Canadian Imperial Bank of Commerce : Quarterly financial report

Report to Shareholders for the Second Quarter, 2023

www.cibc.com May 25, 2023

Report of the President and Chief Executive Officer

Overview of results

CIBC today announced its financial results for the second quarter ended April 30, 2023.

Second quarter highlights

		Q2/23			Q2/22			Q1/23		YoY	QoQ
							Variance	Variance
Revenue		$5,702 million			$5,376 million			$5,927 million		+6%	-4%
Reported Net Income		$1,688 million			$1,523 million			$432 million		+11%	+291%
Adjusted Net Income (1)		$1,627 million			$1,652 million			$1,841 million		-2%	-12%
Adjusted pre-provision,pre-tax earnings (1)		$2,475 million			$2,343 million			$2,660 million		+6%	-7%
Reported Diluted Earnings Per Share (EPS) (2)	$1.76		$1.62		$0.39		+9%	+351%
Adjusted Diluted EPS (1)(2)	$1.70		$1.77		$1.94		-4%	-12%
Reported Return on Common Shareholders' Equity (ROE) (3)	14.5%		14.0%		3.1%
Adjusted ROE (1)	13.9%		15.2%		15.5%
Common Equity Tier 1 (CET1) Ratio (4)	11.9%		11.7%		11.6%

Results for the second quarter of 2023 were affected by the following items of note aggregating to a positive impact of $0.06 per share:

• $114 million ($82 million after-tax) decrease in legal provisions (Corporate and Other); and
• $27 million ($21 million after-tax) amortization of acquisition-related intangible assets.

Our CET1 ratio(4) was 11.9% at April 30, 2023, compared with 11.6% at the end of the prior quarter. CIBC's leverage ratio(4) and liquidity coverage ratio(4) at April 30, 2023 were 4.2% and 124%, respectively.

CIBC announced an increase in its quarterly common share dividend from $0.85 per share to $0.87 per share for the quarter ending July 31, 2023.

We continued to execute on our client-focused strategy, delivering solid financial results in the second quarter by leveraging the investments we've made in high-touch,high-growth markets and furthering our strengths in talent and technology. In a more fluid economic environment we remain well capitalized and our well-diversified business provides resilience, as we live our purpose of helping make ambitions real in the second half of the fiscal year.

Core business performance

Canadian Personal and Business Banking reported net income of $637 million for the second quarter, up $141 million or 28% from the second quarter a year ago, primarily due to higher revenue and a lower provision for credit losses, partially offset by higher non-interest expenses. Adjusted pre-provision,pre-tax earnings(1) were $1,012 million, up $50 million from the second quarter a year ago, as higher revenues primarily driven by higher net interest margin and volume growth were partially offset by higher expenses. Expenses were higher mainly due to employee-related costs.

Canadian Commercial Banking and Wealth Management reported net income of $452 million for the second quarter, down $28 million or 6% from the second quarter a year ago, primarily due to a provision for credit losses in the current quarter compared with a provision reversal in the prior year quarter, and higher non-interest expenses, partially offset by higher revenue. Adjusted pre-provision,pre-tax earnings(1) were $663 million, up $15 million from the second quarter a year ago, primarily due to volume growth, higher net interest income from improved deposit margins, and higher fees in commercial banking. Expenses increased primarily driven by the timing of expenditures, partially offset by lower performance-based compensation.

1. This measure is a non-GAAP measure. For additional information, see the "Non-GAAP measures" section, which section is incorporated by reference herein, including the quantitative reconciliations therein of reported GAAP measures to: adjusted net income on pages 9 to 13; and adjusted pre-provision,pre-tax earnings on page 14.
2. CIBC completed a two-for-one share split of CIBC common shares effective at the close of business on May 13, 2022. All per common share amounts in this CEO message reflect the Share Split.
3. For additional information on the composition, see the "Glossary" section.
4. Our capital ratios are calculated pursuant to the Office of the Superintendent of Financial Institution's (OSFI's) Capital Adequacy Requirements (CAR) Guideline and the leverage ratio is calculated pursuant to OSFI's Leverage Requirements Guideline, all of which are based on the Basel Committee on Banking Supervision (BCBS) standards. The April 30, 2023 results reflect the impacts from the implementation of Basel III reforms that became effective as of February 1, 2023. For additional information, see the "Capital management" and "Liquidity risk" sections.

