Canadian Western Bank : Shareholders Report (PDF, 2.1MB)

CWB reports first quarter 2022 financial and strategic performance

First Quarter 2022

Highlights (compared to the same period in the prior year)

Diluted earnings

Total revenue

Pre-tax, pre-

Loans(2)

Branch-raised

per share (EPS)

provision income(1)

deposits(1)

$0.97

$266 million

$137 million

$33.4 billion

$19.7 billion

Up 7%

Up 9%

Up 5%

Up 9% in total;

Up 12%

Up 10% in Ontario

Edmonton, February 25, 2022 - CWB Financial Group (TSX: CWB) (CWB) announced financial performance for the three months ended January 31, 2022, with first quarter pre-tax,pre-provision income up 12% from the previous quarter. Net income available to common shareholders of $88 million was down 3% sequentially and adjusted earnings per common share(1) of $0.99 declined 4%, primarily due to an increase in the provision for credit losses from the abnormally low level in the previous quarter. Our Board of Directors declared a cash dividend of $0.30 per common share, up one cent from the dividend declared last year and consistent with last quarter.

"Execution of our winning strategy focused on business owners continues to drive accelerated growth of full- service clients, as our teams leverage our expanding products, capabilities, and brand presence in Ontario." said Chris Fowler, President and CEO. "Our new lending volume remained strong this quarter. While our net loan growth was constrained by an elevated level of payouts and paydowns, the strength of our lending pipelines gives us confidence that we remain on track to deliver double-digit loan growth for the year."

"We're pleased to be recognized by Great Place to Work Canada® as a 2022 Best WorkplaceTM for Hybrid Work this quarter, as we have been agile to adapt and remain a destination for top talent in an evolving and competitive environment. We have also finalized plans for some exciting new locations that position CWB as a growing forcein our core markets with spaces designed to support a differentiated experience for our clients and our teams. Building on our strong growth in Ontario, in addition to our previously announced Markham location opening in 2022, we plan to open a new banking centre in Toronto's financial district in 2023 that will consolidate our local wealth management and banking teams into one location. We also plan to transition to a new corporate head office location in downtown Edmonton's Ice District in 2026. These modern and exciting spaces will meet the evolving expectations of our high-performing teams for more collaborative and flexible workspaces, give us prominent signage in desirable locations to continue expanding our brand awareness, and support the continuedgrowth of our market share."

1. Non-GAAPmeasure - refer to definitions and detail provided on page 6.
2. Excludes the allowance for credit losses.

CWB 2022 First Quarter Report

Financial Performance

			Common shareholders' net income of $88 million	Up 11%
	Q1 2022,		Diluted EPS of $0.97	Up 7%
	compared to		Adjusted EPS of $0.99	Up 6%
	Q1 2021(1)		Adjusted return on common shareholders' equity (ROE) of 11.8%	Up 30 bp
			Efficiency ratio of 48.5%	Up 170 bp(2)

Compared to the same quarter last year, common shareholders' net income increased as revenue growth and a decline in the provision for credit losses more than offset non-interest expense growth. In line with our strategy, accelerated growth of full-service client relationships was the primary driver of very strong branch-raised deposit(1) growth of 12%. Pre-tax,pre-provision income was up 5%, supported by an 8% increase in net interest income, reflecting the benefit of 9% loan growth, partially offset by a 13% increase in non-interest expenses, primarily due to continued investment in our people and technology infrastructure to support strategic execution. The provision for credit losses on total loans as a percentage of average loans(1) was seven basis points lower than the same quarter last year primarily due to a lower impaired loan provision, which at 12 basis points remained well below our historical five-year average of 19 basis points. The performing loan provision represented a one basis point recovery compared to a six basis point recovery last year due to a more stable macroeconomic outlook in the current quarter. To support strong loan growth while prudently managing our regulatory capital ratios, we have issued common shares for net proceeds of $99 million since the launch of our at-the-market (ATM) common equity distribution program in the third quarter of 2021, including $28 million issued this quarter.

