Mr. David Taylor reports

VERSABANK ANNOUNCES STABLECORP'S QCAD AS FIRST STABLECOIN CUSTOMER

VersaBank has signed a definitive agreement with Stablecorp Digital Currencies Inc., a pioneering Canadian digital asset infrastructure company and servicer of the QCAD Digital Trust and whose investors include Coinbase, Circle, DeFi Technologies and FTP Ventures, under which the bank will serve as the custodian for Stablecorp's QCAD stablecoin. QCAD recently became Canada's first regulatory compliant Canadian-dollar stablecoin.

"Stablecorp is on the leading edge of the mainstream adoption of digital currency in Canada and we are proud they have chosen VersaBank and our proprietary VersaVault technology for their QCAD stablecoin custody requirements," said David Taylor, founder and president, VersaBank. "VersaVault is entirely unique in its technological approach to the security of digital assets with proven performance and validated by SOC 2 (Type I) certification, considered to be the gold standard in data security. As a federally regulated, national bank in both Canada and the United States, we believe we offer the ultimate value proposition for the custody of digital assets on both sides of the border."

Mr. Taylor added: "Like our bank-issued real bank deposit tokens (RBDTs), we believe non-bank-issued stablecoins will play a meaningful role in the coming revolution of the payments economy alongside bank-issued tokenized deposits. We look forward to capitalizing on these separate and distinct opportunities based on our existing, proven technology, deep expertise and early mover advantage, each of which could contribute significant balances of low-cost deposits via new channels."

"Securing this custodial relationship with a federally regulated, Schedule I bank is a significant milestone for our industry, placing Stablecorp at the forefront of modernizing Canada's financial infrastructure," said Kesem Frank, chief executive officer, Stablecorp. "This collaboration with VersaBank marks a new standard for the Canadian digital asset industry, specifically in the context of stablecoin issuance. The VersaVault solution provides an ideal fusion of regulatory integrity and technological security, which is key to our mission of connecting Canada with the global digital economy in a secure and compliant way."

VersaBank will earn both a fee based on the value of QCAD assets held in custody and a spread based on the QCAD deposits. Net interest income earned from stablecoin custody activities will be included in net interest income on cash and securities and will not impact net interest margin on credit assets.

About VersaBank

VersaBank is a North American bank with a difference. Federally chartered in both Canada and the United States, 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 multitrillion-dollar United States market. VersaBank also owns Minneapolis-based DRT Cyber Inc., a North American leader in the provision of cyber security services to address the rapidly growing volume of cyber threats challenging financial institutions, multinational corporations and government entities. Through DRT Cyber Inc., VersaBank owns proprietary intellectual property and technology to enable the next generation of digital assets for the banking and financial community, including the bank's revolutionary tokenized deposits.

We seek Safe Harbor.