CWB reports solid third quarter earnings on record total revenues



    
          Outlook for continued improvements in net interest margin
                  Economic uncertainty expected to continue
           Dividends declared on both common and preferred shares
    

    EDMONTON, Sept. 3 /CNW/ - Canadian Western Bank (CWB on TSX) today
announced solid third quarter results in a recessionary and uncertain economic
environment. CWB's results were highlighted by record total revenues and the
achievement of its 85th consecutive profitable quarter. Third quarter net
income of $28.7 million increased 9% compared to the same quarter last year
reflecting the positive contribution from strong 12% year-over-year loan
growth and very strong other income, offset by a net interest margin that was
12 basis points lower. Diluted earnings per common share of $0.38 were down 7%
and reflect the net impact of the preferred shares issued in March 2009. Total
loans increased 1% in the quarter, 6% year-to-date and 12% over one year ago.
Compared to the prior quarter, revenues and overall profitability were
positively affected by a marked 20 basis point improvement in net interest
margin to 2.13%, on a taxable equivalent basis (teb - see definition following
Financial Highlights table). Year-to-date net income of $75.9 million was 2%
lower compared to the same period last year, while diluted earnings per common
share decreased 10% to $1.08, reflecting the net impact of the preferred
shares issued.

    
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    Third Quarter Highlights:
    (three months ended July 31, 2009 compared with three months ended
     July 31, 2008 unless otherwise noted)
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    -   Net income of $28.7 million, up 9%.
    -   Diluted earnings per common share of $0.38, down 7%.
    -   Record total revenues (teb(1)) of $85.5 million, up 12%.
    -   Net interest margin (teb) of 2.13%, down 12 basis points; up 20 basis
        points from the previous quarter.
    -   Tier 1 capital ratio of 11.2% and total capital ratio of 15.4%; up
        from 11.0% and 15.2% respectively in the previous quarter.
    -   Loan growth of 1% in the quarter, 6% year-to-date and 12% over the
        past twelve months.
    -   Record quarterly net income from the insurance segment of
        $3.2 million, up 30%.
    -   Appointment of Canadian Western Trust Company as trustee for a major
        Canadian investment dealer.
    -   Introduction of a dividend reinvestment plan subsequent to quarter
        end.

    (1) Taxable equivalent basis. See definition following
        Financial Highlights table.
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    On September 2, 2009, CWB's Board of Directors declared a cash dividend
of $0.11 per common share, payable on October 1, 2009 to shareholders of
record on September 17, 2009. This quarterly dividend is unchanged from both
the previous quarter and one year ago. The Board of Directors also declared a
cash dividend of $0.453125 per Series 3 Preferred Share payable on October 31,
2009 to shareholders of record on October 22, 2009. On August 13, 2009,
subsequent to quarter end, CWB introduced a dividend reinvestment plan. Under
the plan, CWB has currently elected to issue common shares from treasury at a
2% discount from the average market price (further details on the dividend
reinvestment plan are available at
http://www.cwbankgroup.com/investor_relations/drip.htm).
    Banking and trust earnings of $25.5 million were up 7% compared to one
year ago as earnings due to strong loan growth and a 29% increase in other
income, including an additional $5.4 million of gains on sale of securities,
more than offset the impact from the compressed net interest margin and higher
non-interest expenses. Quarterly net income from insurance operations was a
record $3.2 million, up 30% compared to a year earlier. On a year-to-date
basis, banking and trust earnings of $69.7 million were down 2% from 2008,
while net income from insurance operations was unchanged at $6.2 million.
    "We are pleased with both our third quarter and year-to-date results,
particularly given the impact from margin compression and a recessionary
environment," said Larry Pollock, President and CEO. "While positive signs are
clearly evident, economic uncertainties remain. We are committed to prudently
managing through these challenging times while continuing to support the needs
of our customers. Based on our current view, overall credit quality is
relatively stable. The level of gross impaired loans will fluctuate as we
progress through the current cycle, but we expect actual write-offs will
remain within our range of acceptable levels. As expected, net interest margin
showed good improvement over the prior quarter and we believe this trend will
continue."
    "CWB's performance through the most difficult markets in decades for
financial institutions underscores the value of our disciplined strategies.
Our employees must also be commended, as they continue to do an excellent job.
Achieving robust asset growth has not recently been the primary focus for us,
but CWB still has tremendous growth potential. We are very well positioned in
our primary markets, which should be poised for solid economic recovery once
major global economies begin to expand. We also continue to evaluate the
potential to grow via acquisition. While there are many buying opportunities
in today's markets, high quality assets or businesses that are accretive and
fit strategically are more difficult to identify. Our strong capital position
provides us flexibility and we believe that patience is important for both the
Bank and our shareholders at this time," added Pollock.

    
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    Financial Highlights
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                                 For the three months ended
    (unaudited)           -------------------------------------- Change from
    ($ thousands, except      July 31     April 30      July 31      July 31
     per share amounts)          2009         2009         2008         2008
    -------------------------------------------------------------------------
    Results of Operations
      Net interest income
       (teb - see below)  $    60,934  $    52,812  $    57,290            6%
      Less teb adjustment       2,189        1,675        1,442           52
    -------------------------------------------------------------------------
      Net interest income
       per financial
       statements              58,745       51,137       55,848            5
      Other income             24,604       22,570       19,085           29
      Total revenues (teb)     85,538       75,382       76,375           12
      Total revenues           83,349       73,707       74,933           11
      Net income               28,729       21,580       26,327            9
      Earnings per common
       share
        Basic(1)                 0.39         0.30         0.42           (7)
        Diluted(2)               0.38         0.30         0.41           (7)
      Return on common
       shareholders'
       equity(3)                 13.4%        11.0%        16.0%   (260)bp(4)
      Return on assets(5)        0.87         0.70         1.03          (16)
      Efficiency ratio(6)
       (teb)                     47.0         53.1         45.2          180
      Efficiency ratio           48.2         54.3         46.1          210
      Net interest margin
       (teb)(7)                  2.13         1.93         2.25          (12)
      Net interest margin        2.05         1.87         2.19          (14)
      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  $      0.11            -%
      Book value                11.87        11.42        10.47           13
      Closing market value      18.19        13.35        25.00          (27)
      Common shares
       outstanding
       (thousands)             63,738       63,589       63,342            1
    -------------------------------------------------------------------------
    Balance Sheet and
     Off-Balance Sheet
     Summary
      Assets              $11,331,377  $11,450,625  $10,056,644           13%
      Loans                 9,137,763    9,041,518    8,168,748           12
      Deposits              9,393,809    9,713,334    8,686,336            8
      Subordinated
       debentures             375,000      375,000      410,000           (9)
      Shareholders' equity    966,232      935,753      663,401           46
      Assets under
       administration       4,751,886    4,472,060    4,498,545            6
      Assets under
       management             835,613      816,600            -           nm
    -------------------------------------------------------------------------
    Capital Adequacy(8)
    Tangible common equity
     to risk-weighted
     assets(9)                    7.9%         7.6%         8.0%       (10)bp
      Tier 1 ratio               11.2         11.0          9.2          200
      Total ratio                15.4         15.2         14.0          140
    -------------------------------------------------------------------------


                          For the nine months ended
    (unaudited)           ------------------------- Change from
    ($ thousands, except      July 31      July 31      July 31
     per share amounts)          2009         2008         2008
    ------------------------------------------------------------
    Results of Operations
      Net interest income
       (teb - see below)  $   168,342  $   169,995          (1)%
      Less teb adjustment       5,450        4,131           32
    ------------------------------------------------------------
      Net interest income
       per financial
       statements             162,892      165,864           (2)
      Other income             69,525       54,803           27
      Total revenues (teb)    237,867      224,798            6
      Total revenues          232,417      220,667            5
      Net income               75,928       77,534           (2)
      Earnings per common
       share
        Basic(1)                 1.10         1.23          (11)
        Diluted(2)               1.08         1.20          (10)
      Return on common
       shareholders'
       equity(3)                 13.0%        16.3%   (330)bp(4)
      Return on assets(5)        0.84         1.05          (21)
      Efficiency ratio(6)
       (teb)                     49.0         44.4          460
      Efficiency ratio           50.2         45.2          500
      Net interest margin
       (teb)(7)                  2.02         2.29          (27)
      Net interest margin        1.95         2.24          (29)
      Provision for credit
       losses as a
       percentage of
       average loans             0.15         0.15            -
    ------------------------------------------------------------
    Per Common Share
      Cash dividends      $      0.33  $      0.31            6%
      Book value                11.87        10.47           13
      Closing market value      18.19        25.00          (27)
      Common shares
       outstanding
       (thousands)            63,738        63,342            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 solid third quarter
results amidst a recessionary environment and an uncertain economic outlook.
Highlights included the achievement of record total revenues and the 85th
consecutive profitable quarter, a period spanning more than 21 years.
    Third quarter net income of $28.7 million was up 9% ($2.4 million)
compared to the prior year, while diluted earnings per common share were down
7% ($0.03) to $0.38, and reflects the net impact of the preferred shares
issued in March 2009 estimated at $0.04 per diluted common share. Record total
revenues, on a taxable equivalent basis (teb - see definition following
Financial Highlights table), of $85.5 million increased 12% ($9.2 million) on
strong loan growth and a 29% ($5.5 million) increase in other income, offset
by a lower net interest margin.
    Compared to last quarter, consolidated net income increased 33% as the
combined positive impact from a marked 20 basis point improvement in net
interest margin (teb) to 2.13%, strong other income and three additional
revenue earning days more than offset slightly higher non-interest expenses.
Diluted earnings per common share were up 27% from last quarter reflecting the
items already noted. On a year-to-date basis, net income declined 2% from the
same period last year to $75.9 million, while diluted earnings per share
decreased 10% to $1.08.
    The Bank's very strong Tier 1 and total capital ratios at July 31, 2009
of 11.2% and 15.4%, respectively, remained well above regulatory minimums and
are also higher than CWB's targeted capital thresholds. While these very
strong ratios have a negative impact on overall profitability, they provide
considerable flexibility to pursue accretive growth opportunities. Management
continues to evaluate opportunities to deploy capital for the long-term
benefit of CWB shareholders.
    Third quarter return on equity of 13.4% decreased 260 basis points
compared to a year earlier, but was up 240 basis points over the prior
quarter. Return on assets of 0.87% declined 16 basis points from a year
earlier, but increased 17 basis points from the previous quarter. Compared to
last year, lower profitability ratios are mainly attributed to the compressed
net interest margin and the net impact from the preferred shares issued in
March 2009.

    Common Share Price Performance

    CWB shares ended the third quarter at $18.19, compared to $25.00 a year
earlier. Including reinvested dividends, the total return for shareholders
over the one year holding period ended July 31, 2009 was negative 25%. This
compares to a nil change for the Total Return S&P/TSX Financials Index of over
the same one year period.

    Dividends

    On September 2, 2009, CWB's Board of Directors declared a cash dividend
of $0.11 per common share, payable on October 1, 2009 to shareholders of
record on September 17, 2009. This quarterly dividend is unchanged from both
the previous quarter and one year ago. The Board of Directors also declared a
cash dividend of $0.453125 per Series 3 Preferred Share payable on October 31,
2009 to shareholders of record on October 22, 2009.
    On August 13, 2009, subsequent to quarter end, CWB introduced a dividend
reinvestment plan (the "Plan"). The Plan provides holders of the Bank's common
shares and holders of any other class of shares deemed eligible by the Bank's
Board of Directors (together being "Eligible Shares"), with the opportunity to
direct cash dividends paid on any class of their Eligible Shares toward the
purchase of common shares. Currently, holders of the Bank's common shares and
Non-Cumulative 5-Year Rate Reset Preferred Shares, Series 3 are eligible to
participate in the Plan. Details and an application form for the Plan are
available on the Bank's website at
http://www.cwbankgroup.com/investor_relations/drip.htm. At the current time,
for the purposes of the Plan, the Bank has elected to issue common shares from
treasury at a 2% discount from the average market price (as defined in Section
7(a) of the Plan).

    Loan Growth

    Loan growth of 1% in the quarter, 6% year-to-date and 12% over the past
year confirms the Bank's strategies to expand market presence while
proactively managing the impact of moderated economic activity. Reflecting the
recessionary environment and ongoing economic uncertainties, new deal flow has
slowed since the first quarter of this year, and we expect activity will be
constrained until major global economies start to recover. As always, we
remain committed to supporting businesses and individuals within our markets
while maintaining our focus on strong credit discipline and funding quality
assets that offer a fair and profitable return for our shareholders. Current
economic conditions coupled with the Bank's exceptional 6% loan growth in the
fourth quarter last year will challenge our ability to achieve the 10% fiscal
2009 loan growth target, unless we are successful in acquiring quality loan
portfolios from other lenders. Organic growth will likely be further
constrained by expected loan repayments in the Bank's interim construction
portfolio.

