Good morning and afternoon, ladies and gentlemen. My name is Sylvie, and I will be your conference operator today. At this time, I would like to welcome everyone to CWB's Q1 2022 Financial Results Conference Call and Webcast. Note that all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a Q&A session. If you would like to ask a question during this time, simply press star then number one on your telephone keypad. If you would like to withdraw your question, please press star then number two. Thank you. Mr. Patrick Gallagher, you may begin your conference. Thank you, Sylvie. Welcome to our Q1 2022 financial results conference call. My name is Patrick Gallagher, and I'm the Vice President leading our strategy and investor relations team. I'd like to remind listeners and webcast participants that statements about future events made in this call are forward-looking in nature and based on certain assumptions and analysis made by management. Actual results could differ materially from expectations due to various risks and uncertainties associated with CWB's business. Please refer to our forward-looking statement advisory on slide two. The agenda for today's call is on the third slide. Presenting to you today are Chris Fowler, our President and Chief Executive Officer, and Matt Rudd, our Executive Vice President and Chief Financial Officer. Following their presentation, we'll open the lines for a question and answer session. I'll now turn the call over to Chris, who will begin his discussion on slide four. Thank you, Patrick, and good afternoon. Execution of our winning strategy focused on business owners continues to accelerate our growth of full service clients. We're pleased to deliver another quarter of strong new lending and robust growth in deposits from our banking centers. The majority of this growth is from full service client relationships and reflects the significant improvements we've made to our products and capabilities, the differentiated level of service we provided to our clients through a period of continued operating and economic volatility, and the increased momentum we're seeing in leveraging our expanded wealth management offering to drive CWB referral-based client acquisition. We've continued to diversify our funding sources, achieved strong growth in Ontario, and delivered 12% sequential growth in pre-tax, pre-provision income this quarter. Our team's focus on leveraging our expanded product offering and digital capabilities to grow full service client relationships yielded strong results again this quarter, with 2% growth in branch-raised deposits. New lending volume remained strong this quarter with the net offset by elevated payouts and pay downs, resulting in 1% net loan growth in the quarter. Ontario accounted for approximately 36% of the growth. Our Mississauga banking center continues to significantly exceed expectations with our new clients, saying it feels very different dealing with CWB, noting our specialized, proactive, and personal touch. Our performance in the GTA provides clear evidence that Ontario business owners are ready for a clear alternative to the big banks, and we're ready to be that choice. Our teams are core to our strategy of delivering a differentiated level of service to our clients. We've been agile to adapt and remain a destination for top talent in an evolving and competitive environment. We're pleased to be recognized for these efforts by Great Place to Work Canada, who named CWB as a 2022 best workplace for hybrid work this quarter. We also recently announced our new locations to position CWB as a growing force in our core markets with spaces designated to support a differentiated experience for our clients and our teams. Building on our strong growth in Ontario, and in addition to our previously announced Markham location opening in 2022, we also plan to open a new banking center in Toronto's financial district in 2023 to consolidate our Toronto wealth management and downtown banking teams in one location. We've also finalized plans to transition to a new corporate head office location in downtown Edmonton's Ice District in 2026. These modern and exciting spaces will meet the evolving expectations of our high-performing teams for more collaborative and flexible workplaces, give us prominent signage in desirable locations to continue expanding our brand awareness and support the continued growth of our market share. These announced investments, combined with our continued progress towards the launch of our digital banking platform later this year for personal, small business, and commercial clients, including integration with the Virtual COO solution, will enable strong growth of full service client relationships and capitalize on the opportunities available to us in combination with our strategically targeted expansion of our physical presence in the Ontario market. We're seeing continued benefits of our strategic investment in our wealth management capabilities through positive feedback from our clients on our enhanced offering. Further, we continue to execute on our AIRB transition program that we believe, upon approval, will make us more competitive, support higher growth, and achieve further diversification with an enhanced view of risk. I'm also happy to announce that we will publish our annual sustainability report in mid-March, which will provide more details on our focus and progress relating to important ESG activities. I'll now turn the call over to Matt, who will provide greater detail on our Q1 performance and outlook. Thank you, Chris. I'll start on slide five. We continued to deliver on our funding diversification strategy evidenced by our multi-year trend of strong branch-raised deposit growth. Our focus on expanding full-service client relationships supported very strong branch-raised deposit growth, up 12% compared to prior year. The strong deposit growth from our banking centers was offset by a reduction in more expensive modes of funding deposits, and the net drove 2% sequential growth in our branch-raised deposits. Branch trades deposits now represent 59% of our total funding. That's up from 57% last year, and we currently have one of the strongest liability structures in our history. Looking at slide 6, our total loans were up 9% in the past year, with positive growth in all of our core markets and loan categories, except real estate project loans, which declined 5% driven by successful project completions. The 21% growth in commercial mortgages reflects strong new lending volumes in BC, Alberta and Ontario, with high quality borrowers and underlying assets that remain within our risk