CIBC Q2 2026 Earnings Call - EPS Up 24% on Revenue Growth and Operating Leverage

Ebrahim Poonawala, Analyst, Bank of America1: Good morning. Welcome to the CIBC Q2 quarterly results conference call. Please be advised that this call is being recorded. I would now like to turn the meeting over to Geoff Weiss, Senior Vice President, Investor Relations. Please go ahead, Jeff.

Geoff Weiss, Senior Vice President, Investor Relations, CIBC: Thank you, and good morning. We will begin this morning’s call with opening remarks from Harry Culham, our President and Chief Executive Officer, followed by Robert Sedran, our Chief Financial Officer, and Frank Guse, our Chief Risk Officer. Also on the call today are a number of our Group Heads, including Christian Exshaw, Capital Markets, Kevin Li, U.S. Region, Hratch Panossian, Personal and Business Banking, Canada, and Susan Rimmer, Commercial Banking and Wealth Management Canada. They’re all available to take questions following the prepared remarks. As we have a hard stop at 8:30 A.M., we ask that you please limit your questions to one. As noted on slide one of our investor presentation, our comments may contain forward-looking statements which involve assumptions and have inherent risks and uncertainties. Actual results may differ materially. I would also remind listeners that the bank uses non-GAAP financial measures to arrive at adjusted results.

Management measures performance on a reported and adjusted basis and considers both to be useful in assessing underlying business performance. With that, I will now turn the call over to Harry.

Harry Culham, President and Chief Executive Officer, CIBC: Thank you, Geoff, and good morning, everyone. We reported strong second quarter results this morning that demonstrate the consistent execution of our client-focused strategy and the compounding power of our diversified platform. I will provide an overview of our adjusted quarter two results, followed by an update on our strategic progress. I’ll also touch on some announcements we made today aimed at strengthening our platform for growth moving forward. We reported earnings per share of CAD 2.54 for quarter two, a 24% increase from the prior year, marking the eighth consecutive quarter of double-digit earnings per share growth. Revenues of CAD 8 billion were up 14% from the prior year, including double-digit growth across each of our businesses. Expenses were up 10% from the prior year, and operating leverage was 4%, marking the 11th consecutive quarter in which we’ve delivered positive operating leverage.

Provision for credit losses were largely in line with our expectations for this stage of the economic cycle. While our outlook assumes some of the energy price and inflation pressures to be unwound over the balance of the year, potential disruptions from geopolitical and trade tensions remain. Importantly, we are staying close to our clients as they navigate this backdrop, and we remain comfortable with the overall credit quality of our portfolios. Our strong capital position provides us with a solid foundation to navigate the current environment with confidence. We entered the quarter with a robust 13.6% CET1 ratio, even after repurchasing 6.5 million common shares. With this elevated capital, we delivered a return on equity of 16.4%, up 250 basis points from the prior year. I’ll now share some key highlights from each of our four strategic priorities, which demonstrate the progress and momentum we’re seeing across our bank.

Our first strategic priority is to grow our mass affluent and private wealth franchise. By delivering personalized, high-touch service, we continue to differentiate ourselves and build lasting relationships that drive value for our clients. In this quarter, we continued to grow the number of qualified clients within our managed offering and drive higher money and balances. We also ranked in the top two for retail mutual fund long-term net sales among the Big Six Canadian banks. In our private wealth segment, our leadership continues to be recognized by the industry. This quarter, we were honored to receive awards for Best Private Bank in Canada and Best Multifamily Office in the U.S. Our second strategic priority is to expand our digital-first personal banking capabilities. Our focus remains on making banking more convenient, accessible, and personalized through technology.

We are delivering on that commitment with new Amazon and Skip partnerships announced this quarter, which give clients more value from their relationship with our bank. Our momentum extends to our online brokerage platform as well. At CIBC’s Investor’s Edge, new account openings increased by 9% compared to last year, reflecting the growing demand for flexible do-it-yourself investment options. Our third strategic priority is to deliver connectivity and differentiation to our clients. Our highly connected approach is deeply embedded across the CIBC network and is a defining element of our culture. By fostering strong collaboration and integration across our teams, we are delivering solutions that meet the evolving needs of our clients. This drives strong results across our businesses, particularly in Capital Markets, Commercial Banking, and Wealth Management.

