CWB earnings mark 84 consecutive profitable quarters, a period spanning 21 years



    
       Ongoing margin compression adversely impacts total revenues and
                                profitability
                   Celebrated the Bank's 25th anniversary
    

    EDMONTON, June 4 /CNW/ - Canadian Western Bank (CWB on TSX) today
announced the achievement of its 84th consecutive profitable quarter, a period
spanning 21 years. Second quarter net income of $21.6 million decreased 15%
compared to the same quarter last year mainly reflecting ongoing margin
compression. The recessionary economic environment and challenging operating
conditions for the financial services sector were additional factors that
impacted performance. Diluted earnings per common share of $0.30 were down 23%
and include the impact of the initial cash dividend ($0.04 per diluted common
share) paid on preferred shares. Quarterly results also included $1.7 million
($0.03 per diluted common share, before and after tax) of additional non-cash,
stock-based compensation expense reflecting required accounting treatment for
stock options voluntarily forfeited by certain CWB management. Total loans
increased 1% in the quarter, 5% year-to-date and 14% over the past twelve
months. Although partially mitigated by gains on the sale of securities,
revenues and overall profitability continued to be adversely affected by a
significantly lower net interest margin. Consecutive reductions in the prime
lending rate were the main factors contributing to quarterly margin
compression. Compared to a year earlier, the prime lending rate decreased 250
basis points to reach its current historic low of 2.25%. Year-to-date net
income of $47.2 million was 8% lower compared to the same period last year,
while diluted earnings per common share decreased 11% to $0.70.

    
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    Second Quarter Highlights:
    (three months ended April 30, 2009 compared with three months ended
     April 30, 2008 unless otherwise noted)
    -------------------------------------------------------------------------

    -   Net income of $21.6 million, down 15% (down 8% excluding the
        $1.7 million of additional non-cash, stock-based compensation expense
        previously noted).
    -   Diluted earnings per common share of $0.30, down 23% (down 5%
        excluding both the additional non-cash, stock-based compensation
        expense and the initial cash dividend paid on preferred shares).
    -   Completed offerings for a total of 8,390,000 preferred share units
        for gross proceeds of $209.8 million.
    -   Tier 1 capital ratio of 11.0%; total capital ratio of 15.2%.
    -   Loan growth of 1% in the quarter and 14% over the past twelve months.
    -   Total revenues (teb(1)) of $75.4 million, up 2%.
    -   Opened a new trust services office in Toronto (Canadian Western Trust
        Company).
    -   Celebrated the Bank's 25th anniversary.

    (1) Taxable equivalent basis. See definition following Financial
        Highlights table.
    -------------------------------------------------------------------------
    

    On June 3, 2009, CWB's Board of Directors declared a cash dividend of
$0.11 per common share, payable on July 2, 2009 to shareholders of record on
June 18, 2009. This quarterly dividend is unchanged from both the previous
quarter and 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 July 31, 2009 to shareholders of record on July 23, 2009.
    Banking and trust earnings of $19.4 million were down 16% compared to one
year ago as the positive earnings impact from strong loan growth and a 30%
increase in other income was more than offset by the significantly compressed
net interest margin and higher non-interest expenses. Second quarter net
income from insurance operations of $2.2 million was relatively unchanged from
a year earlier. On a year-to-date basis, banking and trust earnings of $44.2
million were down 7% from 2008, while net income from insurance operations of
$3.0 million decreased 20% reflecting higher claims activity in the British
Columbia (BC) home product line due to severe weather.
    "Our second quarter results were as expected given the significant
negative earnings impact from ongoing margin compression, but also as
expected, there is some light on the horizon," said Larry Pollock, President
and CEO. "Interest rates have bottomed, market spreads appear to be
normalizing and deposit costs are trending downwards. These factors, combined
with our ongoing success in repricing new and renewal loan accounts to reflect
current market conditions are very positive indicators as we move forward. We
are now reasonably confident that we are through the worst as it relates to
margin compression, though it will likely take considerable time before we see
a return to historic norms. Margin improvement was evident in the latter part
of the second quarter and we expect this trend will continue for the remainder
of the year."
    "Not unlike the rest of the world, Western Canada continues to cope with
a recessionary economic environment and rising unemployment levels, but our
view is that we are well positioned to manage through the remainder of this
cycle," added Pollock. "The economic contraction in our markets has curbed new
deal flow and, in some cases, this has been intensified by aggressive loan
prices being offered by a few of our competitors. Considering expected
paybacks of existing accounts, coupled with a reduction in new loan
applications, we will likely be challenged this year to achieve our 10% annual
loan growth target."
    "Gross impaired loans were relatively flat for the quarter due to the
successful resolution of some accounts. Remaining problem accounts are in
various stages of being worked out, which should help stabilize the level of
impaired loans over time. However, it's likely we will see further increases
as we progress through the economic cycle. Based on our current assessment,
actual write-offs are expected to remain within acceptable levels and we will
continue to provision accordingly. At this point, we see no need to adjust our
provisions beyond the targeted level of 15 - 18 basis points of average
loans."
    "With the successful closing of our preferred share offerings in the
second quarter, CWB's capital ratios now rank among the strongest of all
Canadian banks. While the placement of these preferred shares has negatively
impacted our net financial results for the short-term, our experienced
executive management team is committed to prudently deploying this capital for
the future benefit of all CWB stakeholders. We are actively evaluating
opportunities and will ensure that any transaction is both strategic and
accretive to our future development."
    "We were excited this quarter to celebrate the Bank's 25th anniversary
and marked this significant achievement by hosting events in many of our key
markets, including special receptions in Edmonton, Calgary and Vancouver. Our
Bank was initially formed during challenging economic times that saw many
institutions rein in their exposure in western Canadian markets. Today, we
continue to lend and grow despite economic and market-related challenges. CWB
has demonstrated success in all operating conditions over the past quarter
century and we look forward to further building on this long history,"
continued Pollock.

    
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    Financial Highlights
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                                 For the three months ended
    (unaudited)           -------------------------------------- Change from
    ($ thousands, except     April 30   January 31     April 30     April 30
     per share amounts)          2009         2009         2008         2008
    -------------------------------------------------------------------------
    Results of Operations
      Net interest income
       (teb - see below)  $    52,812  $    54,596  $    55,659         (5)%
      Less teb adjustment       1,675        1,586        1,352           24
    -------------------------------------------------------------------------
      Net interest income
       per financial
       statements              51,137       53,010       54,307           (6)
      Other income             22,570       22,351       18,095           25
      Total revenues (teb)     75,382       76,947       73,754            2
      Total revenues           73,707       75,361       72,402            2
      Net income               21,580       25,619       25,302          (15)
      Earnings per common
       share
        Basic(1)                 0.30         0.40         0.40          (25)
        Diluted(2)               0.30         0.40         0.39          (23)
      Return on common
       shareholders'
       equity(3)                11.0%        14.7%        16.1%    (510)bp(4)
      Return on assets(5)        0.70         0.93         1.04          (34)
      Efficiency
       ratio(6) (teb)            53.1         47.3         45.4          770
      Efficiency ratio           54.3         48.3         46.2          810
      Net interest margin
       (teb)(7)                  1.93         1.99         2.28          (35)
      Net interest margin        1.87         1.93         2.22          (35)
      Provision for credit
       losses as a
       percentage of
       average loans             0.15         0.15         0.15            -
    -------------------------------------------------------------------------
    Per Common Share
      Cash dividends      $      0.11  $      0.11  $      0.10          10%
      Book value                11.42        11.10        10.22           12
      Closing market
       value                    13.35        11.93        24.83          (46)
      Common shares
       outstanding
       (thousands)             63,589       63,468       63,234            1
    -------------------------------------------------------------------------
    Balance Sheet and
     Off-Balance
     Sheet Summary
      Assets              $11,450,625  $10,907,072  $10,038,214          14%
      Loans                 9,041,518    8,993,453    7,942,636           14
      Deposits              9,713,334    9,523,097    8,679,024           12
      Subordinated
       debentures             375,000      375,000      390,000           (4)
      Shareholders'
       equity                 935,753      704,603      646,215           45
      Assets under
       administration       4,472,060    4,141,064    4,498,560           (1)
      Assets under
       management             816,600      809,500            -           nm
    -------------------------------------------------------------------------
    Capital Adequacy(8)
    Tangible common
     equity to risk-
     weighted assets(9)          7.6%         7.5%         7.9%       (30)bp
      Tier 1 ratio               11.0          8.7          9.3          170
      Total ratio                15.2         13.0         14.0          120
    -------------------------------------------------------------------------


    ------------------------------------------------------------
                          For the six months ended
    (unaudited)           ------------------------- Change from
    ($ thousands, except     April 30     April 30     April 30
     per share amounts)          2009         2008         2008
    ------------------------------------------------------------
    Results of Operations
      Net interest income
       (teb - see below)  $   107,408  $   112,705         (5)%
      Less teb adjustment       3,261        2,689           21
    ------------------------------------------------------------
      Net interest income
       per financial
       statements             104,147      110,016           (5)
      Other income             44,921       35,718           26
      Total revenues (teb)    152,329      148,423            3
      Total revenues          149,068      145,734            2
      Net income               47,199       51,207           (8)
      Earnings per common
       share
        Basic(1)                 0.70         0.81          (14)
        Diluted(2)               0.70         0.79          (11)
      Return on common
       shareholders'
       equity(3)                12.9%        16.5%    (360)bp(4)
      Return on assets(5)        0.82         1.05          (23)
      Efficiency
       ratio(6) (teb)            50.2         44.0          620
      Efficiency ratio           51.3         44.8          650
      Net interest margin
       (teb)(7)                  1.96         2.32          (36)
      Net interest margin        1.90         2.26          (36)
      Provision for credit
       losses as a
       percentage of
       average loans             0.15         0.15            -
    ------------------------------------------------------------
    Per Common Share
      Cash dividends      $      0.22  $      0.20          10%
      Book value                11.42        10.22           12
      Closing market
       value                    13.35        24.83          (46)
      Common shares
       outstanding
       (thousands)             63,589       63,234            1
    ------------------------------------------------------------
    Balance Sheet and
     Off-Balance
     Sheet Summary
      Assets
      Loans
      Deposits
      Subordinated
       debentures
      Shareholders'
       equity
      Assets under
       administration
      Assets under
       management
    ------------------------------------------------------------
    Capital Adequacy(8)
    Tangible common
     equity to risk-
     weighted assets(9)
      Tier 1 ratio
      Total ratio
    ------------------------------------------------------------

     nm - not meaningful.

    (1) Basic earnings per share is calculated as net income less preferred
        share dividends divided by the average number of common shares
        outstanding.
    (2) Diluted earnings per share is calculated as net income less preferred
        share dividends divided by the average number of common shares
        outstanding adjusted for the dilutive effects of stock options,
        warrants and other common stock equivalents.
    (3) Return on common shareholders' equity is calculated as annualized net
        income after preferred share dividends divided by average common
        shareholders' equity.
    (4) bp - basis point change.
    (5) Return on assets is calculated as annualized net income after
        preferred share dividends divided by average total assets.
    (6) Efficiency ratio is calculated as non-interest expenses divided by
        total revenues.
    (7) Net interest margin is calculated as annualized net interest income
        divided by average total assets.
    (8) Capital adequacy is calculated in accordance with guidelines issued
        by the Office of the Superintendent of Financial Institutions Canada
        (OSFI).
    (9) Tangible common equity to risk-weighted assets is calculated as
        shareholders' equity less subsidiary goodwill divided by risk-
        weighted assets, calculated in accordance with guidelines issued by
        OSFI.
    

    Taxable Equivalent Basis (teb)

    Most financial institutions 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.

    Non-GAAP Measures

    Taxable equivalent basis, return on common shareholders' equity, return
on assets, efficiency ratio, net interest margin, provisions for credit losses
as a percentage of average loans and tangible common equity to risk-weighted
assets do not have standardized meanings prescribed by generally accepted
accounting principles (GAAP) and therefore may not be comparable to similar
measures presented by other financial institutions.

    
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    Message to Shareholders
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    Canadian Western Bank (CWB or the Bank) reported good second quarter
results amidst falling interest rates, a recessionary environment and ongoing
challenges for the entire financial sector. Highlights included the
achievement of 84 consecutive profitable quarters, a period spanning 21 years,
and the celebration of the Bank's 25th anniversary.
    Compared to the prior year, second quarter net income was down 15% to
$21.6 million, while diluted earnings per common share were down 23% ($0.09)
to $0.30. Second quarter diluted earnings per common share includes the impact
from the initial cash dividend paid on the recently issued preferred shares
which totaled $2.5 million ($0.04 per diluted common share). Reported earnings
also include the impact from $1.7 million ($0.03 per diluted common share,
before and after tax) of additional non-cash expense from stock options
voluntarily forfeited by management. The non-cash expense represents required
accounting recognition of the unamortized initial fair value of the forfeited
options. Total revenues, on a taxable equivalent basis (teb - see definition
following Financial Highlights table), increased 2% as the positive impact of
strong loan growth and a 25% increase in other income was largely offset by a
significantly lower net interest margin.
    Compared to the previous quarter, consolidated net income decreased 16%
mainly reflecting the impact of higher non-interest expenses, three fewer
revenue earning days in the second quarter and further margin compression.
Diluted earnings per common share were down 25% from last quarter reflecting
the items already noted, including the first cash dividend on the newly issued
preferred shares. On a year-to-date basis, net income was down 8% compared to
the same period last year to $47.2 million, while diluted earnings per share
decreased 11% to $0.70.
    The Bank completed offerings in the second quarter for a total of
8,390,000 preferred share units for gross proceeds of $209.8 million. The
success of these public and private placements significantly augments the
Bank's strong balance sheet and provides considerable flexibility to pursue
accretive growth opportunities. The preferred share units were comprised of
one Non-Cumulative 5-Year Rate Reset Preferred Share, Series 3 (the "Series 3
Preferred Share") and common share purchase warrants. Both the Series 3
Preferred Shares and the warrants trade on the Toronto Stock Exchange under
the trading symbols 'CWB.PR.A' and 'CWB.WT' respectively.
    Second quarter return on equity of 11.0% decreased 510 basis points
compared to the same period last year, and was down 370 basis points over the
prior quarter. Return on assets of 0.70% declined 34 basis points from a year
earlier and 23 basis points from the previous quarter. Compared to last year,
lower profitability ratios are mainly attributed to the significantly
compressed net interest margin, which continued to be impacted by consecutive
reductions in the prime lending interest rate. The first dividend payment on
the recently completed preferred share offerings also had a negative impact on
both these measures.

    Common Share Price Performance

    CWB shares ended the second quarter at $13.35, compared to $24.83 a year
earlier. Including reinvested dividends, the total return for shareholders
over the one year holding period ended April 30, 2009 was negative 45%. This
compares to the total return for the S&P/TSX financials index of negative 26%
over the same one year period.

    Dividends

    On June 3, 2009, CWB's Board of Directors declared a cash dividend of
$0.11 per common share, payable on July 2, 2009 to shareholders of record on
June 18, 2009. This quarterly dividend is unchanged from both the previous
quarter and 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 July 31, 2009 to shareholders of record on July 23, 2009.

    Loan Growth

    Loan growth of 1% in the quarter, 5% year-to-date and 14% over the past
year confirm the Bank's strategies to expand market presence while proactively
managing the impact of moderated economic activity and lower commodity prices.
We will maintain our focus on strong credit discipline and funding quality
assets that offer a fair and profitable return. Reflecting current economic
conditions and the recessionary environment, new deal flow has slowed
considerably compared to recent prior periods. Although there are ongoing
opportunities to increase market share, we will likely be challenged this year
to achieve our 10% fiscal 2009 loan growth target, particularly in view of
expected loan repayments in the interim construction and equipment financing
portfolios.
    Quarterly performance for Optimum Mortgage (Optimum), our alternative
mortgage business, was consistent with moderated residential sales activity,
elevated consumer uncertainty and modified lending terms for certain market
segments. Optimum's total loans of $480 million at quarter end decreased 2%
compared to the prior quarter, but were up 2% year-to-date and 17% over the
past year. Optimum continued to post strong profitability while maintaining a
good overall risk profile. This business has good growth potential over time
and we will maintain our efforts to selectively enhance the Bank's position in
this segment of the market.

    Credit Quality

    Overall credit quality remained sound in a challenging operating
environment for all lending sectors. The level of gross impaired loans
decreased slightly from the prior quarter as the dollar value of resolved
accounts previously classified as impaired exceeded new formations. At quarter
end, the dollar amount attributed to the ten largest non-performing accounts
represented approximately 53% of the total $107.0 million of gross impaired
loans. The majority of larger accounts classified as impaired are interim
construction loans that display common problems associated with a softening
real estate market, cost escalations during construction and an inability for
the borrower to access additional capital. The Bank is in varying stages of
enforcing its security to recoup its loans on these projects. Estimated
write-offs from all existing loans classified as impaired are reflected in the
specific provisions for credit losses and have been established based on
current assessments of security held against these accounts. The current
quarterly provision for credit losses of $3.4 million is in line with our
fiscal 2009 performance target range of 15 to 18 basis points of average
loans. Based on our present view of credit quality, taking into consideration
CWB's strong underwriting discipline and secured lending practices, loan
losses should remain within the Bank's historic range of acceptable levels.

    Branch Deposit Growth

    Deposits raised through our branch network and Canadian Western Trust
Company decreased 2% compared to both the previous quarter and one year ago.
The slight decline in total branch deposits was more than offset by an
increase in retail term deposits raised through the Bank's deposit broker
network. The demand and notice component within branch-raised deposits was up
7% in the quarter and was relatively unchanged compared to a year earlier.
Further diversifying our funding mix remains a key strategic priority and we
are optimistic about several opportunities in this regard. Our experience to
date with the Internet-based division of the Bank named Canadian Direct
Financial(TM) (www.canadiandirectfinancial.com) shows potential, but is still
in the early stages of its development.