U.S. Commercial Banking and Wealth Management reported net income of $55 million (US$40 million) for the second quarter, down $125 million (US$102 million or 72%) from the second quarter a year ago, primarily due to a higher provision for credit losses and higher non-interest expenses, partially offset by higher revenue and the impact of foreign currency translation. Adjusted pre-provision,pre-tax earnings(1) were $312 million (US$229 million), up $24 million (US$1 million) from the second quarter a year ago, due to higher revenue, primarily driven by volume growth and higher net interest margin, and the impact of foreign currency translation, partially offset by lower asset management fees and higher employee-related costs.

Capital Markets reported net income of $497 million for the second quarter, down $43 million or 8% from the second quarter a year ago, primarily due to higher non-interest expenses and a provision for credit losses in the current quarter compared with a provision reversal in the prior year quarter, partially offset by higher revenue. Adjusted pre-provision,pre-tax earnings(1) were down $26 million or 4% from the second quarter a year ago, as higher revenue from our direct financial services business, corporate banking, and advisory, was offset by lower underwriting activity, lower global markets revenue and higher expenses. Expenses were up due to higher employee-related costs.

(1) This measure is a non-GAAP measure. For additional information and a reconciliation of reported results to adjusted results, where applicable, see the "Non-GAAP measures" section.

Making a difference in our communities

At CIBC, we believe there should be no limits to ambition. We invest our time and resources to remove barriers to ambitions and demonstrate that when we come together, positive change happens that helps our communities thrive. This quarter we:

• Announced a $1.25 million gift to McGill University in support of the Sustainable Growth Initiative and its goal to contribute to a more sustainable society;
• Donated $100,000 and opened the CIBC Foundation Relief Fund to support the Türkiye and Syria earthquake relief efforts; and
• Announced financing of the 50th property under the CIBC Housing Initiative in the U.S. and will extend the program beyond its original US$10 million investment to continue its commitment to strengthening neighbourhoods through quality and affordable housing options.

Victor G. Dodig

President and Chief Executive Officer

1. CIBC SECOND QUARTER 2023

Enhanced Disclosure Task Force

The Enhanced Disclosure Task Force (EDTF), established by the Financial Stability Board, released its report "Enhancing the Risk Disclosures of Banks" in 2012, which included thirty-two disclosure recommendations. The index below provides the listing of these disclosures, along with their locations. EDTF disclosures are located in our 2022 Annual Report, quarterly Report to Shareholders, and supplementary packages, which may be found on our website (www.cibc.com). No information on CIBC's website, including the supplementary packages, should be considered incorporated herein by reference.

			Second quarter, 2023
					Pillar 3 report
					and
			Management's	Consolidated	Supplementary	2022
			discussion	financial	regulatory	Annual
			capital
Topics	Recommendations	Disclosures	and analysis	statements	disclosure	Report
				Page references
General	1	Index of risk information - current page
	2	Risk terminology and measures	54-57		76-78	104
	3	Top and emerging risks	30-32			55
	4	Key future regulatory ratio requirements	26-27, 43, 44	78	10, 17	40, 43, 78, 79,
						170-171
Risk	5	Risk management structure				48, 49
governance,	6	Risk culture and appetite				47, 50, 52
risk	7	Risks arising from business activities	33			53, 58
management
8	Bank-wide stress testing	36			35-36, 54, 62, 67
and business
					74, 76
model
Capital	9	Minimum capital requirements	25	78		35-36,170-171
adequacy and	10	Components of capital and reconciliation to			9-12	40
risk-weighted		the consolidated regulatory balance sheet
assets	11	Regulatory capital flow statement			13	41
	12	Capital management and planning				43, 170-171
	13	Business activities and risk-weighted	33		4-5	42, 58
		assets
	14	Risk-weighted assets and capital			4-5	38, 42
		requirements
	15	Credit risk by major portfolios			28-38	60-65
	16	Risk-weighted assets flow statement			4-5, 6	42
	17	Back-testing of models			74, 75	54, 62, 72
Liquidity	18	Liquid assets	42			77
Funding	19	Encumbered assets	43			77
	20	Contractual maturities of assets, liabilities	47			81
		and off-balance sheet instruments
	21	Funding strategy and sources	46			80
Market risk	22	Reconciliation of trading and non-trading	39			71
		portfolios to the consolidated balance
		sheet
	23	Significant trading and non-trading market	40-41			71-75
		risk factors
	24	Model assumptions, limitations and				71-75
		validation procedures
	25	Stress testing and scenario analysis				35, 74
Credit risk	26	Analysis of credit risk exposures	34-38		7-8,69-73	63-69,
						143-150, 189
	27	Impaired loan and forbearance techniques	34, 37			60, 68, 88, 123
	28	Reconciliation of impaired loans and the	37	71		68, 144
		allowance for credit losses
	29	Counterparty credit risk arising from	37		73, 35 (1)	60, 64,
		derivatives				159-160
	30	Credit risk mitigation	34		21, 55, 73	60,
						159-160
Other risks	31	Other risks	48			82-86
	32	Discussion of publicly known risk events		80		82, 182