			Common shareholders' net income of $88 million	Down 3%
	Q1 2022,		Diluted EPS of $0.97	Down 4%
	compared to		Adjusted EPS of $0.99	Down 4%
	Q4 2021(1)		Adjusted ROE of 11.8%	Down 70 bp
			Efficiency ratio of 48.5%	Down 440 bp

Compared to the prior quarter, common shareholders' net income declined as revenue growth and lower non- interest expenses were more than offset by an increase in the provision for credit losses. Branch-raised deposits increased 2%, with very strong growth from our banking centres, partially offset by a decline in Motive Financial deposits. Pre-tax,pre-provision income increased 12%, supported by 2% revenue growth and a 7% decrease in non-interest expenses, primarily due to the expected seasonal decline in certain expenses and the timing of ongoing strategic execution activities, which will ramp up as we move through the remainder of the year. The provision for credit losses on total loans as a percentage of average loans was 23 basis points higher on a sequential basis due to the combined impact of a higher impaired loan provision and a lower performing loan provision recovery this quarter. Last quarter, we recognized an abnormally low impaired loan provision for credit losses, which reflected the partial reversal of provisions related to previously impaired loans that were resolved with lower than expected realized losses.

1. Adjusted EPS, adjusted ROE, efficiency ratio, branch-raised deposits, and the provision for credit losses on total loans as a percentage of average loans are non-GAAP measures. Refer to definitions and detail provided on page 6.
2. A decrease in the efficiency ratio reflects improved efficiency. bp - basis point

Strategic Performance

We continue to transform our capabilities to offer a superior full-service client experience through a complete range of in-person and digital channels. These expanded capabilities, delivered by our highly engaged and client- centric teams, have accelerated growth of full-service client relationships in specifically targeted segments that fit within our strategic growth objectives and prudent risk appetite. Our strategic execution, with current period highlights noted below, will enable us to continue to deliver strong growth of full-service client relationships and capitalize on the opportunities available to us as we continue to expand our presence in the Ontario market. This quarter, we:

• finalized plans to expand our presence and market share in Ontario supported by new banking centres expected to open in Markham in 2022 and downtown Toronto in 2023, which will also consolidate our local wealth management and banking teams into one location to support further collaboration and full-service client growth;
• progressed towards the launch of our digital banking platform later this year for personal, small business and commercial clients. The new platform will provide enhanced functionality, including integration with the
  Virtual COO solution for small business owners once fully launched, and recognizes business owners' desire to conduct their banking in one place by providing a single point of access and seamless navigation between business and personal accounts; and,
• were recognized by Great Place to Work Canada® as a 2022 Best WorkplaceTM for Hybrid Work, reflecting our commitment to advance a culture that puts people first and supports our position as a destination for top talent.

CWB 2022 First Quarter Report

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About CWB Financial Group

CWB Financial Group (CWB) is the only full-service financial institution in Canada with a strategic focus to meet the unique financial needs of businesses and their owners. We provide nation-widefull-service business and personal banking, specialized financing, comprehensive wealth management offerings, and trust services. Our teams deliver a uniquely proactive and differentiated level of service to clients in targeted industries where we have deep expertise. Clients choose CWB for our highly personalized service, specialized expertise, customized solutions and faster response times.

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 2022 First Quarter Results Conference Call

CWB's first quarter results conference call is scheduled for Friday, February 25, 2022, at 1:00 p.m. ET (11:00 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 (888) 390-

0546 (toll-free) and entering passcode: 51047947. 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 March 4, 2022 by dialing [phone] (Toronto) or 1 [phone](toll-free) and entering passcode: 047947#.