    Net Interest Margin

    Compressed net interest margin due to consecutive reductions in the prime
lending rate continued to have a significant negative impact on growth in both
total revenues and overall profitability. Second quarter net interest margin
(teb) was 1.93%, down 35 basis points compared to a year earlier and six basis
points lower than the previous quarter. On a more positive note, the prime
lending rate has bottomed, market spreads appear to be returning to more
normal levels and overall deposit costs continue to ease. The foregoing
factors, combined with our success in pricing new and renewal loan accounts to
ensure a fair and profitable return in the context of today's markets, support
our expectation that net interest margin will gradually return to historic
levels. An improved net interest margin was evident in the latter part of the
quarter. To the extent possible, without foregoing overall investment quality
and future income, we will look for further opportunities to augment the
Bank's financial results by realizing gains on sale of securities and
improving investment yields.

    Trust and Wealth Management Services

    Canadian Western Trust Company posted another quarter of solid financial
performance and increased its market presence with the opening of a new trust
services office in Toronto. Valiant Trust Company (Valiant) continues to
manage in a very difficult operating environment attributed to a marked slow
down in capital markets activity. Valiant is actively evaluating opportunities
to further enhance and diversify its product delivery and revenue streams
going forward. Adroit Investment Management Ltd., the most recent addition to
the CWB Group, presents opportunities to improve and expand upon the Bank's
product offerings, and we are excited about the doors that this new business
line will open in the future.

    Insurance

    Our insurance subsidiary, Canadian Direct Insurance Incorporated
(Canadian Direct or CDI), showed much improved results after a difficult first
quarter that was impacted by a high level of claims in its BC Home product
line due to severe weather. Barring the occurrence of further severe weather
or other catastrophe type events, we expect the contribution from insurance
operations to improve over the balance of the year.

    Outlook

    Second quarter and year-to-date results reflect market realities given
the significant impact from ongoing margin compression and the current
recessionary operating environment. Margin pressure showed signs of easing
near the end of the quarter and net interest margin should begin to trend
slowly upward through the rest of this year. While this will positively impact
earnings and revenues in future periods, it is unlikely we will meet our
fiscal 2009 performance targets related to profitability. Economic activity
has slowed in our markets much more than expected when we started the year and
asset growth will likely be constrained as well. That being said, our solid
balance sheet and capital base puts us in an excellent position to take
advantage of opportunities resulting from recent turmoil. We are very
confident that the Bank will emerge from this cycle stronger than ever and
that our geographic focus in Western Canada will further our ability to manage
through current challenges. Our overall outlook is positive and our ongoing
commitment to CWB stakeholders is to continually enhance and execute our
strategies focused on creating value and growth over the long-term.
    We look forward to reporting our fiscal 2009 third quarter results on
September 3, 2009.

    
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    Q2 Results Conference Call

    CWB's second quarter results conference call is scheduled for Thursday,
    June 4, 2009 at 3:00 p.m. ET (1:00 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
    416-644-3423 or toll-free 1-800-732-9303. The call will also be webcast
    live on the Bank's website, www.cwbankgroup.com. The webcast will be
    archived on the Bank's website for 60 days.

    A replay of the conference call will be available until June 18, 2009 by
    dialing 416-640-1917 (Toronto) or 1-877-289-8525 (toll-free) and entering
    passcode 21305850, followed by the pound sign.
    -------------------------------------------------------------------------
    

    About Canadian Western Bank

    Canadian Western Bank offers highly personalized service through 36
branch locations and is the largest publicly traded Schedule I chartered bank
headquartered in Western Canada. The Bank, with total balance sheet assets of
more than $11 billion, assets under administration of over $4 billion and
assets under management approaching $1 billion, specializes in mid-market
commercial lending and offers a full range of retail banking services. Trust
services to independent financial advisors, corporations, income trusts and
individuals are provided through the Bank's subsidiaries, Canadian Western
Trust Company and Valiant Trust Company. Canadian Direct Insurance
Incorporated is a subsidiary that offers personal auto and home insurance to
customers in BC and Alberta. Subsidiary Adroit Investment Management Ltd.
provides wealth management services to individuals, corporations and
institutional clients. 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 and common share purchase warrants trade on the
Toronto Stock Exchange under the trading symbols 'CWB.PR.A' and 'CWB.WT'
respectively. Refer to www.cwbankgroup.com for additional information.

    
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    Management's Discussion and Analysis
    -------------------------------------------------------------------------
    

    This management's discussion and analysis (MD&A) should be read in
conjunction with Canadian Western Bank's (CWB or the Bank) unaudited interim
consolidated financial statements for the period ended April 30, 2009, as well
as the audited consolidated financial statements and MD&A for the year ended
October 31, 2008, available on SEDAR at www.sedar.com and the Bank's website
at www.cwbankgroup.com. Except as discussed below, the factors discussed and
referred to in the MD&A for fiscal 2008 remain substantially unchanged.

    Overview

    CWB's second quarter financial results were consistent with a
recessionary economic environment and very challenging operating conditions
for the financial services industry. Quarterly net income from banking and
trust operations of $19.4 million was down 16% ($3.7 million) compared to one
year ago as positive earnings contributions from strong 14% loan growth and a
$4.4 million increase in gains on sale of securities were more than offset by
a significantly lower net interest margin, measured on a taxable equivalent
basis (teb - see definition following Financial Highlights table), and a 20%
($6.2 million) increase in non-interest expenses. Gains on the sale of
securities reflect market conditions that allowed the Bank to capitalize on
favourable prices on certain short-term investments. The quarterly increase in
non-interest expenses included $1.7 million ($0.03 per diluted common share,
before and after tax) of additional non-cash stock-based compensation expense
attributed to employee stock options voluntarily forfeited by management.
Canadian Direct Insurance Incorporated (Canadian Direct or CDI) recorded net
income of $2.2 million, relatively unchanged compared to a year earlier.
Consolidated second quarter net income decreased 15% from one year ago to
$21.6 million, representing $0.30 ($0.30 basic) per diluted common share.
    Compared to the previous quarter, consolidated net income decreased 16%
($4.0 million) mainly reflecting a 10% ($3.6 million) increase in non-interest
expenses, including the above noted non-cash stock compensation expense, three
fewer revenue earning days, the compressed net interest margin (teb) and $1.6
million lower gains on sale of securities. These factors were partially offset
by a $2.1 million improvement in net insurance revenues reflecting a difficult
first quarter that was impacted by severe weather. Consolidated net income
year-to-date of $47.2 million was down 8% ($4.0 million) compared to the same
period in 2008, while diluted earnings per share decreased 11% to $0.70.
    Second quarter return on common shareholders' equity of 11.0% decreased
from 16.1% a year earlier and 14.7% last quarter. Return on assets was 0.70%,
compared to 1.04% a year earlier and 0.93% in the prior quarter. Year-to-date
return on common shareholders' equity of 12.9% represented a 360 basis point
decline compared to the same period in 2008, while return on assets was down
23 basis points to 0.82%. Although partially offset by strong growth in other
income, profitability ratios were negatively impacted by both constrained
total revenues due to a significantly lower net interest margin and higher
non-interest expenses. Compared to prior periods, dividends on CWB's recently
completed preferred share offerings further reduced profitability ratios.
Excluding the impact of the initial cash dividend paid on preferred shares,
second quarter return on common shareholders' equity would have been 12.4%,
while return on assets would have been 0.79%. Management's success in
prudently leveraging the preferred share capital is expected to become
accretive to earnings over time.

    Total Revenues (teb)

    Total revenues (teb), comprised of net interest income and other income,
of $75.4 million were up 2% ($1.6 million) compared to the same quarter last
year as the positive impact from strong loan growth and a 25% ($4.5 million)
increase in other income, including an additional $2.0 million of gains on
sale of securities, offset a significantly lower net interest margin. Compared
to last quarter, total revenues (teb) were down 2% ($1.6 million) reflecting a
3% ($1.8 million) decline in net interest income (teb) due to three fewer days
and further reductions in the prime lending interest rate, partially offset by
slightly improved other income. Total revenues (teb) year-to-date of $152.3
million were up 3% ($3.9 million) over the same period last year as a 26%
($9.2 million) increase in other income and continued loan growth mitigated
the impact of lower margin and one less revenue earning day this year.

    Net Interest Income (teb)

    Quarterly net interest income (teb) of $52.8 million was down 5% ($2.8
million) compared to the same period last year as the positive revenue impact
from strong loan growth was more than offset by a 35 basis point decline in
net interest margin (teb) to 1.93%. Compared to last year, second quarter net
interest margin was mainly affected by consecutive reductions in the prime
lending interest rate and lower yields on investments held in the securities
portfolio, partially offset by lower deposit costs, more favourable spreads on
both new and renewal loans and an improved mix in the securities portfolio.
Reductions in the prime interest rate negatively impact net interest margin
because deposits do not reprice as quickly as prime-based loans, which
subsequently compresses the interest spread earned on the Bank's assets. Also,
the marginal benefit attributed to the Bank's lower cost demand and notice
deposits is significantly reduced as interest rates approach zero.
    Net interest income (teb) was down 3% ($1.8 million) compared to the
previous quarter reflecting a six basis point decline in net interest margin
(teb) and three fewer interest earnings days in the second quarter. The drop
in net interest margin compared to the prior quarter was due to further
reductions in the prime lending rate and increased liquidity, partially offset
by lower deposit costs. Year-to-date net interest income (teb) of $107.4
million represented a 5% decline from the first six months of fiscal 2008
resulting from a 36 basis point decline in net interest margin and one less
interest earning day this year. The lower net interest margin compared to last
year on a year-to-date basis was mainly attributed to the factors already
noted.
    Note 13 to the unaudited interim consolidated financial statements
summarizes the Bank's exposure to interest rate risk as at April 30, 2009.
Interest rate risk or sensitivity is defined as the impact on net interest
income, both current and future, resulting from a change in market interest
rates. Based on the interest rate gap position at April 30, 2009, it is
estimated that a one-percentage point increase in all interest rates would
increase net interest income by approximately 5.6% ($12.4 million) and
decrease other comprehensive income $23.4 million, net of tax, over the
following twelve months. It is estimated that a one-percentage point decrease
in all interest rates would increase net interest income by approximately 4.8%
($10.5 million) and increase other comprehensive income $23.4 million, net of
tax, over the following twelve months. This compares to January 31, 2009, when
a one-percentage point increase in all interest rates would have increased net
interest income by approximately 5.8% ($12.4 million) and decreased other
comprehensive income $21.4 million, net of tax, over the following twelve
months; the opposite effect would have occurred if all interest rates
decreased. Compared to prior periods, the positive change in interest rate
sensitivity when all interest rates decrease one-percentage point reflects the
potential for a zero percent Bank of Canada overnight interest rate that
effectively puts a floor on the prime lending rate. Interest sensitivity was
high compared to both prior periods and internal target levels reflecting near
zero interest rates, including the effective floor on the prime lending rate,
and abnormal market spreads for conventional financial instruments used to
hedge the Bank's loan portfolio against interest rate risk. Now that interest
rates appear to have reached the bottom of the current cycle, certain interest
rate hedges have been unwound to maximize returns when rates begin to trend
upwards. Management will continue to actively and prudently manage interest
rate sensitivity and related risks.

    Other Income

    Quarterly other income of $22.6 million was up 25% ($4.5 million) from a
year earlier reflecting $4.6 million higher gains on sale of securities and a
$1.0 million increase in the combined contribution from trust services and fee
income from newly acquired Adroit Investment Management Ltd. (Adroit),
partially offset by 19% ($1.3 million) lower credit related fee income. Gains
on sale of securities reflect market conditions that allowed the Bank to
capitalize on favourable pricing for certain short-term investments while
maintaining comparable yields on reinvestment in other high quality
securities. Second quarter net insurance revenues, retail service revenues,
foreign exchange gains and other were all relatively comparable with 2008
results.
    Compared to the previous quarter, other income was up 1% ($0.2 million)
as a $2.1 million increase in net insurance revenues more than offset $1.6
million lower gains on securities sales and a 7% ($0.4 million) decline in
credit related fee income. On a year-to-date basis, other income improved 26%
($9.2 million) reflecting an $11.7 million increase in gains on sale of
securities, 19% ($1.3 million) higher trust and wealth management fee income
and a $0.4 million improvement in foreign exchange gains, offset by 20% ($2.8
million) lower credit related fee income, consistent with decreased loan
volumes, and a 14% ($1.0 million) decline in net insurance revenues. The
year-to-date decrease in net insurance revenues compared to 2008 reflects high
first quarter claims experience in the British Columbia (BC) home product line
due to severe weather.

    Credit Quality

    Overall credit quality remained sound in view of a marked economic
slowdown, ongoing market uncertainties and lower commodity prices. While the
Bank's primary markets have been materially impacted by global economic
turmoil, particularly as it relates to demand for commodities, management
believes that Western Canada is much better positioned than the rest of Canada
to manage through these challenges. Measured as a percentage of average loans,
the provision for credit losses of 15 basis points remained unchanged from
both the previous quarter and one year ago. The quarterly dollar provision of
$3.4 million remained unchanged from last quarter and was up from $3.0 million
a year earlier with the increase reflecting ongoing portfolio growth.

    
                                 For the three months ended
                          -------------------------------------- Change from
    (unaudited)              April 30   January 31     April 30     April 30
    ($ thousands)                2009         2009         2008         2008
    -------------------------------------------------------------------------

    Gross impaired loans,
     beginning of period  $   107,785  $    91,636  $    38,947         177%
      New formations           29,378       33,028       11,517          155
      Reductions, impaired
       accounts paid down
       or returned to
       performing status      (27,487)     (12,415)      (6,381)         329
       Write-offs              (2,759)      (4,464)      (1,065)         159
    -------------------------------------------------------------------------
    Total                     107,017      107,785       43,018          149

    Balance of the ten largest
     impaired accounts         56,478       70,485       26,588          112
    Total number of accounts
     classified as impaired       204          176          117           74
    Total number of accounts
     classified as impaired
     under $1 million             188          158          106           77
    Gross impaired loans
     as a percentage of
     total loans(1)             1.17%        1.19%        0.54%      63 bp(2)

    (1) Total loans do not include an allocation for credit losses or
        deferred revenue and premiums.
    (2) bp - basis point change.
    

    Gross impaired loans at April 30, 2009 were $107.0 million, compared to
$107.8 million last quarter and $43.0 million a year earlier. The increased
dollar level of gross impaired loans compared to 2008 is largely attributed to
a number of interim construction loans located mainly in smaller markets,
although moderated residential sales activity and resulting impacts on the
Bank's alternative mortgage business were additional contributing factors. The
ten largest accounts classified as impaired measured by dollars represented
approximately 53% of the total gross impaired loans at quarter end. A
softening real estate market, cost escalations during construction and an
inability for the borrower to access additional capital are common themes for
impaired interim construction accounts. The Bank is in varying stages of
enforcing its security to recoup its loans on these projects, as demonstrated
by the second quarter resolution of a large interim construction loan in
Alberta.
    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 the tangible security held against
the Bank's lending positions. Existing loans classified as impaired are well
structured and current estimates of expected write-offs are reflected in the
specific provisions for credit losses. The timeframe required to recover
balances on certain lending facilities classified as impaired has been
lengthened due to the presence of other lenders with charges subordinated to
CWB and slow foreclosure processes on residential real estate in the western
provinces. Despite these challenges, management remains confident about both
the overall quality and ultimate marketability of the security held against
these accounts.
    Measured against total loans, gross impaired loans remain within the
Bank's historic range of acceptable levels. Gross impaired loans represented
1.17% of total loans at quarter end, compared to 1.19% last quarter and 0.54%
one year ago. At the end of fiscal 2008, the ten year average for gross
impaired loans measured against total loans was 0.83%, with a high of 1.69% in
1999 and a low of 0.18% in 2006. The average net new specific provisions for
credit losses over the same ten year period noted above was 13 basis points of
average loans (including fiscal 2006 when recoveries exceeded losses). While
the level of impaired loans is likely to increase further amidst a continued
economic contraction, actual losses in consideration of the current operating
environment are expected to remain within the range of acceptable levels.
Based on current credit quality, management expects the fiscal 2009 provisions
for credit losses will remain in the targeted range of 15 - 18 basis points of
average loans.
    The total allowance for credit losses (general and specific) represented
70% of gross impaired loans at quarter end, compared to 69% last quarter and
156% one year ago. The general allowance as a percentage of risk-weighted
loans was 74 basis points, unchanged from the previous quarter and down four
basis points from a year earlier. The purpose of the general allowance for
credit losses is to mitigate the impact of unidentified losses in the
portfolio. It is expected that the level of the general allowance will
fluctuate up or down as specific losses are identified and subsequently
charged off, particularly in view of the rapid turn in the credit cycle. The
Bank's long-standing strategy with respect to managing the general allowance
has been to maintain consistent provisions for unidentified losses in the
portfolio during good economic times and help mitigate the need for
disproportionate provisions in less favourable credit environments.

