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Press release from CNW Group

CWB reports 2011 quarterly and annual results under IFRS

Tuesday, January 24, 2012

CWB reports 2011 quarterly and annual results under IFRS16:32 EST Tuesday, January 24, 2012EDMONTON, Jan. 24, 2012 /CNW/ - Canadian Western Bank (TSX: CWB) today released its 2011 quarterly and annual financial results as reported under International Financial Reporting Standards (IFRS).The Canadian Institute of Chartered Accountants has transitioned Canadian generally accepted accounting principles (GAAP) for publicly accountable entities to IFRS. The transition is applicable to interim and annual financial statements effective for fiscal years beginning on or after January 1, 2011, including comparatives for the prior year. As a result, Canadian Western Bank's (CWB or the Bank) consolidated financial statements for the 2012 fiscal year will be prepared in accordance with IFRS, including comparative information for 2011. CWB's financial results for the quarter ending January 31, 2012 will be the first quarterly IFRS financial statements and are expected to be released before the market opens on March 8, 2012.The following information, in addition to the Bank's prior disclosure, is provided to help users of the financial statements better understand the impact on CWB's 2011 consolidated financial statements as a result of the initial adoption of IFRS. This information should be read in conjunction with the Future Changes in Accounting Policies section of the Management's Discussion and Analysis (MD&A) within CWB's 2011 Annual Report, available on SEDAR at www.sedar.com and the Bank's website at www.cwbankgroup.com.It is important to recognize that the transition to IFRS is an accounting change only and does not reflect a change in the underlying businesses or strategy of CWB.Impact on Key Performance MetricsA summary of CWB's key performance metrics for fiscal 2011 as reported under Canadian GAAP and restated for IFRS follows:($ thousands)Canadian GAAPIFRS(unaudited)Net income available to common shareholders$162,941$149,538Total revenue (teb) (1)$491,014$483,555Total loans$12,221,143$12,293,282Net interest margin (teb) (2)2.82%2.99%Provision for credit losses as a percentage ofaverage loans20 basis points19 basis pointsEfficiency ratio (teb)45.3%44.9%Return on common shareholders' equity15.6%14.7%Return on assets1.20%1.09%Diluted earnings per common share$2.12$1.95Diluted cash earnings per common share (3)$2.18$2.17  (1)  teb - Refer to the "Taxable Equivalent Basis (teb)" section of this news release for definition.  (2)  The increase in net interest margin reflects a non-IFRS change in recognition of certain credit related fees as described in the "Significant Accounting Policy Differences" section of this news release.  (3)  Diluted cash earnings per share is diluted earnings per common share excluding the after-tax amortization of acquisition-related intangible assets and the non-tax deductible change in fair value of the contingent consideration related to the National Leasing acquisition.As described in the 2011 annual MD&A, the most significant changes relate to:The fair value restatement of the contingent consideration related to the Bank's 2010 acquisition of National Leasing Group Inc. (National Leasing). This change, as described in more detail in the Significant Accounting Policy Differences section of this news release, reduces net income and total revenues (teb) and increases the effective income tax rate as the charge is non-tax deductible.The recognition of securitized leases as loans on the IFRS balance sheet with a corresponding increase in debt that reflects the funding obligation.An increase in net interest margin (teb) primarily reflecting a change in recognition of certain credit related fees.A change in the methodology for calculating the efficiency ratio (teb) - previously calculated as non-interest expenses divided by total revenues (teb). The efficiency ratio calculation under IFRS will exclude from total revenues (teb) the change in fair value impact of the contingent consideration related to the acquisition of National Leasing.IFRS Earnings AdjustmentsA summary of the changes in 2011 net income available to common shareholders as a result of the adoption of IFRS follows:      ($ thousands, unaudited)Q1 2011Q2 2011Q3 2011Q4 2011Fiscal 2011Net income available to     common shareholders under$ 40,150$ 40,638$ 40,909$ 41,244$ 162,941 Canadian GAAP     IFRS adjustments:      Business combinations (National Leasing)(2,516)(3,742)(2,508)(3,539)(12,305) Derecognition of securitized leases218454234231,109 Available-for-sale securities impairment---(2,207)(2,207)Net income available to      common shareholders under$ 37,852$ 36,941$ 38,824$ 35,921$ 149,538 IFRS     Significant Accounting Policy DifferencesSignificant accounting policy differences for the Bank on initial transition to IFRS and any elections made are described below with all differences relating to the Banking and Trust operating segment.