CWB reports very strong financial performance for fiscal 2018 and a positive 2019 outlook

Strong execution of CWB's Balanced Growth strategy in 2018 with ongoing diversification
Fourth quarter adjusted cash earnings per common share of $0.78, up 5% from 2017
Fiscal 2018 adjusted cash earnings per common share of $3.01, up 14% from 2017

EDMONTON, Dec. 6, 2018 /CNW/ - "CWB's strategic execution and financial performance in fiscal 2018 were both very strong," said Chris Fowler, President and CEO. "Our focus is on business owners, and we delivered a return to double-digit loan growth across our broader geographic footprint with increased industry diversification. This continued the significant progress we have made over the past several years to fundamentally transform CWB's geographic reach and expand our future growth opportunities. Alongside ongoing balanced growth and diversification of loans and funding, we have materially increased our capabilities to support full-service client relationships, made significant progress toward the upcoming transformation of our capital and risk management processes, and worked to ensure our ongoing technology investments and focused business transformation position us to meet the rapid pace of change within our industry. All of this has made CWB more resilient to regional challenges, and better equipped to create long-term value for stakeholders throughout the business cycle."

"Turning back to our very strong fiscal 2018 financial results, we started the year with a strategic and highly accretive acquisition of business lending assets. The acquired portfolio delivered exactly the performance we expected. Alongside accelerating market share gains within CWB's established lines of business, the acquisition contributed approximately one fifth of the 13% increase in outstanding loans. Strong growth enabled us to achieve record total revenues, record pre-tax, pre-provision income and positive operating leverage. Growth of adjusted cash earnings per common share was well ahead of our medium-term target, and we delivered a material improvement in return on common shareholders' equity. We also maintained strong credit quality, and increased our annual common share dividend for the 26th consecutive year."

"Looking ahead, CWB is well-positioned to continue to execute our Balanced Growth strategy in 2019, and I am confident in our ability to deliver strong financial performance consistent with our medium-term targets. We are carefully monitoring developments related to volatile energy commodity prices, including the potential economic impacts of very low prices for Alberta heavy oil and production curtailments. Coming out of the recent period of sustained low oil prices, CWB's total balance of non-syndicated loans to oil and gas producers is immaterial at less than 0.1% of our overall portfolio. Lending to producers exposed to Western Canadian Select comprises less than 0.05% of the total loan book. Our overall portfolio of Alberta-based loans now represents 32% of total loans, down from 41% in fiscal 2014. As always, lending exposures across our portfolio are well-secured and well-diversified, and we are confident in our conservative underwriting."

"As we close fiscal 2018, I want to thank our people for their passion and commitment to help both our clients and CWB achieve our collective strategic goals. Today, we have an incredible opportunity to create exceptional full-service client experiences for business owners across Canada. There is no doubt in my mind that CWB's future looks more exciting than ever before. Thanks to our tremendous teams, I am very confident in our ability to achieve our full potential together."  

Fourth Quarter Fiscal 2018 Highlights⁽¹⁾ (compared to the same period in the prior year)

• Very strong performance, with common shareholders' net income of $65 million, up 6% and pre-tax, pre-provision income of $111 million, up 7%.
• Diluted and adjusted cash earnings per common share of $0.72 and $0.78, up 6% and 5%, respectively.
• Adjusted for the impact of gains on sale related to the CWT strategic transactions in both periods, growth of adjusted cash earnings per common share was approximately 15%.
• Total revenue of $209 million, up 7%, with double-digit growth of net interest income partially offset by lower non-interest income.
• Strong credit quality, with a provision for credit losses as a percentage of average loans of 19 basis points, down from 20 basis points last year and 21 basis points last quarter.
• Very strong Basel III common equity Tier 1 (CET1) regulatory capital ratio of 9.2% under the Standardized approach for calculating risk-weighted assets.

Selected Financial Highlights  

Full-year Fiscal 2018 Highlights⁽¹⁾ (compared to fiscal 2017)

• Very strong performance with common shareholders' net income of $249 million, up 16%, and pre-tax, pre-provision income of $436 million, up 12%.
• Diluted and adjusted cash earnings per common share of $2.79 and $3.01, up 15% and 14%, respectively. The business lending assets acquired on January 31, 2018, contributed approximately $0.10 of adjusted cash earnings per common share.
• Total revenue of $803 million, up 11%, with 13% growth of net interest income.
• Positive operating leverage of 1.9%, reflecting strong business growth and efficient execution of CWB's focused business transformation initiatives.
• Very strong loan growth of 13%, including 3% from the acquisition of business lending assets on January 31, 2018. Loan growth included expansion in every province, with the strategically targeted general commercial and equipment financing and leasing categories accounting for 68% of the increase from last year.
• Continued execution of CWB's Balanced Growth strategy for funding diversification, including record issuance of senior deposit notes in capital markets, growth of securitization, and continued growth of branch-raised deposits.
• Provision for credit losses as a percentage of average loans of 20 basis points, down from 23 basis points.
• Gross impaired loans represented 0.53% of total loans, down from 0.72% last year and unchanged from last quarter.
• Increased CWB's annual common share dividend for the 26^th consecutive year.

Execution of CWB Financial Group's Balanced Growth Strategy

Balanced Growth objective	Strategic execution during fiscal 2018
Full-service client growth with a focus on business owners, including further geographic and industry diversification	Very strong 13% annual loan growth, including 9% growth in both B.C. and Alberta, and 27% growth in Central and Eastern Canada Increased the proportion of loan portfolio in Central and Eastern Canada to 26% Increased business diversification with 18% overall growth of general commercial loans, and 23% growth of equipment loans and leases
Growth and diversification of funding sources	Growth in debt capital markets funding with five successful senior deposit note issuances or re-openings totaling $1.1 billion over the past 12 months Growth in securitization funding for both equipment loans and leases and residential mortgages Growth of branch-raised deposits Decrease in broker deposits as a proportion of total funding
Optimized capital and risk management processes through transition to the Advanced Internal Ratings Based Approach (AIRB)	On track to apply in fiscal 2019 for transition to the AIRB approach

 

Fiscal 2018 Financial Performance Compared to Medium-term (3-5 year) Target Ranges