    Non-interest Expenses

    Second quarter non-interest expenses of $40.0 million increased 20% ($6.5
million) over one year ago and 10% ($3.6 million) over the prior quarter.
Management is committed to strong fiscal responsibility, but effective
execution of CWB's strategic focus on people, process, infrastructure and
business enhancement has necessitated increased spending in some areas. Aside
from the $1.7 million of additional non-cash stock compensation expense,
expenditures are mainly correlated with enhancements to the Bank's growth
platform including additional staff complement, expanded premises and
technology upgrades. These initiatives are directed to increase operating
efficiencies and capacity over time. Spending in these areas is an integral
part of management's commitment to maximize shareholder value over the
long-term and is expected to provide significant benefits in future periods.
Previously announced plans for three new full service branches (Saskatoon,
Kamloops and Surrey) are proceeding with expected opening dates in 2009 and
2010.
    Compared to last year, second quarter non-interest expenses reflect a 23%
($4.9 million) increase in salary and benefit costs mainly related to
increased staff complement, annual salary increments and an additional
non-cash, stock-based compensation charge. Total second quarter non-cash,
stock-based compensation charges of $3.0 million included $1.7 million ($0.03
per diluted common share, before and after tax) of additional expense
reflecting required accounting treatment for stock options voluntarily
forfeited by management. Premises and equipment expenses, including
depreciation and costs related to the new branch location in Leduc, Alberta,
were up $1.0 million in the aggregate over the same quarter last year. Other
expenses increased $0.8 million. Second quarter non-interest expenses related
to newly acquired Adroit were $0.7 million, including the associated
amortization of intangible assets.
    During the quarter, certain CWB employees voluntarily and irrevocably
released, without consideration, all right, title and interest in 1,283,062
stock options. The related $1.7 million of additional non-cash expense
represents the required accounting recognition of the unamortized initial fair
value of these forfeited options. While stock options had historically been an
efficient and cost effective employee compensation and retention incentive, it
currently represents a material non-cash expense that is no longer adding
value for shareholders due to CWB's significantly depressed share price
attributed to the market's broad sell-off of equities, particularly those in
the financial sector. In light of the foregoing, the Board of Directors, in
consultation with external consultants and senior management, has approved
enhancements for the Bank's existing long-term employee compensation program
to add a restricted share unit component and to reduce the future component of
stock options. The objective of the new program is to increase overall
employee retention for the Bank and to better align CWB's long-term
compensation with industry practices.
    Compared to the prior quarter, $2.8 million of the $3.6 million increase
in non-interest expenses was attributed to salary and benefit costs, including
the previously mentioned accelerated non-cash, stock based compensation
charge. The remainder of the difference reflects a $0.5 million increase in
premises and equipment expense, $0.2 million of additional provincial capital
tax associated with the Bank's recently completed preferred share offerings,
and $0.6 million higher marketing and product development costs, partially
offset by lower other expenses. Year-to-date non-interest expenses of $76.4
million were up 17% ($11.1 million) over the same period last year reflecting
$8.1 million higher salary and benefit costs due to increased staff
complement, annual salary increments and non-cash, stock-based compensation
charges, while premises and equipment expenses increased 15% ($1.7 million).
Year-to-date non-interest expenses related to Adroit were $1.4 million,
including amortization of intangible assets.
    The second quarter efficiency ratio (teb), which measures non-interest
expenses as a percentage of total revenues (teb), was 53.1%, compared to 45.4%
last year and 47.3% in the previous quarter. The considerable deterioration of
this measure compared to the same quarter last year reflects the negative
impact on total revenues from the significantly compressed net interest
margin, coupled with higher non-interest expenses, partially offset by the
positive impact from strong loan growth and increased other income, including
gains on sale of securities. Compared to the prior quarter, the efficiency
ratio reflects the combined negative impact from increased non-interest
expenses and the compressed net interest margin, slightly offset by higher
other income and loan growth. The year-to-date efficiency ratio (teb) of 50.2%
represented a 620 basis point deterioration from the same period last year and
was 120 basis points off the Bank's fiscal 2009 targeted range of 46 - 49%.
The efficiency ratio (teb) will improve as the net Bank's interest margin
trends back towards historic levels. Controls on discretionary spending should
further support modest improvement to this measure through the remainder of
2009.

    Income Taxes

    The income tax rate (teb) for the first six months of 2009 was 31.6%,
down 220 basis points from one year ago, while the tax rate before the teb
adjustment was 28.2%, or 320 basis points lower. The income tax provision in
the first six months of 2008 included $1.0 million of additional tax expense
that resulted from the write-down of future tax assets to reflect lower future
federal corporate income tax rates. Excluding this additional fiscal 2008 tax
expense, the current year's income tax rate (teb) was 90 basis points lower
than a year earlier.
    Effective July 1, 2008, the corporate provincial income tax rates in BC,
Saskatchewan and Manitoba each decreased 100 basis points to 11%, 12% and 13%
respectively. The federal corporate income tax rate was reduced from 19.5% to
19.0%, effective January 1, 2009. The corporate income tax rate in Manitoba
will decrease from 13% to 12% effective July 1, 2009. Looking forward, the
reductions in income tax rates will have a positive impact on overall tax
rates and cash tax paid on future earnings.
    On April 1, 2009, CWB's capital tax rate in BC decreased to 0.33%, down
from 0.67%, and is expected to be eliminated completely by April 1, 2010.

    Comprehensive Income

    Comprehensive income is comprised of net income and other comprehensive
income (OCI) all net of income taxes, and totaled $32.1 million for the second
quarter, compared to $26.9 million in the same period last year. As previously
noted, net income was down 15% ($3.7 million) compared to one year ago.
However, OCI increased due to higher unrealized gains on available-for-sale
cash and securities and on derivative instruments designated as cash flow
hedges, which reflects market value fluctuations related to changes in market
credit spreads, interest rates and shifts in the interest rate curve. These
increases were partially offset by higher realized gains on sale of securities
reclassified to other income, higher amounts reclassified to net interest
income related to derivatives designated as cash flow hedges, and an increase
in realized gains on the unwinding of interest rate swaps in the second
quarter of 2009 compared to a year earlier.

    Balance Sheet

    Total assets were up 5% ($544 million) in the quarter and 14% ($1,412
million) in the past year to reach $11,451 million at April 30, 2009.

    Cash and Securities

    Cash, securities and securities purchased under resale agreements totaled
$2,222 million at April 30, 2009, compared to $1,724 million last quarter and
$1,935 million one year ago. The unrealized gain recorded on the balance sheet
at April 30, 2009 was $10.8 million, compared to an unrealized loss of $13.2
million last quarter and an unrealized gain of $0.2 million one year ago. The
reduction in unrealized losses compared to last quarter is primarily
attributed to a market value improvement in the Bank's preferred share
portfolio. Unrealized losses in the Bank's preferred share portfolio totaled
$14.6 million as at April 30, 2009, compared to $25.8 million last quarter and
$4.0 million a year earlier. The cash and securities portfolio is mainly
comprised of high quality debt instruments that are not held for trading
purposes and, where applicable, are typically held until maturity.
Fluctuations in fair value are generally attributed to changes in interest
rates, market credit spreads and shifts in the interest rate curve.
    Realized gains on sale of securities in the second quarter were $6.6
million, compared to $8.1 million in the previous quarter and $2.0 million in
the same quarter last year. The difference in realized gains on sale of
securities compared to the prior year mainly resulted from transactions
related to favourable pricing on certain investment grade, short-term debt
investments. Market conditions allowed the Bank to capitalize on opportunities
to realize gains while maintaining comparable yields on reinvestment in other
investment-grade securities. The Bank has no direct exposure to any troubled
asset backed commercial paper, collateralized debt obligations, credit default
swaps, U.S. subprime lending or monoline insurers.

    Treasury Management

    High liquidity levels have been maintained since August 2007 in response
to disruptions and related uncertainties in financial markets. Although this
strategy has a negative impact on net interest margin, it reflects the Bank's
conservative risk tolerance and augments its strong position to manage future
unexpected events. Average liquidity balances in the second quarter were
higher than both the prior period and the same quarter last year with the
increase mainly reflecting proceeds from the Bank's completed preferred share
offerings. Comparatively slower loan growth coupled with a strong market
demand for insured deposits also contributed to increased liquidity in the
quarter. The Bank has implemented improved methodologies for measuring and
monitoring liquidity and has also enhanced its deposit monitoring
capabilities. This has enabled management to better assess risks under various
scenarios and to decrease the level of liquid asset coverage on a general
basis. Overall liquidity is expected to decrease in future periods, although
elevated levels will be maintained compared to what would be held under more
normal market conditions. Management intends to maintain this strategy until
market uncertainties subside.

    Loans

    Total loans grew 1% ($48 million) in the quarter and 14% ($1,099 million)
in the past twelve months to reach $9,042 million. Growth was achieved across
all western provinces except Alberta. Measured by lending sector, quarterly
growth was attributed to real estate and general commercial lending, while the
equipment financing, energy and personal lending sectors all showed marginal
declines due to lower loan demand in the recessionary environment. Looking
forward, quarterly loan growth is expected to remain constrained compared to
prior periods. The recessionary environment, including moderated residential
sales and construction activity in Western Canada, will continue to have an
adverse impact on growth in several lending areas, particularly in the Bank's
real estate construction and equipment financing portfolios. Construction
loans are relatively short in duration and there are now far fewer quality
lending opportunities in this area. The equipment financing portfolio also has
a short duration with loans fully repaid over a period of three-to-five years.
Ongoing challenges related to softness in the forestry and natural gas
services industries are expected to persist and this will have a continued
negative impact on loan demand related to these areas. The near-term outlook
for crude oil and natural gas production is also uncertain and subject to
fluctuations correlated with the underlying resource prices and drilling
activity. The competitive environment has changed and there are opportunities
to increase market share across all lending sectors, but CWB will be
challenged to meet its 10% loan growth target for fiscal 2009. Despite ongoing
challenges, management still believes Western Canada is in a good position
relative to the rest of Canada to manage through ongoing economic turbulence
and a recessionary environment.
    Loans in the Bank's alternative mortgage business, Optimum Mortgage
(Optimum), decreased 2% in the quarter, but were up 2% year-to-date and 17%
over the past twelve months to reach $480 million. Though the level of deals
received remained on par with prior periods, the percentage of loan
applications that met the Bank's underwriting criteria dropped considerably.
An increased level of approved deals not accepted by clients due to elevated
consumer uncertainties also had impacted growth in the quarter. It is expected
that growth in this business will continue to be constrained until the
recession runs its course and real estate values stabilize across all markets.
Moderated residential sales activity also impacts marketing time for homes in
foreclosure. Longer marketing time has contributed to a higher level of
delinquent loans, although activity has improved of late, partially due to
seasonal factors. The Bank remains well secured via conventional residential
first mortgages carrying a weighted average underwritten loan-to-value ratio
at initiation of approximately 70%. The vast majority of all Optimum mortgages
carry a fixed interest rate with the principal amortized over 25 years or
less. Management remains committed to grow this business over time as it
continues to produce solid returns while maintaining an acceptable risk
profile.

    Deposits

    Total branch deposits were down 2% compared to both the previous quarter
and the same period last year. The demand and notice component within branch
deposits was up 7% from last quarter and remained relatively unchanged
compared to a year earlier. Reflecting CWB's business banking focus, a
material portion of total branch deposits are attributed to larger commercial
balances that can be subject to greater fluctuation. The recently introduced
Internet-based division of the Bank named Canadian Direct Financial(TM)
(www.canadiandirectfinancial.com) is still in the early stages of development
as management determines the most beneficial strategies to raise deposits
through this medium. More normal financial markets and reduced competitive
influences have eased overall deposit costs for both branch-generated deposits
and those raised through the deposit broker network. Under the assumption that
interest rates remain at current levels, this will have a positive impact on
net interest margin going forward, particularly as a large component of
comparatively higher cost deposits raised through the latter half of the
calendar year 2008 begin to reprice.
    Total deposits at quarter end were $9,713 million, up 2% ($190 million)
from the previous quarter and 12% ($1,034 million) over the past year. Total
branch deposits measured as a percentage of total deposits were 56% at April
30, 2009 down from 58% in the previous quarter and 64% a year earlier.
Compared to prior periods, the reduction in branch-raised deposits as a
percentage of total deposits mainly reflects a marked increase in fixed rate
term deposits raised through the deposit broker network. Demand and notice
deposits represented 26% of total deposits, compared to 25% in the previous
quarter and 29% at the same time last year. The year-over-year decrease in
demand and notice deposits as a percentage of total deposits again reflects 
deposits raised through the deposit broker network.

    Other Assets and Other Liabilities

    Other assets at April 30, 2009 totaled $187 million, compared to $190
million last quarter and $161 million one year ago. Other liabilities at
quarter end were $427 million, compared to $304 million the previous quarter
and $323 million last year. The increase in other liabilities compared to
prior quarters mainly reflects the use of reverse resale agreements.

    Off-Balance Sheet

    Off-balance sheet items include trust assets under administration and
assets under management. Trust assets under administration totaled $4,472
million at April 30, 2009, compared to $4,141 million last quarter and $4,499
million one year ago. Assets under management were $817 million at quarter
end, compared to $810 million last quarter and nil one year ago reflecting the
December 2008 acquisition of Adroit. Other off-balance sheet items are
composed of standard industry credit instruments (guarantees, standby letters
of credit and commitments to extend credit), and the non-consolidated variable
interest entity. 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 Notes 14 and 20
to the audited consolidated financial statements on pages 76 and 80
respectively in the Bank's 2008 Annual Report.

    Capital Management

    At April 30, 2009, CWB's total capital adequacy ratio, which measures
regulatory capital as a percentage of risk-weighted assets, was 15.2%, up from
13.0% last quarter and 14.0% a year earlier. The Tier 1 ratio at quarter end
was 11.0%, compared to 8.7% last quarter and 9.3% at the same time last year.
Compared to one year ago, CWB's total regulatory capital increased with the
issuance of $209.8 million preferred units, the retention of earnings, net of
dividends, and a higher general allowance for credit losses, slightly offset
by strong asset growth and a $15.0 million redemption of subordinated
debentures. The higher Tier 1 ratio compared to the prior quarter and same
time last year mainly reflects the issuance of $209.8 million preferred units.
    During the second quarter, the Bank issued 2,990,000 Preferred Units (the
"Public Offering Preferred Units") for total proceeds of $74.8 million. The
Public Offering Preferred Units each consist of one Non-Cumulative 5-Year Rate
Reset Preferred Share, Series 3 (the "Series 3 Preferred Shares") in the
capital of the Bank with an issue price of $25.00 per share and 1.78 common
share purchase warrants (each whole warrant a "Warrant"). Each Warrant is
exercisable at a price of $14.00 to purchase one common share in the capital
of the Bank until March 3, 2014. The Bank also issued 5,400,000 Preferred
Units (the "Private Placement Preferred Units") by way of a private placement
to institutional investors for total proceeds of $135 million. The Private
Placement Preferred Units consist of one Series 3 Preferred Share and 1.7857
Warrants. The Warrants have the same terms as those issued under the public
offering.
    Based on a $25.00 issue price, the Series 3 Preferred Shares yield 7.25%
annually, payable quarterly, as and when declared by the Board of Directors of
CWB for an initial period ending April 30, 2014. Thereafter, the dividend rate
will reset every five years at a level of 500 basis points over the then
current five-year Government of Canada bond yield. Holders of Series 3
Preferred Shares will, subject to certain conditions, have the option to
convert their shares to Non-Cumulative Floating Rate Preferred Shares, Series
4 (the "Series 4 Preferred Shares") on April 30, 2014 and on April 30 every
five years thereafter. Holders of the Series 4 Preferred Shares will be
entitled to a floating quarterly dividend rate equal to the then current
90-day Canadian Treasury Bill Rate plus 500 basis points, as and when declared
by the Board of Directors of CWB. The Series 3 Preferred Shares and Series 4
Preferred Shares are redeemable at the option of CWB on April 30, 2014, and
every fifth anniversary thereafter at a price of $25.00 per share. In
addition, the Series 4 Preferred Shares are redeemable at the option of CWB at
any other time, on or after April 30, 2014, at a price of $25.50 per share.
    The Preferred Shares Series 3 and the Preferred Shares Series 4 qualify
as Tier 1 capital for the Bank. Both the Series 3 Preferred Shares and the
Warrants commenced trading on the Toronto Stock Exchange on March 2, 2009
under the trading symbols CWB.PR.A and CWB.WT, respectively. As at April 30,
2009, the closing market price of the Series 3 Preferred Shares and Warrants
was $25.50 and $4.20, respectively.
    Further information relating to the Bank's capital position is provided
in Note 15 to the quarterly financial statements as well as the audited
consolidated financial statements and MD&A for the year ended October 31,
2008.
    Book value per common share at April 30, 2009 was $11.42 compared to
$11.10 last quarter and $10.22 one year ago.
    Common shareholders received a quarterly cash dividend of $0.11 per
common share on April 2, 2009. On June 3, 2009, the Board of Directors
declared a quarterly cash dividend of $0.11 per common share payable on July
2, 2009 to shareholders of record on June 18, 2009. The Board of Directors
also declared a cash dividend of $0.453125 per Series 3 Preferred Share
payable on July 31, 2009 to shareholders of record on July 23, 2009.

    
    Changes in Accounting Policies

    Goodwill and Intangible Assets
    

    Effective November 1, 2008, the Bank adopted the CICA new accounting
standard, Section 3064, Goodwill and Intangible Assets. Section 3064, which
replaces Section 3062, Goodwill and Other Intangible Assets, and Section 3450,
Research and Development Costs, provides clarifying guidance on the criteria
that must be satisfied in order for an intangible asset to be recognized,
including internally developed intangible assets. The new guidance did not
have a material effect on the financial position or earnings of the Bank.

    Credit Risk and Fair Value

    Effective November 1, 2008, the Bank adopted EIC 173, Credit Risk and the
Fair Value of Financial Assets and Financial Liabilities. The abstract
clarifies how the Bank's own credit risk and the credit risk of the
counterparty should be taken into account in determining the fair value of
financial assets and financial liabilities, including derivatives. The new
guidance did not have a material effect on the financial position or earnings
of the Bank.

    
    Future Accounting Changes

    International Financial Reporting Standards
    

    The CICA will transition Canadian GAAP for publicly accountable entities
to International Financial Reporting Standards (IFRS). The Bank's consolidated
financial statements will be prepared in accordance with IFRS for the fiscal
year commencing November 1, 2011 and will include comparative information for
the prior year.
    The Bank has embarked on a four stage project to identify and evaluate
the impact of the transition to IFRS on the consolidated financial statements
and develop a plan to complete the transition. The project plan includes the
following phases - diagnostic, design and planning, solution development, and
implementation. The diagnostic phase is complete and the design and planning
phase is underway and expected to be completed by the end of fiscal 2009.
    The impact of the transition to IFRS on the Bank's consolidated financial
statements is not yet determinable. Additional information regarding the
Bank's plan and the expected impact of the transition will be provided as the
project moves forward.

