CWB reports fourth quarter and full year 2024 financial performance

EDMONTON, AB, Dec. 18, 2024 /CNW/ - CWB Financial Group (TSX: CWB) (CWB) today announced financial performance for the year ended October 31, 2024, with annual common shareholders' net income of $268 million, diluted earnings per common share (EPS) of $2.76 and adjusted EPS⁽¹⁾ of $3.01.

"As we progress toward closing the National Bank transaction, our teams have remained focused on delivering a differentiated experience for business owners and their families while supporting the integration planning process," said Chris Fowler, President and CEO. "We continue to retain the deep relationships we have with our clients, the engagement of our teams remains strong, and our balance sheet is resilient. We are well positioned to deliver prudent growth and solid financial performance."

"I sincerely thank all team members for their significant efforts this year. We remain on track to complete the acquisition with National Bank. I am excited about the future for Canadian Western Bank and am confident that the combination of our two banks will create incredible value for our clients, teams, communities, and shareholders."

Quarterly common shareholders' net income of $62 million and adjusted EPS of $0.67 declined 19% and 29%, respectively, compared to the same quarter last year. Pre-tax, pre-provision income⁽¹⁾ of $143 million was consistent with last year. Lower common shareholders' net income was primarily driven by a provision for credit losses on impaired loans⁽¹⁾ of 38 basis points, compared to an impaired loan provision of eight basis points in the prior year, which was significantly below our normal historical experience.

On a sequential basis, quarterly common shareholders' net income increased 50% and adjusted EPS increased 12%, driven by a 16 basis point reduction in the provision for credit losses. Pre-tax, pre-provision income was consistent with last quarter.  

On an annual basis, common shareholders' net income and adjusted earnings per share were down 17% and 16%, respectively. Pre-tax, pre-provision income increased 8% and we delivered positive operating leverage⁽¹⁾ of 1.4%, reflecting solid revenue growth and prudent expense management. Lower common shareholders' net income primarily reflected a 30 basis point increase in the provision for credit losses on impaired loans.

Our Board of Directors declared a cash dividend of $0.36 per common share, which is up two cents, or 6%, from the dividend declared last year and one cent, or 3%, from the dividend declared last quarter.

^(1)	Adjusted EPS, pre-tax, pre-provision income, the provision for credit losses on total loans as a percentage of average loans and operating leverage are non-GAAP measures. Refer to definitions and detail provided on pages 6 and 7.

National Bank of Canada (NBC) Transaction

On June 11, 2024, we announced that we entered into a definitive agreement where NBC proposed to acquire all the issued and outstanding common shares of CWB through a share exchange. As part of the transaction, CWB Shareholders will be entitled to receive 0.450 of a NBC common share for each CWB common share held as of the date of closing.

This transaction will bring together two complementary Canadian banks with growing businesses, enabling the united bank to enhance services to its customers by offering a comprehensive product and service platform at national scale, with a regionally focused service model. CWB's current retail customers will benefit from a larger product offering and digital platform, our small business clients will be able to utilize NBC's cash and risk management solutions, and our commercial clients will benefit from access to NBC's leading capital markets franchise. We are currently undergoing preparation for the transition period following transaction close to effectively integrate our operations into NBC. We remain committed to meeting our clients' banking needs during this time.

The transaction received CWB Shareholder approval on September 3, 2024 and Competition Bureau clearance on September 26, 2024. The transaction is also subject to the review of the Office of the Superintendent of Financial Institutions (OSFI) and approval from the Minister of Finance as conditions to close the transaction, which we expect to occur in 2025.

We have incurred and expect to continue to incur costs directly associated with this potential transaction. These costs are not indicative of our underlying operating performance and therefore are excluded in the calculation of our non-GAAP measures. Refer to definitions and details provided on pages 6 and 7.

Delayed Release of our Fourth quarter and Fiscal 2024 Financial Results

On December 6, 2024, we announced that the release of our fourth quarter and fiscal 2024 financial results would be rescheduled. On December 7, 2024, we announced that the results were delayed following the receipt of a legal claim against CWB Maxium Financial Ltd., a wholly owned subsidiary of CWB. The claim seeks damages in the amount of $18 million, as well as general and punitive damages, and costs, related to the provision of certain loans to corporations affiliated with the claimant and the resolution of these loans, which is occurring through a court-approved receivership process. The claim also contained several allegations, including allegations of unethical conduct by a named individual.

Upon receipt of this claim, we launched an in-depth investigation. The evidence obtained through this investigation supports that this matter has no impact on our financial statements, and no deficiencies in internal controls over financial reporting were identified.

Financial Performance

Q4 2024, compared to Q4 2023	Common shareholders' net income	$62 million	Down 19%
	Diluted EPS Adjusted EPS	$0.63 $0.67	Down 21% Down 29%
	Adjusted return on common shareholders' equity (ROE)^(1)	7.0 %	Down 360 bp
	Efficiency ratio^(1)	53.7 %	Up 270 bp
	Pre-tax, pre-provision income	$143 million	Unchanged

bp – basis point

Compared to the same quarter last year, common shareholders' net income declined 19%. Pre-tax, pre-provision income was consistent with last year, as a 6% increase in revenue was offset by a 12% increase in adjusted non-interest expenses⁽¹⁾. Adjusted common shareholders' net income⁽¹⁾ declined 27%, primarily reflecting a 30 basis point increase in the provision for credit losses on impaired loans.

Higher revenue reflected a 5% increase in net interest income and a 13% increase in non-interest income, which reflected 8% growth in wealth management fees and higher net gains on security sales as we re-balanced our cash and securities portfolio this quarter in response to shifts in market interest rates. Higher net-interest income was driven by a nine basis point improvement in net interest margin⁽¹⁾ and reflected the benefit of increased yields on fixed term assets, which had a larger impact than the increase in deposit costs. Bank of Canada policy interest rate reductions in the current quarter did not have a meaningful impact on our net interest margin as our floating rate loans remain closely balanced with our floating rate deposits.

Non-interest expenses were up 3%. The prior year non-interest expenses included $17 million of costs incurred to execute reorganization initiatives, while the current quarter non-interest expenses included $4 million of integration costs directly associated with the potential NBC transaction. Adjusted non-interest expenses increased 12%, primarily driven by increases in variable and share-based employee compensation costs and higher deposit insurance and technology costs. Higher adjusted non-interest expenses were partially offset by lower salary and benefit costs associated with the reduction in our overall average staffing levels following the reorganization activities which began in the fourth quarter of last year and concluded earlier this year. 

The provision for credit losses on total loans as a percentage of average loans represented 43 basis points this quarter and was 32 basis points higher than the same quarter last year. The increase in our provision for credit losses was primarily due to a 30 basis point increase in our impaired loan provision. Our current quarter provision for credit losses on impaired loans represented 38 basis points of average loans and reflected the impact of current economic conditions continuing to result in elevated levels of borrower defaults and lower expected realization values for the security underpinning these exposures. The prior year quarterly impaired loan provision of eight basis points was significantly below our normal historical experience.

^(1)	Adjusted ROE, efficiency ratio, adjusted non-interest expenses, adjusted common shareholders' net income and net interest margin are non-GAAP measures. Refer to definitions and detail provided on pages 6 and 7.

Q4 2024, compared to Q3 2024	Common shareholders' net income	$62 million	Up 50%
	Diluted EPS Adjusted EPS	$0.63 $0.67	Up 47% Up 12%
	Adjusted ROE	7.0 %	Up 70 bp
	Efficiency ratio	53.7 %	Up 150 bp
	Pre-tax, pre-provision income	$143 million	Unchanged

Compared to the prior quarter, common shareholders' net income increased 50% and adjusted common shareholders' net income increased 15%, primarily driven by a 16 basis point reduction in the provision for credit losses. Pre-tax, pre-provision income was consistent with the prior quarter.

Revenue growth of 4% reflected a 2% increase in net interest income and a 16% increase in non-interest income, primarily due to an increase in net gains on securities sales, higher foreign exchange income and higher credit related fees. The increase in net interest income was primarily due to higher interest-earning assets. Net interest margin of 2.49% was consistent with the prior quarter.