(1) Included in our supplementary financial information package.

CIBC SECOND QUARTER 2023 iii

Management's discussion and analysis

Management's discussion and analysis (MD&A) is provided to enable readers to assess CIBC's financial condition and results of operations as at and for the quarter and six months ended April 30, 2023 compared with corresponding periods. The MD&A should be read in conjunction with our 2022 Annual Report and the unaudited interim consolidated financial statements included in this report. Unless otherwise indicated, all financial information in this MD&A has been prepared in accordance with International Financial Reporting Standards (IFRS or GAAP) and all amounts are expressed in Canadian dollars (CAD). Certain disclosures in the MD&A have been shaded as they form an integral part of the interim consolidated financial statements. The MD&A is current as of May 24, 2023. Additional information relating to CIBC is available on SEDAR at www.sedar.com and on the United States (U.S.) Securities and Exchange Commission's (SEC) website at www.sec.gov. No information on CIBC's website (www.cibc.com) should be considered incorporated herein by reference. A glossary of terms used throughout this quarterly report can be found on pages 51 to 57.

Contents

2	Second quarter financial highlights	25	Capital management
3	Financial performance overview	29	Off-balance sheet arrangements
30	Management of risk
3	Economic outlook
4	Significant events	30	Risk overview
4	Financial results review	30	Top and emerging risks
6	Review of quarterly financial information	34	Credit risk
8	Non-GAAP measures	39	Market risk
42	Liquidity risk
15	Strategic business units overview	48	Other risks
49	Accounting and control matters
15	Canadian Personal and Business Banking
17	Canadian Commercial Banking and Wealth Management	49	Critical accounting policies and estimates
19	U.S. Commercial Banking and Wealth Management	49	Accounting developments
21	Capital Markets	49	Other regulatory developments
22	Corporate and Other	50	Controls and procedures
24	Financial condition	50	Related-party transactions
51	Glossary
24	Review of condensed consolidated balance sheet

