailed in note 3 of the Bank’s 2024 audited Consolidated Financial Statements.

4.	Securities:

As at January 31, 2025, the Bank held securities totaling $158.5 million ( October 31, 2024 - $299.3 million), including accrued interest, comprised of US Treasury Bills with a carrying value of $152.5 million, Government of Canada bonds with a carrying value of $3.0 million and other securities with a carrying value of $3.0 million.

5.	Credit assets , net of allowance for credit losses:

VersaBank organizes its Credit Asset portfolios into the following two broad asset categories: Receivable Purchase Program (previously referred to as “Receivable Purchase Program/Point-of-Sale Loans & Leases” or “Point-of-Sale Loans & Leases”) and Multi-Family Residential Loans and Other (the amalgamation of what was previously referred to as “Commercial Real Estate Mortgages”, “Commercial Real Estate Loans”, and “Public Sector and Other Financing”). These categories have been established in VersaBank’s proprietary, internally developed asset management system and have been designed to catalogue individual lending assets as a function primarily of their key risk drivers, the nature of the underlying collateral, and the applicable market segment.

The Receivable Purchase Program (RPP) category is composed of investments in the expected cash flow streams derived primarily from consumer and small business loans and leases that are originated and owned throughout their lifetime by VersaBank’s RPP partners.

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

The Multi-Family Residential Loans and Other (“MROL”) category is composed of two sub-segments: Multi-Family Residential Loans, which consists of CMHC-insured (zero-risk weighted) loans and uninsured loans to real estate developers to finance the construction phase of development of multi-family, student residence, condominium and retirement homes properties, as well as term and bridge loans secured by completed aforementioned properties and units.  It also includes public sector and infrastructure loans and leases. The vast majority of these loans are business-to-business loans with the underlying credit risk exposure being primarily residential in nature given that the vast majority (approximately 94% as at October 31, 2024) of the loans are related to properties that are designated primarily for residential use. The portfolio benefits from diversity in its underlying security in the form of a broad range of such collateral properties.

Summary of Credit assets, net of allowance for credit losses:

(thousands of Canadian dollars)
	January 31			October 31			January 31
	2025			2024			2024
Receivable purchase program	$	3,401,328		$	3,307,328		$	3,078,941
Multi-family residential loans and other		927,978			910,314			886,226
		4,329,306			4,217,642			3,965,167
Allowance for credit losses		(4,233	)		(3,303	)		(2,386	)
Accrued interest		21,675			21,777			21,500
Total credit assets, net of allowance for credit losses	$	4,346,748		$	4,236,116		$	3,984,281

The following table provides a summary of credit asset amounts, ECL allowance amounts, and expected loss (“EL”) rates by lending asset category:

	As at January 31, 2025												As at October 31, 2024
(thousands of Canadian dollars)	Stage 1			Stage 2			Stage 3			Total			Stage 1			Stage 2			Stage 3			Total
Receivable purchase program	$	3,388,092		$	12,228		$	1,008		$	3,401,328		$	3,294,675		$	12,653		$	-		$	3,307,328
ECL allowance		1,911			4			56		******	1,971			783			-			-		******	783
EL %		0.06	%		0.03	%		5.56	%	****	0.06	%		0.02	%		0.00	%		0.00	%	****	0.02	%
Multi-family residential loans and other	$	714,442		$	213,375		$	161		$	927,978		$	737,125		$	173,121		$	68		$	910,314
ECL allowance		1,772			488			2		******	2,262			2,213			306			1.00		******	2,520
EL %		0.25	%		0.23	%		1.24	%	****	0.24	%		0.30	%		0.18	%		1.47	%	****	0.28	%
Total credit assets	$	4,102,534		$	225,603		$	1,169		$	4,329,306		$	4,031,800		$	185,774		$	68		$	4,217,642
Total ECL allowance		3,683			492			58		******	4,233			2,996			306			1		******	3,303
Total EL %		0.09	%		0.22	%		4.96	%	****	0.10	%		0.07	%		0.16	%		1.47	%	****	0.08	%

The Bank’s maximum exposure to credit risk is the carrying value of its financial assets. The Bank holds security against the majority of its credit assets in the form of mortgage interests over property, other registered securities over assets, guarantees and/or cash reserves (holdbacks) and receivables purchased included in the RPP Financing portfolio (see note 8).

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

Allowance for credit losses

The Bank must maintain an allowance for expected credit losses that is adequate, in management’s opinion, to absorb all credit related losses in the Bank’s lending and treasury portfolios. The expected credit loss methodology requires the recognition of credit losses based on 12 months of expected losses for performing credit assets which is reflected in the Bank’s Stage 1 grouping. The Bank recognizes lifetime expected losses on credit assets that have experienced a significant increase in credit risk since origination which is reflected in the Bank’s Stage 2 grouping. While there is elevated credit risk in the Bank’s RPP Financing portfolio as at the measurement date, management does not believe that this represents a significant increase in credit risk in that portfolio and the majority of this portfolio remains in Stage 1. Impaired credit assets require recognition of lifetime losses and are reflected in Stage 3 grouping.

Forward-looking Information

The Bank has sourced credit risk modeling systems and forecast macroeconomic scenario data from Moody’s Analytics, a third-party service provider for the purpose of computing forward-looking credit risk parameters under multiple macroeconomic scenarios that consider both market-wide and idiosyncratic factors and influences. The macroeconomic indicator data utilized by the Bank for the purpose of sensitizing probability of default and loss given default term structure data to forward economic conditions include, but are not limited to: real GDP, the national unemployment rate, long term interest rates, the consumer price index, the S&P/TSX Index and the price of oil. These specific macroeconomic indicators were selected in an attempt to ensure that the spectrum of fundamental macroeconomic influences on the key drivers of the credit risk profile of the Bank’s balance sheet, including: corporate, consumer and real estate market dynamics; corporate, consumer and SME borrower performance; geography; as well as collateral value volatility, are appropriately captured and incorporated into the Bank’s forward macroeconomic sensitivity analysis.

The key assumptions driving the quarterly outlook for 2025 center on trade policy shifts, monetary and fiscal responses, and global economic conditions. The potential implementation of U.S. tariffs on Canadian motor vehicles, metal products, and other durable goods could dampen export demand, particularly affecting manufacturing and transportation. However, the impact on energy exports may be less. The Bank of Canada could respond to slowing growth by cutting interest rates. A rate divergence with the U.S. could further weaken the Canadian dollar, contributing to inflationary pressures.

Credit conditions may tighten as households face high debt-service obligations, though loan performance is expected to remain stable. Meanwhile, supply chain disruptions from global trade decoupling and U.S. trade policies could increase inflationary risks. Lower global oil prices, projected to reach around US$65 per barrel by late 2026, will impact national income but not production levels, as Canada’s energy sector operates near full capacity. While short-term growth remains constrained, long-term economic resilience will be supported by strong demographics, despite weak productivity gains.

Management developed ECL estimates using credit risk parameter term structure forecasts sensitized to individual baseline, upside and downside forecast macroeconomic scenarios, each weighted at 100%, and subsequently computed the variance of each to the Bank’s reported ECL as at January 31, 2025 in order to assess the alignment of the Bank’s reported ECL with the Bank’s credit risk profile, and further, to assess the scope, depth and ultimate effectiveness of the credit risk mitigation strategies that the Bank has applied to its lending portfolios (see Expected Credit Loss Sensitivity below).

Expected credit loss sensitivity:

The following table presents the sensitivity of the Bank’s estimated ECL to a range of individual macroeconomic scenarios, that in isolation may not reflect the Bank’s actual expected ECL exposure, as well as the variance of each to the Bank’s reported ECL as at January 31, 2025:

(thousands of Canadian dollars)
	Reported		100%			100%			100%
	ECL		Upside			Baseline			Downside
Allowance for expected credit losses	$	4,233	$	3,574		$	3,825		$	4,457
Provision (recovery) from reported ECL				(659	)		(408	)		224
Variance from reported ECL (%)				(16%	)		(10%	)		5	%

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

The following table provides a reconciliation of the Bank’s ECL allowance by lending asset category for the three months ended January 31, 2025:

(thousands of Canadian dollars)	Stage 1			Stage 2			Stage 3		Total
Receivable purchase program	****	****	****	****	****	****	****	****	****	****	****
Balance at beginning of period	$	783		$	-		$	-	$	783
Transfer in (out) to Stage 1		-			-			-		-
Transfer in (out) to Stage 2		-			-			-		-
Transfer in (out) to Stage 3		-			-			-		-
Net remeasurement of loss allowance		1,128			4			56		1,188
Credit asset originations		-			-			-		-
Derecognitions and maturities		-			-			-		-
Provision for (recovery of) credit losses		1,128			4			56		1,188
Write-offs		-			-			-		-
Recoveries		-			-			-		-
Balance at end of period	$	1,911		$	4		$	56	$	1,971
Multi-family residential loans and other	****	****	****	****	****	****	****	****	****	****	****
Balance at beginning of period	$	2,213		$	306		$	1	$	2,520
Transfer in (out) to Stage 1		(197	)		197			-		-
Transfer in (out) to Stage 2		(9	)		9			-		-
Transfer in (out) to Stage 3		(1	)		-			1		-
Net remeasurement of loss allowance		(172	)		8			-		(164	)
Credit asset originations		40			(29	)		-		11
Derecognitions and maturities		(11	)		-			-		(11	)
Provision for (recovery of) credit losses		(350	)		185			1		(164	)
Write-offs		(124	)		-			-		(124	)
Recoveries		-			-			-		-
FX Impact		33			(3	)		-		30
Balance at end of period	$	1,772		$	488		$	2	$	2,262
Total balance at end of period	$	3,683		$	492		$	58	$	4,233

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

The following table provides a reconciliation of the Bank’s ECL allowance by lending asset category for the three months ended January 31, 2024:

(thousands of Canadian dollars)	Stage 1			Stage 2			Stage 3		Total
Receivable purchase program	****	****	****	****	****	****	****	****	****	****	****
Balance at beginning of period	$	100		$	-		$	-	$	100
Transfer in (out) to Stage 1		56			(56	)		-		-
Transfer in (out) to Stage 2		(124	)		124			-		-
Transfer in (out) to Stage 3		-			-			-		-
Net remeasurement of loss allowance		33			(68	)		-		(35	)
Credit asset originations		-			-			-		-
Derecognitions and maturities		-			-			-		-
Provision for (recovery of) credit losses		(35	)		-			-		(35	)
Write-offs		-			-			-		-
Recoveries		-			-			-		-
Balance at end of period	$	65		$	-		$	-	$	65
Multi-family residential loans and other	****	****	****	****	****	****	****	****	****	****	****
Balance at beginning of period	$	1,845		$	568		$	-	$	2,413
Transfer in (out) to Stage 1		140			(140	)		-		-
Transfer in (out) to Stage 2		(109	)		109			-		-
Transfer in (out) to Stage 3		-			-			-		-
Net remeasurement of loss allowance		(19	)		(44	)		-		(63	)
Credit asset originations		77			-			-		77
Derecognitions and maturities		(89	)		(17	)		-		(106	)
Provision for (recovery of) credit losses		-			(92	)		-		(92	)
Write-offs		-			-			-		-
Recoveries		-			-			-		-
FX Impact		-			-			-		-
Balance at end of period	$	1,845		$	476		$	-	$	2,321
Total balance at end of period	$	1,910		$	476		$	-	$	2,386

Credit quality:

The Bank assigns a risk rating to each lending asset comprising its lending portfolio. A risk rating is assigned as a function of each new credit application, annual review or an amendment to a facility. The risk rating considers the credit risk attributes of the lending asset, structure, individual borrower circumstances as well as local, regional and global macroeconomic and market conditions. The Bank aggregates its risk rating assignments into the following three broad categories:

i)    Satisfactory – The borrower and lending asset valuation are of acceptable credit quality.

ii)   Watchlist – The borrower or the lending asset valuation exhibits potential credit weakness or a downward trend which, if not mitigated, will potentially weaken the Bank’s position. The lending asset requires close supervision.

iii)  Classified – The collection of the structural payment and/or the full repayment of the lending asset is uncertain.

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

As of January 31, 2025, 95% ( October 31, 2024 – 96%) of the Bank’s lending assets were categorized Satisfactory. There was no material change in the Bank’s processes for managing credit risk during the current quarter.

6.	Other assets:
(thousands of Canadian dollars)
---	---	---	---	---	---	---
	January 31		October 31		January 31
	2025		2024		2024
Accounts receivable	$	8,662	$	10,718	$	4,149
Prepaid expenses and other		17,122		14,399		20,195
Right-of-use assets		2,560		2,734		3,255
Deferred income tax asset		1,325		750		3,075
Derivative instruments (note 12)		1		20		587
Investment (note 6a)		953		953		953
	$	30,623	$	29,574	$	32,214
a)	In February 2021, the Bank acquired an 11% investment in Canada Stablecorp Inc. for cash consideration of $953,000. The Bank has made an irrevocable election to designate this investment at fair value through other comprehensive income at initial recognition and any future changes in the fair value of the investment will be recognized in other comprehensive income (loss). Amounts recorded in other comprehensive income (loss) will not be reclassified to profit and loss at a later date.
---	---
7.	Subordinated notes payable:
---	---
(thousands of Canadian dollars)
---	---	---	---	---	---
		October 31		January 31
		2024		2024
Issued April 2021, unsecured, non-viability contingent capital compliant, subordinated notes payable, principal amount of US 75.0 million, fixed effective interest rate of 5.38%, maturing May 2031. The fixed rate applies only until May 1, 2026, at which point the obligation switches to floating rate and the notes are redeemable by the Bank, subject to regulatory approval.	106,824	$	102,503	$	98,433
Issued March 2019, unsecured, non-viability contingent capital compliant, subordinated notes payable, principal amount of 5.0 million, 500,000 is held by related party (note 14), fixed effective interest rate of 10.41%, maturing March 2029.	-		-		4,922
	106,824	$	102,503	$	103,355

All values are in US Dollars.

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

8.	Other liabilities:
(thousands of Canadian dollars)
---	---	---	---	---	---	---
	January 31		October 31		January 31
	2025		2024		2024
Accounts payable and other	$	6,324	$	10,752	$	7,543
Current income tax liability		4,351		893		2,426
Deferred income tax liability		118		141		709
Derivative instruments (note 12)		881		-		-
Lease obligations		2,852		3,035		3,594
Cash collateral and amounts held in escrow		5,950		6,076		8,735
Cash reserves on receivable purchase program receivables		189,699		171,208		155,583
	$	210,175	$	192,105	$	178,590
9.	Share capital:
---	---

a) Common shares:

At January 31, 2025, there were 32,518,786 ( October 31, 2024 - 26,002,577) common shares outstanding.

