CWB Reports Solid Financial Performance Led by Strong Loan Growth

CWB Reports Solid Financial Performance Led by Strong Loan Growth 
Common share dividend declared of $0.18 per share, up 13% over the
dividend declared a year earlier  
Quarterly dividend declared on CWB preferred shares 
EDMONTON, ALBERTA -- (Marketwired) -- 08/28/13 -- Canadian Western
Bank (TSX:CWB)(TSX:CWB.PR.A) (CWB or the Bank) -  
Third Quarter 2013 Highlights(1) (compared to the same period in the
prior year) 


 
--  Net income available to common shareholders of $47.5 million, down 1%
    from the record quarterly results last year. 
--  Diluted earnings per common share of $0.60, down 2%, and adjusted cash
    earnings per common share of $0.61, down 3%. 
--  Total revenues, on a taxable equivalent basis (teb), of $145.7 million,
    up 5%. 
--  Loan growth of 3% in the quarter, 10% year-to-date and 12% over the past
    twelve months. 
--  Net interest margin of 2.74% (teb) compared to 2.65% in the previous
    quarter and 2.85% in the same period last year. 
--  Net claims expense of $5.0 million ($0.05 per share) resulting from the
    catastrophic southern Alberta floods and $3.3 million related to severe
    hailstorms contributed to an $8.5 million decline in net insurance
    revenues. 
--  Stable Basel III regulatory capital ratios using the Standardized
    approach for calculating risk-weighted assets of 7.9% common equity Tier
    1 (CET1), 9.6% Tier 1 and 13.9% total ratio. 
--  Completed the previously announced investment in McLean & Partners
    Wealth Management Ltd., a Calgary-based wealth management firm. 
--  Total loans and assets under administration surpassed milestones of $15
    billion and $8 billion, respectively. 
 
1.  Highlights include certain non-IFRS measures - refer to definitions
    following the table of Selected Financial Highlights. 

 
Canadian Western Bank today announced solid third quarter financial
performance led by strong double-digit loan growth. Compared to the
record quarterly results last year, net income available to common
shareholders of $47.5 million was down 1%, while diluted earnings per
common share decreased 2% to $0.60. Adjusted cash earnings per common
share declined 3% to $0.61. Total revenues (teb) of $145.7 million
increased 5% over a year earlier as the positive contribution to net
interest income from strong 12% loan growth was offset by an 11 basis
point decline in net interest margin (teb). Other income was
relatively unchanged as net gains on securities and growth in trust
and wealth management fees combined to offset an $8.5 million decline
in net insurance revenues. Excluding net claims expense related to
the catastrophic southern Alberta floods, quarterly diluted earnings
per share was $0.65, and adjusted cash earnings per share was $0.66,
up 7% and 5%, respectively.  
Compared to last quarter, net income available to common shareholders
increased 10% ($4.5 million), reflecting the combined benefit of
three additional revenue-earning days, a nine basis point improvement
in net interest margin and strong 3% loan growth. Adjusted cash
earnings per share was up 11% ($0.06).  
Year-to-date net income available to common shareholders of $136.0
million increased 5% compared to the same period last year as the
benefit of strong loan growth and higher other income was offset by
the impact of a 13 basis point decline in net interest margin (teb)
and increased non-interest expenses. Diluted earnings per common
share increased 2% to $1.71, while adjusted cash earnings per share
declined 1% to $1.74. 
"Our solid performance this quarter includes the impacts of
catastrophic flooding in June that affected many of our clients and
employees in southern Alberta," said Chris Fowler, President and CEO.
"I'm very proud of how our team came together during this time and we
are continuing to work hard to provide appropriate support for
clients who were directly affected. This includes offering solutions
that consider individual client circumstances, as well as efficiently
processing property and auto insurance claims."  
"The achievement of double-digit loan growth through the first nine
months demonstrates a meaningful part of CWB Group's ongoing growth
potential. The results also underscore our commitment to building
strong client relationships while continuing to enhance our products
and services across all lines of business." 
"Although the financial impact of the floods and subsequent
hailstorms inhibited growth in total revenues, the quarterly increase
in net interest margin and securities gains provided material
positive offsets," continued Mr. Fowler. "While the recent steepening
of the yield curve will help to support net interest margin, the low
prime lending interest rate and competitive influences will likely
constrain our ability to achieve further improvement over the near
term." 
On August 28, 2013, CWB's Board of Directors declared a cash dividend
of $0.18 per common share, payable on September 26, 2013 to
shareholders of record on September 19, 2013. This quarterly dividend
was consistent with the previous quarter and 13% ($0.02) higher than
the quarterly dividend declared one year ago. The Board of Directors
also declared a cash dividend of $0.453125 per Series 3 Preferred
Share payable on October 31, 2013 to shareholders of record on
October 24, 2013. 
Fiscal 2013 Minimum Performance Targets and Outlook 
The minimum performance targets established for the 2013 fiscal year
together with CWB's actual year-to-date performance are presented in
the table below: 


 
                                                   2013                2013 
                                            Year-to-date            Minimum 
                                             Performance             Targets
----------------------------------------------------------------------------
Net income available to common                                              
 shareholders growth(1)                               5%                  8%
Total revenue (teb) growth(1)                         7%                  8%
Loan growth(2)                                       12%                 10%
Provision for credit losses as a                                            
 percentage of average loans(3)                    0.19%       0.18% - 0.23%
Efficiency ratio (teb)(4)                          46.2%                 46%
Return on common shareholders'                                              
 equity(5)                                         13.9%                 14%
Return on assets(6)                                1.04%               1.05%
----------------------------------------------------------------------------
 
1.  Year-to-date performance for earnings and revenue growth is the current
    year results over the same period in the prior year. 
2.  Loan growth is the increase over the past twelve months. 
3.  Year-to-date provision for credit losses, annualized, divided by average
    total loans. 
4.  Efficiency ratio (teb) calculated as non-interest expenses divided by
    total revenues (teb). 
5.  Return on common shareholders' equity calculated as annualized net
    income available to common shareholders divided by average common
    shareholders' equity. 
6.  Return on assets calculated as annualized net income available to common
    shareholders divided by average total assets. 

 
Catastrophic southern Alberta floods in June were followed by severe
hailstorms in July, and net claims expense related to these events
contributed to a $7.2 million decline in net insurance revenues
compared to the first nine months of 2012. Additional claims expense
that may arise as a direct result of the June floods will be covered
by CWB's catastrophe reinsurance treaty. Excluding net claims expense
specifically related to the southern Alberta floods, consolidated
year-to-date growth in net income available to common shareholders
and total revenue (teb) were 8% each, while year-to-date return on
common shareholders' equity and return on assets were 14.3% and 1.07%
respectively. Based on results through the first nine months and in
the absence of severe weather events in the fourth quarter, all of
our 2013 minimum targets are attainable, but the achievement of
performance measures related to total revenue growth, profitability
and efficiency will be challenging.  
Year-to-date performance in relation to our targets for loan growth,
net income available to common shareholders and total revenues was
driven by ongoing strong activity across most of our key lending
sectors and each geographic region. With the notable exception of net
insurance revenues, double-digit growth across most categories of
other income also provided meaningful contributions and helped to
mitigate the effects of a lower net interest margin. Although net
interest margin improved sequentially, primarily as a result of lower
average liquidity, we expect this key metric will continue to be
constrained. Net interest margin challenges and the resulting impact
on total revenues also affect our key profitability measures and the
efficiency ratio. We remain very attentive to the rate of growth in
non-interest expenses and will continue to manage business investment
in consideration of our long-term strategy, minimum performance
targets and expected revenue growth. Overall credit quality remains
consistent with expectations and supports our view that the annual
provision for credit losses will remain below the midpoint of the
2013 target range.  
The Canadian economy continues to expand at a moderate pace,
resulting in low inflation and relatively stable employment levels.
Economic fundamentals within the Bank's key western Canadian markets
remain comparatively strong, with economic repercussions from severe
summer flooding expected to be temporary. The Canadian housing market
appears to be undergoing an orderly adjustment with price and volume
declines concentrated in specific geographic regions. Consensus
forecasts call for accelerated domestic growth in 2014, supporting
our optimistic outlook for ongoing profitable growth opportunities.
We look forward to providing our fourth quarter and fiscal year end
results, along with minimum performance targets for 2014, on December
5, 2013.  
About CWB Group 
Canadian Western Bank offers a full range of business and personal
banking services across the four western provinces and is the largest
publicly traded Canadian bank headquartered in Western Canada. The
Bank, along with its operating affiliates, National Leasing Group,
Canadian Western Trust, Valiant Trust, Canadian Direct Insurance,
Canadian Western Financial, Adroit Investment Management, and McLean
& Partners Wealth Management, collectively offer a diversified range
of financial services across Canada and are together known as the CWB
Group. The common shares of Canadian Western Bank are listed on the
Toronto Stock Exchange under the trading symbol "CWB". The Bank's
Series 3 Preferred Shares trade on the Toronto Stock Exchange under
the trading symbol "CWB.PR.A". Refer to www.cwb.com for additional
information. 
Fiscal 2013 Third Quarter Results Conference Call  
CWB's third quarter results conference call is scheduled for
Thursday, August 29, 2013 at 2:00 p.m. ET (12:00 p.m. MT). The Bank'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
416-695-7848 or toll-free 1-800-396-7098. The call will also be
webcast live on the Bank's website: 
www.cwbankgroup.com/investor_relations/webcast_events.htm.  
A replay of the conference call will be available until September 12,
2013 by dialing 905-694-9451 (Toronto) or 1-800-408-3053 (toll-free)
and entering passcode 6674131.  
Selected Financial Highlights 


 
 (unaudited)                    For the three months ended                 
                                                                   Change  
                                                                from July  
($ thousands, except per      July 31     April 30     July 31        31   
share amounts)                    2013        2013        2012      2012   
---------------------------------------------------------------------------
Results of Operations                                                      
 Net interest income (teb -$                                               
  see below)                   122,702 $   113,576 $   115,217          6 %
 Less teb adjustment             2,161       2,000       2,086          4  
---------------------------------------------------------------------------
 Net interest income per                                                   
 financial statements          120,541     111,576     113,131             
                                                                        7  
 Other income                   23,032      23,390      22,933          -  
 Total revenues (teb)          145,734     136,966     138,150          5  
 Total revenues                143,573     134,966     136,064          6  
 Net income available to                                                   
 common shareholders            47,484      42,988      48,004        (1)  
                                                                           
 Earnings per common share                                                 
  Basic(1)                        0.60        0.54        0.62        (3)  
  Diluted(2)                      0.60        0.54        0.61        (2)  
  Adjusted cash(3)                0.61        0.55        0.63        (3)  
 Return on common                                                          
  shareholders' equity(4)         14.0%       13.4%       16.1%     (210)bp
 Return on assets(6)              1.06        1.00        1.19       (13)  
 Efficiency ratio (teb)(7)        45.9        47.3        42.8        310  
 Efficiency ratio                 46.6        48.0        43.4        320  
 Net interest margin                                                       
  (teb)(8)                        2.74        2.65        2.85       (11)  
 Net interest margin              2.69        2.60        2.80       (11)  
 Provision for credit                                                      
  losses as a                                                              
 percentage of average                                                     
  loans                           0.20        0.19        0.19          1  
                                                                           
                                                                           
---------------------------------------------------------------------------
Per Common Share                                                           
 Cash dividends            $      0.18 $      0.17 $      0.16         13 %
 Book value                      17.06       16.82       15.56         10  
 Closing market value            28.92       28.46       26.27         10  
 Common shares outstanding                                                 
  (thousands)                   79,372      79,171      78,319          1  
---------------------------------------------------------------------------
Balance Sheet and Off-                                                     
 Balance Sheet Summary                                                     
 Assets                    $17,926,556 $17,779,280 $16,033,025         12 %
 Loans                      15,282,875  14,884,553  13,642,414         12  
 Deposits                   14,962,142  14,780,315  13,455,398         11  
 Debt                          852,789     897,183     603,931         41  
 Shareholders' equity        1,563,103   1,540,971   1,428,090          9  
 Assets under                                                              
  administration             8,209,949   7,821,089   6,830,282         20  
 Assets under management     1,811,068     904,730     814,498        122  
---------------------------------------------------------------------------
Capital Adequacy(9)                                                        
 Common equity Tier 1 ratio        7.9%        8.0%        n/a%       n/abp
 Tier 1 ratio                      9.6         9.7        10.5       (90)  
 Total ratio                      13.9        14.1        13.7         20  
---------------------------------------------------------------------------
 
 (unaudited)               For the nine months ended               
                                                        Change     
                                                     from July     
($ thousands, except per        July 31    July 31         31      
share amounts)                     2013        2012      2012      
--------------------------------------------------------------     
Results of Operations                                              
 Net interest income (teb -                                        
  see below)                $   351,027 $   330,326          6    %
 Less teb adjustment              6,076       7,164       (15)     
-------------------------------------------------------------------
 Net interest income per                                           
 financial statements           344,951     323,162          7     
                                                                   
 Other income                    68,801      61,979         11     
 Total revenues (teb)           419,828     392,305          7     
 Total revenues                 413,752     385,141          7     
 Net income available to                                           
 common shareholders            135,954     129,152          5     
                                                                   
 Earnings per common share                                         
  Basic(1)                         1.72        1.69          2     
  Diluted(2)                       1.71        1.68          2     
  Adjusted cash(3)                 1.74        1.75        (1)     
 Return on common                                                  
  shareholders' equity(4)          13.9%       15.4%     (150)bp(5)
 Return on assets(6)               1.04        1.10        (6)     
 Efficiency ratio (teb)(7)         46.2        44.2        200     
 Efficiency ratio                  46.9        45.0        190     
 Net interest margin                                               
  (teb)(8)                         2.68        2.81       (13)     
 Net interest margin               2.64        2.75       (11)     
 Provision for credit                                              
  losses as a                                                      
 percentage of average                                             
  loans                            0.19        0.20        (1)     
                                                                   
                                                                   
-------------------------------------------------------------------
Per Common Share                                                   
 Cash dividends             $      0.52 $      0.46         13    %
 Book value                       17.06       15.56         10     
 Closing market value             28.92       26.27         10     
 Common shares outstanding                                         
  (thousands)                    79,372      78,319          1     
-------------------------------------------------------------------
Balance Sheet and Off-                                             
 Balance Sheet Summary                                             
 Assets                                                            
 Loans                                                             
 Deposits                                                          
 Debt                                                              
 Shareholders' equity                                              
 Assets under                                                      
  administration                                                   
 Assets under management                                           
---------------------------                                        
Capital Adequacy(9)                                                
 Common equity Tier 1 ratio                                        
 Tier 1 ratio                                                      
 Total ratio                                                       
---------------------------                                        
                                                                            
n/a - not applicable                                                        
 
1.  Basic earnings per common share (EPS) is calculated as net income
    available to common shareholders divided by the average number of common
    shares outstanding. 
2.  Diluted EPS is calculated as net income available to common shareholders
    divided by the average number of common shares outstanding adjusted for
    the dilutive effects of stock options. 
3.  Adjusted cash EPS is diluted EPS excluding the after-tax amortization of
    acquisition-related intangible assets and the non-tax deductible change
    in fair value of contingent consideration. These exclusions represent
    non-cash charges mainly related to the acquisition of National Leasing
    Group Inc. and are not considered indicative of ongoing business
    performance. The effect of the non-tax deductible change in the fair
    value of contingent consideration was eliminated in the third quarter of
    2012 on the settlement of such consideration. The Bank believes the
    adjusted results provide a better understanding about how management
    views CWB's performance. 
4.  Return on common shareholders' equity is calculated as annualized net
    income available to common shareholders divided by average common
    shareholders' equity. 
5.  bp - basis point change. 
6.  Return on assets is calculated as annualized net income available to
    common shareholders divided by average total assets. 
7.  Efficiency ratio is calculated as non-interest expenses divided by total
    revenues excluding the non-tax deductible change in fair value of
    contingent consideration. 
8.  Net interest margin is calculated as annualized net interest income
    divided by average total assets. 
9.  As of January 1, 2013, the Office of the Superintendent of Financial
    Institutions Canada (OSFI) adopted a new capital management framework
    called Basel III and capital is managed and reported in accordance with
    those requirements. Capital ratios prior to fiscal 2013 have been
    calculated using the previous framework, Basel II. Capital ratios
    calculated under Basel III are not directly comparable to the equivalent
    Basel II measures. 

