Mr. David Taylor reports

VERSABANK COMMENCES FOREIGN EXCHANGE FUNCTIONALITY AND OTHER ENHANCEMENTS TO SUPPORT COMMERCIALIZATION OF REAL BANK TOKENIZED DEPOSITS

VersaBank has commenced a critical initiative to add foreign exchange functionality and other enhancements to its proprietary VersaView blockchain interface technology to support the commercialization of its real-bank tokenized deposits (RBTDs). VersaView is the bank's own highly secure RBTD program participant's user interface, enabling authorized RBTD partners and corporate customers (holders of RBTDs) to view and transact with their RBTDs stored in VersaVault-managed wallets. The foreign exchange capability will be added to the integrated U.S. and Canadian pilot programs for the bank's RBTDs that continue to steadily advance.

VersaBank has engaged Wisconsin-based Block Time Financial, a leading provider of next-generation blockchain technology. Block Time developed its digital core platform to empower banks, credit unions and other financial institutions with secure, enterprise, blockchain-native solutions. Block Time, which is the original developer of VersaView, will enable the new foreign exchange functionality. Block Time will also enable rewards capability for depositors with RBTDs in VersaVault-managed wallets. Rewards are separate and distinct from interest payments, which are already functional under VersaView.

"With more than $1-trillion in trade between the United States and Canada annually and as the only bank with ability to issue both U.S.-and Canadian-dollar-denominated tokenized deposits, the ability for our partners' depositors to quickly, seamlessly and inexpensively convert these currencies to one another is a unique advantage of our RBTDs," said David Taylor, founder and president of VersaBank. "Even in today's digital economy, foreign exchange transactions remain slow, costly and often subject to the business hours. VersaBank RBTDs can be converted 24/7, 365 days a year, with minimal fees, in just seconds. When combined with the legal ability for our RBTDs to earn interest and the expectation of eligibility for deposit insurance, subject to confirmation by regulators, just like any bank deposit, our RBTDs present a significant opportunity as an additional low-cost source of deposits for our bank as the financial ecosystem continues its rapid evolution to blockchain-based assets."

"VersaBank is both a pioneer and a leader in the tokenized deposit space," said Bruce Rosenheimer, chief executive officer of Block Time. "We have been privileged to have a front-row seat to the bank's development of its RBTDs and contribute to its leading value proposition using our industry-leading digital core platform."

About VersaBank's VersaView

VersaView is VersaBank's proprietary, secure, role-based platform that provides the bank's authorized deposit partners with an interface for controlled visibility and transaction management for bank-issued digital deposit tokens, synchronizing validated core banking activity to public blockchains through VersaVault. VersaView provides strict segregation of accounts by deposit partners, with administrative oversight exclusively managed by designated partner administrators or superusers, ensuring control and compliance. All transactions initiated from VersaVault-linked wallets through VersaView require dual-control processes, including rigorous review, approval and cryptographic signing within VersaVault, creating a robust, layered security architecture.

About VersaBank's real-bank tokenized deposits (RBTDs)

VersaBank real-bank tokenized deposits (previously known as digital deposit receipts, or DDRs), the bank's proprietary tokenized deposits, are highly encrypted digital representations of actual cash on deposit with the bank, combining the safety and soundness of traditional banking with the efficiency, cost savings, security and programmability of blockchain technology. RBTDs are legally permitted to pay interest and eligible for federal deposit insurance (subject to regulatory confirmation). VersaBank RBTDs were developed in conjunction with law enforcement as a trusted alternative to stablecoins 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.

VersaVault is 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, addressing the need for regulated custody of digital assets with secure platforms. VersaVault's military-grade security technology is SOC2 Type 1 audit compliant and securely manages highly sensitive cryptographic material essential for issuing and redeeming and continuing management of RBTDs. It provides robust protection for sensitive data used throughout these critical token life-cycle events, ensuring end-to-end security and traceability.

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 financing activities electronically through financial intermediary partners, it benefits from significant operating leverage that drives efficiency and return on common equity. In August, 2024, VersaBank launched its unique receivable purchase program financing solution for point-of-sale finance companies, which has been highly successful in Canada for over 15 years, to the underserved multitrillion-dollar U.S. market. VersaBank also owns Minnesota-based DRT Cyber Inc., a North America leader in the provision of cybersecurity services to address the rapidly growing volume of cyber threats challenging financial institutions, multinational corporations and government entities. Through DRT Cyber, VersaBank owns proprietary intellectual property and technology to enable the next generation of digital assets for the banking and financial community, including the bank's revolutionary and proprietary real-bank tokenized deposits.

VersaBank's common shares trade on the Toronto Stock Exchange and the Nasdaq Stock Market under the symbol VBNK.

We seek Safe Harbor.