Non-interest expenses declined 3% from the prior quarter, primarily due to a reduction in costs directly associated with the NBC transaction. Adjusted non-interest expenses were up 7% and reflected higher variable and share-based employee compensation costs, an increase in technology costs and the impact of customary seasonal increases in our operating expenses.

Our provision for credit losses on total loans as a percentage of average loans was 16 basis points lower than the prior quarter due to a three basis point increase in the performing loan provision, and a 19 basis point decrease in the impaired loan provision. The prior quarter impaired loan provision included the impact of two impaired loans, where the circumstances which gave rise to the impaired loan provisions were unique to those exposures.

Fiscal 2024 compared to fiscal 2023	Common shareholders' net income	$268 million	Down 17%
	Diluted EPS Adjusted EPS	$2.76 $3.01	Down 18% Down 16%
	Adjusted ROE	8.1 %	Down 230 bp
	Efficiency ratio	51.9 %	Down 70 bp
	Pre-tax, pre-provision income	$570 million	Up 8%

Compared to last year, common shareholders' net income declined 17%, while pre-tax, pre-provision income increased 8% with positive operating leverage of 1.4%. Lower common shareholders' net income primarily reflected a 30 basis point increase in the provision for credit losses on impaired loans.

Total annual revenue increased 6%, which reflected a 6% increase in net interest income and an 8% increase in non-interest income. Higher net interest income reflected the benefit of an 11 basis point improvement in net interest margin and 1% annual loan growth. The increase in net interest margin primarily reflected the benefit of increased yields on fixed term assets from higher market interest rates, which had a larger impact than the increase in deposit costs. Non-interest income growth was driven by higher net gains on securities sales, higher wealth management fees and higher credit related fees.  

Total adjusted non-interest expenses were up 5%, due to higher variable and share-based employee compensation costs, elevated expenses associated with the opening of our new Toronto financial district and Kitchener banking centres, and increases in deposit insurance and technology costs, partially offset by lower salary and benefit costs.

Our total annual provision for credit losses represented 37 basis points as a percentage of average loans compared to seven basis points last year. We recognized a 34 basis point provision for credit losses on impaired loans, which compared to a four basis point provision recorded in the prior year, reflecting increased borrower default rates and the emergence of lower than expected realization values which increased the impaired loan provision for credit losses, including the impact of two impaired loans recognized in the third quarter of the current year. The circumstances that gave rise to the impaired loan provisions on these two loans were unique to those exposures. The prior year impaired loan provision of four basis points was significantly below our normal historical experience and included the impact of the reversal of a previously impaired loan write-off recognized in the first quarter last year.

Fiscal 2025 Outlook

We anticipate steady growth of the Canadian economy over the next fiscal year, with consistent levels of inflation within the Bank of Canada's target range supporting continued policy interest rate reductions. We remain mindful of geopolitical risks that could create volatility in expected economic conditions.

As we progress toward the closing of the NBC transaction, we remain focused on supporting our teams and continuing to provide a differentiated experience to our clients to maintain low levels of attrition. Our resilient balance sheet remains well positioned to support prudent growth, with a continued strategic focus on portfolios that provide full-service client opportunities. We expect solid revenue growth supported by continued net interest margin expansion, and disciplined management of our non-interest expenses to deliver positive operating leverage on an annual basis. As the year progresses, we expect our gross impaired loan formations and provision for credit losses to gradually decline supported by our proven credit risk management process and a lower interest rate environment.

Based on the assumptions described above and presuming no significant adverse shifts in the macroeconomic environment, we expect to deliver strong annual growth of pre-tax, pre-provision income and adjusted earnings per common share.

About CWB Financial Group

CWB Financial Group (CWB) is the only full-service bank in Canada with a strategic focus to meet the unique financial needs of businesses and their owners. We provide our nationwide clients with full-service business and personal banking, specialized financing, comprehensive wealth management offerings, and trust services. Clients choose CWB for a differentiated level of service through specialized expertise, customized solutions, and faster response times relative to the competition. Our people take the time to understand our clients and their business, and work as a united team to provide holistic solutions and advice.

As a public company on the Toronto Stock Exchange (TSX), CWB trades under the symbols "CWB" (common shares), "CWB.PR.B" (Series 5 preferred shares) and "CWB.PR.D" (Series 9 preferred shares). We are firmly committed to the responsible creation of value for all our stakeholders and our approach to sustainability will support our continued success. Learn more at www.cwb.com.

Fiscal 2024 Fourth Quarter and Fiscal 2024 Financial Results Conference Call

CWB's fourth quarter and fiscal 2024 results conference call is scheduled for Wednesday, December 18, 2024, at 10:00 a.m. ET (8:00 a.m. MT). CWB's executives will comment on financial results and respond to questions from analysts.

The conference call may be accessed on a listen-only basis by dialing [phone] (Toronto) or 1 [phone] (toll free) and entering passcode: 54937. The call will also be webcast live on CWB's website:

www.cwb.com/investor-relations/quarterly-reports.

A replay of the conference call will be available until December 25, 2024, by dialing [phone] (Toronto) or 1 [phone] (toll-free) and entering passcode 54937#.

Selected Financial Highlights

	For the three months ended										Change from October 31 2023		For the year ended						Change from October 31 2023
(unaudited)		October 31 2024			July 31  2024			October 31 2023						October 31 2024			October 31 2023
(thousands, except per share amounts)
Results from Operations
Net interest income	$	269,292		$	263,867		$	256,316			5	%	$	1,041,988		$	981,277		6	%
Non-interest income		40,210			34,602			35,447			13			141,896			131,297		8
Total revenue		309,502			298,469			291,763			6			1,183,884			1,112,574		6
Pre-tax, pre-provision income^(1)		143,190			142,812			143,037			-			569,819			527,529		8
Common shareholders' net income		62,195			41,407			76,845			(19)			267,882			324,316		(17)
Common Share Information  Earnings per common share
Basic	$	0.64		$	0.43		$	0.80			(20)	%	$	2.77		$	3.38		(18)	%
Diluted		0.63			0.43			0.80			(21)			2.76			3.38		(18)
Adjusted^(1)		0.67			0.60			0.94			(29)			3.01			3.58		(16)
Cash dividends		0.35			0.35			0.33			6			1.38			1.30		6
Book value^(1)		39.12			38.52			35.79			9			39.12			35.79		9
Closing market price		57.25			47.71			27.48			108			57.25			27.48		108
Common shares outstanding (thousands)		96,743			96,669			96,434			-			96,743			96,434		-
Performance Measures^(1)
Return on common shareholders' equity		6.6	%		4.5	%		9.0	%		(240)	bp		7.4	%		9.8	%	(240)	bp
Adjusted return on common shareholders'
equity		7.0			6.3			10.6			(360)			8.1			10.4		(230)
Return on assets		0.58			0.39			0.72			(14)			0.63			0.77		(14)
Net interest margin		2.49			2.49			2.40			9			2.45			2.34		11
Efficiency ratio		53.7			52.2			51.0			270			51.9			52.6		(70)
Operating leverage		(5.7)			(1.1)			3.3			(900)			1.4			(2.2)		360
Credit Quality^(1)
Provision for credit losses on total loans as
a percentage of average loans^(2)		0.43			0.59			0.11			32			0.37			0.07		30
Provision for credit losses on impaired
loans as a percentage of average loans^(2)		0.38			0.57			0.08			30			0.34			0.04		30
Balance Sheet
Assets	$	43,133,799		$	42,462,058		$	42,320,103			2	%
Loans^(3)		37,583,703			37,439,796			37,209,850			1
Deposits		33,437,711			33,402,822			33,328,449			-
Debt		4,035,761			3,738,589			3,839,159			5
Shareholders' equity		4,359,441			4,299,137			4,026,667			8
Off-Balance Sheet
Wealth Management
Assets under management and   administration		9,372,489			9,320,499			7,925,785			18
Assets under advisement^(4)		2,793,585			2,682,822			2,197,397			27
Assets Under Administration - Other		18,040,438			17,335,716			15,370,989			17
Capital Adequacy^(5)
Common equity Tier 1 ratio		10.3	%		10.2	%		9.7	%		60	bp
Tier 1 ratio		12.0			11.9			11.5			50
Total ratio		14.1			14.0			13.5			60
Other
Number of full-time equivalent staff		2,569			2,532			2,505			3	%