 
Taxable Equivalent Basis (teb) 
Most banks analyze revenue on a taxable equivalent basis to permit
uniform measurement and comparison of net interest income. Net
interest income (as presented in the consolidated statement of
income) includes tax-exempt income on certain securities. Since this
income is not taxable, the rate of interest or dividends received is
significantly lower than would apply to a loan or security of the
same amount. The adjustment to taxable equivalent basis increases
interest income and the provision for income taxes to what they would
have been had the tax-exempt securities been taxed at the statutory
rate. The taxable equivalent basis does not have a standardized
meaning prescribed by International Financial Reporting Standards
(IFRS) and, therefore, may not be comparable to similar measures
presented by other banks. Total revenues, net interest income and
income taxes are discussed on a taxable equivalent basis throughout
this quarterly report to shareholders. 
Non-IFRS Measures 
Taxable equivalent basis, adjusted cash earnings per common share,
return on common shareholders' equity, return on assets, efficiency
ratio, net interest margin, common equity Tier 1, Tier 1 and total
capital adequacy ratios, average balances, claims loss ratio, expense
ratio and combined ratio do not have standardized meanings prescribed
by IFRS and therefore may not be comparable to similar measures
presented by other banks. 
Management's Discussion and Analysis  
This management's discussion and analysis (MD&A), dated August 28,
2013, should be read in conjunction with Canadian Western Bank's (CWB
or the Bank) unaudited condensed interim consolidated financial
statements for the period ended July 31, 2013, and the audited
consolidated financial statements and MD&A for the year ended October
31, 2012, available on SEDAR at www.sedar.com and the Bank's website
at www.cwb.com.  
Forward-looking Statements 
From time to time, the Bank 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 the
Bank's objectives and strategies, targeted and expected financial
results and the outlook for the Bank'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" 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. A variety of factors, many of which are beyond the
Bank'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 lack of
liquidity in financial markets, fluctuations in interest rates and
currency values, changes in monetary policy, changes in economic and
political conditions, regulatory and legal developments, the level of
competition in the Bank's markets, the occurrence of weather-related
and other natural catastrophes, changes in accounting standards and
policies, the accuracy of and completeness of information the Bank
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 the
Bank's 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.  
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 the Bank's
actual results to differ materially from the expectations expressed
in such forward looking statements. Unless required by securities
law, the Bank 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 in 2013 and
how it will affect CWB's businesses are material factors the Bank
considers when setting its objectives. In setting minimum performance
targets for fiscal 2013, management's assumptions included: modest
economic growth in Canada aided by positive relative performance in
the four western provinces; relatively stable energy and other
commodity prices; sound credit quality with actual losses remaining
within the Bank's historical range of acceptable levels; and, a lower
net interest margin attributed to expectations for a prolonged period
of very low interest rates due to uncertainties about the strength of
global economic recovery and other macroeconomic indicators.
Management's assumptions at the end of the third quarter remained
relatively unchanged compared to those at the 2012 fiscal year end.  
Potential risks that would have a material adverse impact on the
Bank's economic expectations and forecasts include a global economic
recession spurred by unfavourable developments in the euro zone, a
recession in the United States, a meaningful slowdown in China's
economic growth, or a significant and sustained deterioration in
Canadian residential real estate prices. At the end of the third
quarter, management's expectations and view of the potential risks
were relatively consistent with the 2012 fiscal year end. However,
ongoing capacity challenges for exporting Canadian crude oil may have
a greater than expected impact on both the overall level of future
capital investment and government fiscal flexibility within the
Bank's key markets.  
Overview 
CWB reported solid third quarter performance led by the achievement
of strong loan growth of 3% in the quarter, 10% year-to-date and 12%
over the past twelve months. Compared to the record third quarter
results last year, net income available to common shareholders of
$47.5 million was down 1% ($0.5 million), as the full benefit of
strong loan growth was offset by the impact of ongoing pressure on
net interest margin and higher non-interest expenses. Total other
income was relatively unchanged from a year earlier and includes an
$8.5 million decline in net insurance revenues mainly resulting from
claims expense related to Alberta's catastrophic floods and severe
hailstorms. Diluted earnings per common share was down 2% ($0.01) to
$0.60. Adjusted cash earnings per common share, which excludes
non-tax deductible changes in fair value of contingent consideration
and the after-tax amortization of acquisition-related intangible
assets, decreased 3% to $0.61.  
Compared to the previous quarter, net income available to common
shareholders increased 10% ($4.5 million) reflecting the positive
revenue impact of three additional revenue-earning days, an improved
net interest margin and loan growth. Within other income, a $3.9
million increase in net gains on securities and a $2.7 million
contribution from the 'other' component of other income combined to
lessen the impact of an $8.4 million decline in net insurance
revenues. An increase of $2.1 million in non-interest expenses was
mainly attributed to the Bank's investment in McLean & Partners
Wealth Management Ltd. (McLean & Partners), and was more than offset
by the related revenue contribution. 
On a year-to-date basis, net income available to common shareholders
was up 5% ($6.8 million) to $136.0 million, while diluted earnings
per common share increased 2% ($0.03) to $1.71. Adjusted cash
earnings per common share declined 1% to $1.74. The difference in the
rate of growth between diluted and adjusted cash earnings per share
relates to the exclusion in adjusted cash earnings per share of the
non-tax deductible change in fair value of contingent consideration
related to the 2010 acquisition of National Leasing and the after-tax
amortization of acquisition-related intangible assets. The lower
growth rate of adjusted cash earnings per share compared to net
income available to common shareholders reflects the foregoing, as
well as the impact of CWB common shares issued in the third quarter
of 2012 in settlement of the contingent consideration associated with
National Leasing. Growth in total revenues (teb) of 7% ($27.5
million) was driven by a 6% ($20.0 million) increase in net interest
income (teb) and 11% ($6.8 million) growth in other income. The
year-to-date net interest margin (teb) of 2.68% was 13 basis points
lower than the prior year while non-interest expenses were up 11%
($19.5 million).  
Third quarter return on common shareholders' equity (ROE) of 14.0%
was 210 basis points lower than the same period in 2012, but up 60
basis points compared to the prior quarter. Year-to-date ROE of 13.9%
was 150 basis points lower than the same period last year. Third
quarter return on assets of 1.06% compares to 1.19% a year earlier
and 1.00% last quarter. Year-to date return on assets was 1.04%,
compared to 1.10% in 2012.  
Investment in McLean & Partners  
On May 17, 2013, CWB completed its previously announced strategic
acquisition of 55% ownership of McLean & Partners, a Calgary-based
wealth management company. The investment complements CWB's existing
wealth management businesses and supports the Bank's strategic
objectives to deepen client relationships, diversify revenue and
augment future earnings growth. At the outset, the acquisition is
slightly accretive to adjusted earnings per common share, but has a
modest negative impact on the efficiency ratio. There was no material
impact on capital ratios. The addition of McLean & Partners' $896
million of assets under management brings CWB's total to $1,811
million as at July 31, 2013.  
Total Revenues (teb) 
Total revenues, comprised of both net interest income (teb) and other
income, grew 5% ($7.6 million) compared to the same quarter in 2012
and 6% ($8.8 million) over previous quarter to reach $145.7 million.
Year-to-date total revenues were $419.8 million, up 7% ($27.5
million) compared to the same period last year.  
Net Interest Income (teb) 
Q3 2013 vs. Q3 2012 
Net interest income of $122.7 million was up 6% ($7.5 million) over
the same quarter last year as the revenue contribution from strong
loan growth of 12% was offset by an 11 basis point reduction in net
interest margin to 2.74%. The change in net interest margin mainly
resulted from lower loan yields reflecting the combined impact of
sustained very low interest rates and ongoing competitive influences,
as well as lower loan fees and payout penalties, partially offset by
more favourable fixed term deposit costs.  
Q3 2013 vs. Q2 2013 
Compared to the previous quarter, net interest income was up 8% ($9.1
million) reflecting the combination of three additional
revenue-earning days, a nine basis point increase in net interest
margin (teb) and ongoing loan growth. The sequential increase in net
interest margin primarily resulted from implementation of the Bank's
strategy to reduce average liquidity to a prudent level based on the
current economic environment.  
YTD 2013 vs. YTD 2012 
Year-to-date net interest income of $351.0 million increased 6%
($20.7 million) as the benefit of strong 10% loan growth was offset
by a 13 basis point reduction in net interest margin (teb) to 2.68%.
The change in net interest margin on a year-to-date basis was
primarily driven by lower yields on loans and securities, including
reduced loan fees and payout penalties, partially offset by more
favourable fixed term deposit costs.  
Interest rate sensitivity 
Note 13 to the unaudited interim consolidated financial statements
summarizes the Bank's exposure to interest rate risk as at July 31,
2013. The estimated sensitivity of net interest income to a change in
interest rates is presented in the table below. The amounts represent
the estimated change in net interest income that would result over
the following twelve months from a one-percentage point change in
interest rates. The estimates are based on a number of assumptions
and factors, which include: 


 
--  a constant structure in the interest sensitive asset and liability
    portfolios; 
--  floor levels for various deposit liabilities; 
--  interest rate changes affecting interest sensitive assets and
    liabilities by proportionally the same amount and applied at the
    appropriate repricing dates; and, 
--  no early redemptions. 
 
                                           July 31    April 30     July 31  
($ thousands)                                 2013        2013        2012  
----------------------------------------------------------------------------
                                                                            
Estimated impact on net interest income                                     
 of a 1% increase in interest rates                                         
1 year                                   $  15,324   $  20,425   $  12,943  
----------------------------------------------------------------------------
1 year percentage change                       3.6%        4.9%        3.2% 
----------------------------------------------------------------------------
                                                                            
Estimated impact on net interest income                                     
 of a 1% decrease in interest rates                                         
1 year                                   $ (25,267)  $ (28,260)  $ (19,267) 
----------------------------------------------------------------------------
1 year percentage change                      (5.9)%      (6.8)%      (4.7)%
----------------------------------------------------------------------------

 
Higher sensitivity to a decrease in rates is due to asymmetry in the
impact of falling rates on loans and deposits. A decrease of
one-percentage point in rates is assumed to reduce loan yields by an
equivalent amount. However, the assumed change in total deposit costs
is lower because deposits yielding less than one percent at the
beginning of the period are only adjusted to zero.  
In addition to the projected changes in net interest income noted
above, it is estimated that a one-percentage point increase in all
interest rates at July 31, 2013 would decrease unrealized gains
related to available-for-sale securities and the fair value of
interest rate swaps designated as hedges, and result in a reduction
in other comprehensive income of approximately $12.7 million, net of
tax (July 31, 2012 - $9.7 million). It is estimated that a
one-percentage point decrease in all interest rates at July 31, 2013
would result in a higher level of unrealized gains related to
available-for-sale securities and increase the fair value of interest
rate swaps designated as hedges, which would increase other
comprehensive income by approximately $12.7 million, net of tax (July
31, 2012 - $9.7 million).  
Management maintains the asset liability structure and interest rate
sensitivity within the Bank's established policies through pricing
and product initiatives, as well as the use of interest rate swaps
and other appropriate strategies. 
Outlook for net interest margin 
Looking forward, improvement in net interest margin over this quarter
is unlikely in the absence of increases in the prime lending interest
rate and/or a persistent steepening of the interest rate curve.
Management maintains its strategic focus on mitigating the earnings
impact of ongoing margin pressure through an emphasis on achieving
higher relative growth in better yielding loan portfolios with an
acceptable risk profile, improving the deposit mix to lower the
overall cost of funds, prudently managing liquidity levels and
increasing contributions from other income sources.  
Other Income 
Q3 2013 vs. Q3 2012 
Third quarter other income of $23.0 million was relatively consistent
with the same quarter last year, but the composition varied
considerably. Negative net insurance revenues of $2.2 million
represented an $8.5 million decline as a result of the significant
impact on net claims expense from Alberta's catastrophic floods and
severe hailstorms. Net gains on securities of $7.0 million increased
$5.1 million mainly reflecting the realization of gains owing to
unexpectedly strong performance within the Bank's portfolio of common
shares. Based on the level of gains realized and the current
composition of the securities portfolio, including a significant
increase toward quarter-end in the level of unrealized losses on
preferred shares, net gains on securities are not expected to provide
a meaningful source of revenue in the fourth quarter. Trust and
wealth management services revenue was up 49% ($2.2 million),
primarily reflecting the addition of McLean & Partners, which
contributed $2.0 million of the overall increase. The 'other'
category of other income increased 28% ($0.6 million) owing to gains
realized on the sale of $66 million of insured residential mortgages.
Credit related fee income increased 9% ($0.5 million). 
Q3 2013 vs. Q2 2013 
Other income was down 2% ($0.4 million) compared to the previous
quarter as an $8.4 million decline in net insurance revenues,
reflecting Alberta weather events, was largely offset by the
combination of a $3.9 million increase in net gains on securities, a
$2.6 million higher contribution from the 'other' component of other
income and $1.5 million growth in trust and wealth management
revenue. The aforementioned gains realized on the sale of residential
mortgages accounted for the increase in 'other' other income, while
higher trust and wealth management revenue was driven by the addition
of McLean & Partners. Credit related fee income increased 8% ($0.4
million), while retail services fees were 14% ($0.4 million) lower. 
YTD 2013 vs. YTD 2012 
Year-to-date other income of $68.8 million was up 11% ($6.8 million)
compared to 2012 driven by strong, double-digit increases in all
categories except net insurance revenues and foreign exchange gains.
Net insurance revenues were $7.2 million lower as growth in net
earned premiums was more than offset by claims expense mainly related
to the Alberta floods and severe hailstorms. Net gains on securities
increased 82% ($5.7 million). Trust and wealth management income was
up 20% ($2.9 million) inclusive of a $2.0 million contribution from
McLean & Partners. The elimination of charges for contingent
consideration fair value changes accounted for $2.5 million of the
positive difference in other income compared to last year. Credit
related fee income increased 11% ($1.5 million), in line with overall
loan growth. The 'other' category of other income was up 26% ($0.8
million) mainly driven by gains recognized on the sale of insured
residential mortgages, while retail services contributions increased
10% ($0.7 million).  
Credit Quality 
Overall credit quality reflects continued strong underwriting
practices and relatively stable levels of economic activity in
Western Canada despite slower growth in the global economy. Gross
impaired loans at July 31, 2013 of $72.7 million remained very low in
relation to total loans outstanding and compare to $61.6 million last
quarter and $70.2 million a year earlier. The increase in the dollar
level of gross impaired loans this quarter is consistent with normal
fluctuations and was not affected by the impact of floods in southern
Alberta.  


 
                             For the three months ended                     
                                                                            
                                                               Change       
                                                                 from       
(unaudited)                 July 31    April 30     July 31   July 31       
($ thousands)                 2013         2013       2012      2012        
----------------------------------------------------------------------------
                                                                            
Gross impaired loans,                                                       
 beginning of period     $   61,623  $   55,734  $   87,873       (30)     %
  New formations             23,285      19,923      13,434        73       
  Reductions, impaired                                                      
   accounts paid down or                                                    
   returned to                                                              
   performing status         (9,086)    (10,158)    (28,233)      (68)      
  Write-offs                 (3,083)     (3,876)     (2,833)        9       
----------------------------------------------------------------------------
Total(1)                 $   72,739  $   61,623  $   70,241         4      %
----------------------------------------------------------------------------
                                                                            
Balance of the ten                                                          
 largest impaired                                                           
 accounts                $   42,831  $   33,189  $   32,444        32      %
Total number of accounts                                                    
 classified as                                                              
 impaired(3)                    142         131         116        22       
Gross impaired loans as                                                     
 a percentage of total                                                      
 loans(4)                      0.48%       0.41%       0.51%       (3)bp(2) 
 
1.  Gross impaired loans include foreclosed assets held for sale with a
    carrying value of $6,857 (April 30, 2013 - $7,256 and July 31, 2012 -
    $11,721). 
2.  bp - basis point change. 
3.  Total number of accounts excludes National Leasing. 
4.  Total loans do not include an allocation for credit losses or deferred
    revenue and premiums. 

