Mr. Laurent Ferreira of National Bank reports

NATIONAL BANK COMPLETES ACQUISITION OF CANADIAN WESTERN BANK

National Bank of Canada has completed its previously announced acquisition of Canadian Western Bank.

"Today is an exciting day for National Bank and marks a pivotal step in our history. This transaction will allow us to deliver a stronger banking choice for all Canadians and Canadian businesses. Our combined organization will provide customers with an expanded product and service offering nationally, while maintaining regional expertise. Thanks to CWB's established roots in Western Canada, National Bank is expanding its operations. We will pull strengths from our collective network and further extend the depth and breadth of our banking capabilities," said Laurent Ferreira, president and chief executive officer of National Bank.

With the closing of the transaction, integration activities will begin and further transition will continue. National Bank looks forward to onboarding CWB clients and employees in the coming months.

Transaction details

The acquisition was completed by way of a share exchange, pursuant to which each Canadian Western common share, other than those held by National Bank, was exchanged for 0.450 of a common share of National Bank, representing equity consideration of $5.3-billion and a total equity value of $5.6-billion inclusive of the shares already held by National Bank. The Canadian Western common shares are expected to be delisted from the Toronto Stock Exchange (the TSX) as of the close of business on Feb. 4, 2025. More information regarding the transaction is provided in the Canadian Western management proxy circular dated July 12, 2024, and filed on SEDAR+.

Subscription receipts financing update

In connection with the transaction, National Bank issued and sold an aggregate of 9,262,500 subscription receipts at a price of $112.30 per subscription receipt pursuant to a public offering and a concurrent private placement with an affiliate of Caisse de depot et placement du Quebec for a total amount of $1.04-billion.

With the closing of the transaction, the common shares of National Bank issuable pursuant to the subscription receipts were automatically issued through the facilities of CDS Clearing and Depository Services Inc. in accordance with the terms of the subscription receipts, on a one-for-one basis, without additional consideration or further action by holders of subscription receipts.

It is expected that trading in the subscription receipts issued in connection with the public offering will be halted effective prior to opening of trading on the TSX today and remain halted until the close of business today, at which time such subscription receipts will be delisted from the TSX. The transfer register maintained by the subscription receipt agent for the public offering will be closed as at the closing of business today. The common shares issued in respect of the subscription receipts issued as part of the public offering and private placement are expected to begin trading on the TSX today.

In addition, pursuant to the terms of the subscription receipts, holders of subscription receipts are also entitled to receive a cash amount for each subscription receipt equivalent to the dividend per common share payable by National Bank to holders of common shares of record on June 24, 2024, Sept. 30, 2024, and Dec. 30, 2024, with payment occurring on Aug. 1, 2024, Nov. 1, 2024, and Feb. 1, 2025, respectively.

The issuance of common shares of National Bank pursuant to the acquisition and upon the automatic exchange of the subscription receipts increases the number of outstanding common shares of National Bank by 50,272,878.

Canadian Western Tier 1 capital reorganization and planned amalgamation of National Bank and Canadian Western

Following the acquisition, all of the issued and outstanding first preferred shares Series 5 (non-viability contingent capital (NVCC)) and Series 9 (non-viability contingent capital (NVCC)), limited recourse capital notes Series 1 and Series 2 (NVCC) (collectively, the LRCNs) and NVCC subordinated debentures of Canadian Western remain outstanding.

Canadian Western intends to implement, effective as of Feb. 4, 2025, certain amendments previously approved by holders of the outstanding first preferred shares and LRCNs, which permit the exchange of the first preferred shares of Canadian Western for substantially equivalent first preferred shares of National Bank, and the early redemption of the LRCNs. Further, Canadian Western expects to deliver notice on Feb. 4, 2025, to the holders of its first preferred shares and LRCNs that, effective Feb. 20, 2025, the first preferred shares will be exchanged for substantially equivalent National Bank first preferred shares and the LRCNs will be redeemed, in accordance with their respective terms.

As a result of the amendments coming into force, Canadian Western will pay the applicable consent fees to holders of first preferred shares as of 5 p.m. Mountain Time on Oct. 24, 2024, who validly tendered a vote in respect of the first preferred shares amendments, and all holders of LRCNs as of 5 p.m. Mountain Time on Oct. 16, 2024.

More information regarding the Canadian Western Tier 1 capital reorganization (including the payment and amounts of the consent fees) is provided in the Canadian Western management proxy circular with respect to the first preferred shares amendments, and the consent solicitation statements with respect to the LRCN amendments, in each case dated Oct. 25, 2024, and filed on SEDAR+.

Following such exchanges and redemptions and certain other corporate actions, National Bank and Canadian Western intend to amalgamate, with the resulting entity assuming the obligations of its predecessors, including the obligations of Canadian Western under its outstanding NVCC subordinated debentures. The amalgamation is expected to occur on March 1, 2025.

Until such amalgamation, National Bank intends for the members of the Canadian Western board of directors to be the same as those of the National Bank board of directors, including the two Canadian Western nominees appointed today to the National Bank board of directors, namely Sarah Morgan-Silvester and Irfhan Rawji; in addition, Chris Fowler will sit on the Canadian Western board in his capacity as chief executive officer of Canadian Western. Accordingly, following the resignation of the prior Canadian Western directors from the Canadian Western board upon the closing of the acquisition and the appointment of National Bank board members thereto, the current Canadian Western board consists of Robert Pare (chair), Laurent Ferreira, Pierre Blouin, Pierre Boivin, Scott Burrows, Yvon Charest, Patricia Curadeau-Grou, Chris Fowler, Annick Guerard, Karen Kinsley, Lynn Loewen, Rebecca McKillican, Arielle Meloul-Wechsler, Sarah Morgan-Silvester, Pierre Pomerleau, Irfhan Rawji and Macky Tall.

About National Bank of Canada

With $462-billion in assets as of Oct. 31, 2024, National Bank is one of Canada's six systemically important banks. National Bank has approximately 30,000 employees in knowledge-intensive positions and operates through three business segments in Canada: personal and commercial banking, wealth management, and financial markets. A fourth segment, U.S. Specialty Finance and International, complements the growth of its domestic operations. Its securities are listed on the Toronto Stock Exchange (TSX: NA).

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