On December 18, 2024 the Bank completed a treasury offering of 5,660,378 common shares at a price of USD $13.25 per share, the equivalent of CAD $18.95 per share, for gross proceeds of USD $75.0 million. On December 24, 2024, the underwriters of the aforementioned offering exercised their full over-allotment option to purchase an additional 849,056 shares (15% of the 5,660,378 common shares issued via the base offering referenced above) at a price of USD $13.25 per share, or CAD $19.07 per share, for gross proceeds of USD $11.2 million. Total net cash proceeds from the common share offering was CAD 116.0 million. The Bank’s share capital increased by CAD $114.8 million corresponding to the Common Share Offering and less tax effected issue costs in the amount of CAD $1.2 million.

b) Preferred shares:

On October 31, 2024, the Bank redeemed all of its 1,461,460 outstanding Non-Cumulative Series 1 preferred shares (NVCC) using cash on hand. The amount paid on redemption for each share was $10.00, and in aggregate $14.6 million. Transaction costs, incurred at issuance in the amount of $965,000, were applied against retained earnings.

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

c) Stock options

Stock option transactions during the three month periods ended January 31, 2025 and 2024:

	for the three months ended
	January 31, 2025				January 31, 2024
			Weighted				Weighted
	Number of		average		Number of		average
	options		exercise price		options		exercise price
Outstanding, beginning of period		819,125	$	15.90		874,393	$	15.90
Granted		-		-		-		-
Exercised		6,775		15.90		-		-
Forfeited/cancelled		7,856		15.90		-		-
Expired		-		-		-		-
Outstanding, end of period		804,494	$	15.90		874,393	$	15.90

For the three month period ended January 31, 2025, the Bank recognized $75,000 ( January 31, 2024 - $132,000) in compensation expense related to the estimated fair value of options granted.

10.	Income tax provision:

Income tax provision for the three month period ended January 31, 2025 was $3.0 million ( January 31, 2024 - $4.3 million). The Bank’s combined statutory federal and provincial income tax rate in Canada is approximately 27% (2024 - 27%). The Bank’s effective rate reflects the statutory rate adjusted for certain items not being taxable or deductible for income tax purposes.

11.	Income per common share:
(thousands of Canadian dollars, except shares outstanding and per share amounts)
---	---	---	---	---	---
	for the three months ended
	January 31		January 31
	2025		2024
Net income	$	8,143	$	12,699
Less: dividends on preferred shares		-		(247	)
		8,143		12,452
Average number of common shares outstanding		29,060,949		25,964,424
Income per common share:	$	0.28	$	0.48

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

12.	Derivative instruments:

At January 31, 2025, the Bank had an outstanding Interest rate swap, applied through a designated hedge which was established for asset liability management purposes to exchange between fixed and floating interest rates with a notional amount totaling $21.5 million ( October 31, 2024 - $22.0 million), of which $21.5 million ( October 31, 2024 - $22.0 million) qualified for hedge accounting. The Bank enters into interest rate swap contracts for its own account exclusively and does not act as an intermediary in this market. As required under the accounting standard relating to hedges, at January 31, 2025, a $314,000 ( October 31, 2024 - $19,000) asset relating to this contract was included in other liabilities and the offsetting amount included in the carrying values of the assets to which they relate. Approved counterparties are limited to major Canadian chartered banks. The carrying amount of the hedged item recognized in the credit assets  was $22.2 million.

As of January 31, 2025, the Bank utilized a foreign exchange forward contract through a designated hedge to mitigate the foreign exchange risk on its net investment in VersaBank USA. This hedging strategy is aimed at minimizing foreign exchange risk related to fluctuations between the VersaBank’s functional currency, CAD, and the foreign currency of its net investment, USD. Changes in the fair value of these derivatives, attributable to the effective portion of the hedge, are recognized in other comprehensive income, while the ineffective portion, if any, is recorded in profit or loss. As of January 31, 2025, the outstanding foreign exchange forward contract had a notional value of USD $63.0 million and a fair value of $461,000 (liability), hedging a portion of the USD $97.1 million net investment in VersaBank USA. Since there was no hedge ineffectiveness, there was no impact on profit or loss from this hedge. The hedge was assessed as highly effective, supporting the Bank’s risk management strategy to stabilize the financial impact of foreign exchange movements.

As of January 31, 2025, a designated hedge  exists for the remaining USD $34.1 million of the USD $97.1 million net investment in VersaBank USA. This is achieved through the allocation of part of a USD $75.0 million subordinated debt raised by the Bank in April 2021. Both the loan (liability) and the investment (asset) move in equal and opposite directions, with the liability serving as a hedge against rate fluctuations that may affect the valuation of the net investment.

As of January 31, 2025, the Bank utilized a foreign exchange forward contract to mitigate foreign exchange risk associated with the intercompany loan denominated in USD, resulting from intercompany transfer of assets, which aims to minimize foreign exchange risk related to fluctuations between the Bank’s functional currency, CAD, and the foreign currency denominated loan. As of January 31, 2025, the outstanding foreign exchange forward contract relating to this intercompany loan had a notional value of USD $13.4 million and a fair value of $106,000 (liability).

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

13.	Commitments and contingencies:

The amount of credit-related commitments represents the maximum amount of additional credit that the Bank could be obligated to extend.

(thousands of Canadian dollars)
	January 31		October 31		January 31
	2025		2024		2024
Loan commitments	$	556,629	$	635,433	$	414,591
Letters of credit		64,741		65,671		84,594
	$	621,370	$	701,104	$	499,185
14.	Related party transactions:
---	---

The Bank’s related parties include members of the Board of Directors and Senior Executive Officers represented as key management personnel and significant minority shareholders. At January 31, 2025, amounts due from these related parties totaled $1.5 million ( October 31, 2024 - $1.5 million) and an amount due from a corporation controlled by key management personnel totaled $4.8 million ( October 31, 2024 - $7.1 million). The interest rates charged on loans and advances to related parties are based on mutually agreed-upon terms. Interest income earned on the above loans for the three months ended January 31, 2025, was $41,000 ( January 31, 2024 - $41,000). As at January 31, 2025, there were no provisions for credit losses associated with loans issued to key management personnel ( October 31, 2024 - $nil), and all loans issued to key management personnel were current.

15.	Capital management:

a) Overview:

The Bank’s policy is to maintain a strong capital base so as to retain investor, creditor and market confidence as well as to support the future growth, and development of the business. The impact of the level of capital held on shareholders’ return is an important consideration, and the Bank recognizes the need to maintain a balance between the higher returns that may be possible with greater leverage and the advantages and security that may be afforded by a more robust capital position.

OSFI sets and monitors capital requirements for the Bank. Capital is managed in accordance with policies and plans that are regularly reviewed and approved by the Board of Directors and that take into account, amongst other items, forecasted capital requirements and current and anticipated financial market conditions.

The goal is to maintain adequate regulatory capital for the Bank to be considered well capitalized, protect deposits and provide capacity to support organic growth as well as to capitalize on strategic opportunities that do not otherwise require accessing the public capital markets, all the while providing a satisfactory return to shareholders. The Bank’s regulatory capital is comprised of share capital, retained earnings and unrealized gains and losses on fair value through other comprehensive income securities (Common Equity Tier 1 capital), preferred shares (Additional Tier 1 capital) and subordinated notes (Tier 2 capital).

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

The Bank monitors its capital adequacy and related capital ratios on a daily basis and has stipulated policies, which are approved by the Board of Directors, setting internal targets and thresholds for its capital ratios. These capital ratios consist of the leverage ratio and the risk-based capital ratios.

The Bank makes use of the Standardized Approach for credit risk as prescribed by OSFI and, therefore, may include eligible ECL allowance amounts in its Tier 2 capital, up to a maximum of 1.25% of its credit risk-weighted assets calculated under the Standardized Approach.

During the period ended January 31, 2025, there were no material changes in the Bank’s management of capital.

b)	Risk-based capital ratios:

The Basel Committee on Banking Supervision has published the Basel III rules on capital adequacy and liquidity (“Basel III”). OSFI requires that all Canadian banks must comply with the Basel III standards on an “all-in” basis for the purpose of determining their risk-based capital ratios. Required minimum regulatory capital ratios are a 7.0% Common Equity Tier 1 capital ratio (“CET1”), an 8.5% Tier 1 capital ratio and a 10.5% Total capital ratio, all of which include a 2.50% capital conservation buffer.

OSFI also requires banks to measure capital adequacy in accordance with guidelines for determining risk- adjusted capital and risk-weighted assets, including off-balance sheet credit instruments as specified in the Basel III regulations. Based on the deemed credit risk for each type of asset, both on and off-balance sheet assets of the Bank are assigned a weighting ranging from 0% to 400% to determine the Bank’s risk- weighted equivalent assets and its risk-based capital ratios.

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

The Bank’s risk-based capital ratios are calculated as follows:

(thousands of Canadian dollars)
	January 31			October 31
	2025			2024
Common Equity Tier 1 (CET1) capital
Directly issued qualifying common share capital	$	330,489		$	215,610
Contributed surplus		2,540			2,485
Retained earnings		188,568			181,238
Accumulated other comprehensive income (loss)		(302	)		(130	)
CET1 before regulatory adjustments		521,295			399,203
Regulatory adjustments applied to CET1		(21,137	)		(25,700	)
Common Equity Tier 1 capital	$	500,158		$	373,503
Additional Tier 1 capital
Directly issued qualifying Additional Tier 1 instruments	$	-		$	-
Total Tier 1 capital	$	500,158		$	373,503
Tier 2 capital
Directly issued Tier 2 capital instruments	$	108,630		$	104,370
Tier 2 capital before regulatory adjustments		108,630			104,370
Eligible stage 1 and stage 2 allowance		4,233			3,303
Total Tier 2 capital	$	112,863		$	107,673
Total regulatory capital	$	613,021		$	481,176
Total risk-weighted assets	$	3,422,768		$	3,323,595
Capital ratios
CET1 capital ratio		14.61	%		11.24	%
Tier 1 capital ratio		14.61	%		11.24	%
Total capital ratio		17.91	%		14.48	%

As at January 31, 2025 and October 31, 2024, the Bank exceeded all of the minimum Basel III regulatory capital requirements prescribed by OSFI.

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

c)	Leverage ratio:

The leverage ratio, which is prescribed under the Basel III Accord, is a supplementary measure to the risk-based capital requirements and is defined as the ratio of Tier 1 capital to the Bank’s total exposures. The Basel III minimum leverage ratio is 3.0%. The Bank’s leverage ratio is calculated as follows:

(thousands of Canadian dollars)
	January 31			October 31
	2025			2024
On-balance sheet assets	$	4,971,732		$	4,838,484
Assets amounts adjusted in determining the Basel III
Tier 1 capital		(21,137	)		(25,700	)
Total on-balance sheet exposures		4,950,595			4,812,784
Total off-balance sheet exposure at gross notional amount	$	621,370		$	701,104
Adjustments for conversion to credit equivalent amount		(399,425	)		(451,759	)
Total off-balance sheet exposures		221,945			249,345
Tier 1 capital		500,158			373,503
Total exposures		5,172,540			5,062,129
Leverage ratio		9.67	%		7.38	%

As at January 31, 2025 and October 31, 2024, the Bank was in compliance with the leverage ratio prescribed by OSFI.

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

16.	Interest rate risk position:

The Bank is subject to interest rate risk, which is the risk that a movement in interest rates could negatively impact net interest margin, net interest income and the economic value of assets, liabilities and shareholders’ equity. The following table provides the duration difference between the Bank’s assets and liabilities and the potential after-tax impact of a 100 basis point shift in interest rates on the Bank’s earnings during a 12 month-period.

(thousands of Canadian dollars)
	January 31, 2025						October 31, 2024
	Increase<br> <br>100 bps			Decrease<br> <br>100 bps			Increase<br> <br>100 bps			Decrease<br> <br>100 bps
Increase (decrease):
Impact on projected net interest income during a 12 month period	$	3,819		$	(4,072	)	$	5,223		$	(5,430	)
Duration difference between assets and liabilities (months)		(0.8	)					(1.6	)

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

17.	Fair value of financial instruments:

Fair values are based on management’s best estimates of market conditions and valuation policies at a certain point in time. The estimates are subjective and involve particular assumptions and judgement and, as such, may not be reflective of future fair values. The Bank’s credit assets and deposits lack an available market as they are not typically exchanged and, therefore, the book value of these instruments is not necessarily representative of amounts realizable upon immediate settlement. See note 21 of the October 31, 2024 audited Consolidated Financial Statements for more information on fair values.

(thousands of Canadian dollars)
	January 31, 2025										October 31, 2024
	Carrying Value		Fair value Level 1		Fair Value Level 2		Fair Value Level 3		Total Fair Value		Carrying Value		Fair value Level 1		Fair Value Level 2		Fair Value Level 3		Total Fair Value
Assets	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Cash
Amortized cost	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
FVOCI		-		-		-		-		-		-		-		-		-		-
FVTPL		386,693		386,693		-		-		386,693		225,254		225,254		-		-		225,254
Securities
Amortized cost		-		-		-		-		-		-		-		-		-		-
FVOCI		158,546		158,546		-		-		158,546		299,300		299,300		-		-		299,300
FVTPL		-		-		-		-		-		-		-		-		-		-
Credit assets
Amortized cost		4,346,748		-		-		4,303,720		4,303,720		4,236,116		-		-		4,190,523		4,190,523
FVOCI		-		-		-		-		-		-		-		-		-		-
FVTPL		-		-		-		-		-		-		-		-		-		-
Derivative instruments
Amortized cost		-		-		-		-		-		-		-		-		-		-
FVOCI		-		-		-		-		-		-		-		-		-		-
FVTPL		1		-		1		-		1		20		-		20		-		20
Other financial assets
Amortized cost		-		-		-		-		-		-		-		-		-		-
FVOCI		953		-		-		953		953		953		-		-		953		953
FVTPL		-		-		-		-		-		-		-		-		-		-
Liabilities	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Deposits
Amortized cost	$	4,133,438	$	-	$	-	$	4,181,976	$	4,181,976	$	4,144,673	$	-	$	-	$	4,182,338	$	4,182,338
FVOCI		-		-		-		-		-		-		-		-		-		-
FVTPL		-		-		-		-		-		-		-		-		-		-
Subordinated notes payable
Amortized cost		106,824		-		103,199		-		103,199		102,503		-		99,152		-		99,152
FVOCI		-		-		-		-		-		-		-		-		-		-
FVTPL		-		-		-		-		-		-		-		-		-		-
Derivative instruments
Amortized cost		-		-		-		-		-		-		-		-		-		-
FVOCI		-		-		-		-		-		-		-		-		-		-
FVTPL		881		-		881		-		881		-		-		-		-		-
Other financial liabilities
Amortized cost		204,825		-		-		204,825		204,825		191,071		-		-		191,071		191,071
FVOCI		-		-		-		-		-		-		-		-		-		-
FVTPL		-		-		-		-		-		-		-		-		-		-

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

18.	Operating segmentation:

Effective as of the transfer of Digital Deposit Receipt (“DDR”) technology to an existing, wholly owned subsidiary (DBG Inc.) of DRT Cyber Inc., which was subsequently renamed Digital Meteor, Inc., the Bank has established four reportable operating segments: Digital Banking Canada, Digital Banking USA, DRTC, and Digital Meteor Inc.. These four operating segments represent strategic business operations that provide distinct products and services to different markets. They are separately managed due to the differences in the nature of each business. The following summarizes the operations of each of the reportable segments:

Digital Banking Canada - The Bank employs a business-to-business model using its proprietary financial technology to address underserved segments in the Canadian banking market. VersaBank obtains its deposits and provides the majority of its credit assets electronically via innovative deposit and lending solutions for financial intermediaries.

