VersaBank - May 2021

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Our investment thesis for VersaBank (TSX:VB) is that its technology-based business model will enable multi-year double-digit EPS growth, while its expansion strategies in blockchain (CAD digital deposit offering) and cybersecurity (DRT Cyber) provide free upside optionality. 2Q21 results and management commentary support this thesis with evidence of sustained double-digit loan growth in 2021 as a differentiator. Commercial potential from crypto and cybersecurity investments remain high, and it is clear VB has premium technology with growing demand. We are increasing 2022E EPS by 5% and remain constructive on this stock.

Disclosure, Disclaimer, and Wavier of Liability

VersaBank – May 2021