 
The dollar level of gross impaired loans represented 0.48% of total
loans at quarter end, compared to 0.41% last quarter and 0.51% one
year ago. As at July 31, 2013, the collective allowance for credit
losses exceeded the balance of impaired loans, net of specific
allowances. The total allowance for credit losses (collective and
specific) represented 116% of gross impaired loans at quarter end,
compared to 129% last quarter and 114% one year ago. The total
allowance for credit losses was $84.5 million at July 31, 2013,
compared to $79.5 million last quarter and $79.8 million a year
earlier.  
The dollar 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. Specific allowances for expected
write-offs are established through detailed analyses of both the
overall quality and ultimate marketability of the security held
against impaired accounts. Actual credit losses are expected to
remain within the Bank's historical range of acceptable levels.  
The provision for credit losses measured against average loans was 20
basis points in the quarter and 19 basis points year-to-date. This
compares to 19 basis points in the previous quarter and 20 basis
points through the first nine months last year. Based on the current
environment and expectations for credit quality looking forward,
management believes the annual provision for credit losses will
remain below the midpoint of the 2013 target range of 18 to 23 basis
points. 
Impact of southern Alberta floods on the loan portfolio 
A total of 21 residential mortgages with a combined authorized dollar
value of $8.6 million were identified as potentially impacted by the
floods, but none have been classified as impaired. All residential
mortgage discussions have confirmed that insurance is in force and
clients are proceeding with claims on their respective properties,
including, where applicable, provincial disaster relief applications.
Flooding also temporarily compromised the ability of many businesses
in the affected regions to operate. The Bank identified 13
potentially affected business clients where property inspections were
completed by CWB staff. These inspections confirmed no extensive
damage to any of the affected clients' operations or property
securing CWB advances. With the information available at August 28,
2013, management expects the collective allowance for credit losses
is sufficient to absorb any flood-related losses that may be
identified in the future.  
Non-interest Expenses 
One of management's key priorities is to deliver strong long-term
growth while maintaining effective control of costs. Significant
anticipated expenditures relate to additional staff complement to
support ongoing growth, as well as expanded infrastructure and
further investment in technology. This strategy is aligned with a
commitment to maximize long-term shareholder value and is expected to
provide material benefits in future periods. Work toward
implementation of a new core banking system is well underway. Current
plans estimate completion of this very significant technology project
in 2015 based on an initial capital budget of $50 million. Upgrades
and expansion of branch infrastructure are also ongoing. Compliance
with an increasing level of regulatory rules and oversight for all
Canadian banks requires the investment of both time and resources,
which further contributes to higher non-interest expenses. 
Q3 2013 vs. Q3 2012 
Quarterly non-interest expenses of $67.0 million were up 13% ($7.8
million) compared to the same quarter last year primarily reflecting
12% ($4.7 million) higher salaries and benefits and a 21% ($2.1
million) increase in general expenses. Of the $7.8 million total
increase in non-interest expenses, $1.5 million (19%) reflects the
current quarter addition of McLean & Partners. The overall change in
salaries and benefits, excluding McLean & Partners, mainly resulted
from higher compensation expense associated with a larger staff
complement to support ongoing growth across all businesses. Increases
in stock-based and variable compensation were influenced by both the
increase in staff complement and a higher number of employees
participating in the Bank's long-term incentive plan. The change in
general expenses was driven by increases of $0.3 million each in
deposit insurance premiums and employee training, as well as a $0.2
million increase in community investment. Employee training costs
relate to delivery of the Bank's Being Crucial training program to
almost all client-facing account managers within the branch network.
Premises and equipment expense was 11% ($1.1 million) higher
primarily due to increases in direct computer costs, ongoing upgrades
to existing technology and infrastructure, and costs associated with
the opening of a new full-service branch in Winnipeg, Manitoba in the
latter part of 2012.  
Q3 2013 vs. Q2 2013 
Compared to the previous quarter, non-interest expenses were up 3%
($2.1 million), with the addition of McLean & Partners accounting for
76% ($1.5 million) of the difference. Excluding the contribution of
McLean & Partners, the change in composition of non-interest expense
mainly reflected $1.2 million lower marketing and business
development costs, offset by expenses related to salaries and
benefits, employee training, regulatory costs and professional
services. 
YTD 2013 vs. YTD 2012 
Year-to-date non-interest expenses were up 11% ($19.5 million) over
2012 reflecting a 12% ($13.7 million) increase in salaries and
benefits driven by staff complement, annual salary increments, and
higher stock-based and variable compensation. General expenses rose
9% ($2.8 million), while premises and equipment costs were up 10%
($2.8 million).  
Efficiency ratio 
The third quarter efficiency ratio (teb), which measures non-interest
expenses as a percentage of total revenues (teb), was 45.9%, compared
to 42.8% in the third quarter last year and 47.3% in the previous
quarter. The improvement compared to the prior quarter mainly
reflects the combined positive impact of three additional
revenue-earning days and an improved net interest margin, partially
offset by the modest negative impact from McLean & Partners.
Excluding claims expense specifically related to the catastrophic
southern Alberta floods, the third quarter efficiency ratio was
44.4%. The negative change in the efficiency ratio compared to the
same quarter last year reflects constrained revenue growth resulting
from the year-over-year decline in net interest margin, increased
non-interest expenses to facilitate business growth, and the impact
of McLean & Partners, partially offset by the benefit of strong loan
growth. Based on the year-to-date efficiency ratio of 46.2%, and in
consideration of expected fourth quarter revenues and planned
expenditures, management believes its 2013 efficiency ratio target of
46% or better is attainable, but it will be challenging.  
Income Taxes 
The third quarter effective income tax rate (teb) was 25.2%, compared
to 26.2% in the same quarter last year. The effective income tax rate
(teb) for the first nine months of 2013 was 25.6%, down 100 basis
points from the same period one year ago reflecting the non-tax
deductible charge related to the 2012 fair value contingent
consideration changes and a 150 basis point decrease in the basic
federal income tax rate effective on January 1, 2012. 
Comprehensive Income 
Comprehensive income is comprised of net income and other
comprehensive income (OCI), all net of income taxes, and totaled
$37.7 million for the third quarter, compared to $50.5 million in the
same period last year. The net decrease in comprehensive income was
driven by unrealized losses from changes in fair value of
available-for-sale securities of $10.4 million and a slight decline
in net income. The change in fair value of available-for-sale
securities mainly relates to declines in the market value of the
Bank's preferred share portfolio. Fluctuations in the value of
preferred shares are generally attributed to changes in interest
rates, movements in market credit spreads and shifts in the interest
rate curve. Market fluctuations during the third quarter,
particularly the impact of a steepening interest rate curve, led to a
5% decline in the reference S&P/TSX preferred share laddered index,
compared to a 4% decline in fair value of the Bank's preferred share
portfolio. While the combined dollar investment in preferred shares
and common equities is relatively small in relation to total liquid
assets, it increases the potential for comparatively larger
fluctuations in OCI. 
Year-to-date comprehensive income of $140.6 million was down from
$146.9 million in 2012 mainly resulting from an increase in
unrealized losses from changes in fair value of available-for-sale
securities. The 5% ($7.1 million) increase in net income was more
than offset by the realization of $9.4 million of gains on
securities, net of tax, through the income statement, and a $2.5
million loss, net of tax, from changes in fair value of
available-for-sale securities, primarily reflecting market dynamics
for preferred shares, described above. 
Balance Sheet 
Total assets increased 1% ($147 million) in the quarter, 6% ($1,053
million) year-to-date and 12% ($1,894 million) in the past year to
reach $17,927 million at July 31, 2013. 
Cash and Securities 
Cash and securities totaled $2,285 million at July 31, 2013, compared
to $2,077 a year earlier and $2,545 million at the end of last
quarter. In a manner consistent with the Bank's asset/liability
policies and in view of the current economic environment, management
prudently reduced average liquidity through the third quarter. Net
unrealized losses recorded on the balance sheet of $4.5 million
compare to unrealized gains of $16.5 million last quarter and $12.1
million a year earlier, with the differences mainly reflecting a
decrease in the market value of preferred shares and the realization
of gains on common shares. The securities portfolio is primarily
comprised of high quality debt instruments, preferred shares and
common equities that are not held for trading purposes and, where
applicable, are typically held until maturity. As discussed above,
fluctuations in value are generally attributed to changes in interest
rates, movements in market credit spreads and shifts in the interest
rate curve. Fluctuations during the current period mainly relate to
steepening of the interest rate curve. Volatility in equity markets
also leads to fluctuations in value, particularly for common shares.  
Net realized gains on securities in the third quarter of $7.0 million
compare to $1.9 million in the same period last year and $3.1 million
in the previous quarter. Year-to-date net gains of $12.8 million
reflect favourable market conditions that prompted the realization of
gains following unexpectedly strong performance within the common
share portfolio. Based on the level of gains realized and current
composition of the securities portfolio, including a significant
quarterly increase in the level of unrealized losses on preferred
shares, net gains on securities are not expected to provide a
meaningful source of revenue in the fourth quarter. The Bank has no
direct investment in any non-Canadian sovereign debt or other
securities issued outside of Canada or the United States. 
Treasury Management 
Assuming a supportive economic environment continues and following
the prudent reduction of liquidity described above, management
expects average liquidity to remain relatively consistent with the
current level going forward.  
DBRS Limited maintains published credit ratings on the Bank's senior
debt (deposits), short-term debt, subordinated debentures and
preferred shares of "A (low)", "R1 (low)", "BBB (high)", and "Pfd-3
(high)", respectively, all with a stable outlook. Credit ratings do
not comment on market price or suitability of any financial
instrument for a particular investor and are not recommendations to
purchase, sell or hold securities. Ratings are subject to revision or
withdrawal at any time by the rating organization. Management
believes the ratings widen the base of clients and investors who can
participate in CWB's offerings, while also lowering overall funding
costs and the cost of capital. The successful launch of a Bearer
Deposit Note (BDN) program during the quarter exemplifies the funding
diversification available to the Bank on the basis of its credit
ratings. Refer to the Deposits section of this MD&A for additional
details of the BDN program.  
The Basel Committee on Banking Supervision (the Basel Committee) has
issued a framework document outlining two new liquidity standards.
The document prescribes the Liquidity Coverage Ratio (LCR) and Net
Stable Funding Ratio (NSFR) as minimum regulatory standards beginning
in 2015 and 2018, respectively. The LCR establishes a common measure
of liquidity risk and requires institutions to maintain sufficient
liquid assets to cover a minimum of 30 days of cash flow requirements
in a stressed situation. The NSFR describes a second common measure
of liquidity establishing a minimum acceptable amount of stable
funding based on the liquidity characteristics of a financial
institution's assets and activities over a one-year horizon. Although
the Basel Committee has introduced a phase-in period for compliance
with LCR guidelines, Canadian banks will be required to fully comply
with the LCR regulations in 2015 with no phase-in. The Basel
Committee issued an additional Consultative Document during the
quarter, discussing qualitative and quantitative disclosure standards
related to the LCR. Based on its review of the relevant standards,
CWB believes it is well positioned to comply with these new
requirements. 
Loans  
Total loans grew 3% ($398 million) in the quarter, 10% ($1,329
million) year-to-date and 12% ($1,640 million) in the past twelve
months to reach $15,283 million. Measured in dollar terms, sequential
growth by lending sector was led by commercial mortgages ($133
million), real estate project loans ($105 million), equipment
financing and leasing ($104 million) and general commercial loans
($91 million). Personal loans and mortgages grew $32 million, net of
the sale of $66 million of insured residential mortgages, and oil and
gas production loans were up $8 million. The corporate lending
portfolio decreased by $70 million.  
Equipment financing and leasing led growth by lending sector both
year-to-date and year-over-year, with growth in dollar terms of $372
million and $454 million, respectively. Commercial mortgages followed
with growth of $327 million year-to-date and $332 million
year-over-year. Growth in real estate project loans was also strong
at $314 million year-to-date and $267 million compared to a year
earlier, as opportunities to finance well capitalized developers on
the basis of sound loan structures and acceptable pre-sale levels
were above management's expectations at the onset of 2013. Growth in
general commercial lending activity was $224 million year-to-date and
$362 million compared to July 31, 2012. Measured by geographic
concentration on a year-to-date basis, lending activity in British
Columbia showed the highest growth in dollar terms, followed by
Alberta, Ontario, Saskatchewan and Manitoba. 


 
(unaudited)                            July 31  April 30   October   July 31
($ millions)                              2013      2013   31 2012      2012
----------------------------------------------------------------------------
                                                                            
General commercial loans             $   3,403 $   3,312 $   3,179 $   3,041
Commercial mortgages                     3,257     3,124     2,930     2,925
Equipment financing and leasing          2,870     2,766     2,498     2,416
Personal loans and mortgages             2,410     2,378     2,292     2,210
Real estate project loans                2,196     2,091     1,882     1,929
Corporate lending (1)                      941     1,011       912       873
Oil and gas production loans               290       282       342       328
----------------------------------------------------------------------------
Total loans outstanding (2)          $  15,367 $  14,964 $  14,035 $  13,722
----------------------------------------------------------------------------
 
1.  Corporate lending represents a diversified portfolio that is centrally
    sourced and administered through a designated lending group located in
    Edmonton. These loans include participation in select syndications that
    are structured and led primarily by the major Canadian banks, but
    exclude participation in various other syndicated facilities sourced
    through relationships developed at CWB branches. 
2.  Loans by lending sector exclude the allowance for credit losses. 

 
While strong competition from domestic banks and other financial
services firms will continue to influence market dynamics across most
lending areas, management believes business will be gained from the
combined positive influences of a strong client value proposition,
enhanced training of client-facing account managers, expanded market
presence and increased brand awareness in core geographic markets.
CWB's strategic plan is focused on further enhancing existing
competitive advantages in business banking, with complementary
offerings in personal banking, equipment leasing and other key
business areas. The minimum loan growth target for 2013 has been met
in the first nine months based on sound credit discipline. The
current overall outlook for generating ongoing profitable loan growth
remains positive. 
Consensus forecasts for Canada's domestic economy remain largely
unchanged from the prior quarter, anticipating an acceleration of
economic growth in 2014 and 2015. Moderate economic expansion is
expected to continue through the remainder of 2013, with relatively
stronger regional activity forecasted for the western provinces. The
probability of broad and dramatic price declines in domestic housing
markets appears to be reducing as overall conditions continue to
soften in certain regions at a modest pace. Housing affordability in
most markets remains within historical ranges, largely reflecting
ongoing very low interest rates and stable employment levels.  
Optimum Mortgage 
Total loans of $1,139 million within the broker-sourced residential
mortgage business, Optimum Mortgage (Optimum), represented a decline
of 1% ($7 million) compared to the prior quarter, and increases of 4%
($47 million) year-to-date and 9% ($92 million) year-over-year.
Adjusted for the sale of residential mortgage portfolios totaling $66
million in the third quarter and $29 million in the first quarter,
Optimum's loan growth was 5% ($59 million) compared to the prior
quarter, 13% ($142 million) year-to-date and 18% ($187 million)
year-over-year. Growth was driven almost exclusively by alternative
mortgages secured via conventional residential first mortgages
carrying a weighted average loan-to-value ratio at initiation of
approximately 71%. The book value of alternative mortgages
represented 79% of Optimum's total portfolio at quarter end. Future
regulatory changes, should they occur, could result in moderated
demand for mortgages going forward. Overall, Optimum continues to
deliver strong performance and management is optimistic about both
the risk profile and growth opportunities within this business.  
Securitization 
Securitized leases are reported on-balance sheet with total loans.
The gross amount of securitized leases at July 31, 2013 was $262
million, compared to $255 million last quarter and $201 million one
year ago. Leases securitized in the third quarter and year-to-date
totaled $31 million and $91 million, respectively. 
Residential Mortgage Exposure 
In accordance with OSFI Guideline B20 - Residential Mortgage
Underwriting Practices and Procedures, additional information is
provided regarding CWB's residential mortgage exposure. This
exposure, including home equity lines of credit (HELOCs), is sourced
through Optimum's third-party channels and CWB branches. Bank and
trust companies in Canada are prohibited from providing mortgages
with a loan-to-value (LTV) of more than 80% unless supported by
third-party mortgage insurance. Although mortgage insurance protects
the Bank from losses resulting from mortgagor default, it does not
replace prudent lending practices, including the underwriting and
administration of insured loans, the collection of payments and the
protection of loan security.  
Following is a geographical breakdown of insured and uninsured loans
secured by residential property, including HELOCs: 


 
(unaudited)                        As at July 31, 2013                      
             ---------------------------------------------------------------
($ thousands)      Insured            Uninsured                             
             ----------------------------------------                       
                          % of                 % of                         
                         Total                Total        Total Provincial 
Province       Balance Balance      Balance Balance      Balance % of Total 
----------------------------------------------------------------------------
Alberta      $ 173,416      21%  $  649,981      79%  $  823,397         40%
British                                                                     
 Columbia       96,163      13      645,801      87      741,964         37 
Manitoba         7,282      12       53,014      88       60,296          3 
Ontario         12,374       5      243,276      95      255,650         13 
Saskatchewan    25,156      18      113,690      82      138,846          7 
Other              108     100            -       -          108          - 
----------------------------------------------------------------------------
             $ 314,499      16%  $1,705,762      84%  $2,020,261        100%
----------------------------------------------------------------------------
                                                                            
                                  As at April 30, 2013                      
             -------------------------------------------------------------- 
                   Insured            Uninsured                             
             ----------------------------------------                       
                          % of                 % of                         
                         Total                Total        Total Provincial 
Province       Balance Balance      Balance Balance      Balance % of Total 
----------------------------------------------------------------------------
Alberta      $ 195,843      24%  $  631,689      76%  $  827,532         42%
British                                                                     
 Columbia      105,826      14      628,670      86      734,496         37 
Manitoba         9,273      15       51,625      85       60,898          3 
Ontario         17,252       8      211,724      92      228,976         11 
Saskatchewan    30,941      22      110,090      78      141,031          7 
Other              111     100            -       -          111          - 
----------------------------------------------------------------------------
             $ 359,246      18%  $1,633,798      82%  $1,993,044        100%
----------------------------------------------------------------------------

 
Following are the approximate average LTV ratios for newly originated
and acquired uninsured residential mortgages and HELOCs: 


 
                                          For the three months ending      
---------------------------------------------------------------------------
(unaudited)                          July 31, 2013      April 30, 2013     
---------------------------------------------------------------------------
Alberta                                         65%                 65%    
British Columbia                                63                  61     
Manitoba                                        71                  66     
Ontario                                         70                  72     
Saskatchewan                                    65                  64     
Other                                            -                  41     
---------------------------------------------------------------------------
                                                66%                 65%    
---------------------------------------------------------------------------