Digital Banking USA - The Bank intends to adopt a business-to-business model, leveraging its proprietary financial technology to address underserved segments of the US banking market. VersaBank USA plans to acquire deposits and deliver the majority of its credit assets electronically through innovative deposit and lending solutions tailored for financial intermediaries.

DRTC (cybersecurity services and banking and financial technology development) - Leveraging its internally developed IT security software and capabilities, VersaBank established a wholly-owned subsidiary, DRTC, to pursue significant large-market opportunities in cybersecurity and to develop innovative solutions to address the rapidly growing volume of cyber threats challenging financial institutions, multi-national corporations and government entities.

Digital Meteor, Inc. -Through its wholly owned subsidiary, Digital Meteor, Inc. (“Digital Meteor”), VersaBank owns proprietary intellectual property and technology to enable the next generation of digital assets by the banking and financial community, including the Bank’s revolutionary Digital Deposit Receipts (“DDR”s).  The Bank’s Digital Deposit Receipts (DDRs) are highly encrypted digital assets that represent an actual fiat currency on deposit with a bank. Issued on secure blockchains such as Algorand, Ethereum, and Stellar, DDRs offer superior security, stability, and regulatory compliance compared to traditional stablecoins. As a SOC2 Type 1 compliant digital asset with a continuously known value, DDRs provide a trusted alternative for mainstream financial applications. Additionally, through its proprietary VersaVault® technology, the world’s first digital vault for security conscious organizations looking to secure their highly sensitive and confidential documents, data, code, blockchain-based assets and more, the Bank addresses the need for regulated custody of digital assets with secure platforms.

The basis for the determination of the reportable segments is a function primarily of the systematic, consistent process employed by the Bank’s chief operating decision maker, the Chief Executive Officer, and the Chief Financial Officer in reviewing and interpreting the operations and performance of each segment. The accounting policies applied to these segments are consistent with those employed in the preparation of the Bank’s Consolidated Financial Statements, as disclosed in note 3 of the Bank’s 2024 audited Consolidated Financial Statements.

VERSABANK

Notes to Interim Consolidated Financial Statements

(Unaudited)

Three month periods ended January 31, 2025 and 2024

Performance is measured based on segment net income, as included in the Bank’s internal management reporting. Management has determined that this measure is the most relevant in evaluating segment results and in the allocation of resources.

The following table sets out the results of each reportable operating segment as at and for the three months ended January 31, 2025 and 2024:

(thousands of Canadian dollars)
for the three months ended	January 31, 2025															January 31, 2024
	Digital Banking Canada		Digital Banking USA			Digital Meteor		DRTC			Eliminations/<br> <br>Adjustments			Consolidated		Digital Banking Canada			Digital Meteor		DRTC		Eliminations/<br> <br>Adjustments			Consolidated
Net interest income	$	23,685	$	2,039		$	-	$	-		$	-		$	25,724	$	26,568		$	-	$	-	$	-		$	26,568
Non-interest income		125		1			342		1,989			(354	)		2,103		120			580		1,920		(337	)		2,283
Total revenue		23,810		2,040			342		1,989			(354	)		27,827		26,688			580		1,920		(337	)		28,851
Provision for (recovery of) credit losses		1,033		(9	)		-		-			-			1,024		(127	)		-		-		-			(127	)
		22,777		2,049			342		1,989			(354	)		26,803		26,815			580		1,920		(337	)		28,978
Non-interest expenses:
Salaries and benefits		5,289		1,164			217		1,944			-			8,614		5,371			144		1,023		-			6,538
General and administrative		4,716		597			44		486			(354	)		5,489		4,276			50		344		(337	)		4,333
Premises and equipment		903		109			48		536			-			1,596		768			43		342		-			1,153
		10,908		1,870			309		2,966			(354	)		15,699		10,415			237		1,709		(337	)		12,024
Income (loss) before income taxes		11,869		179			33		(977	)		-			11,104		16,400			343		211		-			16,954
Income tax provision		3,105		76			-		(220	)		-			2,961		4,136			5		114		-			4,255
Net income (loss)	$	8,764	$	103		$	33	$	(757	)	$	-		$	8,143	$	12,264		$	338	$	97	$	-		$	12,699
Total assets	$	4,707,062	$	256,627		$	11,236	$	25,340		$	(28,533	)	$	4,971,732	$	4,299,625		$	2,821	$	24,476	$	(17,287	)	$	4,309,635
Total liabilities	$	4,350,601	$	115,351		$	8,922	$	21,548		$	(45,985	)	$	4,450,437	$	3,914,863		$	719	$	27,906	$	(22,887	)	$	3,920,601

Prior to the year ended October 31, 2024, substantially all of the Digital Banking’s operations were based in Canada.

19.	Comparative balances:

Certain comparative balances have been reclassified to conform with the financial statement presentation adopted in the current period.

23

ex_783685.htm

Exhibit 99.2

Management’s Discussion and Analysis

This management’s discussion and analysis (“MD&A”) of operations and financial condition for the first quarter of fiscal 2025, dated March 3, 2025, should be read in conjunction with the unaudited interim consolidated financial statements for the period ended January 31, 2025, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”). This MD&A should also be read in conjunction with VersaBank’s MD&A and Audited Consolidated Financial Statements for the year ended October 31, 2024, which are available on VersaBank’s website at www.versabank.com, SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar. Except as discussed below, all other factors discussed and referred to in the MD&A for the year ended October 31, 2024, remain substantially unchanged. All currency amounts in this document are in Canadian dollars unless otherwise indicated.

Cautionary Note Regarding Forward-Looking Statements	2
About VersaBank	3
Strategy	4
Overview of Performance	7
Selected Financial Highlights	9
Financial Review – Earnings	10
Financial Review – Balance Sheet	14
Off-Balance Sheet Arrangements	22
Related Party Transactions	23
Capital Management and Capital Resources	24
Results of Operating Segments	26
Summary of Quarterly Results	28
Non-GAAP and Other Financial Measures	28
Material Accounting Policies and Use of Estimates and Judgements	30
Controls and Procedures	30
Additional Information	31
VersaBank – Q1 2025 MD&A	1
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Cautionary Note Regarding 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; inflation; capital market fluctuations; the timely development and introduction of new products in receptive markets; the impact of changes in the laws, changes in trade laws and tariffs; 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 VersaBank's 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.

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, 2024. Except as required by securities law, VersaBank does not undertake to update any forward-looking statements that is contained in this management’s discussion and analysis or made from time to time by VersaBank or on its behalf.

VersaBank – Q1 2025 MD&A	2

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About VersaBank

Digital Banking Operations

VersaBank is a North American bank (federally chartered in Canada and the United States) with a difference. VersaBank was the world's first fully digital financial institution and today employs a cloud-based, branchless, 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. The Bank’s model is based on obtaining its deposits and providing financing digitally through third-party financial intermediaries (referred to as “partners”) who themselves engage with the actual depositors and borrowers. This provides VersaBank with significant operating leverage, which drives efficiency and return on common equity, and significantly reduces risk.

VersaBank’s recent and expected continued growth is the result of its unique Receivable Purchase Program (“RPP”), which invests in cash flow streams generated by loans and leases originated and owned by companies that provide financing at the point of sale to consumers and small businesses for “big ticket” purchases.  In September 2024, following its acquisition of a US bank, VersaBank broadly launched its RPP, which has been highly successful in Canada for nearly 15 years, to the underserved multi-trillion-dollar US market.

Digital Meteor, Inc.

Through its wholly owned subsidiary, Digital Meteor, Inc. (“Digital Meteor”), 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 Digital Deposit Receipts (DDRs).  The Bank’s DDR are highly encrypted digital assets that represent an actual fiat currency on deposit with a bank.  Issued on secure blockchains such as Algorand, Ethereum, and Stellar, DDRs offer superior security, stability, and regulatory compliance compared to traditional stablecoins. As a SOC2 Type 1 compliant digital asset with a continuously known value, DDRs provide a trusted alternative for mainstream financial applications.  Additionally, through its proprietary VersaVault® technology, the world’s first digital vault for security conscious organizations looking to secure their highly sensitive and confidential documents, data, code, blockchain-based assets and more, the Bank addresses the need for regulated custody of digital assets with secure platforms.

Cybersecurity Services

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. DRT Cyber deploys technology solutions to support the functions of cybersecurity, privacy, and risk management, with experience across numerous sectors to enable it to develop and deploy flexible solutions to partners’ exact requirements.

VersaBank’s Common Shares trade on the Toronto Stock Exchange and Nasdaq under the symbol VBNK. The underlying drivers of VersaBank’s performance changes for the current and comparative periods are set out in the following sections of this MD&A.

VersaBank – Q1 2025 MD&A	3

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Strategy

VersaBank’s goal is to consistently and sustainably deliver outsized growth in earnings per share by utilizing its proprietary technology and established financial intermediary partner network to deliver innovative digital banking, financial and related solutions to under-served markets, while maintaining its low-risk profile. The Bank’s use of technology in its cloud-based, branchless, business-to-business model enables significant operation leverage, enabling the Bank to grow its assets and resulting revenue at a significantly faster rate than non-interest expenses. A significant portion of VersaBank’s workforce are software engineers and technology support staff who are continuously upgrading and enhancing VersaBank’s software, as well as developing new software to support new business initiatives.

Digital Banking Operations

VersaBank’s largest opportunity and primary focus is growth in revenue (driven primarily by growth in net interest income) from its Digital Banking Operations significantly in excess of growth in non-interest expense. VersaBank expects the majority of revenue growth to be driven by the ramp up of its unique Receivable Purchase Program for the point-of-sale market (previously referred to as its “Point-of-Sale” Financing business), which has driven the majority of its growth in Canada over the past five years, in the underserved U.S. market.

VersaBank's unique Receivable Purchase Program (“RPP”) is an innovative and highly attractive digital funding solution for finance companies that provide loans and leases to consumers and small businesses for "big ticket" purchases (e.g. consumer home improvement/HVAC projects and a wide variety of commercial equipment). It was specifically designed to address an unmet need by point-of-sale financing companies for consistently available, readily accessible, economically attractive capital using VersaBank's proprietary, state-of-the-art banking technology. Consistent with its branchless, business-to-business, partner-based digital banking strategy, VersaBank's RPP enables it to access the massive and growing consumer and small business financing market in an indirect, efficient and highly risk-mitigated manner.

In the US, following its acquisition of a US bank (including its national US bank charter) in September 2024, VersaBank broadly launched its RPP to the underserved multi-trillion-dollar US market. The Bank has a strong and growing pipeline of prospective RPP partners that it is aggressively pursuing. In January 2025, the Bank entered into its first US RPP partnership and immediately began purchasing cash flow streams from that partner. The Bank expects to continue to steadily add new RPP Partners as it grows its business with existing partners.

In Canada, VersaBank is focused on generating continued strong growth in its RPP Portfolio by expanding its business with existing RPP Financing Partners, adding new RPP Financing Partners, as well as broader economic growth.

VersaBank – Q1 2025 MD&A	4

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Also in Canada, VersaBank is pursuing a new near-term opportunity in its Multi-Family Residential Construction Real Estate business to address the strong market demand for economical and efficient, CMHC-insured loans by multi-family real estate developers. These loans are zero-risk weighted loans, thus requiring no regulatory capital allocation, and generate an attractive net interest margin, enhancing the Bank’s return on common equity (ROCE). With decades of experience, a strong reputation and extensive relationships in this segment of the market, VersaBank has a competitive advantage to capitalize on this opportunity.

VersaBank has access to sufficient low-cost deposit sources to fund its expected strong growth in credit assets. The Bank’s low-cost deposit sources, combined with the efficiency of its technology-based, business-to-business model, supports its objectives of maintaining a stable net interest margin over the short term and expanding net interest margin over time. Management believes that VersaBank has one of the strongest liquidity risk profiles among North American banks, attributable to the quality, stability and stickiness of its deposit base. The majority of VersaBank’s Canadian and US deposits are sourced through deposit brokers, specifically investment dealers, wealth management firms and financial advisory firms that distribute the Bank’s term deposit products. VersaBank has high visibility into the fixed maturities of these deposits further enhancing its liquidity risk profile. In Canada, the Bank also sources deposits through Licensed Insolvency Trustee firms, which value the ability to use VersaBank’s proprietary technology to seamlessly and efficiently interface with their administrative software, which results in a lower cost of funds to the Bank compared to conventional deposits.   The Bank expects its Insolvency Trustee deposits to increase in the short- to medium-term as the number of insolvency filings in Canada is expected to grow.

Cybersecurity Services

VersaBank’s wholly owned, Washington, DC-based subsidiary, DRT Cyber, addresses the high-growth market for cybersecurity and related IT privacy services arising from the growing volume of cyber threats and privacy issues challenging businesses of all sizes across all sectors (with a specialty in financial institutions) and government entities on a daily basis. The global cost of cybercrime is projected to reach $10.5 trillion per year in 2025. DRT Cyber has established itself as a North American leader in the markets it serves, with more than 400 clients, including large financial services companies, critical infrastructure companies and indispensable government organizations such as metropolitan police departments. DRT Cyber is focused on growing revenue through offering new products and services to existing clients and adding new clients, capitalizing on the significant expected long-term growth in the cybersecurity and privacy market globally.

Under the U.S. Federal Reserve’s approval of VersaBank’s 2024 acquisition of a U.S. bank, the Bank is required to divest DRT Cyber before September 2026, or such later date as may be permitted. Such divestment could be accomplished through a number of corporate actions and the Bank has initiated a process to identify and evaluate alternatives with the objective to maximize the value derived from the divestiture for shareholders.