^(1)	Non-GAAP measure – refer to definitions and detail provided on pages 6 and 7.
^(2)	Includes provisions for credit losses on loans, committed but undrawn credit exposures and letters of credit.
^(3)	Excludes the allowance for credit losses.
^(4)	Primarily comprised of assets under advisement related to our Indigenous Services wealth management business.
^(5)	Calculated using the Standardized approach in accordance with guidelines issued by the Office of the Superintendent of Financial Institutions Canada (OSFI).
	bp – basis point

Financial Summary

This financial summary, dated December 18, 2024, should be read in conjunction with Canadian Western Bank's (CWB) unaudited condensed financial statements for the period ended October 31, 2024, included in this document, as well as the audited consolidated financial statements and Management's Discussion and Analysis (MD&A) for the year ended October 31, 2024, contained in our 2024 Annual Report, available on SEDAR at www.sedarplus.ca and CWB's website at www.cwb.com.

The condensed financial statements have been prepared in accordance with IFRS Accounting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and are presented in Canadian dollars.

Forward-looking Statements

From time to time, we make written and verbal forward-looking statements. Statements of this type are included in our Annual Report and reports to shareholders and may be included in filings with Canadian securities regulators or in other communications such as media releases and corporate presentations. Forward-looking statements include, but are not limited to, statements about our objectives and strategies, targeted and expected financial results and the outlook for CWB's businesses or for the Canadian economy. Forward-looking statements are typically identified by the words "believe", "expect", "anticipate", "intend", "estimate", "may increase", "may impact", "goal", "focus", "potential", "proposed" and other similar expressions, or future or conditional verbs such as "will", "should", "would" and "could".

By their very nature, forward-looking statements involve numerous assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations, and conclusions will not prove to be accurate, that our assumptions may not be correct, and that our strategic goals will not be achieved.

A variety of factors, many of which are beyond our control, may cause actual results to differ materially from the expectations expressed in the forward-looking statements. These factors include, but are not limited to, general business and economic conditions in Canada including housing and commercial real estate market conditions and household and business indebtedness, the volatility and level of liquidity in financial markets, fluctuations in interest rates and currency values, the volatility and level of various commodity prices, changes in monetary policy, changes in economic and political conditions, material changes to trade agreements, legislative and regulatory developments, changes in supervisory expectations or requirements for capital, interest rate and liquidity management, legal developments, the level of competition, the occurrence of natural catastrophes, outbreaks of disease or illness that affect local, national or international economies, changes in accounting standards and policies, information technology and cyber risk, the accuracy and completeness of information we receive about customers and counterparties, the ability to attract and retain key personnel, the ability to complete and integrate acquisitions, reliance on third parties to provide components of business infrastructure, changes in tax laws, technological developments, unexpected changes in consumer spending and saving habits, timely development and introduction of new products, the impact of bank failures or other adverse developments at other banks that drive negative investor and depositor sentiment regarding the stability and liquidity of banks, the expected timing of completion of the transaction pursuant to which National Bank of Canada (NBC) proposes to acquire all of the issued and outstanding CWB common shares by way of a share exchange (the NBC transaction), and the conditions precedent to the closing of the NBC transaction, including the required approvals; that the transaction will be completed on the terms currently contemplated; assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information available as of the date hereof; and our ability to anticipate and manage the risks associated with these factors. It is important to note that the preceding list is not exhaustive of possible factors.

Additional information about these factors can be found in the Risk Management section of our 2024 Annual MD&A. These and other factors should be considered carefully, and readers are cautioned not to place undue reliance on these forward-looking statements as a number of important factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements. Any forward-looking statements contained in this document represent our views as of the date hereof. Unless required by securities law, we do not undertake to update any forward-looking statement, whether written or verbal, that may be made from time to time by us or on our behalf. The forward-looking statements contained in this document are presented for the purpose of assisting readers in understanding our financial position and results of operations as at and for the periods ended on the dates presented, as well as our strategic priorities and objectives, and may not be appropriate for other purposes.

Assumptions about the performance of the Canadian economy over the forecast horizon and how it will affect our business are material factors considered when setting organizational objectives and targets. In determining expectations for economic growth, we consider our own forecasts, economic data and forecasts provided by the Canadian government and its agencies, as well as certain private sector forecasts. These forecasts are subject to inherent risks and uncertainties that may be general or specific. Where relevant, material economic assumptions underlying forward-looking statements are disclosed within the Fiscal 2025 Outlook and Allowance for Credit Losses section of our MD&A.

Non-GAAP Measures

We use a number of financial measures and ratios to assess our performance against strategic initiatives and operational benchmarks. Some of these financial measures and ratios do not have standardized meanings prescribed by Generally Accepted Accounting Principles (GAAP) and may not be comparable to similar measures presented by other financial institutions. Non-GAAP financial measures and ratios provide readers with an enhanced understanding of how we view our financial performance. These measures and ratios may also provide the ability to analyze trends related to profitability and the effectiveness of our operations and strategies and are disclosed in compliance with National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure.

To calculate non-GAAP financial measures, we exclude certain items from our financial results prepared in accordance with IFRS. Adjustments relate to items which we believe are not indicative of underlying operating performance. Our non-GAAP financial measures include:

• Adjusted non-interest expenses – total non-interest expenses, excluding pre-tax costs directly associated with the NBC transaction, amortization of acquisition-related intangible assets, a reorganization of our operations, and acquisition and integration costs. Non-recurring reorganization costs were incurred to execute reorganization initiatives to realize efficiencies in our banking centre footprint, operational support functions, and administrative processes. Acquisition and integration costs include direct and incremental costs incurred as part of the execution and integration of business acquisitions.
• Adjusted common shareholders' net income – total common shareholders' net income, excluding the costs directly associated with the NBC transaction, amortization of acquisition-related intangible assets, organizational redesign initiatives, and acquisition and integration costs, net of tax.
• Pre-tax, pre-provision income – total revenue less adjusted non-interest expenses.

The following table provides a reconciliation of our non-GAAP financial measures to our reported financial results.

	For the three months ended									Change from October 31    2023		For the year ended					Change from October 31    2023
(unaudited) (thousands)		October 31 2024			July 31 2024			October 31 2023					October 31 2024			October 31 2023
Non-interest expenses	$	171,829		$	177,700		$	167,600		3	%	$	647,068		$	611,283	6	%
Adjustments (before tax):
NBC transaction		(3,789)			(19,772)			-		100			(23,561)			-	100
Amortization of acquisition-related intangible assets		(1,728)			(1,728)			(1,728)		-			(6,912)			(8,490)	(19)
Non-recurring reorganization costs		-			(543)			(17,146)		(100)			(2,530)			(17,146)	(85)
Acquisition and integration costs		-			-			-		-			-			(602)	(100)
Adjusted non-interest expenses	$	166,312		$	155,657		$	148,726		12	%	$	614,065		$	585,045	5	%
Common shareholders' net income	$	62,195		$	41,407		$	76,845		(19)	%	$	267,882		$	324,316	(17)	%
Adjustments (after-tax):
NBC transaction^(1)		2,815			14,696			-		100			17,511			-	100
Amortization of acquisition-related intangible assets^(2)		1,268			1,268			1,267		-			5,072			6,495	(22)
Non-recurring reorganization costs^(3)		-			404			12,726		(100)			1,881			12,726	(85)
Acquisition and integration costs^(4)		-			-			-		-			-			451	(100)
Adjusted common shareholders' net income	$	66,278		$	57,775		$	90,838		(27)	%	$	292,346		$	343,988	(15)	%
Total revenue	$	309,502		$	298,469		$	291,763		6	%	$	1,183,884		$	1,112,574	6	%
Less:
Adjusted non-interest expenses (see above)		166,312			155,657			148,726		12			614,065			585,045	5
Pre-tax, pre-provision income	$	143,190		$	142,812		$	143,037		-	%	$	569,819		$	527,529	8	%