(1) Business Combinations - Under IFRS, contingent consideration related to a business combination is accounted for as a financial liability and fair valued at the time of the acquisition. An adjustment of the liability to current fair value is recorded through net income every period thereafter until settlement. Under Canadian GAAP, when the amount of contingent consideration cannot be reasonably estimated or the outcome of the contingency cannot be determined without reasonable doubt, the liability is not recognized until the contingency is resolved and consideration is issued or becomes issuable; at such time, the consideration is recorded as an adjustment of goodwill.The Bank has applied IFRS 3 - Business Combinations retrospectively to the National Leasing acquisition (described in Note 34 to the 2011 annual consolidated financial statements on page 119 of the 2011 Annual Report). Under IFRS 1: First Time Adoption of IFRS, the associated contingent consideration was fair valued at the acquisition date of February 1, 2010.The retrospective restatement increased IFRS goodwill recorded on the consolidated balance sheet at November 1, 2010 by $8 million.The revaluation of the contingent consideration since acquisition decreased retained earnings at November 1, 2010 by $10 million. The net effect of revaluing the obligation in fiscal 2011 resulted in a $12 million reduction in net income.The change in fair value of the contingent consideration reflects the Bank's best estimate of when the contingent consideration will be settled, in accordance with the terms of the purchase agreement and estimates of National Leasing's future earnings. Increases in the estimated fair value of the contingent consideration result in a non-tax deductible charge to quarterly earnings based on forecasted earnings growth attributable to National Leasing, changes in management's estimates of the expected settlement of the contingent consideration and a notional interest charge. Future charges to quarterly earnings attributable to the fair value estimate of the contingent consideration are expected to be lower compared to amounts reported in 2011, as 2011 charges included a larger adjustment to forecasted net income than is expected going forward.(2) Derecognition of Securitized Financial Assets - National Leasing's securitized leases are reported as loans on the IFRS balance sheet and resulted in an increase in both loans and debt. The corresponding impact on net income in fiscal 2011 was insignificant. The IFRS transition resulted in the following increase in total loans at the respective balance sheet dates:($ millions, unaudited)Increase in total loansNovember 1, 2010$ 196January 31, 2011167April 30, 2011140July 31, 2011114October 31, 201190The earnings effect of securitization as reported under IFRS resulted in a $2 million decrease in retained earnings as at November 1, 2010. The change reflects the elimination of cumulative securitization gains and losses realized under Canadian GAAP, less recognition of interest income and expense under IFRS. The net effect on 2011 consolidated net income was an increase of $1 million.The future earnings impact from securitization transactions completed prior to October 31, 2011 is expected to be insignificant.  Leases securitized in the future will remain on the consolidated balance sheet reported as loans.(3) Consolidation - Under IFRS, a variable interest entity (VIE) is consolidated if it is deemed to be controlled by the reporting entity, as determined under specific criteria. Canadian Western Bank Capital Trust is consolidated under IFRS, which resulted in a $105 million decrease in deposits and the presentation of the CWB Capital Trust Capital Securities Series 1 (WesTS) as equity attributed to non-controlling interests. Distributions on the WesTS that were effectively reported as deposit interest expense are now presented as an equity dividend within IFRS "net income attributable to non-controlling interests." For more information about this special purpose entity, refer to Note 15 to the consolidated financial statements beginning on page 100 of the 2011 Annual Report.The net effect on 2011 consolidated "net income" effectively resulted in an increase of $7 million as the deposit interest expense under Canadian GAAP is treated as an equity dividend payment under IFRS.  "Net income attributable to shareholders of the Bank" is reported net of the non-controlling interest and remains unchanged for 2011.(4) Impairment of Available-for-Sale Securities - Under both Canadian GAAP and IFRS, available-for-sale securities are reported on the balance sheet at fair value with changes in fair value generally reported in other comprehensive income. An unrealized loss is recognized in net income when a security is considered impaired; a subsequent recovery in the value of an equity security is not reversed through net income until the security is either sold or redeemed. Under Canadian GAAP, a significant or prolonged decline in the fair value of an investment below its cost is assessed in the context of whether it is considered an "other than temporary impairment" (OTTI). Under IFRS, the concept of OTTI does not exist and either a significant or prolonged decline in fair value is considered objective evidence of impairment. The differences between Canadian GAAP and IFRS will generally result in earlier recognition of impairment losses through net income under IFRS.The impact of the transition results in no change in shareholders' equity and a $2 million reduction in 2011 net income. The impact of the IFRS definition of significant or prolonged impairment on the Bank's future earnings is not determinable as it depends on the future interest rate environment, market conditions, investment strategies and the Bank's asset/liability position.(5) Other Reclassifications- Certain other financial statement reclassifications have been made on the transition to IFRS. An example includes the presentation of the non-controlling interest in Adroit Investment Management Ltd. which has been reclassified from other liabilities under Canadian GAAP to non-controlling interests (presented in equity) under IFRS.In addition to the IFRS transition adjustments previously described, the recognition of certain credit related fees was also amended. Certain credit related fees, previously recognized in other income, are now considered part of the loan yield and amortized to net interest income over the expected life of the loan. Because total loans are reported net of deferred loan fees, this change resulted in a decrease in total loans of $18 million at both November 1, 2010 and October 31, 2011, and a reduction in retained earnings of $13 million at November 1, 2010. While the change had no impact on 2011 net income, approximately $15 million was reclassified from other income to net interest income resulting in a 17 basis point increase in the fiscal 2011 IFRS net interest margin (teb) compared to Canadian GAAP. The impact on the income statement in future periods is expected to be relatively consistent with 2011.Detailed 2011 financial results reconciled from Canadian GAAP to IFRS are included in the following appendices:Appendix A - Consolidated balance sheet (condensed) as at November 1, 2010.Appendix B - Consolidated income statements (condensed) for the three months ended:January 31, 2011,April 30, 2011,July 31, 2011, andOctober 31, 2011.Appendix C - Consolidated balance sheet as at October 31, 2011 and consolidated income statement for the year ended October 31, 2011 (condensed).CWB's October 31, 2011 supplemental financial information package prepared under IFRS is available on the Bank's website at www.cwbankgroup.com.  The unaudited financial statements for the quarter ending January 31, 2012 will include a complete summary of all significant IFRS accounting policies.Expected Regulatory Capital ImplicationsAs at October 31, 2011, the pro forma Basel II Tier 1 and total regulatory capital ratios were estimated to decline 40 basis points under IFRS to 10.7% and 15.0%, respectively. After considering IFRS transition adjustments, these ratios remain well above both regulatory minimums and target capital thresholds determined through the Bank's Internal Capital Adequacy Assessment Process (ICAAP).Under IFRS, leases securitized and sold by National Leasing are accounted for as secured borrowings. Recognition of securitized assets on the consolidated balance sheet increases the regulatory asset-to-capital multiple. As at October 31, 2011, the pro-forma asset-to-capital multiple, including IFRS transition adjustments, was estimated to increase to 8.1, from 7.9, and remains well within the regulatory limit.Fiscal 2012 Minimum Performance Targets The Bank's minimum performance targets established for fiscal 2012 as presented in the 2011 Annual Report were calculated under Canadian GAAP. With the restatement of 2011 results from Canadian GAAP to IFRS, the 2012 performance targets have been adjusted to reflect the IFRS transition on the underlying financial data. Management's assumptions regarding the business outlook for 2012 remain consistent with the discussion in the 2011 Annual Report. 