VersaBank – Q1 2025 MD&A	5

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Digital Meteor

VersaBank also expects to capitalize on its leading-edge, proprietary technology that enables highly encrypted digital assets that combines the safety of traditional banking with the efficiency, cost savings, security, and flexibility of blockchain technology, providing superior security, stability, and regulatory compliance compared to conventional alternatives. Held within its wholly owned Digital Meteor subsidiary, VersaBank’s DDRs provide a trusted alternative for mainstream financial applications, including efficient payments, addressing the rapidly growing propensity of consumers and businesses to hold assets in e-wallets and engage in financial transactions digitally. VersaBank’s DDRs represent the next step in the evolution of such digital assets.

Management believes that licensed banks, as the trusted, regulated safekeepers of personal and business cash assets and other valuables, are naturally positioned to do the same for digital currencies. VersaBank has established itself as a leader in digital asset innovation. Management believes its trusted and secure solutions, along with the potential for DDRs to be an ultra-low-cost source of deposit funding, will play a meaningful role in enabling U.S. banks and other entities to confidently engage in the rapidly developing field of digital commerce. Management is encouraged by the favorable stance of the new U.S. administration with respect to digital assets and the role they can play in the future of banking and commerce in the United States, as well as around the world. To its knowledge, VersaBank is the first bank to have successfully completed a pilot program with a blockchain-based DDR, in which VersaBank’s DDR provided a secure representation of federally regulated bank deposits on the Algorand, Ethereum and Stellar blockchains. As a SOC2 Type 1 compliant digital asset with a continuously known value, VersaBank’s DDRs provide a trusted alternative for mainstream financial applications and can be seamlessly converted to and from other digital currencies such as Bitcoin.

Although the intellectual property, software and other resources related to the DDR technology currently reside within DRT Cyber, they are not expected to be part of any divestiture of cybersecurity services business within DRT Cyber.

In addition, VersaBank remains highly committed to, and focused on, further developing and enhancing its technology advantage, a key component of its value proposition that not only provides efficient access to VersaBank’s chosen underserved lending and deposit markets, but also delivers superior financial products and better customer service to its clients.

The underlying drivers of VersaBank’s performance for the current and comparative periods are set out in the following sections of this MD&A.

VersaBank – Q1 2025 MD&A	6

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Overview of Performance

* See definition in the "Non-GAAP and Other Financial Measures" section below.

Q1 2025 vs Q1 2024

Credit assets and loans increased 9% to $4.35 billion, driven primarily by strong growth in the RPP portfolio, which increased 10% and incremental lending assets growth through the acquisition of Stearns Bank Holdingford N.A. (“SBH”);
Total revenue decreased 4% to $27.8 million, composed of net interest income of $25.7 million and non-interest income of $2.1 million;
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Net interest margin (“NIM”) on credit assets was 2.36% and NIM was 2.08%, a decrease of 27 bps and 40 bps, respectively. The decrease in NIM on credit assets was primarily due to the lag effect of the atypically inverted yield curve that existed throughout fiscal 2024, which dampened RPP portfolio margins, offset partially by higher yields earned on the Bank’s lending assets. The decrease in overall NIM was primarily due to higher than typical liquidity in the first quarter of fiscal 2025.  Notwithstanding these factors, the Bank’s NIM remains amongst the highest of the publicly traded Canadian Schedule 1 Banks;
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VersaBank – Q1 2025 MD&A	7
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Provision for credit losses (“PCL”) was $1.0 million compared with a recovery of credit losses of $127,000, with the increase being primarily due to changes in the forward-looking information used by VersaBank in its credit risk models and higher lending asset balances;
Provision for credit losses as a percentage of average credit assets was 0.09% compared with -0.01%, which remains among the lowest of the publicly traded Canadian Schedule I (federally licensed) Banks;
Non-interest expenses were $15.7 million compared with $12.0 million, reflecting incremental operating cost associated with the VersaBank USA operations that began on August 30, 2024, and higher operating costs to support current and anticipated increased business activities;
Net income decreased 36% to $8.1 million from $12.7 million;
Earnings per share (“EPS”) decreased 42% to $0.28 from $0.48, reflecting in part the impact of the December 18, 2024, treasury common share offering;
Return on average common equity decreased 639 bps to 7.02% from 13.41%; and,
Efficiency ratio for the Digital Banking operations (excluding DRTC) was 50% compared to 40% last year.

Q1 2025 vs Q4 2024

Credit assets increased 3% to $4.35 billion, driven primarily by strong growth in the Bank’s RPP portfolio, which increased 3%;
Total revenue increased 2% to $27.8 million from $27.3 million and was composed of net interest income of $25.7 million and non-interest income of $2.1 million;
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NIM on credit assets was 2.36%, an increase of 2 bps.  The increase was primarily due to higher yields earned on the Bank’s credit assets as the atypically inverted yield curve that existed throughout fiscal 2024 has corrected, improving RRP portfolio margins. Overall NIM was 2.08%, a decrease of 4 bps.  The decrease was primarily due to higher than typical liquidity in the first quarter of fiscal 2025.  The Bank’s NIM remains amongst the highest of the publicly traded Canadian Schedule 1 Banks;
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Provision for credit losses was $1.0 million compared with a recovery of credit losses of $156,000;
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Provision for credit losses as a percentage of average credit assets and was 0.09% compared with -0.01%, which remains among the lowest of the publicly traded Canadian Schedule I (federally licensed) Banks;
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Non-interest expenses decreased 19% to $15.7 million, reflecting a more normalized operating expenditure with the exclusion of one-time expenses incurred in the fourth quarter of 2024 associated with the acquisition of SBH, incentive awards related to specific performance-based milestones, and adjustments related to write down of property and equipment.
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Net income increased 48% to $8.1 million from $5.5 million;
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EPS increased 40% to $0.28 from $0.20, reflecting in part the impact of the December 18, 2024, treasury common share offering;
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Return on average common equity increased 174 bps to 7.02% on lower earnings; and,
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Efficiency ratio for the Digital Banking operations (excluding DRTC) was 50% compared to 70% last quarter.
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VersaBank – Q1 2025 MD&A	8
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Selected Financial Highlights

(unaudited)	For the three months ended
	January 31			October 31			January 31
(thousands of Canadian dollars except per share amounts)	2025			2024			2024
Results of operations	****	****	****	****	****	****	****	****	****
Interest income	$	73,246		$	73,238		$	69,292
Net interest income		25,724			24,901			26,568
Non-interest income		2,103			2,384			2,283
Total revenue		27,827			27,285			28,851
Provision (recovery) for credit losses		1,024			(156	)		(127	)
Non-interest expenses		15,699			19,365			12,024
Digital Banking		12,788			17,119			10,415
DRTC		2,966			2,319			1,709
Digital Meteor		309			268			237
Net income	****	8,143		****	5,516		****	12,699
Income per common share:
Basic	$	0.28		$	0.20		$	0.48
Diluted	$	0.28		$	0.20		$	0.48
Dividends paid on preferred shares	$	-		$	247		$	247
Dividends paid on common shares	$	813		$	650		$	650
Yield*		5.92	%		6.23	%		6.47	%
Cost of funds*		3.84	%		4.11	%		3.99	%
Net interest margin*		2.08	%		2.12	%		2.48	%
Net interest margin on credit assets*		2.36	%		2.34	%		2.63	%
Return on average common equity*		7.02	%		5.28	%		13.41	%
Book value per common share*	$	16.03		$	15.35		$	14.46
Efficiency ratio*		56	%		71	%		42	%
Efficiency ratio - Digital banking*		50	%		70	%		40	%
Return on average total assets*		0.66	%		0.45	%		1.16	%
Provision (recovery) for credit losses as a % of average credit assets*		0.09	%		(0.01%	)		(0.01%	)
	As at
Balance Sheet Summary	****	****	****	****	****	****	****	****	****
Cash	$	386,693		$	225,254		$	127,509
Securities		158,546			299,300			133,005
Credit assets, net of allowance for credit losses		4,346,748			4,236,116			3,984,281
Average credit assets		4,291,432			4,142,783			3,917,343
Total assets		4,971,732			4,838,484			4,309,635
Deposits		4,133,438			4,144,673			3,638,656
Subordinated notes payable		106,824			102,503			103,355
Shareholders' equity		521,295			399,203			389,034
Capital ratios**	****	****	****	****	****	****	****	****	****
Risk-weighted assets	$	3,422,768		$	3,323,595		$	3,194,696
Common Equity Tier 1 capital		500,158			373,503			363,798
Total regulatory capital		613,021			481,176			485,309
Common Equity Tier 1 (CET1) capital ratio		14.61	%		11.24	%		11.39	%
Tier 1 capital ratio		14.61	%		11.24	%		11.81	%
Total capital ratio		17.91	%		14.48	%		15.19	%
Leverage ratio		9.67	%		7.38	%		8.44	%
*	See definition in "Non-GAAP and Other Financial Measures" section below.
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**	Capital management and leverage measures are in accordance with OSFI's Capital Adequacy Requirements and Basel III Accord.
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VersaBank – Q1 2025 MD&A	9
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Financial Review – Earnings

Total Revenue

Total revenue, which consists of net interest income and non-interest income, for the quarter ended January 31, 2025 decreased 4% to $27.8 million compared with the same period a year ago and increased 2% compared with last quarter.

Net Interest Income

(thousands of Canadian dollars)
	January 31		October 31				January 31
For the three months ended:	2025		2024		Change		2024		Change
Interest income
Receivable purchase program	$	50,455	$	49,715		1%	$	45,572		11%
Multi-family residential loans and other		16,504		17,380		(5%)		19,504		(15%)
Other		6,287		6,143		2%		4,216		49%
Interest income	$	73,246	$	73,238		0%	$	69,292		6%
Interest expense
Deposit and other	$	46,130	$	46,997		(2%)	$	41,271		12%
Subordinated notes		1,392		1,340		4%		1,453		(4%)
Interest expense	$	47,522	$	48,337		(2%)	$	42,724		11%
Net interest income	$	25,724	$	24,901		3%	$	26,568		(3%)
Non-interest income	$	2,103	$	2,384		(12%)	$	2,283		(8%)
Total revenue	$	27,827	$	27,285		2%	$	28,851		(4%)

Q1 2025 vs Q1 2024

Net interest income decreased 3% to $25.7 million due primarily to:

Lower Multi-Family Residential Loans and Other (“MROL”) lending asset balance in the current quarter due to timing of loan origination;
The impact of the planned transition of some higher yielding, higher risk-weighted MROL to lower yielding, lower risk-weighted MROL as part of the Bank’s strategy to capitalize on opportunities for lower-risk loans with a higher return on capital deployed; and,
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Higher interest income attributable to continued RPP portfolio growth and incremental lending assets growth through the acquisition of SBH.
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Offset partially by:

Higher interest income attributable to continued RPP portfolio growth.
VersaBank – Q1 2025 MD&A	10
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Q1 2025 vs Q4 2024

Net interest income increased 3% due primarily to:

Higher interest income attributable to continued RPP portfolio growth; and,
Lower interest expense attributable to temporarily lower deposit balances.
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Offset partially by:

The impact of the planned transition of some higher yielding, higher risk-weighted MROL to lower yielding, lower risk-weighted MROL as part of the Bank’s strategy to capitalize on opportunities for lower-risk weighted loans with a higher return on capital.

Net Interest Margin

(thousands of Canadian dollars)
	January 31			October 31					January 31
For the three months ended:	2025			2024			Change		2024			Change
Interest income	$	73,246		$	73,238			0%	$	69,292			6%
Interest expense		47,522			48,337			(2%)		42,724			11%
Net interest income		25,724			24,901			3%		26,568			(3%)
Average assets	$	4,906,828		$	4,677,460			5%	$	4,255,623			15%
Yield*		5.92	%		6.23	%		(5%)		6.47	%		(9%)
Cost of funds*		3.84	%		4.11	%		(7%)		3.99	%		(4%)
Net interest margin*		2.08	%		2.12	%		(2%)		2.48	%		(16%)
Average gross credit assets	$	4,273,474		$	4,123,894			4%	$	3,989,702			7%
Net interest margin on credit assets*		2.36	%		2.34	%		1%		2.63	%		(10%)
* See definition in "Non-GAAP and Other Financial Measures" section below.

Q1 2025 vs Q1 2024

Net interest margin decreased 40 bps due primarily to:

Continued growth in the RPP portfolio, which is composed of lower risk-weighted, lower yielding assets; and,
Lower MROL balance and the impact of the planned transition of some higher yielding, higher risk-weighted MROL to lower yielding, lower risk-weighted MROL as part of the Bank’s strategy to capitalize on opportunities for lower-risk loans with a higher return on capital deployed.
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VersaBank – Q1 2025 MD&A	11
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Q1 2025 vs Q4 2024

Net interest margin decreased 4 bps due primarily to:

Continuing growth in the RPP portfolio which is composed of lower risk-weighted, lower yielding assets; and,
The impact of the planned transition of some higher yielding, higher risk-weighted MROL to lower yielding, lower risk-weighted MROL as part of the Bank’s strategy to capitalize on opportunities for lower-risk weighted loans with a higher return on capital.
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Non-Interest Income

Non-interest income is composed of revenue generated by DRTC and income derived from miscellaneous transaction fees not directly attributable to lending assets.

Non-interest income for the quarter ended January 31, 2025 decreased 8% to $2.1 million from $2.3 million last year and decreased 12% from $2.4 million last quarter. The decrease was a function primarily of lower client engagements in the current quarter.

Provision for Credit Losses

(thousands of Canadian dollars)
	January 31			October 31			January 31
For the three months ended:	2025			2024			2024
Provision for (recovery of) credit losses by credit asset:
Receivable purchase program	$	1,188		$	217		$	(35	)
Multi-family residential loans and other		(164	)		(373	)		(92	)
Total provision for (recovery of) credit losses	$	1,024		$	(156	)	$	(127	)

Q1 2025 vs Q1 2024

VersaBank recorded a provision for credit losses in the amount of $1.0 million in the current quarter compared with a recovery of credit losses in the amount of $127,000 last year due primarily to:

Changes in the forward-looking information used by the Bank in its credit risk models; and,
Higher credit asset balances.
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Q1 2025 vs Q4 2024

VersaBank recorded a provision for credit losses in the amount of $1.0 million in the current quarter compared with a recovery of credit losses in the amount of $156,000 last quarter due primarily to:

Changes in the forward-looking information used by the Bank in its credit risk models; and,
Higher lending asset balance
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VersaBank – Q1 2025 MD&A	12
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Non-Interest Expenses

(thousands of Canadian dollars)
	January 31			October 31					January 31
For the three months ended:	2025			2024			Change		2024			Change
Salaries and benefits	$	8,614		$	11,330			(24%)	$	6,538			32%
General and administrative		5,489			6,446			(15%)		4,333			27%
Premises and equipment		1,596			1,589			0%		1,153			38%
Total non-interest expenses	$	15,699		$	19,365			(19%)	$	12,024			31%
Efficiency Ratio		56	%		71	%		(21%)		42	%		34%

Q1 2025 vs Q1 2024

Non-interest expenses increased 31% to $15.7 million due primarily to:

Incremental operating cost associated with VersaBank USA operations that began on August 30, 2024; and,
Higher general operating costs consistent with increased business activities, including costs being incurred ahead of anticipated asset growth and revenue generated by the launch of US RPP through VersaBank USA.
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Q1 2025 vs Q4 2024

Non-interest expenses decreased 19% due primarily to:

The exclusion of one-time expenses incurred in the fourth quarter of 2024 associated with the acquisition of SBH, incentive awards related to specific performance-based milestones, and adjustments related to write down of property and equipment.

