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A customer walks into a Canadian Western Bank branch in Calgary in 2009.

Todd Korol/Reuters

The chief executive of Canadian Western Bank defended the lender's upbeat growth targets against a worrisome backdrop of low oil prices, a shaken Alberta economy and a beaten-up share price.

"We remain focused on the things we can control," said Chris Fowler, in a conference call with analysts Thursday, pointing to new technology, staff training and customer engagement. "It's business as usual."

His comments followed the release of mixed first-quarter results for the Edmonton-based bank, widely seen as the most susceptible to an oil-led economic downturn in Alberta.

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Earnings rose 3 per cent, to $54.2-million or 67 cents a share. That missed the expectations of analysts, who peppered executives with questions about the quality of the bank's commercial loans in the face of significant economic challenges.

The bank's gross impaired loans rose to $80-million, representing 0.44 per cent of total loans outstanding, up from 0.35 per cent in the previous quarter – largely due to a single, unnamed energy loan.

New impaired loans rose to more than $20-million from $6.4-million in the previous quarter, suggesting some recent deterioration.

"This is the highest level of impaired loan formations that we have seen at CWB since 2010, and in our opinion the significant increase is very early," said Darko Mihelic, an analyst at RBC Dominion Securities, in a note released on Wednesday. "In other words, we had thought that impaired loan formations would increase later this year."

Mr. Fowler maintained that Canadian Western Bank's direct exposure to the energy industry is small, at about 6 per cent of total loans outstanding.

He added that actual credit losses are expected to remain close to the bank's historical acceptable levels between 0.11 per cent and 0.15 per cent, bolstered by the view that oil prices should enjoy a moderate recovery in the second half of the year.

The price of oil has fallen a remarkable 50 per cent since last summer, upsetting corporate balance sheets of many energy companies and pushing Alberta Premier Jim Prentice to warn of "tough choices" ahead for the province.

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The Bank of Canada has also reacted, slashing its key interest rate by a quarter percentage point in January in an effort to provide economic stimulus to the country. According to Statistics Canada, growth slowed to 2.4 per cent in the fourth quarter, and many economists believe growth will slow further in the months ahead.

Yet, Mr. Fowler expects that Canadian Western Bank can navigate through the difficult environment with its growth aspirations intact.

He expects loan growth of 10 to 12 per cent in 2015, with earnings rising 5 to 8 per cent after taking some adjustments into account. Return on equity should move up from 13.5 per cent in the first quarter to a target range between 14 and 15 per cent.

"We measure ourselves on performance-based metrics, like revenue growth, loan growth, provisions for credit loss, return on equity, earnings per share and cost efficiency – metrics which reflect the true performance of CWB Group and have not had a statistically significant correlation to the price of oil," Mr. Fowler said.

The stock market has been expressing concern about the bank's broader operating conditions for some time, though.

Although all bank stocks have retreated from their 2014 highs, by an average of about 9 per cent, Canadian Western Bank's share price decline has been notably steeper, at more than 37 per cent.

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"While our stock price has generally reflected our outstanding performance over the long term, with a statistical correlation of nearly 95 per cent to the price of oil, it is clearly sensitive to short-term fluctuations based on the address of our head office," Mr. Fowler said.

"And we have no intention of changing our Western Canadian address."

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