    Credit Quality

    Overall credit quality remained relatively stable 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 exceeded new formations. As in prior quarters, the majority
of larger accounts classified as impaired are interim construction loans -
mainly in smaller markets - that display common characteristics associated
with a softened real estate market, cost escalations during construction and
the inability for borrowers 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 quarterly provision for credit losses of $3.4 million was
unchanged from last quarter and 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, while the level of gross impaired loans is likely to
fluctuate up or down as we progress through the current cycle, actual losses
are expected to remain within the Bank's historic range of acceptable levels.
CWB's proven history of strong underwriting discipline and secured lending
practices further support our expectation in this regard.

    Branch Deposit Growth

    Deposits raised through our branch network and Canadian Western Trust
Company were up 1% over last quarter but decreased 6% compared to a year
earlier. The decline in total branch deposits compared to 2008 reflects a
reduction in larger commercial balances, which are subject to greater
fluctuation, and 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 5% in the quarter and 7%
compared to a year earlier. Growth in notice and demand deposits substantiates
our strategies to further diversify the Bank's deposit base, which remains a
key priority. We continue to evaluate opportunities to expand and/or enhance
our existing base of retail deposits, which includes the ongoing development
of the Internet-based division of the Bank named Canadian Direct Financial(TM)
(www.canadiandirectfinancial.com).

    Net Interest Margin

    The Bank's compressed net interest margin compared to the same quarter
last year was mainly attributed to consecutive reductions in the prime lending
rate and lower yields on securities, partially offset by lower deposit costs,
more favourable spreads on both new and renewal loans and an improved mix in
the securities portfolio. Margin compression continued to have a significant
negative impact on growth in both total revenues and overall profitability.
However, in comparison to the prior quarter, the expected combination of a
more stable interest rate environment, easing deposit costs and improved
market spreads contributed to a 20 basis point improvement in net interest
margin (teb) to 2.13%. Given current market conditions and the Bank's overall
financial position, we anticipate that net interest margin will continue to
improve and gradually return to historic levels. 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 (CWT) posted solid financial performance
while continuing to expand its market presence. CWT was also very pleased to
announce its appointment during the quarter as trustee for all self-directed
registered and education savings plans administered by a major Canadian
investment dealer, effective August 2009. Valiant Trust Company's revenues
declined reflecting the considerable slowdown in capital markets activity, but
we do foresee increasing opportunities for this business moving forward. Both
of our trust companies are now operating in Ontario, and we believe this
market provides strong growth potential.

    Insurance

    Our insurance subsidiary, Canadian Direct Insurance Incorporated
(Canadian Direct or CDI), reported record quarterly earnings with net income
of $3.2 million. Profitability improved for the auto lines in both Alberta and
British Columbia (BC). Policy growth, aided by higher retention rates, was
also up significantly from the same quarter last year. Quarterly results
included a positive $0.6 million before tax contribution from the Alberta auto
risk sharing pools reflecting a favorable adjustment, based on revised
assumptions, to the Minor Injury Regulation claims reserves.

    Outlook

    The Bank's third quarter and year-to-date results reflect solid
performance despite the significant impact on results from margin compression
and the uncertain economic environment. We expect net interest margin will
continue to improve into fiscal 2010, maintaining the positive trend that was
apparent over the past quarter. Improved margin will positively impact
revenues, earnings and the efficiency ratio (teb), but the net impact from our
preferred share offerings make it unlikely we will meet our fiscal 2009
performance targets for common shareholders' returns on assets and equity.
Economic activity has slowed in our markets much more than expected at the
beginning of the year and asset growth will likely continue to be constrained
as a result. That said, there are opportunities to grow via acquisition and
our solid balance sheet and strong capital base put us in an excellent
position to take advantage of opportunities that meet our investment
objectives. We are currently evaluating potential investments, but will remain
prudent and continue our focus on creating value and growth over the
long-term. Despite current challenges, our overall outlook remains positive
and we are very confident that the Bank will emerge from this cycle stronger
than ever.
    We look forward to reporting our fourth quarter and fiscal 2009 results
on December 3, 2009.

    
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    Q3 Results Conference Call

    CWB's third quarter results conference call is scheduled for Thursday,
    September 3, 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
    416-644-3414 or toll-free 1-800-733-7571. 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 September 17,
    2009 by dialing 416-640-1917 (Toronto) or 1-877-289-8525 (toll-free) and
    entering passcode 21311921, followed by the pound sign.
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    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 $5 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 July 31, 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 recorded solid third quarter financial results in a recessionary and
uncertain economic environment reflecting good performance from both business
segments. Quarterly net income from banking and trust operations of $25.5
million was up 7% ($1.7 million) compared to one year ago as positive earnings
contributions from strong 12% loan growth and a $5.4 million increase in gains
on sale of securities more than offset a lower net interest margin, measured
on a taxable equivalent basis (teb - see definition following Financial
Highlights table), and a 16% ($5.2 million) increase in non-interest expenses.
Gains on the sale of securities reflect strategies that allowed the Bank to
capitalize on favourable prices on certain short-term investments. Canadian
Direct Insurance Incorporated (Canadian Direct or CDI) posted record quarterly
net income of $3.2 million, up 30% ($0.7 million) compared to a year earlier.
Consolidated third quarter net income increased 9% from one year ago to $28.7
million, representing $0.38 ($0.39 basic) per diluted common share, which
reflects the net impact from the preferred shares issued in March 2009.
    Compared to the previous quarter, consolidated net income was up 33%
($7.1 million) reflecting a marked improvement in net interest margin, a 9%
($2.0 million) increase in other income and three more revenue earning days.
Diluted earnings per common share increased 27% ($0.08) over the prior
quarter. Consolidated net income year-to-date of $75.9 million was down 2%
($1.6 million) compared to the same period in 2008. Lower net income
year-to-date reflects the impact of a significantly lower net interest margin
and a 17% ($16.8 million) increase in non-interest expenses, offset by the
positive impact from strong 12% loan growth and 27% ($14.7 million) higher
other income. Other income year-to-date included gains on sale of securities
that were $17.3 million higher than the same period in 2008 while credit
related fee income declined $4.6 million mainly due to comparatively slower
loan volumes. Year-to-date earnings per diluted common share of $1.08 were
down 10% ($0.12 per diluted common share) compared to last year and reflect
the net impact of the preferred shares issued.
    Third quarter return on common shareholders' equity of 13.4% decreased
from 16.0% a year earlier, but was up from 11.0% last quarter. Return on
assets was 0.87%, compared to 1.03% a year earlier and 0.70% in the prior
quarter. Year-to-date return on common shareholders' equity of 13.0%
represented a 330 basis point decline compared to the same period in 2008,
while return on assets was down 21 basis points to 0.84%. Although partially
offset by strong growth in other income, quarterly and year-to-date
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 2008, the net impact from CWB's preferred
share offerings completed in March 2009 further reduced profitability ratios.
The preferred share capital will support considerable future growth and is
expected to become accretive to earnings over time.

    Total Revenues (teb)

    Total revenues (teb), comprised of net interest income and other income,
of $85.5 million were up 12% ($9.2 million) compared to the same quarter last
year reflecting the positive impact from strong loan growth and a 29% ($5.5
million) increase in other income, partially offset by a lower net interest
margin. Compared to last quarter, total revenues (teb) were up 13% ($10.2
million) reflecting a 15% ($8.1 million) increase in net interest income (teb)
and improved other income. Higher net interest income (teb) compared to last
quarter was primarily attributed to a more stable interest rate environment,
lower deposit costs, three additional days this quarter and the Bank's ongoing
success in pricing new and renewal loans to reflect the current market
environment. Year-to-date total revenues (teb) of $237.9 million were up 6%
($13.1 million) over the same period last year as earnings attributed to
continued loan growth and increased other income more than offset the impact
of the significantly lower net interest margin and one less revenue earning
day this year.

    Net Interest Income (teb)

    Quarterly net interest income (teb) of $60.9 million was up 6% ($3.6
million) compared to the same period last year as the positive revenue impact
from strong loan growth more than offset a 12 basis point decline in net
interest margin (teb) to 2.13%. Third quarter net interest margin compared to
last year 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.
Generally, 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 up 15% ($8.1 million) compared to the
previous quarter reflecting a marked 20 basis point increase in net interest
margin (teb) and three additional interest earnings days in the third quarter.
The improved net interest margin compared to the prior quarter mainly reflects
lower deposit costs and the positive effects from loan pricing actions in
prior periods, partially offset by a reduction in the average prime lending
rate. Year-to-date net interest income (teb) of $168.3 million represented a
1% decline from the first nine months of fiscal 2008 as the positive earnings
impact from strong loan growth was more than offset by a significant 27 basis
point decline in net interest margin (teb) to 2.02%. The lower year-to-date
net interest margin compared to last year 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 July 31, 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 July 31, 2009, it is
estimated that a one-percentage point increase in all interest rates would
increase net interest income by approximately 3.8% ($9.5 million) and decrease
other comprehensive income $20.7 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 5.2% ($13.1
million) and increase other comprehensive income $20.7 million, net of tax,
over the following twelve months. The positive earnings impact 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. At April 30, 2009, it was estimated that a
one-percentage point increase in all interest rates would have increased net
interest income by approximately 5.6% ($12.4 million) and decreased other
comprehensive income $23.4 million, net of tax, over the following twelve
months and, that a one-percentage point decrease in all interest rates at
April 30, 2009 would have increased net interest income by approximately 4.8%
($10.5 million) and increased other comprehensive income $23.4 million, net of
tax, over the following twelve months. The potential earnings variance due to
changes in all interest rates was high compared to most 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 manage interest rate sensitivity and related risks.

    Other Income

    Quarterly other income of $24.6 million was up 29% ($5.5 million) from a
year earlier as $5.6 million higher gains on sale of securities and a 24%
($1.1 million) improvement in net insurance revenues more than offset a 22%
($1.7 million) decline in credit related fee income. Gains on sale of
securities reflect strategies that allowed the Bank to capitalize on
favourable pricing for certain short-term investments. The combined
contribution from trust services and fee income from newly acquired Adroit
Investment Management Ltd. (Adroit) was up $0.2 million, while foreign
exchange gains and other categories increased $0.1 million in the aggregate.
    Compared to the previous quarter, other income was up 9% ($2.0 million)
mainly reflecting a $1.6 million increase in net insurance revenues and 16%
($0.8 million) higher credit related fee income. On a year-to-date basis,
other income improved 27% ($14.7 million) reflecting a $17.3 million increase
in gains on sale of securities, 15% ($1.4 million) higher trust and wealth
management fee income and a $0.6 million improvement in foreign exchange gains
and other, offset by 21% ($4.6 million) lower credit related fee income,
consistent with decreased loan volumes. Net insurance revenues year-to-date
were relatively unchanged compared to 2008 and include the impact of high
first quarter claims experience this year in the British Columbia (BC) home
product line due to severe weather.

    Credit Quality

    Overall credit quality remained relatively stable given the recessionary
environment, an uncertain economic outlook and lower commodity prices. The
Bank's primary markets continue to be materially impacted by global economic
turmoil, particularly as it relates to demand for commodities, but management
believes that Western Canada is well positioned 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.

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

    Gross impaired loans,
     beginning of period  $   107,017  $   107,785  $    43,018          149%
      New formations           25,111       29,378       14,708           71
      Reductions, impaired
       accounts paid down
       or returned to
       performing status      (22,444)     (27,387)     (10,054)         123
      Write-offs               (4,455)      (2,759)        (133)       3,249
    -------------------------------------------------------------------------
    Total(3)              $   105,229  $   107,017  $    47,539          121%
    -------------------------------------------------------------------------

    Balance of the ten
     largest impaired
     accounts             $    54,990  $    56,478  $    24,528          124%
    Total number of
     accounts classified
     as impaired                  211          204          138           53
    Total number of
     accounts classified
     as impaired under
     $1 million                   195          188          127           54
    Gross impaired loans
     as a percentage of
     total loans(1)              1.14%        1.17%        0.58%     56 bp(2)

    (1) Total loans do not include an allocation for credit losses or
        deferred revenue and premiums.
    (2) bp - basis point change.
    (3) Gross impaired loans includes foreclosed real estate with a carrying
        value of $4,756 (April 30, 2009 - $3,505 and July 31, 2008 - $nil)
        which is held for sale.
    