As a proof point, 58% of our private banking clients have a Wood Gundy or Investment Council relationship, a number that continues to rise. Our fourth strategic priority is to enable, simplify, and protect our bank. Here, we are leveraging AI as an accelerant to help us execute faster with operational excellence and compete more effectively from a position of strength and differentiation. We are building repeatable, governed, and scalable capabilities that enhance client experience, operational efficiency, risk mitigation, and most importantly, cultural transformation. Ultimately, culture compounds across technology cycles, and we believe this is a key differentiator. The rapid adoption of AI across our organization has delivered measurable operational benefits, saving 3 million hours of productivity on a year-to-date basis.

Our disciplined and consistent approach to capital allocation ensures that every decision aligns with our strategy and supports sustainable value creation. While organic growth remains our primary focus, we also leverage dividends, share buybacks, and select inorganic opportunities to drive long-term shareholder value. I would like to briefly discuss two recent announcements that will sharpen our focus on growth and strengthen our platform. First, we’ve announced a strategic partnership with Bank of N.T. Butterfield & Son that includes an agreement to sell our 92% stake in CIBC Caribbean for a total consideration of approximately US$1.6 billion, subject to regulatory approval. Our proceeds will be comprised of US$1 billion in cash and a fixed number of common shares currently valued at US$645 million, representing a minority interest of approximately 22% at closing.

As we continue to execute on our strategy, this transaction will allow us to reallocate significant capital towards our highest strategic growth priorities. On that note, and second, we also entered into a definitive agreement to acquire a minority interest and establish strategic relationships with &Partners, a U.S. private wealth management firm managing US$54 billion in client assets. The investment is consistent with our strategy in this fast-growing segment of the U.S. wealth market and supports &Partners and their clients as the firm’s strategic banking partner. Across each of our businesses in Canada, the U.S., and globally, our focused approach and a deep commitment to our clients has driven strong business results. To further leverage the connectivity of our client-focused team, both north, south, and east, west, we will take our collaboration to the next level as we harness the power of our North American platform.

Effective immediately, we are realigning our businesses to reflect four strategic business units: Personal and Business Banking, Commercial Banking, Wealth Management, and Capital Markets. Our external financial reporting will be aligned to these changes in Q4 2026. We’re bringing our Commercial Banking teams together in Canada and the U.S. under the leadership of Susan Rimmer to further the momentum we’ve established in this business. Susan and our Commercial Banking team here in Canada have built a strong business with a collaborative approach to growth. Aligning our U.S. and Canadian Commercial teams together will open up new opportunities for us to grow with our clients. We’re also aligning our Wealth Management businesses in the U.S. and Canada under Eric Bélanger’s leadership. Eric has led our CIBC Global Asset Management business since 2024, taking an integrated approach to our growth plans across North America.

We believe the same approach across our broader wealth management businesses will accelerate our growth and create more value for our stakeholders. Kevin Li will continue to play an invaluable role in overseeing our U.S. Region as we leverage our connectivity across businesses to deepen and expand client relationships. We will continue to have strong collaboration across wealth management and commercial banking in Canada and the U.S. This is one of the hallmarks of our bank, and I know Susan, Eric, Kevin, and their teams will stay very closely connected moving forward. In closing, we continue to demonstrate our resilience through the cycle. We delivered another quarter with strong financial results and improved strategic positioning. This is a pivotal time for Canada. A stronger Canada is good for commerce globally, and our bank has a role to play.

In periods of heightened volatility, our clients turn to us to help them navigate uncertainty, and as the Bank of Commerce, we have remained committed to supporting them every step of the way. With that, I’ll now turn it over to Rob for a deeper look at our financials. Over to you, Rob.

Ebrahim Poonawala, Analyst, Bank of America2: Thank you, Harry, and good morning, everyone. Let’s start with three takeaways. First, it was another quarter of focused execution that delivered strong earnings driven by balanced revenue growth and positive operating leverage. Second, this consistent performance reinforces our confidence in our organic growth plans, a strategy that is complemented by the inorganic actions we announced today. Third, our capital and liquidity positions remain very strong even as we grow our client businesses, expand ROE, and return capital to shareholders. Please turn to slide nine. For the second quarter of 2026, we reported earnings per share of CAD 2.53. On an adjusted basis, EPS was CAD 2.54, up 24% from a year ago. Adjusted ROE was 16.4%, up 250 basis points from the same quarter last year. Let’s move on to a detailed review of our performance. I’m on slide 10.