2012 MinimumPerformance Targets -- Canadian GAAP2012 MinimumPerformance Targets -- IFRSNet income available to common shareholders growth (1)6%10%Total revenues (teb) growth6%7%Total loan growth10%10%Provision for credit losses as a percentage of average loans0.20% - 0.25%0.20% - 0.25%Efficiency ratio (teb) (2)46%46%Return on common shareholders' equity (3)15%15%Return on assets (4)1.10%1.05%   (1)  Net income attributable to common shareholders of the Bank after preferred share dividends.   (2) Efficiency ratio (teb) calculated as non-interest expenses divided by total revenues (teb), excluding thechange in fair value impact of the contingent consideration related to the acquisition of National Leasing.   (3)  Return on common shareholders' equity calculated as net income attributable to common shareholders ofthe Bank after preferred share dividends divided by average common shareholders' equity.   (4)  Return on assets calculated as annualized net income attributable to common shareholders of the Bankafter preferred share dividends divided by average total assetsTaxable 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 GAAP or 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 press release.Non-GAAP MeasuresTaxable equivalent basis, return on common shareholders' equity, return on assets, efficiency ratio, net interest margin, Tier 1 and total capital adequacy ratios, average balances and provision for credit losses as a percentage of average loans do not have standardized meanings prescribed by Canadian GAAP or IFRS and, therefore, may not be comparable to similar measures presented by other financial institutions. The non-GAAP measures used in this press release are calculated as follows:taxable equivalent basis - described above;return on common shareholders' equity - net income attributable to common shareholders of the Bank after preferred share dividends divided by average common shareholders' equity;return on assets - net income attributable to common shareholders of the Bank after preferred share dividends divided by average total assets;diluted cash earnings per 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 the contingent consideration related to the National Leasing acquisition;efficiency ratio - non-interest expenses divided by total revenues (net interest income plus other income excluding the non-tax deductible change in fair value of the contingent consideration related to the National Leasing acquisition);net interest margin - net interest income divided by average total assets;Tier 1 and total capital adequacy ratios - in accordance with guidelines issued by the Office of the Superintendent of Financial Institutions Canada (OSFI);average balances - average daily balances; andprovision for credit losses as a percentage of average loans - provision for credit losses divided by average loanForward-looking StatementsFrom time to time, Canadian Western Bank (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 2012 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 2012, 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 potential adverse effects from the European debt crisis.About Canadian Western Bank GroupCanadian 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 Inc., Canadian Western Trust Company, Valiant Trust Company, Canadian Direct Insurance Incorporated, Adroit Investment Management Ltd. and Canadian Western Financial Ltd., collectively offer a diversified range of financial services across Canada and are together known as the Canadian Western Bank 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.cwbankgroup.com for additional information.Appendix A Reconciliation of Condensed Consolidated Balance Sheet                        As at November 1, 2010 (Unaudited)                            ($ thousands)      IFRS Adjustments               (1)  (2)  (3)  (4)           Canadian  Business        AFS         GAAP  Combinations  