A NOTE ABOUT FORWARD-LOOKINGSTATEMENTS: From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including in this report, in other filings with Canadian securities regulators or the SEC and in other communications. All such statements are made pursuant to the "safe harbour" provisions of, and are intended to be forward-looking statements under applicable Canadian and U.S. securities legislation, including the U.S. Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements made in the "Financial performance overview - Economic outlook", "Financial performance overview - Significant events", "Financial performance overview - Financial results review", "Financial performance overview - Review of quarterly financial information", "Financial condition - Capital management", "Management of risk - Risk overview", "Management of risk - Top and emerging risks", "Management of risk - Credit risk", "Management of risk - Market risk", "Management of risk - Liquidity risk", "Accounting and control matters - Critical accounting policies and estimates", "Accounting and control matters - Accounting developments", and "Accounting and control matters - Other regulatory developments" sections of this report and other statements about our operations, business lines, financial condition, risk management, priorities, targets and sustainability commitments (including with respect to net-zero emissions and our environmental, social and governance (ESG) related activities), ongoing objectives, strategies, the regulatory environment in which we operate and outlook for calendar year 2023 and subsequent periods. Forward-looking statements are typically identified by the words "believe", "expect", "anticipate", "intend", "estimate", "forecast", "target", "predict", "commit", "ambition", "goal", "strive", "project", "objective" and other similar expressions or future or conditional verbs such as "will", "may", "should", "would" and "could". By their nature, these statements require us to make assumptions, including the economic assumptions set out in the "Financial performance overview - Economic outlook" section of this report, and are subject to inherent risks and uncertainties that may be general or specific. Given the continuing impact of high inflation, rising interest rates, recent events in the U.S. banking sector which adds pressure on liquidity and funding conditions for the financial industry, the impact of hybrid work arrangements and higher interest rates on the U.S. real estate sector, potential recession and the war in Ukraine on the global economy, financial markets, and our business, results of operations, reputation and financial condition, there is inherently more uncertainty associated with our assumptions as compared to prior periods. A variety of factors, many of which are beyond our control, affect our operations, performance and results, and could cause actual results to differ materially from the expectations expressed in any of our forward-looking statements. These factors include: inflationary pressures; global supply-chain disruptions; geopolitical risk, including from the war in Ukraine, the occurrence, continuance or intensification of public health emergencies, such as the impact of COVID-19, and any related government policies and actions; credit, market, liquidity, strategic, insurance, operational, reputation, conduct and legal, regulatory and environmental risk; currency value and interest rate fluctuations, including as a result of market and oil price volatility; the effectiveness and adequacy of our risk management and valuation models and processes; legislative or regulatory developments in the jurisdictions where we operate, including the Organisation for Economic Co-operation and Development Common Reporting Standard, and regulatory reforms in the United Kingdom and Europe, the Basel Committee on Banking Supervision's global standards for capital and liquidity reform, and those relating to bank recapitalization legislation and the payments system in Canada; amendments to, and interpretations of, risk-based capital guidelines and reporting instructions, and interest rate and liquidity regulatory guidance; exposure to, and the resolution of, significant litigation or regulatory matters, our ability to successfully appeal adverse outcomes of such matters and the timing, determination and recovery of amounts related to such matters; the effect of changes to accounting standards, rules and interpretations; changes in our estimates of reserves and allowances; changes in tax laws; changes to our credit ratings; political conditions and developments, including changes relating to economic or trade matters; the possible effect on our business of international conflicts, such as the war in Ukraine, and terrorism; natural disasters, disruptions to public infrastructure and other catastrophic events; reliance on third parties to provide components of our business infrastructure; potential disruptions to our information technology systems and services; increasing cyber security risks which may include theft or disclosure of assets, unauthorized access to sensitive information, or operational disruption; social media risk; losses incurred as a result of internal or external fraud; anti-money laundering; the accuracy and completeness of information provided to us concerning clients and counterparties; the failure of third parties to comply with their obligations to us and our affiliates or associates; intensifying competition from established competitors and new entrants in the financial services industry including through internet and mobile banking; technological change; global capital market activity; changes in monetary and economic policy; general business and economic conditions worldwide, as well as in Canada, the U.S. and other countries where we have operations, including increasing Canadian household debt levels and global credit risks; climate change and other ESG related risks; our success in developing and introducing new products and services, expanding existing distribution channels, developing new distribution channels and realizing increased revenue from these channels; changes in client spending and saving habits; our ability to attract and retain key employees and executives; our ability to successfully execute our strategies and complete and integrate acquisitions and joint ventures; the risk that expected benefits of an acquisition, merger or divestiture will not be realized within the expected time frame or at all; and our ability to anticipate and manage the risks associated with these factors. This list is not exhaustive of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements. Any forward-looking statements contained in this report represent the views of management only as of the date hereof and are presented for the purpose of assisting our shareholders and financial analysts in understanding our financial position, objectives and priorities and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. We do not undertake to update any forward-looking statement that is contained in this report or in other communications except as required by law.

