CWB reports strong fourth quarter performance and record results for fiscal 2010
Edmonton, December 7, 2010 – Canadian Western Bank (TSX: CWB) today announced strong financial performance marking the Bank’s 90th consecutive profitable quarter. Fourth quarter net income increased 29% to $39.1 million compared to the same quarter last year while diluted earnings per common share increased 23% to $0.48. Record quarterly total revenues (teb) of $111.6 million grew 24% and reflect the combined positive impact of a 50 basis point improvement in net interest margin (teb), 14% annual loan growth and strong other income. CWB also achieved record financial performance for the year and surpassed its 2010 minimum targets for revenue growth, profitability, loan growth and efficiency by a considerable margin. Annual net income of $163.6 million, or $2.05 per diluted common share, increased 54% and 39% respectively, over 2009.
On December 6, 2010, CWB’s Board of Directors declared a cash dividend of $0.13 per common share, payable on January 13, 2011 to shareholders of record on December 30, 2010. This quarterly dividend is 18% higher than the quarterly dividend declared in both the previous quarter and one year ago and represents the first dividend increase since July 2008. The Board of Directors also declared a cash dividend of $0.453125 per Series 3 Preferred Share payable on January 31, 2011 to shareholders of record on January 21, 2011.
Fourth quarter net income for the banking and trust segment of $37.0 million was up 35% over a year earlier. A significant improvement in net interest margin, including the favourable margin impact from the acquisition of National Leasing Group Inc. (National Leasing or NL), loan growth and a 6% increase in other income helped drive banking and trust segment total revenues (teb) up 26% to a record $105.3 million. Quarterly net income from insurance operations was $2.1 million, down $0.8 million compared to a year earlier reflecting higher claims and operating expenses, partially offset by an increase in net earned premiums and a positive contribution from the Alberta auto risk sharing pools.
“We finished 2010 with strong quarterly performance that contributed to an exceptional year for CWB Group,” said Larry Pollock, President and CEO. “We achieved record results across almost all key metrics despite the post-recessionary economy, which makes this accomplishment particularly gratifying, as it further confirms our strategies and the dedication of our people. We significantly surpassed our targets for revenues and profitability, and achieved double-digit loan growth for the twentieth time in the past twentyone years. While there are still uncertainties about the strength of the economic recovery, we are definitely seeing more optimism in our markets compared to earlier in the year. We are also seeing some further positive signs on the credit front, as evidenced by another decline this quarter in the dollar level of gross impaired loans.”
“Perhaps our biggest highlight this year was when we welcomed National Leasing to the CWB Group. We expected this business would materially benefit our performance and diversification over time, but it has already surpassed our expectations. Great employees are the foundation of any successful business and National Leasing’s talented people and strong organizational culture make it a terrific match with CWB.”
“Subsequent to year end, CWB was proud to be recognized as having one of Canada’s 10 Most Admired Corporate Cultures™. We were also identified as one of the 50 Best Employers in Canada for the fifth consecutive year. National Leasing was named one of Canada’s 50 Best Managed Companies for the sixteenth year in a row and one of the 50 Best Small & Medium Employers in Canada for the fourth time in as many years.”
“One of the consequences of having a great year like 2010 is that expectations are that much higher for 2011. While we believe there will be challenges due to economic and competitive factors, our minimum performance targets for next year reflect ongoing confidence across all of our businesses. We will continue to focus on high quality loans and expect to grow earnings and revenues while maintaining strong efficiency. We’re very proud of our track record, but there is still plenty of room for us to develop and grow. Our goal is to improve across each area of our organization so we can better use our competitive advantages to serve clients and increase market share.”
“Our Board of Directors was pleased to increase the dividend for our shareholders this quarter. It represented the first change in our quarterly dividend since July 2008 and brings us more in line with our targeted payout range of 25% to 30% of net income. While we plan to keep our payout range low relative to other Canadian banks to support CWB’s ongoing growth and development, we expect further dividend increases in the future as we achieve our performance objectives,” added Mr. Pollock.
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