Slide 1: Banking on the Future!
NASDAQ: VBNK TSX: VBNK Investor Presentation June 2024 Banking on the Future!
Slide 2: Advisory
2 Advisory The Bank occasionally makes forward-looking statements about its objectives, operations and targeted financial results. These statements may be written or verbal and may be included in such things as press releases, corporate presentations, annual reports and other disclosure documents an
Slide 3: A Better Banking Model Founded on Technology
3 - excessive lending risk - loan losses - people /collections - deposit risk - economic exposure A Better - interest rate exposure Banking Model - inefficiency FOUNDED on VersaBank ! Technology
Slide 4: A Fully Digital North American Bank
4 A Fully Digital North American Bank Operating leverage of a technology Highly efficient: company with the intrinsic value of a bank Branchless, partner (B2B) model 1 Highly risk-mitigated model: Very sticky deposits/History of virtually no loan losses A North Track record of significant American e
Slide 5: Branchless, Digital, Partner (B2B) Model Based on Proprietary Banking Technology
Branchless, Digital, Partner (B2B) Model Based 5 on Proprietary Banking Technology Significant operating leverage derived • All deposits/loans managed digitally from scalability of technology • No direct interaction with end users • Very high asset-to-employee ratio platform & partner model Deposit
Slide 6: Ultra Low-Risk Digital Model
6 Ultra Low-Risk Digital Model Organization-Wide Very Sticky Deposits Focus on Risk Mitigation • Insolvency Professionals: Long-term relationships based on unique, high- • Technology-based value add, integrated technology approach to risk • Wealth Management: 100% term deposit receipts/Depositors ha
Slide 7: Deposits: Unlimited Low-Cost, Very Stable Sources
7 Deposits: Unlimited Low-Cost, Very Stable Sources >220 Partners Provide Access to • Objective to minimize cost of deposit funding Millions of Depositors • All Wealth Management deposits are term deposits • Very “sticky” deposit base Insolvency Professionals (>100 Offices) Deposit Composition (Q2 2
Slide 8: Loans: Very Low Risk Lending Channels
8 Loans: Very Low Risk Lending Channels >275 Partners Provide Access to • Low-cost deposits enable low-risk lending Hundreds of Millions of Borrowers • 30-year history of virtually no loan losses Loan Composition (Q2 2024) Point-of-Sale Financing (Loans and Leases) • Reliable, attractive alternative
Slide 9: Momentum in Profitability and Long-Term Earnings Capacity
9 Momentum in Profitability and Long-Term Earnings Capacity 180 5 160 $4.20B 140 4 $3.27B 120 $109M $ CAD (millions) $ CAD (billions) 3 100 $2.42B $82M 80 $1.94B $65M $1.81B $1.79B 2 $52M $54M $54M $49M $50M 60 $35M 40 $26M $26M $28M 1 $42M 20 $28M $18M $20M $19M $22M 0 0 2018 2019 2020 2021 2022 20
Slide 10: H1 2024 Key Metrics & Highlights: Record Results
10 H1 2024 Key Metrics & Highlights: Record Results1 Total Assets $4.39B Digital Banking 39% Loan Portfolio $4.02B Efficiency Rati0 YoY 396 bps (9%) Loan Growth YoY YoY 18% Total Revenue YoY 9% Ave. Return on Common Equity 12.89% 151 bps (ROCE) YoY (13%) Net Income YoY 25% EPS YoY 29% 1. In the firs
Slide 11: Digital Banking Growth Strategy: Momentum for the Future
11 Digital Banking Growth Strategy: Momentum for the Future Goal: Maximize ROCE Through Growth in Total Assets, Balancing Net Interest Margin and Low-Capital Deployment Opportunities 1 2 3 Grow Loan Portfolio Minimize Cost of Funding Pursue Accretive Acquisitions via Point-of-Sale/RPP to Maximize Ne
Slide 12: U.S. Receivables Purchase Program (RPP): A New Financing Solution
U.S. Receivables Purchase Program (RPP): A New Financing 12 Solution for a High-Growth, Underserved Market Strong growth in U.S. Point-of-Sale financing Same attractive, reliable activity driven by technology & increasing consumer alternative solution that has been preference for non-credit card/non
Slide 13: Acquisition of OCC-Chartered, National US Bank
Acquisition of OCC-Chartered, National US Bank: 13 Transformational Next Step in Long-Term Growth Strategy Definitive Agreement to • Provides access to US deposits to fuel growth of the US Acquire Minnesota-based Receivable Purchase Program business (launched in US Stearns Bank Holdingford following
Slide 14: Next Milestones
Capitalizing on the Significant Operating Leverage 14 in Our Core Digital Banking Operations Period of Investment in Future Growth Next Milestones 62% 55% 11.75% 52% 12.36% 50% 49% Total Assets 47% >$5B >$6B 43% 10.29% 8.50% 8.89% 8.45% 6.61% 38% 7.89% $4.39 $4.20 $3.85 $4.02 Efficiency Ratio <40% <
Slide 15: DRT Cyber: "Free Option" on Digital Banking Valuation
15 DRT Cyber: “Free Option” on Digital Banking Valuation One of North America’s Comprehensive Suite of Services: Premiere IT Security • External network, web and mobile app penetration testing Assurance Services Firms • Physical social engineering engagements • Supervisory control & data acquisition
Slide 16: Why VersaBank? Why Now?
16 Why VersaBank? Why Now? At inflection point for operating leverage, earnings growth and ROCE generation based on expected continued strong growth in Canada and entry into the U.S Proposed acquisition of national, chartered US bank provides access to $1.8T market for highly unique Receivables Purc
Slide 17: Banking on the Future!
Banking on the Future! VersaBank Choice Through Innovation 17