appetite. We also delivered 10% growth in our strategically targeted general commercial portfolio, and that reflects our focus to increase full service client relationships across our national footprint. Oil and gas production loans increased primarily due to participation in syndicated facilities that remain within our risk appetite. Our exposure to oil and gas service and production businesses represent approximately 2% and 1% of our total loans, respectively. Total loans in Ontario grew 10% over the last year, supported by our increased presence with the Mississauga banking center and Ontario loans now represent 24% of our total loans. Our sequential loan growth reflects strong new origination volumes in the quarter, partially offset by elevated payouts and pay downs. We delivered 3% sequential growth in personal loans and mortgages, with strong contributions from both insured and uninsured mortgages. Our general commercial loans grew 1% driven by growth in BC and Alberta. With a gradual improvement in economic conditions, new project starts have increased over the last two quarters, primarily in Ontario and BC, and that's driven 4% sequential growth in our real estate project loans. Our commercial mortgages increased 1% primarily due to strong new lending volumes in Ontario. As slide seven shows, we delivered another solid quarter of profitability. Common shareholders net income increased 11% and pre-tax, pre-provision income increased 5% compared to the same quarter last year. Adjusted and diluted EPS each increased CAD 0.06 from the same quarter last year. A lower total provision for credit losses contributed CAD 0.04 and was primarily driven by reduction in impaired loan provisions for credit losses. Increased net interest income reflected strong loan growth and contributed CAD 0.15, and higher non-interest income contributed CAD 0.03. Higher non-interest expenses reduced EPS by CAD 0.12, which reflects our continued investment in our people, technology infrastructure and our brand to support strategic execution and growth across our geographic footprint. Our ATM program, which we established in May of last year, also reduced EPS by CAD 0.03, but has helped to bolster our CET1 ratio since its inception. Our sequential performance is shown on slide 8. Common shareholders net income decreased 3% sequentially as revenue growth and lower non-interest expenses were more than offset by an increase in the provision for credit losses. Pre-tax, pre-provision income increased 12%. Adjusted and diluted EPS each decreased CAD 0.04 compared to the prior quarter. Lower non-interest expenses increased EPS by CAD 0.07, primarily due to the expected seasonal decline in certain expenses and the timing of strategic project spend, which we do expect to ramp up as we move through the remainder of the year. Higher net interest income contributed CAD 0.03 and improved non-interest income increased EPS by CAD 0.02. The increase in the provision for credit losses compared to the abnormally low levels last quarter reduced EPS by $0.16. As shown on slide 9, on a sequential basis, a 2% increase in total revenue reflected a 1% increase in net interest income and a 7% increase in non-interest income, and that was primarily due to foreign exchange revenue related to the strengthening of the US dollar through the quarter. The net interest income increased from last quarter, driven by 1% loan growth and a consistent net interest margin. Net interest income was 8% higher than last year, primarily reflecting the benefit of 9% loan growth. Non-interest income was up 11%, primarily due to higher wealth management fees, foreign exchange revenue and credit related fees, partially offset by lower gains on securities. Highlighted on slide 10, our Q1 provision for credit losses on total loans was 11 basis points and remains well below our five-year historical average of 19 basis points. Our performing loan provision for credit losses was a recovery of 1 basis point compared to an 8 basis point recovery last quarter. That reflects the continued stabilization in macroeconomic forecasts and a 1% decrease in stage two loans over the previous quarter. This quarter, we recognized an impaired loan provision of 12 basis points compared to a recovery of 4 basis points in the prior quarter. Impaired loans, CAD 212 million, are up 5% from last quarter and represent 63 basis points of gross loans. That's still well below pre-pandemic levels. We continue to generate strong resolutions and our quarterly write-offs of 9 basis points remain consistent with the prior year. We remain in a very strong credit quality position. Our capital ratios are shown on slide 11, calculated using the standardized approach. Our CET1 ratio at 9% increased 20 basis points from last quarter, primarily due to retained earnings growth and incremental common shares issued under our ATM program. That was partially offset by the impact of risk-weighted asset growth. The Tier 1 capital and total capital ratios both increased 10 basis points from the prior quarter due to the same factors that impacted CET1 ratio. Our ATM program has been an effective tool to dynamically manage our capital ratios. We expect to continue to use it to issue common shares to support strong loan growth and to ensure our capital levels appropriately reflect the potential for near-term volatility. In January, OSFI released final revised capital adequacy requirements, which includes adjustments to the calculation of risk-weighted assets under both the standardized and AIRB capital frameworks. From our preliminary assessment, we expect the overall impact of the revised standardized capital requirements will be moderately positive to our CET1 ratio when they become effective, in Q2 of next year. As Chris noted, we're making good progress to advance our AIRB transition program, including incorporating changes to adopt the capital guideline revisions just released and the continued implementation of identified enhancements to our AIRB tools. We continue to believe that approval will make us more competitive, support higher growth, achieve further diversification with an enhanced view of risk, and provide a boost to our regulatory capital ratios due to the more risk sensitive measurement of risk-weighted assets compared to the standardized approach. Yesterday, our board declared a common share dividend of CAD 0.03 per share, which is up CAD 0.01 or 3% from the dividend declared 1 year ago, and consistent with the dividend declared last quarter. Looking forward on slide 12, our expectation for the continued gradual recovery of the Canadian economy over the current year