    Controls and Procedures

    There were no changes in the Bank's internal controls over financial
reporting that occurred during the quarter ended April 30, 2009 that have
materially affected, or are reasonably likely to materially affect, internal
controls over financial reporting.
    With the recent acquisition of Adroit, the Bank's certifying officers
have limited the scope of design of disclosure controls and procedures and
internal control over financial reporting to exclude Adroit controls, policies
and procedures. With the work in the final stages, it is expected that the
limitation will be removed for the next 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 Canadian Western Bank, consistent with prior
quarters.

    Updated Common Share Information

    As at May 29, 2009, there were 63,621,040 common shares outstanding and
employee stock options, which are or will be exercisable for up to 4,444,255 
common shares for maximum proceeds of $ 80.2 million. Also outstanding were
14,964,980 warrants that are each exercisable at a price of $14.00 to purchase
one common share in the Bank until March 3, 2014.

    
    Summary of Quarterly Financial Information

                               2009                       2008
                        ----------------- -----------------------------------
    ($ thousands)          Q2       Q1       Q4       Q3       Q2       Q1
    -------------------------------------------------------------------------
    Total revenues
     (teb)              $75,382  $76,947  $74,059  $76,375  $73,754  $74,669
    Total revenues       73,707   75,361   72,519   74,933   72,402   73,332
    Net income           21,580   25,619   24,485   26,327   25,302   25,905
    Earnings per
     common share
      Basic                0.30     0.40     0.39     0.42     0.40     0.41
      Diluted              0.30     0.40     0.38     0.41     0.39     0.40
    Total assets
     ($ millions)        11,450   10,907   10,601   10,057   10,038    9,865
    -------------------------------------------------------------------------


                               2007
                        -----------------
    ($ thousands)          Q4       Q3
    -------------------------------------
    Total revenues
     (teb)              $74,359  $70,665
    Total revenues       72,863   69,242
    Net income           29,572   24,033
    Earnings per
     common share
      Basic                0.47     0.39
      Diluted              0.46     0.37
    Total assets
     ($ millions)         9,525    8,881
    -------------------------------------
    

    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 2008.
    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 (refer to Results by Business
Segment - Insurance), 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.
    Quarterly results can also fluctuate due to the recognition of periodic
income tax items. Net income in the first quarter of 2008 included $1.0
million ($0.01 per diluted share) of tax expense resulting from the write-down
of future tax assets to reflect lower future federal corporate income tax
rates. Net income in the fourth quarter of 2007 included the recognition of
previously unrecorded tax benefits related to certain prior period
transactions of $2.9 million ($0.04 per diluted share).
    For details on variations between the prior quarters see the summary of
quarterly results section of the Bank's MD&A for the year ended October 31,
2008 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. The
2008 Annual Report and audited consolidated financial statements for the year
ended October 31, 2008 are available on both SEDAR and the Bank's website.

    Results by Business Segment

    CWB operates in two business segments: 1) banking and trust and 2)
insurance. Segmented information is also provided in Note 14 of the unaudited
interim consolidated financial statements.

    Banking and trust

    Operations of the banking and trust segment include commercial and retail
banking services, as well as personal and corporate trust services provided
through CWB's subsidiaries, Canadian Western Trust Company (CWT) and Valiant
Trust Company (Valiant). Effective November 1, 2008, the banking and trust
segment also includes wealth management services provided through CWB's 72.5%
ownership interest in subsidiary, Adroit Investment Management Ltd.
    Second quarter net income of $19.4 million decreased 16% ($3.7 million)
compared to last year mainly reflecting the impact of a 35 basis point decline
in net interest margin (teb) to 1.91%, a 20% ($6.2 million) increase in
non-interest expenses and one less interest earning day this year. These
factors were partially offset by the positive earnings contribution from
strong 14% loan growth and $4.4 million higher gains on sale of securities.
The significant reduction in net interest margin (teb) compared to a year
earlier mainly resulted from consecutive reductions in the prime lending
interest rate and lower yields on securities, partially offset by lower
deposit costs, more favourable spreads on both new and renewal loans, and an
improved securities mix. Second quarter non-interest expenses included $1.7
million (before and after tax) of additional non-cash stock compensation
expense. The remainder of the increase in non-interest expenses mainly
resulted from continued business growth and investment in future development
initiatives, including the addition of Adroit. Credit related fee income was
down 19% ($1.3 million) while trust and wealth management services fee income
increased 31% ($0.9 million) mainly due to contributions from Adroit. Retail
services fee income, foreign exchange and other was up $0.2 million in the
aggregate. The quarterly efficiency ratio (teb), which measures non-interest
expense as a percentage of total revenues (teb), was 53.8%, compared to 45.7%
one year ago. The deterioration in the efficiency ratio (teb) reflects
constrained growth in net interest income attributed to a compressed net
interest margin (teb) and higher non-interest expenses, including the
additional non-cash stock compensation expense noted above, partially offset
by the positive impact of continued loan growth and a 30% ($4.2 million)
increase in other income.
    Quarterly earnings were down 22% ($5.4 million) from the previous period
as positive loan growth was more than offset by a $3.5 million increase in
non-interest expenses, $2.1 million lower other income, three fewer days in
the second quarter and continued margin pressure. The quarterly efficiency
ratio (teb) deteriorated 760 basis points compared to last quarter. On a
year-to-date basis, net income was 7% ($3.3 million) lower than 2008 as strong
loan growth and a 35% ($10.0 million) increase in other income (largely
attributed to gains on sale of securities) was more than offset by a
significant 36 basis point drop in net interest margin and a 17% ($10.6
million) increase in non-interest expenses. The year-to-date efficiency ratio
(teb) of 49.9% deteriorated 600 basis points from the same time in 2008.

    
                                 For the three months ended
                          -------------------------------------- Change from
                             April 30   January 31     April 30     April 30
    ($ thousands)                2009         2009         2008         2008
    -------------------------------------------------------------------------
    Net interest
     income (teb)         $    51,399  $    53,101  $    54,325         (5)%
    Other income               18,125       20,218       13,948           30
    -------------------------------------------------------------------------
    Total revenues (teb)       69,524       73,319       68,273            2
    Provision for credit
     losses                     3,369        3,369        2,962           14
    Non-interest expenses      37,381       33,910       31,207           20
    Provision for income
     taxes (teb)                9,313       11,151       11,031          (16)
    Non-controlling
     interest in
     subsidiary                    56           67            -           nm
    -------------------------------------------------------------------------
    Net income            $    19,405  $    24,822  $    23,073        (16)%
    -------------------------------------------------------------------------
    Efficiency
     ratio (teb)                53.8%        46.2%        45.7%       810 bp
    Efficiency ratio             55.0         47.2         46.6          840
    Net interest
     margin (teb)                1.91         1.97         2.26          (35)
    Net interest margin          1.86         1.91         2.21          (35)
    Average loans
     (millions)(1)        $     8,982  $     8,855  $     7,798          15%
    Average assets
     (millions)(1)             11,024       10,711        9,730           13
    -------------------------------------------------------------------------


                          For the six months ended
                          ------------------------- Change from
                             April 30     April 30     April 30
    ($ thousands)                2009         2008         2008
    ------------------------------------------------------------
    Net interest
     income (teb)         $   104,500  $   109,967         (5)%
    Other income               38,343       28,343           35
    ------------------------------------------------------------
    Total revenues (teb)      142,843      138,310            3
    Provision for credit
     losses                     6,738        5,775           17
    Non-interest expenses      71,291       60,711           17
    Provision for income
     taxes (teb)               20,464       24,311          (16)
    Non-controlling
     interest in
     subsidiary                   123            -           nm
    ------------------------------------------------------------
    Net income            $    44,227  $    47,513         (7)%
    ------------------------------------------------------------
    Efficiency
     ratio (teb)                49.9%        43.9%       600 bp
    Efficiency ratio             51.0         44.7          630
    Net interest
     margin (teb)                1.94         2.30          (36)
    Net interest margin          1.88         2.25          (37)
    Average loans
     (millions)(1)        $     8,918  $     7,672          16%
    Average assets
     (millions)(1)             10,867        9,579           13
    ------------------------------------------------------------

    bp -  basis point change.
    teb - taxable equivalent basis, see definition following Financial
          Highlights table.
    nm -  not meaningful.

    (1) Assets are disclosed on an average daily balance basis.
    

    Insurance

    The insurance segment is comprised of the operations of CWB's subsidiary,
Canadian Direct Insurance Incorporated (Canadian Direct or CDI), which
provides auto and home insurance to individuals in BC and Alberta.
    Canadian Direct reported second quarter net income of $2.2 million. This
represented a 2% ($0.1 million) decrease compared to the same quarter last
year reflecting higher claims experience in the BC home product line. Two
large fire claims and some adverse development from weather related claims in
the first quarter resulted in a 78% loss ratio for this line of business,
compared to 57% a year earlier. Net earned premiums grew 5% ($1.1 million)
reflecting growth in policies outstanding and a higher average premium per
policy sold in all lines of business except BC auto. Canadian Direct's share
of the Alberta auto risk sharing pools (the Pools) had minimal impact on net
income before tax, both this quarter and in the same quarter last year.
    In comparison to the previous quarter, Canadian Direct's net income
increased 173% ($1.4 million) primarily due to improvement in the loss ratios
for the BC home and BC auto lines of business. The BC home loss ratio, which
was materially impacted by severe weather related events in the first quarter,
dropped from 109% to 78%. The BC auto loss ratio improved from 62% to 48% due
to positive development on existing liability claims. Canadian Direct also
benefited from improvements of $0.2 million in both gains on the sale of
securities and before tax earnings attributed to its share of the Pools.
Offsetting these positive results was a 1% ($0.3 million) decline in net
earned premiums due to three fewer days in the quarter.
    Year-to-date net income of $3.0 million represented a 20% ($0.7 million)
decline compared to the same period last year as growth in net earned premiums
($2.1 million) was more than offset by higher net claims expense ($2.6
million). Gains on the sale of securities were $0.2 million higher than last
year, offset by a comparable decline in before tax earnings contributions from
the Pools. Barring any further severe weather or other catastrophe type
events, the combination of expected improved claims experience and a higher
volume of policy sales in the remaining months of fiscal 2009 due to both
seasonal factors and ongoing business growth should support improved results
through the second half of the year.

    
                                 For the three months ended
                          -------------------------------------- Change from
                             April 30   January 31     April 30     April 30
    ($ thousands)                2009         2009         2008         2008
    -------------------------------------------------------------------------
    Net interest
     income (teb)         $     1,413  $     1,495  $     1,334           6%
    -------------------------------------------------------------------------
    Other income (net)
      Net earned premiums      24,880       25,215       23,737            5
      Commissions and
       processing fees            760          654          738            3
      Net claims and
       adjustment expenses    (16,126)     (18,651)     (15,135)           7
      Policy acquisition
       costs                   (5,316)      (5,106)      (5,212)           2
    -------------------------------------------------------------------------
    Insurance
     revenue (net)              4,198        2,112        4,128            2
    Gains on sale of
     securities                   247           21           19           nm
    -------------------------------------------------------------------------
    Total revenues
     (net) (teb)                5,858        3,628        5,481            7
    Non-interest expenses       2,613        2,495        2,246           16
    Provision for income
     taxes (teb)                1,070          336        1,006            6
    -------------------------------------------------------------------------
    Net income            $     2,175  $       797  $     2,229         (2)%
    -------------------------------------------------------------------------
    Policies
     outstanding (No.)        170,433      168,642      166,093            3
    Gross written
     premiums             $    29,120  $    23,103  $    26,642            9
    Claims loss ratio(1)          65%          74%          64%       100 bp
    Expense ratio(2)               29           28           28          100
    Combined ratio(3)              94          102           92          200
    Alberta auto risk
     sharing pools impact
     on net income
     before tax           $        31  $      (158) $        (3)         nm%
    Average total assets
     (millions)                   192          18          180            6
    -------------------------------------------------------------------------


                          For the six months ended
                          ------------------------- Change from
                             April 30     April 30     April 30
    ($ thousands)                2009         2008         2008
    ------------------------------------------------------------
    Net interest
     income (teb)         $     2,908  $     2,738           6%
    ------------------------------------------------------------
    Other income (net)
      Net earned premiums      50,095       48,036            4
      Commissions and
       processing fees          1,414        1,400            1
      Net claims and
       adjustment expenses    (34,777)     (32,204)           8
      Policy acquisition
       costs                  (10,422)      (9,895)           5
    ------------------------------------------------------------
    Insurance
     revenue (net)              6,310        7,337          (14)
    Gains on sale of
     securities                   268           38           nm
    ------------------------------------------------------------
    Total revenues
     (net) (teb)                9,486       10,113           (6)
    Non-interest expenses       5,108        4,566           12
    Provision for income
     taxes (teb)                1,406        1,853          (24)
    ------------------------------------------------------------
    Net income            $     2,972  $     3,694        (20)%
    ------------------------------------------------------------
    Policies
     outstanding (No.)        170,433      166,093            3
    Gross written
     premiums             $    52,223  $    48,258            8
    Claims loss ratio(1)          69%          67%       200 bp
    Expense ratio(2)               29           27          200
    Combined ratio(3)              98           94          400
    Alberta auto risk
     sharing pools impact
     on net income
     before tax           $      (127) $       117          nm%
    Average total assets
     (millions)                   190          180            6
    ------------------------------------------------------------

    bp -  basis point change.
    teb - taxable equivalent basis, see definition following Financial
          Highlights table.
    nm -  not meaningful.

    (1) Net claims and adjustment expenses as a percentage of net earned
        premiums.
    (2) Policy acquisition costs and non-interest expenses net of commissions
        and processing fees as a percentage of net earned premiums.
    (3) Sum of the claims loss and expense ratios.


    Fiscal 2009 Target Ranges and Performance

    The performance target ranges established for the 2009 fiscal year are
presented in the table below together with CWB's actual performance to date.

                                               ------------------------------
                                                         2009
                                                       Target           2009
                                                       Ranges  Performance(1)
    -------------------------------------------------------------------------
    Net income growth(2)                             2% to 5%           (8)%
    -------------------------------------------------------------------------
    Total revenue (teb) growth                       5% to 8%             3%
    -------------------------------------------------------------------------
    Loan growth                                           10%            14%
    -------------------------------------------------------------------------
    Provision for credit losses as a
     percentage of average loans                0.15% - 0.18%          0.15%
    -------------------------------------------------------------------------
    Efficiency ratio (teb)                          46% - 49%          50.2%
    -------------------------------------------------------------------------
    Return on common equity                         14% - 16%        12.9%(3)
    -------------------------------------------------------------------------
    Return on assets                            0.90% - 1.05%        0.82%(4)
    -------------------------------------------------------------------------

    (1) 2009 performance for earnings and revenue growth is the current year
        results over the same period in the prior year, loan growth is the
        increase over the past twelve months and performance for ratio
        targets is the current year-to-date results annualized.
    (2) Net income, before preferred share dividends.
    (3) Return on common equity calculated as annualized year-to-date net
        income after preferred share dividends divided by average common
        shareholders' equity.
    (4) Return on assets calculated as annualized year-to-date net income
        after preferred share dividends divided by average total assets.
    

    The adverse impact of a compressed net interest margin coupled with
Western Canada's ongoing recessionary environment has been more pronounced
than anticipated when the Bank initially established its fiscal 2009
performance target ranges. The year-to-date drop in the prime lending interest
rate of 175 basis points to reach an historic low of 2.25% was much greater
than expected and has significantly affected both total revenues and overall
profitability. While realized gains on the sale of securities have helped
alleviate the full financial impact of margin pressures, this does not
represent a sustainable source of income over the long-term. Also, the
performance impact from the recently completed preferred share offerings was
not applicable when the above targets were established at the end of fiscal
2008. In view of the foregoing, it is unlikely the Bank will achieve its
fiscal 2009 performance targets related to profitability. Reflecting slower
economic activity and anticipated loan repayments, particularly for interim
construction accounts, CWB will also be challenged to meet its 10% loan growth
target. Management believes the targeted provisions for credit losses should
be sufficient in consideration of current credit quality. An improved net
interest margin should have a positive influence on total revenues going
forward, while controls on discretionary spending will likely support modest
improvements for the efficiency ratio (teb).
    Interest rates appear to have bottomed, market spreads are returning to
more normal historic levels and deposit costs have eased. These factors
combined with the CWB's success in establishing interest rate floors on
floating rate loans and more favourable pricing on new and renewal lending
accounts are all positive indicators for net interest margin going forward, as
was evident in the latter part of the second quarter. Net interest margin is
expected to return to more normal historic levels over time. Effective
execution of strategies to prudently leverage capital from the preferred share
units should also become accretive to earnings over time. Despite an
expectation for ongoing challenges through the remainder of 2009, management
is very optimistic about the Bank's overall financial strength and flexibility
to manage through the current cycle. The medium-term outlook is positive and
CWB is well positioned to build on its long-history of strong financial
performance and growth.
    This management's discussion and analysis is dated June 4, 2009.

    Taxable Equivalent Basis (teb)

    Most financial institutions 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.

    Non-GAAP Measures

    Taxable equivalent basis, return on common shareholders' equity, return
on assets, efficiency ratio, net interest margin, provisions for credit losses
as a percentage of average loans, tangible common equity to risk-weighted
assets, Tier 1 and total capital adequacy ratios, average balances, claims
loss ratio, expense ratio and combined ratio do not have standardized meanings
prescribed by generally accepted accounting principles (GAAP) and therefore
may not be comparable to similar measures presented by other financial
institutions. The non-GAAP measures used in this MD&A are calculated as
follows:

    
    -   taxable equivalent basis - described above;
    -   return on common shareholders' equity - net income less preferred
        share dividends divided by average shareholder's equity;
    -   return on assets - net income divided by average total assets;
    -   efficiency ratio - non-interest expenses divided by total revenues
        (net interest income plus other income);
    -   net interest margin - net interest income divided by average total
        assets;
    -   tangible common equity to risk-weighted assets - shareholders' equity
        less subsidiary goodwill divided by risk-weighted assets, calculated
        in accordance with guidelines issued by the Office of the
        Superintendent of Financial Institutions Canada (OSFI);
    -   Tier 1 and total capital adequacy ratios - in accordance with
        guidelines issued by OSFI;
    -   average balances - average daily balances;
    -   claims loss ratio - net insurance claims and adjustment expenses as a
        percentage of net earned premiums;
    -   expense ratio - policy acquisition costs and non-interest expenses
        net of commissions and processing fees as a percentage of net earned
        premiums; and
    -   combined ratio - sum of the claims loss and expense ratios.
    

