ANNUAL AND SPECIAL MEETING

MARCH 28, 2013

KPMG LLP

Auditor

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Director Nominees for PWCC • William Mitchell • David Taylor • Patrick George • Arnold Hillier • Paul Oliver • Robbert Jan Brabander

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KPMG LLP

Auditor

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Presentation Agenda

• • • • •

David R. Taylor, President & CEO

• Company Overview Fiscal 2012 Financial Performance PWB Key Growth Drivers Group Capital Restructuring A New Role for PWC Closing Remarks 7

Advisory

The Corporation occasionally makes forward-looking statements about its objectives, operations and targeted financial results. These statements may be written or verbal and may be included in such things as press releases, corporate presentations, Annual Reports and other disclosure documents and communications. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other forward-looking statements will not be achieved. A number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the strength of the Canadian economy in general and the strength of local economies within Canada in which we conduct operations; the effect of changes in interest rates; the effects of competition in the markets in which we operate; capital market fluctuations; and, the impact of changes in laws and regulations. When relying on forward-looking statements to make decisions, investors and others should carefully consider these factors and other uncertainties or potential events. The Corporation makes no undertaking to update any forward-looking statement that is made from time to time by the Corporation.

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Company Overview

National Presence

• • • • • • • •

Pacific & Western Credit Corp.

PWCC is a TSX-listed holding company of Pacific & Western Bank of Canada (PWB); PWB was founded in 1979 as Pacific & Western Trust Corporation; PWB became a Schedule I Canadian Chartered Bank on August 1, 2002; PWB is a member institution of the Canada Deposit Insurance Corporation; Deposits generated through a “branchless” diversified network of over 120 financial advisory and brokerage firms; Key lending segments include commercial real estate, bulk lease finance, public sector and retail (credit card); Focus on lending within under-served markets; CMHC approved lender;

Calgary Toronto Ottawa Saskatoon Vancouver London (Headquarters) Waterloo Key Metrics – As @ October 31, 2012 Total Loans & Leases $1.2 billion Total Assets $1.5 billion Shareholders Equity Total Deposits $93 million $1.3 billion

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Corporate Structure

Pacific & Western Credit Corp. (TSX:PWC) (“PWCC”)



Holding company



Shares trade on the TSX under the ticker “PWC”



Holds 100% of the common shares of PWB.



Not classified as a “Bank Holding Company” under Bank Act (Canada)

100%

Pacific & Western Bank of Canada (“PWB”)



Wholly-owned and principal subsidiary of PWCC;



Operates as a Schedule I bank under the Bank Act (Canada);



Provides lending services to select niche markets;



Deposits are received through a diversified deposit broker network across Canada;



Member institution of CDIC.

100%

Versabanq Innovations Inc.

(“VBI”)



Incorporated in 2006;



Wholly-owned subsidiary of PWCC;



Currently holds the asset and deposit management software and licenses to PWB under a related party software licensing agreement;



Currently no employees or operations.

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Deposit Gathering Activities Deposit Broker Services

 Deposits raised through “branchless” network of over 120 brokers across Canada  7,446 Investment Advisors in 2,286 Deposit Broker offices across Canada

Branchless Bank Model

Lending Services Real Estate Public Sector Corporate Loans & Leases Retail Loans

 Land & construction loans, residential term mortgages, commercial term mortgages and insured mortgages.

 Sourced directly through the Bank or via brokers and syndication partnerships with other financial institutions.

 Financing to public sector entities and PPPs.  Sourced directly or through small brokers, leasing companies / vendor partners or syndication partnerships with other financial institutions.

 Term loans and leases to corporate and mid-market commercial companies.

 Sourced directly or through securitized assignments from non institutional lenders .

 Consumer loans sourced through securitized assignments from non institutional lenders.

 Private label credit card program with Home Hardware.

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Strategic Highlights

PWB’s Vision:

•

We aspire to be the preferred provider of financial solutions to our clients.

PWB’s Mission:

•

To deliver a competitive and sustainable rate of return to shareholders by delivering ideally suited financial products, services and solutions to our clients in selected niche markets throughout Canada.

PWB’s Strategic Objectives:

1.

Expand and diversify lending operations to Include higher spread commercial and retail lending products.

2.

Diversify our deposit product offerings and capture new cost-effective, stable funding sources.

