CWBFG Annual Report 2022

ADEQUACY OF CWB’S RI SK MANAGEMENT FRAMEWORK The Risk Management framework is comprised of various policies, processes and tools for managing risk exposure. There can be no assurance that the framework to manage risks, including the framework’s underlying assumptions, will be effective under all condit ions and circumstances. If the Risk Management framework proves ineffective, we could be materially affected by unexpected financial losses and/or other harm. CHANGES IN ACCOUNTING STANDARDS AND ACCOUNTING POLICIES AND ESTIMATES The IASB continues to change the financial accounting and reporting standards that govern the preparation of our financial statements. These types of changes can be significant and may materially impact how we record and report our financial condition and results of operations. Where we are required to retroactively apply a new or revised standard, we will restate prior period financial statements. OTHER FACTORS We caution that the above discussion of risk factors is not exhaustive. Other factors beyond our control that may affect future results include changes in tax laws, technological changes, unexpected changes in consumer or business spending and saving habits, timely development and introduction of new products, and the anticipation of and success in managing the associated risks.

SHARE AND DISTRIBUTION INFORMATION As at November 25, 2022, there were 94,326,112 common shares and 1,871,717 stock options outstanding.

We evaluate common share dividends considering the strength of our capital position and capital requirements under the Standardized approach to support ongoing strong risk-weighted asset growth. The following dividends on common and preferred shares were declared by the Board of Directors and paid during the year:

2022

2021

$1.22 per common share (2021 – $1.16)

$

111,245

$

101,421

$1.08 per preferred share - Series 5 (2021 – $1.08) $1.50 per preferred share - Series 9 (2021 – $1.50)

5,376 7,500

5,375 7,500 6,563

$nil per preferred share - Series 7 (2021 – $1.17)

-

Total

$

124,121

$

120,859

Subsequent to October 31, 2022, the Board of Directors of CWB declared a dividend of $0.32 per common share payable on January 5, 2023 to shareholders of record on December 15, 2022, and cash dividends of $0.2688125 per Series 5 and $0.375 per Series 9 preferred share all payable on January 31, 2023 to shareholders of record on January 24, 2023. With respect to these dividend declarations, no liability was recorded on the consolidated balance sheets at October 31, 2022. On April 30, 2022 and October 31, 2022, Series 1 NVCC Limited Recourse Capital Notes (LRCN) note holders received semi-annual coupon payments of $30, per $1,000 principal amount of notes outstanding, reflecting total payments of $11 million, recorded in common shareholders’ net income on an after -tax basis. On January 31, 2022 and July 31, 2022, Series 2 NVCC LRCN note holders received semi-annual coupon payments of $25 per $1,000 principal amount of notes outstanding, reflecting total payments of $8 million.

Further information is provided in Note 15 of the audited consolidated financial statements for the year ended October 31, 2022.

RELATED PARTY TRANSACTIONS Transactions with and between subsidiary entities are made at normal market prices and eliminated on consolidation.

We provide banking services to our officers and employees, including key management personnel, and their immediate family at various preferred rates and terms. Key management personnel are those that have authority and responsibility for planning, directing and controlling our activities and include our independent directors.

Further information is provided in Note 21 of the audited consolidated financial statements for the year ended October 31, 2022.

CONTROLS AND PROCEDURES As of October 31, 2022 , an evaluation was carried out on the effectiveness of CWB’s disclosure controls and procedures. Based on that evaluation, the CEO and CFO have certified that the design and operating effectiveness of CWB’s disclosure controls and procedures were effective. Also at October 31, 2022, an evaluation was carried out on the effectiveness of internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS. Based on that evaluation, the CEO and CFO have certified that the design and operating effectiveness of internal controls over financial reporting were effective. These evaluations were conducted using the framework and criteria established in accordance with Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). A Disclosure Committee, comprised of members of senior management, assists the CEO and CFO in their responsibilities. Management’s evaluation of controls can on ly provide reasonable, not absolute, assurance that all control issues that may result in material misstatement, if any, have been detected.

Prior to its release, this MD&A was reviewed by the Audit Committee and, on the Audit Committee’s recommendation, a pproved by the Board of Directors of CWB.

60 | CWB Financial Group 2022 Annual Report

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