remains relatively consistent with the outlook provided in our 2021 annual report, despite some initial economic setbacks and volatility we've seen so far at the start of this year. Against these economic assumptions, we continue to expect double-digit annual percentage loan growth where prudent, as well as double-digit branch raised deposit growth. The Bank of Canada is expected to commence raising policy interest rates in the near term, with the potential for multiple increases in the current year. Our revised expectation is for policy interest rates to increase beginning, starting in the Q2, with a total increase of 75 basis points during the current fiscal year. Based on this assumption, we now expect that our annual net interest margin may exceed last year by 3 to 5 basis points. We continue to expect to deliver annual pre-tax, pre-provision income growth within a range of mid- to high-single digits, but with a revised outlook for net interest margin, we expect to finish in the higher end of that range. With that, Sylvie, let's go ahead and open the lines for Q&A. Thank you, sir. Ladies and gentlemen, if you would like to ask a question at this time, please press star followed by one on your touchtone phone. You will then hear a three-tone prompt acknowledging your request. If you would like to withdraw your question, simply press star followed by two. If you're using a speakerphone, we do ask that you please lift the handset before pressing any keys. Please go ahead and press star one now if you have any questions. Your first question will be from Meny Grauman at Scotiabank. Please go ahead. Hi, good afternoon. You mentioned the AIRB transition a few times. Just wondering if there's anything new you can tell us in terms of expected timing on that front. Nothing new, Meny. We're continuing to work our way through the process and run the models in parallel. We remain positive on the outcome of the process. Okay. Then if I could just ask about loan growth. Year-over-year number looks good, but when I look on a sequential basis, suddenly it looks like it's slowed down. When I was looking at the OSFI data heading into reporting, definitely looked slower. I'm wondering, you know, I think you touched on it a little bit, but, you know, what's driving that? It seemed like it came more early in the quarter, but if you could talk about timing and what you're seeing now in this new quarter and how that compares. Sure. Yeah. On the loan growth side, we actually had very good lending volume. In Q1 what we had was some payoffs. What occurs there is that, say we financed a apartment project and it's been in our project loans, and then it's gone to CMHC financing, for example. That type of outcome is what we do see in the portfolio, so they can be kind of some chunky changes there. The volume and the momentum of the teams is still good. As we look at the balance of the year, our teams are comfortable with the pipeline as we look at still looking at delivering double digit growth through the year. In terms of what you're seeing so far in Q2, what does that picture look like? Especially from a paydown point of view, could you see that be an issue again? How long-tailed is that paydown issue or do you think it's behind you? Paydowns really come mostly through the project lending portfolio and sometimes in the commercial mortgage book, because those are the kind of the chunkier ones, where projects get to a position and then they go out to a different type of financing than we provide. What we did see this last quarter, of course, was growth in that project lending portfolio, which is excellent. We've got a very strong group of Tier 1 developers that we participate either as the primary banker, we lead syndicated facilities or we participate. We're very positive in what we see as prospects in that part of the market because, you know, we do see from a real estate perspective, Vancouver and Toronto being very challenged with the supply. We've got projects that will be coming online, so we're positive there. As we look at the kind of the prospects, we are positive on where we see loan growth going. Okay, that's very helpful. Just maybe a more detailed question. I think you clarified it, but I just wanna make sure. In terms of non-interest income, that increase that we saw in the other category, is that FX? Is that what the explanation was? I just wanted to make sure I understood that. Yeah, Meny, about just over CAD 1 million of that increase related to FX. About half of that I'd say is just structural U.S. dollar denominated assets slightly above U.S. dollar denominated liabilities. So a bit of a structural increase there. About half of it I'd classify as a one-time bit of a hedge we had against U.S. dollar deposit and note maturity, and recognized a gain on that in the quarter. Great. That's it for me. Thank you. Next question will be from Paul Holden at CIBC. Please go ahead. Thank you. Good afternoon, or I guess still good morning for you. I wanna go back to sort of some of the headwinds in the quarter. Maybe we can talk about the equipment financing and leasing segment specifically. It's been a source of weaker growth, and maybe that's just simply due to supply chain constraints, but maybe you can talk about the outlook there and if growth is anticipated to pick up at all, this year. That absolutely is supply chain, it's a big driver. The teams on. We have three ways in which we participate in equipment finance. We have National Leasing, we have our branch-based group, and we have a broker buying center that in Calgary. That really is the challenge, has been just the inability to source equipment. We're seeing, you know, obviously good conversations on demand. You know, the general perspective on growth is positive. There is just that lingering challenge with, you know, there being equipment to actually get in the hands of the client. It's. The teams are focused and our goal is to, you know, continue to, you know, be very active in the market. Okay. Another question I wanna ask you in terms of the growth in the, really in the last couple quarters is, what I've observed is Canadian Western Bank's commercial loan growth overall has kind of slowed in the last couple quarters versus the pace in earlier quarters. At the same time, I would say commercial loan growth for your D-SIB competitors has actually accelerated. Are there any kind of competitive dynamics or intensity that's maybe made it harder to grow in your markets? Well, you know, I would say it is our key focus, of course. Commercial lending is 80% of our books, so it is the area that we are, you know, absolutely