CIBC SECOND QUARTER 2023 1

Second quarter financial highlights

								As at or for the three				As at or for the six
										months ended						months ended
					2023			2023			2022			2023				2022
Unaudited			Apr. 30			Jan. 31			Apr. 30			Apr. 30				Apr. 30
Financial results ($ millions)	$	3,187							$	6,392
Net interest income	$	3,205	$	3,088	$	6,220
Non-interest income			2,515			2,722			2,288			5,237				4,654
Total revenue			5,702			5,927			5,376			11,629				10,874
Provision for credit losses			438			295			303			733				378
Non-interest expenses			3,140			4,462			3,114			7,602				6,137
Income before income taxes			2,124			1,170			1,959			3,294				4,359
Income taxes			436			738			436			1,174				967
Net income	$	1,688	$	432	$	1,523	$	2,120	$	3,392
Net income attributable to non-controlling interests	$	11	$	9	$	5	$	20	$	10
Preferred shareholders and other equity instrument holders			67			72			47			139				88
Common shareholders			1,610			351			1,471			1,961				3,294
Net income attributable to equity shareholders				$	1,677		$	423		$	1,518		$	2,100			$	3,382
Financial measures

Reported efficiency ratio (1)						55.1 %			75.3 %			57.9 %
Reported operating leverage (1)						5.2 %			(39.8)%			(4.0)%
Loan loss ratio (2)						0.29 %			0.19 %			0.16 %
Reported return on common shareholders' equity (1)					14.5 %			3.1 %			14.0 %
Net interest margin (1)						1.40 %			1.33 %			1.44 %
Net interest margin on average interest-earning assets (1)(3)					1.54 %			1.49 %			1.61 %
Return on average assets (1)(3)						0.74 %			0.18 %			0.71 %
Return on average interest-earning assets (1)(3)					0.82 %			0.20 %			0.79 %
Reported effective tax rate						20.5 %			63.1 %			22.3 %
Common share information	- basic earnings	$	1.77	$	0.39	$	1.63
Per share ($) (4)
	- reported diluted earnings					1.76			0.39			1.62
	- dividends					0.850			0.850			0.805
	- book value (5)					50.52			49.12			48.09
Closing share price ($) (4)						56.80			60.74			71.01
Shares outstanding (thousands) (4)	- weighted-average basic					912,297			906,770			902,489
	- weighted-average diluted					913,219			907,725			905,739
	- end of period					917,769			911,629			903,155
Market capitalization ($ millions)		$	52,129	$	55,372	$	64,133
Value measures						(5.07)%
Total shareholder return								(0.30)%			(10.12)%
Dividend yield (based on closing share price)					6.1 %			5.6 %			4.6 %
Reported dividend payout ratio (1)						48.1 %			219.6 %			49.4 %
Market value to book value ratio						1.12			1.24			1.48

Selected financial measures - adjusted (6)

65.4 %

(16.9)%

0.24 %

8.7 %

1.37 %

1.52 %

0.45 %

0.50 %

35.6 %

$ 2.16 2.15 1.700 50.52 56.80

909,488

910,444

917,769

$ 52,129

(5.36)%

6.0 %

78.8 %

1.12

56.4 %

(2.0)%

0.13 %

15.7 %

1.43 %

1.60 %

0.78 %

0.87 %

22.2 %

$ 3.65 3.64 1.610 48.09 71.01 902,174 905,380 903,155

$ 64,133

(3.42)%

4.6 %

44.1 %

1.48

Adjusted efficiency ratio (7) Adjusted operating leverage (7)

Adjusted return on common shareholders' equity Adjusted effective tax rate

Adjusted diluted earnings per share (EPS) (4) Adjusted dividend payout ratio

On- and off-balance sheet information ($ millions) Cash, deposits with banks and securities

Loans and acceptances, net of allowance for credit losses Total assets

Deposits

Common shareholders' equity (1) Average assets (3)

Average interest-earning assets (1)(3) Average common shareholders' equity (1)(3) Assets under administration (AUA) (1)(8)(9) Assets under management (AUM) (1)(9)

Balance sheet quality and liquidity measures (10) Risk-weightedassets (RWA) ($ millions)

Common Equity Tier 1 (CET1) ratio (11)