    Gross impaired loans at July 31, 2009 were $105.2 million, compared to
$107.0 million last quarter and $47.5 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 mainly located in smaller markets. A
softened real estate market, cost escalations during construction and the
inability of borrowers to access additional capital are common characteristics
for these accounts. The Bank is in various stages of enforcing its security to
recoup its loans on these projects. The ten largest accounts classified as
impaired measured by dollars outstanding represented approximately 52% of the
total gross impaired loans at quarter end, compared to 53% in the prior
quarter and 52% a year earlier.
    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. Current estimates include detailed
analyses of both the overall quality and ultimate marketability of the
security held against impaired accounts. In certain cases, the timeframe
required to recover balances on loans 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.
    Gross impaired loans represented 1.14% of total loans at quarter end,
compared to 1.17% last quarter and 0.58% 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). As noted above, the level of impaired loans
will fluctuate up or down until the economic cycle runs its course, but actual
losses in consideration of today's operating environment are expected to
remain within the Bank's 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
targeted provisions for credit losses and other performance targets for fiscal
2010 will be published in December of this year along with the Bank's fiscal
2009 financial results.
    The total allowance for credit losses (general and specific) represented
71% of gross impaired loans at quarter end, compared to 70% last quarter and
147% one year ago. The total allowance for credit losses (general and
specific) was $74.2 million at July 31, 2009, compared to $75.1 million last
quarter and $70.0 million a year earlier. The general allowance as a
percentage of risk-weighted loans was 73 basis points, down from 74 basis
points in the previous quarter and 80 basis points a year earlier. The Bank's
long-standing strategy with respect to managing the allowance for credit
losses has been to maintain consistent provisions to cover both identified and
unidentified losses. The purpose of the general allowance for credit losses is
to mitigate the timing 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 recognized and subsequently charged off.

    Non-interest Expenses

    Effective execution of CWB's strategic plan which is focused on
sustainable growth has necessitated increased spending in some areas.
Significant expenditures include additional staff complement, as well as
expanded premises and technology upgrades. 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 material 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. The Bank also expects to open an additional new branch in the Edmonton
area (Sherwood Park) with a tentative opening date in 2010.
    Compared to last year, third quarter non-interest expenses increased 16%
($5.7 million) to $40.2 million. Within non-interest expenses, salary and
benefit costs were up 20% ($4.5 million) with the increase mainly attributed
to additional stock-based compensation charges, increased staff complement and
annual salary increments. Total third quarter stock-based compensation charges
of $3.2 million were up $1.7 million over the same period in 2008 reflecting
the recognition of expense related to the Bank's third quarter granting of
Restricted Share Units (RSUs) associated with a revised long-term incentive
plan. Salary expense for RSUs is recognized evenly over the vesting period
except where the employee is eligible to retire prior to the vesting date, in
which case the expense is recognized between the grant date and the date the
employee is eligible to retire. Because there are a number of CWB employees
currently deemed eligible to retire, salary expense recognized for RSUs is
highest in the same quarter as the grant date. Of the amount expensed in the
third quarter, approximately $1.6 million related to the recognition of the
eligible to retire liability. Premises and equipment expenses were up $1.0
million in the aggregate over the same quarter last year. Other expenses
increased $0.2 million. Third quarter non-interest expenses related to newly
acquired Adroit were $0.7 million, including the associated amortization of
intangible assets.
    Non-interest expenses were up $0.2 million compared to the prior quarter
as a $0.4 million increase in salary and benefit costs was offset by lower
premises, equipment and other expenses. Year-to-date non-interest expenses of
$116.6 million were up 17% ($16.8 million) over the same period last year
reflecting $12.6 million higher salary and benefit costs due to increased
staff complement, stock-based compensation charges and annual salary
increments. Total year-to-date stock-based compensation charges of $7.8
million represented a $3.6 million increase over the same period in 2008 and
included $2.2 million of expense recognized for RSUs and $1.7 million of
additional non-cash, stock-based compensation expense reflecting required
accounting treatment for stock options voluntarily forfeited by certain CWB
management in the prior quarter. Premises and equipment expenses, including
depreciation, increased 16% ($2.7 million) mainly resulting from ongoing
business growth and capital investment. Year-to-date non-interest expenses
related to Adroit were $2.1 million, including amortization of intangible
assets.
    The third quarter efficiency ratio (teb), which measures non-interest
expenses as a percentage of total revenues (teb), was 47.0%, compared to 45.2%
last year and 53.1% in the previous quarter. The deterioration of this measure
compared to the same quarter last year reflects the negative impact on total
revenues from the compressed net interest margin coupled with higher
non-interest expenses, 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 considerable improvement in the efficiency ratio
reflects the combined positive impact from the higher net interest margin,
increased other income and three additional revenue earning days. The
year-to-date efficiency ratio (teb) of 49.0% represented a 460 basis point
deterioration from the same period last year and was within the Bank's fiscal
2009 targeted range of 46 - 49%. A positive trend for net interest margin and
ongoing discipline with regard to discretionary spending should support
further modest improvement to this measure for the year.

    Income Taxes

    The income tax rate (teb) for the first nine months of 2009 was 31.5%,
down 180 basis points from one year ago, while the tax rate before the teb
adjustment was 28.0%, or 280 basis points lower. The income tax provision in
the first nine 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
decreased from 13% to 12% effective July 1, 2009. On April 1, 2009, the
capital tax rate in BC applicable to CWB 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 $39.3 million for the third
quarter, compared to $22.4 million in the same period last year. As previously
noted, net income was up 9% ($2.4 million) compared to one year ago. In
addition, 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 and higher amounts reclassified to net interest
income related to derivatives designated as cash flow hedges in the third
quarter of 2009, compared to a year earlier.

    Balance Sheet

    Total assets were down 1% ($119 million) in the quarter and up 13%
($1,275 million) in the past year to reach $11,331 million at July 31, 2009.
Lower total assets compared to the prior quarter reflects lower cash and
securities balances, partially offset by loan growth.

    Cash and Securities

    Cash, securities and securities purchased under resale agreements totaled
$1,997 million at July 31, 2009, compared to $2,222 million last quarter and
$1,725 million one year ago. The unrealized gain recorded on the balance sheet
at July 31, 2009 was $25.6 million, compared to $10.8 million last quarter and
an unrealized loss of $17.8 million as at October 31, 2008. The change in
unrealized gains and losses compared to last quarter and October 31, 2008 is
primarily attributed to a market value improvement in the Bank's preferred
share portfolio; unrealized gains in this portfolio totaled $8.4 million as at
July 31, 2009, compared to unrealized losses of $14.6 million last quarter and
$17.8 million as at October 31, 2008. 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 third quarter were $6.4
million, compared to $6.6 million in the previous quarter and $0.8 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. Where the sale of securities was not directed to reducing CWB's
overall liquidity position, investment strategies allowed the Bank to
capitalize on opportunities to realize gains while maintaining relatively
comparable yields on reinvestment in other high quality 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, net of securities purchased
under reverse resale agreements, were higher compared to the same quarter last
year reflecting proceeds from the Bank's preferred share offerings completed
in March 2009. Comparatively slower loan growth also contributed to increased
liquidity compared to 2008. Average liquidity, net of securities purchased
under reverse resale agreements, declined compared to the prior 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 provides
flexibility 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 economic
uncertainties subside further.

    Loans

    Total loans grew 1% ($96 million) in the quarter, 6% ($514 million)
year-to-date and 12% ($969 million) in the past twelve months to reach $9,138
million. Quarterly loan growth reflects lending activity in Alberta and
Saskatchewan, as both BC and Manitoba showed marginal declines compared to
last quarter. Measured by lending sector, quarterly growth was attributed to
equipment financing, energy, personal lending and the general commercial
lending sectors. Real estate loans showed a marginal decline in the quarter,
which was not unexpected. All lending sectors have realized positive
year-to-date growth led by activity in Alberta and BC. Looking forward, loan
growth is expected to remain constrained compared to prior periods. The
recessionary environment, including moderated residential construction
activity in Western Canada, will continue to have an adverse impact on growth
in certain 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 portfolio
performance 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
foregoing factors coupled with last year's exceptional fourth quarter loan
growth of 6% will challenge the Bank's ability to meet the fiscal 2009 loan
growth target of 10% unless quality loan portfolios are acquired from other
lenders. Despite these challenges, management believes Western Canada is in a
good position to manage through ongoing economic uncertainty and the
recessionary environment. Management also believes Western Canada's
resource-based economies will be poised for a comparatively faster recovery
than the rest of Canada once major global economies begin to expand.
    Loans in the Bank's alternative mortgage business, Optimum Mortgage
(Optimum), increased 4% in the quarter, 6% year-to-date and 14% over the past
twelve months to reach $494 million. Residential sales activity in Western
Canada improved considerably compared to recent prior quarters, partially due
to seasonal factors, and the level of applications received by Optimum
increased accordingly. There are signs that real estate values have begun to
stabilize across all of the Bank's markets, although growth opportunities will
likely continue to be constrained in this business line until recessionary
impacts subside. As an alternative source of growth, Optimum recently
commenced offering, through select mortgage brokers, higher ratio mortgages
insured by either the Canada Mortgage and Housing Corporation (CMHC) or
Genworth Financial Canada. This endeavour has shown positive results to date
and management expects insured mortgages will become a larger component of
Optimum's total portfolio over time. Improved residential sales activity also
positively impacted marketing time for homes in foreclosure and had a
stabilizing effect on the overall level of delinquent loans in the quarter.
For uninsured mortgages, 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 strong returns while maintaining an acceptable
risk profile.

    Deposits

    Total branch deposits were up 1% from the previous quarter, but down 6%
compared to a year earlier. The demand and notice component within branch
deposits was up 5% from last quarter and 7% compared to the same time last
year. Reflecting CWB's business banking focus, a material portion of total
branch deposits are attributed to larger commercial balances that are subject
to greater fluctuation. The recently introduced Internet-based division of the
Bank named Canadian Direct Financial(TM) (www.canadiandirectfinancial.com) has
shown promising success to date and is still in the early stages of
development as management determines the most effective strategies to raise
deposits through this channel. Consistent with last quarter, more normalized
financial markets and reduced competitive influences have continued to ease
overall deposit costs for both branch-generated deposits and those raised
through the deposit broker network. If interest rates remain at current
levels, this will have a positive impact on net interest margin going forward.
Also, a significant component of comparatively higher cost one-year deposits
that were raised in the latter part of calendar year 2008, largely to increase
liquidity, will be maturing. These deposits will either be replaced at much
more favourable current rates or paid out at maturity due to reduced liquidity
requirements.
    Total deposits at quarter end were $9,394 million, down 3% ($320 million)
from the previous quarter and up 8% ($707 million) over the past year. Total
branch deposits measured as a percentage of total deposits were 58% at July
31, 2009 compared to 56% in the previous quarter and 67% a year earlier.
Compared to a year earlier, the reduction in branch-raised deposits as a
percentage of total deposits reflects both an increase in fixed rate term
deposits raised through the deposit broker network and a reduction in larger
commercial term deposits. Demand and notice deposits represented 28% of total
deposits, compared to 26% in the previous quarter and 28% at the same time
last year. Total notice deposits will increase in the fourth quarter this year
due to CWT's recent appointment as trustee for a major Canadian investment
dealer.

    Other Assets and Other Liabilities

    Other assets at July 31, 2009 totaled $196 million, compared to $187
million last quarter and $163 million one year ago. Other liabilities at
quarter end were $596 million, compared to $427 million the previous quarter
and $297 million last year. The increase in other liabilities compared to
prior quarters mainly reflects the use of reverse resale agreements for asset
funding.

    Off-Balance Sheet

    Off-balance sheet items include trust assets under administration and
assets under management. Trust assets under administration totaled $4,752
million at July 31, 2009, compared to $4,472 million last quarter and $4,499
million one year ago. Assets under management were $836 million at quarter
end, compared to $817 million last quarter and nil one year ago reflecting the
acquisition of Adroit, which was effective November 1, 2008. 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 July 31, 2009, CWB's total capital adequacy ratio, which measures
regulatory capital as a percentage of risk-weighted assets, was 15.4%, up from
15.2% last quarter and 14.0% a year earlier. The Tier 1 ratio at quarter end
was 11.2%, compared to 11.0% last quarter and 9.2% 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 the redemption of $35.0 million of subordinated
debentures. The higher Tier 1 and total capital ratios compared to the prior
quarter reflect the retention of earnings, net of dividends, slightly offset
by ongoing growth in risk weighted assets.
    During the second quarter of fiscal 2009, 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
$135.0 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 July 31,
2009, the closing market price of the Series 3 Preferred Shares and Warrants
was $27.99 and $6.20, 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 July 31, 2009 was $11.87 compared to
$11.42 last quarter and $10.47 one year ago.
    Common shareholders received a quarterly cash dividend of $0.11 per
common share on July 2, 2009. On September 2, 2009, the Board of Directors
declared a quarterly cash dividend of $0.11 per common share payable on
October 1, 2009 to shareholders of record on September 17, 2009. The Board of
Directors also declared a cash dividend of $0.453125 per Series 3 Preferred
Share payable on October 31, 2009 to shareholders of record on October 22,
2009.
    On August 13, 2009, subsequent to quarter end, the Bank announced the
introduction of dividend reinvestment plan. Further details on CWB's dividend
reinvestment plan, including an application form, are available at
http://www.cwbankgroup.com/investor_relations/drip.htm.