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0 0 0 0 0 0 0 0 0

Key Performance Trends

Net Interest Income ($ millions)

1.30% $18.1

0.91% 0.91% $13.2

$13.5

1.50% $18.2

1.38% $19.1

1.20% $16.9

1.30% $19.6

2007 2008 2009 CGAAP 2010 2011 2011 2012 IFRS

Loan Growth ($ millions)

$1,111 $1,091 $1,210 $978 $965 $930 25 5 0 20 15 10 2007 2008 2009 CGAAP 2010 2011 2012 IFRS 13

Provision for Credit Losses as % Average Loans

0.34% 0.27% 0.08% 2007 2008 2009

Gross Impaired Loans to Total Loans

0.70% 0.69% -0.12% 2010

Credit Quality

0.03% 2011 0.04% 2012 0.15% 2007 2008 2009 0.34% 2010 0.14% 2011 0.13% 2012 14

Financial Performance

(000s)

Pacific & Western Bank of Canada

IFRS IFRS Q1 2013 2012 IFRS 2011 CGAAP CGAAP CGAAP 2010 2009 2008 OPERATING RESULTS

Net Interest Income

Spread %

Provision for Credit Losses (Recovery) Other Income Gains on Sale of Pref. Shares Net Interest Income and Other Income

Net Income (Loss)

$ 5,929

1.59%

(21) 1,280 7,230

$ 1,115

$ 19,608

1.30%

461 3,146 10,141 32,434

$ 3,824

$ 16,927

1.21%

309 209 11,936 28,763

$ 7,570

$ 15,687

1.15%

(1,163) 286 17,136

$ 467

$ 10,482

0.72%

3,449 1,449 8,482

$ (3,925)

$ 10,618

0.72%

2,836 (23,654) 0 (15,872)

$ (20,894)

Return on Average Assets Impaired Loans to Total Loans Provisions as % of AVG Loans

CAPITAL RATIOS

Common Equity Tier 1 Capital Total Regulatory Capital Risk-Weighted Assets Asset-To-Capital Multiple CET1 Ratio Total Capital Ratio 0.30% 0.14% 0.00% 0.25% 0.13% 0.04% 0.54% 0.14% 0.03% 0.30% 0.25% -0.12% -0.68% 0.45% 0.34% -1.41% 0.70% 0.27% $ 85,335 $ 131,084 $ 1,092,731 10.37

7.81%

12.00% N/A $ 143,714 $ 1,121,815 10.86

N/A 12.81% N/A $ 149,006 $ 1,118,036 9.87

N/A 13.33% N/A $ 129,182 $ 965,716 10.39

N/A 13.38% N/A $ 121,769 $ 920,744 11.81

N/A 13.23% N/A $ 94,752 $ 898,798 16.28

N/A 10.54% 15

Financial Performance

Pacific & Western Credit Corp. - Consolidated

(000s) IFRS Q1 2013 IFRS 2012 IFRS 2011 CGAAP CGAAP CGAAP 2010 2009 2008 OPERATING RESULTS

Net Earnings (loss) of PWB Net Interest Expense on Notes Interest Expense on Pref. Shares Net Non-Interest Expenses Provision for Income Taxes

Net Income (Loss)

$ 1,115 (732) (1,227) 133 (387)

$ (1,098)

$ 3,824 (2,730) (4,865) 272 (1,573)

$ (5,072)

$ 7,570 (4,586) (4,808) (3,405) (2,998)

$ (8,227)

$ 467 (3,558) (4,499) (484) -

$ (8,074)

$ (3,925) (5,096) (548) (326) -

$ (9,895)

$ (20,894) (2,095) (1,231) (1,822)

$ (26,042)

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Financial Performance

Pacific & Western Credit Corp. - Consolidated

(000s) IFRS Q1 2013 IFRS 2012 IFRS 2011 CGAAP CGAAP CGAAP 2010 2009 2008 ASSETS:

Cash and Securities Mortgages and Loans Other Assets

Total Assets

$ 234,919 1,173,287 25,384

$ 1,433,590

$ 299,993 1,210,311 24,953

$ 1,535,257

$ 325,743 1,131,526 28,100

$ 1,485,369

$ 331,650 964,862 26,220

$ 1,322,732

$ 443,957 929,831 35,132

$ 1,408,920

$ 366,806 1,110,807 32,049

$ 1,509,662 LIABILITIES:

Deposits Other Liabilities Securitization Liabilities Notes Payable Preferred Share Liabilities

Total Liabilities Shareholders' Equity Total

1,233,453 14,078 43,484 82,331 41,975

$ 1,415,321

1,317,298 32,711 43,356 82,172 41,823

$ 1,517,360

1,269,730 30,024 43,247 77,581 41,256

$ 1,461,838

1,150,903 38,396 75,559 40,744

$ 1,305,602

1,217,136 71,293 77,933 27,892

$ 1,394,254

1,389,455 28,476 70,405 -

$ 1,488,336 $ 18,269 $ 17,897 $ 23,531 $ 17,130 $ 14,666 $ 21,326 $ 1,433,590 $ 1,535,257 $ 1,485,369 $ 1,322,732 $ 1,408,920 $ 1,509,662

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Key Growth Initiatives

Bulk Finance Program

• In 2010, PWB appoints Moe Danis, VP Leasing to develop Bulk Finance Program • December 2010, first $43 million funded • August 2011, new software management program instituted • As of February 28, 2013: – Over 35,000 contracts and over $200 million funded since inception – Current Portfolio = $128 million outstanding – Over $11 million in Cash Reserves – 4 Warehouse facilities with total $15 million capacity – 11 facilities funding and 3 others pending approval • • •

Home Hardware Credit Card Trustee Deposit Initiative

July 2011 PWB signs contract with Home Hardware to provide private-label credit card January 2012, PWB launches HH Credit Card program • In 2011, PWB signed a 10-year agreement with the market leading software provider to trustees (Promeric) As of February 28, 2013: – Over 32,700 Applications – Approx. 29,000 approved – $53.6 million in Sales – $1.15 million in balance transfers – $25MM in Receivables • Agreement to jointly develop and market fully-integrated banking software for trustees in bankruptcy • March 23, 2011, PWB signs services agreement with Royal Bank of Canada as clearing agent • Pilot program was launched on April 2 nd , 2012 with Meyers Norris Penny LLP and BDO Canada joined pilot on June 4, 2012 • Successful completion of pilot and full program launched in July 2012 18

Group Capital Restructuring

Objectives:

•

Increase PWB’s CET1 ratio well above regulatory minimum of 7%

•

Reduce PWB’s expensive subordinate debt

•

Provide an efficient mechanism to allow PWB to become more independent of PWCC

•

Provide for the opportunity for PWCC to evolve its business model from a holding company to a diversified investment company

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Capital Restructuring

On March 7, 2013, PWCC revised the terms of its outstanding of Series C Notes.

• As of June 30, 2014, PWCC will have the option to make interest payments in-kind in the form of PWB common shares held by PWCC • PWCC overall aggregate cash obligations reduced by $5.6 million per year • On March 8, 2013, PWCC converted $30MM of subordinated notes of PWB into common equity ownership of PWB.

• • PWB’s shareholders’ equity increased to $124 million Bank subdebt reduced to $21.5 million from $51.5 million • • Bank CET1 capital increased by $30 million Bank annual interest obligations reduced by $3.3 million

PWB Basel III Regulatory Capital Ratios

Common Equity Tier 1 Capital (CET1) Total Capital

Q1 2013

7.81% 12.00%

March 8/13 10.4% 11.84% Regulatory Minimum

7.0% 10.5% 20

Comparative Capital Adequacy

Common Equity Tier 1 Capital

PWB CIBC 10,4% 9,6% BMO RBC TD Scotia 9,4% 9,3% 8,8% 8,2% CWB NBF 8,0% 7,9% LB 7,5% Source: CIBC Company Reports. All figures are as of January 31, 2013 with the exception of PWB, which is as of March 8, 2013.

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A New Role for PWCC

• • List PWB’s common shares on the TSX Allow PWB to raise capital independent of PWCC Expected in April 2013 • • • • Transition PWCC from a single purpose holding company to a diversified investment company Continue to have controlling interest in PWB Specialize in investing in income producing real estate (similar to previous PacWest Ventures) • • • Leverage existing strengths: Long-standing strategic relationships with successful real estate developers Existing knowledge and experience in local real estate markets $35 million in available tax losses to shelter investment income 22

ANNUAL AND SPECIAL MEETING

MARCH 28, 2013