VersaBank Announces Preferred Share Offering

LONDON, Ontario--()--VersaBank (the "Bank") (TSX:VB) is pleased to announce that it obtained a receipt from the securities regulatory authorities in each of the provinces of Canada for a preliminary short form prospectus relating to an offering of up to $30,000,000 of non-cumulative 5-year rate reset preferred shares, series 5 (the "Series 5 Preferred Shares") at a price of $10.00 per share (the "Offering").

Net proceeds of the Offering are expected to qualify as Tier 1 capital of the Bank and approximately $10,000,000 will be used for the repayment of certain subordinated indebtedness, subject to regulatory approval, with the balance being used for general corporate purposes.

The syndicate of agents for this Offering is being led by RBC Dominion Securities Inc. and includes BMO Capital Markets, Industrial Alliance Securities Inc., GMP Securities L.P., Raymond James Ltd. and PI Financial Corp. The Bank has granted the Agents an option, exercisable in whole or in part, to sell, as agents, such number of Series 5 Preferred Shares equal to 15% of the number of Series 5 Preferred Shares sold pursuant to the Offering on the same terms, to cover over-allotments, if any, and for market stabilization purposes, exercisable at any time within 30 days of closing.

Subject to regulatory approval, the Bank has the right to redeem up to all of the then outstanding Series 5 Preferred Shares on July 31, 2022, and on July 31 every five years thereafter at a price of $10.00 per share.

The Offering is scheduled to close on or about June 29, 2017 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange and other applicable securities regulatory authorities.

About VersaBank

VersaBank, a technology based and digital Canadian Schedule I chartered bank, operates using an "electronic branchless model". It obtains deposits, along with consumer and commercial loan and lease receivables, electronically. The Bank also makes residential development and commercial mortgages it obtains through a well-established network of brokers and through direct contact with its lending staff. VersaBank’s Common Shares trade on the Toronto Stock Exchange under the symbol VB and its Series 1 Preferred Shares and Series 3 Preferred Shares trade under the symbols VB.PR.A and VB.PR.B, respectively. The securities described above have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Not for distribution to U.S. news wire services or dissemination in the U.S.

A preliminary short form prospectus containing important information relating to these securities has been filed with securities commissions or similar authorities in each of the provinces of Canada. The preliminary short form prospectus is still subject to completion or amendment. Copies of the preliminary short form prospectus may be obtained from one of the dealers noted above. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release may contain 'forward-looking' statements regarding the plans, intentions, beliefs and current expectations of the Bank, its directors, or its officers with respect to the future business activities and operating performance of the Bank. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions, as they relate to the Bank, or its management, are intended to identify such forward-looking statements. Specific forward-looking statements in this press release include statements regarding the expected closing date of the Offering and the anticipated amount and use of the proceeds from the Offering. Investors are cautioned that any such forward-looking statements are not guarantees of the future business activities or performance and involve risks and uncertainties, and that the Bank's future business activities may differ materially from those in the forward-looking statements as a result of various factors. Such risks, uncertainties and factors are described in the periodic filings with the Canadian securities regulatory authorities, including the Bank's Annual Information Form and quarterly and annual Management Discussion & Analysis, which may be viewed on SEDAR at www.sedar.com. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. The closing of the Offering could be delayed if the Bank is not able to obtain the necessary regulatory approvals on the timelines planned. The Offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the Offering will not be completed within the anticipated time, or at all. Further, the intended use of the net proceeds of the Offering might change if the board of directors determines that it would be in the best interests of the Bank to deploy the proceeds for some other purpose. Although the Bank has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not anticipated, estimated or intended. The Bank does not intend, and does not assume any obligation, to update these forward-looking statements.

Contacts

Investor Relations:
VersaBank
Wade MacBain, 800-244-1509
wadem@versabank.com
http://www.versabank.com

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