Adjusted net income of CAD 2.5 billion increased 23%, pre-provision earnings were up 19%. Revenues were up 14%, benefiting from balance sheet growth, improving net interest margins, and higher fee income. Loan loss provisions were modestly higher, though we remain comfortable with our absolute level of loss at this point in the cycle. Frank will discuss credit in detail in his remarks. Please turn to slide 11. Excluding trading, net interest income was up 14%, with continued balance sheet growth and expanding margins. All bank margin ex-trading was up 17 basis points from the prior year and down one basis point sequentially, reflective of the Q2 seasonality to which we had previously guided. Canadian P&C NIM of 301 basis points was up one basis point sequentially, as the continued benefit from tractors was offset by product mix and competitive pricing.

In the U.S. segment, NIM of 390 basis points decreased 11 basis points from the prior quarter, mainly due to seasonally lower deposit balances and lower loan margins. We maintain our expectation of a stable to gradual positive bias on net interest margins over time. Slide 12 highlights key revenue trends. Non-interest income of CAD 3.7 billion was up 13%, helped by constructive markets and strong trading activity. Market-related fees increased 18%, with particularly strong growth in underwriting and advisory, trading, investment management and custodial, and mutual fund fees. Slide 13 highlights our expense performance. Expenses were up 10%, driven by revenue-linked costs, increased business activity, and technology investments across our bank. Excluding performance-based compensation, expenses were up 4% from a year ago. We continued to pace our expenses relative to our strong revenue growth and delivered solidly positive operating leverage again this quarter.

Slide 14 highlights the consistent strength of our balance sheet. Our CT1 ratio at the end of the quarter was 13.6%, up 20 basis points from the prior quarter. We delivered strong organic capital generation and benefited from a reduction in operational risk weights as disclosed previously. These were partly offset by an increase in organic RWA growth and continued share buybacks. Having now fully utilized our 20 million share NCIB, we have announced a new program for 30 million shares, or just over 3% of shares outstanding, pending TSX approval. Our liquidity position is very strong, with an average LCR of 131%. Starting on slide 15 with Canadian Personal and Business Banking, we highlight our strategic business unit results. Adjusted net income growth of 15% and pre-provision earnings growth of 16% were driven by strong revenue growth.

Revenues were up 11% year over year, supported by 32 basis points of net interest margin expansion and loan growth. The sequential decline in revenue is largely owing to the impact of three fewer days in the quarter. We continue to see tangible results from our focus on deep client relationships, selective balance sheet deployment, and disciplined pricing decisions. Expenses were up 6%, mainly due to higher investments in technology and other strategic initiatives and higher employee-related compensation. Slide 16, we show Canadian Commercial Banking and Wealth Management, where net income and pre-provision pre-tax earnings were up 12% and 19%, respectively, from a year ago. Revenues were up 17% from last year. Commercial banking revenues were up 10%, driven by higher deposit margins and balances. Commercial loan and deposit volumes were each up 7% from a year ago.

Wealth Management revenue growth of 22% was driven by higher average fee-based assets and increased client activity driving higher commissions. AUA and AUM were both up 24% compared with Q2 2025. CIBC Asset Management ranked second among the Big Six banks in retail mutual fund long-term net sales this quarter and first in long-term net sales as a percentage of opening AUM. Expenses increased 15% from a year ago due to higher performance-based and employee-related compensation and higher investments in strategic initiatives. Turning to U.S. Commercial Banking and Wealth Management on slide 17. Net income increased 53% from the prior year, mainly due to lower loan loss provisions, while pre-provision pre-tax earnings grew 10%. Revenues were up 11% from last year, driven by loan and deposit growth, higher net interest margins, and broad-based fee income growth. Expenses were also up 11% due to higher employee compensation.

Turning to slide 18 and our Capital Markets segment. Net income was up 40% from the same quarter last year as revenues were up 21% and operating leverage was solidly positive. Global Markets revenue saw continued growth across most products, benefiting from constructive markets and increased client activity. Investment Banking revenue was higher mainly in underwriting and advisory, and Corporate and Transaction Banking revenues were supported by volume growth. We are pleased with the growth of our client businesses and continue to build those businesses. As such, based on what we see today, we expect H2 revenues to be above last year’s H2, but down from the very strong H1. This view is subject to changes in an operating environment that remains fluid, to say the least.