 
Following are total loans secured by residential property, including
HELOCs, categorized by amortization period: 


 
                               As at July 31, 2013    As at April 30, 2013 
                            -----------------------------------------------
                                                                     % of  
(unaudited)                             % of Total                   Total 
($ thousands)                    Balance   Balance       Balance   Balance 
---------------------------------------------------------------------------
Amortization (years)                                                       
5 or less                    $    44,484         2%  $    39,329         2%
greater than 5 to 10             23,996         1        21,553         1 
greater than 10 to 15            48,768         3        47,828         2 
greater than 15 to 20           155,645         8       147,213         7 
greater than 20 to 25           974,987        48       950,864        48 
greater than 25 to 30           625,981        31       610,514        31 
greater than 30 to 35           143,463         7       172,281         9 
greater than 35                   2,937         -         3,462         - 
---------------------------------------------------------------------------
                             $ 2,020,261       100%  $ 1,993,044       100%
---------------------------------------------------------------------------

 
The total residential mortgage portfolio is well secured with an
average LTV of less than 65%. In the event of a significant economic
downturn and/or contraction in real estate prices, the Bank's strong
collateral position would mitigate potential losses within this
portfolio. 
Deposits 
Total deposits at quarter end were $14,962 million, up 1% ($182
million) over the previous quarter, 6% ($817 million) year-to-date,
and 11% ($1,507 million) over the past year. Personal deposits
represented 63% of total deposits at July 31, 2013, unchanged from
the prior quarter and down from 66% one year ago. Total branch-raised
deposits represented 55% of total deposits at July 31, 2013, down
from 56% in the previous quarter and 57% one year ago. Demand and
notice deposits were 33% of total deposits, unchanged from the
previous quarter and up from 32% in the same period last year.  
Total branch deposits, including trust services deposits, of $8,292
million were consistent with the prior quarter, up 6% ($470 million)
year-to-date and 8% ($584 million) over the past twelve months. The
demand and notice component within branch-raised deposits, which
includes lower cost deposits, was also consistent with the prior
quarter, up 9% ($419 million) year-to-date and 12% ($522 million)
from the same time last year to reach $4,877 million. One of
management's strategic objectives is to increase the level of
personal and business deposits raised within the branch network,
trust companies and Canadian Direct Financial, the Internet-based
division of the Bank. Specific emphasis is placed on growing deposits
that are lower cost, provide associated transactional fee income and
strengthen relationships by providing clients with relevant tools for
managing their business and personal finances. Meaningful
enhancements to CWB's cash management offerings for business clients
continue to support this focus on growing branch-raised deposits, as
do recently offered training programs that have reached a significant
number of branch employees. CWB's expanding market presence,
including ongoing expansion and upgrades to existing branches, also
supports generation of branch-raised deposits.  
Management remains committed to further enhance and diversify all
funding sources to support growth, manage the impact of competitive
pressures and sustain adequate net interest margins. The deposit
broker network remains a valued source for raising insured fixed term
retail deposits and has proven to be an extremely effective and
efficient way to access funding and liquidity over a wide geographic
base. Selectively utilizing debt capital markets is also part of
management's strategy to further diversify the funding base over
time. At the end of the third quarter, there was a total of $1,030
million of term deposits raised through debt capital markets,
representing 7% of total deposits. Earlier this year, DBRS Limited
issued an initial rating of "R-1 (low)" with a stable trend on CWB's
short-term debt, enabling the Bank to access an additional source of
funding through the issuance of bearer deposit notes (BDNs). The Bank
formally announced its BDN program in July with an internally
authorized limit of $500 million. The initial issuance of $30 million
under the BDN program is captured within the total for debt capital
market term deposits referenced above. Current plans are to issue
approximately $250 million of BDNs by fiscal year-end. Management
will also continue to evaluate the funding potential available
through securitization of portfolios that may include equipment loans
and leases, residential mortgages and commercial mortgages.  
Other Assets and Other Liabilities 
Other assets at July 31, 2013 totaled $358 million, compared to $350
million last quarter and $313 million one year ago. Other liabilities
at quarter end were $443 million, compared to $456 million the
previous quarter and $440 million a year earlier.  
Off-Balance Sheet 
Off-balance sheet items include assets under administration and
assets under management. Total assets under administration, which are
comprised of trust assets and third-party leases under
administration, as well as mortgages under service agreements,
totaled $8,210 million at July 31, 2013, compared to $7,821 million
last quarter and $6,830 million one year ago. Assets under management
were $1,811 million at quarter end, compared to $905 million last
quarter and $815 million a year earlier, primarily reflecting the
addition of McLean & Partners. 
Other off-balance sheet items are comprised of standard industry
credit instruments (guarantees, standby letters of credit and
commitments to extend credit). CWB does not utilize, nor does it have
exposure to, collateralized debt obligations or credit default swaps.
For additional information regarding other off-balance sheet items
refer to Note 11 of the unaudited interim consolidated financial
statements for the period ended July 31, 2013, as well as Notes 11
and 20 of the audited consolidated financial statements on pages 81
and 91, respectively, in the Bank's 2012 Annual Report. 
Capital Management 
Effective January 1, 2013, the Office of the Superintendent of
Financial Institutions Canada (OSFI) requires Canadian financial
institutions to manage and report regulatory capital in accordance
with a new capital management framework, commonly referred to as
Basel III. The required minimum regulatory capital ratios, including
a 250 basis point capital conservation buffer, are 7.0% common equity
Tier 1 (CET1), effective in the first quarter of 2013, and 8.5% Tier
1 and 10.5% total capital effective in the first quarter of 2014. The
Basel III rules provide for transitional adjustments whereby certain
aspects of the new rules will be phased in between 2013 and 2019. The
only available transition allowance in the Basel III capital
standards permitted by OSFI for Canadian banks relates to the
multi-year phase out of non-qualifying capital instruments.  
At July 31, 2013, the Bank's capital ratios were 7.9% CET1, 9.6% Tier
1 and 13.9% total capital, essentially unchanged from the previous
quarter. In June 2013, the Bank redeemed $50 million of subordinated
debentures with a fixed interest rate of 5.95%. The 2013 inclusion of
non-qualifying capital instruments in total capital under Basel III
is capped at $607.5 million, based on 90% of the January 1, 2013
balance of $675 million. As a result, the June redemption of
subordinated debentures had no impact on non-qualifying capital
included in total capital as the balance of subordinated debentures
after the redemption was still in excess of the $607.5 million cap. 
Further details regarding CWB's regulatory capital and capital
adequacy ratios are included in the following table: 


 
                                            As at        As at       As at  
(unaudited)                               July 31    April 30       July 31 
($ millions)                              2013(1)      2013(1)      2012(2) 
----------------------------------------------------------------------------
Regulatory capital                                                          
  CET1 capital before deductions      $     1,354  $     1,331  $       n/a 
  Net CET1 deductions                       (110)        (101)          n/a 
----------------------------------------------------------------------------
CET1 capital                                1,244        1,230          n/a 
----------------------------------------------------------------------------
  Tier 1 capital before deductions          1,527        1,513        1,524 
  Net deductions                             (11)         (10)        (106) 
----------------------------------------------------------------------------
Tier 1 capital                              1,516        1,503        1,418 
----------------------------------------------------------------------------
  Total capital before deductions           2,195        2,181        1,915 
  Net deductions                              (1)          (1)         (61) 
----------------------------------------------------------------------------
Total capital                         $     2,194  $     2,180  $     1,854 
----------------------------------------------------------------------------
Risk-weighted assets                  $    15,846  $    15,446  $    13,495 
----------------------------------------------------------------------------
Capital adequacy ratios                                                     
  CET1                                        7.9%         8.0%         n/a 
  Tier 1                                      9.6          9.7         10.5%
  Total                                      13.9         14.1         13.7 
n/a - not applicable                                                        
 
1.  Basel III capital balances at July 31 and April 30, 2013 exclude 10% of
    existing non-common equity instruments that do not include non-viability
    contingent capital clauses. At July 31, 2013, a combined $31 million of
    outstanding Innovative Tier 1 capital (disclosed in non-controlling
    interest) and preferred shares (April 30, 2013: $31 million) as well as
    $18 million of outstanding subordinated debentures (April 30, 2013: $68
    million) were excluded from regulatory capital.  
2.  Capital is managed and reported in accordance with the new capital
    management framework called Basel III, which was adopted by OSFI on
    January 1, 2013. Capital ratios prior to fiscal 2013 have been
    calculated using the previous framework, Basel II. Capital ratios
    calculated under Basel III are not directly comparable to the equivalent
    Basel II measures. 

 
Capital ratios exceed the Basel III targets established through CWB's
Internal Capital Adequacy Assessment Process (ICAAP) and are
supportive of near-term growth expectations and strategic priorities.
The ongoing retention of earnings should support capital requirements
associated with the anticipated achievement of the 2013 minimum
performance targets.  
CWB currently reports its regulatory capital ratios using the
Standardized approach for calculating risk-weighted assets. This
approach requires the Bank to carry significantly more capital for
certain credit exposures compared to requirements under the Advanced
Internal Ratings Based (AIRB) methodology used by larger Canadian
financial institutions. For this reason, regulatory capital ratios of
banks that utilize the Standardized approach versus the AIRB
methodology are not directly comparable. Required resources, costs
and potential timelines related to the Bank's possible transition to
an AIRB methodology for managing credit risk and calculating
risk-weighted assets continue to be evaluated. Preliminary analysis
confirms a multi-year timeframe will be required. CWB's new core
banking system, expected to be implemented in 2015, is a critical
component for a number of requirements necessary for AIRB compliance,
including the collection and analysis of certain types of data. 
Further information relating to the Bank's capital position is
provided in Note 14 of the unaudited interim consolidated financial
statements as well as the audited consolidated financial statements
and MD&A for the year ended October 31, 2012.  
Book value per common share at July 31, 2013 was $17.06, compared to
$16.82 last quarter and $15.56 one year ago. 
Common shareholders received a quarterly cash dividend of $0.18 per
common share on June 27, 2013. On August 28, 2013, CWB's Board of
Directors declared a cash dividend of $0.18 per common share, payable
on September 26, 2013 to shareholders of record on September 19,
2013. This quarterly dividend was 13% higher than the quarterly
dividend declared one year ago. The Board of Directors also declared
a cash dividend of $0.453125 per Series 3 Preferred Share payable on
October 31, 2013 to shareholders of record on October 24, 2013. 
Changes in Accounting Policies 
There were no new significant accounting policies adopted during the
quarter for purposes of presenting the Bank's financial statements
under International Financial Reporting Standards (IFRS). 
Future Accounting Changes 
A number of standards and amendments have been issued by the
International Accounting Standards Board (IASB) and are noted on page
51 of the 2012 Annual Report. There were no changes to these items
through the third quarter of 2013. The standards and amendments may
impact the presentation of financial statements in the future and
management is currently reviewing these changes to determine the
impact, if any. 
CWB continues to monitor activities of the IASB as well as proposed
changes to IFRS. Several accounting standards in the process of being
amended by the IASB (e.g. loan impairment, leases and insurance) may
have a significant impact on the presentation of the Bank's
consolidated financial statements in the future. 
Controls and Procedures 
There were no changes in the Bank's internal controls over financial
reporting that occurred during the quarter ended July 31, 2013 that
have materially affected, or are reasonably likely to materially
affect, the Bank's internal controls over financial reporting.  
The Bank's certifying officers have limited the scope of design of
disclosure controls and procedures (DC&P) and internal control over
financial reporting (ICFR) to exclude the controls, policies and
procedures of McLean & Partners, acquired this quarter.  
Prior to its release, this quarterly report to shareholders was
reviewed by the Audit Committee and, on the Audit Committee's
recommendation, approved by the Board of Directors of CWB. 
Updated Share Information 
As at August 23, 2013, there were 79,373,825 CWB common shares
outstanding. Also outstanding were employee stock options, which are
or will be exercisable for up to 4,498,626 common shares for maximum
proceeds of $119 million.  
Dividend Reinvestment Plan  
CWB common shares (TSX:CWB) and preferred shares (TSX:CWB.PR.A) are
deemed eligible to participate in the Bank's dividend reinvestment
plan (the Plan). The Plan provides holders of eligible shares the
opportunity to direct cash dividends toward the purchase of CWB
common shares. Further details for the Plan are available on the
Bank's website at www.cwbankgroup.com/investor_relations/drip. At the
current time, for the purposes of the Plan, the Bank has elected to
issue common shares from treasury at a 2% discount from the average
market price (as defined in the Plan).  
Preferred Share Normal Course Issuer Bid 
CWB has a Normal Course Issuer Bid (NCIB) outstanding to purchase,
for cancellation, up to up to 826,120 Non-Cumulative 5-Year Rate
Reset Preferred Shares Series 3 ("preferred shares"). The NCIB
commenced March 1, 2013 and will expire February 28, 2014. During the
nine months ended July 31, 2013, the Bank purchased and cancelled
31,404 preferred shares under the NCIB. Security holders may contact
the Bank to obtain, without charge, a copy of the notice filed with
the TSX. Additionally, a copy of the news release is available on the
Bank's website and on SEDAR at www.sedar.com.  
Summary of Quarterly Financial Information 


 
                                   2013              
-----------------------------------------------------
($ thousands)                Q3         Q2         Q1
-----------------------------------------------------
Total revenues (teb)  $ 145,734  $ 136,966  $ 137,128
Total revenues          143,573    134,966   135,21.3
Net income               53,323     48,534     51,062
Net income available                                 
 to common                                           
 shareholders            47,484     42,988     45,482
Earnings per common                                  
 share                                               
Basic                      0.60       0.54       0.58
Diluted                    0.60       0.54       0.57
Adjusted cash              0.61       0.55       0.58
Total assets ($                                      
 millions)               17,927     17,779     17,161
-----------------------------------------------------
 
                                        2012                           2011
---------------------------------------------------------------------------
($ thousands)                Q4         Q3         Q2         Q1         Q4
---------------------------------------------------------------------------
Total revenues (teb)  $ 133,178  $ 138,150  $ 127,854  $ 126,300  $ 119,673
Total revenues          131,199    136,064    125,396    123,680    116,540
Net income               48,616     53,578     45,212     47,051     41,474
Net income available                                                       
 to common                                                                 
 shareholders            43,046     48,004     39,669     41,478     35,921
Earnings per common                                                        
 share                                                                     
Basic                      0.55       0.62       0.52       0.55       0.48
Diluted                    0.55       0.61       0.52       0.54       0.47
Adjusted cash              0.56       0.63       0.55       0.57       0.53
Total assets ($                                                            
 millions)               16,873     16,033     15,713     15,484     14,849
---------------------------------------------------------------------------

 
The financial results for each of the last eight quarters are
summarized above. In general, CWB's performance reflects a relatively
consistent trend, although the second quarter contains three fewer
revenue-earning days, or two fewer days in a leap year such as 2012.  
The Bank's quarterly financial results are subject to some
fluctuation due to its exposure to property and casualty insurance.
Insurance operations, which are primarily reflected in other income,
are subject to seasonal weather conditions, cyclical patterns of the
industry and natural catastrophes. Mandatory participation in the
Alberta auto risk sharing pools can also result in unpredictable
quarterly fluctuations.  
Among other things, quarterly results can also fluctuate from the
recognition of periodic income tax items. 
For additional details on variations between the prior quarters,
refer to the summary of quarterly results section of the Bank's MD&A
for the year ended October 31, 2012 and the individual quarterly
reports to shareholders which are available on SEDAR at www.sedar.com
and on CWB's website at www.cwbankgroup.com. 
Taxable Equivalent Basis (teb) 
Most banks analyze revenue on a taxable equivalent basis to permit
uniform measurement and comparison of net interest income. Net
interest income (as presented in the consolidated statement of
income) includes tax-exempt income on certain securities. Since this
income is not taxable, the rate of interest or dividends received is
significantly lower than would apply to a loan or security of the
same amount. The adjustment to taxable equivalent basis increases
interest income and the provision for income taxes to what they would
have been had the tax-exempt securities been taxed at the statutory
rate. The taxable equivalent basis does not have a standardized
meaning prescribed by IFRS and, therefore, may not be comparable to
similar measures presented by other banks. Total revenues, net
interest income and income taxes are discussed on a taxable
equivalent basis throughout this quarterly report to shareholders. 
Non-IFRS Measures 
Taxable equivalent basis, adjusted cash earnings per common share,
return on common shareholders' equity, return on assets, efficiency
ratio, net interest margin, common equity Tier 1, Tier 1 and total
capital adequacy ratios, and average balances do not have
standardized meanings prescribed by IFRS and therefore may not be
comparable to similar measures presented by other financial
institutions. The non-IFRS measures used in this MD&A are calculated
as follows: 


 
--  taxable equivalent basis - described above; 
--  adjusted cash earnings per common share - diluted earnings per common
    share excluding the after-tax amortization of acquisition-related
    intangible assets and the non-tax deductible change in fair value of
    contingent consideration. These exclusions represent non-cash charges
    mainly related to the acquisition of National Leasing Group Inc. and are
    not considered to be indicative of ongoing business performance; 
--  return on common shareholders' equity - annualized net income available
    to common shareholders divided by average common shareholders' equity; 
--  return on assets - annualized net income available to common
    shareholders divided by average total assets; 
--  efficiency ratio - non-interest expenses divided by total revenues
    excluding the non-tax deductible change in fair value of contingent
    consideration; 
--  net interest margin - net interest income divided by average total
    assets; 
--  Basel II Tier 1 and total capital adequacy ratios - in accordance with
    guidelines issued by OSFI; 
--  Basel III common equity Tier 1, Tier 1 and total capital ratios - in
    accordance with guidelines issued by OSFI; and 
--  average balances - average daily balances. 

