Mr. Victor Dodig reports

CIBC ANNOUNCES THIRD QUARTER 2016 RESULTS

Canadian Imperial Bank of Commerce has released its financial results for the third quarter ended July 31, 2016.

Third quarter highlights

• Reported net income was $1,441-million, compared with $978-million for the third quarter a year ago, and $941-million for the prior quarter.
• Adjusted net income was $1,072-million, compared with $990-million for the third quarter a year ago, and $962-million for the prior quarter.
• Reported diluted earnings per share (EPS) were $3.61, compared with $2.42 for the third quarter a year ago, and $2.35 for the prior quarter.
• Adjusted diluted EPS was $2.67, compared with $2.45 for the third quarter a year ago, and $2.40 for the prior quarter.
• Reported return on common shareholder equity (ROE) was 26.8 per cent and adjusted ROE was 19.8 per cent.

"Our strong results this quarter were broad based, as each of our retail and business banking, wealth management, and capital markets business units performed well," said Victor G. Dodig, CIBC president and chief executive officer. "We continue to pursue and make progress against our strategy of building a strong, innovative and relationship-oriented bank while delivering consistent and sustainable financial results for our shareholders."

Results for the third quarter of 2016 were affected by the following items of note aggregating to a positive impact of 94 cents per share:

• $428-million gain ($383-million after tax), net of related transaction costs, on the sale of the bank's minority investment in American Century Investments (ACI);
• $40-million ($30-million after tax) of loan losses in the bank's exited European leveraged finance portfolio;
• $28-million gain ($21-million after tax) from the structured credit runoff business;
• $7-million amortization ($5-million after tax) of intangible assets.

At July 31, 2016, CIBC's Basel III common equity Tier 1, Tier 1 and total capital ratios were 10.9 per cent, 12.4 per cent and 14.4 per cent, respectively, on an all-in basis compared with 10.4 per cent, 11.9 per cent and 13.9 per cent, respectively, at the end of the prior quarter. CIBC's Basel III leverage ratio at July 31, 2016, was 3.9 per cent on an all-in basis.

On June 29, 2016, CIBC announced that it had entered into a definitive agreement to acquire PrivateBancorp Inc. and its subsidiary, the PrivateBank, a high-quality Chicago-based middle-market commercial bank with private banking and wealth-management capabilities. This transaction is expected to close in the first calendar quarter of 2017, subject to customary closing conditions, regulatory approvals and the approval of PrivateBancorp's common shareholders. Upon closing, CIBC expects to maintain a common equity Tier 1 ratio of at least 10 per cent on an all-in basis.

Core business performance

Retail and business banking reported net income of $666-million for the third quarter, up $36-million or 6 per cent from the third quarter a year ago. Solid volume growth and higher fees were partially offset by a higher provision for credit losses due to increased write-offs in cards and personal lending, and higher spending on strategic initiatives.

Retail and business banking continued to make progress against the bank's objectives of leadership in profitable revenue growth and client experience. During the third quarter of 2016:

• CIBC was recognized for the third year in a row for its continued leadership in mobile banking, achieving the top overall score among the five largest Canadian banks in the Forrester Research 2016 Canadian mobile functionality benchmark;
• Chequing account opens reached their highest quarterly level in over 10 years as a result of the successful launch of the innovative CIBC Smart account.

Wealth management reported net income of $506-million for the third quarter, which included the gain of $383-million, net of transaction costs, on the sale of the bank's minority investment in ACI, identified as an item of note. Excluding items of note, adjusted net income was $126-million, down $17-million or 12 per cent from the third quarter a year ago, as the bank ceased recognizing income from ACI following the announcement of the sale in December, 2015. Total retail brokerage revenue was also lower as a result of a decline in transaction volume. These factors were partly offset by higher revenue due to growth in average assets under management and seed capital gains in asset management.

During the third quarter of 2016, wealth management continued its progress in support of the bank's strategic focus to enhance client experience, drive asset growth and simplify the bank's business platform:

• The bank expanded its CIBC personal portfolio services offer with three new income generation portfolios;
• The bank launched e-statements for CIBC personal portfolio services and CIBC mutual fund accounts, further simplifying investment statement management for clients.

Capital markets reported net income of $304-million for the third quarter, up $39-million or 15 per cent from the third quarter a year ago. Excluding items of note, adjusted net income was $313-million, up $43-million or 16 per cent, primarily due to higher revenue, partially offset by a higher provision for credit losses and higher expenses. Higher revenue from interest rate and equity derivatives trading, corporate banking, and equity and debt issuance activity was partly offset by lower revenue from the bank's U.S. real estate finance business.

As a leading capital markets franchise in Canada that is also active in select industries in the rest of the world, capital markets acted as:

• Financial adviser and co-underwriter to Lowe's Companies Inc. on its $3.2-billion acquisition of Rona Inc.;
• Bookrunner on Suncor's $2.9-billion bought common share offering, one of the largest-ever bought deals in Canada;
• Financial adviser, sole underwriter, bookrunner and lead arranger on $1.8-billion in credit facilities, lead and joint bookrunner on $525-million of subscription receipts, and sole foreign exchange provider relating to Stantec Inc.'s acquisition of MWH Global;
• Financial adviser, co-underwriter, joint bookrunner and co-lead arranger on $925-million in credit facilities primarily used to support Cheung Kong Infrastructure Holdings Ltd.'s and Power Assets Holdings Ltd.'s acquisition of a 65-per-cent interest in certain mid-stream assets from Husky Energy Inc.;
• Adviser on Teine Energy's $975-million acquisition of Penn West oil assets in southwestern Saskatchewan.

Credit quality

Provision for credit losses was $243-million. Excluding the loss in the bank's exited European leveraged finance portfolio, identified as an item of note, the provision for credit losses was $203-million, up $14-million or 7 per cent from the same quarter last year. This increase was primarily driven by higher write-offs in the card and personal lending portfolios.

Conference call/webcast

The conference call will be held at 8 a.m. Eastern Time and is available in English (416-340-2217, or toll-free 1-866-696-5910, pass code 6808864 followed by the number sign) and French (514-861-2255, or toll-free 1-877-405-9213, pass code 8696193 followed by the number sign). Participants are asked to dial in 10 minutes before the call. Immediately following the formal presentations, CIBC executives will be available to answer questions.

A live audio webcast of the conference call will also be available in English and French at the bank's website.

Details of CIBC's fiscal 2016 third quarter results, as well as a presentation to investors, will be available in English and French at the bank's website, investor relations section, prior to the conference call/webcast. The bank is not incorporating information contained on the website in this news release.

A telephone replay will be available in English (905-694-9451 or 1-800-408-3053, pass code 3554469 followed by the number sign) and French (514-861-2272 or 1-800-408-3053, pass code 1143874 followed by the number sign) until 11:59 p.m. ET on Sept. 1, 2016. The audio webcast will be archived at the bank's website.

About CIBC

CIBC has 11 million personal banking and business clients. Through its three major business units -- retail and business banking, wealth management, and capital markets -- CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada with offices in the United States and around the world.

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