    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 July 31, 2009 that have
materially affected, or are reasonably likely to materially affect, internal
controls over financial reporting.
    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 August 31, 2009, there were 63,795,762 common shares outstanding
and employee stock options, which are or will be exercisable for up to
4,558,905 common shares for maximum proceeds of $84.3 million. Also
outstanding were 14,964,356 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)                Q3           Q2           Q1           Q4
    -------------------------------------------------------------------------
    Total revenues (teb)  $    85,538  $    75,382  $    76,947  $    74,059
    Total revenues             83,349       73,707       75,361       72,519
    Net income                 28,729       21,580       25,619       24,485
    Earnings per
     common share
      Basic                      0.39         0.30         0.40         0.39
      Diluted                    0.38         0.30         0.40         0.38
    Total assets
     ($ millions)              11,331       11,450       10,907       10,601
    -------------------------------------------------------------------------

                                             2008                      2007
                          -------------------------------------- ------------
    ($ thousands)                Q3           Q2           Q1           Q4
    -------------------------------------------------------------------------
    Total revenues (teb)  $    76,375  $    73,754  $    74,669  $    74,359
    Total revenues             74,933       72,402       73,332       72,863
    Net income                 26,327       25,302       25,905       29,572
    Earnings per
     common share
      Basic                      0.42         0.40         0.41         0.47
      Diluted                    0.41         0.39         0.40         0.46
    Total assets
     ($ millions)              10,057       10,038        9,865        9,525
    -------------------------------------------------------------------------
    

    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.
    Third quarter net income of $25.5 million increased 7% ($1.7 million)
compared to last year as positive earnings contributions from strong 12% loan
growth and 29% ($4.2 million) higher other income, including an additional
$5.4 million of gains on sale of securities, more than offset the impact of a
12 basis point decline in net interest margin (teb), to 2.11%, and a 16% ($5.2
million) increase in non-interest expenses. The lower 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. The change in non-interest expenses
reflects higher salary and benefit costs - mainly related to increased staff
complement and stock-based compensation expense - continued business growth
and investment in future development initiatives, including the addition of
Adroit. Credit related fee income was down 22% ($1.7 million) while trust and
wealth management services fee income increased 5% ($0.2 million). The
quarterly efficiency ratio (teb), which measures non-interest expense as a
percentage of total revenues (teb), was 47.8%, compared to 45.7% one year ago.
The deterioration in the efficiency ratio (teb) reflects constrained growth in
net interest income attributed to the compressed net interest margin (teb) and
higher non-interest expenses, partially offset by the positive earnings impact
from continued loan growth and a 29% ($4.2 million) increase in other income.
    Quarterly earnings were up 31% ($6.1 million) from the previous period
reflecting the combined positive impact of a marked 20 basis point improvement
in net interest margin, three additional revenue earnings days, a 3% ($0.5
million) increase in other income and a slight decline in non-interest
expenses. The quarterly efficiency ratio (teb) improved 600 basis points
compared to last quarter. On a year-to-date basis, net income was 2% ($1.6
million) lower than 2008 as strong loan growth and a 33% ($14.2 million)
increase in other income, largely attributed to gains on sale of securities,
were more than offset by a significant 28 basis point drop in net interest
margin and a 17% ($15.7 million) increase in non-interest expenses. The
year-to-date efficiency ratio (teb) of 49.2% deteriorated 470 basis points
from the same time in 2008.

    
                                For the three months ended
                          -------------------------------------  Change from
                              July 31     April 30      July 31      July 31
    ($ thousands)                2009         2009         2008         2008
    -------------------------------------------------------------------------
    Net interest
     income (teb)         $    59,340  $    51,399  $    55,877          6%
    Other income               18,651       18,125       14,415         29
    -------------------------------------------------------------------------
    Total revenues (teb)       77,991       69,524       70,292         11
    Provision for
     credit losses              3,369        3,369        3,038         11
    Non-interest expenses      37,283       37,381       32,124         16
    Provision for
     income taxes (teb)        11,809        9,313       11,306          4
    Non-controlling
     interest
     in subsidiary                 50           56            -         nm
    -------------------------------------------------------------------------
    Net income            $    25,480  $    19,405  $    23,824          7%
    -------------------------------------------------------------------------
    Efficiency ratio (teb)      47.8%        53.8%        45.7%        210 bp
    Efficiency ratio            49.1         55.0         46.6         250
    Net interest margin
     (teb)                      2.11         1.91         2.23         (12)
    Net interest margin         2.04         1.86         2.18         (14)
    Average loans
     (millions)(1)       $     9,028  $     8,982  $     7,981          13%
    Average assets
     (millions)(1)            11,142       11,024        9,927          12
    -------------------------------------------------------------------------


                          For the nine months ended
                          ------------------------- Change from
                              July 31      July 31      July 31
    ($ thousands)                2009         2008         2008
    ------------------------------------------------------------
    Net interest
     income (teb)         $   163,840  $   165,844         (1)%
    Other income               56,994       42,758         33
    ------------------------------------------------------------
    Total revenues (teb)      220,834      208,602          6
    Provision for
     credit losses             10,107        8,813         15
    Non-interest expenses     108,574       92,835         17
    Provision for
     income taxes (teb)        32,273       35,617         (9)
    Non-controlling
     interest
     in subsidiary                173            -         nm
    ------------------------------------------------------------
    Net income            $    69,707  $    71,337         (2)%
    ------------------------------------------------------------
    Efficiency ratio (teb)       49.2%        44.5%       470 bp
    Efficiency ratio             50.3         45.3        500
    Net interest margin
     (teb)                       2.00         2.28        (28)
    Net interest margin          1.94         2.23        (29)
    Average loans
     (millions)(1)        $     8,955  $     7,775         15%
    Average assets
     (millions)(1)             10,959        9,695         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 record quarterly earnings with net income of
$3.2 million. This represented a $0.7 million increase compared to the same
quarter last year and included a positive $0.6 million before tax contribution
from the Alberta auto risk sharing pools ("the Pools"). Third quarter net
income, excluding the impact of the Pools, was up $0.3 million compared to
last year mainly due to an 8% increase in net earned premiums. Profitability
improved for the auto lines in both Alberta and BC. Policy growth, aided by
higher retention rates, was also up significantly from the same quarter last
year. Excluding the impact of the Pools, the loss ratio was 2% higher than
last year. The higher loss ratio was mostly due to fire-related home claims.
The Pools' results reflected a favorable adjustment, based on revised
assumptions, to the Minor Injury Regulation claims reserves.
    Net income was up $1.1 million compared to the previous quarter. Absent
the impact of the Pools, after tax income was up $0.7 million due to a 7%
improvement in net earned premiums coupled with a 1% improvement in the loss
ratio. Net earned premiums were up in all product lines reflecting policy
growth and three additional days this quarter.
    Year-to-date net income of $6.2 million was relatively unchanged compared
to a year earlier. Excluding the Pools' results, net earned premiums were up
6%, offset by a 2% deterioration in the loss ratio. The higher loss ratio was
attributed to first quarter losses in the BC home product line which was
materially impacted by severe weather.
    On June 12, 2009, the Alberta Court of Appeal unanimously overturned the
February 2008 Court of Queen's Bench decision suspending the cap on minor
injuries, thereby reinstating the cap on minor injuries sustained in an
automobile accident in Alberta. However, this ruling is being appealed to the
Supreme Court of Canada. Management believes it has adequately provided for
the cost of these claims without regard to the cap and will continue to
monitor the situation closely.
    On July 29, 2009, the Alberta Insurance Rate Board mandated a 5% rate
reduction on basic coverage on private passenger vehicles. The order will go
into effect November 1, 2009 and will have a negative impact on revenues for
this line of business. This decision reflects the reinstatement of the cap on
minor injuries by the Alberta Court of Appeal.

    
                                For the three months ended
                          -------------------------------------  Change from
                              July 31     April 30      July 31      July 31
    ($ thousands)                2009         2009         2008         2008
    -------------------------------------------------------------------------
    Net interest
     income (teb)         $     1,594  $     1,413  $     1,413          13%
    -------------------------------------------------------------------------
    Other income (net)
      Net earned premiums      26,895       24,880       25,030            7
      Commissions and
       processing fees            741          760          734            1
      Net claims and
       adjustment expenses    (16,660)     (16,126)     (15,612)           7
      Policy acquisition
       costs                   (5,181)      (5,316)      (5,466)          (5)
    -------------------------------------------------------------------------
    Insurance revenue (net)     5,795        4,198        4,686           24
    Gains on sale
     of securities                158          247          (16)          nm
    -------------------------------------------------------------------------
    Total revenues
     (net) (teb)                7,547        5,858        6,083           24
    Non-interest expenses       2,927        2,613        2,406           22
    Provision for
     income taxes (teb)         1,371        1,070        1,174           17
    -------------------------------------------------------------------------
    Net income            $     3,249  $     2,175  $     2,503          30%
    -------------------------------------------------------------------------
    Policies outstanding
     (No.)                    172,979      170,433      167,150            3
    Gross written
     premiums             $    33,067  $    29,120  $    30,020           10
    Claims loss ratio(1)           62%          65%          62%         - bp
    Expense ratio(2)               27           29           29         (200)
    Combined ratio(3)              89           94           91         (200)
    Alberta auto risk
     sharing pools impact
     on net income
     before tax           $       557  $        31  $       (30)         nm%
    Average total assets
     (millions)                   200          192          185            8
    -------------------------------------------------------------------------


                          For the nine months ended
                          ------------------------- Change from
                              July 31      July 31      July 31
    ($ thousands)                2009         2008         2008
    ------------------------------------------------------------
    Net interest
     income (teb)         $     4,502  $     4,151           8%
    ------------------------------------------------------------
    Other income (net)
      Net earned premiums      76,990       73,066            5
      Commissions and
       processing fees          2,155        2,134            1
      Net claims and
       adjustment expenses    (51,437)     (47,816)           8
      Policy acquisition
       costs                  (15,603)     (15,361)           2
    ------------------------------------------------------------
    Insurance revenue (net)    12,105       12,023            1
    Gains on sale
     of securities                426           22           nm
    ------------------------------------------------------------
    Total revenues
     (net) (teb)               17,033       16,196            5
    Non-interest expenses       8,035        6,972           15
    Provision for
     income taxes (teb)         2,777        3,027           (8)
    ------------------------------------------------------------
    Net income            $     6,221  $     6,197           -%
    ------------------------------------------------------------
    Policies outstanding
     (No.)                    172,979      167,150            3
    Gross written
     premiums             $    85,290  $    78,278            9
    Claims loss ratio(1)           67%          65%         200 bp
    Expense ratio(2)               28           28            -
    Combined ratio(3)              95           93          200
    Alberta auto risk
     sharing pools impact
     on net income
     before tax           $       430  $        87         394%
    Average total assets
     (millions)                   193          181           7
    ------------------------------------------------------------
    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           2009
                                                Target Ranges  Performance(1)
    -------------------------------------------------------------------------
    Net income growth(2)                           2% to 5%         (2)%
    -------------------------------------------------------------------------
    Total revenue (teb) growth                     5% to 8%          6%
    -------------------------------------------------------------------------
    Loan growth                                      10%            12%
    -------------------------------------------------------------------------
    Provision for credit losses as a
     percentage of average loans                0.15% - 0.18%      0.15%
    -------------------------------------------------------------------------
    Efficiency ratio (teb)                        46% - 49%        49.0%
    -------------------------------------------------------------------------
    Return on common equity                       14% - 16%        13.0%(3)
    -------------------------------------------------------------------------
    Return on assets                            0.90% - 1.05%      0.84%(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.
    

    While the recessionary environment and uncertain economic outlook have
impacted results more than anticipated when the fiscal 2009 performance target
ranges were first established, management is now cautiously optimistic that
the Bank could still achieve most of these benchmarks. Both total revenue
growth and the efficiency ratio (teb) are currently within the respective
target ranges and a positive outlook for net interest margin will further
benefit these measures. Ongoing discipline with regard to discretionary
spending will further support modest improvements in the efficiency ratio. The
provision for credit losses as a percentage of average loans is also on
target. The target for net income growth is still within reach, as realized
gains on the sale of securities have helped offset the financial impact of
margin pressures. These gains do not represent a sustainable source of income
over the long-term, but the positive outlook for continued margin improvement
will help mitigate this. The net impact on the return on equity and return on
assets ratios from the preferred share offerings completed in March 2009 was
not considered when the above targets were established at the end of fiscal
2008. Reflecting the exceptional 6% loan growth in the fourth quarter of 2008,
slower economic activity and anticipated loan repayments, particularly for
interim construction accounts, CWB will be challenged to meet its 10% loan
growth target unless loan portfolios are acquired from other lenders.
    A stable prime lending interest rate, lower deposit costs and more normal
market spreads, combined with CWB's pricing actions on new and renewal lending
accounts, have all positively impacted net interest margin and this trend is
expected to continue. Effective execution of strategies to prudently leverage
capital from the preferred share units should also increase earnings over
time. Despite an expectation for ongoing challenges due to uncertain market
conditions, management is very optimistic about the Bank's overall financial
strength. CWB is well positioned to capitalize on market opportunities,
including strategic acquisitions, and will maintain its focus on creating
value and growth over the long-term.
    This management's discussion and analysis is dated September 2,  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, 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 less preferred share dividends 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 stated at the end of the
second quarter, interest rates have fallen much more than management
anticipated at the onset of fiscal 2009 and a recessionary environment in
Western Canada was confirmed.