 
Consolidated Balance Sheets 


 
                                                                            
                                                                     Change 
                       As at        As at        As at        As at    from 
(unaudited)          July 31     April 30   October 31      July 31 July 31 
($ thousands)           2013         2013         2012         2012    2012 
----------------------------------------------------------------------------
Assets                                                                      
Cash Resources                                                              
  Cash and non-                                                             
   interest                                                                 
   bearing                                                                  
   deposits                                                                 
   with                                                                     
   financial                                                                
   institutions  $     3,009  $    48,506  $    33,690  $    59,470    (95)%
  Interest                                                                  
   bearing                                                                  
   deposits                                                                 
   with                                                                     
   regulated                                                                
   financial                                                                
   institutions                                                             
   (Note 4)           93,478      107,683      177,028      217,290    (57) 
  Cheques and                                                               
   other items                                                              
   in transit          1,252        5,251       26,265          112   1,018 
----------------------------------------------------------------------------
                      97,739      161,440      236,983      276,872    (65) 
----------------------------------------------------------------------------
Securities                                                                  
 (Note 4)                                                                   
  Issued or                                                                 
   guaranteed                                                               
   by Canada         785,135      736,092      980,200      688,164      14 
  Issued or                                                                 
   guaranteed                                                               
   by a                                                                     
   province or                                                              
   municipality      388,240      600,257      478,622      272,826      42 
  Other                                                                     
   securities      1,014,203    1,046,854      877,278      839,519      21 
----------------------------------------------------------------------------
                   2,187,578    2,383,203    2,336,100    1,800,509      21 
----------------------------------------------------------------------------
                                                                            
Loans (Notes 5                                                              
 and 7)                                                                     
  Personal         2,410,165    2,378,451    2,292,388    2,210,127       9 
  Business        12,957,199   12,585,573   11,743,021   11,512,082      13 
----------------------------------------------------------------------------
                  15,367,364   14,964,024   14,035,409   13,722,209      12 
  Allowance for                                                             
   credit                                                                   
   losses (Note                                                             
   6)               (84,489)     (79,471)     (81,723)     (79,795)       6 
----------------------------------------------------------------------------
                  15,282,875   14,884,553   13,953,686   13,642,414      12 
----------------------------------------------------------------------------
Other                                                                       
  Property and                                                              
   equipment          65,170       64,860       68,938       60,862       7 
  Goodwill            49,424       45,536       45,536       45,536       9 
  Intangible                                                                
   assets             66,894       53,141       49,959       48,068      39 
  Insurance                                                                 
   related            61,666       56,853       57,650       56,774       9 
  Derivative                                                                
   related                                                                  
   (Note 8)            1,249        1,468        1,951          130     861 
  Other assets       113,961      128,226      122,466      101,860      12 
----------------------------------------------------------------------------
                     358,364      350,084      346,500      313,230      14 
----------------------------------------------------------------------------
Total Assets     $17,926,556  $17,779,280  $16,873,269  $16,033,025      12%
----------------------------------------------------------------------------
                                                                            
Liabilities and                                                             
 Shareholders'                                                              
 Equity                                                                     
Deposits                                                                    
  Personal       $ 9,393,847  $ 9,293,391  $ 8,960,118  $ 8,853,855       6%
  Business and                                                              
   government      5,568,295    5,486,924    5,184,719    4,601,543      21 
----------------------------------------------------------------------------
                  14,962,142   14,780,315   14,144,837   13,455,398      11 
----------------------------------------------------------------------------
Other                                                                       
  Cheques and                                                               
   other items                                                              
   in transit         39,719       68,708       54,030       78,726    (50) 
  Insurance                                                                 
   related           165,277      153,837      160,302      151,052       9 
  Derivative                                                                
   related                                                                  
   (Note 8)              168           18           10          238    (29) 
  Securities                                                                
   sold under                                                               
   repurchase                                                               
   agreements              -            -       70,089            -       - 
  Other                                                                     
   liabilities       237,557      233,006      239,503      210,353      13 
----------------------------------------------------------------------------
                     442,721      455,569      523,934      440,369       1 
----------------------------------------------------------------------------
Debt                                                                        
  Debt                                                                      
   securities        227,789      222,183      209,273      178,931      27 
  Subordinated                                                              
   debentures        625,000      675,000      425,000      425,000      47 
----------------------------------------------------------------------------
                     852,789      897,183      634,273      603,931      41 
----------------------------------------------------------------------------
Equity                                                                      
  Preferred                                                                 
   shares (Note                                                             
   9)                208,965      209,649      209,750      209,750       - 
  Common shares                                                             
   (Note 9)          504,380      499,730      490,218      483,266       4 
  Retained                                                                  
   earnings          828,175      794,944      733,298      702,799      18 
  Share-based                                                               
   payment                                                                  
   reserve            24,611       24,026       22,468       23,339       5 
  Other                                                                     
   reserves          (3,028)       12,622        9,247        8,936   (134) 
----------------------------------------------------------------------------
Total                                                                       
 Shareholders'                                                              
 Equity            1,563,103    1,540,971    1,464,981    1,428,090       9 
  Non-                                                                      
   controlling                                                              
   interests         105,801      105,242      105,244      105,237       1 
----------------------------------------------------------------------------
Total Equity       1,668,904    1,646,213    1,570,225    1,533,327       9 
----------------------------------------------------------------------------
Total                                                                       
 Liabilities                                                                
 and Equity      $17,926,556  $17,779,280  $16,873,269  $16,033,025      12%
----------------------------------------------------------------------------
                                                                            
nm - not meaningful                                                         
                                                                            
The accompanying notes are an integral part of the interim consolidated     
financial statements.                                                       

 
Consolidated Statements of Income 


 
                                                                    Change  
                                 For the three months ended           from  
                           -------------------------------------            
(unaudited)                     July 31     April 30     July 31   July 31  
($ thousands,                                                               
 except per share                                                           
 amounts)                          2013         2013        2012      2012  
----------------------------------------------------------------------------
Interest Income                                                             
  Loans                     $   187,420  $   177,159 $   176,977         6% 
  Securities                     11,522       11,272      10,578         9  
  Deposits with                                                             
   regulated                                                                
   financial                                                                
   institutions                     261          419         500       (48) 
----------------------------------------------------------------------------
                                199,203      188,850     188,055         6  
----------------------------------------------------------------------------
Interest Expense                                                            
  Deposits                       70,302       68,853      68,387         3  
  Debt                            8,360        8,421       6,537        28  
----------------------------------------------------------------------------
                                 78,662       77,274      74,924         5  
----------------------------------------------------------------------------
Net Interest Income             120,541      111,576     113,131         7  
Provision for                                                               
 Credit Losses     (Note 6)       7,491        6,684       6,453        16  
----------------------------------------------------------------------------
Net Interest Income                                                         
 after Provision                                                            
 for Credit Losses              113,050      104,892     106,678         6  
----------------------------------------------------------------------------
Other Income                                                                
  Credit related                  5,475        5,053       5,026         9  
  Insurance, net   (Note 3)      (2,225)       6,201       6,251      (136) 
  Trust and wealth                                                          
   management                                                               
   services                       6,825        5,371       4,587        49  
  Gains on                                                                  
   securities, net                7,020        3,074       1,896       270  
  Retail services                 2,373        2,774       2,249         6  
  Foreign exchange                                                          
   gains                            863          804         812         6  
  Contingent                                                                
   consideration                                                            
   fair value                                                               
   change                             -            -           -         -  
  Other                           2,701          113       2,112        28  
----------------------------------------------------------------------------
                                 23,032       23,390      22,933         -  
----------------------------------------------------------------------------
Net Interest and                                                            
 Other Income                   136,082      128,282     129,611         5  
----------------------------------------------------------------------------
Non-Interest                                                                
 Expenses                                                                   
  Salaries and                                                              
   employee                                                                 
   benefits                      44,038       42,287      39,350        12  
  Premises and                                                              
   equipment                     10,900       10,730       9,839        11  
  Other expenses                 11,857       11,623       9,779        21  
  Provincial                                                                
   capital taxes                    164          187         150         9  
----------------------------------------------------------------------------
                                 66,959       64,827      59,118        13  
----------------------------------------------------------------------------
Net Income before                                                           
 Income Taxes                    69,123       63,455      70,493        (2) 
Income Taxes                     15,800       14,921      16,915        (7) 
----------------------------------------------------------------------------
Net Income                  $    53,323  $    48,534 $    53,578         -% 
----------------------------------------------------------------------------
Net Income                                                                  
 Attributable to                                                            
 Non-Controlling                                                            
 Interests                        2,020        1,739       1,772        14  
----------------------------------------------------------------------------
Net Income                                                                  
 Attributable to                                                            
 Shareholders of                                                            
 the Bank                   $    51,303  $    46,795 $    51,806        (1)%
Preferred share                                                             
 dividends         (Note 9)       3,796        3,800       3,802         -  
Premium paid on                                                             
 purchase of                                                                
 preferred shares                                                           
 for cancellation  (Note 9)          23            7           -        nm  
----------------------------------------------------------------------------
Net Income                                                                  
 Available to                                                               
 Common                                                                     
 Shareholders               $    47,484  $    42,988 $    48,004        (1)%
----------------------------------------------------------------------------
Average number of                                                           
 common shares (in                                                          
 thousands)                      79,248       79,075      77,527         2  
Average number of                                                           
 diluted common                                                             
 shares (in                                                                 
 thousands)                      79,590       79,471      78,107         2  
----------------------------------------------------------------------------
Earnings per Common                                                         
 Share                                                                      
  Basic                     $      0.60  $      0.54 $      0.62        (3) 
  Diluted                          0.60         0.54        0.61        (2) 
----------------------------------------------------------------------------
 
                                                                     Change 
                               For the nine months ended               from 
                           ----------------------------------               
(unaudited)                         July 31          July 31        July 31 
($ thousands,                                                               
 except per share                                                           
 amounts)                              2013             2012           2012 
----------------------------------------------------------------------------
Interest Income                                                             
  Loans                     $       543,620  $       509,343              7%
  Securities                         34,018           33,412              2 
  Deposits with                                                             
   regulated                                                                
   financial                                                                
   institutions                       1,117            1,822            (39)
----------------------------------------------------------------------------
                                    578,755          544,577              6 
----------------------------------------------------------------------------
Interest Expense                                                            
  Deposits                          209,370          199,749              5 
  Debt                               24,434           21,666             13 
----------------------------------------------------------------------------
                                    233,804          221,415              6 
----------------------------------------------------------------------------
Net Interest Income                 344,951          323,162              7 
Provision for                                                               
 Credit Losses     (Note 6)          20,502           19,144              7 
----------------------------------------------------------------------------
Net Interest Income                                                         
 after Provision                                                            
 for Credit Losses                  324,449          304,018              7 
----------------------------------------------------------------------------
Other Income                                                                
  Credit related                     15,962           14,422             11 
  Insurance, net   (Note 3)           9,178           16,406            (44)
  Trust and wealth                                                          
   management                                                               
   services                          17,239           14,340             20 
  Gains on                                                                  
   securities, net                   12,756            7,016             82 
  Retail services                     7,615            6,916             10 
  Foreign exchange                                                          
   gains                              2,169            2,291             (5)
  Contingent                                                                
   consideration                                                            
   fair value                                                               
   change                                 -           (2,489)          (100)
  Other                               3,882            3,077             26 
----------------------------------------------------------------------------
                                     68,801           61,979             11 
----------------------------------------------------------------------------
Net Interest and                                                            
 Other Income                       393,250          365,997              7 
----------------------------------------------------------------------------
Non-Interest                                                                
 Expenses                                                                   
  Salaries and                                                              
   employee                                                                 
   benefits                         127,680          114,019             12 
  Premises and                                                              
   equipment                         31,884           29,098             10 
  Other expenses                     33,758           30,930              9 
  Provincial                                                                
   capital taxes                        531              345             54 
----------------------------------------------------------------------------
                                    193,853          174,392             11 
----------------------------------------------------------------------------
Net Income before                                                           
 Income Taxes                       199,397          191,605              4 
Income Taxes                         46,478           45,764              2 
----------------------------------------------------------------------------
Net Income                  $       152,919  $       145,841              5%
----------------------------------------------------------------------------
Net Income                                                                  
 Attributable to                                                            
 Non-Controlling                                                            
 Interests                            5,537            5,284              5 
----------------------------------------------------------------------------
Net Income                                                                  
 Attributable to                                                            
 Shareholders of                                                            
 the Bank                   $       147,382  $       140,557              5%
Preferred share                                                             
 dividends         (Note 9)          11,398           11,405              - 
Premium paid on                                                             
 purchase of                                                                
 preferred shares                                                           
 for cancellation  (Note 9)              30                -             nm 
----------------------------------------------------------------------------
Net Income                                                                  
 Available to                                                               
 Common                                                                     
 Shareholders               $       135,954  $       129,152              5%
----------------------------------------------------------------------------
Average number of                                                           
 common shares (in                                                          
 thousands)                          79,041           76,281              4 
Average number of                                                           
 diluted common                                                             
 shares (in                                                                 
 thousands)                          79,437           76,972              3 
----------------------------------------------------------------------------
Earnings per Common                                                         
 Share                                                                      
  Basic                     $          1.72  $          1.69              2 
  Diluted                              1.71             1.68              2 
----------------------------------------------------------------------------
                                                                            
nm - not meaningful                                                         
                                                                            
The accompanying notes are an integral part of the interim consolidated     
financial statements.                                                       

 
Consolidated Statements of Comprehensive Income 


 
                               For the three months     For the nine months 
                                              ended                   ended 
(unaudited)                     July 31     July 31     July 31     July 31 
($ thousands)                      2013        2012        2013        2012 
----------------------------------------------------------------------------
Net Income                   $   53,323  $   53,578  $  152,919  $  145,841 
----------------------------------------------------------------------------
Other Comprehensive Income                                                  
 (Loss), net of tax                                                         
Available-for-sale                                                          
 securities:                                                                
Gains (losses) from change                                                  
 in fair value(1)               (10,426)     (1,541)     (2,531)      6,154 
Reclassification to net                                                     
 income(2)                       (5,257)     (1,377)     (9,439)     (5,145)
----------------------------------------------------------------------------
                                (15,683)     (2,918)    (11,970)      1,009 
----------------------------------------------------------------------------
Derivatives designated as                                                   
 cash flow hedges:                                                          
Gains (losses) from change                                                  
 in fair value(3)                   161        (592)       (204)        (84)
Reclassification to net                                                     
 income(4)                         (128)        461        (101)        162 
----------------------------------------------------------------------------
                                     33        (131)       (305)         78 
----------------------------------------------------------------------------
                                (15,650)     (3,049)    (12,275)      1,087 
----------------------------------------------------------------------------
Comprehensive Income for the                                                
 Period                      $   37,673  $   50,529  $  140,644  $  146,928 
----------------------------------------------------------------------------
                                                                            
Comprehensive income for the                                                
 period attributable to:                                                    
Shareholders of the Bank     $   35,653  $   48,757  $  135,107  $  141,644 
Non-controlling interests         2,020       1,772       5,537       5,284 
----------------------------------------------------------------------------
Comprehensive Income for the                                                
 Period                      $   37,673  $   50,529  $  140,644  $  146,928 
----------------------------------------------------------------------------
                                                                            
(1) Net of income tax of $3,743 and $794 for the three and nine months ended
July 31, 2013, respectively (2012 - $560 and $2,194).                       
(2) Net of income tax of $1,763 and $3,317 for the three and nine months    
ended July 31, 2013, respectively (2012 - $500 and $1,870).                 
(3) Net of income tax of $54 and $69 for the three and nine months ended    
July 31, 2013, respectively (2012 - $206 and $30).                          
(4) Net of income tax of $43 and $34 for the three and nine months ended    
July 31, 2013, respectively (2012 - $161 and $57).                          

