VersaBank — Capital/Financing Update 2021

Oct 1, 2021

FORM 51-102F3 MATERIAL CHANGE REPORT

Item 1 Name and Address of Company

VersaBank (the “ Bank ”) 2002-140 Fullarton Street London, Ontario N6A 5P2

Item 2 Date of Material Change

September 24, 2021 and September 29, 2021

Item 3 News Release

News releases describing the material changes referred to in this report were issued on September 24, 2021 and September 29, 2021 through the facilities of Cision and subsequently filed on SEDAR.

Item 4 Summary of Material Change

On September 24, 2021 the Bank announced the closing of its previously-announced public offering (the “ Offering ”) of the Bank’s common shares. The Bank issued 5,500,000 common shares at a price of US $10.00 per share (the “ Offering Price ”), the equivalent of CAD $12.80 per share based on the Bank of Canada exchange rate at the time of pricing, for gross proceeds of US $55,000,000.

On September 29, 2021, the Bank offered and sold a total of 825,000 common shares pursuant to the exercise of the Over-Allotment Option (defined below) granted to the Underwriters (defined below) in connection with the Offering.

Item 5 Full Description of Material Change

5.1 Full Description of Material Change

On September 24, 2021, the Bank announced the closing of the Offering. The Bank issued 5,500,000 common shares at a price of US $10.00 per share, the equivalent of CAD $12.80 per share based on the Bank of Canada exchange rate at the time of pricing, for gross proceeds of US $55,000,000.

The Offering was conducted through a syndicate of underwriters led by Raymond James & Associates, Inc. as sole bookrunning manager and Keefe, Bruyette & Woods, Inc., as comanager and includes their respective Canadian broker dealer affiliates (collectively, the “ Underwriters ”).

The Bank also granted the underwriters an option (the “ Over-Allotment Option ”) to purchase up to an additional 825,000 common shares, representing 15% of the number of common shares sold pursuant to the Offering, solely to cover the underwriters’ over-allocation position, if any, and for market stabilization purposes.

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On September 29, 2021, the Underwriters exercised their Over-Allotment Option in full and purchased an additional 825,000 common shares at the Offering Price. The additional gross proceeds of US $8,250,000 from the exercise of the Over-Allotment Option bring the total gross proceeds raised from the Offering to US $63,250,000.

The net proceeds from the Offering, together with the proceeds from the Over-Allotment Option, are expected to be used for general banking purposes and will qualify as Common Equity Tier 1 capital for the Bank.

Officers and other related parties (the " Related Parties "), as defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (" MI 61-101 "), participated in the Offering, and therefore the Offering constituted a "related party transaction" within the meaning of MI 61-101. The Offering was exempt from the formal valuation and minority approval requirements of MI 61-101 on the basis that the fair market value of the Offering, as it related to the Related Parties, did not exceed 25% of the market capitalization of the Bank, in accordance with sections 5.5 and 5.7 of MI 61-101. 340268 Ontario Limited, Mr. David Taylor and Mr. Shawn Clarke, all considered to be related parties of the Bank, participated in the Offering and immediately following the closing of the Offering, owned approximately 29.64%, 3.95% and 0.051% of the common shares of the Bank, respectively, on an undiluted basis. Neither the Bank nor, to the knowledge of the Bank after reasonable inquiry, the Related Parties, had knowledge of any material information concerning the Bank or its securities that had not been generally disclosed at the time of the closing of the Offering. The Bank did not file a material change report more than 21 days before the closing of the Offering as the details of the Offering, and the confirmation of insider participation in the Offering, was not definitively known to the Bank until the date of the closing of the Offering, and the Bank determined for sound business reasons to close the Offering on a timeframe consistent with usual market practices of this nature.

5.2 Disclosure for Restructuring Transactions

Not applicable.

Item 6 Reliance on subsection 7.1(2) of National Instrument 51-102

Not applicable.

Item 7 Omitted Information

Not applicable.

Item 8 Executive Officer

For further information, please contact: David Taylor President & Chief Executive Officer Telephone No.: (519) 675-4206

Item 9

Date of Report

October 1, 2021.