Tier 1 capital ratio (11)

Total capital ratio (11)

Leverage ratio

Liquidity coverage ratio (LCR)

Net stable funding ratio (NSFR)

Other information

Full-time equivalent employees

	56.0 %			54.5 %			55.8 %
	(0.3)%			(1.5)%			(1.8)%
	13.9 %			15.5 %			15.2 %
	20.1 %			22.2 %			22.6 %
$	1.70	$	1.94	$	1.77
	50.0 %			43.8 %			45.4 %
$	246,294	$	238,819	$	220,293
	538,273			531,306			502,430
	935,239			921,991			894,148
	705,917			694,724			665,487
	46,366			44,780			43,429
	932,775			953,164			881,909
	847,244			852,588			787,462
	45,597			45,078			43,155
	2,995,583			3,002,744			2,918,191
	310,637			304,948			302,258
$	321,188	$	315,038	$	299,535
	11.9 %			11.6 %			11.7 %
	13.4 %			13.2 %			13.2 %
	15.5 %			15.6 %			15.3 %
	4.2 %			4.3 %			4.2 %
	124 %			134 %			125 %
	117 %			115 %			117 %
	48,673			49,530			47,814

55.2 %

(0.9)%

14.7 %

21.2 %

$ 3.63 46.7 %

$ 246,294 538,273 935,239 705,917 46,366 943,138 849,960 45,333

2,995,583

310,637

$ 321,188 11.9 % 13.4 % 15.5 % 4.2 % n/a n/a

48,673

54.8 %

(0.8)%

16.4 %

22.4 %

$ 3.81 42.1 %

$ 220,293 502,430 894,148 665,487 43,429 876,137 782,561 42,370 2,918,191 302,258

$ 299,535 11.7 % 13.2 % 15.3 %

4.2 % n/a n/a

47,814

1. For additional information on the composition, see the "Glossary" section.
2. The ratio is calculated as the provision for credit losses on impaired loans to average loans and acceptances, net of allowance for credit losses.
3. Average balances are calculated as a weighted average of daily closing balances.
4. On April 7, 2022, CIBC shareholders approved a two-for-one share split (Share Split) of CIBC's issued and outstanding common shares. Each shareholder of record at the close of business on May 6, 2022 (Record Date) received one additional share on May 13, 2022 (Payment Date) for every one share held on the Record Date. All common share numbers and per common share amounts have been adjusted to reflect the Share Split as if it was retroactively applied to the beginning of 2022.
5. Common shareholders' equity divided by the number of common shares issued and outstanding at end of period.
6. Adjusted measures are non-GAAP measures. Adjusted measures are calculated in the same manner as reported measures, except that financial information included in the calculation of adjusted measures is adjusted to exclude the impact of items of note. For additional information and a reconciliation of reported results to adjusted results, where applicable, see the "Non-GAAP measures" section.
7. Calculated on a taxable equivalent basis (TEB).
8. Includes the full contract amount of AUA or custody under a 50/50 joint venture between CIBC and The Bank of New York Mellon of $2,370.5 billion (January 31, 2023: $2,382.7 billion; April 30, 2022: $2,301.6 billion).
9. AUM amounts are included in the amounts reported under AUA.
10. RWA and our capital ratios are calculated pursuant to the Office of the Superintendent of Financial Institution's (OSFI's) Capital Adequacy Requirements (CAR) Guideline, the leverage ratio is calculated pursuant to OSFI's Leverage Requirements Guideline, and LCR and NSFR are calculated pursuant to OSFI's Liquidity Adequacy Requirements (LAR) Guideline, all of which are based on the Basel Committee on Banking Supervision (BCBS) standards. The April 30, 2023 results reflect the impacts from the implementation of Basel III reforms that became effective as of February 1, 2023. For additional information, see the "Capital management" and "Liquidity risk" sections.
11. The 2022 ratios reflect the expected credit loss (ECL) transitional arrangement announced by OSFI on March 27, 2020 in response to the onset of the COVID-19 pandemic. Effective November 1, 2022, the ECL transitional arrangement was no longer applicable.

n/a Not applicable.

2 CIBC SECOND QUARTER 2023