CWB's performance target ranges for key financial metrics reflect the objectives embedded within CWB's Balanced Growth strategy and a time horizon consistent with the longer-term interests of CWB's shareholders. These targets are based on expectations for performance under the more conservative Standardized approach for risk and capital management, moderate economic growth and a relatively stable interest rate environment in Canada over the three- to five-year forecast horizon. CWB's target ranges are presented in the following table:

Key Metrics(1)	Medium-term Performance Target Ranges	Fiscal 2018 Performance
Adjusted cash earnings per common share growth	7 - 12%	Delivered 14%
Adjusted return on common shareholders' equity	12 - 15%	Delivered 11.9%, up 90 basis points from fiscal 2017
Operating leverage	Positive	Delivered positive 1.9%
Common equity Tier 1 capital ratio under the Standardized approach	Strong	Maintained a very strong ratio of 9.2%
Common share dividend payout ratio(2)	~30%	Delivered 36%, with an 8% increase to the annual common share dividend, and a higher annual dividend for the 26th consecutive year

(1)	Refer to definitions following the table of Selected Financial Highlights on page 4.
(2)	Common share dividend payout ratio is calculated as common share dividends declared during the past twelve months divided by common shareholders' net income earned over the same period.

 

	For the three months ended									Change from		For the year ended						Change from
(unaudited) ($thousands, except per share amounts)		October 31 2018			July 31 2018			October 31  2017		October 31 2017			October 31 2018			October 31  2017		October 31 2017
Results from Operations
Net interest income	$	189,093		$	186,644		$	170,494		11	%	$	724,990		$	642,390		13		%
Non-interest income		19,473			18,345			24,628		(21)			78,368			84,245		(7)
Total revenue		208,566			204,989			195,122		7			803,358			726,635		11
Pre-tax, pre-provision income(1)		111,182			110,695			103,902		7			436,188			388,729		12
Common shareholders' net income		64,501			62,362			60,833		6			249,256			214,277		16
Earnings per common share
Basic		0.73			0.70			0.69		6			2.81			2.43		16
Diluted		0.72			0.70			0.68		6			2.79			2.42		15
Adjusted cash(2)		0.78			0.75			0.74		5			3.01			2.63		14
Return on common shareholders' equity(3)		11.1	%		10.8	%		11.2	%	(10)	bp(10)		11.0	%		10.1	%	90		bp(10)
Adjusted return on common shareholders'
equity(4)		11.9			11.7			12.0		(10)			11.9			11.0		90
Return on assets(5)		0.89			0.88			0.94		(5)			0.89			0.85		4
Efficiency ratio(6)		46.7			46.0			46.8		(10)			45.7			46.5		(80)
Net interest margin(7)		2.61			2.64			2.63		(2)			2.60			2.56		4
Operating leverage(8)		0.1			(1.4)			1.0		(90)			1.9			0.3		160
Provision for credit losses as a
percentage of average loans		0.19			0.21			0.20		(1)			0.20			0.23		(3)
Number of full-time equivalent staff		2,178			2,173			2,058		6	%		2,178			2,058		6		%
Per Common Share
Cash dividends	$	0.26		$	0.25		$	0.24		8	%	$	1.00		$	0.93		8		%
Book value		26.09			25.87			24.82		5			26.09			24.82		5
Closing market value		30.62			36.49			36.34		(16)			30.62			36.34		(16)
Common shares outstanding (thousands)		88,952			88,917			88,494		1			88,952			88,494		1
Balance Sheet and Off-Balance Sheet
Summary
Assets	$	29,021,463		$	28,170,077		$	26,447,453		10	%
Loans		26,204,599			25,537,677			23,229,239		13
Deposits		23,699,957			22,821,967			21,902,982		8
Debt		2,007,854			2,060,974			1,476,336		36
Shareholders' equity		2,585,752			2,565,192			2,461,045		5
Assets under administration		8,368,716			8,315,137			10,408,012		(20)
Assets under management		2,100,802			2,227,293			2,114,861		(1)
Capital Adequacy(9)
Common equity Tier 1 ratio		9.2	%		9.3	%		9.5	%	(30)	bp(10)
Tier 1 ratio		10.3			10.5			10.8		(50)
Total ratio		11.9			12.1			12.5		(60)

(1)	Pre-tax, pre-provision income is calculated as total revenue less non-interest expenses, excluding the pre-tax amortization of acquisition-related intangible assets.
(2)	Adjusted cash earnings per common share is calculated as diluted earnings per common share excluding the amortization of acquisition-related intangible assets and contingent consideration fair value changes, net of tax. Excluded items are not considered to be indicative of ongoing business performance.
(3)	Return on common shareholders' equity is calculated as common shareholders' net income divided by average common shareholders' equity.
(4)	Adjusted return on common shareholders' equity is calculated as common shareholders' net income excluding the amortization of acquisition-related intangible assets and contingent consideration fair value changes, net of tax, divided by average common shareholders' equity.
(5)	Return on assets is calculated as common shareholders' net income divided by average total assets.
(6)	Efficiency ratio is calculated as non-interest expenses, excluding the pre-tax amortization of acquisition-related intangible assets, divided by total revenue.
(7)	Net interest margin is calculated as net interest income divided by average total assets.
(8)	Operating leverage is calculated as the growth rate of total revenue less the growth rate of non-interest expenses, excluding the pre-tax amortization of acquisition-related intangible assets.
(9)	Capital adequacy is calculated in accordance with Basel III guidelines issued by the Office of the Superintendent of Financial Institutions Canada (OSFI).
(10)	bp – basis point change.

 

Non-IFRS Measures
CWB uses a number of financial measures to assess its performance. These measures provide readers with an enhanced understanding of how management views the results. Non-IFRS measures may also provide readers the ability to analyze trends and provide comparisons with our competitors. These non-IFRS measures do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other financial institutions.

Of note, commencing in the first quarter of 2018, CWB discontinued the use of the taxable equivalent basis (teb) non-IFRS measure as it is no longer of material significance to CWB's results. Previously, teb increased interest income and the provision for income taxes to what they would have been had certain tax-exempt securities been taxed at the statutory rate. Comparative figures have been restated to conform to the current period presentation.

Financial Summary

Forward-looking Statements

From time to time, CWB makes written and verbal forward-looking statements. Statements of this type are included in the Annual Report and reports to shareholders and may be included in filings with Canadian securities regulators or in other communications such as press releases and corporate presentations. Forward-looking statements include, but are not limited to, statements about CWB's 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 management's predictions, forecasts, projections, expectations and conclusions will not prove to be accurate, that its assumptions may not be correct and that its strategic goals will not be achieved.

