Note 24 - Capital Management

12 Months Ended

Oct. 31, 2025

Statement Line Items [Line Items]

Disclosure of objectives, policies and processes for managing capital [text block]

24. Capital management:

a) Overview:

The Bank’s policy is to maintain a strong capital base so as to retain regulator, investor, creditor and market confidence, as well as to support the future growth and development of the business. The impact of the level of capital held on shareholders’ return is an important consideration and the Bank recognizes the need to maintain a balance between the higher returns that may be possible with greater leverage and the advantages and security that may be afforded by a more robust capital position. OSFI sets and monitors capital requirements for the Bank. Capital is managed in accordance with policies and plans that are regularly reviewed and approved by the Board of Directors and that take into account, amongst other items, forecasted capital requirements and current and anticipated financial market conditions.

The goal is to maintain adequate regulatory capital for the Bank to be considered well capitalized, protect consumer deposits and provide capacity to support organic growth as well as to capitalize on strategic opportunities that do not otherwise require accessing the public capital markets, all while providing a satisfactory return to shareholders. The Bank’s regulatory capital is comprised of share capital, retained earnings and unrealized gains and losses on fair value through other comprehensive income securities (Common Equity Tier 1 capital), preferred shares (Additional Tier

1 capital) and subordinated notes (Tier 2 capital). The Bank monitors its capital adequacy and related capital ratios on a daily basis and has policies setting internal targets and thresholds for its capital ratios. These capital ratios consist of the leverage ratio and risk-based capital ratios.

The Bank makes use of the Standardized Approach for credit risk as prescribed by OSFI, and therefore, may include eligible ECL allowance amounts in its Tier 2 capital, up to a maximum of 1.25% of its credit risk-weighted assets calculated under the Standardized Approach.

b) Risk-based capital ratios:

The Basel Committee on Banking Supervision has published the Basel III rules on capital adequacy and liquidity (“Basel III”). OSFI requires that all Canadian banks must comply with the Basel III standards on an “all-in” basis for the purpose of determining their risk-based capital ratios. Required minimum regulatory capital ratios are a 7.0% Common Equity Tier 1 capital ratio (“CET1”), an 8.5% Tier 1 capital ratio and a 10.5% Total capital ratio, all of which include a 2.50% capital conservation buffer.

OSFI also requires banks to measure capital adequacy in accordance with guidelines for determining risk adjusted capital and risk-weighted assets including off-balance sheet credit instruments as specified in the Basel III regulations. Based on the deemed credit risk for each type of asset, both on and off balance sheet assets of the Bank are assigned a weighting ranging from 0% to 400% to determine the Bank’s risk weighted equivalent assets and its risk-based capital ratios.

The Bank’s risk-based capital ratios are calculated as follows:

(thousands of Canadian dollars)
	2025			2024
Common Equity Tier 1 (CET1) capital
Directly issued qualifying common share capital	$	325,910		$	215,610
Contributed surplus		2,473			2,485
Retained earnings		203,728			181,238
Accumulated other comprehensive income (loss)		562			(130	)
CET1 before regulatory adjustments		532,673			399,203
Regulatory adjustments applied to CET1		(23,023	)		(25,700	)
Common Equity Tier 1 capital	$	509,650		$	373,503
Additional Tier 1 capital
Directly issued qualifying Additional Tier 1 instruments	$	-		$	-
Total Tier 1 capital	$	509,650		$	373,503
Tier 2 capital
Directly issued Tier 2 capital instruments	$	105,135		$	104,370
Tier 2 capital before regulatory adjustments		105,135			104,370
Eligible stage 1 and stage 2 allowance		5,105			3,303
Total Tier 2 capital	$	110,240		$	107,673
Total regulatory capital	$	619,890		$	481,176
Total risk-weighted assets	$	3,943,657		$	3,323,595
Capital ratios
CET1 capital ratio		12.92	%		11.24	%
Tier 1 capital ratio		12.92	%		11.24	%
Total capital ratio		15.72	%		14.48	%

As at October 31, 2025 and 2024, the Bank was in compliance with all minimum capital ratios prescribed by OSFI.

c)    Leverage ratio

The leverage ratio, which is prescribed under the Basel III Accord, is a supplementary measure to the risk-based capital requirements and is defined as the ratio of Tier 1 capital to the Bank’s total exposures. The Basel III minimum leverage ratio is 3.0%. The Bank’s leverage ratio is calculated as follows:

(thousands of Canadian dollars)
	2025			2024
On-balance sheet assets	$	5,808,475		$	4,838,484
Asset amounts adjusted in determining the Basel III
Tier 1 capital		(23,023	)		(25,700	)
Total on-balance sheet exposures		5,785,452			4,812,784
Replacement cost associated with all derivative transactions	$	-		$	-
Add-on amounts for PFE associated with all derivative transactions		3,975			-
Total derivative exposures		3,975			-
Total off-balance sheet exposure at gross notional amount	$	635,854		$	701,104
Adjustments for conversion to credit equivalent amount		(410,571	)		(451,759	)
Total off-balance sheet exposures		225,283			249,345
Tier 1 capital		509,650			373,503
Total exposures		6,014,710			5,062,129
Leverage ratio		8.47	%		7.38	%

As at October 31, 2025 and 2024, the Bank was in compliance with the leverage ratio prescribed by OSFI.