^(1)	Net of income tax of $974 for the three months ended October 31, 2024 (Q3 2024 – $5,076, Q4 2023 – $nil) and $6,050 for the year ended October 31, 2024 (2023 – $nil).
^(2)	Net of income tax of $460 for the three months ended October 31, 2024 (Q3 2024 – $460, Q4 2023 – $461) and $1,840 for the year ended October 31, 2024 (2023 – $1,995).
^(3)	Net of income tax of $nil for the three months ended October 31, 2024 (Q3 2024 – $139, Q4 2023 – $4,420) and $649 for the year ended October 31, 2024 (2023 – $4,420).
^(4)	Net of income tax of $nil for the three months ended October 31, 2024 (Q3 2024 – $nil, Q4 2023 – $nil) and $nil for the year ended October 31, 2024 (2023 – $151).

Non-GAAP ratios are calculated using the non-GAAP financial measures defined above. Our non-GAAP ratios include:

• Adjusted earnings per common share – diluted earnings per common share calculated with adjusted common shareholders' net income.
• Adjusted return on common shareholders' equity – annualized adjusted common shareholders' net income divided by average common shareholders' equity, which is total shareholders' equity excluding preferred shares and limited recourse capital notes.
• Efficiency ratio – adjusted non-interest expenses divided by total revenue.
• Operating leverage – growth rate of total revenue less growth rate of adjusted non-interest expenses.

Supplementary financial measures are measures that do not have definitions prescribed by GAAP, but do not meet the definition of a non-GAAP financial measure or ratio. Our supplementary financial measures include:

• Return on assets – annualized common shareholders' net income divided by average total assets.
• Net interest margin – annualized net interest income divided by average total assets.
• Return on common shareholders' equity – annualized common shareholders' net income divided by average common shareholders' equity.
• Write-offs as a percentage of average loans – annualized write-offs divided by average total loans.
• Book value per common share – total common shareholders' equity divided by total common shares outstanding.
• Franchise deposits (formerly referred to as branch-raised deposits) – total deposits excluding broker term and capital market deposits.
• Provision for credit losses on total loans as a percentage of average loans – annualized provision for credit losses on loans, committed but undrawn credit exposures and letters of credit divided by average total loans. Provisions for credit losses related to debt securities measured at fair value through other comprehensive income (FVOCI) and other financial assets are excluded.
• Provision for credit losses on impaired loans as a percentage of average loans – annualized provision for credit losses on impaired loans divided by average total loans.
• Provision for credit losses on performing loans as a percentage of average loans – annualized provision for credit losses on performing loans (Stage 1 and 2) divided by average total loans.
• Average balances – average daily balances.

Financial Performance

Q4 2024 vs. Q4 2023

Common shareholders' net income of $62 million and diluted earnings per common share of $0.63 decreased 19% and 21% respectively. Pre-tax, pre-provision income of $143 million was consistent with the same quarter last year, as a 6% increase in revenue was offset by a 12% increase in adjusted non-interest expenses. Adjusted common shareholders' net income of $66 million and adjusted earnings per common share of $0.67 decreased 27% and 29%, respectively, primarily reflecting a 30 basis point increase in the provision for credit losses on impaired loans.

Total revenue of $310 million grew 6%, which reflected a 5% increase in net interest income and a 13% increase in non-interest income. Higher non-interest income primarily reflected 8% growth in wealth management fees and higher net gains on security sales as we re-balanced our cash and securities portfolio this quarter in response to shifts in market interest rates. Net interest income of $269 million was driven by a nine basis point improvement in net interest margin and 1% annual loan growth. The increase in net interest margin reflected the benefit of increased yields on fixed term assets, which had a larger impact than the increase in deposit costs. Bank of Canada policy interest rate reductions in the current quarter did not have a meaningful impact on our net interest margin as our floating rate loans remain closely balanced with our floating rate deposits.

Non-interest expenses of $172 million were up 3%. The prior year non-interest expenses included $17 million of costs incurred to execute reorganization initiatives, while the current quarter non-interest expenses included $4 million of integration costs directly associated with the potential NBC transaction. Adjusted non-interest expenses of $166 million were up 12%, primarily driven by increases in variable and share-based employee compensation costs and higher deposit insurance and technology costs. Higher adjusted non-interest expenses were partially offset by lower salary and benefit costs associated with the reduction in our overall average staffing levels following the reorganization activities which began in the fourth quarter of last year and concluded earlier this year. 

The provision for credit losses on total loans as a percentage of average loans represented 43 basis points this quarter and was 32 basis points higher than the same quarter last year. The increase in our provision for credit losses was primarily due to a 30 basis point increase in our impaired loan provision. Our current quarter provision for credit losses on impaired loans represented 38 basis points of average loans and reflected the impact of current economic conditions continuing to result in elevated levels of borrower defaults and lower expected realization values for the security underpinning these exposures. The prior year quarterly impaired loan provision of eight basis points was significantly below our normal historical experience.

Q4 2024 vs. Q3 2024

Common shareholders' net income and diluted earnings per common share increased 50% and 47%, respectively. Adjusted common shareholders' net income and adjusted earnings per common share increased 15% and 12% respectively, primarily driven by a 16 basis point reduction in the provision for credit losses. Pre-tax, pre-provision income was consistent with the prior quarter.

Total revenue increased 4%, due to a 16% increase in non-interest income and a 2% increase in net interest income. Higher non-interest income primarily reflected an increase in net gains on securities sales, higher foreign exchange income and higher credit related fees. The increase in net interest income was primarily due to higher interest-earning assets. Net interest margin was consistent with the prior quarter as higher fixed rate asset yields, which outpaced the increase in deposit costs, were offset by higher average liquidity.

Non-interest expenses declined 3% from the prior quarter, primarily due to a reduction in costs directly associated with the NBC transaction. Adjusted non-interest expenses were up 7% and reflected higher variable and share-based employee compensation costs, an increase in technology costs and the impact of customary seasonal increases in our operating expenses.

Our provision for credit losses on total loans as a percentage of average loans was 16 basis points lower than the prior quarter due to a three basis point increase in the performing loan provision, and a 19 basis point decrease in the impaired loan provision. The prior quarter impaired loan provision included the impact of two impaired loans, where the circumstances which gave rise to the impaired loan provisions were unique to those exposures. A higher current quarter performing loan provision was primarily driven by higher default rates, partially offset by improvements in forecast macroeconomic conditions.

2024 vs. 2023

Common shareholders' net income of $268 million and diluted earnings per share of $2.76 were down 17% and 18%, respectively. Pre-tax, pre-provision income of $570 million increased 8% from last year, with positive operating leverage of 1.4%. Adjusted common shareholders' net income of $292 million and adjusted earnings per share of $3.01 were down 15% and 16%, respectively, primarily driven by a 30 basis point increase in the provision for credit losses on impaired loans.

Total revenue of $1.2 billion increased 6%, which reflected a 6% increase in net interest income and an 8% increase in non-interest income. Net interest income of $1 billion reflected the benefit of an 11 basis point improvement in net interest margin and 1% annual loan growth. The increase in net interest margin primarily reflected the benefit of increased yields on fixed term assets from higher market interest rates, which had a larger impact than the increase in deposit costs. Non-interest income growth was driven by higher net gains on securities sales, higher wealth management fees and higher credit related fees.  