A variety of factors, many of which are beyond CWB's 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 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, legislative and regulatory developments, legal developments, the level of competition, the occurrence of natural catastrophes, changes in accounting standards and policies, information technology and cyber risk, the accuracy and completeness of information CWB receives 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 management's 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 this Management's Discussion and Analysis (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 CWB's actual results to differ materially from the expectations expressed in such forward-looking statements. Unless required by securities law, CWB does not undertake to update any forward-looking statement, whether written or verbal, that may be made from time to time by it or on its behalf.

Assumptions about the performance of the Canadian economy over the forecast horizon and how it will affect CWB's businesses are material factors considered when setting organizational objectives and targets. In determining expectations for economic growth, CWB primarily considers economic data and forecasts provided by the Canadian government and its agencies, as well as an average of 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 Outlook sections of CWB's annual MD&A. 

This financial summary, dated December 5, 2018, should be read in conjunction with Canadian Western Bank's (CWB) unaudited interim consolidated financial statements for the period ended October 31, 2018 and the audited consolidated financial statements and Management's Discussion and Analysis (MD&A) for the year ended October 31, 2017, available on SEDAR at www.sedar.com and the CWB's website at www.cwb.com. The 2018 Annual Report, including MD&A and audited consolidated financial statements, for the year ended October 31, 2018 is expected to be available on both SEDAR and CWB's website on December 6, 2018. The 2018 Annual Report will be distributed to shareholders in February 2019.

Strategic Transactions

On October 30, 2017, CWB entered into a definitive asset purchase agreement to acquire for cash approximately $900 million of equipment loans and leases, and general commercial lending assets. The transaction closed on January 31, 2018, and totaled approximately $850 million (referred to as the acquired "business lending assets"). The business lending assets acquired are fully aligned with CWB's Balanced Growth strategy, including strategic objectives for industry and geographic diversification. The portfolio is primarily comprised of assets concentrated within the transportation, construction and healthcare industries, with approximately three quarters of the exposures distributed across Central and Eastern Canada. As expected, the transaction was immediately accretive, contributing approximately $0.10 of adjusted cash earnings per common share in fiscal 2018, with positive impacts to return on common shareholders' equity, net interest margin and operating leverage, and a negative impact within the provision for credit losses as a percentage of average loans. CWB's common equity Tier 1 capital (CET1) ratio remained in a very strong position, with approximately 25 basis points of existing CET1 capital deployed as part of the purchase. Management funded the portfolio primarily through its securitization facilities. In view of the portfolio's relatively short weighted average duration, some degree of run-off was expected. The balance of acquired assets as at October 31, 2018, including associated renewals and new lending, was approximately $684 million.

On August 16, 2017, CWB announced that Canadian Western Trust (CWT) will focus its activities within business lines that are most aligned with the strategic objectives of CWB Financial Group, and will no longer offer self-directed account services to holders of certain securities. CWT initiated a process to appoint successor trustees for these accounts (referred to as the "CWT strategic transactions"). As a result of this process, CWB realized pre-tax gains on sale of approximately $4 million, or $0.04 of adjusted cash earnings per common share in fiscal 2018, and approximately $6 million, or $0.06 of adjusted cash earnings per common share, in fiscal 2017. CWB's annual revenue associated with the transferred accounts was less than $1 million in fiscal 2018, compared to approximately $3 million in fiscal 2017. Approximately $30 million of CWT branch-raised deposits (2017 – $71 million) and $2.0 billion (2017 – $1.3 billion) of assets under administration have transferred to the successor trustees this year. The CWT strategic transactions are now complete. No further transfers of deposits or assets under administration to successor trustees will occur under the agreements.

Overview of Financial Performance

Q4 2018 vs. Q4 2017

Common shareholders' net income of $65 million and pre-tax, pre-provision income of $111 million were up 6% and 7%, respectively. Earnings growth was primarily driven by record quarterly revenues of $209 million, up 7% from the same period last year. Net interest income of $189 million was up 11%, as the positive impact of very strong 13% loan growth was partially offset by a two basis point decrease in net interest margin to 2.61%. Within net interest margin, higher asset yields and favourable changes in asset mix were more than offset by increased funding costs and changes in funding mix, including an ongoing shift in depositor preference toward longer duration fixed term deposits within the rising interest rate environment. The provision for credit losses as a percentage of average loans of 19 basis points improved from 20 basis points. These factors were partially offset by 6% higher non-interest expenses to support business growth, lower non-interest income, higher income taxes and increased acquisition-related fair value changes. Non-interest income of $19 million was 21% lower, and CWB's income tax provision was 13% higher, primarily due to the gain on sale, and the associated tax treatment, related to the CWT strategic transactions in the fourth quarter last year. Diluted earnings per common share of $0.72 and adjusted cash earnings per common share of $0.78 increased 6% and 5%, respectively, reflecting the factors noted above. The CWT-related gain on sale contributed nil (2017 - $0.06) to adjusted cash earnings per common share.

Q4 2018 vs. Q3 2018

Sequential growth of common shareholders' net income was strong at 3%, and pre-tax, pre-provision income was slightly higher. Total revenue growth was 2%, reflecting 1% higher net interest income and a 6% increase in non-interest income. Higher net interest income reflects the positive impact of 3% loan growth, partially offset by a three basis point decrease in net interest margin as increased funding costs and changes in funding mix similar to those described above more than offset higher asset yields. The increase in non-interest income mainly reflects higher credit related fee income and increased 'other' non-interest income. 'Other' non-interest income this quarter includes $1 million of gains on sale related to the CWT strategic transactions. The provision for credit losses was 19 basis points of average loans, compared to 21 basis points last quarter. Non-interest expenses to support business growth were 3% higher. Diluted earnings per common share was up 3% and adjusted cash earnings per common share increased 4%.