 
Items presented in other comprehensive income will be subsequently
reclassified to the Consolidated Statement of Income when specific
conditions are met. 
The accompanying notes are an integral part of the interim
consolidated financial statements. 
Consolidated Statements of Changes in Equity 


 
                                                  For the nine months ended 
(unaudited)                                                                 
                                                       July 31      July 31 
($ thousands)                                             2013         2012 
----------------------------------------------------------------------------
Retained Earnings                                                           
Balance at beginning of period                     $   733,298  $   608,848 
Net income attributable to shareholders                                     
 of the Bank                                           147,382      140,557 
Dividends - Preferred shares                           (11,398)     (11,405)
    - Common shares                                    (41,077)     (35,201)
Premium paid on purchase of preferred                                       
 shares for cancellation                  (Note 9)         (30)           - 
----------------------------------------------------------------------------
Balance at end of period                               828,175      702,799 
----------------------------------------------------------------------------
Other Reserves                                                              
Balance at beginning of period                           9,247        7,849 
Changes in available-for-sale securities               (11,970)       1,009 
Changes in derivatives designated as                                        
 cash flow hedges                                         (305)          78 
----------------------------------------------------------------------------
Balance at end of period                                (3,028)       8,936 
----------------------------------------------------------------------------
Preferred Shares                          (Note 9)                          
Balance at beginning period                            209,750      209,750 
Purchase of preferred shares for                                            
 cancellation                                             (785)           - 
----------------------------------------------------------------------------
Balance at end of period                               208,965      209,750 
----------------------------------------------------------------------------
Common Shares                             (Note 9)                          
Balance at beginning of period                         490,218      408,282 
Issued under dividend reinvestment plan                 10,571        8,400 
Transferred from share-based payment                                        
 reserve on the exercise or exchange of                                     
 options                                                 2,397        2,207 
Issued on exercise of options                            1,194          978 
Issued on settlement of contingent                                          
 consideration                                               -       63,399 
----------------------------------------------------------------------------
Balance at end of period                               504,380      483,266 
----------------------------------------------------------------------------
Share-based Payment Reserve                                                 
Balance at beginning of period                          22,468       21,884 
Amortization of fair value of options    (Note 10)       4,540        3,662 
Transferred to common shares on the                                         
 exercise or exchange of options                        (2,397)      (2,207)
----------------------------------------------------------------------------
Balance at end of period                                24,611       23,339 
----------------------------------------------------------------------------
Total Shareholders' Equity                           1,563,103    1,428,090 
----------------------------------------------------------------------------
Non-Controlling Interests                                                   
Balance at beginning of period                         105,244      105,225 
Net income attributable to non-                                             
 controlling interests                                   5,537        5,284 
Dividends to non-controlling interests                  (5,296)      (5,272)
Business acquisition                                       316            - 
----------------------------------------------------------------------------
Balance at end of period                 (Note 15)     105,801      105,237 
----------------------------------------------------------------------------
Total Equity                                       $ 1,668,904  $ 1,533,327 
----------------------------------------------------------------------------

 
The accompanying notes are an integral part of the interim
consolidated financial statements. 
Consolidated Statements of Cash Flow 


 
                                                  For the nine months ended 
                                                                            
(unaudited)                                                                 
                                                       July 31     July 31  
($ thousands)                                             2013         2012 
----------------------------------------------------------------------------
Cash Flows from Operating Activities                                        
  Net income                                       $   152,919  $   145,841 
  Adjustments to determine net cash                                         
   flows:                                                                   
    Provision for credit losses                         20,502       19,144 
    Depreciation and amortization                       15,884       12,975 
    Current income taxes receivable and                                     
     payable                                            (4,450)       7,793 
    Amortization of fair value of                                           
     employee stock options              (Note 10)       4,540        3,662 
    Accrued interest receivable and                                         
     payable, net                                        7,061        1,455 
    Deferred income taxes, net                           2,468       (1,631)
    Gain on securities, net                            (12,756)      (7,016)
  Change in operating assets and                                            
   liabilities:                                                             
    Deposits, net                                      817,305    1,060,709 
    Loans, net                                      (1,349,691)  (1,368,276)
    Securities sold under repurchase                                        
     agreements, net                                   (70,089)           - 
    Other items, net                                    (3,922)       3,206 
----------------------------------------------------------------------------
                                                      (420,229)    (122,138)
----------------------------------------------------------------------------
Cash Flows from Financing Activities                                        
  Common shares issued                   (Note 10)      11,765        9,277 
  Preferred shares purchased and                                            
   cancelled                             (Note 10)        (815)           - 
  Debentures issued                                    250,000            - 
  Debentures redeemed                                  (50,000)    (120,000)
  Debt securities issued                                90,596      170,237 
  Debt securities repaid                               (72,079)     (81,183)
  Dividends                                            (52,475)     (46,606)
  Distributions to non-controlling                                          
   interests                                            (5,296)      (5,272)
----------------------------------------------------------------------------
                                                       171,696      (73,547)
----------------------------------------------------------------------------
Cash Flows from Investing Activities                                        
  Interest bearing deposits with                                            
   regulated financial institutions,                                        
   net                                                  83,362       16,736 
  Securities, purchased                             (4,578,671)  (3,234,525)
  Securities, sale proceeds                          3,002,929    1,967,368 
  Securities, matured                                1,728,735    1,407,463 
  Property, equipment and software                                          
   costs                                               (19,108)     (12,886)
  Business acquisition                   (Note 15)     (10,098)           - 
----------------------------------------------------------------------------
                                                       207,149      144,156 
----------------------------------------------------------------------------
Change in Cash and Cash Equivalents                    (41,384)     (51,529)
Cash and Cash Equivalents at Beginning                                      
 of Period                                               5,926       32,385 
----------------------------------------------------------------------------
Cash and Cash Equivalents at End of                                         
 Period (i)                                        $   (35,458) $   (19,144)
----------------------------------------------------------------------------
(i) Represented by:                                                         
  Cash and non-interest bearing                                             
   deposits with financial institutions            $     3,009  $    59,470 
  Cheques and other items in transit                                        
   (included in Cash Resources)                          1,252          112 
  Cheques and other items in transit                                        
   (included in Other Liabilities)                     (39,719)     (78,726)
----------------------------------------------------------------------------
Cash and Cash Equivalents at End of                                         
 Period                                            $   (35,458) $   (19,144)
----------------------------------------------------------------------------
                                                                            
Supplemental Disclosure of Cash Flow                                        
 Information                                                                
  Interest and dividends received                  $   600,916  $   555,521 
  Interest paid                                        232,722      217,487 
  Income taxes paid                                     49,125       37,728 

 
The accompanying notes are an integral part of the interim
consolidated financial statements. 
Notes to Interim Consolidated Financial Statements 


 
(unaudited)                                                                 
($thousands, except per share amounts)                                      
 

 
1.  Basis of Presentation and Significant Accounting Policies

 
These unaudited condensed interim consolidated financial statements
of Canadian Western Bank (CWB or the Bank) have been prepared in
accordance with International Accounting Standard (IAS) 34 - Interim
Financial Reporting as issued by the International Accounting
Standards Board (IASB) using the same accounting policies as the
audited consolidated financial statements for the year ended October
31, 2012. These interim consolidated financial statements of CWB,
domiciled in Canada, have also been prepared in accordance with
subsection 308 (4) of the Bank Act and the accounting requirements of
the Office of the Superintendent of Financial Institutions Canada
(OSFI). Under IFRS, additional disclosures are required in annual
financial statements and accordingly, these unaudited interim
consolidated financial statements should be read in conjunction with
the audited consolidated financial statements for the year ended
October 31, 2012 as set out on pages 64 to 109 of the Bank's 2012
Annual Report.  
The interim consolidated financial statements were authorized for
issue by the Board of Directors on August 28, 2013. 


 
2.  Future Accounting Changes

 
CWB continues to monitor the IASB's proposed changes to accounting
standards. Although not expected to materially impact the Bank's 2013
consolidated financial statements, these proposed changes may have a
significant impact on future financial statements. Additional
discussion on certain accounting standards that may impact the Bank
is included in the audited consolidated financial statements within
the Bank's 2012 Annual Report. 


 
3.  Insurance Revenues, Net

 
Insurance revenues, net, as reported in other income on the
consolidated statement of income are presented net of net claims and
adjustment expenses, and policy acquisition costs. 


 
                                                For the             For the 
                                     three months ended   nine months ended 
                         ---------------------------------------------------
                           July 31   April 30   July 31   July 31   July 31 
                              2013       2013      2012      2013      2012 
----------------------------------------------------------------------------
Net earned premiums       $ 32,122  $  30,701  $ 31,476  $ 94,318  $ 91,965 
Commissions and                                                             
 processing fees               487        404       490     1,329     1,422 
Net claims and adjustment                                                   
 expenses                  (28,226)   (18,312)  (19,330)  (67,223)  (58,319)
Policy acquisition costs    (6,608)    (6,592)   (6,385)  (19,246)  (18,662)
----------------------------------------------------------------------------
Total, net                $ (2,225) $   6,201  $  6,251  $  9,178  $ 16,406 
----------------------------------------------------------------------------
 
4.  Securities

 
Net unrealized gains (losses) reflected on the balance sheet follow: 


 
                                                                       As at
                                                   As at     As at   October
                                                 July 31  April 30        31
                                                    2013      2013      2012
----------------------------------------------------------------------------
Interest bearing deposits with regulated                                    
 financial institutions                        $     264 $     672 $     482
Securities issued or guaranteed by                                          
  Canada                                             119       495       176
  A province or municipality                        (76)       253      (67)
Other debt securities                              1,067     1,916     1,637
Equity securities                                                           
  Preferred shares                               (8,748)     8,451     6,971
  Common shares                                    2,876     4,681     2,114
----------------------------------------------------------------------------
Unrealized gains (losses), net                 $ (4,498) $  16,468 $  11,313
----------------------------------------------------------------------------

 
The securities portfolio is primarily comprised of high quality debt
instruments, preferred shares and common shares that are not held for
trading purposes and, where applicable, are typically held until
maturity. Fluctuations in value are generally attributed to changes
in interest rates, market credit spreads and shifts in the interest
rate curve. Volatility in equity markets also leads to fluctuations
in value, particularly for common shares. For the three and nine
months ended July 31, 2013, the Bank assessed the securities with
unrealized losses and, based on available objective evidence, no
impairment charges (2012 - nil) were included in gains on securities,
net. 


 
5.  Loans

 
The composition of the Bank's loan portfolio by geographic region and
industry sector follows: 


 
                                                                            
($ millions)        BC       AB       ON      SK       MB    Other    Total 
----------------------------------------------------------------------------
                                                                            
Personal       $   831  $ 1,008  $   348 $   157  $    65  $     1  $ 2,410 
----------------------------------------------------------------------------
                                                                            
Business                                                                    
Real estate      2,602    2,207      349     378      119       25    5,680 
Commercial       1,373    1,902      392     203      103      118    4,091 
Equipment                                                                   
 financing and                                                              
 energy(1)         569    1,375      553     252      102      335    3,186 
----------------------------------------------------------------------------
                 4,544    5,484    1,294     833      324      478   12,957 
----------------------------------------------------------------------------
Total Loans(2) $ 5,375  $ 6,492  $ 1,642 $   990  $   389  $   479  $15,367 
----------------------------------------------------------------------------
Composition                                                                 
 Percentage                                                                 
July 31, 2013       35%      42%      11 %     6%       3%       3%     100%
April 30, 3013      34%      43%      11 %     6%       3%       3%     100%
October 31,                                                                 
 2012               33%      45%      10 %     6%       3%       3%     100%
 
                                  Composition Percentage                    
($ millions)         July 31 2013        April 30 2013      October 31 2012 
----------------------------------------------------------------------------
                                                                            
Personal                       16%                  16%                  16%
----------------------------------------------------------------------------
                                                                            
Business                                                                    
Real estate                    36                   36                   36 
Commercial                     27                   27                   28 
Equipment                                                                   
 financing and                                                              
 energy(1)                     21                   21                   20 
----------------------------------------------------------------------------
                               84                   84                   84 
----------------------------------------------------------------------------
Total Loans(2)                100%                 100%                 100%
----------------------------------------------------------------------------
Composition                                                                 
 Percentage                                                                 
July 31, 2013                                                               
April 30, 3013                                                              
October 31,                                                                 
 2012                                                                       
                                                                            
(1) Includes securitized leases reported on-balance sheet of $262 (April 30,
2013 - $255; October 31, 2012 - $238).                                      
(2) This table does not include an allocation for credit losses.            
 
6.  Allowance for Credit Losses

 
The following table shows the changes in the allowance for credit
losses: 


 
             For the three months ended       For the three months ended    
                    July 31, 2013                   April 30, 2013          
          ------------------------------------------------------------------
                        Collective                       Collective         
                         Allowance                        Allowance         
             Specific   for Credit            Specific   for Credit         
            Allowance       Losses   Total   Allowance       Losses   Total 
----------------------------------------------------------------------------
Balance at                                                                  
 beginning                                                                  
 of period $    8,971  $    70,500 $79,471  $    6,667  $    69,701 $76,368 
Provision                                                                   
 for                                                                        
 credit                                                                     
 losses         6,067        1,424   7,491       5,885          799   6,684 
Write-offs     (3,083)           -  (3,083)     (3,876)           -  (3,876)
Recoveries        610            -     610         295            -     295 
----------------------------------------------------------------------------
Balance at                                                                  
 end of                                                                     
 period    $   12,565  $    71,924 $84,489  $    8,971  $    70,500 $79,471 
----------------------------------------------------------------------------
                                                                            
                                                                            
                                           For the three months ended       
                                                  July 31, 2012             
                                      --------------------------------------
                                                     Collective             
                                                      Allowance             
                                          Specific   for Credit             
                                         Allowance       Losses       Total 
----------------------------------------------------------------------------
Balance at beginning of period         $    10,718  $    64,771 $    75,489 
Provision for credit losses                  4,191        2,262       6,453 
Write-offs                                  (2,833)           -      (2,833)
Recoveries                                     686            -         686 
----------------------------------------------------------------------------
Balance at end of period               $    12,762  $    67,033 $    79,795 
----------------------------------------------------------------------------
                                                                            
                                                                            
             For the nine months ended        For the nine months ended     
                    July 31, 2013                    July 31, 2012          
          ------------------------------------------------------------------
                          Collec-                          Collec-          
                             tive                             tive          
                        Allowance                        Allowance          
                              for                              for          
             Specific      Credit             Specific      Credit          
            Allowance      Losses    Total   Allowance      Losses    Total 
----------------------------------------------------------------------------
Balance at                                                                  
 beginning                                                                  
 of period $   14,379  $   67,344 $ 81,723  $   10,650  $   61,330 $ 71,980 
Provision                                                                   
 for                                                                        
 credit                                                                     
 losses        15,922       4,580   20,502      13,441       5,703   19,144 
Write-offs    (20,131)          -  (20,131)    (13,090)          -  (13,090)
Recoveries      2,395           -    2,395       1,761           -    1,761 
----------------------------------------------------------------------------
Balance at                                                                  
 end of                                                                     
 period    $   12,565  $   71,924 $ 84,489  $   12,762  $   67,033 $ 79,795 
----------------------------------------------------------------------------
 
7.  Impaired and Past Due Loans 

 
Outstanding gross loans and impaired loans, net of allowance for
credit losses, by loan type, are as follows: 


 
                                          As at July 31, 2013               
                                                                            
                                              Gross                     Net 
                                  Gross    Impaired    Specific    Impaired 
                                 Amount      Amount   Allowance       Loans 
----------------------------------------------------------------------------
Personal                    $ 2,410,165 $    16,993 $       795 $    16,198 
Business                                                                    
  Real estate(1)              5,680,489      35,876       8,362      27,514 
  Commercial                  4,089,650       7,935         499       7,436 
  Equipment financing and                                                   
   energy                     3,187,060      11,935       2,909       9,026 
----------------------------------------------------------------------------
Total(2)                    $15,367,364 $    72,739 $    12,565      60,174 
---------------------------------------------------------------             
Collective allowance(3)                                             (71,924)
----------------------------------------------------------------------------
Net impaired loans after                                                    
 collective allowance                                           $   (11,750)
----------------------------------------------------------------------------
                                                                            
                                                                            
 
                                         As at April 30, 2013               
                           -------------------------------------------------
                                              Gross                     Net 
                                  Gross    Impaired    Specific    Impaired 
                                 Amount      Amount   Allowance       Loans 
----------------------------------------------------------------------------
Personal                    $ 2,378,451 $    14,561 $       715 $    13,846 
Business                                                                    
  Real estate(1)              5,448,703      28,664       3,453      25,211 
  Commercial                  4,062,170       9,586       1,231       8,355 
  Equipment financing and                                                   
   energy                     3,074,700       8,812       3,572       5,240 
----------------------------------------------------------------------------
Total(2)                    $14,964,024 $    61,623 $     8,971      52,652 
---------------------------------------------------------------             
Collective allowance(3)                                             (70,500)
----------------------------------------------------------------------------
Net impaired loans after                                                    
 collective allowance                                           $   (17,848)
----------------------------------------------------------------------------
                                                                            
                                                                            
                                    As at October 31, 2012                  
                                          Gross                             
                                       Impaired      Specific  Net Impaired 
                     Gross Amount        Amount     Allowance         Loans 
----------------------------------------------------------------------------
Personal            $   2,292,388 $      13,404 $         459 $      12,945 
Business                                                                    
  Real estate(1)        5,001,041        23,022         2,605        20,417 
  Commercial            3,867,557        22,281         7,745        14,536 
  Equipment                                                                 
   financing and                                                            
   energy               2,874,423         8,133         3,570         4,563 
----------------------------------------------------------------------------
Total(2)            $  14,035,409 $      66,840 $      14,379        52,461 
-------------------------------------------------------------               
Collective                                                                  
 allowance(3)                                                       (67,344)
----------------------------------------------------------------------------
Net impaired loans                                                          
 after collective                                                           
 allowance                                                    $     (14,883)
----------------------------------------------------------------------------
                                                                            
(1) Multi-family residential mortgages are included in real estate loans.   
(2) Gross impaired loans include foreclosed assets with a carrying value of 
$6,857 (April 30, 2013 - $7,256 and October 31, 2012 - $10,462) which are   
held for sale. The Bank pursues timely realization on foreclosed assets and 
does not use the assets for its own operations.                             
(3) The collective allowance for credit risk is not allocated by loan type. 