Total non-interest expenses of $647 million were up 6%. The prior year non-interest expenses included $17 million of costs incurred to execute reorganization initiatives, while the current year non-interest expenses included $24 million of professional fees and employee compensation costs directly associated with the potential NBC transaction. Total adjusted non-interest expenses of $614 million were up 5%, due to higher variable and share-based employee compensation costs, elevated expenses associated with the opening of our new Toronto financial district and Kitchener banking centres, and increases in deposit insurance and technology costs, partially offset by lower salary and benefit costs.

Our total annual provision for credit losses represented 37 basis points as a percentage of average loans compared to seven basis points last year. We recognized a 34 basis point provision for credit losses on impaired loans, which compared to a four basis point provision recorded in the prior year, reflecting increased borrower default rates and the emergence of lower than expected realization values which increased the impaired loan provision for credit losses, including the impact of two impaired loans recognized in the third quarter of the current year. The circumstances that gave rise to the impaired loan provisions on these two loans were unique to those exposures. The prior year impaired loan provision of four basis points was significantly below our normal historical experience and included the impact of the reversal of a previously impaired loan write-off recognized in the first quarter last year. The current year's provision for credit losses on performing loans of three basis points was consistent with the prior year.

ROE and ROA

The fourth quarter return on common shareholders' equity (ROE) of 6.6% and adjusted ROE of 7.0% decreased 240 basis points and 360 basis points, respectively, from the same quarter last year. On a sequential quarter basis, ROE increased 210 basis points, while adjusted ROE increased 70 basis points. Full year ROE of 7.4% and adjusted ROE of 8.1% declined 240 and 230 basis points, respectively, from the prior year. Compared to the same quarter last year and on an annual basis, lower ROE and lower adjusted ROE reflected an increase in common shareholders' equity and a decline in common shareholders' net income. On a sequential quarter basis, higher ROE and adjusted ROE were primarily driven by an increase in common shareholders' net income, partially offset by higher common shareholders' equity.

The fourth quarter return on assets (ROA) of 0.58% was 14 basis points lower than the same quarter last year and reflected lower common shareholders' net income, driven by a higher impaired loan provision, and higher average assets. On a sequential quarter basis, ROA increased 19 basis points as higher common shareholders' net income more than offset higher average assets. Full year ROA of 0.63% decreased 14 basis points reflecting the combined impact of lower common shareholders' net income and higher average assets.

Efficiency Ratio and Operating Leverage

The fourth quarter efficiency ratio of 53.7% increased 270 basis points from last year and 150 basis points from last quarter, as non-interest expense growth outpaced revenue growth this quarter. Operating leverage in the fourth quarter was negative 5.7%, compared to positive 3.3% last year and negative 1.1% last quarter.

On a full year basis, the efficiency ratio of 51.9% decreased 70 basis points and positive operating leverage of 1.4% improved 360 basis points, reflecting the combination of solid revenue growth and prudent expense management.

Loans

Total loans, excluding the allowance for credit losses, of $37.6 billion increased 1% compared to last year and were relatively consistent with last quarter. The volume and composition of our loan growth reflects our continued focus on optimizing risk-adjusted returns in an environment with lower than expected origination volumes.

(unaudited) ($ millions)		October 31 2024		% of total as at October 31 2024			July 31     2024			October 31 2023	Change from October 31 2023
General commercial loans	$	14,213		38	%	$	14,199		$	13,681	4	%
Personal loans and mortgages		7,032		19			7,002			7,118	(1)
Commercial mortgages		6,605		17			6,682			7,106	(7)
Equipment financing and leasing		5,966		16			5,908			5,722	4
Real estate project loans		3,305		9			3,130			3,098	7
Oil and gas production loans		463		1			519			485	(5)
Total loans outstanding^(1)	$	37,584		100	%	$	37,440		$	37,210	1	%

^(1)	Total loans outstanding by lending sector exclude the allowance for credit losses.

Q4 2024 vs. Q4 2023

General commercial loans grew 4% on an annual basis, reflecting solid nationwide growth in our strategically targeted lending portfolio.

Personal loans and mortgages declined 1% compared to the prior year as strong new lending volumes in our uninsured mortgage portfolio, with prudent loan-to-value ratios, were more than offset by scheduled paydowns and payouts and a decline in our participation in the National Housing Act Mortgage Backed Securities (NHA MBS) program.

Our commercial mortgage portfolio declined 7% with new origination volume more than offset by scheduled repayments and loan payouts, as fewer new lending opportunities met our risk-adjusted return expectations.  

Our equipment financing and leasing portfolio increased 4%, reflecting solid new origination volumes.

Real estate project loans increased 7%, supported by strong new project starts from top-tier borrowers, primarily in British Columbia (BC).

Oil and gas production loans decreased $22 million as participation in syndicated facilities that remain within our risk appetite were more than offset by scheduled repayments. Our exposures to oil and gas service and production businesses each represent approximately 2% of total loans.

Q4 2024 vs. Q3 2024

Our strategically targeted general commercial portfolio increased $14 million as growth from our banking centre footprint was partially offset by payouts and paydowns in our specialty lending portfolios.

Personal loans and mortgages remained consistent with the prior quarter as new origination volumes were more than offset by scheduled paydowns and payouts and a decline in our participation in the NHA MBS program.

Our commercial mortgage portfolio declined 1%, as new lending opportunities that met our risk-adjusted return expectations were more than offset by scheduled repayments.

Our equipment financing and leasing portfolio increased 1%, reflecting continued solid new origination volumes.

Real estate project loans increased 6%, supported by new project starts from top-tier borrowers, primarily in BC.

Oil and gas production loans declined $56 million as participation in syndicated facilities that remain within our risk appetite were more than offset by scheduled repayments.

Geographic diversification

(unaudited) ($ millions)		October 31 2024	% of total as at October 31 2024			July 31 2024			October 31 2023	Change from October 31 2023
British Columbia	$	12,353	33	%	$	12,273		$	11,926	4	%
Alberta		10,808	29			10,924			11,126	(3)
Ontario		9,409	25			9,317			9,431	-
Saskatchewan		1,561	4			1,579			1,508	4
Quebec		1,377	3			1,366			1,349	2
Manitoba		1,069	3			1,057			1,058	1
Other		1,007	3			924			812	24
Total loans outstanding^(1)	$	37,584	100	%	$	37,440		$	37,210	1	%

^(1)	Total loans outstanding by geographic region exclude the allowance for credit losses.

Q4 2024 vs. Q4 2023

BC loans increased 4% compared to the prior year as strong growth in general commercial and real estate project loans were offset by a decline in commercial mortgages. Alberta loans declined 3% as growth in general commercial loans was more than offset by lower commercial mortgages and real estate project loans. Ontario loans were relatively consistent with the prior year as growth from our new and existing banking centres was offset by the impact of payouts and paydowns of large commercial real estate and specialty lending exposures.

Q4 2024 vs. Q3 2024

Loan growth of 1% in BC was driven primarily by our real estate project loans and our strategically targeted general commercial portfolio. Growth in Ontario reflected an increase in our real estate project and equipment financing loans, partially offset by lower general commercial loans. Alberta loans declined 1% primarily due to a reduction in our oil and gas production loan portfolio.

Credit Quality

Our credit performance this quarter was impacted by the continuation of elevated borrower default rates and lower realization values which elevated impaired loan provisions for credit losses. Supported by the secured nature of our lending portfolio, disciplined underwriting practices and proactive loan management, we expect our ongoing credit quality to trend back towards our normal historical performance as economic conditions continue to normalize.

Gross impaired loans

The level of gross impaired loans fluctuates as loans become impaired and are subsequently resolved and does not directly reflect the dollar value of expected write-offs given tangible security held in support of lending exposures. The dollar amount of gross impaired loans totaled $503 million, compared to $266 million last year and $465 million last quarter.