2018 vs. 2017

Common shareholders' net income of $249 million and pre-tax, pre-provision income of $436 million increased 16% and 12%, respectively. Very strong earnings growth resulted from an 11% increase in total revenue, strong credit quality and disciplined expense control. Net interest income of $725 million was up 13%, reflecting the combined positive impact of 13% loan growth and a 4 basis point increase in net interest margin to 2.60%. As expected at the start of fiscal 2018, the combined positive impact of successful execution of CWB's Balanced Growth strategy and the higher interest rate environment supported incrementally higher net interest margin compared to last year. CWB delivered very strong, targeted growth in higher-yielding loan portfolios, including the contributions of business lending assets acquired at the end of the first quarter, along with increased funding diversification. Acceleration of loan growth was supported through planned growth of CWB's debt capital markets and securitization funding channels, as well as continued growth of branch-raised deposits and broker deposits. A further increase in full-year net interest margin was constrained as competitive pressure on loan yields remained apparent, and deposit costs moved incrementally higher, reflecting intense competition for branch-raised deposits, the impact of Bank of Canada rate increases and increased depositor preference for longer-duration term deposits in the rising rate environment.

Non-interest income of $78 million decreased 7%, as growth in wealth management income was more than offset by lower revenues from trust services following the CWT strategic transactions, as well as lower credit-related fee income and decreases in other categories. The provision for credit losses was 20 basis points of average loans, down from 23 basis points in the prior year. Non-interest expenses were up 8%, and acquisition-related fair value changes were 10% higher. Diluted earnings per common share of $2.79 and adjusted cash earnings per common share of $3.01 were up 15% and 14%, respectively. The CWT-related gain on sale contributed $0.04 (2017 - $0.06) of adjusted cash earnings per common share.

Higher Adjusted ROE and ROA

Fourth quarter adjusted return on common shareholders' equity (ROE) of 11.9% was relatively consistent with the same period last year.

Adjusted ROE was up 20 basis points compared to the prior quarter. This was primarily driven by very strong growth in common shareholders' net income, reflecting effective execution of CWB's Balanced Growth strategy and strong financial performance across CWB Financial Group.

Full-year adjusted ROE of 11.9% increased 90 basis points to a level relatively consistent with CWB's medium-term performance target range of 12 – 15%. Meaningful improvement in ROE was primarily driven by very strong growth in common shareholders' net income, reflecting strong performance across CWB Financial Group.

Return on assets (ROA) was 0.89% in the fourth quarter, compared to 0.94% in the same period last year and 0.88% last quarter. ROA for the year was 0.89%, up four basis points from 2017.

Efficient Operations and Positive Operating Leverage

The fourth quarter efficiency ratio of 46.7%, which measures non-interest expenses, excluding the pre-tax amortization of acquisition-related intangible assets, divided by total revenues, was relatively unchanged from 46.8% in the same period last year, and up 70 basis points from last quarter. Year-over-year stability reflects the combined positive impact of higher revenues from very strong growth of net interest income and higher non-interest income, as well as effective management of discretionary expense growth. The increase in CWB's efficiency ratio from the prior quarter primarily reflects the customary seasonal increase of non-interest expenses across most categories in the final quarter of the fiscal year.

The full-year efficiency ratio of 45.7% improved from 46.5% in 2017, reflecting the same factors noted in the comparison of the fourth quarter efficiency ratios above, as well as the positive impact of higher net interest margin.

Operating leverage, which is calculated as the growth rate of total revenue less the growth rate of non-interest expenses, excluding the pre-tax amortization of acquisition-related intangible assets, over the past 12 months, was positive 1.9%, compared to 0.3% last year.

Profitable Loan Growth

Total loans, excluding the allowance for credit losses, of $26.3 billion increased 13% ($3.0 billion) from last year and 3% ($668 million) from the prior quarter.

(unaudited) ($ millions)		October 31 2018		% of total as at October 31 2018			July 31  2018			October 31 2017		% change from October 31 2017
General commercial loans	$	7,458		28	%	$	7,110		$	6,307		18	%
Personal loans and mortgages		5,247		20			5,141			4,726		11
Commercial mortgages		4,865		19			4,602			4,267		14
Equipment financing and leasing		4,779		18			4,704			3,892		23
Real estate project loans		3,855		15			3,988			4,030		(4)
Oil and gas production loans		129		-			120			124		4
Total loans	$	26,333		100	%	$	25,665		$	23,346		13	%

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

 

Year-over-year growth by lending sector was consistent with CWB's Balanced Growth strategy. In dollar terms, growth was led by the strategically targeted general commercial category ($1.2 billion), including $160 million from the acquisition of business lending assets at the end of the first quarter. In percentage terms, annual growth within general commercial lending was 18% overall, including growth of 28% in Ontario, 16% in Alberta and 14% in British Columbia, respectively. Growth of equipment financing and leasing was also very strong at 23% ($887 million), with $524 million contributed from the acquisition of business lending assets. Commercial mortgages increased 14% ($598 million), and personal loans and mortgages were up 11% ($521 million), including 10% growth within CWB Optimum Mortgage ($267 million). Real estate project loans contracted 4% ($175 million), consistent with management's expectations, reflecting the successful completion of development projects along with reduced new activity within Alberta.

On a sequential basis, loan growth exceeded $500 million for the sixth consecutive quarter, with Alberta accounting for 43% of the increase. Performance within general commercial loans was very strong, with the balance of outstanding loans in this category up 5% ($348 million). Commercial mortgages increased 6% ($263 million) in the fourth quarter, and personal loans and mortgages were up 2% ($106 million). Equipment finance and leasing was up 2% ($75 million), with strong organic growth more than offsetting $74 million of paydowns and payouts within the acquired portfolio. Real estate project loans contracted 3% ($133 million).

(unaudited) ($ millions)		October 31 2018		% of total as at October 31 2018			July 31  2018			October 31 2017		% change from October 31 2017
British Columbia	$	8,894		34	%	$	8,710		$	8,145		9	%
Alberta		8,395		32			8,109			7,728		9
Ontario		5,622		21			5,517			4,397		28
Saskatchewan		1,404		5			1,378			1,343		5
Manitoba		773		3			754			737		5
Quebec		680		3			654			557		22
Other		565		2			543			439		29
Total loans	$	26,333		100	%	$	25,665		$	23,346		13	%

(1)	Total loans outstanding by province exclude the allowance for credit losses.