Slide 19 reflects the results of corporate and other, which was a net loss of CAD 47 million, compared with a net loss of CAD 15 million in the prior year. On this slide, you also see the financial implications of the Caribbean transaction Harry referenced in his remarks. At closing, we anticipate that the deal will add roughly 25 basis points to our CT1 ratio. After accounting for the deployment of that capital and our proportionate share of Butterfield earnings, we expect this to be marginally accretive to ROE, but dilutive to EPS by a little over 1%, all else equal. We also plan to book a charge related to the Caribbean in our Q3 results of approximately CAD 350 million, which will be treated as an item of note.

In closing, the second quarter reflected continued revenue momentum and disciplined execution, delivering consistent and sustainable results that are fully aligned with our long-term strategy while maintaining a strong capital and liquidity position. With that, I’ll turn it over to Frank.

Frank Guse, Chief Risk Officer, CIBC: Thank you, Rob. Good morning, everyone. Our credit portfolio continues to demonstrate resilience with overall performance remaining broadly stable. Elevated unemployment and heightened geopolitical tensions contributed to an increase in impaired provisions this quarter, with some segments of the loan portfolios experiencing more pressure than anticipated earlier in the year. While we are not currently seeing material credit concerns, we continue to monitor the portfolio closely given the evolving economic environment. We remain confident in the quality of our credit portfolio and the prudence of our reserves, which positions us well to manage through the current environment. Turning to slide 22, our total provision for credit losses was CAD 605 million in Q2, compared with CAD 568 million last quarter.

Our allowance coverage increased by one basis point to 80 basis points. Our performing provision was CAD 57 million this quarter, reflecting the impact of credit migration and the evolving economic environment that resulted in unfavorable changes to our forward-looking indicators. Our provision on impaired loans was CAD 548 million, up CAD 28 million quarter-over-quarter, mainly as a result of higher provisions in our Canadian Personal and Business Banking portfolios. These were partially offset by lower provisions in U.S. Commercial Banking, which had a strong quarter. Turning to slide 23. We have highlighted impaired trends across our business units. In Canadian Personal and Business Banking, impaired provisions were higher this quarter, mainly due to increased write-offs and a higher allowance for 90-plus day delinquencies, consistent with broader economic conditions, along with some seasonality in the portfolio.

In Canadian Commercial Banking, impaired provisions remained elevated compared with the historical strong performance of this segment, driven by a small number of isolated provisions across unrelated sectors. While provisions increased, we see no evidence of broader systemic risk in this book. This portfolio has demonstrated industry-leading performance over the past few years. And while provisions have increased from historic lows, we expect the levels to begin to moderate slightly through the second half of the year. Performance remains strong in our other business and government segments, with lower losses in U.S. Commercial Banking and stable trends in Capital Markets. Slide 24 summarizes our gross impaired loans and formations. Our gross impaired loan ratio was 66 basis points, up two basis points quarter-over-quarter. New formations were down in Q2, with a decrease in business and government loans partially offset by an increase in consumer loans.

In our mortgage portfolio, the gross impaired loan ratio increased this quarter, given continued softness in the housing market. This portfolio remains both well-secured and well-provisioned, with low historical net write-off ratios that we do not expect to materially increase. Slide 25 outlines the 90-plus day delinquency rates and net write-offs of our Canadian consumer portfolios. The 90-plus day delinquency rates increased quarter over quarter, primarily driven by residential mortgages. The credit quality of our mortgage portfolio remains strong, supported by a solid loan-to-value profile. Our consumer net write-off ratios increased this quarter, mainly reflecting continued pressure in the credit cards and personal lending portfolios as elevated unemployment and ongoing economic uncertainty weigh on certain consumer segments. While we continue to monitor the macroeconomic environment closely, we remain confident in the overall resilience of our Canadian consumer portfolios aligned to our client-focused strategy.

In closing, our overall credit portfolios continue to be resilient despite persistent pressures in the macroeconomic backdrop. As we look to the second half of fiscal 2026, I would expect impaired provisions to be broadly in line with the levels we’ve seen in the first half of the year. Notwithstanding these pressures, our allowance coverage remains robust and continues to provide a meaningful buffer against potential headwinds, supported by disciplined risk management and active portfolio oversight. Overall, we remain confident in the quality of our portfolio and in our ability to manage through the current environment. I will now ask the operator to open the line as we welcome your questions.

Ebrahim Poonawala, Analyst, Bank of America1: Thank you. Please press star one at this time if you have a question. Our first question comes from Ebrahim Poonawala with Bank of America. Please go ahead.