	For the three months ended									Change from  October 31  2023
(unaudited)		October 31  2024			July 31  2024			October 31 2023
($ thousands)
Gross impaired loans, beginning of period	$	464,978		$	357,268		$	282,048		65	%
New formations		181,661			169,110			35,104		417
Reductions, impaired accounts paid down or returned to performing status		(106,239)			(45,761)			(36,097)		194
Write-offs		(37,534)			(15,639)			(15,079)		149
Total^(1)	$	502,866		$	464,978		$	265,976		89	%
Balance of the ten largest impaired accounts	$	158,877		$	171,130		$	139,162		14	%
Total number of accounts classified as impaired^(2)		336			333			255		32
Gross impaired loans as a percentage of gross loans		1.34	%		1.24	%		0.71	%	63	bp

^(1)	Gross impaired loans include foreclosed assets held for sale with a carrying value of $7,750 (July 31, 2024 – $5,645, October 31, 2023 – $2,712). We pursue timely realization of foreclosed assets and do not use the assets for our own operations.
^(2)	Total number of accounts excludes CWB National Leasing.
	bp – basis point

Gross impaired loan balances represented 1.34% of gross loans, up from 0.71% last year and 1.24% last quarter. The increase in gross impaired loans was driven by new formations of impaired loans of $182 million this quarter, reflecting the continued impact of sustained higher interest rates and overall economic conditions.

Allowance for credit losses

At October 31, 2024, the total allowance for credit losses (Stages 1, 2 and 3) was $235 million, compared to $175 million last year and $231 million last quarter.

										Change from   October 31 2023
(unaudited)		October 31 2024			July 31 2024			October 31 2023
($ thousands)
Performing (Stage 1 and 2)
Loans	$	136,745		$	132,531		$	129,364		6	%
Committed by undrawn credit exposures and letters of credit		4,012			4,167			2,749		46
		140,757			136,698			132,113		7
Loans - Impaired (Stage 3)		93,951			94,597			43,199		117
Total	$	234,708		$	231,295		$	175,312		34	%

Performing loan allowance

The performing loan allowance is estimated based on 12-month expected credit losses (ECL) for loans in Stage 1, while loans in Stage 2 require the recognition of lifetime ECL. The proportion of performing loans in Stage 2 at the end of the fourth quarter was 15%, up from 13% last year and last quarter, primarily driven by higher watchlist loans this quarter, reflecting the impact of sustained higher interest rates and overall economic conditions which continue to increase borrower delinquencies.

The performing loan allowance of $141 million increased 7% ($9 million) from the prior year and 3% ($4 million) from the prior quarter, primarily reflecting a larger loan balance and higher default rates, partially offset by improvements in forecast macroeconomic conditions.

Key economic variables incorporated into our ECL models are inherently prone to volatility on a forward-looking basis. Hindsight cannot be used, so while evolving macroeconomic assumptions may result in future forecasts that differ from those used in the ECL estimation as at October 31, 2024, those changes will be reflected in future periods.

In estimating the performing loan allowance, where required, we supplement our modeled ECL to reflect expert credit judgments. These expert credit judgements incorporate the estimated impact of factors that are not fully captured through our modeled ECL.

Impaired loan allowance

The allowance for impaired loans (Stage 3) was $94 million, compared to $43 million last year and $95 million last quarter. To determine allowances for impaired loans, we establish estimates through detailed analysis of both the overall quality and ultimate marketability of the security held against each impaired account on a case-by-case basis.

Provision for credit losses

The current quarter provision for credit losses on total loans as a percentage of average loans was 43 basis points, compared to 11 basis points last year and 59 basis points last quarter.

	For the three months ended											Change from October 31   2023		For the year ended						Change from October 31   2023
(unaudited) (as a % of average loans)	October 31 2024			July 31 2024					October 31 2023					October 31 2024				October 31 2023
Provision for credit losses on impaired loans		0.38	%		0.57	%			0.08	%		30	bp	0.34		%		0.04	%	30	bp
Provision for credit losses on performing loans		0.05			0.02				0.03			2		0.03				0.03		-
Total		0.43			0.59				0.11			32	bp	0.37				0.07		30	bp
Write-offs		0.40			0.17				0.16			24		0.22				0.10		12

bp – basis point

The impaired loan provision for credit losses in the fourth quarter was $36 million, compared to $7 million last year and $53 million last quarter. Compared to last year, the increase in the impaired loan provision for credit losses reflects an increase in borrower default rates and the emergence of lower realization values. On a sequential quarter basis, the prior quarter impaired loan provision included the impact of two impaired loans, where the circumstances which gave rise to the impaired loan provisions were unique to those exposures. On a year-to-date basis, the prior year impaired loan provision of four basis points was significantly below our normal historical experience and included the impact of the reversal of a previously impaired loan write-off recognized in the first quarter last year.

The fourth quarter performing loan provision for credit losses was $4 million compared to $3 million in the same quarter last year and $2 million last quarter. For further details on the estimation of the performing loan allowance, see the Performing loan allowance section.

Deposits and Funding

Total deposits of $33.4 billion were consistent with last year and last quarter. Franchise deposits increased 5% ($1.0 billion) from last year and 3% ($0.7 billion) compared to last quarter.

		As at									Change from October 31  2023
(unaudited)			October 31 2024			July 31 2024			October 31 2023
(millions)
CWB Financial Group franchise deposits
Demand and notice		$	13,822		$	13,350		$	13,767		-		%
Term			7,931			7,678			6,978		14
			21,753			21,028			20,745		5
Broker term			8,377			8,818			9,187		(9)
Capital markets			3,308			3,557			3,396		(3)
Total deposits		$	33,438		$	33,403		$	33,328		-		%

Q4 2024 vs. Q4 2023

On an annual basis our teams grew our strategically focused franchise deposits by 5%, which now represent 65% of total deposits, up from 62% last year. Demand and notice deposits remained relatively consistent with the prior year as new client growth was offset by the decline in existing customer account balances over the past year as clients deployed excess savings. For clients that retained excess savings, we noted a continued preference for term deposits in the current interest rate environment.

Capital market deposits remained relatively consistent with the prior year and continue to represent 10% of total deposits.

Very strong franchise deposit growth resulted in a 9% decline in broker-sourced deposits, which now represent 25% of total deposits, compared to 28% last year. While our preference is to raise relationship-based franchise deposits, the broker deposit market continues to be a deep and efficient source to raise insured fixed term retail deposits and has proven to be a reliable and effective way to access funding and liquidity over a wide geographic base. At times broker-sourced deposits also reflect a lower relative cost compared to other funding options. We raise only fixed term broker deposits, with terms to maturity between one and five years.

Q4 2024 vs. Q3 2024

Franchise deposits increased 3% sequentially and reflected strong growth across our diverse franchise deposit channels.

Capital market deposits decreased 7% from the prior quarter, as a senior deposit note maturity in the current quarter was replaced by a prior quarter issuance. Strong franchise deposit growth supported a 5% sequential decline in broker term deposits.

Capital Management

OSFI requires Canadian financial institutions to manage and report regulatory capital in accordance with the Basel III capital management framework. We currently report regulatory capital ratios using the Standardized approach for calculating risk-weighted assets, which requires us to carry significantly more capital for certain of our credit exposures compared to requirements under the Advanced Internal Ratings Based (AIRB) methodology. For this reason, regulatory capital ratios of banks that utilize the Standardized approach are not directly comparable with the large Canadian banks and other financial institutions that utilize the AIRB methodology. Our required minimum regulatory capital ratios, including a 250 basis point capital conservation buffer, are 7.0% CET1, 8.5% Tier 1 and 10.5% Total capital.

Subordinated debentures

On January 29, 2024, we issued $250 million of non-viability contingent capital (NVCC) subordinated debentures, which qualify as Tier 2 regulatory capital. The subordinated debentures have a fixed annual interest rate of 5.949% until January 29, 2029. Thereafter, the rate will be set quarterly at the daily Canadian Overnight Repo Rate (CORRA) plus 273 basis points until maturity on January 29, 2034. This issuance replaced the Series F NVCC subordinated debentures, which we redeemed for cash on June 11, 2024. The Series F debentures were redeemed for an aggregate amount of $255 million representing the principal amount plus accrued interest.