 

Ontario continued to lead year-over-year loan growth by province in dollar terms with a significant increase of approximately $1.2 billion (28%). Growth in both British Columbia and Alberta was also strong at 9% in percentage terms, or $749 million, and $667 million, respectively. Outstanding loans in Quebec and the Atlantic provinces increased by $249 million (25%). Strong growth in Ontario and the other provinces outside of Western Canada reflects the geographic diversification objectives embedded within CWB's Balanced Growth strategy. Growth in these regions was underpinned by strong performance from CWB's businesses that have a national footprint, including CWB Maxium, CWB Optimum Mortgage, CWB National Leasing, and CWB Franchise Finance, and further supported by the acquisition of business lending assets at the end of the first quarter. Saskatchewan and Manitoba both grew 5% from last year, or $61 million and $36 million, respectively.

Compared to the prior quarter, Alberta and British Columbia delivered the strongest growth, followed by Ontario.

Strong Credit Quality

Overall credit quality is consistent with expectations and continues to reflect CWB's secured lending business model, disciplined underwriting practices and proactive loan management.

	For the three months ended									Change from October 31 2017
(unaudited)		October 31 2018			July 31 2018			October 31 2017
($ thousands)
Gross impaired loans, beginning of period	$	135,430		$	122,954		$	168,684		(20)	%
New formations		31,977			31,807			54,214		(41)
Reductions, impaired accounts paid down or returned to performing status		(15,724)			(6,466)			(37,132)		(58)
Write-offs		(13,811)			(12,865)			(17,505)		(21)
Total(1)	$	137,872		$	135,430		$	168,261		(18)	%
Balance of the ten largest impaired accounts	$	56,748		$	55,308		$	70,935		(20)	%
Total number of accounts classified as impaired(3)		214			229			237		(10)
Gross impaired loans as a percentage of total loans		0.53	%		0.53	%		0.72	%	(19)	bp(2)

(1)	Gross impaired loans include foreclosed assets held for sale with a carrying value of $6,628 (July 31, 2018 – $6,709 and October 31, 2017 – $1,983).
(2)	bp – basis point change.
(3)	Total number of accounts excludes CWB National Leasing.

 

The dollar level of gross impaired loans at October 31, 2018 totaled $138 million, down from $168 million last year and relatively consistent with the prior quarter. The dollar level of gross impaired loans represented 0.53% of total loans at quarter end, compared to 0.72% last year and unchanged from 0.53% at July 31, 2018. Gross impaired loans within Alberta of $77 million accounted for 56% of total impairments at year end, compared to 63% last year and 48% in the prior quarter. The relative concentration of impaired loans in Alberta continues to reflect the lagging impacts of the 2015 – 2016 regional recession and is consistent with management's expectations. Gross impairments outside of Alberta represented 0.34% of total non-Alberta loans, compared to 0.40% last year.

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 overall loan portfolio is reviewed regularly with credit decisions undertaken on a case-by-case basis to provide early identification of possible adverse trends.

As at October 31, 2018, the total allowance for credit losses (collective and specific) was $147 million, compared to $136 million a year ago and unchanged from $147 million last quarter.

The total allowance for credit losses represented 106% of gross impaired loans at quarter end, compared to 81% last year and 109% in the prior quarter. The collective allowance for credit losses was relatively unchanged over the past twelve months and compared to the prior quarter.

Lower Provision for Credit Losses

The fourth quarter provision for credit losses of 19 basis points of average loans compares to 20 basis points in the same quarter last year and 21 basis points in the prior quarter.

The annual provision for credit losses as a percentage of average loans in fiscal 2018 was 20 basis points, down from 23 basis points last year and consistent with CWB's traditional range of 18 – 23 basis points.

Growth and Diversification of Funding Sources

CWB delivered strong execution against its Balanced Growth strategy for funding diversification. Total deposits were up 8% over the past year ($1.8 billion) and 4% ($878 million) from the prior quarter. Total deposits by type and source are summarized below:

	As at									Change from October 31  2017
(unaudited)		October 31 2018			July 31 2018			October 31  2017
($ millions)
Deposits by type
CWB Financial Group branch-raised
Demand and notice	$	7,594		$	6,997		$	7,641		(1)	%
Term		4,732			4,535			4,175		13
		12,326			11,532			11,816		4
Broker term		8,368			8,275			7,923		6
Capital markets		3,006			3,015			2,164		39
Total Deposits	$	23,700		$	22,822		$	21,903		8	%

 

Branch-raised deposits are primarily comprised of deposits generated through CWB's full-service banking branches, certain deposits raised via CWT, and CWB's internet banking division, Motive Financial. Branch-raised funding increased 4% from last year, and 7% from the prior quarter. Very strong sequential growth of branch-raised deposits was led by CWB's banking branches, and also included strong contributions from CWT's notice account line of business, which is mainly comprised of cash balances held in self-directed registered accounts. Total branch-raised deposits, including CWT deposits, accounted for 52% of total deposits at October 31, 2018, compared to 54% last year and 51% in the prior quarter. Demand and notice deposits comprise 32% of total deposits, compared to 35% last year and 31% last quarter.  

Further success against CWB's Balanced Growth strategy for funding diversification included a new record for issuances or re-openings of senior deposit notes in capital markets, with $1.1 billion raised across five successful transactions, as well as growth of securitization funding. Total funding raised through the debt capital markets of $3.0 billion represented 13% of total deposits at October 31, 2018, up from 10% last year and consistent with last quarter. Of note, the acquisition of business lending assets at the end of the first quarter was funded primarily through CWB's existing securitization channels.   

Personal deposits, including deposits raised through the broker network, represented 61% of total deposits at October 31, 2018, unchanged from last year and last quarter. The deposit broker network remains an efficient source for raising 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. CWB actively raises only fixed-term broker deposits, with terms to maturity between one and five years, and does not offer a High Interest Savings Account (HISA) product. Term deposits raised through the broker network represented 35% of total funding at quarter end, down from 36% both last year and in the prior quarter.

Securitization

Securitized leases, loans and mortgages are reported on-balance sheet with total loans. The gross amount of securitized leases at October 31, 2018 was $1.6 billion, compared to $1.2 billion last year and $1.7 billion last quarter. Gross participation in the National Housing Act Mortgage Backed Securities (NHA MBS) program was $608 million (October 31, 2017 - $381 million; July 31, 2018 - $573 million).

Fiscal 2018 funding from the securitization of leases, loans and mortgages was $1.2 billion (2017 - $739 million).