targeted. Our focus is that general commercial growth to find that full service client that we can really leverage the different capabilities that we've built. You know, outcome of COVID has been the challenge of just marketing to clients. You know, we continue to be focused on that and appropriate with all COVID restrictions. You know, that would be some of the challenge, would be just that getting in front. For a full service client to move over, it's obviously there's a bit of a time required and invested to generate that, you know, turn that contact into an actual prospect and then into a live client. We are focused on that. The other challenge that we often find is, you know, we focus on our risk appetite and our threshold on pricing. We wanna make sure that we're taking on the clients that meet our credit standards, but also meet our return standards too. You know, we have found at times that both of those can be challenged by credit terms by the other banks that are not quite the structure that we would provide or pricing that's not at a level that we would also be looking to provide. I mean, our focus is to you know, improve our capabilities, improve the way that we can manage capital with the AIRB, improve our cost of funds with the real growth of our branch-raised deposits, all of which are coming together very well. We anticipate that you know, as we continue to invest and grow, that you know, we can expand that as we look at our at our ideal client that we're looking to book. Okay. I think the next question I'm gonna ask. I think you've already partly addressed it, but I just wanna go back because I think it's important for us all of us in terms of setting the expectations for the rest of the year. Like, what specific points give you the confidence to reiterate your double-digit loan growth expectation for the year? As we look at, we obviously run lots of internal MIS based on the contacts we have with, you know, building our pipeline and determining our, you know, the ability to turn that pipeline into actually book business. It's really that constant, you know, feedback loop that we have with our teams in all the different business lines that we focused on that is there. As we look at the market, we see growth as available to us and the teams are focused to win it and our, you know, within our risk appetite, both on credit and on pricing. You know, that is the, that's the feedback loop. We do have active process under which we manage our pipeline. Okay, great. Great. I'm just gonna ask one more question, if you don't mind, and that's just with respect to the ATM during the quarter. I thought this was more of a program that was kind of to be used on an as needed basis. As the loans were coming in, you'd issue equity and sort of keep your CET1 level. This quarter, it looks like you used it to increase the CET1 a little bit. Can you walk us through the logic on why it happened the way it did this quarter? Yeah, the ATM, it was a tool put in place to dynamically manage our CET1. In an environment where if you're looking outwards for potential sources of volatility and economic or operating conditions and saying it's pretty benign, then the ATM would be a tool to do just as you described. Hold your CET1 ratio constant and absorb stronger loan growth in doing so. What we've seen in the last couple of quarters are things looking outwards where it causes us to look at our CET1 ratio and decide it'd be prudent to put a little bit extra in our back pocket. A 9% CET1 isn't an unusual number for us. If you look backwards, we've historically been in comfortable operating in the high 8s to low 9s, somewhere in that range, so we're not necessarily out of line. Just looking at what we see swirling around, we saw Omicron creep up and just decided it'd be prudent to hold it in or around this 9% level. That doesn't mean we're going to leave it here on a continued basis. It's an evaluation we can do each quarter, where we look at what's in front of us, what sort of loan growth are we predicting, what are we seeing in the external environment. There could be factors we look at with maybe a bit more economic stability where we say, you know, we're comfortable working it back into the high 8s. It'd be relatively easy for us to do that, just turn off the ATM issuances and strong loan growth would soak it up pretty quickly. It allows us to make the call quarter- to- quarter, dynamically manage our capital. It's really the only tool to do that, as a standardized bank, if you're looking to build CET1, other than turn off the loan growth, which we're not interested in doing and haven't done for opportunities that are in our strike zone, in our risk appetite. This is the tool. That's how we're using it and managing things, very dynamic basis in a very flexible way. Hopefully that helps, Don. It does. Thanks for the answers. Thanks, Paul. Your next question will be from Lemar Persaud at Cormark Securities. Please go ahead. Yeah, thanks. I just wanna start off with the guidance here. It looks like you didn't change the EPS growth target, still in the low to mid-single digit range. You moved up the expectations for PTPP growth to the high end of your target range. Am I reading too much into it in suggesting that there's a deterioration in the credit environment that you're expecting? Or why not move up the EPS growth target as well? Yeah, nothing specific that we're seeing. I think when we look at our forecast for the remainder of the year, on formation of gross impaired loans as well as impaired loan losses, we do see it increasing from where we're starting. In Q1, our actual results were a little bit higher than we would have expected. We had no trends, no concerning trends emerging, but really, something idiosyncratic that accounted for the majority of our PCL in the quarter. That's something that we look at the forecast for the rest of the year. It's unchanged compared to how we would have seen the year playing out, but starting Q1 a little bit higher than usual. It's those two factors working together that has our PTPP feeling a little more robust with the NIM expansion, but holding our earnings guidance because we think PCL might nudge a little bit higher than what we might have predicted at the start of the year. Not significantly. Okay. That's helpful. Thank you. Just wondering, what do you guys use when you set your interest rate hike expectations, both, I guess, in terms of timing and magnitude of the hike expectations? I think in the past, you guys had mentioned you look at the big banks' forecast for ECLs in terms of their macroeconomic variables. What do you use in