Preferred Shares

On November 28, 2024, we held a special meeting of holders of First Preferred Share Series 5 (Series 5), and First Preferred Share Series 9 (Series 9) where amendments to the bylaws of CWB were approved. The amendments make the Series 5 and Series 9 preferred shares exchangeable, at the option of CWB and exercisable for a period of 180 days following the successful close of the NBC transaction, into new First Preferred Shares of NBC having substantially the same rights, privileges, restrictions and conditions as the Series 5 and Series 9 preferred shares.

Limited Recourse Capital Notes (LRCNs)

On November 28, 2024, we obtained consent from the holders of both CWB NVCC LRCN Series 1 (Series 1) and NVCC LRCN Series 2 (Series 2) to amend the respective trust indentures to make the Series 1 and Series 2 notes redeemable, at the option of CWB and exercisable for a period of 180 days following the successful close of the transaction and with the prior approval of OSFI, at a price equal to the aggregate of (i) the principal amounts to be redeemed, and (ii) any accrued and unpaid interest.

Regulatory Capital and Capital Adequacy Ratios

(unaudited)					As at October 31 2024			As at July 31  2024			As at October 31  2023
(millions)
Regulatory capital
CET1 capital before deductions				$	3,708		$	3,672		$	3,496
Net CET1 deductions					(336)			(335)			(339)
CET1 capital					3,372			3,337			3,157
Tier 1 capital					3,947			3,912			3,732
Total capital					4,611			4,571			4,388
Risk-weighted assets					32,803			32,757			32,536
Capital adequacy ratios  CET1					10.3	%		10.2	%		9.7	%
Tier 1					12.0			11.9			11.5
Total					14.1			14.0			13.5
Leverage ratio					8.9			9.0			8.5

Changes in Capital Ratios

Our CET1 capital ratio of 10.3% increased 60 basis points compared to last year and 10 basis points compared to last quarter. Compared to the prior year and prior quarter, the increase in CET1 capital ratio is primarily due to the impact of retained earnings growth and higher accumulated other comprehensive income associated with a continued increase in the fair value of debt securities measured at FVOCI, partially offset by risk-weighted asset growth.

The Tier 1 capital ratio of 12.0% increased 50 basis points from last year and 10 basis points compared to last quarter. The Total capital ratio of 14.1% increased 60 basis points from last year and 10 basis points from last quarter. The increase in both the Tier 1 and Total capital ratio compared to last year and last quarter primarily reflect the proportional impact of the same factors noted above.

ATM Program

Our ATM program, which expired on July 1, 2024, allowed the periodic issuance up to a total of $150 million of common shares, at our discretion and if needed, at the prevailing market price, under a prospectus supplement to the CWB short-form base shelf prospectus.

(unaudited)	For the three months ended						For the year ended
(thousands, except share amounts)		October 31 2024		July 31 2024		October 31 2023		October 31 2024		October 31 2023
Common shares issued		-		-		-		-		1,834,595
Average price per share	$	-	$	-	$	-	$	-	$	24.53
Gross proceeds		-		-		-		-		44,998
Net proceeds^(1)		-		-		-		-		44,253

^(1)	Gross proceeds less sales commissions and other issuance costs.

Dividends and LRCN Distributions

Common shareholders received a quarterly cash dividend of $0.35 per common share on September 12, 2024. On December 5, 2024, our Board of Directors declared a cash dividend of $0.36 per common share, payable on January 2, 2025, to shareholders of record on December 18, 2024. This quarterly dividend is up two cents, or 6%, from the dividend declared last year and up one cent, or 3%, from last quarter.

On May 1, 2024, we reset the annual dividend rate for Series 5 and Series 9 preferred shares to 6.371% and 7.651%, respectively. The new annual dividend rates reflect the five-year Government of Canada Bond Yield as at April 1, 2024 plus 276 basis points for Series 5 preferred shares and 404 basis points for Series 9 preferred shares. Consistent with the dividend paid to preferred shareholders on October 31, 2024, and consistent with the new effective quarterly dividend rates, the Board of Directors also declared cash dividends of $0.3981875 per Series 5 and $0.4781875 per Series 9 preferred shares, all payable on January 31, 2025 to shareholders of record on January 24, 2025.

On October 31, 2024, Series 1 note holders received a semi-annual coupon payment of $30 per $1,000 principal amount of notes outstanding, reflecting a total payment of $5 million, recorded in common shareholders' net income on an after-tax basis and consistent with the prior year. On July 31, 2024, Series 2 note holders received a semi-annual coupon payment of $25 per $1,000 principal amount of notes outstanding, reflecting a total payment of $4 million.

Further information related to our capital position is provided in Note 15 of the audited consolidated financial statements for the year ended October 31, 2024.

Condensed Financial Statements - Consolidated Balance Sheets

								As at October 31 2024			As at   July 31     2024			As at October 31 2023
(unaudited)
($ thousands)
Assets
Cash Resources
Cash and non-interest bearing deposits with financial institutions							$	39,525		$	84,649		$	49,114
Interest bearing deposits with financial institutions								51,143			58,267			149,285
Cheques and other items in transit								31,324			9,949			17,410
								121,992			152,865			215,809
Securities
Issued or guaranteed by Canada								3,104,741			2,612,240			3,268,476
Issued or guaranteed by a province or municipality								1,130,033			1,142,152			440,313
Other securities								272,992			346,709			200,017
								4,507,766			4,101,101			3,908,806
Securities Purchased under Resale Agreements								74,999			-			134,662
Loans
Personal								7,031,409			7,001,567			7,117,829
Business								30,552,294			30,438,229			30,092,021
								37,583,703			37,439,796			37,209,850
Allowance for credit losses								(230,696)			(227,128)			(172,563)
								37,353,007			37,212,668			37,037,287
Other
Property and equipment								211,915			148,599			152,355
Goodwill								138,701			138,701			138,701
Intangible assets								242,691			242,478			241,195
Derivatives								152,688			123,048			109,290
Other assets								330,040			342,598			381,998
								1,076,035			995,424			1,023,539
Total Assets							$	43,133,799		$	42,462,058		$	42,320,103
Liabilities and Equity
Deposits
Personal							$	20,757,703		$	20,612,868		$	19,773,898
Business and government								12,680,008			12,789,954			13,554,551
								33,437,711			33,402,822			33,328,449
Other
Cheques and other items in transit								29,781			32,586			37,831
Derivatives								46,267			59,427			198,596
Other liabilities								1,224,838			929,497			889,401
								1,300,886			1,021,510			1,125,828
Debt
Debt related to securitization activities								3,513,076			3,216,099			3,315,721
Subordinated debentures								522,685			522,490			523,438
								4,035,761			3,738,589			3,839,159
Equity
Preferred shares								250,000			250,000			250,000
Limited recourse capital notes								325,000			325,000			325,000
Common shares								1,016,443			1,014,731			1,007,983
Retained earnings								2,650,371			2,622,022			2,515,719
Share-based payment reserve								27,915			28,319			28,918
Accumulated other comprehensive income (loss)								89,712			59,065			(100,953)
Total Equity								4,359,441			4,299,137			4,026,667
Total Liabilities and Equity							$	43,133,799		$	42,462,058		$	42,320,103