Prudent Capital Management

With a very strong CET1 capital position under the more conservative Standardized approach for calculating risk weighted assets, CWB is well-positioned to create value for shareholders through a range of capital deployment options consistent with our balanced growth strategy. Ongoing support and development of each of CWB's businesses will remain a key priority, and we will continue to evaluate potential strategic acquisitions. A normal course issuer bid (NCIB) authorizing CWB to purchase for cancellation prior to September 30, 2019, up to 1,767,000 common shares, representing approximately 2% of the issued and outstanding common shares, has been approved by OSFI and the Toronto Stock Exchange. No shares were purchased through the NCIB which expired on September 30, 2018, and no shares have been purchased through the current NCIB as at October 31, 2018. Management may choose to activate the NCIB in fiscal 2019 should appropriate circumstances become apparent.

At October 31, 2018, CWB's capital ratios were 9.2% CET1, 10.3% Tier 1 and 11.9% total capital. Further details regarding CWB's regulatory capital and capital adequacy ratios are included in the following table:

(unaudited)			As at October 31 2018			As at July 31 2018			As at October 31  2017
($ millions)
Regulatory capital
CET1 capital before deductions		$	2,369		$	2,333		$	2,216
Net CET1 deductions			(216)			(213)			(206)
CET1 capital			2,153			2,120			2,010
Tier 1 capital(1)			2,418			2,385			2,275
Total capital(1)			2,788			2,755			2,644
Risk-weighted assets		$	23,486		$	22,807		$	21,082
Capital adequacy ratios  CET1			9.2	%		9.3	%		9.5	%
Tier 1			10.3			10.5			10.8
Total			11.9			12.1			12.5

(1)	The 2018 inclusion of non-common equity instruments that do not include NVCC clauses is capped at 40% of the January 1, 2013 outstanding balances (2017 - 50%). For all periods, there was no exclusion from regulatory capital related to NVCC instruments.

 

CWB's CET1 capital ratio decreased 30 basis points from last year, mainly reflecting the acquisition of business lending assets at the end of the first quarter. The Tier 1 and Total capital ratios declined 50 basis points and 60 basis points, respectively, also mainly reflecting the acquisition. At 8.0% (8.3% as at October 31, 2017), the Basel III leverage ratio remains very conservative.

Dividends

On December 5, 2018, CWB's Board of Directors declared a cash dividend of $0.26 per common share, payable on January 3, 2019 to shareholders of record on December 14, 2018. This quarterly dividend is consistent with the prior quarter and 8% higher than the dividend declared one year ago. The Board of Directors also declared a cash dividend of $0.275 per Series 5 Preferred Share, and a cash dividend of $0.390625 per Series 7 Preferred Share, both payable on January 31, 2019 to shareholders of record on January 22, 2019.

Management evaluates common share dividend increases every quarter against capital requirements under the Standardized approach and opportunities to create value for shareholders through various forms of capital deployment, including support for ongoing strong and balanced asset growth. The dividend payout ratio this quarter was approximately 36% of common shareholders' income, against our medium-term dividend payout ratio target of approximately 30%.

Dividend Reinvestment Plan

CWB common shares (TSX: CWB) and preferred shares (TSX: CWB.PR.B and CWB.PR.C) are deemed eligible to participate in CWB's dividend reinvestment plan (the Plan). The Plan provides holders of eligible shares of CWB the opportunity to direct cash dividends toward the purchase of CWB common shares. Further details for the Plan are available on CWB's website. CWB has elected to issue common shares for the Plan from treasury at the average market price (as defined in the Plan).

Fiscal 2018 Fourth Quarter and Annual Results Conference Call CWB's fourth quarter and annual results conference call is scheduled for Thursday, December 6, 2018, at 11:00 a.m. ET (9:00 a.m. MT). CWB's executives will comment on financial results and respond to questions from analysts and institutional investors.  The conference call may be accessed on a listen-only basis by dialing [phone] or toll-free [phone]. The call will also be webcast live on the CWB's website, www.cwb.com. A replay of the conference call will be available until December 13, 2018, by dialing [phone] (toll-free) and entering passcode 9992083.

 

About CWB Financial Group

CWB Financial Group (CWB) is a diversified financial services organization serving businesses and individuals across Canada. Operating from its headquarters in Edmonton, Alberta, CWB's key business lines include full service business and personal banking offered through the branch locations of Canadian Western Bank and Internet banking services provided by Motive Financial. Highly responsive specialized financing is delivered under the banners of CWB Optimum Mortgage, CWB Equipment Financing, CWB National Leasing, CWB Maxium Financial and CWB Franchise Finance. Trust Services are offered through Canadian Western Trust. Comprehensive wealth management offerings are provided through CWB Wealth Management, which includes the businesses of McLean & Partners Wealth Management and Canadian Western Financial. 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.C" (Series 7 Preferred Shares). Learn more at www.cwb.com.

FOR FURTHER INFORMATION CONTACT:

Matt Evans, CFA
Vice President, Strategy and Corporate Development
Phone: [phone]
Email: [e-mail]

Non-IFRS Measures

Adjusted Financial Measures
	For the three months ended						Change from			For the year ended			Change from
(unaudited) ($ thousands)		October 31 2018		July 31 2018		October 31 2017	October 31 2017			October 31 2018		October 31 2017	October 31 2017
Non-interest expenses	$	98,751	$	95,695	$	93,129	6	%	$	373,483	$	345,466	8	%
Adjustments (before tax):
Amortization of acquisition-related
intangible assets		(1,367)		(1,401)		(1,909)	(28)			(6,313)		(7,560)	(16)
Adjusted non-interest expenses	$	97,384	$	94,294	$	91,220	7	%	$	367,170	$	337,906	9	%
Common shareholders' net income	$	64,501	$	62,362	$	60,833	6	%	$	249,256	$	214,277	16	%
Adjustments (after-tax):
Acquisition-related fair value changes		3,705		3,675		3,462	7			14,769		13,402	10
Amortization of acquisition-related
intangible assets		1,005		1,031		1,408	(29)			4,695		5,572	(16)
Adjusted common shareholders' net income	$	69,211	$	67,068	$	65,703	5	%	$	268,720	$	233,251	15	%
Pre-tax, Pre-provision Income
	For the three months ended						Change from			For the year ended			Change from
(unaudited) ($ thousands)		October 31 2018		July 31 2018		October 31 2017	October 31   2017			October 31  2018		October 31 2017	October 31   2017
Total revenue	$	208,566	$	204,989	$	195,122	7	%	$	803,358	$	726,635	11	%
Less:
Adjusted non-interest expenses		97,384		94,294		91,220	7			367,170		337,906	9
Pre-tax, pre-provision income	$	111,182	$	110,695	$	103,902	7	%	$	436,188	$	388,729	12