setting your rate hike expectations? Yeah. We're using that as a starting point, a consensus macroeconomic estimate from the large banks. From there, deriving a bit of an average. Where it's playing out for us this year is we see two hikes in Q2 and then a third hike coming in the middle of the Q3. It's pretty consistent with consensus expectations at this point. Okay, thanks. Just the final one for me. I just wanna come back to the equipment finance business. I appreciate this might be a tougher one to answer, but I'm gonna ask it anyway. Would it be fair to suggest there's a lot of pent-up demand there, so when the supply chain issue resolves itself, we could see a period of, you know, very, very strong loan growth in that business specifically? What could that look like? You know, could we be talking about growth in the 20% range year-over-year or even higher than that? I'm just wondering if there's anything you can offer there. Well, I think that's good observation, 'cause typically following, you know, some sort of dislocation or downturn, that is when the equipment finance demand does go up. It's usually the portfolio that drops first when there's whatever type of disruption in the economy as people scale back their fleets and cut their costs. When they start to ramp up, they obviously looking to find opportunities to increase their fleets. I would say, you know, anecdotally, I've talked to a few different clients, and the challenge today is that not only is it difficult to get equipment, it's difficult to get staff too. It's there's a few pressures depending on the industry that are factoring in here. To your point, I think that when we do see some alleviation of supply chain, you know, I think we will see some growth in that book for sure. It's a good one and it's been a very strong book for us for 30 years, so we'll continue to be very focused on it. Okay, thank you. Thanks, Lemar. Next question will be from Doug Young at Desjardins Capital Markets. Please go ahead. Hi, good afternoon. Just Matt, I want to go back to the ATM and I think in your prepared remarks you talked about it being 3% dilutive, if I got that number right. Is that sequentially? And can you just remind us how much you've issued this quarter and how much of that ATM you've used up? Yeah. The CAD 0.03 of dilution, and that's the dilution isolated to the impact of the incremental shares. It obviously doesn't count any incremental loan growth generated with that capital. That's based on the usage we've had to date on it, just under CAD 100 million of usage. That leaves about CAD 50 million or so left on the ATM that could be used. That doesn't that CAD 0.03 doesn't factor in the loan and the earnings that come from the loan. That's just essentially the added shares? 'Cause I thought the ATM would be accretive is I guess where I'm going with this, and you're telling me it's dilutive, so I'm just trying to triangulate. Yeah. That is the isolated impact of the incremental shares and doesn't count what we've used that capital for. Part of the usage of the ATM, it'd probably be, you know, just under half of it you could point to and say that supported incremental loan growth beyond what we could have absorbed through organic capital generation and then offsetting some of the unrealized losses we've had in our liquidity portfolio that are hitting AOCI. The other portion of it being used to reset our level of CET1 just as I described in an earlier question nudging it up just considering some volatility in the external environment. The usage of an ATM to fund stronger loan growth continues to be accretive. That on its own would be driving accretion. Kind of weighing if you thought net-net of the two factors, the roughly less than half of it supporting strong loan growth and even using the ATM to work up our CET1 ratio. On a net-net basis, it's still not dilutive. It's modestly accretive, which is a good thing to do if you're also releveling your CET1 ratio and increasing it. If you can do that and accommodate loan growth and come out as accretive, at the end of the day, we're pretty happy with that as an outcome still. I'm just going to simplify this. It's not dilutive in the context of how you've used it. It's dilutive if you just look at it by the amount of shares you've issued. The way that you've put it to work net net, it has been accretive since you've issued shares. Absolutely correct. Okay. Second is just, you know, on the new banking centers in Markham and Toronto, can you give a little bit of context on, you know, what you expect from these new branches given the market intelligence and the work that you've done? You know, if you can also weave in a little bit about what the product focus is going to be for these new branches. Sure. Yeah. We've been very happy with the impact of the Mississauga, and they've actually got the second highest pipeline in our system. Really the product focus is that business owner full service banking. I mean, that's really the target client that we're focused on. That will continue to be the goal of these banking centers. It's not that much different than we've done in Western Canada historically. You know, come into a market, understand the areas that we know that we can be successful with and really pursue those clients. Mississauga's done that. We anticipate Markham has done this. They're both very well located geographically within the business centers of the two communities. Downtown, I think we'll just be leveraging our opportunity in Ontario because we've got, as you know, 6 businesses that we run there. We've seen lots of opportunity. We think the GTA is a tremendous amount of market share for us to gain. We want to be very strategic in where we place the kind of physical presence. We're, you know, obviously very happy with the areas that we've chosen so far. Is there any way to quantify or kind of give some guideposts as to what you expect from these? Or is it just too early? I would say it's probably too early. I mean, I think we've got impact from, you know, if we look at that 10% growth that we've been able to generate in Ontario over the last 12 months, you know, I don't have the breakdown of, you know, what Mississauga is of that growth, but they're certainly a meaningful part of that. Do you have that, Matt? Yeah. The contribution from Mississauga, if you just look backwards, what did it contribute last year to net loan growth overall, I mean it by itself, and the growth it put up, it contributed more than 1% of our kind of, if you think about total loan growth we delivered, and continuing to build and continuing to ramp from there. This