VersaBank to invest in CMHC-insured multiunit mortgages

Mr. David Taylor reports VERSABANK LAUNCHES ENHANCED CMHC LENDING PROGRAM: EXPECTED TO GENERATE A MINIMUM OF $2 MILLION IN INCREMENTAL REVENUE IN FISCAL 2026 WITH DE MINIMIS ADDITIONAL OPERATING EXPENSES VersaBank has enhanced its Canadian Mortgage and Housing Corp.-insured lending program such that the bank will begin utilizing its Canadian mortgage bond program allocation capacity to invest in CMHC-insured multiunit residential term mortgages originated by partners which are well-established leaders in the Canadian MUR mortgage industry. The enhanced CMHC program, which requires minimal regulatory capital, is expected to contribute a minimum of $2-million of incremental revenue to the bank in fiscal 2026 with de minimis additional operating costs. "This new income stream within our already very successful CMHC lending program is another example of VersaBank leveraging our proprietary banking technology and specific expertise to capitalize on unique opportunities in the banking industry and use our operating leverage to drive earnings growth and value for our shareholders, while further mitigating risk," said David Taylor, founder and president, VersaBank. "The incremental profitability generated by our enhanced CMHC program in fiscal 2026 will complement the anticipated continued growth from the strong momentum in the ramp-up of our unique and attractive receivable purchase program financing solution in the United States, as well as continued steady growth in Canada." VersaBank will earn a fixed fee on the securitization and sale into the CMB program of the enhanced CMHC program mortgages, which reside on the balance sheet of the Canada Housing Trust, which issues CMBs. The enhanced CMHC program does not affect the bank's existing CMHC-insured MUR construction mortgages that currently reside on its balance sheet or the more than $920-million in commitments for such. It does, however, create the opportunity for VersaBank to transfer these existing and potential future mortgages to the enhanced CMHC program for which VersaBank would earn incremental fees over and above the current yield on those mortgages. 2025 Canadian federal budget further supports bank's enhanced CMHC program VersaBank today also applauded Canadian Prime Minister Mark Carney and Finance Minister Francois-Philippe Champagne on the multiresidential housing initiatives outlined in the 2025 federal budget, which was passed on Nov. 17, 2025. Specifically, the 2025 federal budget provides for an increase in the CMB annual issuance limit to $80-billion from $60-billion, starting in 2026, to support the construction and financing of more multiunit rental housing, which are critical to increasing the housing supply and providing affordable housing to Canadians. The higher CMB issuance limit is expected to provide VersaBank with additional potential opportunity for its enhanced CMHC program. "The federal government's plan to expand access to cost-effective mortgage funding for lenders to support the construction of new multiunit housing across the country is a significant and much needed initiative for our country, said Mr. Taylor. "As we have done for decades, VersaBank is proud to play an integral role in the provision of multiresidential housing throughout Canada, especially at this time of urgent need for our country." 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 electronically through financial intermediary partners, it benefits from significant operating leverage that drives efficiency and return on common equity. In August, 2024, VersaBank broadly 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 U.S. market. VersaBank also owns Minneapolis-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 tokenized deposits. VersaBank's common shares trade on the Toronto Stock Exchange and Nasdaq under the symbol VBNK. We seek Safe Harbor.