Offset partially by:

Higher general operating costs consistent with increased business activities, including costs being incurred ahead of anticipated asset growth and revenue generated by the launch of US RPP through VersaBank USA.

Income Tax Provision

The Bank’s effective tax rate for the current year is estimated to be approximately 27% compared with approximately 27% for fiscal 2024. Any shift in the effective tax rate from the estimated annual tax rate will be primarily attributable to changes in assumptions on non-deductible expenses and other permanent tax differences, a notable changes earning allocation in different tax jurisdictions. Provision for income taxes for the current quarter was $3.0 million compared with $4.3 million for the same period a year ago and $2.6 million last quarter.

VersaBank – Q1 2025 MD&A	13

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Financial Review – Balance Sheet

(thousands of Canadian dollars)
	January 31		October 31				January 31
	2025		2024		Change		2024		Change
Total assets	$	4,971,732	$	4,838,484		3%	$	4,309,635		15%
Cash and securities		545,239		524,554		4%		260,514		109%
Credit assets, net of allowance for credit losses		4,346,748		4,236,116		3%		3,984,281		9%
Deposits		4,133,438		4,144,673		0%		3,638,656		14%

Total Assets

Total assets as at January 31, 2025, were $4.97 billion compared with $4.31 billion a year ago and $4.84 billion last quarter. The year-over-year and sequential increases were due primarily to growth in VersaBank’s RPP Portfolio.

Cash and securities

Cash and securities, which are held primarily for liquidity purposes, at January 31, 2025, were $545.2 million, or 11% of total assets, compared with $260.5 million, or 6% of total assets a year ago and $524.6 million, or 11% of total assets last quarter. The increase in liquidity asset balances over a year ago reflects the impact of the additional liquidity held at VersaBank USA post capital infusion pending disbursements towards credit assets.

VersaBank – Q1 2025 MD&A	14

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As at January 31, 2025, the Bank held securities totaling $158.5 million (October 31, 2024 - $299.3 million), including accrued interest, comprised of US Treasury Bills with a carrying value of $152.5 million, Government of Canada bonds with a carrying value of $3.0 million and other securities with a carrying value of $3.0 million.

Credit assets

(thousands of Canadian dollars)
	January 31			October 31					January 31
	2025			2024			Change		2024			Change
Receivable purchase program	$	3,401,328		$	3,307,328			3%	$	3,078,941			10%
Multi-family residential loans and other		927,978			910,314			2%		886,226			5%
		4,329,306			4,217,642			3%		3,965,167			9%
Allowance for credit losses		(4,233	)		(3,303	)				(2,386	)
Accrued interest		21,675			21,777					21,500
Total credit assets, net of allowance for credit losses	$	4,346,748		$	4,236,116			3%	$	3,984,281			9%

VersaBank organizes its credit asset portfolios into the following two broad asset categories: Receivable Purchase Program (previously referred to as “Receivable Purchase Program/Point-of-Sale Loans & Leases” or “Point-of-Sale Loans & Leases”) and Multi-Family Residential Loans and Other (the amalgamation of what was previously referred to as “Commercial Real Estate Mortgages”, “Commercial Real Estate Loans”, and “Public Sector and Other Financing”). These categories have been established in VersaBank’s proprietary, internally developed asset management system and have been designed to catalogue individual lending assets as a function primarily of their key risk drivers, the nature of the underlying collateral, and the applicable market segment.

The Receivable Purchase Program (“RPP”) category is composed of investments in the expected cash flow streams derived primarily from consumer and small business loans and leases that are originated and owned throughout their lifetime by VersaBank’s RPP partners.

The Multi-Family Residential Loans and Other (“MROL”) category is composed of two sub-segments:  Multi-Family Residential Loans, which consists of CMHC-insured (zero-risk weighted) loans and uninsured loans to real estate developers to finance the construction phase of development of multi-family, student residence, condominium and retirement homes properties, as well as term and bridge loans secured by completed aforementioned properties and units.  It also includes public sector and infrastructure loans and leases. The vast majority of these loans are business-to-business loans with the underlying credit risk exposure being primarily residential in nature given that the vast majority (approximately 94% as at October 31, 2024) of the loans are related to properties that are designated primarily for residential use. The portfolio benefits from diversity in its underlying security in the form of a broad range of such collateral properties.

VersaBank – Q1 2025 MD&A	15

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Q1 2025 vs Q1 2024

Credit assets increased 9% to $4.35 billion due primarily to:

Higher RPP portfolio balances, which increased 10% year-over-year due primarily to consistent strong demand for home improvement/HVAC receivable financing in Canada; and,
Incremental lending assets growth through the acquisition of Stearns Bank Holdingford N.A. on August 30, 2024.
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Offset partially by:

Lower multi-family residential lending balances due to timing of loan originations.

Q1 2025 vs Q4 2024

Credit assets increased 3% due primarily to:

Higher RPP portfolio balances, which increased 3% sequentially.

Offset partially by:

Lower multi-family residential lending balances due to timing of loan originations.

Residential Mortgage Exposures

In accordance with the OSFI Guideline B-20 – Residential Mortgage Underwriting Practices and Procedures, additional information is provided regarding the Bank’s residential mortgage exposure. For the purposes of the Guideline, a residential mortgage is defined as a loan to an individual that is secured by residential property (one-to-four-unit dwellings) and includes home equity lines of credit (“HELOCs”). This differs from the classification of residential mortgages used by the Bank which also includes multi-family residential mortgages.

Under OSFI’s definition, the Bank’s exposure to residential mortgages at January 31, 2025 was $4.1 million compared with $4.2 million a year ago and $4.2 million last quarter. The Bank does not currently offer residential mortgages to the public. The Bank did not have any HELOCs outstanding at January 31, 2025, last quarter or a year ago.

Credit Quality and Allowance for Credit Losses

VersaBank closely monitors its lending portfolio, the portfolio’s underlying borrowers, as well as its origination partners to ensure that management maintains effective visibility on credit trends that could provide an early warning indication of the emergence of any elevated risk in VersaBank’s lending portfolio.

VersaBank – Q1 2025 MD&A	16

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Allowance for Credit Losses

The Bank maintains an allowance for expected credit losses (or ECL allowance) that is adequate, in management’s opinion, to absorb all credit related losses in the Bank’s lending and treasury portfolios. Under IFRS 9 the Bank’s allowance for expected credit losses is estimated using the expected credit loss methodology and is comprised of expected credit losses recognized on both performing credit assets, and non-performing, or impaired credit assets even if no actual loss event has occurred.

(thousands of Canadian dollars)
	January 31		October 31				January 31
	2025		2024		Change		2024		Change
ECL allowance by lending asset:	****	****	****	****	****	****	****	****	****	****
Receivable purchase program	$	1,971	$	783		152%	$	65		2932%
Multi-family residential loans and other		2,262		2,520		(10%)		2,321		(3%)
Total ECL allowance	$	4,233	$	3,303		28%	$	2,386		77%
(thousands of Canadian dollars)
---	---	---	---	---	---	---	---	---	---	---
	January 31		October 31				January 31
	2025		2024		Change		2024		Change
ECL allowance by stage:	****	****	****	****	****	****	****	****	****	****
ECL allowance stage 1	$	3,683	$	2,996		23%	$	1,910		93%
ECL allowance stage 2		492		306		61%		476		3%
ECL allowance stage 3		58		1		5700%		-
Total ECL allowance	$	4,233	$	3,303		28%	$	2,386		77%

Q1 2025 vs Q1 2024

VersaBank’s ECL allowance as at January 31, 2025, was $4.23 million compared with $2.39 million a year ago due primarily to:

Changes in the forward-looking information used by the Bank in its credit risk models; and,
Higher lending asset balances.
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Q1 2025 vs Q4 2024

VersaBank’s ECL allowance as at January 31, 2025, was $4.23 million compared with $3.30 million last quarter due primarily to:

Changes in the forward-looking information used by the Bank in its credit risk models; and,
Higher lending asset balances.
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VersaBank – Q1 2025 MD&A	17
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Forward-looking information

The Bank has sourced credit risk modeling systems and forecast macroeconomic scenario data from Moody’s Analytics, a third-party service provider for the purpose of computing forward-looking credit risk parameters under multiple macroeconomic scenarios that consider both market-wide and idiosyncratic factors and influences. The macroeconomic indicator data utilized by the Bank for the purpose of sensitizing probability of default and loss given default term structure data to forward economic conditions include, but are not limited to: real GDP, the national unemployment rate, long term interest rates, the consumer price index, the S&P/TSX Index and the price of oil. These specific macroeconomic indicators were selected in an attempt to ensure that the spectrum of fundamental macroeconomic influences on the key drivers of the credit risk profile of the Bank’s balance sheet, including: corporate, consumer and real estate market dynamics; corporate, consumer and SME borrower performance; geography; as well as collateral value volatility, are appropriately captured and incorporated into the Bank’s forward macroeconomic sensitivity analysis.

The key assumptions driving the quarterly outlook for 2025 center on trade policy shifts, monetary and fiscal responses, and global economic conditions. The potential implementation of U.S. tariffs on Canadian motor vehicles, metal products, and other durable goods could dampen export demand, particularly affecting manufacturing and transportation. However, the impact on energy exports may be less. The Bank of Canada could respond to slowing growth by cutting interest rates. A rate divergence with the U.S. could further weaken the Canadian dollar, contributing to inflationary pressures.

Credit conditions may tighten as households face high debt-service obligations, though loan performance is expected to remain stable. Meanwhile, supply chain disruptions from global trade decoupling and U.S. trade policies could increase inflationary risks. Lower global oil prices, projected to reach around US$65 per barrel by late 2026, will impact national income but not production levels, as Canada’s energy sector operates near full capacity. While short-term growth remains constrained, long-term economic resilience will be supported by strong demographics, despite weak productivity gains.

Management developed ECL estimates using credit risk parameter term structure forecasts sensitized to individual baseline, upside and downside forecast macroeconomic scenarios, each weighted at 100%, and subsequently computed the variance of each to the Bank’s reported ECL as at January 31, 2025 in order to assess the alignment of the Bank’s reported ECL with the Bank’s credit risk profile, and further, to assess the scope, depth and ultimate effectiveness of the credit risk mitigation strategies that the Bank has applied to its lending portfolios.

VersaBank – Q1 2025 MD&A	18

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A summary of the key forecast macroeconomic indicator data trends utilized by VersaBank for the purpose of sensitizing lending asset credit risk parameter term structure forecasts to forward looking information, which in turn are used in the estimation of VersaBank’s reported ECL, as well as in the assessment of same are presented in the charts below.

Expected Credit Loss Sensitivity:

The following table presents the sensitivity of the Bank’s estimated ECL to a range of individual forecast macroeconomic scenarios, that in isolation may not reflect the Bank’s actual expected ECL exposure, as well as the variance of each to the Bank’s reported ECL as at January 31, 2025:

(thousands of Canadian dollars)
	Reported		100%			100%			100%
	ECL		Upside			Baseline			Downside
Allowance for expected credit losses	$	4,233	$	3,574		$	3,825		$	4,457
Provision (recovery) from reported ECL				(659	)		(408	)		224
Variance from reported ECL (%)				(16%	)		(10%	)		5	%

The uncertainty associated with the directionality, velocity and magnitude of both interest rates and inflation as well as the general uncertainty associated with the broader Canadian and US economies may result in VersaBank’s estimated ECL amounts exhibiting some future volatility which in turn may result in the Bank recognizing higher provisions for credit losses in the coming quarters.

VersaBank – Q1 2025 MD&A	19

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Considering the analysis set out above and based on management’s review of the credit assets and credit data comprising VersaBank’s lending portfolio, combined with management’s interpretation of the available forecast macroeconomic and industry data, management is of the view that its reported ECL allowance represents a reasonable proxy for potential future losses.

Deposits

(thousands of Canadian dollars)
	January 31		October 31				January 31
	2025		2024		Change		2024		Change
Licensed insolvency trustee firms	$	781,962	$	743,783		5%	$	641,842		22%
Deposit brokers		3,351,476		3,400,890		(1%)		2,996,814		12%
Total deposits	$	4,133,438	$	4,144,673		0%	$	3,638,656		14%

VersaBank has established three core low-cost deposit funding channels: Deposit brokers (previously referred to as “Personal Deposits”) in Canada and the US, Licensed Insolvency Trustee firms (previously referred to as “Commercial Deposits”) in Canada, and cash reserves retained from VersaBank’s RPP partners, which are classified as other liabilities.

The majority of VersaBank’s Canadian and US deposits are sourced through deposit brokers, specifically investment dealers, wealth management firms and financial advisory firms that distribute the Bank’s term deposit products to their respective end clients.

In Canada, the Bank also sources deposits through Licensed Insolvency Trustee firms that value the ability to use VersaBank’s proprietary technology to seamlessly and efficiently interface with their administrative software, which results in a lower cost of funds to the Bank compared to conventional deposits.

Q1 2025 vs Q1 2024

Deposits increased 14% to $4.1 billion due primarily to:

Higher deposits from brokers attributable to VersaBank increasing activity in its broker market network to fund balance sheet growth; and,
Higher deposits from Licensed Insolvency Trustee firms attributable to an increase in the volume of consumer and commercial bankruptcy and proposal restructuring proceedings year-over-year.
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Q1 2025 vs Q4 2024

Deposits decreased marginally due primarily to:

Lower deposits from brokers attributable to VersaBank funding activity from proceeds of the the December 18, 2024 treasury common share offering that provided net cash of approximately $116.0 million (see Shareholders’ Equity below).
VersaBank – Q1 2025 MD&A	20
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Offset partially by:

Higher deposits from Licensed Insolvency Trustee firms attributable to an increase in the volume of consumer and commercial bankruptcy and proposal restructuring proceedings in the current quarter.