one outperformed our modeling on it. We didn't expect that sort of a contribution that quick. As we think about the other two branches, is it a case where they'll also over-deliver our model? We hope so, and Mississauga has told us that that's possible and probable. It's one that we need to see a bit more momentum as we open the branch, get the team in place, start thinking about an initial pipeline, and from there recalibrate what sort of growth trajectory we might see. We're pretty bullish. Okay, just two more. On the NIX ratio, 48.5%. I think the guidance, if I recall, Matt, I thought you were talking more about the low 50% range for fiscal 2022, and you can correct me if I'm wrong. What I'm going with this is this just a timing issue that, you know, expenses were, you know, a little bit less in terms of some of the development stuff this quarter and then it's gonna get pushed into future quarters? Was there any unusual items, or did I just read it wrong that, you know, fiscal 2022 was really being guided to the low 50% range? No, you had it exactly right. That's still what we'd expect on a full year basis. What we saw in Q1, nothing unusual, but really just the timing of project spend. Really a shift between work effort that's going in some of these large projects, and this includes AIRB and the enhancements we're putting in there. It's sort of a mix between internal labor we're putting towards those projects and then pulling in third party consultants, which is more where the incremental NIE is coming from. So the weighting in Q1 was weighted a little more heavily than we would've expected to internal work effort. The third party work that's being done, it's still coming, but it's just going to hit us a bit harder in Q2 and Q3. We would've expected some of that to come into Q1, but it didn't just due to timing. Oh, okay. Then lastly on the NIMs. You know, you said you're guiding to for fiscal 2022 to be higher than fiscal 2021 by 3 to 5 basis points. Can you talk a bit about what you're assuming in terms of mix and change in liquidity? 'Cause you talk about the rates side of it, but you didn't mention on the mix. Are you assuming the balance sheet and the loan mix doesn't change, or are you building in that expectation of continued momentum in some of your higher NIM products like real estate project lending? Yeah. Well, we're thinking about mix benefits from two sides, and those are a factor as we're thinking about that 3 to 5 basis points of expansion. On the asset side of things, you're exactly right. Weighting to portfolios like real estate, project lending, equipment finance, if we start seeing stronger momentum on that through the second half of the year, those are helpful to NIM from an asset mix perspective. From the funding mix side of things, we're continuing to expect very strong growth in our branch raised deposits and in our lowest cost branch raised deposits, the cash management side of things. Between those two factors, it's not the majority of our NIM impact. Both are likely contributing about a basis point each of the expansion. The other 3 basis points, if you're thinking about the upper end of 3 to 5 basis points of expansion, 3 basis points or so would be coming from the rate hikes. Okay. You are factoring in some mix shift in your favor within the NIM guidance essentially? Correct. Okay. Perfect. I appreciate the color. Thanks. Thanks, Doug. Next question will be from Marcel McCain at TD Securities. Please go ahead. Okay, thanks. Good afternoon. A couple of quick ones for me. First one on the ATM. So this seems to be a tool that you guys like using, and it's sort of worked as intended so far. But at this pace, it looks like it'll be used up in the next sort of one to two quarters, with that CAD 50 million remaining. Is this something we should expect that you will be looking to renew at that point? And secondly, from your perspective, is this thought of just sort of a bridge tool till you guys get to AIRB, or is this something the bank might use in perpetuity? How do we think of the ATM over maybe a sort of medium longer term? Yeah. Yeah, I mean, you're right. If with the strong loan growth we see in front of us, looking at what we have left on the ATM, if we wanted to hold our CET1 ratio, if we thought it was prudent to hold it at the 9% it currently is, we'd fully utilize our current ATM over Q2 and Q3. The decision to put in a new ATM, I mean, we'll make that call a bit later through the year, but factors we'd consider it'd be looking at our growth pipeline. The other factor we have to think about is finalizing our quantification of the revised capital adequacy guidelines. Specifically under that revised framework, which we believe will be a net positive for us, how much incremental loan growth can we accommodate under the new capital rules as a standardized bank before we consume capital? It'll be a higher level than what we're at under current standardized. We just need to quantify precisely how much. AIRB and whether that factors in. I think you've heard us on these calls before say that we'll continue managing our capital prudently as a standardized bank until we're no longer a standardized bank. We definitely won't be looking to front run AIRB approval or any potential capital benefits. We'll continue to manage our capital prudently under standardized. In an AIRB world, though, in the use of an ATM to fund strong loan growth, looking at the sort of modeling we're doing under our current AIRB models, there would be no need for a tool like an ATM to accommodate loan growth even at a stronger level than what we're currently projecting. Our organic capital generation just gives us a much higher run rate of organic loan growth we can accommodate before we consume CET1 capital. It's not likely we'd need one in an AIRB world. Okay, thanks. That's helpful. Secondly, on the branch-raised deposit growth, I'm sorry if I might have missed this earlier, but that has slowed down. I think that was expected though. In prior quarters, you said that there was virtually no runoff in deposits. Has that started to shift now in that lower growth number that we saw? Are you still seeing very little in terms of any sort of runoff? Yeah. Within our core cash management products, even in some of our more, like if we're thinking about part of the full suite of deposit products, a full-service customer would have, we have not really seen much runoff to this point in those core deposits. We did see some runoff this quarter, but that was, frankly, a bit intentional. We have one product, it's an online deposit gathering product, one that's predominantly a