Condensed Financial Statements - Consolidated Statements of Income

		For the three months ended							For the year ended
(unaudited)			October 31 2024			October 31 2023				October 31 2024			October 31 2023
($ thousands, except per share amounts)
Interest Income
Loans		$	624,386		$	617,189			$	2,488,481		$	2,281,621
Securities			42,393			24,474				149,407			72,906
Deposits with financial institutions			1,128			4,227				12,463			10,945
			667,907			645,890				2,650,351			2,365,472
Interest Expense
Deposits			357,304			356,075				1,456,423			1,261,037
Debt			41,311			33,499				151,940			123,158
			398,615			389,574				1,608,363			1,384,195
Net Interest Income			269,292			256,316				1,041,988			981,277
Non-interest Income
Wealth management services			16,207			15,013				64,510			61,202
Credit related			12,877			12,109				47,714			45,187
Trust services			2,651			2,870				11,234			10,723
Retail services			2,513			2,612				10,968			10,442
Gains (losses) on securities, net			3,614			(4)				3,614			(52)
Other			2,348			2,847				3,856			3,795
			40,210			35,447				141,896			131,297
Total Revenue			309,502			291,763				1,183,884			1,112,574
Provision for Credit Losses			39,999			9,841				136,094			26,641
Non-interest Expenses
Salaries and employee benefits			96,971			112,084				369,746			390,164
Premises and equipment			35,482			29,868				139,822			121,727
Other expenses			39,376			25,648				137,500			99,392
			171,829			167,600				647,068			611,283
Net Income before Income Taxes			97,674			114,322				400,722			474,650
Income Taxes			27,208			30,360				104,268			124,001
Net Income			70,466			83,962				296,454			350,649
Preferred share dividends and limited recourse capital note distributions			8,271			7,117				28,572			26,333
Common Shareholders' Net Income		$	62,195		$	76,845			$	267,882		$	324,316
Average number of common shares (in thousands)			96,709			96,398				96,568			96,054
Average number of diluted common shares (in thousands)			97,461			96,416				97,053			96,061
Earnings Per Common Share
Basic		$	0.64		$	0.80			$	2.77		$	3.38
Diluted			0.63			0.80				2.76			3.38

    Condensed Financial Statements - Consolidated Statements of Comprehensive Income

	For the three months ended						For the year ended
(unaudited) ($ thousands)		October 31 2024			October 31 2023			October 31 2024			October 31 2023
Net Income	$	70,466		$	83,962		$	296,454		$	350,649
Other Comprehensive Income, net of tax
Items that will be subsequently reclassified to net income
Debt securities measured at fair value through other comprehensive income
Gains from change in fair value^(1)		9,040			19,997			71,987			65,694
Reclassification to net income, of gains in the period^(2)		(2,689)			(142)			(2,680)			(209)
		6,351			19,855			69,307			65,485
Derivatives designated as cash flow hedges
Gains (losses) from change in fair value^(3)		22,031			(8,276)			90,305			(55,058)
Reclassification to net income, of losses in the period^(4)		2,265			12,001			31,032			32,303
		24,296			3,725			121,337			(22,755)
Items that will not be subsequently reclassified to net income
Unrealized gains (losses) on equity securities designated at fair value
through other comprehensive income^(5)		-			(20)			21			(986)
		30,647			23,560			190,665			41,744
Comprehensive Income for the Period	$	101,113		$	107,522		$	487,119		$	392,393

^(1)	Net of income tax of $3,344 and $24,544 for the quarter and year ended October 31, 2024, respectively (2023 – $6,224 and $21,458).
^(2)	Net of income tax of $907 and $904 for the quarter and year ended October 31, 2024, respectively (2023 – $73 and $116).
^(3)	Net of income tax of $7,379 and $30,286 for the quarter and year ended October 31, 2024, respectively (2023 –$2,817 and $18,412).
^(4)	Net of income tax of $992 and $10,651 for the quarter and year ended October 31, 2024, respectively (2023 – $3,992 and $10,510).
^(5)	Net of income tax of $nil and $7 for the quarter and year ended October 31, 2024, respectively (2023 – $7 and $303).

Condensed Financial Statements - Consolidated Statements of Changes in Equity

		For the year ended
(unaudited)			October 31 2024		October 31 2023
($ thousands)
Preferred Shares
Balance at beginning and end of year		$	250,000	$	250,000
Limited Recourse Capital Notes
Balance at beginning and end of year			325,000		325,000
Common Shares
Balance at beginning of year			1,007,983		956,061
Issued under dividend reinvestment plan			5,743		6,492
Transferred from share-based payment reserve on the exercise of exchange of options			2,717		432
Issued under at-the-market common equity distribution program			-		44,998
Balance at end of year			1,016,443		1,007,983
Retained Earnings
Balance at beginning of year			2,515,719		2,317,146
Shareholders' net income			296,454		350,649
Dividends and other distributions – Preferred shares and limited recourse capital notes			(28,572)		(26,333)
– Common shares			(133,230)		(124,998)
Issuance costs on at-the-market common equity distribution program			-		(745)
Balance at end of year			2,650,371		2,515,719
Share-based Payment Reserve
Balance at beginning of year			28,918		27,466
Amortization of fair value of options			1,714		1,884
Transferred to common shares on the exercise or exchange of options			(2,717)		(432)
Balance at end of year			27,915		28,918
Accumulated Other Comprehensive Income (Loss)
Debt securities measured at fair value through other comprehensive income
Balance at beginning of year			(56,464)		(121,949)
Other comprehensive income			69,307		65,485
Balance at end of year			12,843		(56,464)
Derivatives designated as cash flow hedges
Balance at beginning of year			(44,427)		(21,672)
Other comprehensive income (loss)			121,337		(22,755)
Balance at end of year			76,910		(44,427)
Equity securities designated at fair value through other comprehensive income
Balance at beginning of year			(62)		924
Other comprehensive income (loss)			21		(986)
Balance at end of year			(41)		(62)
Total Accumulated Other Comprehensive Income (Loss)			89,712		(100,953)
Total Equity		$	4,359,441	$	4,026,667

Condensed Financial Statements - Consolidated Statements of Cash Flows 

						For the year ended
(unaudited)							October 31 2024		October 31 2023
($ thousands)
Cash Flows from Operating Activities
Net income						$	296,454	$	350,649
Adjustments to determine net cash flows:
Provision for credit losses							136,094		26,641
Depreciation and amortization							71,033		62,178
Accrued interest receivable and payable, net							56,883		116,970
Deferred income taxes, net							12,706		(550)
Amortization of fair value of employee stock options							1,714		1,884
(Gains) losses on securities, net							(3,614)		52
Current income taxes receivable and payable, net							(14,369)		38,708
Change in operating assets and liabilities:
Derivative collateral receivable and payable, net							201,870		(56,200)
Debt related to securitization activities, net							197,355		231,630
Deposits, net							109,262		317,987
Securities purchased under resale agreements, net							59,663		(134,662)
Loans, net							(450,297)		(1,323,065)
Securities sold under repurchase agreements, net							-		(247,354)
Other items, net							10,229		73,706
Net Cash from (used in) Operating Activities							684,983		(541,426)
Cash Flows from Financing Activities
Debentures issued, net of issuance costs							249,031		149,160
Debentures redeemed							(250,000)		-
Dividends and limited recourse capital note distributions							(156,059)		(144,839)
Repayment of lease liabilities, net of tenant allowances received							(16,398)		(15,841)
Common shares issued, net of issuance costs							-		44,253
Net Cash from (used in) Financing Activities							(173,426)		32,733
Cash Flows from Investing Activities
Interest bearing deposits with financial institutions, net							98,142		(122,452)
Securities, purchased							(8,510,001)		(2,615,355)
Securities, sale proceeds							2,389,240		284,891
Securities, matured							5,655,526		3,013,124
Property, equipment and intangible assets							(132,089)		(78,781)
Net Cash from (used in) Investing Activities							(499,182)		481,427
Change in Cash and Cash Equivalents							12,375		(27,266)
Cash and Cash Equivalents at Beginning of Year							28,693		55,959
Cash and Cash Equivalents at End of Year *						$	41,068	$	28,693
* Represented by:
Cash and non-interest bearing deposits with financial institutions						$	39,525	$	49,114
Cheques and other items in transit (included in Cash Resources)							31,324		17,410
Cheques and other items in transit (included in Other Liabilities)							(29,781)		(37,831)
Cash and Cash Equivalents at End of Year						$	41,068	$	28,693
Supplemental Disclosure of Cash Flow Information
Interest and dividends received						$	2,583,903	$	2,359,639
Interest paid							1,537,470		1,237,215
Income taxes paid							180,232		104,571

SOURCE Canadian Western Bank

FOR FURTHER INFORMATION CONTACT: Chris Williams, MBA, AVP, Investor Relations, Phone: [phone], Email: [email protected]