Subordinated Notes Payable

(thousands of Canadian dollars)
		October 31		January 31
		2024		2024
Issued April 2021, unsecured, non-viability contingent capital compliant, subordinated notes payable, principal amount of US 75.0 million, fixed effective interest rate of 5.38%, maturing May 2031. The fixed rate applies only until May 1, 2026, at which point the obligation switches to floating rate and the notes are redeemable by the Bank, subject to regulatory approval.	106,824	$	102,503	$	98,433
Issued March 2019, unsecured, non-viability contingent capital compliant, subordinated notes payable, principal amount of 5.0 million, fixed effective interest rate of 10.41%, maturing March 2029.	-		-		4,922
	106,824	$	102,503	$	103,355

All values are in US Dollars.

Subordinated notes payable, net of issue costs, were $106.8 million as at January 31, 2025, compared with $103.4 million a year ago and $102.5 million last quarter. The year-over-year increase was a function primarily attributable to the change in the USD/CAD foreign exchange spot rate related to the US $75.0 million subordinated note, offset by the Bank redeeming its $5.0 million, unsecured, non-viability contingent capital compliant, subordinate note payable on April 30, 2024, using the Bank’s general funds. The sequential increase reflects the change in the USD/CAD foreign exchange spot rate.

Shareholders’ Equity

Shareholders’ equity was $521.3 million as at January 31, 2025, compared with $389.0 million a year ago and $399.2 million last quarter.

On December 18, 2024 the Bank completed a treasury offering of 5,660,378 common shares at a price of USD $13.25 per share, the equivalent of CAD $18.95 per share, for gross proceeds of USD $75.0 million. On December 24, 2024, the underwriters of the aforementioned offering exercised their full over-allotment option to purchase an additional 849,056 common shares (15% of the 5,660,378 common shares issued via the base offering referenced above) at a price of USD $13.25 per share, or CAD $19.07 per share, for gross proceeds of USD $11.2 million. Total net cash proceeds from the common share offering was CAD $116.0 million. However, the Bank’s share capital increased by CAD $114.9 million corresponding to the Common Share Offering and tax effected issue costs in the amount of CAD $1.2 million.

At January 31, 2025, there were 32,518,786 common shares outstanding compared with 25,924,424 common shares outstanding a year ago and 26,002,577 common shares outstanding last quarter.

VersaBank – Q1 2025 MD&A	21

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During the current quarter, the Bank also issued 6,755 Common Shares in connection with the exercise of stock options for proceeds of $107,000.

Q1 2025 vs Q1 2024 vs Q4 2024

Shareholders’ equity increased 34% compared with a year ago and 31% compared with last quarter due primarily to the December 18, 2024 treasury common share offering and higher retained earnings attributable to net income earned over the current quarter, offset partially by payment of dividends in the same period.  The year-over-year variance also reflects the redemption of the Non-Cumulative Series 1 preferred shares on October 31, 2024.

VersaBank’s book value per common share as at January 31, 2025 was $15.98 compared with $14.46 a year ago and $15.35 last quarter. The year-over-year and sequential increases were due primarily the December 18, 2024 treasury common share offering and to higher retained earnings attributable to net income earned in the current quarter offset partially by the payment of dividends over the same period.

See note 9 to the unaudited interim consolidated financial statements for additional information relating to share capital.

Stock-Based Compensation

Stock options are accounted for using the fair value method which recognizes the fair value of the stock option over the applicable vesting period as an increase in salaries and benefits expense with the same amount being recorded in contributed surplus. VersaBank recognized compensation expense for the current quarter totaling $75,000 compared with $132,000 for the same period a year ago and $72,000 last quarter, relating to the estimated fair value of stock options granted. See note 9 to the unaudited interim consolidated financial statements for additional information relating to stock options.

Updated Share Information

As at March 3, 2025, there were no changes since January 31, 2025 in the number of common shares and common share options outstanding.

Off-Balance Sheet Arrangements

At January 31, 2025, the Bank had an outstanding Interest rate swap, applied through a designated hedge which was established for asset liability management purposes to exchange between fixed and floating interest rates with a notional amount totaling $21.5 million (October 31, 2024 - $22.0 million), of which $21.5 million (October 31, 2024 - $22.0 million) qualified for hedge accounting. The Bank enters into interest rate swap contracts for its own account exclusively and does not act as an intermediary in this market. As required under the accounting standard relating to hedges, at January 31, 2025, a $314,000 (October 31, 2024 - $19,000) asset relating to this contract was included in other liabilities and the offsetting amount included in the carrying values of the assets to which they relate. Approved counterparties are limited to major Canadian chartered banks. The carrying amount of the hedged item recognized in the credit assets  was $22.2 million.

As at January 31, 2025, the Bank utilized a foreign exchange forward contract through a designated hedge to mitigate foreign exchange risk on its net investment in VersaBank USA. This hedging strategy is aimed at minimizing foreign exchange risk related to fluctuations between the VersaBank’s functional currency, CAD, and the foreign currency of its net investment, USD. Changes in the fair value of these derivatives, attributable to the effective portion of the hedge, are recognized in other comprehensive income, while the ineffective portion, if any, is recorded in profit or loss. As of January 31, 2025, the outstanding foreign exchange forward contract had a notional value of USD $63.0 million and a fair value of $461,000 (liability), hedging a portion of the USD $97.1 million net investment in VersaBank USA. Since there was no hedge ineffectiveness, there was no impact on profit or loss from this hedge. The hedge was assessed as highly effective, supporting the Bank’s risk management strategy to stabilize the financial impact of foreign exchange movements.

VersaBank – Q1 2025 MD&A	22

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As at January 31, 2025, the Bank utilized a foreign exchange forward contract through a designated hedge to mitigate foreign exchange risk on its net investment in VersaBank USA. This hedging strategy is aimed at minimizing foreign exchange risk related to fluctuations between the VersaBank’s functional currency, CAD, and the foreign currency of its net investment, USD. Changes in the fair value of these derivatives, attributable to the effective portion of the hedge, are recognized in other comprehensive income, while the ineffective portion, if any, is recorded in profit or loss. As of January 31, 2025, the outstanding foreign exchange forward contract had a notional value of USD $63.0 million and a fair value of $461,000 (liability), hedging a portion of the USD $97.1 million net investment in VersaBank USA. Since there was no hedge ineffectiveness, there was no impact on profit or loss from this hedge. The hedge was assessed as highly effective, supporting the Bank’s risk management strategy to stabilize the financial impact of foreign exchange movements.

As of January 31, 2025, a designated hedge exists for the remaining USD $34.1 million of the USD $97.1 million net investment in VersaBank USA. This is achieved through the allocation of part of a USD $75.0 million subordinated debt raised by the Bank in April 2021. Both the loan (liability) and the investment (asset) move in equal and opposite directions, with the liability serving as a hedge against rate fluctuations that may affect the valuation of the net investment.

As of January 31, 2025, the Bank utilized a foreign exchange forward contract to mitigate foreign exchange risk associated with the intercompany loan denominated in USD, resulting from intercompany transfer of assets, which aims to minimize foreign exchange risk related to fluctuations between the Bank’s functional currency, CAD, and the foreign currency denominated loan.  As of January 31, 2025, the outstanding foreign exchange forward contract relating to this intercompany loan had a notional value of USD $13.4 million and a fair value of $106,000 (liability).

As at January 31, 2025, VersaBank did not have any significant off-balance sheet arrangements other than an interest rate swap contract, a foreign exchange forward contract, loan commitments and letters of credit attributable to normal course business activities. See notes 12 and 13 to the unaudited interim consolidated financial statements for more information.

Related Party Transactions

VersaBank’s related parties include members of the Board of Directors and Senior Executive Officers represented as key management personnel and significant minority shareholders. See note 14 to the unaudited interim consolidated financial statements for additional information on related party transactions and balances.

VersaBank – Q1 2025 MD&A	23

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Capital Management and Capital Resources

The table below presents VersaBank’s regulatory capital position, risk-weighted assets and regulatory capital and leverage ratios for the current and comparative periods.

(thousands of Canadian dollars)
	January 31			October 31					January 31
	2025			2024			Change		2024			Change
Common Equity Tier 1 capital	$	500,158		$	373,503			34%	$	363,798			37%
Total Tier 1 capital	$	500,158		$	373,503			34%	$	377,445			33%
Total Tier 2 capital	$	112,863		$	107,673			5%	$	107,864			5%
Total regulatory capital	$	613,021		$	481,176			27%	$	485,309			26%
Total risk-weighted assets	$	3,422,768		$	3,323,595			3%	$	3,194,696			7%
Capital ratios
CET1 capital ratio		14.61	%		11.24	%		30%		11.39	%		28%
Tier 1 capital ratio		14.61	%		11.24	%		30%		11.81	%		24%
Total capital ratio		17.91	%		14.48	%		24%		15.19	%		18%
Leverage ratio		9.67	%		7.38	%		31%		8.44	%		15%

VersaBank reports its regulatory capital ratios using the Standardized approach for calculating risk-weighted assets, as defined under Basel III, which may require VersaBank to carry more capital for certain credit exposures compared with requirements under the Advanced Internal Ratings Based (“AIRB”) methodology. As a result, regulatory capital ratios of banks that utilize the Standardized approach are not directly comparable with the large Canadian banks that employ the AIRB methodology.

OSFI requires that all Canadian banks must comply with the Basel III standards on an “all-in” basis for purposes of determining their risk-based capital ratios. Required minimum regulatory capital ratios are a 7.0% Common Equity Tier 1 (“CET1”) capital ratio, an 8.5% Tier 1 capital ratio and a 10.5% total capital ratio, all of which include a 2.5% capital conservation buffer.

The year-over-year and sequential changes exhibited by VersaBank’s reported regulatory capital levels, regulatory capital ratios and leverage ratio were a function primarily of retained earnings growth, the treasury offering of common shares on December 18, 2024, the redemption of the Non-Cumulative Series 1 preferred shares on October 31, 2024 and changes to VersaBank’s risk-weighted asset balances and composition.

For more information regarding capital management, please see note 15 to VersaBank’s January 31, 2025, unaudited interim Consolidated Financial Statements as well as the Capital Management and Capital Resources section of VersaBank’s MD&A for the year ended October 31, 2024.

VersaBank – Q1 2025 MD&A	24

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Liquidity

The unaudited Consolidated Statement of Cash Flows for the three months ended January 31, 2025, shows cash used by operations in the amount of $89.1 million compared with cash used by operations in the amount of $18.1 million for the same period last year. The current period reflects outflows to fund credit assets, contraction in deposits offset partially by cash from operations. The comparative period reflects cash outflows to fund credit assets exceeding the cash inflows from operations and deposits raised. Based on factors such as liquidity requirements and opportunities for investment in credit assets and securities, VersaBank may manage the amount of deposits it raises and credit assets it funds in ways that result in the balances of these items giving rise to either negative or positive cash flow from operations. VersaBank will continue to fund its operations and meet contractual obligations as they become due using cash on hand and by closely managing its flow of deposit raising activities.

Interest Rate Sensitivity

The table below presents the duration difference between VersaBank’s assets and liabilities and the potential after-tax impact of a 100-basis point shift in interest rates on VersaBank’s earnings during a 12-month period if no remedial actions are taken. As at January 31, 2025, the duration difference between assets and liabilities was (0.8) months compared with (1.6) months as at October 31, 2024. As at January 31, 2025, VersaBank’s assets would reprice faster than its liabilities in the event of a future change in interest rates.

(thousands of Canadian dollars)
	January 31, 2025						October 31, 2024
	Increase<br><br> <br>100 bps			Decrease<br><br> <br>100 bps			Increase<br><br> <br>100 bps			Decrease<br><br> <br>100 bps
Increase (decrease):
Impact on projected net interest income during a 12 month period	$	3,819		$	(4,072	)	$	5,223		$	(5,430	)
Duration difference between assets and liabilities (months)		(0.8	)					(1.6	)

Contractual Obligations

As at January 31, 2025, VersaBank had an outstanding contract established for asset liability management purposes to swap between fixed and floating interest rates with a notional amount totalling $21.5 million which qualified for hedge accounting. There have been no other significant changes in contractual obligations as disclosed in VersaBank’s MD&A and Audited Consolidated Financial Statements for the year ended October 31, 2024.

VersaBank – Q1 2025 MD&A	25

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Results of Operating Segments

(thousands of Canadian dollars)
for the three months ended	January 31, 2025															October 31, 2024																	January 31, 2024
	Digital Banking<br><br> <br>Canada		Digital Banking<br><br> <br>USA			Digital Meteor		DRTC			Eliminations/<br><br> <br>Adjustments			Consolidated		Digital Banking<br><br> <br>Canada			Digital Banking<br><br> <br>USA			Digital Meteor		DRTC			Eliminations/<br><br> <br>Adjustments			Consolidated			Digital Banking<br><br> <br>Canada			Digital Meteor		DRTC		Eliminations/<br><br> <br>Adjustments			Consolidated
Net interest income	$	23,685	$	2,039		$	-	$	-		$	-		$	25,724	$	23,509		$	1,392		$	-	$	-		$	-		$	24,901		$	26,568		$	-	$	-	$	-		$	26,568
Non-interest income		125		1			342		1,989			(354	)		2,103		141			1			389		2,194			(341	)		2,384			120			580		1,920		(337	)		2,283
Total revenue		23,810		2,040			342		1,989			(354	)		27,827		23,650			1,393			389		2,194			(341	)		27,285			26,688			580		1,920		(337	)		28,851
Provision for (recovery of) credit losses		1,033		(9	)		-		-			-			1,024		(22	)		(134	)		-		-			-			(156	)		(127	)		-		-		-			(127	)
		22,777		2,049			342		1,989			(354	)		26,803		23,672			1,527			389		2,194			(341	)		27,441			26,815			580		1,920		(337	)		28,978
Non-interest expenses:
Salaries and benefits		5,289		1,164			217		1,944			-			8,614		9,483			437			183		1,227			-			11,330			5,371			144		1,023		-			6,538
General and administrative		4,716		597			44		486			(354	)		5,489		5,874			365			37		511			(341	)		6,446			4,276			50		344		(337	)		4,333
Premises and equipment		903		109			48		536			-			1,596		855			105			48		581			-			1,589			768			43		342		-			1,153
		10,908		1,870			309		2,966			(354	)		15,699		16,212			907			268		2,319			(341	)		19,365			10,415			237		1,709		(337	)		12,024
Income (loss) before income taxes		11,869		179			33		(977	)		-			11,104		7,460			620			121		(125	)		-			8,076			16,400			343		211		-			16,954
Income tax provision		3,105		76			-		(220	)		-			2,961		2,429			155			-		(220	)		-			2,560			4,136			5		114		-			4,255
Net income (loss)	$	8,764	$	103		$	33	$	(757	)	$	-		$	8,143	$	5,031		$	465		$	121	$	95		$	-		$	5,516		$	12,264		$	338	$	97	$	-		$	12,699
Total assets	$	4,707,062	$	256,627		$	11,236	$	25,340		$	(28,533	)	$	4,971,732	$	4,602,360		$	226,319		$	3,434	$	25,804		$	(19,433	)	$	4,838,484		$	4,299,625		$	2,821	$	24,476	$	(17,287	)	$	4,309,635
Total liabilities	$	4,350,601	$	115,351		$	8,922	$	21,548		$	(45,985	)	$	4,450,437	$	4,343,878		$	90,716		$	1,245	$	29,020		$	(25,578	)	$	4,439,281		$	3,914,863		$	719	$	27,906	$	(22,887	)	$	3,920,601

Digital Banking Canada

Q1 2025 vs Q1 2024

Net income decreased 29% to $8.8 million due primarily to lower net interest income, higher provision for credit losses and higher non-interest expenses. The efficiency ratio was 47% compared to 40% a year ago reflecting increase in infrastructure to support the Bank’s lending asset growth and related earnings.