single product type customer. Frankly, the deposits looked a bit expensive compared to other sources of funding. In late October, we did proactively take a pricing cut in that product, knew it would trigger some runoff, and that we'd be able to replace that runoff with less expensive sources of funding. That's exactly what happened and exactly what we did. It was a factor in the quarter that did dampen our total branch raised deposit growth. From our banking centers directly, we would have had a level of sequential growth in branch raised deposits close to double what you saw on a net basis, net of the runoff we triggered in that online deposit product. Okay. All right, thanks. That's it for me. Thank you. Thanks, Marcel. Next question will be from Gabriel Dechaine at National Bank. Please go ahead. Merci beaucoup. Yeah, on the NIM guidance hike there, I want to approach this from the deposit business first, the 75 basis point rate hike expectation, like how much of it, you know, what's the percentage of floating rate deposits in the book, and how much of that 75% are you assuming you're passing through to those depositors? Yeah. Just breaking down our deposit book, just under half of it is at floating rates. About 20% of our deposits are directly linked to prime. And then just under 20% or so are what we'd call administered rate deposits, where we do have the pricing discretion. And that's where we've made the big assumption on how much of the rate hikes we're intending to pass through. The short answer is it's just about half of the hike, predicted and phased in over time. Not all at once immediately when the hike happens. Mm-hmm. There's a bit of a lagging impact. Under the covers of that estimate, though, is we've taken that administered rate deposit book and split it into the sorts of deposits that we believe are most interest sensitive, most competition sensitive Right all the way down to deposits that we aren't seeing much sensitivity historically, and our current view matches that. It kind of breaks down about a third, a third, a third in terms of pieces of that deposit book that look to be very sensitive to rate hikes, and you'd have to pass through the majority. A third that you could probably pass through about half on a lagging basis and be just fine, be able to hold and continue to build deposits. about a third where you probably wouldn't have to touch rates at all because they're either at no or very low rates of interest. Through past cycles, we haven't seen the need to make any adjustments. I'm definitely gonna have to read the transcript, but, just, you know, maybe I'll take a crack at it. About half of your deposit base is floating rate, and of that amount, 20% is administered rate, and that's where you're assuming the pass-through is about half of the 75. Is that roughly it? No. Our administered rate deposits, they would be about 20%, just under 20%, of our total deposits. Of the total. Okay, got it. Okay, perfect. Then in answer to my other question, I'll just ask the next one on the deposit side of things, because you commented last year that the bank is now more spread sensitive than it is rate sensitive. It speaks to a competitive dynamic and, you know, how you're able to, you know, pass rate hikes through to your depositors, which we just talked about, and your borrowers. I'm just seeing double-digit growth in commercial lending across the industry like the big six banks, that's what they're generating. When you're seeing growth like that, should I also infer that, well, maybe competition is not that intense, so maybe you can actually pass through price hikes a bit more readily than if growth was zero? Yeah. So far what we've seen, this I suppose is more so in the fixed rate pieces of the portfolio. I mean, you've seen an increase in GIC rates. We've seen an increase in certain portfolios as well, where you've been able to start seeing a bit of steepness in pricing, especially as the term lengths extend. General commercial is one and many pockets there where we've been able to pass along some increased pricing and still win the deals. Other portfolios are incredibly competitive and incredibly price sensitive, and we haven't seen that same factor yet. Commercial mortgages would be one where we haven't seen much of an increase at all in pricing there. It remains very competitive and a bunch of deals we look at that financially don't make sense, don't meet our return hurdles, and haven't really moved with underlying movements in the market curve. I mean, it depends, and it's specific on a portfolio basis. It's one that, as we start to see the actual policy rate move, it'll be interesting to see if at some point the back breaks on holding the pen on passing through some of these rate hikes through to fixed term pricing, and whether that starts happening as the year progresses. In our assumptions underpinning our forecast, we've assumed that competition on certain of those portfolios keeps yields relatively low, and we don't see much expansion. If you see competitive pressures abate a bit and pricing start to escalate on some of those portfolios, could be a bit of NIM upside. Probably not material, but maybe you'll find a basis point there. Oh, okay. An answer in response to an earlier question on the ATM and, you know, potentially renewing it or not. You did mention, I think, in something about the small and medium-sized deposit taking institution capital and liquidity requirements, that thing that OSFI just posted about a few weeks ago. I took a crack at it. I'm getting to maybe a 10 basis point benefit to you, but maybe that's short-changing. Can you maybe edify me a little bit? Yeah. We're not ready to quantify it specifically because we still have a bit of homework to do. As you've probably seen in taking a crack at it's causing us to put our risk-weighted assets in different buckets. Okay using much different criteria, much more risk sensitive than current standardized. Uh-huh. We just need to work through the data exercise, validate to make sure we're bucketing everything appropriately. Some elements of this are data we're capturing in our underwriting decisions when we look at these deals. In terms of a minable sortable data set, that's where we need to do a bit more work. Yeah, it's one we don't see as a material expansion of our set one. We use the words moderately positive. Okay. It's something we'll be more specific on once we've done the homework and certainly with enough time to think about how it impacts 2023, we'll be a bit more specific. Sounds fair. It's better than a kick in the teeth. Anyway, thanks for answering all the