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

                                For the three months ended
    (unaudited)           -------------------------------------  Change from
    ($ thousands, except      July 31     April 30      July 31      July 31
     per share amounts)          2009         2009         2008         2008
    -------------------------------------------------------------------------
    Interest Income
    Loans                 $   112,275  $   107,828  $   120,455         (7)%
    Securities                 11,124       10,462       13,058        (15)
    Deposits with
     regulated financial
     institutions               3,103        3,770        4,490        (31)
    -------------------------------------------------------------------------
                              126,502      122,060      138,003         (8)
    -------------------------------------------------------------------------
    Interest Expense
      Deposits                 62,490       65,824       76,506        (18)
      Subordinated
       debentures               5,267        5,099        5,649         (7)
    -------------------------------------------------------------------------
                               67,757       70,923       82,155        (18)
    -------------------------------------------------------------------------
    Net Interest Income        58,745       51,137       55,848          5
    Provision for Credit
     Losses (Note 6)            3,369        3,369        3,038         11
    -------------------------------------------------------------------------
    Net Interest Income
      after Provision
      for Credit Losses        55,376       47,768       52,810          5
    -------------------------------------------------------------------------
    Other Income
      Credit related            6,155        5,321        7,876        (22)
      Insurance, net
       (Note 3)                 5,795        4,198        4,686         24
      Trust and wealth
       management
       services                 3,557        3,869        3,385          5
      Retail services           1,781        1,913        1,906         (7)
      Gains on sale
       of securities            6,399        6,580          765        736
      Foreign exchange
       gains                      876          667          467         88
      Other                        41           22            -         nm
    -------------------------------------------------------------------------
                               24,604       22,570       19,085         29
    -------------------------------------------------------------------------
    Net Interest and
     Other Income              79,980       70,338       71,895         11
    -------------------------------------------------------------------------
    Non-Interest Expenses
      Salaries and
       employee benefits       26,977       26,587       22,508         20
      Premises and
       equipment                6,478        6,528        5,454         19
      Other expenses            6,263        6,330        6,021          4
      Provincial
       capital taxes              492          549          547        (10)
    -------------------------------------------------------------------------
                               40,210       39,994       34,530         16
    -------------------------------------------------------------------------
    Net Income before
     Income Taxes and
     Non-Controlling
     Interest in
     Subsidiary                39,770       30,344       37,365          6
    Income Taxes               10,991        8,708       11,038          -
    -------------------------------------------------------------------------
                               28,779       21,636       26,327          9
    Non-Controlling
     Interest in
     Subsidiary                    50           56            -         nm
    -------------------------------------------------------------------------
    Net Income            $    28,729  $    21,580  $    26,327          9%
    -------------------------------------------------------------------------

    Preferred share
     dividends (Note 9)   $     3,802  $     2,458  $         -          nm%
    Net income available
     to common
     shareholders         $    24,927  $    19,122  $    26,327          (5)
    -------------------------------------------------------------------------
    Average number of
     common shares
     (in thousands)            63,654       63,503       63,279           1
    Average number of
     diluted common
     shares (in thousands)     65,439       63,559       64,438           2
    -------------------------------------------------------------------------
    Earnings Per
     Common Share
      Basic               $      0.39  $      0.30  $      0.42          (7)
      Diluted             $      0.38  $      0.30  $      0.41          (7)
    -------------------------------------------------------------------------


                          For the nine months ended
    (unaudited)           ------------------------- Change from
    ($ thousands, except      July 31      July 31      July 31
     per share amounts)          2009         2008         2008
    ------------------------------------------------------------
    Interest Income
    Loans                 $   339,371  $  368,799          (8)%
    Securities                 32,798      42,111         (22)
    Deposits with
     regulated financial
     institutions              10,410      13,990         (26)
    ------------------------------------------------------------
                              382,579     424,900         (10)
    ------------------------------------------------------------
    Interest Expense
      Deposits                204,054     242,538         (16)
      Subordinated
       debentures              15,633      16,498          (5)
    ------------------------------------------------------------
                              219,687     259,036         (15)
    ------------------------------------------------------------
    Net Interest Income       162,892     165,864          (2)
    Provision for Credit
     Losses (Note 6)           10,107       8,813          15
    ------------------------------------------------------------
    Net Interest Income
      after Provision
      for Credit Losses       152,785     157,051          (3)
    ------------------------------------------------------------
    Other Income
      Credit related           17,219      21,772         (21)
      Insurance, net
       (Note 3)                12,105      12,023           1
      Trust and wealth
       management
       services                11,339       9,901          15
      Retail services           5,538       5,726          (3)
      Gains on sale
       of securities           21,122       3,777         459
      Foreign exchange
       gains                    2,098       1,286          63
      Other                       104         318         (67)
    ------------------------------------------------------------
                               69,525      54,803          27
    ------------------------------------------------------------
    Net Interest and
     Other Income             222,310     211,854           5
    ------------------------------------------------------------
    Non-Interest Expenses
      Salaries and
       employee benefits       77,401      64,799          19
      Premises and
       equipment               19,034      16,339          16
      Other expenses           18,742      17,124           9
      Provincial
       capital taxes            1,432       1,545          (7)
    ------------------------------------------------------------
                              116,609      99,807          17
    ------------------------------------------------------------
    Net Income before
     Income Taxes and
     Non-Controlling
     Interest in
     Subsidiary               105,701     112,047          (6)
    Income Taxes               29,600      34,513         (14)
    ------------------------------------------------------------
                               76,101      77,534          (2)
    Non-Controlling
     Interest in
     Subsidiary                   173           -          nm
    ------------------------------------------------------------
    Net Income            $    75,928  $   77,534          (2)%
    ------------------------------------------------------------

    Preferred share
     dividends (Note 9)   $     6,260  $        -          nm%
    Net income available
     to common
     shareholders         $    69,668  $   77,534         (10)
    ------------------------------------------------------------
    Average number of
     common shares
     (in thousands)            63,541      63,146           1
    Average number of
     diluted common
     shares (in thousands)     64,222      64,535           -
    ------------------------------------------------------------
    Earnings Per
     Common Share
      Basic               $      1.10  $     1.23           (11)
      Diluted             $      1.08  $     1.20           (10)
    ------------------------------------------------------------
    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)          July 31    April 30  October 31     July 31  July 31
    ($ thousands)           2009        2009        2008        2008    2008
    -------------------------------------------------------------------------
    Assets
    Cash Resources
      Cash and
       non-interest
       bearing deposits
       with financial
       institutions    $  38,297   $  14,739   $   8,988   $  23,903     60%
      Interest bearing
       deposits with
       regulated
       financial
       institutions
       (Note 4)          357,057     557,313     464,193     409,882     (13)
      Cheques and other
       items in transit        -           -      18,992       2,172    (100)
    -------------------------------------------------------------------------
                         395,354     572,052     492,173     435,957      (9)
    -------------------------------------------------------------------------
    Securities (Note 4)
      Issued or
       guaranteed
       by Canada         611,644     585,320     347,777     313,986      95
      Issued or
       guaranteed by a
       province or
       municipality      334,370     545,032     452,045     473,414     (29)
      Other securities   656,029     519,283     429,142     492,706      33
    -------------------------------------------------------------------------
                       1,602,043   1,649,635   1,228,964   1,280,106      25
    -------------------------------------------------------------------------
    Securities Purchased
     Under Resale Agreements   -           -      77,000       9,001    (100)
    -------------------------------------------------------------------------
    Loans (Notes 5 and 7)
      Residential
       mortgages       2,100,432   2,239,023   2,134,327   1,974,285       6
      Other loans      7,111,545   6,877,594   6,565,280   6,264,472      14
    -------------------------------------------------------------------------
                       9,211,977   9,116,617   8,699,607   8,238,757      12
      Allowance for
       credit losses
       (Note 6)          (74,214)    (75,099)    (75,538)    (70,009)      6
    -------------------------------------------------------------------------
                       9,137,763   9,041,518   8,624,069   8,168,748      12
    -------------------------------------------------------------------------
    Other
      Land, buildings
       and equipment      31,738      30,369      31,893      26,258      21
      Goodwill             9,360       9,360       6,933       6,933      35
      Other intangible
       assets              6,801       7,089       2,155       2,274     199
      Insurance related   55,500      52,283      52,943      53,514       4
      Derivative related
       (Note 8)            4,081       4,524       9,980       3,529      16
      Other assets        88,737      83,795      74,622      70,324      26
    -------------------------------------------------------------------------
                         196,217     187,420     178,526     162,832      21
    -------------------------------------------------------------------------
    Total Assets     $11,331,377 $11,450,625 $10,600,732 $10,056,644     13%
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity
    Deposits
      Payable on
       demand          $ 395,128   $ 360,989   $ 383,083   $ 366,725      8%
      Payable after
       notice          2,239,682   2,139,361   2,010,039   2,096,550      7
      Payable on a
       fixed date      6,653,999   7,107,984   6,747,597   6,118,061      9
      Deposit from
       Canadian
       Western Bank
       Capital Trust     105,000     105,000     105,000     105,000      -
    -------------------------------------------------------------------------
                       9,393,809   9,713,334   9,245,719   8,686,336      8
    -------------------------------------------------------------------------
    Other
      Cheques and other
       items in transit   27,472      44,039      29,036      27,045       2
      Insurance related  138,996     135,563     134,769     131,504       6
      Derivative related
       (Note 8)              164         852         163         285     (42)
      Securities
       purchased under
       reverse resale
       agreements        246,794      83,468           -           -     100
      Other liabilities  182,910     162,616     136,897     138,073      32
    -------------------------------------------------------------------------
                         596,336     426,538     300,865     296,907     101
    -------------------------------------------------------------------------
    Subordinated
     Debentures
    -------------------------------------------------------------------------
      Conventional       375,000     375,000     375,000     410,000      (9)
    -------------------------------------------------------------------------
    Shareholders' Equity
      Preferred shares
       (Note 9)          209,750     209,750           -           -     100
      Common shares
       (Note 9)          224,405     223,062     221,914     221,103       1
      Contributed
       surplus            18,708      18,060      14,234      12,909      45
      Retained
       earnings          492,274     474,353     448,203     430,697      14
      Accumulated other
       comprehensive
       income (loss)      21,095      10,528      (5,203)     (1,308)     nm
    -------------------------------------------------------------------------
                         966,232     935,753     679,148     663,401      46
    -------------------------------------------------------------------------
    Total Liabilities
     and Shareholders'
     Equity          $11,331,377 $11,450,625 $10,600,732 $10,056,644     13%
    -------------------------------------------------------------------------
    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 nine months ended
                                                   --------------------------
    (unaudited)                                           July 31    July 31
    ($ thousands)                                            2009       2008
    -------------------------------------------------------------------------
    Retained Earnings
    Balance at beginning of period                      $ 448,203  $ 372,739
      Net income                                           75,928     77,534
      Dividends - Preferred shares                         (6,260)         -
                - Common shares                           (20,969)   (19,576)
      Issuance costs on preferred units                    (4,628)         -
    -------------------------------------------------------------------------
    Balance at end of period                              492,274    430,697
    -------------------------------------------------------------------------
    Accumulated Other Comprehensive Income (Loss)
    Balance at beginning of period                         (5,203)    (5,931)
      Other comprehensive income                           26,298      4,623
    -------------------------------------------------------------------------
    Balance at end of period                               21,095     (1,308)
    -------------------------------------------------------------------------
    Total retained earnings and accumulated
     other comprehensive income (loss)                    513,369    429,389
    -------------------------------------------------------------------------
    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          1,306      1,086
      Transferred from contributed surplus on
       exercise or exchange of options                      1,185      1,013
    -------------------------------------------------------------------------
    Balance at end of period                              224,405    221,103
    -------------------------------------------------------------------------
    Contributed Surplus
    Balance at beginning of period                         14,234      9,681
      Amortization of fair value of
       employee stock options                               5,659      4,241
      Transferred to common shares on exercise
       or exchange of options                              (1,185)    (1,013)
    -------------------------------------------------------------------------
    Balance at end of period                               18,708     12,909
    -------------------------------------------------------------------------
    Total Shareholders' Equity                          $ 966,232  $ 663,401
    -------------------------------------------------------------------------



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

                                           For the                   For the
                                three months ended         nine months ended
                          ------------------------  -------------------------
    (unaudited)               July 31      July 31      July 31      July 31
    ($ thousands)                2009         2008         2009         2008
    -------------------------------------------------------------------------
    Net Income            $    28,729  $    26,327  $    75,928  $    77,534
    -------------------------------------------------------------------------
    Other Comprehensive
     Income, net of tax
      Available-for-sale
       securities:
        Gains from change
         in fair value(1)      14,904       (2,906)      45,452        5,523
        Reclassification
         to other income(2)    (4,504)        (600)     (14,884)      (2,634)
    -------------------------------------------------------------------------
                               10,400       (3,506)      30,568        2,889
    -------------------------------------------------------------------------
      Derivatives
       designated as cash
       flow hedges:
        Gains from change
         in fair value(3)       2,596          566        8,564        3,904
        Reclassification
         to net interest
         income(4)             (2,429)        (965)      (7,424)      (1,232)
        Reclassification
         to other
         liabilities for
         derivatives
         terminated prior
         to maturity(5)             -            -       (5,410)        (938)
    -------------------------------------------------------------------------
                                  167         (399)      (4,270)       1,734
    -------------------------------------------------------------------------
                               10,567       (3,905)      26,298        4,623
    -------------------------------------------------------------------------
    Comprehensive Income
     for the Period       $    39,296  $    22,422  $   102,226  $    82,157
    -------------------------------------------------------------------------
    (1) Net of income tax expense of $6,267 and $19,047 for the three and
        nine months ended July 31, 2009, respectively (2008 - tax benefit of
        $1,260 and tax expense of $2,394).
    (2) Net of income tax benefit of $1,895 and $6,267 for the three and nine
        months ended July 31, 2009, respectively (2008 - tax benefit of $260
        and $1,142).
    (3) Net of income tax expense of $1,087 and $3,584 for the three and nine
        months ended July 31, 2009, respectively (2008 - tax expense of $187
        and $1,714).
    (4) Net of income tax benefit of $1,016 and $3,107 for the three and nine
        months ended July 31, 2009, respectively (2008 - tax benefit of $411
        and $534).
    (5) Net of income tax benefit of nil and $2,264 for the three and nine
        months ended July 31, 2009, respectively (2008 - tax benefit nil and
        $429).

