Note 8 - Share Capital

3 Months Ended

Jan. 31, 2022

Statement Line Items [Line Items]

Disclosure of classes of share capital [text block]

8.         Share capital:

a) Common shares:

At January 31, 2022, there were 27,441,082 ( October 31, 2021 – 27,441,082) common shares outstanding.

b) Preferred shares:

At January 31, 2022, there were 1,461,460 ( October 31, 2021 – 1,461,460) Series 1 preferred shares outstanding. These shares are Basel III compliant, non-cumulative rate reset preferred shares which include NVCC provisions. As a result, these shares qualify as Additional Tier 1 Capital (see note 13).

On April 30, 2021, the Bank redeemed all of its 1,681,320 ( October 31, 2021 – $nil) outstanding Non-Cumulative Series 3 preferred shares (NVCC) using cash on hand. The amount paid on redemption for each share was $10.00, and in aggregate $16.8 million. Transaction costs, incurred at issuance in the amount of $1.1 million were applied against retained earnings.

c) Stock options

Under the Bank’s stock option plan, the Bank will grant, to eligible participants options for the Bank’s common shares on a periodic basis. As per the Bank’s current stock option plan all options issued have a five year term and vest over a three year period. At January 31, 2022, the Bank was authorized to issue 1,240,000 common share stock options through its stock option plan of which 953,730 common share stock options were issued and outstanding ( October 31, 2021 – 40,000).

Stock option transactions during the three month periods ended January 31, 2022 and 2021:

	for the three months ended
	January 31, 2022				January 31, 2021
			Weighted				Weighted
	Number of		average		Number of		average
	options		exercise price		options		exercise price
Outstanding, beginning of period		40,000	$	7.00		42,017	$	10.73
Granted		913,730		15.90		-		-
Exercised		-		-		-		-
Forfeired/cancelled		-		-		-		-
Expired		-		-		-		-
Outstanding, end of period		953,730	$	15.53		42,017	$	10.73

For the three month period ended January 31, 2022, the Bank recognized $196,000 ( January 31, 2021 - $nil) in compensation expense related to the estimated fair value of options granted. The fair value of the 913,730 stock options granted during the period ended January 31, 2022, was estimated at the grant date using the Black-Scholes valuation model and the following input assumptions: risk-free rate of 1.26%, expected option life of 3.5 years, expected volatility of 29.5%, expected annual dividends of 0.64% and a forfeiture rate of 2.0%. The fair value of each stock option granted was estimated at $3.10 per share.

As at January 31, 2022, 40,000 common share stock options were fully vested and exercisable at $7.00 per share and expire in October 2023.