questions. Have a good day. Thanks, Gabe. Once again, as a reminder, ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touchtone phone. Your next question will be from Nigel D'Souza at Veritas. Please go ahead. Thank you. Good afternoon. I have a few questions, if you could bear with me. The first was in the net interest margin, and I appreciate the guidance there. When I model out your NIMs, I get a substantial expansion and much of the benefit from expansion high rates in 2023. First, is it fair to say that your acceleration of expansion is more likely to happen next year? Second, some of your peers provide disclosure on the impact to net interest income from 100 basis points parallel shift. Is that a disclosure that you may consider providing in the future, given that we're entering a rate hike cycle? Yeah. I guess starting with your second question, I mean, we'll be explicit in our outlook in terms of impact on NIM. You know, you'll have your own assumptions on loan growth, but we're fairly explicit about those as well. You can back into dollar amount of NII impact. I'm not sure you'll see us be much more specific, but we'll be very specific in terms of NIM impact we see as a result of the rate hikes. You're absolutely correct, though. Just thinking about the timing of when the rate hikes get enacted, knowing that there's an immediate impact of the rate hikes in terms of upward momentum on our NIM. Really, that's the spread between our loans linked to prime and deposits linked to prime. We have about double the amount of loans linked to prime than deposits. It's that immediate reset that immediately starts contributing to NIM. It's just a case of not having enough time in the year to have the full annual benefit to your NIM of those rate hikes. If we're saying 3 basis points or so of expansion in 2022 from the rate hikes, you get about double that in 2023 just from the impact of having a full year of the benefit versus the blended average about half a year's worth of benefit this year, just the way that the calendar would stagger them in. Okay, that's helpful. If I could pivot to your guidance, you know, double-digit loan growth guidance, I assume that's at the bank level. I'm trying to square that with your guidance for mid- to high-single-digit pre-tax, pre-provision income. Is the gap there on higher expenses? Do you expect high-single-digit expense growth for 2022? No, we were expecting expense growth in the low teens. That was our initial guidance. Despite a lighter start to the year on NIEs, that's primarily timing, and we still expect that our annual NIE growth will remain in the low teens, consistent with our previous outlook. Okay, that's really helpful. Then if I could ask a strategic question on your branches and the ones you've opened in Ontario. Could you provide us some color on how that fits strategically with digital banking and, you know, you've highlighted, you've again emphasized digital banking and that shift to it has accelerated during the pandemic. Do you look at your physical branch network differently in Ontario than in western Canada, and how does this fit with the big picture? Yeah. We look at the same in Ontario versus Western Canada, and we think digital banking is just gonna be a tremendous opportunity for us. As you know, we have 42 branches today, and many of our clients historically have done their banking at the large banks that were more convenient for them to do daily deposits. Digital will absolutely change that equation, and we expect it to. It already has when we use remote deposit capture. That's the growth we're seeing in our full service clientele has really come from just the improvement we've already made in our cash management delivery, and that will be further enhanced with the digital delivery. Same sort of focus in Ontario as in Western Canada. Same client that we're zeroing in on, same risk appetite. The addressable market in Ontario is very large, so we see a great growth opportunity. Great. Just last question from me on the macro point. You know, if we go back to an environment of 10 to 12 years ago where energy prices are above $100 a barrel on a sustained basis, what does that mean for CWB? Does that improve your credit outlook? Does that improve your loan growth outlook and your outlook for Western Canada? Maybe just some color there if we're in a high inflation, high energy price environment. Yeah. Well, you know, historically high energy prices has created a supply response essentially where there's been a bigger investment, so that if you look through sort of 2003 to 2015, that was the oil sands tremendous expansion there. Tremendous amount of capital expenditures that went into play. That certainly was a very strong driver for Alberta and the growth. So where we sit today is we've got that growth that is actually very large daily production that is benefiting, absolutely, in terms of revenue into the province. But the constraint of course is the pipeline limitation of how much you can ship. So where we sit today, you know, I think there would need to be a response that would come from how does one actually ship more oil. You know, I think what we're not seeing at this point is a CapEx response, and we'll follow for that. You know, I think the energy companies, the opportunity is there, and I think we're all focused on what that might be. It can be natural gas. It can be oil. We've got ESG concerns as we look at how that gets factored into the equation for for energy transition. I believe everybody's very focused on how this can move forward. It's very positive for the country. It's very positive for the province. Clearly the businesses in Alberta are beneficiaries of higher oil prices too. Okay. That's helpful. That's it for me. Thanks. Thank you. Thank you. At this time, we have no further questions. Please proceed. Thank you, Sylvie. This quarter our solid results once again demonstrate that our specialized, proactive, and personal service resonates with our business owner clients across Canada. The performance of our Mississauga banking center continues to significantly exceed expectations and shows that Ontario business owners are ready for an alternative to the big banks. The progress we're making on our strategic priorities will drive accelerated growth of full service clients and will increase value for all our stakeholders. Thank you all very much for your continued interest in CWB Financial Group, and we look forward to reporting Q2 financial results on May 27 th. With that, we wish you all a great day. Thank you. Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines. Have a good weekend.