Ebrahim Poonawala, Analyst, Bank of America: Hey, good morning. I guess maybe, Rob, if we can spend some time on the net interest margin outlook. Being a nice tailwind over the last few years, as we think about and just listening to some of your peers who reported yesterday, to me, incremental growth seems to be margin dilutive and deposit growth and pricing seems super competitive. One, do you agree with both those statements? If yes, is there material offset with the repricing that we should be mindful of that could still sort of propel margin expansion? I think you have a slide showing mortgage spreads also tightening over the last few months. Prime that for us in terms of the risk that the margin expansion story is over. Thank you.

Ebrahim Poonawala, Analyst, Bank of America2: Good morning, Ebrahim. Thanks for the question. We tweaked our slide a little bit to show the margin breakdown more in the way we think about it and talk about it on these calls. You may not have gotten there with the volume of material that you have coming at you today, but we think it’s a helpful way to think about the margin. The hedging strategy, the so-called tractoring, is going to continue to provide a benefit. In fact, if anything, over the last several months, the curve has steepened somewhat, and so the intersection point between the roll-on and the roll-off of the hedges has actually been pushed out a couple of quarters from where it originally was.

Frank Guse, Chief Risk Officer, CIBC: That’s obviously subject to market changes, but at the very least, the hedging strategy will continue to kick off at the all bank level, we think in the one to one and a half basis points, gradually falling away at some point in 2027. The rest of what you’re talking about from a product mix perspective, our strategy is really unchanged in terms of where we’re focused, and we do think the money in, particularly the money in focus, the deposit focus, is something that all of our businesses have. While we’re down a little bit this quarter from a just expected seasonality on the deposit side in particular, we do think deposits are going to continue to be a focus and continue to help the margin overall. Then from a pricing perspective, there’s no question it’s a competitive market.

Frankly, on both sides of the border, it’s a competitive market.

Robert Sedran, Chief Financial Officer, CIBC: We’re focused on the client, focused on doing right by the client, and so overall, we think we can manage the margin. What you’ve seen in recent periods have been some significant margin expansion quarter-over-quarter. I’m not sure I would model that, but we remain constructive on the margin in terms of flat to gradually higher over time as we look forward to the next several quarters.

Ebrahim Poonawala, Analyst, Bank of America: Got it. Thank you.

Ebrahim Poonawala, Analyst, Bank of America1: Our next question comes from Matthew Lee with Canaccord Genuity. Please go ahead.

Ebrahim Poonawala, Analyst, Bank of America0: Hi, good morning. Thanks for taking my question. Maybe one for Susan. With Commercial Banking now reporting to you on both sides of the border, should we think about this as primarily a client connectivity move, or is there some desire to manage the North American commercial balance sheet more consistently? In particular, how could this change the way you think about deposit gathering, loan growth, capital allocation across both the U.S.?

Ebrahim Poonawala, Analyst, Bank of America3: Yes. Thank you, Matthew. As we think about the commercial banking business, we’re really excited about the opportunity to frame our business in a north-south dimension. Looking at commercial banking on a North American basis, following our clients, as they actually invest from Canada into the U.S., and vice versa, is going to be an important priority. We do think that there’s an opportunity to continue with our culture of connectivity and really driving our origination efforts properly, with our clients, both sides of the border. We will look at capital allocation, we will look at efficiency, we will look at all of those business imperatives to continue to drive a real best-in-class result for shareholders. I’ll conclude by saying we’re excited about the opportunity to work together with Kevin Li and the team in the U.S.

Ebrahim Poonawala, Analyst, Bank of America0: All right. Appreciate it. Thanks.

Ebrahim Poonawala, Analyst, Bank of America1: Our next question comes from John Aiken with Jefferies. Please go ahead.

John Aiken, Analyst, Jefferies: Good morning. In terms of the sale of the Caribbean, is there any restrictions on the 22% stake that you’re going to be taking in Butterfield?

Robert Sedran, Chief Financial Officer, CIBC: Hey, John. Good morning. It’s Rob. No restrictions other than the closing conditions and the rest. We will manage that 22%. We’re excited about the combination. We’re excited about what this means for the region and what this means for our team members and clients. There’s no immediate plans to change our ownership stake, but there’s no permanent restrictions. I think Harry might want to add a few points on the Caribbean as well.