 
Outstanding impaired loans, net of allowance for credit losses, by
provincial location of security, are as follows: 


 
                                                As at July 31, 2013         
                                       -------------------------------------
                                              Gross                    Net  
                                           Impaired    Specific    Impaired 
                                             Amount   Allowance       Loans 
----------------------------------------------------------------------------
Alberta                                 $    40,260 $     9,249 $    31,011 
British Columbia                             24,273       1,415      22,858 
Ontario                                       4,121         840       3,281 
Saskatchewan                                  1,783         439       1,344 
Manitoba                                        929         149         780 
Other                                         1,373         473         900 
----------------------------------------------------------------------------
Total                                   $    72,739 $    12,565      60,174 
---------------------------------------------------------------             
Collective allowance(1)                                             (71,924)
----------------------------------------------------------------------------
Net impaired loans after collective                                         
 allowance                                                      $   (11,750)
----------------------------------------------------------------------------
                                                                            
                                                                            
 
                                               As at April 30, 2013         
                                       -------------------------------------
                                              Gross                     Net 
                                           Impaired    Specific    Impaired 
                                             Amount   Allowance       Loans 
----------------------------------------------------------------------------
Alberta                                 $    31,958 $     5,479 $    26,479 
British Columbia                             21,866       1,027      20,839 
Ontario                                       4,607       1,170       3,437 
Saskatchewan                                  1,392         520         872 
Manitoba                                        308         188         120 
Other                                         1,492         587         905 
----------------------------------------------------------------------------
Total                                   $    61,623 $     8,971      52,652 
---------------------------------------------------------------             
Collective allowance(1)                                             (70,500)
----------------------------------------------------------------------------
Net impaired loans after collective                                         
 allowance                                                      $   (17,848)
----------------------------------------------------------------------------
                                                                            
                                                                            
                                           As at October 31, 2012           
                                 -------------------------------------------
                                          Gross                             
                                       Impaired      Specific  Net Impaired 
                                         Amount     Allowance         Loans 
----------------------------------------------------------------------------
Alberta                           $      36,769 $       9,711 $      27,058 
British Columbia                         22,629         2,190        20,439 
Ontario                                   3,081         1,167         1,914 
Saskatchewan                              2,309           456         1,853 
Manitoba                                    615           203           412 
Other                                     1,437           652           785 
----------------------------------------------------------------------------
Total                             $      66,840 $      14,379        52,461 
-------------------------------------------------------------               
Collective allowance(1)                                             (67,344)
----------------------------------------------------------------------------
Net impaired loans after                                                    
 collective allowance                                         $     (14,883)
----------------------------------------------------------------------------
                                                                            
(1) The collective allowance for credit risk is not allocated by province.  

 
Gross impaired loans exclude certain past due loans where payment of
interest or principal is contractually in arrears. Details of such
past due loans that have not been included in the gross impaired
amount are as follows: 


 
                                            As at July 31, 2013             
                              ----------------------------------------------
                                 1 - 30  31 - 60  61 - 90 More than         
                                   days     days     days   90 days    Total
----------------------------------------------------------------------------
Personal                       $ 16,414 $  8,455 $  1,192 $   1,336 $ 27,397
Business                         13,764   14,248    1,805        23   29,840
----------------------------------------------------------------------------
                               $ 30,178 $ 22,703 $  2,997 $   1,359 $ 57,237
----------------------------------------------------------------------------
                                                                            
Total as at April 30, 2013     $ 47,634 $  7,572 $  3,241 $   1,858 $ 60,305
----------------------------------------------------------------------------
Total as at October 31, 2012   $ 25,849 $ 27,799 $  4,194 $     375 $ 58,217
----------------------------------------------------------------------------
 
8.  Derivative Financial Instruments 

 
The Bank designates certain derivative financial instruments as
either a hedge of the fair value of recognized assets or liabilities
or firm commitments (fair value hedges), or a hedge of highly
probable future cash flows attributable to a recognized asset or
liability or a forecasted transaction (cash flow hedges). On an
ongoing basis, the derivatives used in hedging transactions are
assessed to determine whether they are effective in offsetting
changes in fair values or cash flows of the hedged items. If a
hedging transaction becomes ineffective or if the derivative is not
designated as a cash flow hedge, any subsequent change in the fair
value of the hedging instrument is recognized in net income.  
For the three and nine months ended July 31, 2013, $161 of net
unrealized after tax gains and $204 of net unrealized after tax
losses (2012 - $592 and $84 after tax losses) were recorded in other
comprehensive income for changes in fair value of the effective
portion of equity and interest rate swap derivatives designated as
cash flow hedges, and no amounts (2012 - nil) were recorded in other
income for changes in fair value of the ineffective portion of
derivatives classified as cash flow hedges. Amounts accumulated in
other comprehensive income are reclassified to net income in the same
period that the hedged item affects income. For the three and nine
months ended July 31, 2013, $128 and $101 of net gains after tax
(2012 - $461 and $162 after tax losses) were reclassified to net
income.  
The following table shows the notional value outstanding for
derivative financial instruments and the related fair value: 


 
                    As at July 31, 2013           As at April 30, 2013      
              --------------------------------------------------------------
                          Positive  Negative             Positive  Negative 
                Notional      Fair      Fair   Notional      Fair      Fair 
                  Amount     Value     Value     Amount     Value     Value 
----------------------------------------------------------------------------
Interest rate                                                               
 swaps                                                                      
 designated as                                                              
 hedges(1)     $ 725,000 $      78 $    (163) $ 325,000 $     102 $      (7)
Equity swaps                                                                
 designated as                                                              
 hedges(2)        17,470     1,158         -     15,445     1,342         - 
Foreign                                                                     
 exchange                                                                   
 contracts(3)      1,091        13        (5)    11,639        24       (11)
----------------------------------------------------------------------------
Derivative                                                                  
 related                                                                    
 amounts       $ 743,561 $   1,249 $    (168) $ 352,084 $   1,468 $     (18)
----------------------------------------------------------------------------
                                                                            
                                                                            
                                           As at October 31, 2012           
                                 -------------------------------------------
                                       Notional     Positive      Negative  
                                         Amount    Fair Value    Fair Value 
----------------------------------------------------------------------------
Interest rate swaps designated
 as                                           
 hedges                           $     225,000 $         154 $           - 
Equity swaps designated as hedges        15,445         1,778             - 
Foreign exchange contracts                2,450            19           (10)
----------------------------------------------------------------------------
Derivative related amounts        $     242,895 $       1,951 $         (10)
----------------------------------------------------------------------------
                                                                            
(1) Interest rate swaps designated as hedges outstanding at July 31, 2013   
mature between August 2013 and January 2015.                                
(2) Equity swaps designated as hedges outstanding at July 31, 2013 mature   
between June 2014 and June 2016. Equity swaps are used to reduce the        
earnings volatility from restricted share units linked to the Bank's common 
share price.                                                                
(3) Foreign exchange contracts outstanding at July 31, 2013 mature between  
August 2013 and April 2014.                                                 

 
There were no forecasted transactions that failed to occur during the
three and nine months ended July 31, 2013. 


 
9.  Capital Stock

 
Share Capital 


 
                                         For the nine months ended          
                              ----------------------------------------------
                                   July 31, 2013           July 31, 2012    
                              ----------------------------------------------
                                 Number of               Number of          
                                    Shares     Amount       Shares    Amount
----------------------------------------------------------------------------
Preferred Shares - Series 3                                                 
  Outstanding at beginning and                                              
   end of period(1)              8,390,000  $ 209,750    8,390,000 $ 209,750
  Purchased for cancellation       (31,404)      (785)           -         -
----------------------------------------------------------------------------
  Outstanding at end of period   8,358,596    208,965    8,390,000   209,750
----------------------------------------------------------------------------
Common Shares                                                               
  Outstanding at beginning of                                               
   period                       78,742,812    490,218   75,461,981   408,282
  Issued under dividend                                                     
   reinvestment plan(2)            384,296     10,571      316,862     8,400
  Issued on exercise or                                                     
   exchange of options             245,066      1,194      283,664       978
  Issued on settlement of                                                   
   contingent consideration              -          -    2,256,868    63,399
  Transferred from share-based                                              
   payment reserve on exercise                                              
   or exchange of options                -      2,397            -     2,207
----------------------------------------------------------------------------
  Outstanding at end of period  79,372,174    504,380   78,319,375   483,266
----------------------------------------------------------------------------
Share Capital                               $ 713,345              $ 693,016
----------------------------------------------------------------------------
                                                                            
(1) Holders of the Preferred Shares - Series 3 are entitled to receive non- 
cumulative quarterly fixed dividends for the initial five-year period ending
April 30, 2014 of 7.25% per annum, payable quarterly, as and when declared. 
For further information on dividend rates after April 30, 2014, refer to    
Note 17 of the audited consolidated financial statements for the year ended 
October 31, 2012 (see page 87 of the 2012 Annual Report).                   
(2) Shares were issued at a 2% discount from the average closing price of   
the five trading days preceding the dividend payment date.                  

 
Preferred Share Normal Course Issuer Bid  
On February 27, 2013, the Bank received approval from the Toronto
Stock Exchange (TSX) to institute a Normal Course Issuer Bid (NCIB)
to purchase and cancel up to 826,120 of its Non-Cumulative 5-Year
Rate Reset Preferred Shares Series 3, being 10% of the issued
preferred shares. The NCIB commenced March 1, 2013 and will expire
February 28, 2014. During the nine months ended July 31, 2013, the
Bank purchased and cancelled 31,404 preferred shares for a total of
$815, of which $785 reduced the outstanding balance of preferred
shares and the $30 premium paid above book value was charged to
retained earnings. 


 
10. Share-based Payments

 
Stock Options 


 
                                        For the three months ended          
                                   July 31, 2013          July 31, 2012     
                              ----------------------------------------------
                                             Weighted               Weighted
                                              Average                Average
                                 Number of   Exercise   Number of   Exercise
                                   Options      Price     Options      Price
----------------------------------------------------------------------------
Options                                                                     
  Balance at beginning of                                                   
   period                        3,735,818  $   25.60   3,650,376  $   22.79
  Granted                          986,232      28.47     531,548      26.40
  Exercised or exchanged          (206,858)     19.60     (75,534)     15.83
  Forfeited                         (8,355)     27.92     (48,875)     26.81
----------------------------------------------------------------------------
Balance at end of period         4,506,837  $   26.49   4,057,515  $   23.35
----------------------------------------------------------------------------
                                                                            
                                                                            
                                         For the nine months ended          
                                   July 31, 2013          July 31, 2012     
                              ----------------------------------------------
                                             Weighted               Weighted
                                              Average                Average
                                 Number of   Exercise   Number of   Exercise
                                   Options      Price     Options      Price
----------------------------------------------------------------------------
Options                                                                     
  Balance at beginning of                                                   
   period                        3,441,100  $   24.51   3,542,072  $   21.36
  Granted                        1,810,899      28.30   1,261,378      25.86
  Exercised or exchanged          (550,580)     18.58    (655,275)     17.14
  Expired                         (162,075)     31.18           -          -
  Forfeited                        (32,507)     27.53     (90,660)     25.62
----------------------------------------------------------------------------
Balance at end of period         4,506,837  $   26.49   4,057,515  $   23.35
----------------------------------------------------------------------------

 
The terms of the share incentive plan a
llow the holders of vested
options a cashless settlement alternative whereby the option holder
can either (i) elect to receive shares by delivering cash to the Bank
in the amount of the option exercise price or (ii) elect to receive
the number of shares equivalent to the excess of the market value of
the shares under option, determined at the exercise date, over the
exercise price. Of the 550,580 (2012 - 655,275) options exercised or
exchanged in the nine months ended July 31, 2013, option holders
exchanged the rights to 487,739 (2012 - 584,525) options and received
182,225 (2012 - 212,914) shares in return under the cashless
settlement alternative.  
For the nine months ended July 31, 2013, salary expense of $4,540
(2012 - $3,662) was recognized relating to the estimated fair value
of options granted. The fair value of options granted was estimated
using a binomial option pricing model with the following variables
and assumptions: (i) risk-free interest rate of 1.4% (2012 - 1.1%),
(ii) expected option life of 4.0 (2012 - 4.0) years, (iii) expected
annual volatility of 22% (2012 - 31%), and (iv) expected annual
dividends of 2.5% (2012 - 2.4%). The weighted average fair value of
options granted was estimated at $3.93 (2012 - $4.92) per share.  
Further details relating to stock options outstanding and exercisable
at July 31, 2013 follow: 


 
                             Options Outstanding        Options Exercisable 
                      ------------------------------------------------------
                                    Weighted                                
                                     Average                                
                                   Remaining   Weighted             Weighted
                                 Contractual    Average              Average
                       Number of        Life   Exercise Number of   Exercise
                         Options     (years)      Price   Options      Price
----------------------------------------------------------------------------
$ 8.58 to $11.76          77,050         0.4 $    11.65    77,050 $    11.65
$16.89 to $22.09         463,355         1.1      19.71   463,355      19.71
$23.93 to $26.40       1,463,838         3.3      25.48   229,886      23.43
$28.09 to $30.76       2,502,594         4.1      28.80         -          -
----------------------------------------------------------------------------
Total                  4,506,837         3.5 $    26.49   770,291 $    20.01
----------------------------------------------------------------------------

 
Restricted Share Units  
For the nine months ended July 31, 2013, salary expense of $6,809
(2012 - $5,274) was recognized related to the Restricted Share Units
(RSUs). As at July 31, 2013, the liability for the RSUs held under
this plan was $7,663 (2012 - $7,012). At the end of each period, the
liability is adjusted through salary expense to reflect changes in
the fair value of the RSUs. As at July 31, 2013, 655,615 RSUs were
outstanding (2012 - 595,707). 
Deferred Share Units  
For the nine months ended July 31, 2013, non-interest expenses "other
expenses" included $375 (2012 - $404) related to the Deferred Share
Units (DSUs). As at July 31, 2013, the liability for DSUs held under
this plan was $2,392 (2012 - $2,058). At the end of each period, the
liability is adjusted through salary expense to reflect changes in
the fair value of the DSUs. As at July 31, 2013, 82,710 DSUs were
outstanding (2012 - 78,347). 


 
11. Contingent Liabilities and Commitments

 
In the normal course of business, the Bank enters into various
commitments and has contingent liabilities, which are not reflected
in the consolidated balance sheets. At July 31, 2013, these items
include guarantees and standby letters of credit of $342,077 (April
30, 2013 - $315,837; October 31, 2012 - $286,676). Significant
contingent liabilities and commitments, including guarantees provided
to third parties, are discussed in Note 20 of the Bank's audited
consolidated financial statements for the year ended October 31, 2012
(see page 91 of the 2012 Annual Report). 
In the ordinary course of business, the Bank and its subsidiaries are
party to legal proceedings. Based on current knowledge, CWB does not
expect the outcome of any of these proceedings to have a material
effect on the consolidated financial position or results of
operations. 


