Canadian Imperial Bank of Commerce

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 Jeff Weiss, Senior Vice President, Investor Relations. Please go ahead, Jeff.

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 Rob 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 Lee, 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, 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. Thank you, Jeff, 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 $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 $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 ended 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. And this quarter, we continue 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 multi-family 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 Investors 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. that continues to rise. And 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 the Bank of N.T. Butterfield & Son that includes an agreement to sell our 92% stake in CIBC Caribbean for a total consideration of approximately U.S. $1.6 billion, subject to regulatory approval. Our proceeds will be comprised of $1 billion U.S. in cash and a fixed number of common shares currently valued at $645 million U.S. dollars, 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. and on that note and second, we also entered into a definitive agreement to acquire a minority interest and establish a strategic relationships with Ann Partners, a US private wealth management firm managing US dollars 54 billion in client assets. The investment is consistent with our strategy in this fast growing segment of the US wealth market and supports Ann Partners and their clients as the firm's strategic banking partner. Across each of our businesses in Canada, the US 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 business banking, commercial banking, wealth management, and capital markets. Our external financial reporting will be aligned to these changes in Quarter 4, 2026. We're bringing our commercial banking teams together in Canada and the US 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 US 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 US and Canada under Eric Belanger's leadership. Eric has led our 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 Lee will continue to play an invaluable role in overseeing our US 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 US. 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 this 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.