    Forward-looking Statements

    From 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 2009 and how
it will affect CWB's businesses are material factors the Bank considers when
setting its objectives. In setting performance target ranges for fiscal 2009,
management's expectations assumed prolonged economic uncertainty that included
significantly challenged global economies and troubled markets; moderated
economic activity in Western Canada; a declining interest rate environment
supported by stable inflation partially attributed to lower energy and
commodity prices; sound credit quality with actual losses remaining within the
Bank's historic range of acceptable levels; and, a compressed net interest
margin consistent with elevated deposit costs, reduced prime lending rates,
comparatively lower investment returns reflecting high quality assets held in
the securities portfolio and the Bank's higher liquidity levels maintained in
response to disruptions in financial markets, partially offset by expectations
for higher credit spreads and a corresponding increase in loan yields on both
new lending facilities and renewal accounts. As at April 30, 2009, interest
rates had fallen much more than management anticipated at the onset of fiscal
2009 and there was also a confirmed recessionary environment in Western
Canada.

    
    -------------------------------------------------------------------------
    Consolidated Statements of Income
    -------------------------------------------------------------------------

                                 For the three months ended
    (unaudited)           -------------------------------------- Change from
    ($ thousands, except     April 30   January 31     April 30     April 30
     per share amounts)          2009         2009         2008         2008
    -------------------------------------------------------------------------
    Interest Income
      Loans               $   107,828  $   119,268  $   121,593        (11)%
      Securities               10,462       11,212       13,862          (25)
      Deposits with
       regulated financial
       institutions             3,770        3,537        4,543          (17)
    -------------------------------------------------------------------------
                              122,060      134,017      139,998          (13)
    -------------------------------------------------------------------------
    Interest Expense
      Deposits                 65,824       75,740       80,325          (18)
      Subordinated
       debentures               5,099        5,267        5,366           (5)
    -------------------------------------------------------------------------
                               70,923       81,007       85,691          (17)
    -------------------------------------------------------------------------
    Net Interest Income        51,137       53,010       54,307           (6)
    Provision for Credit
     Losses (Note 6)            3,369        3,369        2,962           14
    -------------------------------------------------------------------------
    Net Interest Income
     after Provision for
     Credit Losses             47,768       49,641       51,345           (7)
    -------------------------------------------------------------------------
    Other Income
      Credit related            5,321        5,743        6,587          (19)
      Insurance, net
       (Note 3)                 4,198        2,112        4,128            2
      Trust and wealth
       management services      3,869        3,913        2,952           31
      Retail services           1,913        1,844        1,861            3
      Gains on sale of
       securities               6,580        8,143        1,998          229
      Foreign exchange
       gains                      667          555          435           53
      Other                        22           41          134          (84)
    -------------------------------------------------------------------------
                               22,570       22,351       18,095           25
    -------------------------------------------------------------------------
    Net Interest and
     Other Income              70,338       71,992       69,440            1
    -------------------------------------------------------------------------
    Non-Interest Expenses
      Salaries and
       employee benefits       26,587       23,837       21,674           23
      Premises and
       equipment                6,528        6,028        5,503           19
      Other expenses            6,330        6,149        5,847            8
      Provincial
       capital taxes              549          391          429           28
    -------------------------------------------------------------------------
                               39,994       36,405       33,453           20
    -------------------------------------------------------------------------
    Net Income before
     Income Taxes and
     Non-Controlling
     Interest in
     Subsidiary                30,344       35,587       35,987          (16)
    Income Taxes                8,708        9,901       10,685          (19)
    -------------------------------------------------------------------------
                               21,636       25,686       25,302          (14)
    Non-Controlling
     Interest in
     Subsidiary                    56           67            -           nm
    -------------------------------------------------------------------------
    Net Income            $    21,580  $    25,619  $    25,302        (15)%
    -------------------------------------------------------------------------

    Preferred share
     dividends (Note 9)   $     2,458  $         -  $         -          nm%
    Net income available
     to common
     shareholders         $    19,122  $    25,619  $    25,302          (24)
    -------------------------------------------------------------------------
    Average number of
     common shares
     (in thousands)            63,503       63,465       63,183            1
    Average number of
     diluted common shares
     (in thousands)            63,559       63,667       64,472           (1)
    -------------------------------------------------------------------------
    Earnings Per Share
      Basic               $      0.30  $      0.40  $      0.40          (25)
      Diluted             $      0.30  $      0.40  $      0.39          (23)
    -------------------------------------------------------------------------


                          For the six months ended
    (unaudited)           ------------------------- Change from
    ($ thousands, except     April 30     April 30     April 30
     per share amounts)          2009         2008         2008
    ------------------------------------------------------------
    Interest Income
      Loans               $   227,096  $   248,344         (9)%
      Securities               21,674       29,053          (25)
      Deposits with
       regulated financial
       institutions             7,307        9,500          (23)
    ------------------------------------------------------------
                              256,077      286,897          (11)
    ------------------------------------------------------------
    Interest Expense
      Deposits                141,564      166,032          (15)
      Subordinated
       debentures              10,366       10,849           (4)
    ------------------------------------------------------------
                              151,930      176,881          (14)
    ------------------------------------------------------------
    Net Interest Income       104,147      110,016           (5)
    Provision for Credit
     Losses (Note 6)            6,738        5,775           17
    ------------------------------------------------------------
    Net Interest Income
     after Provision for
     Credit Losses             97,409      104,241           (7)
    ------------------------------------------------------------
    Other Income
      Credit related           11,064       13,896          (20)
      Insurance, net
       (Note 3)                 6,310        7,337          (14)
      Trust and wealth
       management services      7,782        6,516           19
      Retail services           3,757        3,820           (2)
      Gains on sale of
       securities              14,723        3,012          389
      Foreign exchange
       gains                    1,222          818           49
      Other                        63          319          (80)
    ------------------------------------------------------------
                               44,921       35,718           26
    ------------------------------------------------------------
    Net Interest and
     Other Income             142,330      139,959            2
    ------------------------------------------------------------
    Non-Interest Expenses
      Salaries and
       employee benefits       50,424       42,291           19
      Premises and
       equipment               12,556       10,885           15
      Other expenses           12,479       11,103           12
      Provincial
       capital taxes              940          998           (6)
    ------------------------------------------------------------
                               76,399       65,277           17
    ------------------------------------------------------------
    Net Income before
     Income Taxes and
     Non-Controlling
     Interest in
     Subsidiary                65,931       74,682          (12)
    Income Taxes               18,609       23,475          (21)
    ------------------------------------------------------------
                               47,322       51,207           (8)
    Non-Controlling
     Interest in
     Subsidiary                   123            -           nm
    ------------------------------------------------------------
    Net Income            $    47,199  $    51,207         (8)%
    ------------------------------------------------------------

    Preferred share
     dividends (Note 9)   $     2,458  $         -          nm%
    Net income available
     to common
     shareholders         $    44,741  $    51,207          (13)
    ------------------------------------------------------------
    Average number of
     common shares
     (in thousands)            63,484       63,078            1
    Average number of
     diluted common shares
     (in thousands)            63,609       64,583           (2)
    ------------------------------------------------------------
    Earnings Per Share
      Basic               $      0.70  $      0.81          (14)
      Diluted             $      0.70  $      0.79          (11)
    ------------------------------------------------------------

    nm - not meaningful.

    The accompanying notes are an integral part of the interim consolidated
    financial statements.



    -------------------------------------------------------------------------
    Consolidated Balance Sheets
    -------------------------------------------------------------------------

                                                                      Change
                       As at        As at        As at        As at     from
    (unaudited)     April 30   January 31   October 31     April 30 April 30
    ($ thousands)       2009         2009         2008         2008     2008
    -------------------------------------------------------------------------
    Assets
    Cash Resources
      Cash and
       non-
       interest
       bearing
       deposits
       with
       financial
       institu-
       tions     $    14,739  $    31,984  $     8,988  $    31,039    (53)%
      Interest
       bearing
       deposits
       with
       regulated
       financial
       institu-
       tions
       (Note 4)      557,313      430,594      464,193      476,585     17
      Cheques and
       other items
       in transit          -        7,461       18,992        6,065   (100)
    -------------------------------------------------------------------------
                     572,052      470,039      492,173      513,689     11
    -------------------------------------------------------------------------
    Securities
     (Note 4)
      Issued or
       guaranteed
       by Canada     585,320      338,844      347,777      331,272     77
      Issued or
       guaranteed
       by a
       province or
       municipality  545,032      455,759      452,045      443,775     23
      Other
       securities    519,283      444,166      429,142      490,945      6
    -------------------------------------------------------------------------
                   1,649,635    1,238,769    1,228,964    1,265,992     30
    -------------------------------------------------------------------------
    Securities
     Purchased
     Under Resale
     Agreements            -       15,000       77,000      155,148   (100)
    -------------------------------------------------------------------------
    Loans (Notes 5
     and 7)
      Residential
       mortgages   2,239,023    2,233,841    2,134,327    1,959,048     14
      Other loans  6,877,594    6,834,088    6,565,280    6,050,679     14
    -------------------------------------------------------------------------
                   9,116,617    9,067,929    8,699,607    8,009,727     14
      Allowance
       for credit
       losses
       (Note 6)      (75,099)     (74,476)     (75,538)     (67,091)    12
    -------------------------------------------------------------------------
                   9,041,518    8,993,453    8,624,069    7,942,636     14
    -------------------------------------------------------------------------
    Other
      Land,
       buildings
       and
       equipment      30,369       31,195       31,893       25,795     18
      Goodwill         9,360        9,360        6,933        6,933     35
      Other
       intangible
       assets          7,089        7,412        2,155        2,410    194
      Insurance
       related        52,283       52,011       52,943       52,656     (1)
      Derivative
       related
       (Note 8)        4,524       12,852        9,980        3,966     14
      Other
       assets         83,795       76,981       74,622       68,989     21
    -------------------------------------------------------------------------
                     187,420      189,811      178,526      160,749     17
    -------------------------------------------------------------------------
    Total
     Assets      $11,450,625  $10,907,072  $10,600,732  $10,038,214     14 %
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity
    Deposits
      Payable on
       demand    $   360,989  $   362,394  $   383,083  $   373,692     (3)%
      Payable
       after
       notice      2,139,361    1,982,001    2,010,039    2,123,327      1
      Payable on
       a fixed
       date        7,107,984    7,073,702    6,747,597    6,077,005     17
      Deposit from
       Canadian
       Western
       Bank
       Capital
       Trust         105,000      105,000      105,000      105,000      -
    -------------------------------------------------------------------------
                   9,713,334    9,523,097    9,245,719    8,679,024     12
    -------------------------------------------------------------------------
    Other
      Cheques and
       other items
       in transit     44,039       30,432       29,036       34,550     27
      Insurance
       related       135,563      135,565      134,769      127,337      6
      Derivative
       related
       (Note 8)          852           97          163          846      1
      Securities
       purchased
       under
       reverse
       resale
       agreements     83,468            -            -       19,896    320
      Other
       liabilities   162,616      138,278      136,897      140,346     16
    -------------------------------------------------------------------------
                     426,538      304,372      300,865      322,975     32
    -------------------------------------------------------------------------
    Subordinated
     Debentures
      Conventional   375,000      375,000      375,000      390,000     (4)
    -------------------------------------------------------------------------
    Shareholders'
     Equity
      Preferred
       shares
       (Note 9)      209,750            -            -            -     nm
      Common
       shares
       (Note 9)      223,062      222,010      221,914      220,634      1
      Contributed
       surplus        18,060       15,759       14,234       11,655     55
      Retained
       earnings      474,353      466,841      448,203      411,329     15
      Accumulated
       other
       comprehensive
       income (loss)  10,528           (7)      (5,203)       2,597    305
    -------------------------------------------------------------------------
                     935,753      704,603      679,148      646,215     45
    -------------------------------------------------------------------------
    Total
     Liabilities
     and Share-
     holders'
     Equity      $11,450,625  $10,907,072  $10,600,732  $10,038,214     14 %
    -------------------------------------------------------------------------
    Contingent
     Liabilities
     and
     Commitments
     (Note 11)

    nm - not meaningful.

    The accompanying notes are an integral part of the interim consolidated
    financial statements.



    -------------------------------------------------------------------------
    Consolidated Statements of Changes in Shareholders' Equity
    -------------------------------------------------------------------------

                                                    For the six months ended
                                                    -------------------------
    (unaudited)                                        April 30     April 30
    ($ thousands)                                          2009         2008
    -------------------------------------------------------------------------
    Retained Earnings
    Balance at beginning of period                  $   448,203  $   372,739
      Net income                                         47,199       51,207
      Dividends - Preferred shares                       (2,458)           -
                - Common shares                         (13,965)     (12,617)
      Issuance costs on preferred units                  (4,626)           -
    -------------------------------------------------------------------------
    Balance at end of period                            474,353      411,329
    -------------------------------------------------------------------------
    Accumulated Other Comprehensive Income (Loss)
    Balance at beginning of period                       (5,203)      (5,931)
      Other comprehensive income                         15,731        8,523
    -------------------------------------------------------------------------
    Balance at end of period                             10,528        2,597
    -------------------------------------------------------------------------
    Total retained earnings and accumulated
     other comprehensive income (loss)                  484,881      413,926
    -------------------------------------------------------------------------
    Preferred Shares (Note 9)
    Balance at beginning of period                            -            -
      Issued during the period                          209,750            -
    -------------------------------------------------------------------------
    Balance at end of period                            209,750            -
    -------------------------------------------------------------------------
    Common Shares (Note 9)
    Balance at beginning of period                      221,914      219,004
      Issued on exercise of employee stock options          393          900
      Transferred from contributed surplus on
       exercise or exchange of options                      755          730
    -------------------------------------------------------------------------
    Balance at end of period                            223,062      220,634
    -------------------------------------------------------------------------
    Contributed Surplus
    Balance at beginning of period                       14,234        9,681
      Amortization of fair value of employee
       stock options                                      4,581        2,704
      Transferred to common shares on exercise
       or exchange of options                              (755)        (730)
    -------------------------------------------------------------------------
    Balance at end of period                             18,060       11,655
    -------------------------------------------------------------------------
    Total Shareholders' Equity                      $   935,753  $   646,215
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    Consolidated Statements of Comprehensive Income
    -------------------------------------------------------------------------

                             For the three months        For the six months
                                     ended                     ended
                          ------------------------- -------------------------
    (unaudited)              April 30     April 30     April 30     April 30
    ($ thousands)                2009         2008         2009         2008
    -------------------------------------------------------------------------
    Net Income            $    21,580  $    25,302  $    47,199  $    51,207
    -------------------------------------------------------------------------
    Other Comprehensive
     Income, net of tax
      Available-for-sale
       securities:
        Gains from change
         in fair value(1)      21,528        2,573       30,549        8,429
        Reclassification
         to other income(2)    (4,630)      (1,349)     (10,380)      (2,034)
    -------------------------------------------------------------------------
                               16,898        1,224       20,169        6,395
    -------------------------------------------------------------------------
      Derivatives designated
       as cash flow hedges:
        Gains from change
         in fair value(3)       2,532        1,529        5,968        3,338
        Reclassification
         to net interest
         income(4)             (3,485)        (179)      (4,996)        (267)
        Reclassification to
         other liabilities
         for derivatives
         terminated prior
         to maturity(5)        (5,410)        (938)      (5,410)        (938)
    -------------------------------------------------------------------------
                               (6,363)         412       (4,438)       2,133
    -------------------------------------------------------------------------
                               10,535        1,636       15,731        8,528
    -------------------------------------------------------------------------
    Comprehensive Income
     for the Period       $    32,115  $    26,938  $    62,930  $    59,735
    -------------------------------------------------------------------------

    (1) Net of income tax expense of $9,027 and $12,780 for the three and six
        months ended April 30, 2009, respectively (2008 - $1,237 and $4,053).
    (2) Net of income tax benefit of $1,950 and $4,343 for the three and six
        months ended April 30, 2009, respectively (2008 - $649 and $978).
    (3) Net of income tax expense of $948 and $2,497 for the three and six
        months ended April 30, 2009, respectively (2008 - $695 and $1,528).
    (4) Net of income tax benefit of $1,409 and $2,090 for the three and six
        months ended April 30, 2009, respectively (2008 - $82 and $123).
    (5) Net of income tax benefit of $2,264 and $2,264 for the three and six
        months ended April 30, 2009, respectively (2008 - $429 and $429).

    The accompanying notes are an integral part of the interim consolidated
    financial statements.