 

Consolidated Balance Sheets

		As at		As at		As at	Change from
(unaudited)		October 31		July 31		October 31	October 31
($ thousands)		2018		2018		2017	2017
Assets
Cash Resources
Cash and non-interest bearing deposits with financial institutions	$	73,822	$	90,847	$	17,491	322	%
Interest bearing deposits with regulated financial institutions		26,825		48,534		503,895	(95)
Cheques and other items in transit		52,574		-		410	nm
		153,221		139,381		521,796	(71)
Securities
Issued or guaranteed by Canada		1,325,816		1,256,841		1,307,298	1
Issued or guaranteed by a province or municipality		521,825		425,397		438,858	19
Other debt securities		143,536		164,213		308,421	(53)
Preferred shares		93,575		100,334		132,410	(29)
		2,084,752		1,946,785		2,186,987	(5)
Loans
Personal		5,247,160		5,141,440		4,725,715	11
Business		21,085,968		20,523,645		18,619,853	13
		26,333,128		25,665,085		23,345,568	13
Allowance for credit losses		(128,529)		(127,408)		(116,329)	10
		26,204,599		25,537,677		23,229,239	13
Other
Property and equipment		59,098		57,765		56,115	5
Goodwill		85,168		85,168		85,669	(1)
Intangible assets		160,790		155,809		149,730	7
Derivative related		2,496		6,251		12,393	(80)
Other assets		271,339		241,241		205,524	32
		578,891		546,234		509,431	14
Total Assets	$	29,021,463	$	28,170,077	$	26,447,453	10	%
Liabilities and Equity
Deposits
Personal	$	14,483,686	$	13,957,503	$	13,394,562	8	%
Business and government		9,216,271		8,864,464		8,508,420	8
		23,699,957		22,821,967		21,902,982	8
Other
Cheques and other items in transit		28,489		42,390		55,545	(49)
Securities sold under repurchase agreements		95,126		147,929		58,358	63
Derivative related		69,581		49,992		35,381	97
Other liabilities		531,953		478,997		455,009	17
		725,149		719,308		604,293	20
Debt
Debt securities		1,757,854		1,810,974		1,226,336	43
Subordinated debentures		250,000		250,000		250,000	-
		2,007,854		2,060,974		1,476,336	36
Equity
Preferred shares		265,000		265,000		265,000	-
Common shares		744,701		743,788		731,885	2
Retained earnings		1,649,196		1,607,816		1,488,634	11
Share-based payment reserve		23,937		23,642		24,979	(4)
Other reserves		(97,082)		(75,054)		(49,453)	96
Total Shareholders' Equity		2,585,752		2,565,192		2,461,045	5
Non-controlling interests		2,751		2,636		2,797	(2)
Total Equity		2,588,503		2,567,828		2,463,842	5
Total Liabilities and Equity	$	29,021,463	$	28,170,077	$	26,447,453	10	%

nm – not meaningful

 

Consolidated Statements of Income 

	For the three months ended						Change from		For the year ended				Change from
(unaudited) ($ thousands, except per share amounts)		October 31  2018		July 31  2018		October 31  2017	October 31  2017			October 31  2018		October 31 2017	October 31  2017
Interest Income
Loans	$	319,310	$	305,348	$	264,575	21	%	$	1,185,530	$	993,950	19	%
Securities		8,075		8,654		7,326	10			35,529		25,136	41
Deposits with regulated
financial institutions		1,095		378		1,614	(32)			4,236		8,198	(48)
		328,480		314,380		273,515	20			1,225,295		1,027,284	19
Interest Expense
Deposits		125,779		114,520		95,630	32			452,526		355,521	27
Debt		13,608		13,216		7,391	84			47,779		29,373	63
		139,387		127,736		103,021	35			500,305		384,894	30
Net Interest Income		189,093		186,644		170,494	11			724,990		642,390	13
Non-interest Income
Credit related		8,456		8,042		8,381	1			32,165		34,012	(5)
Wealth management services		5,119		5,164		4,427	16			20,371		19,073	7
Retail services		2,588		2,511		2,754	(6)			10,334		10,758	(4)
Trust services		1,919		1,777		2,521	(24)			7,784		11,305	(31)
Gains (losses) on securities, net		1		(242)		9	(89)			(217)		664	nm
Other		1,390		1,093		6,536	(79)			7,931		8,433	(6)
		19,473		18,345		24,628	(21)			78,368		84,245	(7)
Total Revenue		208,566		204,989		195,122	7			803,358		726,635	11
Provision for Credit Losses		12,432		13,318		11,411	9			48,257		50,986	(5)
Acquisition-related Fair Value Changes		5,041		5,000		4,710	7			20,094		18,295	10
Non-interest Expenses
Salaries and employee benefits		59,549		61,231		57,761	3			237,228		220,416	8
Premises and equipment		16,474		15,575		16,634	(1)			62,754		60,348	4
Other expenses		22,728		18,889		18,734	21			73,501		64,702	14
		98,751		95,695		93,129	6			373,483		345,466	8
Net Income before Income Taxes		92,342		90,976		85,872	8			361,524		311,888	16
Income Taxes		23,919		24,804		21,227	13			96,877		82,233	18
Net Income		68,423		66,172		64,645	6			264,647		229,655	15
Net income attributable to
non-controlling interests		360		247		250	44			1,141		1,128	1
Shareholders' Net Income		68,063		65,925		64,395	6			263,506		228,527	15
Preferred share dividends		3,562		3,563		3,562	-			14,250		14,250	-
Common Shareholders' Net Income	$	64,501	$	62,362	$	60,833	6	%	$	249,256	$	214,277	16	%
Average number of common
shares (in thousands)		88,933		88,869		88,409	1	%		88,806		88,297	1	%
Average number of diluted common
shares (in thousands)		89,267		89,265		88,783	1			89,285		88,592	1
Earnings Per Common Share
Basic	$	0.73	$	0.70	$	0.69	6	%	$	2.81	$	2.43	16	%
Diluted		0.72		0.70		0.68	6			2.79		2.42	15

