SUMMARY OF QUARTERLY RESULTS AND FOURTH QUARTER QUARTERLY RESULTS
The financial results for each of the last eight quarters are summarized in Table 29. Detailed MD&A along with unaudited interim consolidated financial statements for each quarter, except for the fourth quarters, are available for review on SEDAR at www.sedar.com and on our website at www.cwb.com. Copies of the quarterly reports to shareholders can also be obtained, free of charge, by contacting InvestorRelations@cwbank.com.
Table 29 - Quarterly Financial Highlights ($ thousands, except per share amounts)
2022
2021
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Results from Operations Net interest income
$ 240,202
$ 240,593
$ 226,109
$ 233,072
$ 229,925
$ 230,021
$ 216,964
$ 215,453
Non-interest income
39,636
31,119
32,652
32,904
30,699
33,194
30,142
29,635
Total revenue
279,838 132,528
271,712 132,346
258,761 119,919
265,976 137,110
260,624 122,747
263,215 137,586
247,106 126,342
245,088 130,474
Pre-tax, pre-provision income (1)
Common shareholders' net income
67,687
80,809
74,164
87,642
89,998
86,280
71,956
79,237
Earnings per share Basic
0.72
0.88 0.88
0.82 0.82
0.98 0.97
1.01 1.01
0.99 0.98
0.83 0.82
0.91 0.91
Diluted
0.72
Adjusted (1)
0.88
0.90
0.84
0.99
1.03
1.01
0.84
0.93
Return on common shareholders' equity
8.6 %
10.4 %
10.0 %
11.6 %
12.2 %
12.1 %
10.6 %
11.3 %
Adjusted return on common shareholders' equity (1)
10.5
10.7
10.3
11.8
12.5
12.3
10.8
11.5
Return on assets (1)
0.66
0.81
0.79
0.93
0.97
0.94
0.84
0.91
Net interest margin (1)
2.33
2.43
2.42
2.47
2.47
2.51
2.53
2.47
Efficiency ratio (1)
52.6
51.3
53.7
48.5
52.9
47.7
48.9
46.8
Provision for credit losses on total loans as a percentage of average loans (1)(2) Provision for credit losses on impaired loans as a percentage of average loans (1)(2)
0.14
0.16
0.14
0.11
(0.12)
0.11
0.20
0.18
-
0.12
0.14
0.12
(0.04)
0.20
0.27
0.24
(1) Non-GAAP measure – refer to definitions and detail provided on page 16. (2) Includes provisions for credit losses on loans, committed but undrawn credit exposures and letters of credit.
FOURTH QUARTER OF 2022 Q4 2022 VS. Q4 2021
Common shareholders’ net income of $68 million and diluted earnings per common share of $0.72 decreased 25% and 29%, respectively. Adjusted common shareholders’ net income of $82 million and adjusted earnings per common share of $0.88 decreased 11% and 15% , respectively. The decline in adjusted common shareholders’ net income was primarily driven by an increase in the provision for credit losses on performing loans compared to the recovery we recognized in the prior year. Pre-tax, pre- provision income of $133 million was up 8%. Total revenue of $280 million grew 7%, which reflected a 4% increase in net interest income and 29% increase in non-interest income. Net interest income of $240 million increased due to the benefit of 9% annual loan growth, partially offset by a 14 basis point decrease in net interest margin. The decline in net interest margin reflects that growth in asset yields has lagged the growth in deposit costs over the last year driven by the higher market interest rate environment, and the impact of a proportional shift in our funding mix towards higher-cost fixed term deposits. Our fixed term deposit portfolio has repriced faster to reflect higher market interest rates than our fixed term loans, which have a longer average duration. Loan yields have also been slower to reflect the changes in market interest rates due to high competition for new lending. Net interest margin was also negatively impacted by higher average liquidity and a change in our lending mix to comparatively lower-yielding borrowers and portfolios. Non- interest income growth reflects higher foreign exchange revenue recorded within ‘other’ non -interest income and higher credit-related fees, partially offset by lower wealth management fees due to market value declines that reduced average assets under management. The provision for credit losses on total loans of 14 basis points was 26 basis points higher than last year, primarily due to a 22 basis point increase in the performing loan provision, which was an eight basis point recovery in the prior year and reflected an improving macroeconomic outlook associated with the ongoing economic recovery at that point in time. The current year performing loan provision of 14 basis points reflected the impact of a deterioration in the forward-looking macroeconomic outlook. We recognized a nil provision for credit losses on impaired loans, compared to a four basis point recovery last year, and gross impaired loan balances represented 0.46% of gross loans, down from 0.61% one year ago and reflect historically low levels. Non-interest expenses of $167 million were up 18%, which included a $17 million impact from the accelerated amortization due to a reduction in estimated useful lives of certain previously capitalized AIRB assets, concurrent with the completion of a material portion of our revised AIRB tools. Adjusted non-interest expenses increased 7%, and we delivered positive operating leverage this quarter. We continued to make targeted investments in strategic priorities, including our AIRB tools and processes, digital capabilities, client offerings and our new banking centres in Markham, Ontario and downtown Vancouver as we optimize our business, deliver an unrivaled experience to our clients, and accelerate full-service client growth.
40 | CWB Financial Group 2022 Annual Report
Powered by FlippingBook