Derecognition  Consolidation  Impairment  Other  IFRSAssets                            Cash resources, securities and                               securities under resale agreements  $1,876,085  $  -  $  -  $-  $  -  $  -  $1,876,085Loans   10,496,464   -   196,215   -   -   (17,982)   10,674,697Other assets   329,142   7,839   (10,567)   -   -   4,532   330,946Total assets  $  12,701,691  $  7,839  $  185,648  $  -  $  -  $(13,450)  $ 12,881,728                             Liabilities                            Deposits  $  10,812,767  $  -  $  -  $  (105,000)  $  -  $  -  $10,707,767Other liabilities   425,881   17,835   (14,047)   -   -   (179)   429,490Debt   315,000   -   202,006   -   -   -   517,006Total liabilities   11,553,648   17,835   187,959   (105,000)   -   (179)   11,654,263Shareholders' equity   1,148,043   (9,996)   (2,311)   -   -   (13,450)   1,122,286Non-controlling interest    -   -   -   105,000   -   179   105,179Total equity   1,148,043   (9,996)   (2,311)   105,000   -   (13,271)   1,227,465Total liabilities and equity  $  12,701,691  $  7,839  $  185,648  $  -  $  -  $ (13,450)  $ 12,881,728 Appendix BReconciliation of Condensed Consolidated Income Statements                          For the three months ended January 31, 2011 (Unaudited)                            ($ thousands)      IFRS Adjustments              (1)  (2)  (3)  (4)         Canadian  Business        AFS         GAAP  Combinations  Derecognition  Consolidation  Impairment  Other  IFRSNet interest income (teb) (1)  $93,426  $  -  $1,804  $  1,700  $  -  $  4,287  $101,217Provision for credit losses   6,216   -   34   -   -   -   6,250Other income   28,421   (2,516)   (1,472)   -   -   (4,287)   20,146Non-interest expenses   55,128   -   -   -   -   -   55,128Income taxes (teb)   16,491   -   80   -   -   -   16,571Non-controlling interest in subsidiary   60   -   -   -   -   (60)   -Net income   43,952   (2,516)   218   1,700   -   60   43,414Net income attributable to non-controlling interests   -   -   -   1,700   -   60   1,760Net income attributable to shareholders of the Bank  $ 43,952  $  (2,516)  $  218  $  -  $  -  $  -  $  41,654Preferred share dividends   3,802   -   -   -   -   -   3,802Net income available to common shareholders  $40,150  $  (2,516)  $  218  $  -  $  -  $  -  $  37,852                             For the three months ended April 30, 2011 (Unaudited)                            ($ thousands)      IFRS Adjustments              (1)  (2)  (3)  (4)         Canadian  Business        AFS         GAAP  Combinations  Derecognition  Consolidation  Impairment  Other  IFRSNet interest income (teb)  $  93,282  $  -  $  1,337  $  1,647  $  -  $ 2,899  $  99,165Provision for credit losses   5,267   -   11   -   -   -   5,278Other income   28,506   (3,742)   (1,264)   -   -   (2,899)   20,601Non-interest expenses   55,408   -   -   -   -   -   55,408Income taxes (teb)   16,623   -   17   -   -   -   16,640Non-controlling interest in subsidiary   50   -   -   -   -   (50)   -Net income   44,440   (3,742)   45   1,647   -   50   42,440Net income attributable to non-controlling interests   -   -   -   1,647   -   50   1,697Net income attributable to shareholders of the Bank  $44,440  $  (3,742)  $  45  $  -  $  -  $  -  $  40,743Preferred share dividends   3,802   -   -   -   -   -   3,802Net income available to common shareholders  $ 40,638  $  (3,742)  $  45  $  -  $  -  $  -  $  36,941                             (1)  Refer to the "Non-GAAP Measures" section of this news release for a definition of teb (taxable equivalent basis)                For the three months ended July 31, 2011 (Unaudited)                          ($ thousands)      IFRS Adjustments              (1)  (2)  (3)  (4)         Canadian  Business        AFS         GAAP  Combinations  Derecognition  Consolidation  Impairment  Other  IFRSNet interest income (teb) (1)  $98,133  $  -  $  1,361  $  1,700  $  -  $ 3,692  $ 104,886Provision for credit losses   5,175   -   (103)   -   -   -   5,072Other income   24,952   (2,508)   (885)   -   -   (3,692)   17,867Non-interest expenses   55,805   -   -   -   -   -   55,805Income taxes (teb)   17,327   -   156   -   -   -   17,483 Non-controlling interest in subsidiary   67   -   -   -   -   (67)   - Net income   44,711   (2,508)   423   1,700   -   67   44,393 Net income attributable to non-controlling interests   -   -   -   1,700   -   67   1,767 Net income attributable to shareholders of the Bank  $44,711  $  (2,508)  $  423  $  -  $  -  $  -  $  42,626Preferred share