CWB reports solid fourth quarter performance and record results for fiscal 2012
EDMONTON, December 4, 2012 – Canadian Western Bank (TSX: CWB) today announced solid financial
performance marking the Bank’s 98th consecutive profitable quarter. Fourth quarter net income available to
common shareholders of $43.0 million was up 20% ($7.1 million) compared to the same quarter last year while
diluted earnings per common share increased 17% to $0.55. Adjusted cash earnings per share, which excludes
the after-tax amortization of acquisition-related intangible assets and the non-tax deductible change in fair value
of contingent consideration, was $0.56, up 6%.
Fourth quarter total revenues, measured on a taxable equivalent basis (teb - see definition following the Financial
Highlights table), grew 11% ($13.5 million) to reach a record $133.2 million as the benefit of very strong 14%
year-over-year loan growth and 48% ($6.4 million) higher other income more than offset the impact of a 16 basis
point decline in net interest margin (teb) to 2.71%. Growth in other income mainly resulted from an $8.5 million
positive change in net gains on securities and the elimination of charges related to changes in fair value of
contingent consideration ($3.6 million in the fourth quarter of 2011), partially offset by $4.0 million lower net
insurance revenues and a $2.6 million decline in the “other” component of other income. Net gains on securities
of $5.4 million in the fourth quarter compared to net losses of $3.1 million in the same period of 2011. Charges for
contingent consideration were eliminated in the third quarter of this year upon the settlement of the Bank’s
ownership of National Leasing Group Inc. Net insurance revenues were impacted by increased claims expense
related to severe hailstorms in Alberta in August 2012. The ‘other’ component of other income in the fourth
quarter of 2011 included a $2.0 million gain attributed to the sale of a residential mortgage portfolio.
Compared to last quarter, net income available to common shareholders declined 10% ($5.0 million) as the
positive revenue contribution from 2% quarterly loan growth and $3.5 million higher gains on securities was more
than offset by the combined impact of a 14 basis point reduction in net interest margin (teb), a $5.3 million decline
in net insurance revenues and a $1.8 million reduction in the ‘other’ component of other income. The material
reduction in net interest margin largely resulted from unusually high interest recoveries in the previous quarter, as
well as lower yields on both loans and securities, partially offset by more favourable fixed term deposit costs.
Diluted earnings per common share decreased 10% ($0.06) from the prior quarter while adjusted cash earnings
per share was down 11% ($0.07).
Record annual net income available to common shareholders of $172.2 million increased 15% ($22.7 million)
compared to last year while diluted earnings per common share was up 14% to $2.22. Adjusted cash earnings
per share of $2.30 improved from $2.17 in the prior year. Record total revenues (teb) of $525.5 million increased
9%, reflecting 8% ($32.1 million) growth in net interest income (teb) and 14% ($9.8 million) higher other income.
Growth in net interest income was driven by the benefit of very strong loan growth, partially offset by the
significant impact of a 20 basis point reduction in net interest margin (teb) to 2.79%. Read the release in full.