 
12. Fair Value of Financial Instruments

 
The Bank categorizes its fair value measurements of financial
instruments recorded on the consolidated balance sheets according to
a three-level hierarchy. Level 1 fair value measurements reflect
published market prices quoted in active markets. Level 2 fair value
measurements were estimated using a valuation technique based on
observable market data. Level 3 fair value measurements were
determined using a valuation technique based on unobservable market
data.  
Further information on how the fair value of financial instruments is
determined is included in Note 29 of the October 31, 2012
consolidated audited financial statements (see page 99 of the 2012
Annual Report).  
The following table presents the Bank's financial assets and
liabilities that are carried at fair value, categorized by level
under the fair value hierarchy: 


 
                                                Valuation Technique         
                                       -------------------------------------
As at July 31, 2013          Fair Value      Level 1     Level 2     Level 3
----------------------------------------------------------------------------
Financial assets                                                            
  Cash resources            $    97,739  $    89,521  $    8,218  $        -
  Securities                  2,187,578    2,187,578           -           -
  Derivative related              1,249            -       1,249           -
----------------------------------------------------------------------------
                            $ 2,286,566  $ 2,277,099  $    9,467  $        -
----------------------------------------------------------------------------
                                                                            
Financial liabilities                                                       
  Other liability(1)        $     1,679  $         -  $        -  $    1,679
  Derivative related                168            -         168           -
----------------------------------------------------------------------------
                            $     1,847  $         -  $      168  $    1,679
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                   Valuation Technique      
                                            --------------------------------
As at April 30, 2013              Fair Value     Level 1   Level 2   Level 3
----------------------------------------------------------------------------
Financial assets                                                            
  Cash resources                 $   161,440  $  130,140  $ 31,300  $      -
  Securities                       2,383,203   2,383,203         -         -
  Derivative related                   1,468           -     1,468         -
----------------------------------------------------------------------------
                                 $ 2,546,111  $2,513,343  $ 32,768  $      -
----------------------------------------------------------------------------
                                                                            
Financial liabilities                                                       
  Derivative related             $        18  $        -  $     18  $      -
----------------------------------------------------------------------------
                           
                                                 
                                                    Valuation Technique     
                                            --------------------------------
As at October 31, 2012            Fair Value     Level 1   Level 2   Level 3
----------------------------------------------------------------------------
Financial assets                                                            
  Cash resources                 $   236,983  $  236,983  $      -  $      -
  Securities                       2,336,100   2,336,100         -         -
  Securities purchased under                                                
   resale agreements                   1,951           -     1,951         -
----------------------------------------------------------------------------
                                 $ 2,575,034  $2,573,083  $  1,951  $      -
----------------------------------------------------------------------------
                                                                            
Financial liabilities                                                       
  Derivative related             $        10  $        -  $     10  $      -
----------------------------------------------------------------------------
                                                                            
(1) Level 3 financial instruments was comprised of the contingent           
consideration related to the acquisition of McLean & Partners Wealth        
Management Ltd. (see note 15).                                              
 
13. Interest Rate Sensitivity

 
The Bank's exposure to interest rate risk as a result of a difference
or gap between the maturity or repricing behavior of interest
sensitive assets and liabilities, including derivative financial
instruments, is discussed in Note 28 of the audited consolidated
financial statements for the year ended October 31, 2012 (see page 98
of the 2012 Annual Report). The following table shows the gap
position for selected time intervals. 
Asset Liability Gap Positions 


 
                            Floating                                        
                            Rate and                                  Total 
                            Within 1       1 to 3     3 Months     Within 1 
($ millions)                   Month       Months    to 1 Year         Year 
----------------------------------------------------------------------------
July 31, 2013                                                               
Assets                                                                      
Cash resources and                                                          
 securities              $       246  $       686  $       703  $     1,635 
Loans                          7,035          716        1,872        9,623 
Other assets                       -            -            -            - 
Derivative financial                                                        
 instruments(1)                   50           75          534          659 
----------------------------------------------------------------------------
Total                          7,331        1,477        3,109       11,917 
----------------------------------------------------------------------------
Liabilities and Equity                                                      
Deposits                       5,723          847        3,664       10,234 
Other liabilities                  4            7           30           41 
Debt                               8           17           68           93 
Equity                             -            -            -            - 
Derivative financial                                                        
 instruments(1)                  743            -            -          743 
----------------------------------------------------------------------------
Total                          6,478          871        3,762       11,111 
----------------------------------------------------------------------------
Interest Rate Sensitive                                                     
 Gap                     $       853  $       606  $      (653) $       806 
----------------------------------------------------------------------------
Cumulative Gap           $       853  $     1,459  $       806  $       806 
----------------------------------------------------------------------------
Cumulative Gap as a                                                         
 Percentage of Total                                                        
 Assets                          4.6%         7.8%         4.3%         4.3%
----------------------------------------------------------------------------
                                                                            
April 30, 2013                                                              
Cumulative Gap           $     1,364  $     2,056  $     1,245  $     1,245 
----------------------------------------------------------------------------
Cumulative Gap as a                                                         
 Percentage of Total                                                        
 Assets                          7.5%        11.3%         6.9%         6.9%
----------------------------------------------------------------------------
                                                                            
October 31, 2012                                                            
Cumulative Gap           $     1,560  $     1,586  $       773  $       773 
----------------------------------------------------------------------------
Cumulative Gap as a                                                         
 Percentage of Total                                                        
 Assets                          9.1%         9.3%         4.5%         4.5%
----------------------------------------------------------------------------
 
                                                                            
                                                          Non-              
                         1 Year to 5   More than      interest              
($ millions)                   Years      5 Years    Sensitive        Total 
----------------------------------------------------------------------------
July 31, 2013                                                               
Assets                                                                      
Cash resources and                                                          
 securities              $       428  $       194  $        29  $     2,286 
Loans                          5,576          146          (62)      15,283 
Other assets                       -            -          358          358 
Derivative financial                                                        
 instruments(1)                   84            -            1          744 
----------------------------------------------------------------------------
Total                          6,088          340          326       18,671 
----------------------------------------------------------------------------
Liabilities and Equity                                                      
Deposits                       4,745            -          (17)      14,962 
Other liabilities                 40           11          351          443 
Debt                             510          250            -          853 
Equity                           105            -        1,564        1,669 
Derivative financial                                                        
 instruments(1)                    -            -            1          744 
----------------------------------------------------------------------------
Total                          5,400          261        1,899       18,671 
----------------------------------------------------------------------------
Interest Rate Sensitive                             
                        
 Gap                     $       688  $        79  $    (1,573) $         - 
----------------------------------------------------------------------------
Cumulative Gap           $     1,494  $     1,573  $         -  $         - 
----------------------------------------------------------------------------
Cumulative Gap as a                                                         
 Percentage of Total                                                        
 Assets                          8.0%         8.4%           -%           -%
----------------------------------------------------------------------------
                                                                            
April 30, 2013                                                              
Cumulative Gap           $     1,478  $     1,502  $         -  $         - 
----------------------------------------------------------------------------
Cumulative Gap as a                                                         
 Percentage of Total                                                        
 Assets                          8.2%         8.3%           -%           -%
----------------------------------------------------------------------------
                                                                            
October 31, 2012                                                            
Cumulative Gap           $     1,211  $     1,437  $         -  $         - 
----------------------------------------------------------------------------
Cumulative Gap as a                                                         
 Percentage of Total                                                        
 Assets                          7.1%         8.4%           -%           -%
----------------------------------------------------------------------------
(1) Derivative financial instruments are included in this table at the      
notional amount.                                                            
(2) Accrued interest is excluded in calculating interest sensitive assets   
and liabilities.                                                            
(3) Potential prepayments of fixed rate loans and early redemption of       
redeemable fixed term deposits have not been estimated. Redemptions of fixed
term deposits where depositors have this option are not expected to be      
material. The majority of fixed rate loans, mortgages and leases are either 
closed or carry prepayment penalties.                                       

 
The effective, weighted average interest rates of financial assets
and liabilities are shown below: 


 
                                                                            
             Floating                                                       
             Rate and          3 Months    Total   1 Year     More          
             Within 1   1 to 3     to 1 Within 1      to    than 5          
July 31, 2013   Month   Months     Year     Year  5 Years    Years    Total 
----------------------------------------------------------------------------
Total assets      3.8%     2.6%     3.7%     3.6%     4.8%     4.7%     4.0%
Total                                                                       
 liabilities      1.3      1.8      2.1      1.6      2.4      3.3      1.9 
----------------------------------------------------------------------------
Interest rate                                                               
 sensitive                                                                  
 gap              2.5%     0.8%     1.6%     2.0%     2.4%     1.4%     2.1%
----------------------------------------------------------------------------
                                                                            
April 30,                                                                   
 2013                                                                       
----------------------------------------------------------------------------
Total assets      3.8%     2.4%     3.8%     3.6%     4.9%     4.9%     4.0%
Total                                                                       
 liabilities      1.3      2.1      2.1      1.6      2.4      3.4      1.9 
----------------------------------------------------------------------------
Interest rate                                                               
 sensitive                                                                  
 gap              2.5%     0.3%     1.7%     2.0%     2.5%     1.5%     2.1%
----------------------------------------------------------------------------
                                                                            
October 31,                                                                 
 2012                                                                       
----------------------------------------------------------------------------
Total assets      3.8%     2.7%     3.7%     3.6%     5.0%     5.0%     4.1%
Total                                                                       
 liabilities      1.3      2.1      2.3      1.7      2.5        -      2.0 
----------------------------------------------------------------------------
Interest rate                                                               
 sensitive                                                                  
 gap              2.5%     0.6%     1.4%     1.9%     2.5%     5.0%     2.1%
----------------------------------------------------------------------------

 
Based on the current interest rate gap position, it is estimated that
a one-percentage point increase in all interest rates would increase
net interest income by approximately 3.6% or $15,324 (April 30, 2013
- 4.9% or $20,425) and decrease other comprehensive income $12,707
(April 30, 2013 - $9,464) net of tax, respectively over the following
twelve months. A one-percentage point decrease in all interest rates
would decrease net interest income by approximately 5.9% or $25,267
(April 30, 2013 - 6.8% or $28,260) and increase other comprehensive
income $12,707 (April 30, 2013 - $9,464) net of tax.  


 
14. Capital Management

 
Beginning January 1, 2013, capital for Canadian financial
institutions is managed and reported in accordance with a capital
management framework specified by OSFI commonly called Basel III.
Further details are available in the Capital Management section in
the Q3 2013 Management's Discussion and Analysis.  
Capital funds are managed in accordance with policies and plans that
are regularly reviewed and approved by the Board of Directors and
take into account forecasted capital needs and markets. The goal is
to maintain adequate regulatory capital to be considered well
capitalized, protect customer deposits and provide capacity for
internally generated growth and strategic opportunities that do not
otherwise require accessing the public capital markets, all while
providing a satisfactory return for shareholders.  
Additional information about the Bank's capital management practices
is provided in Note 31 to the fiscal 2012 audited consolidated
financial statements within 2012 Annual Report. 
Capital Structure and Regulatory Ratios 


 
                                       As at          As at          As at  
                                     July 31        April 30        July 31 
                                         2013           2013        2012(1) 
----------------------------------------------------------------------------
Regulatory capital, net of                                                  
 deductions                                                                 
  Common equity Tier 1          $   1,243,708  $   1,229,936  $         n/a 
  Tier 1                            1,515,961      1,503,325      1,417,660 
  Total                             2,194,220      2,180,295      1,854,224 
--------------------------------------------------------------------------
--
Capital ratios                                                              
  Common equity Tier 1                    7.9%           8.0%           n/a%
  Tier 1                                  9.6            9.7           10.5 
  Total                                  13.9           14.1           13.7 
Asset to capital multiple                 8.0x           8.0x           8.6x
----------------------------------------------------------------------------
                                                                            
(1) Capital ratios prior to fiscal 2013 have been calculated using the      
previous capital framework, Basel II. Capital ratios calculated under Basel 
III are not directly comparable to the equivalent Basel II measures.        

 
In June 2013, the Bank redeemed $50,000 of subordinated debentures
with a fixed interest rate of 5.95%. The 2013 inclusion of
non-qualifying capital instruments in total capital under Basel III
is capped at $607,500, based on 90% of the January 1, 2013 balance of
$675,000. As a result, the June redemption of subordinated debentures
had no impact on non-qualifying capital included in total capital as
the balance of subordinated debentures after the redemption was still
in excess of the $607,500 cap.  
During the three and nine months ended July 31, 2013, the Bank
complied with all internal and external capital requirements. 


 
15. Business Acquisition

 
Effective May 17, 2013, the Bank acquired 54.6% of the outstanding
common shares of McLean & Partners Wealth Management Ltd. (McLean &
Partners), a Calgary, Alberta based wealth management firm, in
exchange for $10,098 cash and contingent consideration for a total
acquisition cost of $11,777. Additional contingent consideration, to
a maximum of $1,639, will be paid in cash if earnings targets are
achieved over a two year period. The results of operations for McLean
& Partners have been included in the Bank's consolidated financial
statements since the effective acquisition date.  
The following table summarizes the fair value of the assets acquired
and liabilities assumed: 


 
Fair value of consideration transferred                       $      11,777 
                                                                            
Identifiable assets acquired and liabilities assumed                        
  Intangible assets                                                   9,840 
  Other items, net                                                      696 
  Deferred income tax liability                                      (2,330)
  Non-controlling interest                                             (316)
----------------------------------------------------------------------------
  Goodwill                                                    $       3,887 
----------------------------------------------------------------------------

 
Intangible assets include customer relationships, non-competition
agreements and a trade name. The trade name, which has an estimated
value of $518, is not subject to amortization. The total amount of
goodwill and intangible assets is not deductible for income tax
purposes.  


 
16. Comparative Figures

 
Certain comparative figures have been reclassified to conform to the
current period's presentation. 


 
Head Office                                                                 
                                                                            
Canadian Western Bank Group                                                 
Suite 3000, Canadian Western Bank Place                                     
10303 Jasper Avenue                                                         
Edmonton, AB T5J 3X6                                                        
Telephone: (780) 423-8888                                                   
Fax: (780) 423-8897                                                         
www.cwb.com                                                                 
                                                                            
Subsidiary Offices                                                          
                                                                            
National Leasing Group Inc.                                                 
1525 Buffalo Place                                                          
Winnipeg, MB R3T 1L9                                                        
Toll-free: 1-800-665-1326                                                   
Toll-free fax: 1-866-408-0729                                               
nationalleasing.com                                                         
                                                                            
Canadian Western Trust Company                                              
Suite 600, 750 Cambie Street                                                
Vancouver, BC V6B 0A2                                                       
Toll-free: 1-800-663-1124                                                   
Fax: (604) 669-6069                                                         
cwt.ca                                                                      
                                                                            
Valiant Trust Company                                                       
Suite 310, 606 - 4th Street S.W.                                            
Calgary, AB T2P 1T1                                                         
Toll-free: 1-866-313-1872                                                   
Fax: (403) 233-2857                                                         
valianttrust.com                                                            
                                                                            
Canadian Direct Insurance Incorporated                                      
Suite 600, 750 Cambie Street                                                
Vancouver, BC V6B 0A2                                                       
Telephone: (604) 699-3678                                                   
Fax: (604) 699-3851                                                         
canadiandirect.com                                                          
                                                                            
Adroit Investment Management Ltd.                                           
Suite 1250, Canadian Western Bank Place                                     
10303 Jasper Avenue                                                         
Edmonton, AB T5J 3N6                                                        
Telephone: (780) 429-3500                                                   
Fax: (780) 429-9680                                                         
adroitinvestments.ca                                                        
                                                                            
McLean & Partners Wealth Management Ltd.                                    
801 10th Avenue SW                                                          
Calgary, AB T2R 0B4                                                         
Telephone: (403) 234-0005                                                   
Fax: (403) 234-0606                                                         
mcleanpartners.com                                                          
                                                                            
Stock Exchange Listings                                                     
                                                                            
The Toronto Stock Exchange                                                  
Common Shares: CWB                                                          
Series 3 Preferred Shares: CWB.PR.A                                         
                                                                            
Transfer Agent and Registrar        
                                        
                                                                            
Valiant Trust Company                                                       
Suite 310, 606 - 4th Street S.W.                                            
Calgary, AB T2P 1T1                                                         
Telephone: (403) 233-2801                                                   
Fax: (403) 233-2857                                                         
Website: www.valianttrust.com                                               
Email: inquiries@valianttrust.com                                           

 
Eligible Dividends Designation  
CWB designates all dividends for both common and preferred shares
paid to Canadian residents as "eligible dividends", as defined in the
Income Tax Act (Canada), unless otherwise noted. 
Dividend Reinvestment Plan  
CWB's dividend reinvestment plan allows common and preferred
shareholders to purchase additional common shares by reinvesting
their cash dividend without incurring brokerage and commission fees.
For information about participation in the plan, please contact the
Transfer Agent and Registrar or visit www.cwb.com.  
Investor Relations  


 
Investor & Public Relations                                                 
Canadian Western Bank                                                       
Telephone: (780) 441-3770                                                   
Toll-free: 1-800-836-1886                                                   
Fax: (780) 969-8326                                                         
Email: InvestorRelations@cwbank.com                                         

 
Online Investor Information  
Additional investor information including supplemental financial
information and corporate presentations are available on CWB's
website at www.cwb.com.  
Quarterly Conference Call and Webcast  
CWB's quarterly conference call and live audio webcast will take
place on August 29, 2013 at 2:00 p.m. ET (12:00 p.m. MT). The webcast
will be archived on the Bank's website at www.cwb.com for sixty days.
A replay of the conference call will be available until September 12,
2013 by dialing 905-694-9451 (Toronto) or 1-800-408-3053 (toll-free)
and entering passcode 6674131.
Contacts:
Canadian Western Bank
Chris Fowler
President and Chief Executive Officer
(780) 423-8888 
Canadian Western Bank
Kirby Hill, CFA
Vice President, Strategy and Communications
(780) 441-3770
kirby.hill@cwbank.com