    -------------------------------------------------------------------------
    Consolidated Statements of Cash Flow
    -------------------------------------------------------------------------

                             For the three months        For the six months
                                     ended                     ended
                          ------------------------- -------------------------
    (unaudited)              April 30     April 30     April 30     April 30
    ($ thousands)                2009         2008         2009         2008
    -------------------------------------------------------------------------
    Cash Flows from
     Operating Activities
      Net income          $    21,580  $    25,302  $    47,199  $    51,207
      Adjustments to
       determine net cash
       flows
        Provision for
         credit losses          3,369        2,962        6,738        5,775
        Depreciation and
         amortization           2,159        1,686        4,285        3,355
        Amortization of
         fair value of
         employee stock
         options                3,020        1,376        4,581        2,704
        Future income
         taxes, net            (2,687)        (199)      (4,312)         527
        Gain on sale of
         securities, net       (6,580)      (1,998)     (14,723)      (3,012)
        Accrued interest
         receivable and
         payable, net           3,261       (2,215)      15,061        9,600
        Current income
         taxes payable, net     1,931          (83)      (2,047)      (1,884)
        Other items, net       15,090        9,631        7,528       (9,050)
    -------------------------------------------------------------------------
                               41,143       36,462       64,310       59,222
    -------------------------------------------------------------------------
    Cash Flows from
     Financing Activities
      Deposits, net           190,237      118,678      467,615      422,106
      Common shares issued
       (Note 9)                   333          250          393          900
      Preferred units
       issued (Note 9)        209,750            -      209,750            -
      Issuance costs on
       preferred units         (4,626)           -       (4,626)           -
      Dividends                (9,442)      (6,318)     (16,423)     (12,617)
    -------------------------------------------------------------------------
                              386,252      112,610      656,709      410,389
    -------------------------------------------------------------------------
    Cash Flows from
     Investing Activities
      Interest bearing
       deposits with
       regulated financial
       institutions, net     (121,028)         174      (81,828)     (68,545)
      Securities, purchased  (776,638)    (845,860)  (1,516,274)  (1,398,868)
      Securities, sale
       proceeds               361,682      451,469      989,576      749,756
      Securities, matured      24,252      425,223      131,578      739,510
      Securities purchased
       under resale
       agreements, net         98,468       73,748      160,468       71,673
      Loans, net              (51,434)    (238,617)    (424,187)    (542,831)
      Land, buildings
       and equipment           (1,010)      (1,553)      (2,115)      (3,143)
      Business acquisitions
       (Note 2)                     -            -       (6,481)           -
    -------------------------------------------------------------------------
                             (465,708)    (135,416)    (749,263)    (452,448)
    -------------------------------------------------------------------------
    Change in Cash and
     Cash Equivalents         (38,313)      13,656      (28,244)      17,163
    Cash and Cash
     Equivalents at
     Beginning of Period        9,013      (11,102)      (1,056)     (14,609)
    -------------------------------------------------------------------------
    Cash and Cash
     Equivalents at End
     of Period(*)         $   (29,300) $     2,554  $   (29,300) $     2,554
    -------------------------------------------------------------------------
    (*) Represented by:
        Cash and
         non-interest
         bearing deposits
         with financial
         institutions     $    14,739  $    31,039  $    14,739  $    31,039
        Cheques and other
         items in transit
         (included in
         Cash Resources)            -        6,065            -        6,065
        Cheques and other
         items in transit
         (included in
         Other Liabilities)   (44,039)     (34,550)     (44,039)     (34,550)
    -------------------------------------------------------------------------
    Cash and Cash
     Equivalents at End
     of Period            $   (29,300) $     2,554  $   (29,300) $     2,554
    -------------------------------------------------------------------------

    Supplemental
     Disclosure of Cash
     Flow Information
      Amount of interest
       paid in the period $    62,745  $    85,779  $   132,961  $   166,443
      Amount of income
       taxes paid in the
       period                   9,464       13,865       24,968       24,832
    -------------------------------------------------------------------------

    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.  Summary of Significant Accounting Policies

        Basis of Presentation

        These unaudited interim consolidated financial statements have been
        prepared in accordance with Canadian generally accepted accounting
        principles (GAAP), including the accounting requirements of the
        Office of the Superintendent of Financial Institutions Canada (OSFI),
        using the same accounting policies as the audited consolidated
        financial statements for the year ended October 31, 2008. Under
        Canadian GAAP, 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, 2008 as set out on pages 61 to 91 of the Bank's 2008
        Annual Report.

        Changes in Accounting Policies

        Goodwill and Intangible Assets

        Effective November 1, 2008, the Bank adopted the CICA new accounting
        standard, Section 3064, Goodwill and Intangible Assets. Section 3064,
        which replaces Section 3062, Goodwill and Other Intangible Assets,
        and Section 3450, Research and Development Costs, provides clarifying
        guidance on the criteria that must be satisfied in order for an
        intangible asset to be recognized, including internally developed
        intangible assets. The new guidance did not have a material effect on
        the financial position or earnings of the Bank.

        Credit Risk and Fair Value

        Effective November 1, 2008, the Bank adopted EIC 173, Credit Risk and
        the Fair Value of Financial Assets and Financial Liabilities. The
        abstract clarifies how the Bank's own credit risk and the credit risk
        of a counterparty should be taken into account in determining the
        fair value of financial assets and financial liabilities, including
        derivatives. The new guidance did not have a material effect on the
        financial position or earnings of the Bank.

    2.  Business Acquisition

        Effective November 1, 2008 the Bank acquired 72.5% of the outstanding
        shares of Adroit Investment Management Ltd. (Adroit). Adroit is an
        Edmonton, Alberta based firm specializing in wealth management for
        individuals, corporations and institutional clients. The results of
        operations for Adroit have been included in the Bank's consolidated
        financial statements since the effective acquisition date. The
        initial $6,481 acquisition cost was paid in cash. Additional
        contingent consideration, to a maximum of $1,675, will be paid in
        cash if earnings targets are achieved over a two year period. Any
        future contingent payment will be recorded when the liability has
        been incurred and will increase goodwill.

        The following table summarizes the fair value of the assets acquired
        and liabilities assumed:

        Net assets acquired
          Other assets                                           $        90
          Other intangible assets                                      3,964
          Goodwill                                                     2,427
        ---------------------------------------------------------------------
                                                                 $     6,481
        ---------------------------------------------------------------------

        Other intangible assets include customer relationships, non-
        competition agreements and a trade name. The trade name, which has an
        estimated value of $280, is not subject to amortization. Adroit's
        financial results, the goodwill and other intangible assets related
        to the acquisition are included in the banking and trust segment. The
        total amount of goodwill and intangible assets are not deductible for
        income tax purposes.

    3.  Insurance Revenues, Net

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

                                                         For the six months
                         For the three months ended            ended
                      -------------------------------------------------------
                        April 30 January 31   April 30   April 30   April 30
                            2009       2009       2008       2009       2008
        ---------------------------------------------------------------------
        Net earned
         premiums     $   24,880 $   25,215 $   23,737 $   50,095 $   48,036
        Commissions
         and processing
         fees                760        654        738      1,414      1,400
        Net claims and
         adjustment
         expenses        (16,126)   (18,651)   (15,135)   (34,777)   (32,204)
        Policy
         acquisition
         costs            (5,316)    (5,106)    (5,212)   (10,422)    (9,895)
        ---------------------------------------------------------------------
        Total, net    $    4,198 $    2,112 $    4,128 $    6,310 $    7,337
        ---------------------------------------------------------------------

    4.  Securities

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

                                               As at       As at       As at
                                            April 30  January 31    April 30
                                                2009        2009        2008
        ---------------------------------------------------------------------
        Interest bearing deposits with
         regulated financial institutions $   12,231  $    6,540  $    1,849
        Securities
          Issued or guaranteed by Canada       3,090       2,452       1,106
          Issued or guaranteed by a
           province or municipality           10,509       7,112       1,827
          Other securities                   (15,039)    (29,288)     (4,600)
        ---------------------------------------------------------------------
        Unrealized gain (losses), net     $   10,791  $  (13,184) $      182
        ---------------------------------------------------------------------

        The securities portfolio is primarily comprised of high quality debt
        instruments and preferred 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 market
        credit spreads, interest rates and shifts in the interest rate curve.
        Unrealized losses are considered to be other than permanent in
        nature.

    5.  Loans

        The composition of the Bank's loan portfolio by geographic region and
        industry sector follow.

                   British             Saskat-
    ($ millions)  Columbia   Alberta    chewan  Manitoba     Other     Total
    -------------------------------------------------------------------------
    Loans to
     Individuals
      Residential
       mort-
       gages(2)   $  1,149  $    845  $    117  $     79  $     49  $  2,239
      Other loans      118       215        25         4         1       363
    -------------------------------------------------------------------------
                     1,267     1,060       142        83        50     2,602
    -------------------------------------------------------------------------

    Loans to
     Businesses
      Commercial       734     1,283       105        88       247     2,457
      Construction
       and real
       estate(3)       958     1,414        89        59       178     2,698
      Equipment
       financing       300       813        42        12        52     1,219
      Energy             -       141         -         -         -       141
    -------------------------------------------------------------------------
                     1,992     3,651       236       159       477     6,515
    -------------------------------------------------------------------------
    Total
     Loans(1)     $  3,259  $  4,711  $    378  $    242  $    527  $  9,117
    -------------------------------------------------------------------------
    Composition
     Percentage
      April 30,
       2009            36%       52%        4%        2%        6%      100%
      January 31,
       2009            36%       52%        4%        2%        6%      100%
      October 31,
       2008            36%       53%        4%        2%        5%      100%
    -------------------------------------------------------------------------


                     April   January   October
                        30        31        31
                      2009      2009      2008
                  Composi-  Composi-  Composi-
                      tion      tion      tion
                  Percent-  Percent-  Percent-
    ($ millions)       age       age       age
    -------------------------------------------
    Loans to
     Individuals
      Residential
       mort-
       gages(2)        24%       24%       24%
      Other loans        4         4         4
    -------------------------------------------
                        28        28        28
    -------------------------------------------

    Loans to
     Businesses
      Commercial        27        27        27
      Construction
       and real
       estate(3)        30        29        29
      Equipment
       financing        13        14        14
      Energy             2         2         2
                        72        72        72
    -------------------------------------------
    Total
     Loans(1)         100%      100%      100%
    -------------------------------------------
    Composition
     Percentage
      April 30,
       2009
      January 31,
       2009
      October 31,
       2008
    -------------------------------------------
    (1) This table does not include an allocation for credit losses or
        deferred revenue and premiums.
    (2) Includes single- and multi-unit residential mortgages and project
        (interim) mortgages on residential property.
    (3) Includes commercial term mortgages and project (interim) mortgages
        for non-residential property.

    6.  Allowance for Credit Losses

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

                                             For the three months ended
                                                    April 30, 2009
                                       --------------------------------------
                                                        General
                                                      Allowance
                                          Specific   for Credit
                                         Allowance       Losses        Total
        ---------------------------------------------------------------------
        Balance at beginning of period $    13,554  $    60,922  $    74,476
        Provision for credit losses          3,276           93        3,369
        Write-offs                          (2,759)           -       (2,759)
        Recoveries                              13            -           13
        ---------------------------------------------------------------------
        Balance at end of period       $    14,084  $    61,015  $    75,099
        ---------------------------------------------------------------------


                                             For the three months ended
                                                   January 31, 2009
                                       --------------------------------------
                                                        General
                                                      Allowance
                                          Specific   for Credit
                                         Allowance       Losses        Total
        ---------------------------------------------------------------------
        Balance at beginning of period $    15,011  $    60,527  $    75,538
        Provision for credit losses          2,974          395        3,369
        Write-offs                          (4,464)           -       (4,464)
        Recoveries                              33            -           33
        ---------------------------------------------------------------------
        Balance at end of period       $    13,554  $    60,922  $    74,476
        ---------------------------------------------------------------------


                                             For the three months ended
                                                    April 30, 2008
                                       --------------------------------------
                                                        General
                                                      Allowance
                                          Specific   for Credit
                                         Allowance       Losses        Total
        ---------------------------------------------------------------------
        Balance at beginning of period $     9,248  $    55,940  $    65,188
        Provision for credit losses          2,598          364        2,962
        Write-offs                          (1,065)           -       (1,065)
        Recoveries                               6            -            6
        ---------------------------------------------------------------------
        Balance at end of period       $    10,787  $    56,304  $    67,091
        ---------------------------------------------------------------------


                                               For the six months ended
                                                    April 30, 2009
                                       --------------------------------------
                                                        General
                                                      Allowance
                                          Specific   for Credit
                                         Allowance       Losses        Total
        ---------------------------------------------------------------------
        Balance at beginning of period $    15,011  $    60,527  $    75,538
        Provision for credit losses          6,250          488        6,738
        Write-offs                          (7,223)           -       (7,223)
        Recoveries                              46            -           46
        ---------------------------------------------------------------------
        Balance at end of period       $    14,084  $    61,015  $    75,099
        ---------------------------------------------------------------------


                                               For the six months ended
                                                    April 30, 2008
                                       --------------------------------------
                                                        General
                                                      Allowance
                                          Specific   for Credit
                                         Allowance       Losses        Total
        ---------------------------------------------------------------------
        Balance at beginning of period $     7,414  $    55,608  $    63,022
        Provision for credit losses          5,079          696        5,775
        Write-offs                          (1,739)           -       (1,739)
        Recoveries                              33            -           33
        ---------------------------------------------------------------------
        Balance at end of period       $    10,787 $     56,304  $    67,091
        ---------------------------------------------------------------------

    7.  Impaired and Past Due Loans

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

                                          As at April 30, 2009
                          ---------------------------------------------------
                                             Gross                       Net
                                Gross     Impaired     Specific     Impaired
                               Amount       Amount    Allowance        Loans
        ---------------------------------------------------------------------
        Consumer and
         personal         $ 1,317,270  $    17,809  $       862  $    16,947
        Real estate(1)(3)   3,929,189       65,515        7,566       57,949
        Industrial          1,359,937       20,709        3,675       17,034
        Commercial          2,510,221        2,984        1,981        1,003
        ---------------------------------------------------------------------
        Total             $ 9,116,617  $   107,017  $    14,084       92,933
        ---------------------------------------------------------
        General
         allowance(2)                                                (61,015)
        ---------------------------------------------------------------------
        Net impaired loans
         after general
         allowance                                               $    31,918
        ---------------------------------------------------------------------


                                         As at January 31, 2009
                          ---------------------------------------------------
                                             Gross                       Net
                                Gross     Impaired     Specific     Impaired
                               Amount       Amount    Allowance        Loans
        ---------------------------------------------------------------------
        Consumer and
         personal         $ 1,323,201  $    12,700  $       534  $    12,166
        Real estate(1)(3)   3,864,064       75,092        4,698       70,394
        Industrial          1,416,287       16,115        5,962       10,153
        Commercial          2,464,377        3,878        2,360        1,518
        ---------------------------------------------------------------------
        Total             $ 9,067,929  $   107,785  $    13,554       94,231
        ---------------------------------------------------------
        General
         allowance(2)                                                (60,922)
        ---------------------------------------------------------------------
        Net impaired loans
         after general
         allowance                                               $    33,309
        ---------------------------------------------------------------------


                                          As at April 30, 2008
                          ---------------------------------------------------
                                             Gross                       Net
                                Gross     Impaired     Specific     Impaired
                               Amount       Amount    Allowance        Loans
        ---------------------------------------------------------------------
        Consumer and
         personal         $ 1,159,586  $     6,417  $       283  $     6,134
        Real estate(1)      3,232,475       11,223          920       10,303
        Industrial          1,580,911       14,972        3,948       11,024
        Commercial          2,036,755       10,406        5,636        4,770
        ---------------------------------------------------------------------
        Total             $ 8,009,727  $    43,018  $    10,787       32,231
        ---------------------------------------------------------
        General
         allowance(2)                                                (56,304)
        ---------------------------------------------------------------------
        Net impaired loans
         after general
         allowance                                               $   (24,073)
        ---------------------------------------------------------------------

        (1) Multi-family residential mortgages are included in real estate
            loans.
        (2) The general allowance for credit risk is not allocated by loan
            type.
        (3) Real estate includes foreclosed real estate with a carrying value
            of $3,505 (2008 - nil) which is held for sale.

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

                                                  As at April 30, 2009
                                       --------------------------------------
                                             Gross                       Net
                                          Impaired     Specific     Impaired
                                            Amount    Allowance        Loans
        ---------------------------------------------------------------------
        Alberta                        $    46,534  $     4,424  $    42,110
        British Columbia                    58,171        8,568       49,603
        Saskatchewan                         1,565          620          945
        Manitoba                               402          402            -
        Other                                  345           70          275
        ---------------------------------------------------------------------
        Total                          $   107,017  $    14,084       92,933
        --------------------------------------------------------
        General allowance(1)                                         (61,015)
        ---------------------------------------------------------------------
        Net impaired loans after
         general allowance                                       $    31,918
        ---------------------------------------------------------------------


                                                 As at January 31, 2009
                                       --------------------------------------
                                             Gross                       Net
                                          Impaired     Specific     Impaired
                                            Amount    Allowance        Loans
        ---------------------------------------------------------------------
        Alberta                        $    54,925  $     5,204  $    49,721
        British Columbia                    50,166        7,134       43,032
        Saskatchewan                         1,801          609        1,192
        Manitoba                               388          388            -
        Other                                  505          219          286
        ---------------------------------------------------------------------
        Total                          $   107,785  $    13,554       94,231
        --------------------------------------------------------
        General allowance(1)                                         (60,922)
        ---------------------------------------------------------------------
        Net impaired loans after
         general allowance                                       $    33,309
        ---------------------------------------------------------------------


                                                  As at April 30, 2008
                                       --------------------------------------
                                             Gross                       Net
                                          Impaired     Specific     Impaired
                                            Amount    Allowance        Loans
        ---------------------------------------------------------------------
        Alberta                        $    18,586  $     8,071  $    10,515
        British Columbia                    21,757        1,778       19,979
        Saskatchewan                         2,167          499        1,668
        Manitoba                               508          439           69
        Other                                    -            -            -
        ---------------------------------------------------------------------
        Total                          $    43,018  $    10,787       32,231
        --------------------------------------------------------
        General allowance(1)                                         (56,304)
        ---------------------------------------------------------------------
        Net impaired loans after
         general allowance                                       $   (24,073)
        ---------------------------------------------------------------------

        (1) The general allowance for credit risk is not allocated by
            province.

        During the three and six months ended April 30, 2009, interest
        recognized as income on impaired loans totaled $726 and $932
        respectively (2008 - $115 and $178).