nm – not meaningful

Consolidated Statements of Comprehensive Income

	For the three months ended					For the year ended
(unaudited) ($ thousands)		October 31 2018		October 31 2017			October 31  2018		October 31  2017
Net Income	$	68,423	$	64,645		$	264,647	$	229,655
Other Comprehensive Income (Loss), net of tax
Available-for-sale securities:
(Losses) gains from change in fair value(1)		(7,095)		7,017			(19,945)		4,021
Reclassification to net income(2)		(1)		(6)			158		(485)
		(7,096)		7,011			(19,787)		3,536
Derivatives designated as cash flow hedges:
Gains (losses) from change in fair value(3)		(16,204)		3,594			(26,848)		(22,089)
Reclassification to net income(4)		1,272		(2,575)			(994)		(3,321)
		(14,932)		1,019			(27,842)		(25,410)
		(22,028)		8,030			(47,629)		(21,874)
Comprehensive Income for the Period	$	46,395	$	72,675		$	217,018	$	207,781
Comprehensive income for the period attributable to:
Shareholders of CWB	$	46,035	$	72,425		$	215,877	$	206,653
Non-controlling interests		360		250			1,141		1,128
Comprehensive Income for the Period	$	46,395	$	72,675		$	217,018	$	207,781

(1)									Net of income tax of $2,577 and $7,351 for the quarter and year ended October 31, 2018, respectively (2017 - $2,570 and $1,463).
(2)									Net of income tax of nil and $59 for the quarter and year ended October 31, 2018, respectively (2017 - $3 and $179).
(3)									Net of income tax of $5,993 and $9,930 for the quarter and year ended October 31, 2018, respectively (2017 - $1,322 and $8,128).
(4)									Net of income tax of $471 and $367 for the quarter and year ended October 31, 2018, respectively (2017 - $947 and $1,222).

 

Consolidated Statements of Changes in Equity

		For the year ended
(unaudited)			October 31 2018		October 31 2017
($ thousands)
Retained Earnings
Balance at beginning of year		$	1,488,634	$	1,354,966
Shareholders' net income			263,506		228,527
Dividends	– Preferred shares		(14,250)		(14,250)
	– Common shares		(88,819)		(82,107)
Increase in equity attributable to non-controlling interests ownership change			125		1,498
Balance at end of year			1,649,196		1,488,634
Other Reserves
Balance at beginning of year			(49,453)		(27,579)
Changes in available-for-sale securities			(19,787)		3,536
Changes in derivatives designated as cash flow hedges			(27,842)		(25,410)
Balance at end of year			(97,082)		(49,453)
Preferred Shares
Balance at beginning and end of year			265,000		265,000
Common Shares
Balance at beginning of year			731,885		718,377
Issued on acquisition-related contingent consideration instalment payment			5,750		-
Issued under dividend reinvestment plan			4,248		5,280
Transferred from share-based payment reserve on the exercise or exchange of options			2,818		8,228
Balance at end of year			744,701		731,885
Share-based Payment Reserve
Balance at beginning of year			24,979		31,276
Amortization of fair value of options			1,776		1,931
Transferred to common shares on the exercise or exchange of options			(2,818)		(8,228)
Balance at end of year			23,937		24,979
Total Shareholders' Equity			2,585,752		2,461,045
Non-Controlling Interests
Balance at beginning of year			2,797		773
Net income attributable to non-controlling interests			1,141		1,128
Dividends to non-controlling interests			(1,431)		(670)
Partial ownership (decrease) increase			244		(117)
Increase in equity attributable to non-controlling interests			-		1,683
Balance at end of year			2,751		2,797
Total Equity		$	2,588,503	$	2,463,842

 

Consolidated Statements of Cash Flows

	For the year ended
(unaudited) ($ thousands)		October 31 2018		October 31 2017
Cash Flows from Operating Activities
Net income	$	264,647	$	229,655
Adjustments to determine net cash flows:
Provision for credit losses		48,257		50,986
Depreciation and amortization		29,708		30,692
Current income taxes receivable and payable, net		(3,456)		12,134
Amortization of fair value of employee stock options		1,776		1,931
Accrued interest receivable and payable, net		28,415		(19,061)
Deferred income taxes, net		(7,677)		(10,638)
Net gain on CWT strategic transactions		(4,030)		(5,726)
Losses (gains) on securities, net		217		(664)
Fair value change in contingent consideration		20,094		18,295
Change in operating assets and liabilities:
Deposits, net		1,796,975		708,429
Loans, net		(3,024,939)		(1,322,714)
Securities sold under resale agreements, net		36,768		58,358
Securities purchased under resale agreements, net		-		163,318
Other items, net		17,436		46,543
		(795,809)		(38,462)
Cash Flows from Financing Activities
Debt securities issued		1,245,427		739,177
Debt securities repaid		(713,909)		(456,039)
Dividends		(98,821)		(91,077)
Contributions by non-controlling interest		1,316		3,401
Dividends to non-controlling interests		(1,431)		(670)
Debentures redeemed		-		(75,000)
		432,582		119,792
Cash Flows from Investing Activities
Interest bearing deposits with regulated financial institutions, net		477,070		386,621
Securities, purchased		(2,892,129)		(5,843,898)
Securities, sale proceeds		1,266,827		4,338,132
Securities, matured		1,704,328		1,031,966
Proceeds from CWT strategic transactions		4,135		7,164
Partial ownership increase		-		(1,838)
Property, equipment and intangible assets		(44,203)		(28,846)
Acquisition-related contingent consideration instalment payment		(17,250)		(10,132)
		498,778		(120,831)
Change in Cash and Cash Equivalents		135,551		(39,501)
Cash and Cash Equivalents at Beginning of Year		(37,644)		1,857
Cash and Cash Equivalents at End of Year *	$	97,907	$	(37,644)
* Represented by:
Cash and non-interest bearing deposits with financial institutions	$	73,822	$	17,491
Cheques and other items in transit (included in Cash Resources)		52,574		410
Cheques and other items in transit (included in Other Liabilities)		(28,489)		(55,545)
Cash and Cash Equivalents at End of Year	$	97,907	$	(37,644)
Supplemental Disclosure of Cash Flow Information
Interest and dividends received	$	1,237,809	$	1,031,937
Interest paid		462,691		392,413
Income taxes paid		88,116		66,009

 

SOURCE Canadian Western Bank

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