Q1 2025 vs Q4 2024

Net income increased 74% due primarily to lower non-interest expenses, offset partially by higher provision for credit losses. The efficiency ratio improved from 70% in the sequential quarter reflecting exclusion of one-time expenses incurred in the previous quarter associated with the acquisition of SBH, incentive awards related to specific performance-based milestones, and adjustments related to write down of property and equipment.

Digital Banking USA

Q1 2025 vs Q1 2024

Digital Banking USA began on August 30, 2024 following the acquisition of Stearns Bank Holdingford N.A.

Q1 2025 vs Q4 2024

Net income decreased 78% due primarily to higher non-interest expenses reflecting the onboarding of staff and relating operating expense to support the expansion of VersaBank USA, and a higher provision for credit losses, offset partially by higher revenue.

VersaBank – Q1 2025 MD&A	26

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DRTC (Cybersecurity Services and Banking and Financial Technology Development)

Q1 2025 vs Q1 2024

DRTC net loss was $757,000 compared to  a net income of $97,000 last year. The decrease was due primarily to lower revenue driven by lower client engagements in the current quarter and higher operating expenses related to the onboarding support cost for new cybersecurity offerings beginning in fiscal 2025.

Q1 2025 vs Q4 2024

DRTC net loss was $757,000 compared to a net income of $95,000 last quarter. The decrease was due primarily to lower revenue driven by lower client engagements in the current quarter and higher operating expenses related to the onboarding support cost for new cybersecurity offerings beginning in fiscal 2025.

Digital Meteor Inc.

Q1 2025 vs Q1 2024

Digital Meteor Inc. net income was $33,000 compared to a net income of $338,000 last year.

Q1 2025 vs Q4 2024

Digital Meteor Inc. net income was $33,000 compared to a net income of $121,000 last quarter.

VersaBank – Q1 2025 MD&A	27

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Summary of Quarterly Results

(thousands of Canadian dollars,
except per share amounts)	2025			2024												2023
	Q1			Q4			Q3			Q2			Q1			Q4			Q3			Q2
Results of operations:	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Interest income	$	73,246		$	73,238		$	71,646		$	71,243		$	69,292		$	66,089		$	60,089		$	53,595
Yield on assets (%)		5.92	%		6.23	%		6.40	%		6.66	%		6.47	%		6.40	%		6.19	%		6.05	%
Interest expense		47,522			48,337			46,702			45,001			42,724			39,850			35,160			28,986
Cost of funds (%)		3.84	%		4.11	%		4.17	%		4.21	%		3.99	%		3.86	%		3.62	%		3.27	%
Net interest income		25,724			24,901			24,944			26,242			26,568			26,239			24,929			24,609
Net interest margin (%)		2.08	%		2.12	%		2.23	%		2.45	%		2.48	%		2.54	%		2.57	%		2.78	%
Net interest margin on credit assets (%)		2.36	%		2.34	%		2.41	%		2.52	%		2.63	%		2.69	%		2.69	%		2.99	%
Non-interest income		2,103			2,384			2,052			2,259			2,283			2,934			1,930			2,076
Total revenue		27,827			27,285			26,996			28,501			28,851			29,173			26,859			26,685
Provision for (recovery of) credit losses		1,024			(156	)		(1	)		16			(127	)		(184	)		171			237
Non-interest expenses		15,699			19,365			13,534			12,185			12,024			12,441			12,879			12,726
Efficiency ratio		56	%		71	%		50	%		43	%		42	%		43	%		48	%		48	%
Efficiency ratio - Digital Banking		50	%		70	%		46	%		38	%		40	%		45	%		43	%		43	%
Tax provision		2,961			2,560			3,758			4,472			4,255			4,437			3,806			3,459
Net income	$	8,143		$	5,516		$	9,705		$	11,828		$	12,699		$	12,479		$	10,003		$	10,263
Income per share
Basic	$	0.28		$	0.20		$	0.36		$	0.45		$	0.48		$	0.47		$	0.38		$	0.38
Diluted	$	0.28		$	0.20		$	0.36		$	0.45		$	0.48		$	0.47		$	0.38		$	0.38
Return on average common equity		7.02	%		5.28	%		9.63	%		12.36	%		13.41	%		13.58	%		11.15	%		12.07	%
Return on average total assets		0.66	%		0.45	%		0.85	%		1.08	%		1.16	%		1.19	%		1.00	%		1.13	%

The financial results for each of the last eight quarters are summarized above. Key drivers of VersaBank’s sequential performance changes for the current reporting period were:

Credit asset growth attributable to continued growth in the RPP portfolio;
Lower NIM attributable primarily to lower yields earned on the Bank’s lending assets offset partially by lower cost of funds;
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Higher provision for credit losses attributable primarily to changes in the forward-looking information used by the Bank in its credit risk models; and,
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Lower non-interest expense attributable primarily to the exclusion of one-time costs incurred in the fourth quarter of 2024 associated with the acquisition of SBH, incentive awards related to specific performance-based milestones, and adjustments related to write down of property and equipment.
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Non-GAAP and Other Financial Measures

Non-GAAP and other financial measures are not standardized financial measures under the financial reporting framework used to prepare the financial statements of the Bank to which these measures relate. These measures may not be comparable to similar financial measures disclosed by other issuers. The Bank uses these financial measures to assess its performance and as such believes these financial measures are useful in providing readers with a better understanding of how management assesses the Bank’s performance.

VersaBank – Q1 2025 MD&A	28

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Non-GAAP Measures

Return on Average Common Equity is defined as annualized net income less amounts relating to preferred share dividends, divided by average common shareholders’ equity, which is average shareholders’ equity less amounts relating to preferred shares recorded in equity.

	January 31			October 31			January 31
(thousands of Canadian dollars)	2025			2024			2024
Return on average common equity	****	****	****	****	****	****	****	****	****
Net income	$	8,143		$	5,516		$	12,699
Preferred share dividends		-			(247	)		(247	)
Adjusted net income		8,143			5,269			12,452
Annualized adjusted net income		32,306			20,961			49,537
Average common equity	$	460,249		$	397,271		$	369,450
Return on average common equity		7.02	%		5.28	%		13.41	%

Book Value per Common Share is defined as Shareholders’ Equity less amounts relating to preferred shares recorded in equity, divided by the number of common shares outstanding.

	January 31		October 31		January 31
(thousands of Canadian dollars)	2025		2024		2024
Book value per common share	****	****	****	****	****	****
Common equity	$	521,295	$	399,203	$	375,387
Shares outstanding		32,518,786		26,002,577		25,964,424
Book value per common share	$	16.03	$	15.35	$	14.46

Return on Average Total Assets is defined as annualized net income less amounts relating to preferred share dividends, divided by average total assets.

	January 31			October 31			January 31
(thousands of Canadian dollars)	2025			2024			2024
Return on average total assets	****	****	****	****	****	****	****	****	****
Net income	$	8,143		$	5,516		$	12,699
Preferred share dividends		-			(247	)		(247	)
Adjusted net income		8,143			5,269			12,452
Annualized adjusted net income		32,306			20,961			49,537
Average Assets	$	4,905,108		$	4,677,460		$	4,255,623
Return on average total assets		0.66	%		0.45	%		1.16	%

Other Financial Measures

Yield is calculated as interest income (as presented in the Consolidated Statements of Comprehensive Income) divided by average total assets. Yield does not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other financial institutions.

Cost of Funds is calculated as interest expense (as presented in the Consolidated Statements of Comprehensive Income) divided by average total assets. Cost of funds does not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other financial institutions.

VersaBank – Q1 2025 MD&A	29

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Net Interest Margin or Spread are calculated as net interest income divided by average total assets. Net interest margin or spread does not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other financial institutions.

Net Interest Margin on Credit Assets is calculated as net interest income adjusted for the impact of cash, securities and other assets, divided by average gross credit assets. This metric does not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other financial institutions.

Efficiency Ratio is calculated as non-interest expenses from consolidated operations as a percentage of total revenue (as presented in the interim Consolidated Statements of Comprehensive Income). This ratio does not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other financial institutions.

Efficiency Ratio Digital Banking is calculated as non-interest expenses from the Digital Banking operations as a percentage of total revenue from the Digital Banking operations. This ratio does not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other financial institutions.

Provision for (Recovery of) Credit Losses as a Percentage of Average Total Credit Assets captures the provision for (recovery of) credit losses (as presented in the interim Consolidated Statements of Comprehensive Income) as a percentage of VersaBank’s average credit assets, net of allowance for credit losses. This percentage does not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other financial institutions.

Basel III Common Equity Tier 1, Tier 1, Total Capital Adequacy and Leverage Ratios are determined in accordance with guidelines issued by the Office of the Superintendent of Financial Institutions (Canada) (OSFI).

Material Accounting Policies and Use of Estimates and Judgements

Material accounting policies and use of estimates and judgements are detailed in note 2 and note 3 of VersaBank’s 2024 Audited Consolidated Financial Statements. There have been no material changes in accounting policies since October 31, 2024.

Controls and Procedures

During the quarter ended January 31, 2025, there were no changes in VersaBank’s internal controls over financial reporting, that have materially affected or are reasonably likely to materially affect VersaBank’s internal controls over financial reporting.

VersaBank – Q1 2025 MD&A	30

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Additional Information

Additional information regarding VersaBank, including its Annual Information Form for the year ended October 31, 2024, is available on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar, as well as on VersaBank’s website at www.versabank.com.

VersaBank – Q1 2025 MD&A	31

ex_784663.htm

Exhibit 99.3

For Immediate Release: March 5, 2025

Attention: Business Editors

VERSABANK FIRST QUARTER 2025 RESULTS CONTINUE TO DEMONSTRATE STRENGTH OF BUSINESS MODEL AS BANK RAMPS UP PROVEN RPP SOLUTION IN US MARKET

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 2025 (“Q1 2025”) unaudited Interim Consolidated Financial Statements for the period ended January 31, 2025 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/CNW – 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, 2025. All figures are in Canadian dollars unless otherwise stated.

CONSOLIDATED AND SEGMENTED 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)	2025			2024			Change		2024			Change
Financial results	****	****	****	****	****	****	****	****	****	****	****	****	****
Total revenue	$	27,827		$	27,285			2%	$	28,851			(4%)
Cost of funds*		3.84	%		4.11	%		(7%)		3.99	%		(4%)
Net interest margin*		2.08	%		2.12	%		(2%)		2.48	%		(16%)
Net interest margin on credit assets*		2.36	%		2.34	%		1%		2.63	%		(10%)
Return on average common equity*		7.02	%		5.28	%		33%		13.41	%		(48%)
Net income	****	8,143		****	5,516		****	48%	****	12,699		****	(36%)
Net income per common share basic and diluted		0.28			0.20			40%		0.48			(42%)
Balance sheet and capital ratios**	****	****	****	****	****	****	****	****	****	****	****	****	****
Total assets	$	4,971,732		$	4,838,484			3%	$	4,309,635			15%
Book value per common share*		16.03			15.35			4%		14.46			11%
Common Equity Tier 1 (CET1) capital ratio		14.61	%		11.24	%		30%		11.39	%		28%
Total capital ratio		17.91	%		14.48	%		24%		15.19	%		18%
Leverage ratio		9.67	%		7.38	%		31%		8.44	%		15%

* See definitions under ‘Non-GAAP and Other Financial Measures' in the Q1 2025 Management’s Discussion and Analysis.

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

1

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(thousands of Canadian dollars)
for the three months ended	January 31, 2025															October 31, 2024																	January 31, 2024
	Digital Banking Canada		Digital Banking USA			Digital Meteor		DRTC			Eliminations/<br><br> <br>Adjustments			Consolidated		Digital Banking Canada			Digital Banking USA			Digital Meteor		DRTC			Eliminations/<br><br> <br>Adjustments			Consolidated			Digital Banking Canada			Digital Meteor		DRTC		Eliminations/<br><br> <br>Adjustments			Consolidated
Net interest income	$	23,685	$	2,039		$	-	$	-		$	-		$	25,724	$	23,509		$	1,392		$	-	$	-		$	-		$	24,901		$	26,568		$	-	$	-	$	-		$	26,568
Non-interest income		125		1			342		1,989			(354	)		2,103		141			1			389		2,194			(341	)		2,384			120			580		1,920		(337	)		2,283
Total revenue		23,810		2,040			342		1,989			(354	)		27,827		23,650			1,393			389		2,194			(341	)		27,285			26,688			580		1,920		(337	)		28,851
Provision for (recovery of) credit losses		1,033		(9	)		-		-			-			1,024		(22	)		(134	)		-		-			-			(156	)		(127	)		-		-		-			(127	)
		22,777		2,049			342		1,989			(354	)		26,803		23,672			1,527			389		2,194			(341	)		27,441			26,815			580		1,920		(337	)		28,978
Non-interest expenses:
Salaries and benefits		5,289		1,164			217		1,944			-			8,614		9,483			437			183		1,227			-			11,330			5,371			144		1,023		-			6,538
General and administrative		4,716		597			44		486			(354	)		5,489		5,874			365			37		511			(341	)		6,446			4,276			50		344		(337	)		4,333
Premises and equipment		903		109			48		536			-			1,596		855			105			48		581			-			1,589			768			43		342		-			1,153
		10,908		1,870			309		2,966			(354	)		15,699		16,212			907			268		2,319			(341	)		19,365			10,415			237		1,709		(337	)		12,024
Income (loss) before income taxes		11,869		179			33		(977	)		-			11,104		7,460			620			121		(125	)		-			8,076			16,400			343		211		-			16,954
Income tax provision		3,105		76			-		(220	)		-			2,961		2,429			155			-		(220	)		-			2,560			4,136			5		114		-			4,255
Net income (loss)	$	8,764	$	103		$	33	$	(757	)	$	-		$	8,143	$	5,031		$	465		$	121	$	95		$	-		$	5,516		$	12,264		$	338	$	97	$	-		$	12,699
Total assets	$	4,707,062	$	256,627		$	11,236	$	25,340		$	(28,533	)	$	4,971,732	$	4,602,360		$	226,319		$	3,434	$	25,804		$	(19,433	)	$	4,838,484		$	4,299,625		$	2,821	$	24,476	$	(17,287	)	$	4,309,635
Total liabilities	$	4,350,601	$	115,351		$	8,922	$	21,548		$	(45,985	)	$	4,450,437	$	4,343,878		$	90,716		$	1,245	$	29,020		$	(25,578	)	$	4,439,281		$	3,914,863		$	719	$	27,906	$	(22,887	)	$	3,920,601

MANAGEMENT COMMENTARY

“The first quarter of fiscal 2025 was highlighted by the first post-acquisition partnership for our US Receivable Purchase Program, immediately followed by multiple fundings,” said David Taylor, President and Chief Executive Officer, VersaBank.  “Importantly, the program is functioning as expected by both our team and our partner and we expect our funding with this partner to steadily expand throughout the year.  We are working with multiple parties in our robust pipeline to add them as new partners. Supported by our successful capital raise in December, we have the balance sheet capacity to support this growth and capitalize on the even greater operating leverage and lower cost deposits in the US than in Canada to rapidly drive incremental profitability and return on common equity. We do not expect the implementation of tariffs by the U.S. or Canadian administrations to have an impact on the ramp up of our RPP in the U.S.”