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

                                           As at April 30, 2009
                        -----------------------------------------------------
                          1 - 30    31 - 60    61 - 90  More than
                            days       days       days    90 days      Total
        ---------------------------------------------------------------------
        Residential
         mortgages      $ 20,580   $  2,111   $  3,381   $      -   $ 26,072
        Other loans       34,572          -      5,517          -     40,089
        ---------------------------------------------------------------------
                        $ 55,152   $  2,111   $  8,898   $      -   $ 66,161
        ---------------------------------------------------------------------


                           As at      As at
                      January 31,  April 30,
                            2009       2008
                        --------------------
                           Total      Total
        ------------------------------------
        Residential
         mortgages      $ 21,448   $ 21,990
        Other loans       27,760     17,840
        ------------------------------------
                        $ 49,208   $ 39,830
        ------------------------------------

    8.  Derivative Financial Instruments

        For the three and six months ended April 30, 2009, a net unrealized
        after tax gain of $2,532 and $5,968 respectively (2008 - $1,529 and
        $3,338) was recorded in other comprehensive income for changes in
        fair value of the effective portion of derivatives designated as cash
        flow hedges, and $nil (2008 - $nil) was 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 interest on certain floating rate loans (i.e. the hedged
        items) affect income. For the three and six months ended April 30,
        2009, a net gain after tax of $3,485 and $4,996 respectively (2008 -
        $179 and $267) was reclassified to net income. During the quarter,
        $5,410 after tax (2008 - $938) was reclassified to other liabilities
        for derivatives terminated prior to maturity and the deferred balance
        will be amortized into net interest income over the original hedged
        period. A net gain of $4,155 (2008 - $2,206) after tax recorded in
        accumulated other comprehensive income (loss) as at April 30, 2009 is
        expected to be reclassified to net income in the next 12 months and
        will offset variable cash flows from floating rate loans.

        The following table shows the notional value outstanding for
        derivative financial instruments and the related fair value.

                                                  As at April 30, 2009
                                       --------------------------------------
                                          Notional     Positive     Negative
                                            Amount   Fair Value   Fair Value
        ---------------------------------------------------------------------
        Interest rate swaps designated
         as cash flow hedges(1)        $   328,000  $     4,422  $       737
        Equity contracts(2)                  2,000            -          100
        Foreign exchange contracts(3)        3,007            5           15
        Embedded derivatives in
         equity-linked deposits(2)             n/a           97            -
        Other forecasted transactions            -            -            -
        ---------------------------------------------------------------------
        Derivative related amounts                  $     4,524  $       852
        ---------------------------------------------------------------------


                                                 As at January 31, 2009
                                       --------------------------------------
                                          Notional     Positive     Negative
                                            Amount   Fair Value   Fair Value
        ---------------------------------------------------------------------
        Interest rate swaps designated
         as cash flow hedges(1)        $   513,000  $    12,848  $        75
        Equity contracts(2)                  4,440            -          169
        Foreign exchange contracts(3)        4,280            4           37
        Embedded derivatives in
         equity-linked deposits(2)             n/a          184            -
        Other forecasted transactions            -            -            -
        ---------------------------------------------------------------------
        Derivative related amounts                  $    13,036  $       281
        ---------------------------------------------------------------------


                                                  As at April 30, 2008
                                       --------------------------------------
                                          Notional     Positive     Negative
                                            Amount   Fair Value   Fair Value
        ---------------------------------------------------------------------
        Interest rate swaps designated
         as cash flow hedges           $   693,000  $     3,632  $        74
        Equity contracts                     4,400          320            -
        Foreign exchange contracts          71,299           14          456
        Embedded derivatives in
         equity-linked deposits                n/a            -          316
        Other forecasted transactions            -            -            -
        ---------------------------------------------------------------------
        Derivative related amounts                  $     3,966  $       846
        ---------------------------------------------------------------------

        (1) Interest rate swaps outstanding at April 30, 2009 mature between
            May 2009 and June 2010.
        (2) Equity contracts and equity-linked deposits outstanding at
            April 30, 2009 mature between March 2010 and March 2011.
        (3) Foreign exchange contracts outstanding at April 30, 2009 mature
            between May 2009 and December 2009.

        n/a - not applicable.

        There were no forecasted transactions that failed to occur during the
        three and six months ended April 30, 2009.

    9.  Capital Stock

        Share Capital                  For the three months ended
                          ---------------------------------------------------
                                 April 30, 2009            April 30, 2008
        ---------------------------------------------------------------------
                            Number of                 Number of
                               Shares       Amount       Shares       Amount
        ---------------------------------------------------------------------
        Preferred Shares
         - Series 3
          Outstanding at
           beginning of
           period                   -  $         -            -  $         -
          Issued during
           the period       8,390,000      209,750            -            -
        ---------------------------------------------------------------------
          Outstanding at
           end of period    8,390,000      209,750            -            -
        ---------------------------------------------------------------------
        Common Shares
          Outstanding at
           beginning of
           period          63,468,132      222,010   63,146,077      220,217
          Issued on
           exercise or
           exchange of
           options            120,388          333       88,373          250
          Transferred
           from
           contributed
           surplus on
           exercise or
           exchange of
           options                  -          719            -          167
        ---------------------------------------------------------------------
          Outstanding at
           end of period   63,588,520      223,062   63,234,450      220,634
        ---------------------------------------------------------------------
        Share Capital                  $   432,812               $   220,634
        ---------------------------------------------------------------------


                                        For the six months ended
                          ---------------------------------------------------
                                 April 30, 2009            April 30, 2008
        ---------------------------------------------------------------------
                            Number of                 Number of
                               Shares       Amount       Shares       Amount
        ---------------------------------------------------------------------
        Preferred Shares
         - Series 3
          Outstanding at
           beginning of
           period                   -  $         -            -  $         -
          Issued during
           the period       8,390,000      209,750            -            -
        ---------------------------------------------------------------------
          Outstanding at
           end of period    8,390,000      209,750            -            -
        ---------------------------------------------------------------------
        Common Shares
          Outstanding at
           beginning of
           period          63,457,142      221,914   62,836,189      219,004
          Issued on
           exercise or
           exchange of
           options            131,378          393      398,261          900
          Transferred
           from
           contributed
           surplus on
           exercise or
           exchange of
           options                  -          755            -          730
        ---------------------------------------------------------------------
          Outstanding at
           end of period   63,588,520      223,062   63,234,450      220,634
        ---------------------------------------------------------------------
        Share Capital                  $   432,812               $   220,634
        ---------------------------------------------------------------------

        During March 2009, the Bank issued 8.4 million Preferred Units at
        $25 per unit, for total proceeds of $209.8 million. Of the total,
        5.4 million Preferred Units were issued by way of a private placement
        for total proceeds of $135.0 million, and 3.0 million were issued
        under a public offering for total proceeds of $74.8 million.

        The Preferred Units issued by way of the private placement and the
        public offering each consist of one Non-Cumulative 5-Year Rate Reset
        Preferred Share, Series 3 (Series 3 Preferred Shares) in the capital
        of the Bank with an issue price of $25.00 per share and 1.7857 and
        1.7800 common share purchase warrants, respectively. Each warrant is
        exercisable at a price of $14.00 to purchase one common share in the
        capital of the Bank until March 3, 2014.

        Holders of the Series 3 Preferred Shares 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 by the Board of Directors. The dividend rate on Series
        3 Preferred Shares will reset May 1, 2014 and every five years
        thereafter at a level of 500 basis points over the then current five-
        year Government of Canada bond yield. On April 30, 2014, and every
        five years thereafter, holders of Series 3 Preferred Shares will,
        subject to certain conditions, have the option to convert their
        shares to Non-Cumulative Floating Rate Preferred Shares, Series 4
        (Series 4 Preferred Shares). Holders of the Series 4 Preferred Shares
        will be entitled to a floating quarterly dividend rate equal to the
        90-day Canadian treasury bill rate plus 500 basis points, as and when
        declared by the Board of Directors.

        The Series 3 Preferred Shares are not redeemable prior to April 30,
        2014. Subject to the provisions of the Bank Act, the prior consent of
        OSFI and the provisions described in the prospectus for the public
        offering, on April 30, 2014 and on April 30 every five years
        thereafter, the Bank may redeem all or any part of the then
        outstanding Series 3 Preferred Shares at the Bank's option without
        the consent of the holder, by the payment of an amount in cash for
        each such share so redeemed of $25.00 together with all declared and
        unpaid dividends to the date fixed for redemption.

        Subject to the provisions of the Bank Act, the prior consent of OSFI
        and the provisions described in the prospectus for the public
        offering, on not more than 60 nor less than 30 days' notice, the Bank
        may redeem all or any part of the then outstanding Series 4 Preferred
        Shares at the Bank's option without the consent of the holder by the
        payment of an amount in cash for each such share so redeemed of: (i)
        $25.00 together with all declared and unpaid dividends to the date
        fixed for redemption in the case of redemptions on April 30, 2019 and
        on April 30 every five years thereafter; or (ii) $25.50 together with
        all declared and unpaid dividends to the date fixed for redemption in
        the case of redemptions on any other date on or after April 30, 2014.

        Warrants to Purchase Common Shares

                                   For the three and six months ended
                          ---------------------------------------------------
                                April 30, 2009            April 30, 2008
        ---------------------------------------------------------------------
                            Number of     Exercise    Number of     Exercise
                             Warrants        Price     Warrants        Price
        ---------------------------------------------------------------------
        Outstanding at
         beginning of
         period                     -  $         -            -  $         -
        Issued during
         the period        14,964,980        14.00
        ---------------------------------------------------------------------
        Outstanding at
         end of period     14,964,980  $     14.00            -  $         -
        ---------------------------------------------------------------------

        The warrants issued during March 2009 were part of the Preferred Unit
        issuance discussed in the section above.

    10. Employee Stock Options

                                       For the three months ended
                          ---------------------------------------------------
                                April 30, 2009            April 30, 2008
        ---------------------------------------------------------------------
                                          Weighted                  Weighted
                                           Average                   Average
                            Number of     Exercise    Number of     Exercise
                              Options        Price      Options        Price
        ---------------------------------------------------------------------
        Options
          Balance at
           beginning of
           period           6,173,917  $     19.41    5,087,269  $     19.26
          Granted              16,500         8.58        5,500        22.98
          Exercised or
           exchanged         (445,000)       10.06     (120,477)        8.97
          Forfeited        (1,301,162)       27.12      (31,050)       21.55
        ---------------------------------------------------------------------
        Balance at end
         of period          4,444,255  $     18.05    4,941,242  $     19.50
        ---------------------------------------------------------------------


                                        For the six months ended
                          ---------------------------------------------------
                                April 30, 2009            April 30, 2008
        ---------------------------------------------------------------------
                                          Weighted                  Weighted
                                           Average                   Average
                            Number of     Exercise    Number of     Exercise
                              Options        Price      Options        Price
        ---------------------------------------------------------------------
        Options
          Balance at
           beginning of
           period           5,204,882  $     20.83    4,911,277  $     16.96
          Granted           1,006,535        11.71      601,342        31.11
          Exercised or
           exchanged         (466,000)       10.06     (529,527)        8.90
          Forfeited        (1,301,162)       27.12      (41,850)       22.44
        ---------------------------------------------------------------------
        Balance at end
         of period          4,444,255  $     18.05    4,941,242  $     19.50
        ---------------------------------------------------------------------
        Exercisable at
         end of period      1,458,500  $     14.25    1,158,050  $      9.74
        ---------------------------------------------------------------------

        The terms of the share incentive plan allow the holders of vested
        options a cashless settlement alternative whereby the option holder
        can either (a) elect to receive shares by delivering cash to the Bank
        in the amount of the option exercise price or (b) elect to receive
        the number of shares equivalent to the excess of the market value of
        the shares under option over the exercise price. Of the 466,000
        options (2008 - 529,527) exercised or exchanged in the six months
        ended April 30, 2009, option holders exchanged the rights to 432,000
        options (2008 - 419,077) and received 97,378 shares (2008 - 287,811)
        in return under the cashless settlement alternative.

        For the six months ended April 30, 2009, salary expense of $4,581
        (2008 - $2,704) was recognized relating to the estimated fair value
        of options granted since November 1, 2002, which included the stock
        option forfeiture discussed below. 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
        2.1% (2008 - 4.1%), (ii) expected option life of 4.0 years (2008 -
        4.0 years), (iii) expected volatility of 35% (2008 - 21%), and (iv)
        expected dividends of 4.0% (2008 - 1.3%). The weighted average fair
        value of options granted was estimated at $1.91 (2008 - $6.66) per
        share.

        During the period, certain employees voluntarily and irrevocably
        released, without consideration, all right, title and interest in
        1,283,062 stock options. The unamortized fair value of these
        forfeited options ($1,696) has been recognized as additional non-tax
        deductible salary expense with an offsetting increase to contributed
        surplus.

        During the second quarter of 2009, 750,000 additional options, which
        were granted in the first quarter of 2009, received shareholder and
        TSX approval.

        Further details relating to stock options outstanding and exercisable
        at April 30, 2009 follow:

                            Options Outstanding          Options Exercisable
                       ------------------------------------------------------
                                   Weighted
                                    Average
                                  Remaining
                                   Contrac-   Weighted              Weighted
                                       tual    Average               Average
    Range of Exercise  Number of       Life   Exercise  Number of   Exercise
     Prices              Options     (years)     Price    Options      Price
    -------------------------------------------------------------------------
    $ 8.58 to $10.84     414,300        0.5  $   10.04    397,800  $   10.11
    $11.18 to $17.58   2,038,135        2.9      13.83  1,052,700      15.77
    $19.16 to $21.46   1,066,290        2.6      21.45      8,000      19.98
    $22.29 to $26.38     697,250        3.3      25.64          -          -
    $28.11 to $31.18     228,280        3.6      31.13          -          -
    -------------------------------------------------------------------------
    Total              4,444,255        2.7  $   18.05  1,458,500  $   14.25
    -------------------------------------------------------------------------

    11. Contingent Liabilities and Commitments

        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, 2008 (see pages 80 to 81 of the 2008 Annual Report) and
        include:

                                             As at        As at        As at
                                          April 30   January 31     April 30
                                              2009         2009         2008
        ---------------------------------------------------------------------
        Guarantees and standby letters
         of credit
          Balance outstanding          $   218,269  $   217,270  $   231,837
        Business credit cards
          Total approved limit              10,753       11,763       11,169
          Balance outstanding                2,204        2,703        2,326
        ---------------------------------------------------------------------

        In the ordinary course of business, the Bank and its subsidiaries are
        party to legal proceedings. Based on current knowledge, management
        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. Financial Instruments

        As a financial institution, most of the Bank's balance sheet is
        comprised of financial instruments and the majority of net income
        results from gains, losses, income and expenses related to the same.

        Financial instrument assets include cash resources, securities,
        securities purchased under resale agreements, loans and derivative
        financial instruments. Financial instrument liabilities include
        deposits, securities purchased under reverse resale agreements,
        derivative financial instruments and subordinated debentures.

        The use of financial instruments exposes the Bank to credit,
        liquidity and market risk. A discussion of how these and other risks
        are managed can be found in the 2008 consolidated annual financial
        statements.

        The value of financial assets recorded on the consolidated balance
        sheet at April 30, 2009 at fair value (cash, securities, securities
        purchased under resale agreements and derivatives) was determined
        using published market prices quoted in active markets for 95% (2008
        - 90%) of the portfolio and estimated using a valuation technique
        based on observable market data for 5% (2008 - 10%) of the portfolio.
        The value of liabilities recorded on the consolidated balance sheet
        at fair value (derivatives and securities purchased under reverse
        resale agreements) was determined for the entire portfolio using a
        valuation technique based on observable market data.

        The table below sets out the fair values of financial instruments
        (including certain derivatives) using the valuation methods and
        assumptions outlined in the 2008 consolidated annual financial
        statements. The table does not include assets and liabilities that
        are not considered financial instruments.

                                                    April 30, 2009
                                      ---------------------------------------
                                                                  Fair Value
                                                                 Over (Under)
                                        Book Value   Fair Value   Book Value
        ---------------------------------------------------------------------
        Assets
          Cash resources               $   572,052  $   572,052  $         -
          Securities                     1,649,635    1,649,635            -
          Securities purchased
           under resale agreements               -            -            -
          Loans(1)                       9,112,752    9,157,519       44,767
          Other assets(2)                   86,702       86,702            -
          Derivative related                 4,524        4,524            -
        Liabilities
          Deposits(1)                    9,731,528    9,881,520      149,992
          Other liabilities(3)             364,358      364,358            -
          Subordinated debentures          375,000      382,917        7,917
          Derivative related                   852          852            -
        ---------------------------------------------------------------------


                                                  January 31, 2009
                                      ---------------------------------------
                                                                  Fair Value
                                                                 Over (Under)
                                        Book Value   Fair Value   Book Value
        ---------------------------------------------------------------------
        Assets
          Cash resources               $   470,039  $   470,039  $         -
          Securities                     1,238,769    1,238,769            -
          Securities purchased
           under resale agreements          15,000       15,000            -
          Loans(1)                       9,069,187    9,066,945       (2,242)
          Other assets(2)                   83,885       83,885            -
          Derivative related                12,852       12,852            -
        Liabilities
          Deposits(1)                    9,537,951    9,630,012       92,061
          Other liabilities(3)             242,895      242,895            -
          Subordinated debentures          375,000      379,288        4,288
          Derivative related                    97           97            -
        ---------------------------------------------------------------------

        (1) Loans and deposits exclude deferred premiums and deferred
            revenue, which are not financial instruments.
        (2) Other assets exclude land, buildings and equipment, goodwill and
            other intangible assets, reinsurers' share of unpaid claims and
            adjustment expenses, future income tax asset, prepaid and
            deferred expenses, financing costs and other items that are not
            financial instruments.
        (3) Other liabilities exclude future income tax liability, deferred
            revenue, unearned insurance premiums and other items that are not
            financial instruments.
        (4) For further information on interest rates associated with
            financial assets and liabilities, including derivative
            instruments, refer to Note 13.