Harry Culham, President and Chief Executive Officer, CIBC: Yeah. Thank you, Rob, and thanks for the question. I do think that I’d like to just highlight how pleased we are with this combination. This will create the leading bank serving the English-speaking Caribbean and Atlantic jurisdictions, really positioning our business as a platform for strength and support in the region. The transaction brings together two complementary banks with deep roots and established relationships across the region. We’ve been working with Butterfield for many, many years in the past, so we know them well. Clients will benefit from an expanded range of financial services, including Butterfield’s trust and wealth management expertise. Importantly, the transaction enables us to allocate capital towards our highest strategic growth priorities. We’re really pleased with the combination.

John Aiken, Analyst, Jefferies: Thank you both.

Ebrahim Poonawala, Analyst, Bank of America1: Our next question comes from Gabriel Dechaine with National Bank Financial. Please go ahead.

Gabriel Dechaine, Analyst, National Bank Financial: Good morning. Just a couple things here. I’d like to revisit that mortgage spread slide. It is dipped down a lot. I am wondering, is that a big deal for you? You have got a large mortgage book proportionally, and not just for you, but a lot of banks have been talking about mortgage refinancing spreads as a tailwind. Is that gone now? Is it being competed away? My second question relates to the strategic priorities you have. You have that excess capital coming from the CIBC Caribbean sale. You mentioned talk-ins, I think, geographically, whatever segment, whatever business line. Can you give me a bit of a sense of what you are looking at there? Thanks.

Robert Sedran, Chief Financial Officer, CIBC: Morning, Gabe, it’s Saraj. I’ll take the first part and then I’ll pass on for the second part on the strategic priorities across the enterprise. Thanks for the question on mortgages, and I’ll start by reminding everybody, we’ve got a client-focused strategy.

Our priorities are to continue to engage the 14 million clients that deal with us, the vast majority of whom have everyday banking products with us, the checking accounts, the credit cards, the engagement day to day. That’s a big priority for us.

We’re also trying to win in the mass affluent segment. Across those two things, mortgages obviously do come in. They’re a key product for our clients. The way we manage mortgages is we are continuing to price for profitability, but also price to win business with clients where the overall profitability and relationship with that client is accretive to the shareholder. If you look at that over the last little while, mortgages have been going down. You did say we have a big mortgage book. Of course, we do. It’s a core product for our clients. We’ve talked in the past, it’s around the 10% of our revenue range, so it is not as material of a driver as it was before.

Second is while the spreads have come down and it was a bit tougher in Q2, it does look a little bit better going forward. There’s still a positive spread there. So that positive margin trajectory Rob described, at least on our end, given our strategy and how we’re competing, there is positive contributions from the mortgage rolls, and we continue to expect some positive contributions from the mortgage rolls going forward. Lastly, I’ll say, look, we’ll follow our strategy. It’s been working for us. You look at the last number of quarters, we’ve had street-leading revenue growth.

Ebrahim Poonawala, Analyst, Bank of America2: We’ve outperformed on the deposit side, even when you look at this quarter. We’ve outperformed in credit cards, and that’s what’s leading to the street-leading NIM we have in the retail segment. Our goal is the same, create a premium margin bank by focusing on the right clients and the right products.

Gabriel Dechaine, Analyst, National Bank Financial: Got it. Thanks.

Ebrahim Poonawala, Analyst, Bank of America2: Hey, Gabe, it’s Rob. Good morning. Just to follow up on your second question, Harry referenced the four capital deployment buckets in his prepared remarks, and we were active on all four of those this quarter. Organic growth, we continue to see opportunities to deploy across our businesses, and quite happy with the progress. He also referenced us as the Bank of Commerce. We do look forward to continuing to grow with our clients throughout our North American footprint and frankly, throughout our global footprint. We think the organic deployment is going to remain the primary answer here. Dividends have been growing. We have revisited annually. The buybacks have been active. We actually had a small tuck-in acquisition as we had discussed previously. I wouldn’t suggest that this changes our capital deployment plans. If anything, we’re happy to run with a strong balance sheet.

It’s there to support our clients, it’s there to protect our shareholders and stakeholders, and we feel very comfortable with where we’ve landed and the opportunities to deploy over time.

Gabriel Dechaine, Analyst, National Bank Financial: I guess my question is more along the lines of the sizing, but if it’s inorganic, tuck-ins are the apt description.

Ebrahim Poonawala, Analyst, Bank of America2: That is 100% still the right description.