“Our Canadian Digital Banking Operations continue to demonstrate the inherent strength of our cloud-based, business-to-business banking model, reinforcing the significant potential for our RPP business in the U.S. to drive efficiency, outsized earnings growth and return on common equity for years to come. We saw continued growth in our Canadian Credit Asset portfolio, both year-over-year and sequentially, driven by continued expansion of our RPP Portfolio, as well as early success in capitalizing on the zero-risk weighted, CMHC-insured multi-family residential loan opportunity. Notably, we saw a sequential improvement in net interest margin on credit assets, a trend that we expect to continue throughout 2025.”

Mr. Taylor added, "In addition to the strong year-over-year growth we expect from our Digital Banking Operations in fiscal 2025, with the now favourable US regulatory environment, we are actively pursuing the renewed opportunity for our revolutionary Digital Deposit Receipts (“DDRs”) – highly encrypted digital assets that combine the safety of traditional banking with the efficiency, cost savings, security, and flexibility of blockchain technology, providing superior security, stability, and regulatory compliance compared to conventional alternatives. We have a tremendous head start, having successfully completed a pilot program on the Algorand, Ethereum and Stellar blockchains.  Our DDRs have the potential to be an ultra-low-cost source of deposit funding for VersaBank, as well as any bank that uses VersaBank’s DDR technology, backed by the military-grade security of our own VersaVault® technology.”

HIGHLIGHTS FOR THE FIRST QUARTER OF FISCAL 2025

Consolidated (Canadian and U.S. Digital Banking Operations, Digital Meteor and DRTC)

●	Total assets increased 15% year-over-year and 3% sequentially to a record $5.0 billion, with the increase driven primarily by growth in Digital Banking Operations’ Receivable Purchase Program (“RPP”) portfolio;
●	Consolidated total revenue decreased 4% year-over-year and increased 2% sequentially to $27.8 million, with the year-over-year decrease due primarily to lower overall net interest margin, as well as lower non-interest income;

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●	Consolidated net income was $8.1 million compared with $5.5 million for the fourth quarter of 2024 and $12.7 million for the first quarter of last year;
●	Consolidated earnings per share was $0.28 compared with $0.20 for the fourth quarter of 2024 and $0.48 for the first quarter of last year, with the decrease compared to the first quarter of 2024 reflecting the 12% higher weighted-average shares outstanding following the share offering in December 2024;
●	Successfully completed an equity offering, including, the full exercise of the over-allotment option, for gross proceeds of US$86.3 million (approximately CAD$124.2 million); and,
●	Transitioned key members of the executive team responsible for the success of the RPP in Canada to VersaBank USA in support of the Bank's US RPP opportunity; and,
●	Internally transferred certain assets, including intellectual property, and other resources related to its revolutionary Digital Deposit Receipt technology to an existing, wholly owned subsidiary of DRT Cyber Inc. (“DRTC”) (the “Transfer”). The subsidiary, which will exclusively hold DDR assets and resources, has been renamed Digital Meteor, Inc., and is expected to enable VersaBank to generate additional shareholder value by capitalizing on its proven, proprietary digital asset technology and intellectual property, alongside its strong anticipated growth from ramping up its RPP in the U.S. The Transfer also supports the Bank's planned divestiture of its Cyber Security businesses.

Digital Banking Operations (Combined Canada and U.S.)

●	Credit assets increased 9% year-over-year and 3% sequentially to a record $4.35 billion, driven primarily by continued growth in the Bank’s RPP portfolio, which increased 10% year-over-year and 3% sequentially;
●	Total revenue decreased 3% year-over-year and increased 3% sequentially to $25.9 million, with the year-over-year decrease due primarily to lower overall net interest margin;
●	Net interest margin on credit assets decreased 27 bps, or 10%, year-over-year and increased 2 bps, or 1%, sequentially at 2.36%, with decreases primarily due to the lag effect of the atypically inverted yield curve that existed throughout fiscal 2024, which dampened RPP portfolio margins, offset partially by higher yields earned on the Bank’s credit assets;
●	Net interest margin decreased 40 bps, or 16%, year-over-year and decreased 4 bps, or 2%, sequentially to 2.08%, due to higher than typical liquidity in the first quarter of fiscal 2025 but remained among the highest of the publicly traded Canadian Schedule I (federally licensed) banks;
●	Provision for credit losses as a percentage of average credit assets remained negligible at 0.09%, compared with a 12-quarter average of 0.02%, which remains among the lowest of the publicly traded Canadian Schedule I (federally licensed) Banks;
●	Digital Banking operations efficiency ratio was 50% compared with 70% for the fourth quarter of 2024 and 40% for the first quarter of last year; and,
●	Net income was $8.9 million compared with $5.5 million for the fourth quarter of 2024 and $12.3 million for the first quarter of last year; and,
●	Earnings per share was $0.30 compared with $0.20 for the fourth quarter of 2024 and $0.46 for the first quarter of last year, with the decrease compared to the first quarter of 2024 reflecting the 12% higher weighted-average shares outstanding following the share offering in December 2024.

Digital Banking Operations Canada

●	Canadian Digital Banking operations net income was $8.8 million compared with $5.0 million for the fourth quarter of 2024 and $12.3 million for the first quarter of last year;
●	Canadian Digital Banking operations earnings per share was $0.30 compared with $0.18 for the fourth quarter of 2024 and $0.46 for the first quarter of last year;
●	Canadian Digital Banking operations efficiency ratio was 47% compared with 70% for the fourth quarter of 2024 and 40% for the first quarter of last year; and,
●	Canadian Digital Banking operations return on common equity (excluding DRTC) based on net income was 7.56% compared with 4.82% for the fourth quarter of 2024 and 12.95% for the first quarter of last year.

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Digital Banking Operations U.S.

●	U.S. Digital Banking operations net income was $103,000 compared with $465,000 for the fourth quarter of 2024 and U.S. Digital Banking operations earnings per share was $0.00 compared with $0.02 for the fourth quarter of 2024. 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; and,
●	On January 30, 2025, entered into an agreement for its first post-US acquisition RPP partnership with Watercress Financial Group LLC, a rapidly growing point-of-sale originator of home improvement loans in the US.

Digital Meteor Inc.

●	Digital Meteor’s net income was $33,000 compared with $121,000 for the fourth quarter of 2024 and $338,000 for the first quarter of last year.

DRTC’s Cybersecurity Services Operations

●	DRTC’s net loss was $757,000 compared with net income of $95,000 for the fourth quarter of 2024 and net income of $97,000 for the first quarter of last year.

4

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FINANCIAL SUMMARY

(unaudited)	For the three months ended
	January 31			October 31			January 31
(thousands of Canadian dollars except per share amounts)	2025			2024			2024
Results of operations	****	****	****	****	****	****	****	****	****
Interest income	$	73,246		$	73,238		$	69,292
Net interest income		25,724			24,901			26,568
Non-interest income		2,103			2,384			2,283
Total revenue		27,827			27,285			28,851
Provision (recovery) for credit losses		1,024			(156	)		(127	)
Non-interest expenses		15,699			19,365			12,024
Digital Banking		12,788			17,119			10,415
DRTC		2,966			2,319			1,709
Digital Meteor		309			268			237
Net income	****	8,143		****	5,516		****	12,699
Income per common share:
Basic	$	0.28		$	0.20		$	0.48
Diluted	$	0.28		$	0.20		$	0.48
Dividends paid on preferred shares	$	-		$	247		$	247
Dividends paid on common shares	$	813		$	650		$	650
Yield*		5.92	%		6.23	%		6.47	%
Cost of funds*		3.84	%		4.11	%		3.99	%
Net interest margin*		2.08	%		2.12	%		2.48	%
Net interest margin on credit assets*		2.36	%		2.34	%		2.63	%
Return on average common equity*		7.02	%		5.28	%		13.41	%
Book value per common share*	$	16.03		$	15.35		$	14.46
Efficiency ratio*		56	%		71	%		42	%
Efficiency ratio - Digital banking*		50	%		70	%		40	%
Return on average total assets*		0.66	%		0.45	%		1.16	%
Provision (recovery) for credit losses as a % of average credit assets*		0.09	%		(0.01	%)		(0.01	%)
	As at
Balance Sheet Summary	****	****	****	****	****	****	****	****	****
Cash	$	386,693		$	225,254		$	127,509
Securities		158,546			299,300			133,005
Credit assets, net of allowance for credit losses		4,346,748			4,236,116			3,984,281
Average credit assets		4,291,432			4,142,783			3,917,343
Total assets		4,971,732			4,838,484			4,309,635
Deposits		4,133,438			4,144,673			3,638,656
Subordinated notes payable		106,824			102,503			103,355
Shareholders' equity		521,295			399,203			389,034
Capital ratios**	****	****	****	****	****	****	****	****	****
Risk-weighted assets	$	3,422,768		$	3,323,595		$	3,194,696
Common Equity Tier 1 capital		500,158			373,503			363,798
Total regulatory capital		613,021			481,176			485,309
Common Equity Tier 1 (CET1) capital ratio		14.61	%		11.24	%		11.39	%
Tier 1 capital ratio		14.61	%		11.24	%		11.81	%
Total capital ratio		17.91	%		14.48	%		15.19	%
Leverage ratio		9.67	%		7.38	%		8.44	%

* See definition under 'Non-GAAP and Other Financial Measures' in the Q1 2025 Management's Discussion and Analysis.

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

5

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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, 2025, which are available on VersaBank’s website at www.versabank.com, SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar.

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 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 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. Through its wholly owned subsidiary, Digital Meteor, Inc. (“Digital Meteor”), 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 Digital Deposit Receipts (DDRs).

VersaBank’s Common Shares trade on the Toronto Stock Exchange 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 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. 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, 2024.

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. Except as required by securities law, VersaBank does not undertake to update any forward-looking statement that is contained in this management’s discussion and analysis or made from time to time by VersaBank or on its behalf.

6

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Conference Call

VersaBank will be hosting a conference call and webcast today, Wednesday, March 5, 2025, at 9:00 a.m. (ET) to discuss its first quarter results, featuring a presentation by David Taylor, President & CEO and John Asma, 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/41kgfxG 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/o0pjVzmNAeZ 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/o0pjVzmNAeZ 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 5, 2025 by calling 289-819-1450 or 1-888-660-6345 (toll free) and the passcode is: 86556#

FOR FURTHER INFORMATION, PLEASE CONTACT:

LodeRock Advisors

Lawrence Chamberlain

(416) 519-4196

lawrence.chamberlain@loderockadvisors.com

Visit our website at: www.versabank.com

Follow VersaBank on Facebook, Instagram, LinkedIn and X (formerly Twitter)

7

ex_782795.htm

Exhibit 99.4

For Immediate Release: March 5, 2025

Attention: Business Editors

VERSABANK DECLARES DIVIDENDS

LONDON, ON/CNW - VersaBank (the “Bank”) (TSX: VBNK; NASDAQ: VBNK) today announced that cash dividends in the amount of CAD $0.025 per Common Share of the Bank have been declared for the quarter ending April 30, 2025, payable as of April 30, 2025, to shareholders of record at the close of business on April 4, 2025.

The dividends to which this notice relates are eligible dividends for tax purposes.

About VersaBank

VersaBank is a North American bank (federally chartered in Canada and the U.S.) 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 U.S. 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.

FOR FURTHER INFORMATION, PLEASE CONTACT:

LodeRock Advisors

Lawrence Chamberlain

(416) 519-4196

lawrence.chamberlain@loderockadvisors.com

Visit our website at: www.versabank.com

Follow VersaBank on Facebook, Instagram, LinkedIn and X

ex_782796.htm

Exhibit 99.5

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, David R. Taylor, President & Chief Executive Officer of VersaBank, certify the following:

1.	Review:  I have reviewed the interim financial statements and interim MD&A (together, the “interim filings”) of VersaBank (the “issuer”) for the interim period ended January 31, 2025.
2.	No misrepresentations:  Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
---	---
3.	Fair presentation:  Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
---	---
4.	Responsibility:  The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’Annual and Interim Filings, for the issuer.
---	---
5.	Design:  Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
---	---
(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
---	---
(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
---	---
(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
---	---
(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
---	---
5.1	Control framework:  The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control –Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission.
---	---
5.2	N/A
---	---
5.3	N/A
---	---
6.	Reporting changes in ICFR:  The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on November 1, 2024 and ended on January 31, 2025 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
---	---
Date:	March 5, 2025
---	---

/s/ David Taylor

___________________

David R. Taylor

President &

Chief Executive Officer

ex_782794.htm

Exhibit 99.6

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, John Asma, Chief Financial Officer of VersaBank, certify the following:

1.	Review:  I have reviewed the interim financial statements and interim MD&A (together, the “interim filings”) of VersaBank (the “issuer”) for the interim period ended January 31, 2025.
2.	No misrepresentations:  Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
---	---
3.	Fair presentation:  Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
---	---
4.	Responsibility:  The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’Annual and Interim Filings, for the issuer.
---	---
5.	Design:  Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
---	---
(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
---	---
(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
---	---
(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
---	---
(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
---	---
5.1	Control framework:  The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control –Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission.
---	---
5.2	N/A
---	---
5.3	N/A
---	---
6.	Reporting changes in ICFR:  The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on November 1, 2024 and ended on January 31, 2025 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
---	---
Date:	March 5, 2025
---	---

/s/ John Asma

____________________

John Asma

Chief Financial Officer