    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, 2008 (see page 86
        of the 2008 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
        ---------------------------------------------------------------------
        April 30, 2009
        Assets
        Cash resources
         and securities   $       124  $       195  $       279  $       598
        Loans                   5,113          649          839        6,601
        Other assets                -            -            -            -
        Derivative
         financial
         instruments(1)            10           83          211          304
        ---------------------------------------------------------------------
        Total                   5,247          927        1,329        7,503
        ---------------------------------------------------------------------
        Liabilities
         and Equity
        Deposits                3,328          878        2,175        6,381
        Other liabilities          86            6           25          117
        Debentures                  -            -           60           60
        Shareholders' equity        -            -            -            -
        Derivative financial
         instruments(1)           330            -            -          330
        ---------------------------------------------------------------------
        Total             $     3,744  $       884  $     2,260  $     6,888
        ---------------------------------------------------------------------
        Interest Rate
         Sensitive Gap    $     1,503  $        43  $      (931) $       615
        ---------------------------------------------------------------------
        Cumulative Gap    $     1,503  $     1,546  $       615  $       615
        ---------------------------------------------------------------------
        Cumulative Gap
         as a percentage
         of total assets        12.8%        13.1%         5.2%         5.2%
        ---------------------------------------------------------------------

        January 31, 2009
        Assets            $     5,253  $       717  $     1,345  $     7,315
        Liabilities
         and equity             3,958          641        2,284        6,883
        ---------------------------------------------------------------------
        Interest rate
         sensitive gap    $     1,295  $        76  $      (939) $       432
        ---------------------------------------------------------------------
        Cumulative gap    $     1,295  $     1,371  $       432  $       432
        ---------------------------------------------------------------------
        Cumulative gap
         as a Percentage
         of total assets        11.3%        12.0%         3.8%         3.8%
        ---------------------------------------------------------------------

        April 30, 2008
        Cumulative gap    $       376  $       434  $        99  $        99
        ---------------------------------------------------------------------
        Cumulative gap
         as a percentage
         of total assets         3.5%         4.0%         0.9%         0.9%
        ---------------------------------------------------------------------


                                                           Non-
                            1 Year to    More than     interest
        ($ millions)          5 Years      5 Years    Sensitive        Total
        ---------------------------------------------------------------------
        April 30, 2009
        Assets
        Cash resources
         and securities   $     1,515  $        79  $        30  $     2,222
        Loans                   2,433           80          (72)       9,042
        Other assets                -            -          187          187
        Derivative
         financial
         instruments(1)            26            -            -          330
        ---------------------------------------------------------------------
        Total                   3,974          159          145       11,781
        ---------------------------------------------------------------------
        Liabilities
         and Equity
        Deposits                3,245          105          (18)       9,713
        Other liabilities          35            8          267          427
        Debentures                240           75            -          375
        Shareholders' equity        -            -          936          936
        Derivative financial
         instruments(1)             -            -            -          330
        ---------------------------------------------------------------------
        Total             $     3,520  $       188  $     1,185  $    11,781
        ---------------------------------------------------------------------
        Interest Rate
         Sensitive Gap    $       454  $       (29) $    (1,040) $         -
        ---------------------------------------------------------------------
        Cumulative Gap    $     1,069  $     1,040  $         -  $         -
        ---------------------------------------------------------------------
        Cumulative Gap
         as a percentage
         of total assets         9.1%         8.8%           -%           -%
        ---------------------------------------------------------------------

        January 31, 2009
        Assets            $     3,812  $       149  $       148  $    11,424
        Liabilities
         and equity             3,439          188          914       11,424
        ---------------------------------------------------------------------
        Interest rate
         sensitive gap    $       373  $       (39) $      (766) $         -
        ---------------------------------------------------------------------
        Cumulative gap    $       805  $       766  $         -  $         -
        ---------------------------------------------------------------------
        Cumulative gap
         as a Percentage
         of total assets         7.0%         6.7%           -%           -%
        ---------------------------------------------------------------------

        April 30, 2008
        Cumulative gap    $       814  $       727  $         -  $         -
        ---------------------------------------------------------------------
        Cumulative gap
         as a percentage
         of total assets         7.6%         6.8%           -%           -%
        ---------------------------------------------------------------------

        (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 for each class of
        financial assets and liabilities are shown below:


                             Floating
                             Rate and                                  Total
                             Within 1       1 to 3     3 Months     Within 1
        April 30, 2009          Month       Months    to 1 Year         Year
        ---------------------------------------------------------------------
        Total assets             3.5%         2.6%         4.8%         3.6%
        Total liabilities         0.8          2.7          3.6          1.9
        ---------------------------------------------------------------------
        Interest rate
         sensitive gap           2.7%       (0.1)%         1.2%         1.7%
        ---------------------------------------------------------------------

        January 31, 2009
        ---------------------------------------------------------------------
        Total assets             3.9%        3.1%          5.0%         4.0%
        Total liabilities         1.3         2.5           3.9          2.3
        ---------------------------------------------------------------------
        Interest rate
         sensitive gap           2.6%        0.6%          1.1%         1.7%
        ---------------------------------------------------------------------

        April 30, 2008
        ---------------------------------------------------------------------
        Total assets             5.4%        4.6%          5.3%         5.3%
        Total liabilities         2.8         3.9           4.1          3.2
        ---------------------------------------------------------------------
        Interest rate
         sensitive gap           2.6%        0.7%          1.2%         2.1%
        ---------------------------------------------------------------------


                            1 Year to    More than
        April 30, 2009        5 Years      5 Years        Total
        ---------------------------------------------------------
        Total assets             5.0%         6.6%         4.1%
        Total liabilities         4.0          5.8          2.7
        ---------------------------------------------------------
        Interest rate
         sensitive gap           1.0%         0.8%         1.4%
        ---------------------------------------------------------

        January 31, 2009
        ---------------------------------------------------------
        Total assets             5.4%         6.4%         4.5%
        Total liabilities         4.2          5.8          2.9
        ---------------------------------------------------------
        Interest rate
         sensitive gap           1.2%         0.6%         1.6%
        ---------------------------------------------------------

        April 30, 2008
        ---------------------------------------------------------
        Total assets             5.6%         5.3%         5.4%
        Total liabilities         4.3          5.8          3.6
        ---------------------------------------------------------
        Interest rate
         sensitive gap           1.3%       (0.5)%         1.8%
        ---------------------------------------------------------

        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 5.6% (January 31, 2009 - 5.8%)
        and decrease other comprehensive income $23,383 (January 31, 2009 -
        $21,444) net of tax, respectively over the following twelve months. A
        one-percentage point decrease in all interest rates would increase
        net interest income by approximately 4.8% (January 31, 2009 - 7.0%
        decrease to net interest income) and increase other comprehensive
        income $23,383 (January 31, 2009 - $21,444) net of tax.

    14. Segmented Information

        The Bank operates principally in two industry segments - banking and
        trust, and insurance. These two segments differ in products and
        services but are both within the same geographic region. The banking
        and trust segment provides banking, trust and wealth management
        services to personal clients, small to medium-sized commercial
        business clients and institutional clients primarily in Western
        Canada. The insurance segment provides home and auto insurance to
        individuals in British Columbia and Alberta.


                                                 Banking and Trust
                                       --------------------------------------
                                                 Three months ended
                                       --------------------------------------
                                          April 30   January 31     April 30
                                              2009         2009         2008
        ---------------------------------------------------------------------
        Net interest income (teb)(1)   $    51,399  $    53,101  $    54,325
        Less teb adjustment                  1,528        1,438        1,252
        ---------------------------------------------------------------------
        Net interest income per
         financial statements               49,871       51,663       53,073
        Other income(2)                     18,125       20,218       13,948
        ---------------------------------------------------------------------
        Total revenues                      67,996       71,881       67,021
        Provision for credit losses          3,369        3,369        2,962
        Non-interest expenses               37,381       33,910       31,207
        Provision for income taxes           7,785        9,713        9,779
        Non-controlling interest
         in subsidiary                          56           67            -
        ---------------------------------------------------------------------
        Net income                     $    19,405  $    24,822  $    23,073
        ---------------------------------------------------------------------
        Total average assets
         ($ millions)(3)               $    11,024  $    10,711  $     9,730
        ---------------------------------------------------------------------


                                                      Insurance
                                       --------------------------------------
                                                  Three months ended
                                       --------------------------------------
                                          April 30   January 31     April 30
                                              2009         2009         2008
        ---------------------------------------------------------------------
        Net interest income (teb)(1)   $     1,413  $     1,495  $     1,334
        Less teb adjustment                    147          148          100
        ---------------------------------------------------------------------
        Net interest income per
         financial statements                1,266        1,347        1,234
        Other income(2)                      4,445        2,133        4,147
        ---------------------------------------------------------------------
        Total revenues                       5,711        3,480        5,381
        Provision for credit losses              -            -            -
        Non-interest expenses                2,613        2,495        2,246
        Provision for income taxes             923          188          906
        Non-controlling interest
         in subsidiary                           -            -            -
        ---------------------------------------------------------------------
        Net income                     $     2,175  $       797  $     2,229
        ---------------------------------------------------------------------
        Total average assets
         ($ millions)(3)               $       192  $       188  $       180
        ---------------------------------------------------------------------



                                                        Total
                                       --------------------------------------
                                                  Three months ended
                                       --------------------------------------
                                          April 30   January 31     April 30
                                              2009         2009         2008
        ---------------------------------------------------------------------
        Net interest income (teb)(1)   $    52,812  $    54,596  $    55,659
        Less teb adjustment                  1,675        1,586        1,352
        ---------------------------------------------------------------------
        Net interest income per
         financial statements               51,137       53,010       54,307
        Other income                        22,570       22,351       18,095
        ---------------------------------------------------------------------
        Total revenues                      73,707       75,361       72,402
        Provision for credit losses          3,369        3,369        2,962
        Non-interest expenses               39,994       36,405       33,453
        Provision for income taxes           8,708        9,901       10,685
        Non-controlling interest
         in subsidiary                          56           67            -
        ---------------------------------------------------------------------
        Net income                     $    21,580  $    25,619  $    25,302
        ---------------------------------------------------------------------
        Total average assets
         ($ millions)(3)               $    11,216  $    10,899  $     9,910
        ---------------------------------------------------------------------



                                    Banking and Trust          Insurance
                                 --------------------------------------------
                                     Six months ended      Six months ended
    -------------------------------------------------------------------------
                                   April 30   April 30   April 30   April 30
                                       2009       2008       2009       2008
    -------------------------------------------------------------------------
    Net interest income (teb)(1)  $ 104,500  $ 109,967  $   2,908  $   2,738
    Less teb adjustment               2,966      2,490        295        199
    -------------------------------------------------------------------------
    Net interest income per
     financial statements           101,534    107,477      2,613      2,539
    Other income(2)                  38,343     28,343      6,578      7,375
    -------------------------------------------------------------------------
    Total revenues                  139,877    135,820      9,191      9,914
    Provision for credit losses       6,738      5,775          -          -
    Non-interest expenses            71,291     60,711      5,108      4,566
    Provision for income taxes       17,498     21,821      1,111      1,654
    Non-controlling interest in
     subsidiary                         123          -          -          -
    -------------------------------------------------------------------------
    Net income                    $  44,227  $  47,513  $   2,972  $   3,694
    -------------------------------------------------------------------------
    Total average assets
     ($ millions)(3)              $  10,867  $   9,579  $     190  $     180
    -------------------------------------------------------------------------


                                          Total
                                 ----------------------
                                    Six months ended
    ---------------------------------------------------
                                   April 30   April 30
                                       2009       2008
    ---------------------------------------------------
    Net interest income (teb)(1)  $ 107,408  $ 112,705
    Less teb adjustment               3,261      2,689
    ---------------------------------------------------
    Net interest income per
     financial statements           104,147    110,016
    Other income(2)                  44,921     35,718
    ---------------------------------------------------
    Total revenues                  149,068    145,734
    Provision for credit losses       6,738      5,775
    Non-interest expenses            76,399     65,277
    Provision for income taxes       18,609     23,475
    Non-controlling interest in
     subsidiary                         123          -
    ---------------------------------------------------
    Net income                    $  47,199  $  51,207
    ---------------------------------------------------
    Total average assets
     ($ millions)(3)              $  11,057  $   9,759
    ---------------------------------------------------

    (1) Taxable Equivalent Basis (teb) - Most financial institutions 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
        generally accepted accounting principles and therefore may not be
        comparable to similar measures presented by other financial
        institutions.
    (2) Other income for the insurance segment is presented net of net
        claims, adjustment expenses and policy acquisition expenses and
        includes gains on sale of securities.
    (3) Assets are disclosed on an average daily balance basis as this
        measure is most relevant to a financial institution and is the
        measure reviewed by management.

    15. Capital Management

        Capital for Canadian financial institutions is managed and reported
        in accordance with a capital management framework specified by OSFI
        called Basel II.

        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.

        During March 2009, the Bank issued 8.4 million Preferred Units for
        total proceeds of $209.8 million, which qualify as Tier 1 capital
        (refer to Note 9). The Preferred Units were issued by way of the
        private placement and the public offering each consist of one Non-
        Cumulative 5-Year Rate Reset Preferred Share, Series 3 (Series 3
        Preferred Shares) in the capital of the Bank with an issue price of
        $25.00 per share and 1.7857 and 1.7800 common share purchase
        warrants, respectively. Each warrant is exercisable at a price of
        $14.00 to purchase one common share in the capital of the Bank until
        March 3, 2014 (refer to note 9).

        Additional information about the Bank's capital management practices
        is provided in Note 31 to the 2008 audited financial statements
        beginning on page 89 of the 2008 Annual Report.

        Capital Structure and Regulatory Ratios

                                             As at        As at        As at
                                          April 30   January 31     April 30
                                              2009         2009         2008
        ---------------------------------------------------------------------
        Capital
          Tier 1                       $ 1,013,204  $   787,859  $   739,724
          Total                          1,403,487    1,180,204    1,117,667
        ---------------------------------------------------------------------
        Capital ratios
          Tier 1                             11.0%         8.7%         9.3%
          Total                               15.2         13.0         14.0
        Assets to capital multiple           8.2 x        9.3 x        9.1 x
        ---------------------------------------------------------------------

        During the three and six months ended April 30, 2009, the Bank
        complied with all internal and external capital requirements.

    16. Future Accounting Changes

        International Financial Reporting Standards

        The CICA will transition Canadian GAAP for publicly accountable
        entities to International Financial Reporting Standards (IFRS). The
        Bank's consolidated financial statements will be prepared in
        accordance with IFRS for the fiscal year commencing November 1, 2011
        and will include comparative information for the prior year.

        The Bank has embarked on a four stage project to identify and
        evaluate the impact of the transition to IFRS on the consolidated
        financial statements and develop a plan to complete the transition.
        The project plan includes the following phases - diagnostic, design
        and planning, solution development, and implementation. The
        diagnostic phase is complete and the design and planning phase is
        underway and expected to be completed by the end of fiscal 2009.

        The impact of the transition to IFRS on the Bank's consolidated
        financial statements is not yet determinable. Additional information
        regarding the Bank's plan and the expected impact of the transition
        will be provided as the project moves forward.

    -------------------------------------------------------------------------
    Shareholder Information
    -------------------------------------------------------------------------

    Head Office                       Transfer Agent and Registrar

    Canadian Western Bank & Trust     Valiant Trust Company
    Suite 2300, Canadian Western      Suite 310, 606 - 4th Street S.W.
     Bank Place                       Calgary, AB T2P 1T1
    10303 Jasper Avenue               Telephone: (403) 233-2801
    Edmonton, AB T5J 3X6              Fax: (403) 233-2857
    Telephone: (780) 423-8888         Website: www.valianttrust.com
    Fax: (780) 423-8897               E-mail: inquiries@valianttrust.com
    Website: www.cwbankgroup.com

    Subsidiary Offices                Eligible Dividends Designation

    Canadian Western Trust Company    CWB designates all dividends for both
    Suite 600, 750 Cambie Street      common and preferred shares paid
    Vancouver, BC  V6B 0A2            to Canadian residents as "eligible
    Toll-free: 1-800-663-1124         dividends", as defined in the Income
    Fax: (604) 669-6069               Tax Act (Canada), unless otherwise
    Website: www.cwt.ca               noted.

    Canadian Direct Insurance         Investor Relations
     Incorporated
    Suite 600, 750 Cambie Street      For further financial information
    Vancouver, BC V6B 0A2             contact:
    Telephone: (604) 699-3678         Kirby Hill, CFA
    Fax: (604) 699-3851               Assistant Vice President, Investor and
    Website: www.canadiandirect.com    Public Relations
                                      Canadian Western Bank
    Valiant Trust Company             Telephone: (780) 441-3770
    Suite 310, 606 - 4th Street S.W.  Toll-free: 1-800-836-1886
    Calgary, AB T2P 1T1               Fax: (780) 423-8899
    Toll-free: 1-866-313-1872         E-mail:
    Fax: (403) 233-2857                InvestorRelations@cwbankgroup.com
    Website: www.valianttrust.com
                                      Online Investor Information
    Adroit Investment Management Ltd.
    Suite 2020, 10060 Jasper Avenue   Additional investor information
    Edmonton, AB  T5J 3R8             including supplemental financial
    Telephone: (780) 429-3500         information and a corporate
    Fax: (780) 429-9680               presentation is available on CWB's
    Website:                          website at www.cwbankgroup.com.
     www.adroitinvestments.ca
                                      Quarterly Conference Call and Webcast

    Stock Exchange Listings           CWB's quarterly conference call and
                                      live audio webcast will take place on
    The Toronto Stock Exchange        June 4, 2009 at 3:00 p.m. ET.
      Common Shares: CWB              The webcast will be archived on the
      Series 3 Preferred              Bank's website at www.cwbankgroup.com
       Shares: CWB.PR.A               for sixty days. A replay of the
      Common Share Purchase           conference call will be available until
       Warrants: CWB.WT               June 18, 2009 by dialing (416) 640-1917
                                      or toll free (877) 289-8525 and
                                      entering passcode 21305850, followed
                                      by the pound sign.
    





For further information:

For further information: Larry M. Pollock, President and Chief Executive
Officer, Canadian Western Bank, Phone: (780) 423-8888; Kirby Hill, CFA,
Assistant Vice President, Investor and Public Relations, Canadian Western
Bank, Phone: (780) 441-3770, E-mail: kirby.hill@cwbank.com

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Canadian Western Bank

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