FOR FURTHER INFORMATION CONTACT:

Chris Williams, MBA

AVP, Investor Relations

Phone: [phone]

Email:[e-mail]

			Selected Financial Highlights	4
	Contents		Management's Discussion and Analysis	5
		Interim Consolidated Financial Statements	19
			Shareholder Information	39

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Selected Financial Highlights

			For the three months ended			Change from
(unaudited)		January 31				October 31		January 31		January 31
(thousands, except per share amounts)		2022				2021		2021		2021
Results from Operations
Net interest income	$	233,072			$	229,925	$	215,453		8	%
Non-interest income		32,904				30,699		29,635		11
Total revenue		265,976				260,624		245,088		9
Pre-tax,pre-provision income(1)		137,110				122,747		130,474		5
Common shareholders' net income		87,642				89,998		79,237		11
Common Share Information
Earnings per common share
Basic	$	0.98			$	1.01	$	0.91		8	%
Diluted		0.97				1.01		0.91		7
Adjusted(1)		0.99				1.03		0.93		6
Cash dividends		0.30				0.29		0.29		3
Book value		33.64				33.10		32.24		4
Closing market value		38.63				39.59		28.45		36
Common shares outstanding (thousands)		90,203				89,390		87,101		4
Performance Measures(1)
Return on common shareholders' equity		11.6		%		12.2	%	11.3	%	30	bp
Adjusted return on common shareholders' equity		11.8				12.5		11.5		30
Return on assets		0.93				0.97		0.91		2
Net interest margin		2.47				2.47		2.47		-
Efficiency ratio		48.5				52.9		46.8		170
Operating leverage		(3.9)			(4.4)		(3.0)		(90)
Credit Quality(1)
Provision for credit losses on total loans as a percentage of average loans(2)		0.11				(0.12)		0.18		(7)
Provision for credit losses on impaired loans as a percentage of average loans(2)		0.12				(0.04)		0.24		(12)
Balance Sheet
Assets	$	37,684,907			$	37,323,176	$	35,301,768		7	%
Loans(3)		33,364,006				32,900,951		30,566,902		9
Deposits		30,302,691				29,975,739		28,635,312		6
Debt		3,041,667				3,015,065		2,572,638		18
Shareholders' equity		3,609,475				3,533,885		3,373,145		7
Off-Balance Sheet
Wealth management(4)
Assets under management and administration		8,689,298				8,687,136		7,219,698		20
Assets under advisement(5)		2,185,748				2,067,069		1,916,353		14
Assets under administration - other(6)		14,421,779				14,031,042		11,971,322		20
Capital Adequacy(7)
Common equity Tier 1 ratio		9.0		%		8.8	%	8.8	%	20	bp
Tier 1 ratio		10.9				10.8		10.8		10
Total ratio		12.5				12.4		12.6		(10)
Other
Number of full-time equivalent staff		2,643				2,617		2,498		6	%

1. Non-GAAPmeasure - refer to definitions and detail provided on page 6.
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. Certain comparative figures have been reclassified to conform with the current period's presentation.
5. Primarily comprised of assets under advisement related to our Indigenous Services wealth management business.
6. Comprised of trust assets under administration, third-party leases under administration and loans under service agreements.
7. Calculated using the Standardized approach in accordance with guidelines issued by the Office of the Superintendent of Financial Institutions Canada (OSFI). bp - basis point

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Management's Discussion and Analysis

This Management's Discussion and Analysis (MD&A), dated February 24 2022, should be read in conjunction with the unaudited condensed interim consolidated financial statements of Canadian Western Bank (CWB) for the period ended January 31, 2022, available on SEDAR at www.sedar.comand on CWB's website at www.cwb.com.

The consolidated interim consolidated financial statements have been prepared under International Accounting Standard 34 Interim Financial Reporting in accordance with International Financial Reporting Standards (IFRS) 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 market conditions, 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, transition to the Advanced Internal Ratings Based (AIRB) approach for regulatory capital purposes, legislative and regulatory developments, legal developments, the level of competition, the occurrence of natural catastrophes, outbreaks of disease or illness that affect local, national or international economies, supply chain disruptions, 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, 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 sections of our 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. The impact that COVID-19, including the evolving government and public health authority response to the outbreak, will continue to have on the Canadian economy and our business is uncertain and difficult to predict at this time. Where relevant, material economic assumptions underlying forward-looking statements are disclosed within the Outlook and Allowance for Credit Losses sections of this MD&A and our annual MD&A.

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