Gabriel Dechaine, Analyst, National Bank Financial: Thank you.

Ebrahim Poonawala, Analyst, Bank of America1: Our next question comes from Doug with Desjardins Securities. Please go ahead.

Doug, Analyst, Desjardins Securities: Good morning. Just Harry or Rob, if you can elaborate on the U.S. tuck-in. Sorry, I got distracted, but I think you said you did a U.S. wealth acquisition or tuck-in acquisition. Can you just size that maybe in a little bit more detail? Rob, you talked about dilution from the Caribbean deal. I assume that goes through obviously, Other’s always a real tough one to model. What’s the guidance on how we should be thinking about the Other division?

Ebrahim Poonawala, Analyst, Bank of America2: Hey, Doug. Good morning. Yeah, it will flow through the corporate and other at close. That close is still open to exactly when it’s going to happen. Just given there’s some puts and takes because our proportionate share of Butterfield will also sit in corporate and other. When you think about it, like I said, a little over 1% overall dilution to earnings per share, while still being marginally ROE accretive. In terms of the acquisition, we didn’t disclose the terms. I’ll hand it to Kevin to talk a little bit about what we’ve done and why we’ve done it.

Kevin Li, Head of U.S. Region, CIBC: Sure. Thanks, Rob, and thanks for the question. Just to back up a bit, we’ve been talking about wealth tuck-ins for a period of time, and we’re happy to have found something I think is really interesting. We did not disclose the size. It is a very fast-growing hybrid RIA broker-dealer. It’s based in St. Louis, although advisors across the country. It’s, as I said, very fast-growing, it’s highly complementary to the business we have today, and very excited to make it part of the family.

Doug, Analyst, Desjardins Securities: Okay, thanks. I’ll leave it there.

Ebrahim Poonawala, Analyst, Bank of America1: Our last question comes from Mario Mendonca with TD Securities. Please go ahead.

Mario Mendonca, Analyst, TD Securities: Good afternoon. I kind of want to go back to that question on the U.S. Perhaps this is for Harry or for Kevin. It does appear that CIBC has sort of hit its stride in the U.S. It was a business that for some time now looked like you were investing, sort of cleaning up processes and controls. Am I right to suggest that that part of the journey in the U.S. is over? You’ve hit your stride in the U.S. If I’ve got that right, and if I also have it right that the U.S. regionals, and it looks like a lot of these folks are up for sale right now, does it make sense that CIBC would look at another deal? It’s been a long time since the PrivateBancorp deal. Does that make sense?

Harry Culham, President and Chief Executive Officer, CIBC: Good morning. It’s Harry. I’ll kick it off, and I’m going to pass it over to Kevin to go into some detail around our client franchise, et cetera, in the U.S. because we’re very proud of our team and our client franchise in the U.S. I just say that when we look at our U.S. region, we look at it from a capital markets, commercial banking, and wealth management viewpoint. All the businesses are highly connected. You make a good point. We have invested very heavily over the years in the infrastructure, the foundation of our U.S. operations, and we feel very good about where we are today on the back of those investments in technology, systems, talent, et cetera.

The connectivity with Canada is going to be enhanced with our new SBU structure, but Kevin Li, as CEO of the region, is driving the business in that area. Kevin, over to you just to talk a little bit about the business and the opportunity.

Kevin Li, Head of U.S. Region, CIBC: Sure. Thanks, Harry, and thanks, Mario, for the question. I think you’ve got it right. There have been a number of foundational investments that I’ve made over the past years, and the good news is it’s really put us in, I think, an enviable position to grow from today. I think you’re starting to see that in the last couple of quarters with some notable expansion of ROE and some noticeable continued growth across the segments. We feel really good about where we are, and I think that the change in SBU that you’re seeing now is really just a representation of us taking this to the next level in terms of collaborating both north, south and east, west. It’s not an or, it’s an and. Team’s very excited about taking our collaboration to the next level.

As you said, I think the opportunity for us in the U.S. continues to be very meaningful, both in commercial as well as wealth.

Harry Culham, President and Chief Executive Officer, CIBC: I might just add as well, it is Harry again, that our capital deployment will be stable.

Steady, predictable, consistent, Mario. We’ve had some very good success with tuck-in acquisitions and team lift outs over the years. We’re really focused on driving our organic growth. You see the strength of our balance sheet. Our funding, our capital, our risk management is, we think, street leading. We’re going to continue to focus on our organic growth trajectory, taking that to the next level.