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



    -------------------------------------------------------------------------
    Consolidated Statements of Cash Flow
    -------------------------------------------------------------------------
                                           For the                   For the
                                three months ended         nine months ended
                          ------------------------  -------------------------
    (unaudited)               July 31      July 31      July 31      July 31
    ($ thousands)                2009         2008         2009         2008
    -------------------------------------------------------------------------
    Cash Flows from
     Operating Activities
      Net income          $    28,729  $    26,327  $    75,928  $    77,534
      Adjustments to
       determine net
       cash flows
        Provision for
         credit losses          3,369        3,038       10,107        8,813
        Depreciation and
         amortization           2,156        1,761        6,441        5,116
        Amortization of
         fair value of
         employee stock
         options                1,078        1,537        5,659        4,241
        Future income
         taxes, net            (6,651)         372      (10,963)         899
        Gain on sale of
         securities, net       (6,399)        (765)     (21,122)      (3,777)
        Accrued interest
         receivable and
         payable, net          14,970       (3,274)      30,031        6,326
        Current income
         taxes payable,
         net                    8,993          816        6,946       (1,068)
        Other items, net        2,676        4,087       10,204       (4,963)
    -------------------------------------------------------------------------
                               48,921       33,899      113,231       93,121
    -------------------------------------------------------------------------
    Cash Flows from
     Financing Activities
      Deposits, net          (319,525)       7,312      148,090      429,418
      Securities purchased
       under reverse
       resale agreements,
       net                    163,326      (19,896)     246,794            -
      Debentures issued             -       50,000            -       50,000
      Debentures redeemed           -      (30,000)           -      (30,000)
      Common shares issued
       (Note 9)                   913          186        1,306        1,086
      Preferred units
       issued  (Note 9)             -            -      209,750            -
      Issuance costs on
       preferred units             (2)           -       (4,628)           -
      Dividends               (10,806)      (6,959)     (27,229)     (19,576)
    -------------------------------------------------------------------------
                             (166,094)         643      574,083      430,928
    -------------------------------------------------------------------------
    Cash Flows from
     Investing Activities
      Interest bearing
       deposits with
       regulated financial
       institutions, net      198,030       65,595      116,202       (2,950)
      Securities, purchased  (803,484)    (658,402)  (2,319,758)  (2,057,270)
      Securities,
       sale proceeds          705,305      187,183    1,694,881      936,939
      Securities, matured     160,298      452,649      291,876    1,192,159
      Securities purchased
       under resale
       agreements, net              -      146,147       77,000      197,924
      Loans, net              (99,614)    (229,150)    (523,801)    (771,981)
      Land, buildings
       and equipment           (3,237)      (2,088)      (5,352)      (5,231)
      Business acquisitions
       (Note 2)                     -            -       (6,481)           -
    -------------------------------------------------------------------------
                              157,298      (38,066)    (675,433)    (510,410)
    -------------------------------------------------------------------------
    Change in Cash and
     Cash Equivalents          40,125       (3,524)      11,881       13,639
    Cash and Cash
     Equivalents at
     Beginning of Period      (29,300)       2,554       (1,056)     (14,609)
    -------------------------------------------------------------------------
    Cash and Cash
     Equivalents at
     End of Period(*)     $    10,825  $      (970) $    10,825  $      (970)
    -------------------------------------------------------------------------
    (*) Represented by:
      Cash and
       non-interest
       bearing deposits
       with financial
       institutions       $    38,297  $    23,903  $    38,297  $    23,903
      Cheques and other
       items in transit
       (included in Cash
       Resources)                   -        2,172            -        2,172
      Cheques and other
       items in transit
       (included in Other
       Liabilities)           (27,472)     (27,045)     (27,472)     (27,045)
    -------------------------------------------------------------------------
    Cash and Cash
     Equivalents at
     End of Period        $    10,825  $      (970) $    10,825  $      (970)
    -------------------------------------------------------------------------

    Supplemental
     Disclosure of
     Cash Flow
     Information
      Amount of interest
       paid in the
       period             $    57,240  $    87,589  $   190,201  $   254,032
      Amount of income
       taxes paid in
       the period               8,649        9,850       33,617       34,682
    -------------------------------------------------------------------------

    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, except as
        disclosed below. 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 nine
                         For the three months ended          months ended
                       ------------------------------------------------------
                         July 31   April 30    July 31    July 31    July 31
                            2009       2009       2008       2009       2008
        ---------------------------------------------------------------------
        Net earned
         premiums      $  26,895  $  24,880  $  25,030  $  76,990  $  73,066
        Commissions
         and processing
         fees                741        760        734      2,155      2,134
        Net claims and
         adjustment
         expenses        (16,660)   (16,126)   (15,612)   (51,437)   (47,816)
        Policy
         acquisition
         costs            (5,181)    (5,316)    (5,466)   (15,603)   (15,361)
        ---------------------------------------------------------------------
        Total, net     $   5,795  $   4,198  $   4,686  $  12,105  $  12,023
        ---------------------------------------------------------------------


    4.  Securities

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

                                                 As at      As at      As at
                                               July 31   April 30 October 31
                                                  2009       2009       2008
        ---------------------------------------------------------------------
        Interest bearing deposits with
         regulated financial institutions    $  10,006  $  12,231  $     940
        Securities
          Issued or guaranteed by Canada           490      3,090      1,417
          Issued or guaranteed by a province
           or municipality                       3,900     10,509      1,214
          Other securities                      11,166    (15,039)   (21,386)
        ---------------------------------------------------------------------
        Unrealized gain (losses), net        $  25,562  $  10,791  $ (17,815)
        ---------------------------------------------------------------------

        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)   $  1,013  $    854  $    103  $     77  $     54  $  2,101
      Other loans      119       222        26         4         1       372
    -------------------------------------------------------------------------
                     1,132     1,076       129        81        55     2,473
    -------------------------------------------------------------------------

    Loans to
     Businesses
      Commercial       742     1,245       115        84       287     2,473
      Construction
       and real
       estate(3)     1,020     1,454       112        64       165     2,815
      Equipment
       financing       327       828        51        16        55     1,277
      Energy             -       174         -         -         -       174
    -------------------------------------------------------------------------
                     2,089     3,701       278       164       507     6,739
    -------------------------------------------------------------------------
    Total
     Loans(1)     $  3,221  $  4,777  $    407  $    245  $    562  $  9,212
    -------------------------------------------------------------------------
    Composition
     Percentage
      July 31,
       2009            35%       52%        4%        3%        6%      100%
      April 30,
       2009            36%       52%        4%        2%        6%      100%
      October 31,
       2008            36%       53%        4%        2%        5%      100%
    -------------------------------------------------------------------------


                   July 31  April 30   October
                      2009      2009   31 2008
                  Composi-  Composi-  Composi-
                      tion      tion      tion
                  Percent-   Percent  Percent-
    ($ millions)       age       age       age
    -------------------------------------------
    Loans to
     Individuals
      Residential
       mort-
       gages(2)        23%       24%       24%
      Other loans       4         4         4
    -------------------------------------------
                       27        28        28
    -------------------------------------------

    Loans to
     Businesses
      Commercial       27        27        27
      Construction
       and real
       estate(3)       30        30        29
      Equipment
       financing       14        13        14
      Energy            2         2         2
    -------------------------------------------
                       73        72        72
    -------------------------------------------
    Total
     Loans(1)         100%      100%      100%
    -------------------------------------------
    Composition
     Percentage
      July 31,
       2009
      April 30,
       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
                                                     July 31, 2009
                                       --------------------------------------
                                                        General
                                                      Allowance
                                          Specific   for Credit
                                         Allowance       Losses        Total
        ---------------------------------------------------------------------
        Balance at beginning of period $    14,084  $    61,015  $    75,099
        Provision for credit losses          3,168          201        3,369
        Write-offs                          (4,455)           -       (4,455)
        Recoveries                             201            -          201
        ---------------------------------------------------------------------
        Balance at end of period       $    12,998  $    61,216  $    74,214
        ---------------------------------------------------------------------


                                             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
                                                    July 31, 2008
                                       --------------------------------------
                                                        General
                                                      Allowance
                                          Specific   for Credit
                                         Allowance       Losses        Total
        ---------------------------------------------------------------------
        Balance at beginning of period $    10,787  $    56,304  $    67,091
        Provision for credit losses            117        2,921        3,038
        Write-offs                            (133)           -         (133)
        Recoveries                              13            -           13
        ---------------------------------------------------------------------
        Balance at end of period       $    10,784  $    59,225  $    70,009
        ---------------------------------------------------------------------


                                              For the nine months ended
                                                    July 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          9,418          689       10,107
        Write-offs                         (11,678)           -      (11,678)
        Recoveries                             247            -          247
        ---------------------------------------------------------------------
        Balance at end of period        $   12,998  $    61,216  $    74,214
        ---------------------------------------------------------------------


                                              For the nine months ended
                                                    July 31, 2008
                                       --------------------------------------
                                                        General
                                                      Allowance
                                          Specific   for Credit
                                         Allowance       Losses        Total
        ---------------------------------------------------------------------
        Balance at beginning of period $     7,414  $    55,608  $    63,022
        Provision for credit losses          5,196        3,617        8,813
        Write-offs                          (1,872)           -       (1,872)
        Recoveries                              46            -           46
        ---------------------------------------------------------------------
        Balance at end of period       $    10,784  $    59,225  $    70,009
        ---------------------------------------------------------------------

    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 July 31, 2009
                          ---------------------------------------------------
                                             Gross                       Net
                                Gross     Impaired     Specific     Impaired
                               Amount       Amount    Allowance        Loans
        ---------------------------------------------------------------------
        Consumer and
         personal         $ 1,348,362  $    16,706  $     1,306  $    15,400
        Real estate(1)      3,892,443       63,999        5,513       58,486
        Industrial          1,449,319       23,223        5,494       17,729
        Commercial          2,521,853        1,301          685          616
        ---------------------------------------------------------------------
        Total(3)          $ 9,211,977  $   105,229  $    12,998       92,231
        --------------------------------------------------------
        General
         allowance(2)                                                (61,216)
        ---------------------------------------------------------------------
        Net impaired loans after general allowance               $    31,015
        ---------------------------------------------------------------------


                                        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)      3,929,189       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(3)          $ 9,116,617  $   107,017  $    14,084       92,933
        --------------------------------------------------------
        General
         allowance(2)                                                (61,015)
        ---------------------------------------------------------------------
        Net impaired loans after general allowance               $    31,918
        ---------------------------------------------------------------------


                                        As at October 31, 2008
                          ---------------------------------------------------
                                             Gross                       Net
                                Gross     Impaired     Specific     Impaired
                               Amount       Amount    Allowance        Loans
        ---------------------------------------------------------------------
        Consumer and
         personal         $ 1,288,160  $    11,462  $       305  $    11,157
        Real estate(1)      3,673,158       51,909        2,948       48,961
        Industrial          1,391,287       20,456        5,647       14,809
        Commercial          2,347,002        7,809        6,111        1,698
        ---------------------------------------------------------------------
        Total             $ 8,699,607  $    91,636  $    15,011       76,625
        --------------------------------------------------------
        General allowance(2)                                         (60,527)
        ---------------------------------------------------------------------
        Net impaired loans after general allowance               $    16,098
        ---------------------------------------------------------------------
        (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) Gross impaired loans includes foreclosed real estate with a
            carrying value of $4,756 (April 30, 2009 - $3,505 and October 31,
            2008 - $901) which is held for sale.