dividends   3,802   -   -   -   -   -   3,802Net income available to common shareholders  $40,909  $  (2,508)  $  423  $  -  $  -  $  -  $  38,824                             For the three months ended October 31, 2011 (Unaudited)                          ($ thousands)      IFRS Adjustments              (1)  (2)  (3)  (4)         Canadian  Business        AFS         GAAP  Combinations  Derecognition  Consolidation  Impairment  Other  IFRSNet interest income (teb)  $99,842  $  -  $  1,006  $  1,700  $  -  $ 3,636  $ 106,184Provision for credit losses   5,521   -   (338)   -   -   -   5,183Other income   24,452   (3,539)   (765)   -   (3,023)   (3,636)   13,489Non-interest expenses   56,110   -   -   -   -   -   56,110Income taxes (teb)   17,566   -   156   -   (816)   -   16,906Non-controlling interest in subsidiary   51   -   -   -   -   (51)   -Net income   45,046   (3,539)   423   1,700   (2,207)   51   41,474Net income attributable to non-controlling interests   -   -   -   1,700   -   51   1,751Net income attributable to shareholders of the Bank  $45,046  $  (3,539)  $  423  $  -  $(2,207)  $  -  $  39,723Preferred share dividends   3,802   -   -   -   -   -   3,802Net income available to common shareholders  $41,244  $  (3,539)  $  423  $  -  $(2,207)   $-  $  35,921                             (1)  Refer to the "Non-GAAP Measures" section of this news release for a definition of teb (taxable equivalent basis)                Appendix C Reconciliation of Condensed Consolidated Balance Sheet                          As at October 31, 2011 (Unaudited)                            ($ thousands)      IFRS Adjustments              (1)  (2)  (3)  (4)         Canadian  Business        AFS         GAAP  Combinations  Derecognition  Consolidation  Impairment  Other  IFRSAssets                            Cash resources, securities and                               securities under resale agreements  $  2,238,039  $  -  $  -  $  -  $  -  $  -  $  2,238,039Loans   12,221,143   -   90,121   -   -   (17,982)   12,293,282Other assets   312,853   7,839   (7,404)   -   -   4,532   317,820Total assets  $  14,772,035  $  7,839  $  82,717  $  -  $  -  $ (13,450)  $ 14,849,141                             Liabilities                            Deposits  $  12,499,689  $  -  $  -  $(105,000)  $  -  $  -  $  12,394,689Other liabilities   433,780   30,140   (5,958)   -   -   (225)   457,737Debt   545,000   -   89,877   -   -   -   634,877Total liabilities   13,478,469   30,140   83,919   (105,000)   -   (225)   13,487,303Shareholders' equity   1,293,566   (22,301)   (1,202)   -   -   (13,450)   1,256,613Non-controlling interests   -   -   -   105,000   -   225   105,225Total equity   1,293,566   (22,301)   (1,202)   105,000   -   (13,225)   1,361,838Total liabilities and equity  $  14,772,035  $  7,839  $  82,717  $  -  $  -  $  (13,450)  $  14,849,141                             Reconciliation of Condensed Consolidated Income Statement                          For the year ended October 31, 2011 (Unaudited)                            ($ thousands)      IFRS Adjustments              (1)  (2)  (3)  (4)         Canadian  Business        AFS         GAAP  Combinations  Derecognition  Consolidation  Impairment  Other  IFRSNet interest income (teb) (1)  $  384,683  $  -  $  5,508  $  6,747  $  -  $  14,514  $  411,452Provision for credit losses   22,179   -   (396)   -   -   -   21,783Other income   106,331   (12,305)   (4,386)   -   (3,023)   (14,514)   72,103Non-interest expenses   222,451   -   -   -   -   -   222,451Income taxes (teb)   68,007   -   409   -   (816)   -   67,600Non-controlling interest in subsidiary   228   -   -   -   -   (228)   -Net income   178,149   (12,305)   1,109   6,747   (2,207)   228   171,721Net income attributable to non-controlling interests   -   -   -   6,747   -   228   6,975Net income attributable to shareholders of the Bank  $  178,149  $  (12,305)  $  1,109  $  -  $(2,207)  $  -  $  164,746Preferred share dividends   15,208   -   -   -   -   -   15,208Net income available to common shareholders  $  162,941  $  (12,305)  $  1,109  $  -  $(2,207)  $  -  $  149,538(1)  Refer to the "Non-GAAP Measures" section of this news release for a definition of teb (taxable equivalent basis)         For further information: Tracey C. Ball, FCA Executive Vice President and Chief Financial Officer Canadian Western Bank Phone: (780) 423-8855                     Kirby Hill, CFA Director, Investor and Public Relations Canadian Western Bank Phone: (780) 441-3770 Email: kirby.hill@cwbank.com