Mario Mendonca, Analyst, TD Securities: Yeah. It’s the capital and the improvement in operations in the U.S. that’s made me ask that question. My interpretation from your responses is that that’s not a priority for CIBC, an acquisition in the U.S.

Harry Culham, President and Chief Executive Officer, CIBC: That’s correct.

Mario Mendonca, Analyst, TD Securities: Okay.

Harry Culham, President and Chief Executive Officer, CIBC: Thank you.

Mario Mendonca, Analyst, TD Securities: If we could flip over to Canada for a moment. Every bank is showing some momentum in their commercial lending in Canada. While it seemed plausible to me that that was going to happen at some point in 2026, maybe 2027, it seems like that’s coming in a little sooner. Do you have a sense for why it’s coming in sooner and what sectors we’re actually seeing some growth in C&I? I want to understand if this is real, if this is enduring, or maybe just a one-quarter thing.

Ebrahim Poonawala, Analyst, Bank of America3: Yeah, thank you. It’s Susan speaking. We continue to expect loan and deposit growth in the second half of the fiscal year, and we continue to guide to mid to high single-digit growth year-over-year. We did post, you saw it, we posted a 7% growth in loans and deposits year-over-year. We’re quite proud of that. We are pacing growth ahead of market. We do practice a relationship business model, and most of our growth in Commercial Banking is coming from new clients to CIBC. The growth is coming mostly from what we would call our diversified segment. It’s diversified by way of geography. It’s diversified by way of industry type. The pipelines are strong, and I would say that our clients are demonstrating real resilience in the face of uncertainty in the economy.

We do travel across the country and spend time with our clients, and we’re really encouraged by their continued ambitions to grow.

Harry Culham, President and Chief Executive Officer, CIBC: I might just add, if I may, Mario. I think it’s a great question. The economy continues to show resilience. As Susan points out, our clients are resilient despite the uncertainties out there. If we look at our base case 2027 outlook, there’s less uncertainty. It’s a stronger growth. I believe this is a pivotal time for Canada and for our clients globally. Now is the time, really, we believe, to act with urgency and really leverage the opportunities with pace. As we have since 1867, I don’t know if I told you this, Mario, but two months before Confederation, our bank was formed. We stand ready to be helpful and very involved, and we’re quite optimistic about Canada’s long-term prospects here. We plan to be very involved and very helpful.

Mario Mendonca, Analyst, TD Securities: Okay. Because there’s just a couple of minutes of time left, can I just go back to the NCIB, the 3%? One of your peers just announced their 3%. It’s just big numbers, like 30 million shares, 45 million shares. How do I interpret this? Not every bank announces an NCIB and actually does it. Given where things stand today, we all know valuations for Canadian banks, man, they look heavy. We all know that. Would you point me to doing the whole 30 million or not?

Harry Culham, President and Chief Executive Officer, CIBC: Hey, Mario, it’s Rob. Good morning. Yeah, this is the third announcement. We’ve completed two 20 million share NCIBs, and now we’ve upsized it to 30 million shares. We announce these things because we intend to use them, but the nice thing about the buyback is we’ve got some flexibility depending on how organic growth comes in. We use the buyback sort of as the outlet to manage excess capital, the outlet to manage the delta between organic growth and what we’re generating. The ROE’s been rising as well. Our generation has been going up even while our loan growth has been rising. The plan is to use it, but it’s also one of these things that its organic growth is what’s truly driving our capital planning, and the buyback is more of an output from that.

Ebrahim Poonawala, Analyst, Bank of America2: With a 13.6 CET1 and continuing to build, we do expect to remain active on the buyback.

Mario Mendonca, Analyst, TD Securities: It’s helpful. Thank you. Over.

Ebrahim Poonawala, Analyst, Bank of America1: Thank you. I would now like to turn the meeting over to Harry.

Harry Culham, President and Chief Executive Officer, CIBC: Thank you, operator, and thank you all for joining us this morning. We continue to remain laser-focused on delivering against our strategy and our purpose. Our employees continue to show remarkable pride in their work, our partnerships are as strong as ever, our clients deeply appreciate our unique advice and service. To that end, I’d like to thank the entire CIBC team for their commitment to our clients, our communities, and our shareholders, and to one another. Thank you for joining us today and for your continued interest in CIBC.

Ebrahim Poonawala, Analyst, Bank of America1: This concludes today’s conference call. You may now disconnect.