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

                                                 As at July 31, 2009
                                       --------------------------------------
                                             Gross                       Net
                                          Impaired     Specific     Impaired
                                            Amount    Allowance        Loans
        ---------------------------------------------------------------------
        Alberta                        $    50,553  $     5,178  $    45,375
        British Columbia                    52,477        6,737       45,740
        Saskatchewan                         1,424          618          806
        Manitoba                               498          336          162
        Other                                  277          129          148
        ---------------------------------------------------------------------
        Total                          $   105,229  $    12,998       92,231
        --------------------------------------------------------
        General allowance(1)                                         (61,216)
        ---------------------------------------------------------------------
        Net impaired loans after
         general allowance                                       $    31,015
        ---------------------------------------------------------------------


                                                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 October 31, 2008
                                       --------------------------------------
                                             Gross                       Net
                                          Impaired     Specific     Impaired
                                            Amount    Allowance        Loans
        ---------------------------------------------------------------------
        Alberta                        $    48,436  $     9,204  $    39,232
        British Columbia                    40,656        4,626       36,030
        Saskatchewan                         2,155          792        1,363
        Manitoba                               389          389            -
        Other                                    -            -            -
        ---------------------------------------------------------------------
        Total                          $    91,636  $    15,011       76,625
        --------------------------------------------------------
        General allowance(1)                                         (60,527)
        ---------------------------------------------------------------------
        Net impaired loans after
         general allowance                                       $    16,098
        ---------------------------------------------------------------------
        (1) The general allowance for credit risk is not allocated by
            province.

        During the three and nine months ended July 31, 2009, interest
        recognized as income on impaired loans totaled $468 and $1,400
        respectively (2008 - $126 and $304).

        Gross impaired loans exclude certain past due loans where payment of
        interest or principal is contractually in arrears, 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 July 31, 2009
                       ------------------------------------------------------
                          1 - 30    31 - 60    61 - 90  More than
                            days       days       days    90 days      Total
        ---------------------------------------------------------------------
        Residential
         mortgages     $   4,610  $   6,833  $   2,556  $       -  $  13,999
        Other loans       11,332     38,273      3,291          -     52,896
        ---------------------------------------------------------------------
                       $  15,942  $  45,106  $   5,847  $       -  $  66,895
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------
        Total as at
         April 30,
         2009          $  55,152  $   2,111  $   8,898  $       -  $  66,161
        ---------------------------------------------------------------------
        Total as at
         October 31,
         2008          $  18,949  $  12,560  $     689  $       -  $  32,198
        ---------------------------------------------------------------------

    8.  Derivative Financial Instruments

        For the three and nine months ended July 31, 2009, a net unrealized
        after tax gain of $2,596 and $8,564 respectively (2008 - $566 and
        $3,904) 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 nine months ended July 31,
        2009, a net gain after tax of $2,429 and $7,424 respectively (2008 -
        $965 and $1,232) was reclassified to net income. A net gain of $2,958
        (2008 - $247) after tax recorded in accumulated other comprehensive
        income (loss) as at July 31, 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 July 31, 2009
                                       --------------------------------------
                                          Notional     Positive     Negative
                                            Amount   Fair Value   Fair Value
        ---------------------------------------------------------------------
        Interest rate swaps designated
         as cash flow hedges(1)        $   235,000  $     3,922  $         -
        Equity contracts(2)                  2,000            -           40
        Foreign exchange contracts(3)        2,234          128          124
        Embedded derivatives in
         equity-linked deposits(2)             n/a           31            -
        Other forecasted transactions            -            -            -
        ---------------------------------------------------------------------
        Derivative related amounts                  $     4,081  $       164
        ---------------------------------------------------------------------


                                                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 October 31, 2008
                                       --------------------------------------
                                          Notional     Positive     Negative
                                            Amount   Fair Value   Fair Value
        ---------------------------------------------------------------------
        Interest rate swaps designated
         as cash flow hedges           $   593,000  $     9,827  $         -
        Equity contracts                     4,400            -          139
        Foreign exchange contracts           2,600            2           24
        Embedded derivatives in
         equity-linked deposits                n/a          151            -
        Other forecasted transactions            -            -            -
        ---------------------------------------------------------------------
        Derivative related amounts                  $     9,980  $       163
        ---------------------------------------------------------------------
        (1) Interest rate swaps outstanding at July 31, 2009 mature between
            November 2009 and June 2010.
        (2) Equity contracts and equity-linked deposits outstanding at
            July 31, 2009 mature between March 2010 and March 2011.
        (3) Foreign exchange contracts outstanding at July 31, 2009 mature
            between August and December 2009.

        n/a - not applicable.

        There were no forecasted transactions that failed to occur during the
        nine months ended July 31, 2009.

    9.  Capital Stock

        Share Capital

                                       For the three months ended
                          ---------------------------------------------------
                                July 31, 2009             July 31, 2008
        ---------------------------------------------------------------------
                            Number of                 Number of
                               Shares       Amount       Shares       Amount
        ---------------------------------------------------------------------
        Preferred Shares
         - Series 3
           Outstanding at
            beginning of
            period          8,390,000  $   209,750            -  $         -
           Issued during
            the period              -            -            -            -
        ---------------------------------------------------------------------
           Outstanding at
            end of period   8,390,000      209,750            -            -
        ---------------------------------------------------------------------
        Common Shares
          Outstanding at
           beginning of
           period          63,588,520      223,062   63,234,450      220,634
          Issued on
           exercise or
           exchange of
           options            149,593          913      107,499          186
          Transferred from
           contributed
           surplus on
           exercise or
           exchange of
           options                  -          430            -          283
        ---------------------------------------------------------------------
          Outstanding at
           end of period   63,738,113      224,405   63,341,949      221,103
        ---------------------------------------------------------------------
        Share Capital                  $   434,155               $   221,103
        ---------------------------------------------------------------------


                                       For the nine months ended
                          ---------------------------------------------------
                                July 31, 2009             July 31, 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            280,971        1,306      505,760        1,086
          Transferred
           from
           contributed
           surplus on
           exercise or
           exchange of
           options                  -        1,185            -        1,013
        ---------------------------------------------------------------------
          Outstanding at
           end of period   63,738,113      224,405   63,341,949      221,103
        ---------------------------------------------------------------------
        Share Capital                  $   434,155               $   221,103
        ---------------------------------------------------------------------

        In 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 nine months ended
                          ---------------------------------------------------
                               July 31, 2009             July 31, 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 in March 2009 were part of the Preferred Unit
        issuance discussed in the section above.

    10.  Stock-Based Compensation

         Stock Options

                                      For the three months ended
                          ---------------------------------------------------
                               July 31, 2009             July 31, 2008
        ---------------------------------------------------------------------
                                          Weighted                  Weighted
                                           Average                   Average
                            Number of     Exercise    Number of     Exercise
                              Options        Price      Options        Price
        ---------------------------------------------------------------------
        Options
          Balance at
           beginning of
           period           4,444,255  $     18.05    4,941,242  $     19.50
          Granted             458,500        16.89      614,900        26.10
          Exercised or
           exchanged         (259,300)       10.29     (156,450)        8.89
          Forfeited           (17,050)       17.65      (39,850)       25.08
        ---------------------------------------------------------------------
        Balance at end of
         period             4,626,405  $     18.37    5,359,842  $     20.53
        ---------------------------------------------------------------------


                                       For the nine months ended
                          ---------------------------------------------------
                               July 31, 2009             July 31, 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           1,465,035        13.33    1,216,242        28.57
          Exercised or
           exchanged         (725,300)       10.14     (685,977)        8.90
          Forfeited        (1,318,212)       27.00      (81,700)       23.73
        ---------------------------------------------------------------------
        Balance at end of
         period             4,626,405  $     18.37    5,359,842  $     20.53
        ---------------------------------------------------------------------
        Exercisable at end
         of period          1,940,700  $     17.53    1,263,100  $     10.68
        ---------------------------------------------------------------------

        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 725,300
        options (2008 - 685,977) exercised or exchanged in the nine months
        ended July 31, 2009, option holders exchanged the rights to 602,300
        options (2008 - 558,527) and received 157,971 shares (2008 - 378,310)
        in return under the cashless settlement alternative.

        For the nine months ended July 31, 2009, salary expense of $5,659
        (2008 - $4,241) 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
        2.2% (2008 - 3.8%), (ii) expected option life of 4.0 years (2008 -
        4.0 years), (iii) expected volatility of 38% (2008 - 23%), and (iv)
        expected dividends of 3.6% (2008 - 1.3%). The weighted average fair
        value of options granted was estimated at $2.94 (2008 - $5.88) per
        share.

        In March 2009, 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) was recognized at that time as additional
        non-tax deductible salary expense with an offsetting increase to
        contributed surplus.

        Further details relating to stock options outstanding and exercisable
        at July 31, 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     165,000        0.5  $    9.91    148,500  $   10.06
    $11.18 to $13.78   1,226,635        3.6      12.16    250,500      13.71
    $15.46 to $17.58   1,248,700        2.5      16.60    790,200      16.43
    $19.16 to $21.46   1,066,290        2.4      21.45    751,500      21.44
    $22.29 to $26.38     693,000        3.0      25.64          -          -
    $28.11 to $31.18     226,780        3.4      31.13          -          -
    -------------------------------------------------------------------------
    Total              4,626,405        2.8  $   18.37  1,940,700  $   17.53
    -------------------------------------------------------------------------

        Restricted Share Units

        During the quarter, the Bank adopted a plan to grant Restricted Share
        Units (RSUs) as part of its long-term incentive plan. Under this
        plan, certain employees received an award in the form of RSUs. Each
        RSU entitles the holder to receive the cash equivalent of the market
        value of the Bank's common shares at the vesting date and an amount
        equivalent to the dividends paid on the common shares during the
        vesting period. RSUs vest on each anniversary of the grant in equal
        one-third installments over a vesting period of three years. Salary
        expense is recognized evenly over the vesting period except where the
        employee is eligible to retire prior to the vesting date, in which
        case the expense is recognized between the grant date and the date
        the employee is eligible to retire.

        For the three and nine months ended July 31, 2009, salary expense of
        $2,159 ($1,501, net of tax) was recognized related to RSUs. As at
        July 31, 2009, the liability for the RSUs held under this plan was
        $2,159. At the end of each period, the liability and salary expense
        are adjusted to reflect changes in the market value of the Bank's
        common shares.

                                                                   Number of
        For the three and nine months ended July 31, 2009               RSUs
        ---------------------------------------------------------------------
        Restricted Share Units
          Balance at beginning of period                                   -
          Granted                                                    286,929
          Vested                                                           -
          Forfeited                                                        -
        ---------------------------------------------------------------------
          Balance at end of period                                   286,929
        ---------------------------------------------------------------------

    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
                                           July 31     April 30   October 31
                                              2009         2009         2008
        ---------------------------------------------------------------------
        Guarantees and standby letters
         of credit
          Balance outstanding          $   208,166  $   218,269  $   232,649
        Business credit cards
          Total approved limit              10,610       10,753       11,503
          Balance outstanding                2,357        2,204        2,778
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------

        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 July 31, 2009 at fair value (cash, securities, securities
        purchased under resale agreements and derivatives) was determined
        using published market prices quoted in active markets for 86% (2008
        - 97%) of the portfolio and estimated using a valuation technique
        based on observable market data for 14% (2008 - 3%) 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.


                                                    July 31, 2009
        ---------------------------------------------------------------------
                                                                  Fair Value
                                                                 Over (Under)
                                        Book Value   Fair Value   Book Value
        ---------------------------------------------------------------------
        Assets
          Cash resources               $   395,354  $   395,354  $         -
          Securities                     1,602,043    1,602,043            -
          Securities purchased
           under resale agreements               -            -            -
          Loans(1)                       9,217,247    9,269,295       52,048
          Other assets(2)                   88,053       88,053            -
          Derivative related                 4,081        4,081            -
        Liabilities
          Deposits(1)                    9,410,200    9,540,803      130,603
          Other liabilities(3)             263,307      263,307            -
          Securities purchased under
           reverse resale agreements       246,794      246,794            -
          Subordinated debentures          375,000      377,036        2,036
          Derivative related                   164          164            -
        ---------------------------------------------------------------------


                                                  October 31, 2008
        ---------------------------------------------------------------------
                                                                  Fair Value
                                                                 Over (Under)
                                        Book Value   Fair Value   Book Value
        ---------------------------------------------------------------------
        Assets
          Cash resources               $   492,173  $   492,173  $         -
          Securities                     1,228,964    1,228,964            -
          Securities purchased
           under resale agreements          77,000       77,000            -
          Loans(1)                       8,700,672    8,635,811      (64,861)
          Other assets(2)                   82,782       82,782            -
          Derivative related                 9,980        9,980            -
        Liabilities
          Deposits(1)                    9,258,776    9,247,017      (11,759)
          Other liabilities(3)             232,678      232,678            -
          Securities purchased under
           reverse resale agreements             -            -            -
          Subordinated debentures          375,000      387,774       12,774
          Derivative related                   163          163            -
        ---------------------------------------------------------------------
        (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 to 3    3 Months      Within
        ($ millions)             1 Month      Months   to 1 Year      1 Year
        ---------------------------------------------------------------------
        July 31, 2009
        Assets
        Cash resources and
         securities           $      103  $      100  $      201  $      404
        Loans                      4,937         586         935       6,458
        Other assets                   -           -           -           -
        Derivative financial
         instruments(1)                -           -         239         239
        ---------------------------------------------------------------------
        Total                      5,040         686       1,375       7,101
        ---------------------------------------------------------------------
        Liabilities and Equity
        Deposits                   3,324         948       1,759       6,031
        Other liabilities            250           6          26         282
        Debentures                     -           -          60          60
        Shareholders' equity           -           -           -           -
        Derivative financial
         instruments(1)              239           -           -         239
        ---------------------------------------------------------------------
        Total                 $    3,813  $      954  $    1,845  $    6,612
        ---------------------------------------------------------------------
        Interest Rate
         Sensitive Gap        $    1,227  $     (268) $     (470) $      489
        ---------------------------------------------------------------------
        Cumulative Gap        $    1,227  $      959  $      489  $      489
        ---------------------------------------------------------------------
        Cumulative Gap as a
         percentage of total
         assets                   10.6 %       8.3 %       4.2 %       4.2 %
        ---------------------------------------------------------------------

        April 30, 2009
        Assets                $    5,247  $      927  $    1,329  $    7,503
        Liabilities and equity     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 %
        ---------------------------------------------------------------------

        October 31, 2008
        Cumulative gap        $    1,068  $      963  $      234  $      234
        ---------------------------------------------------------------------
        Cumulative gap as a
         percentage of total
         assets                    9.5 %       8.6 %       2.1 %       2.1 %
        ---------------------------------------------------------------------


                                                            Non-
                               1 Year to   More than    interest
        ($ millions)             5 Years     5 Years   Sensitive       Total
        ---------------------------------------------------------------------
        July 31, 2009
        Assets
        Cash resources and
         securities           $    1,468  $       64  $       61  $    1,997
        Loans                      2,655         104         (79)      9,138
        Other assets                   -           -         196         196
        Derivative financial
         instruments(1)                -           -           -         239
        ---------------------------------------------------------------------
        Total                      4,123         168         178      11,570
        ---------------------------------------------------------------------
        Liabilities and Equity
        Deposits                   3,275         105         (17)      9,394
        Other liabilities             35           8         271         596
        Debentures                   240          75           -         375
        Shareholders' equity           -           -         966         966
        Derivative financial
         instruments(1)                -           -           -         239
        ---------------------------------------------------------------------
        Total                 $    3,550  $      188  $    1,220  $   11,570
        ---------------------------------------------------------------------
        Interest Rate
         Sensitive Gap        $      573  $      (20) $   (1,042) $        -
        ---------------------------------------------------------------------
        Cumulative Gap        $    1,062  $    1,042  $        -  $        -
        ---------------------------------------------------------------------
        Cumulative Gap as a
         percentage of total
         assets                    9.2 %       9.0 %         - %         - %
        ---------------------------------------------------------------------

        April 30, 2009
        Assets                $    3,974  $      159  $      145  $   11,781
        Liabilities and equity     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 %         - %         - %
        ---------------------------------------------------------------------

        October 31, 2008
        Cumulative gap        $      818  $      770  $        -  $        -
        ---------------------------------------------------------------------
        Cumulative gap as a
         percentage of total
         assets                    7.3 %          6.9 %      - %         - %
        ---------------------------------------------------------------------
        (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          3 Months    Total   1 Year     More
    July 31,    Within   1 to 3     to 1   Within       to     than
    2009       1 Month   Months     Year   1 Year  5 Years  5 Years    Total
    -------------------------------------------------------------------------
    Total assets 3.7 %    2.5 %    4.6 %    3.8 %    5.1 %    6.1 %    4.3 %
    Total
     liabilities 0.6      3.1      3.3      1.7      3.9      5.8      2.5
    -------------------------------------------------------------------------
    Interest
     rate
     sensitive
     gap         3.1 %   (0.6)%    1.3 %    2.1 %    1.2 %    0.3 %    1.8 %
    -------------------------------------------------------------------------

    April 30,
     2009
    -------------------------------------------------------------------------
    Total assets 3.5 %    2.6 %    4.8 %    3.6 %    5.0 %    6.6 %    4.1 %
    Total
     liabilities 0.8      2.7      3.6      1.9      4.0      5.8      2.7
    -------------------------------------------------------------------------
    Interest
     rate
     sensitive
     gap         2.7 %  (0.1) %    1.2 %    1.7 %    1.0 %    0.8 %    1.4 %
    -------------------------------------------------------------------------

    October 31,
     2008
    -------------------------------------------------------------------------
    Total assets 4.7 %    4.2 %    5.1 %    4.8 %    5.4 %    5.8 %    5.0 %
    Total
     liabilities 2.2      3.6      4.0      2.9      4.2      5.7      3.4
    -------------------------------------------------------------------------
    Interest
     rate
     sensitive
     gap         2.5 %    0.6 %    1.1 %    1.9 %    1.2 %    0.1 %    1.6 %
    -------------------------------------------------------------------------

        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 3.8% or $9.5 million (April 30,
        2009 - 5.6% or $12.4 million) and decrease other comprehensive income
        $20,689 (April 30, 2009 - $23,383) 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
        5.2% or $13.1 million (April 30, 2009 - 4.8% or $10.5 million) and
        increase other comprehensive income $20,689 (April 30, 2009 -
        $23,383) 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                Insurance
                  -----------------------------------------------------------
                         Three months ended          Three months ended
                  -----------------------------------------------------------
                   July 31  April 30   July 31   July 31  April 30   July 31
                      2009      2009      2008      2009      2009      2008
    -------------------------------------------------------------------------
    Net interest
     income
     (teb)(1)     $ 59,340  $ 51,399  $ 55,877  $  1,594  $  1,413  $  1,413
    Less teb
     adjustment      2,018     1,528     1,326       171       147       116
    -------------------------------------------------------------------------
    Net interest
     income per
     financial
     statements     57,322    49,871    54,551     1,423     1,266     1,297
    Other income(2) 18,651    18,125    14,415     5,953     4,445     4,670
    -------------------------------------------------------------------------
    Total revenues  75,973    67,996    68,966     7,376     5,711     5,967
    Provision for
     credit losses   3,369     3,369     3,038         -         -         -
    Non-interest
     expenses       37,283    37,381    32,124     2,927     2,613     2,406
    Provision for
     income taxes    9,791     7,785     9,980     1,200       923     1,058
    Non-controlling
     interest in
     subsidiary         50        56         -         -         -         -
    -------------------------------------------------------------------------
    Net income    $ 25,480  $ 19,405  $ 23,824  $  3,249  $  2,175  $  2,503
    -------------------------------------------------------------------------
    Total average
     assets ($
     millions)(3) $ 11,142  $ 11,024  $  9,927  $    200  $    192  $    185
    -------------------------------------------------------------------------


                                                             Total
                                               ------------------------------
                                                      Three months ended
                                               ------------------------------
                                                 July 31  April 30   July 31
                                                    2009      2009      2008
    -------------------------------------------------------------------------
    Net interest income (teb)(1)                $ 60,934  $ 52,812  $ 57,290
    Less teb adjustment                            2,189     1,675     1,442
    -------------------------------------------------------------------------
    Net interest income per financial
     statements                                   58,745    51,137    55,848
    Other income                                  24,604    22,570    19,085
    -------------------------------------------------------------------------
    Total revenues                                83,349    73,707    74,933
    Provision for credit losses                    3,369     3,369     3,038
    Non-interest expenses                         40,210    39,994    34,530
    Provision for income taxes                    10,991     8,708    11,038
    Non-controlling interest in subsidiary            50        56         -
    -------------------------------------------------------------------------
    Net income                                  $ 28,729  $ 21,580  $ 26,327
    -------------------------------------------------------------------------
    Total average assets ($ millions)(3)        $ 11,342  $ 11,216  $ 10,112
    -------------------------------------------------------------------------


                   Banking and Trust       Insurance             Total
                  -----------------------------------------------------------
                   Nine months ended   Nine months ended   Nine months ended
                  -----------------------------------------------------------
                   July 31   July 31   July 31   July 31   July 31   July 31
                      2009      2008      2009      2008      2009      2008
    -------------------------------------------------------------------------
    Net interest
     income
     (teb)(1)     $163,840  $165,844  $  4,502  $  4,151  $168,342  $169,995
    Less teb
     adjustment      4,984     3,816       466       315     5,450     4,131
    -------------------------------------------------------------------------
    Net interest
     income per
     financial
     statements    158,856   162,028     4,036     3,836   162,892   165,864
    Other
     income(2)      56,994    42,758    12,531    12,045    69,525    54,803
    -------------------------------------------------------------------------
    Total revenues 215,850   204,786    16,567    15,881   232,417   220,667
    Provision for
     credit losses  10,107     8,813         -         -    10,107     8,813
    Non-interest
     expenses      108,574    92,835     8,035     6,972   116,609    99,807
    Provision for
     income taxes   27,289    31,801     2,311     2,712    29,600    34,513
    Non-controlling
     interest in
     subsidiary        173         -         -         -       173         -
    -------------------------------------------------------------------------
    Net income    $ 69,707  $ 71,337  $  6,221  $  6,197  $ 75,928  $ 77,534
    -------------------------------------------------------------------------
    Total average
     assets ($
     millions)(3) $ 10,959  $  9,695  $    193  $    181  $ 11,152  $  9,876
    -------------------------------------------------------------------------
    (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
        commonly 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, 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
                                           July 31     April 30      July 31
                                              2009         2009         2008
        ---------------------------------------------------------------------
        Capital
          Tier 1                       $ 1,040,753  $ 1,013,204  $   760,597
          Total                          1,432,146    1,403,487    1,149,434
        ---------------------------------------------------------------------
        Capital ratios
          Tier 1                            11.2 %       11.0 %        9.2 %
          Total                               15.4         15.2         14.0
        Assets to capital multiple           8.0 x        8.2 x        8.8 x
        ---------------------------------------------------------------------

        During the three and nine months ended July 31, 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 3000, 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
                                      Eligible Dividends Designation
    Subsidiary Offices
                                      CWB designates all dividends for both
    Canadian Western Trust Company    common and preferred shares paid to
    Suite 600, 750 Cambie Street      Canadian residents as "eligible
    Vancouver, BC  V6B 0A2            dividends", as defined in the Income
    Toll-free: 1-800-663-1124         Tax Act (Canada), unless otherwise
    Fax: (604) 669-6069               noted.
    Website: www.cwt.ca               Investor Relations

    Canadian Direct Insurance         For further financial information
     Incorporated                     contact:
    Suite 600, 750 Cambie Street      Kirby Hill, CFA
    Vancouver, BC  V6B 0A2            Assistant Vice President, Investor
    Telephone: (604) 699-3678          and Public Relations
    Fax: (604) 699-3851               Canadian Western Bank
    Website: www.canadiandirect.com   Telephone: (780) 441-3770
                                      Toll-free: 1-800-836-1886
    Valiant Trust Company             Fax: (780) 423-8899
    Suite 310, 606 - 4th Street S.W.  E-mail:
    Calgary, AB  T2P 1T1              InvestorRelations@cwbank.com
    Toll-free: 1-866-313-1872
    Fax: (403) 233-2857               Online Investor Information
    Website: www.valianttrust.com
                                      Additional investor information
    Adroit Investment Management Ltd. including supplemental financial
    Suite 2020                        information and a corporate
    10060 Jasper Avenue               presentation is available on
    Edmonton, AB  T5J 3R8             CWB's website at www.cwbankgroup.com.
    Telephone: (780) 429-3500
    Fax: (780) 429-9680               Quarterly Conference Call and Webcast
    Website:
    www.adroitinvestments.ca          CWB's quarterly conference call and
                                      live audio webcast will take place
    Stock Exchange Listings           on September 3, 2009 at 3:00 p.m. ET.
                                      The webcast will be archived on the
    The Toronto Stock Exchange        Bank's website at www.cwbankgroup.com
    Common Shares: CWB                for sixty days. A replay of the
    Series 3 Preferred Shares:        conference call will be available
     CWB.PR.A                         until September 17, 2009 by dialing
    Common Share Purchase Warrants:   (416) 640-1917 or toll free
     CWB.WT                           (877) 289-8525 and entering
                                      passcode 21311921, 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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