Pacific & Western Bank of Canada Announces Preferred Share Offering

Pacific & Western Bank of Canada (the "Bank") (TSX:PWB) is pleased to announce that it has filed and was receipted by the securities regulatory authorities in Ontario, Manitoba, Saskatchewan, Alberta and British Columbia for a preliminary short form prospectus for an offering of a minimum of $10,000,000 and a maximum of $25,000,000 of non-cumulative 5-year rate reset preferred shares, series 1 (the "Series 1 Preferred Shares") in the capital of the Bank at a price of $25.00 per share (the "Offering").

The syndicate of agents for this Offering is being led by Industrial Alliance Securities Inc. and includes Dundee Securities Ltd., Haywood Securities Inc., Mackie Research Capital Corporation, PI Financial Corp., Burgeonvest Bick Securities Limited, and Leede Financial Markets Inc. The Bank has granted the Agents an option, exercisable in whole or in part, to sell, as agents, such number of Series 1 Preferred Shares equal to 15% of the number of Series 1 Preferred Shares sold pursuant to the Offering on the same terms as set out above, to cover over-allotments, if any, and for market stabilization purposes, exercisable at any time within 30 days of closing.

The Series 1 Preferred Shares will yield 7.0% annually, payable quarterly, as and when declared by the Board of Directors of the Bank, for the initial period ending October 31, 2019, based on the stated issued price per share. Thereafter, the dividend rate will reset every five years at a level of 543 basis points over the then 5-year Government of Canada bond yield.

Subject to regulatory approval, the Bank has the right to redeem up to all of the then outstanding Series 1 Preferred Shares on October 31, 2019, and on October 31 every five years thereafter at a price of $25.00 per share.

Should the Bank choose not to exercise its right to redeem the Series 1 Preferred Shares, holders of these shares will have the right to convert their shares into an equal number of non-cumulative floating rate preferred shares, series 2 (the "Series 2 Preferred Shares"), subject to certain conditions, on October 31, 2019, and on October 31 every five years thereafter. Holders of the Series 2 Preferred Shares will be entitled to receive quarterly floating dividends, as and when declared by the Board of Directors of the Bank, equal to the 90-day Government of Canada Treasury Bill rate plus 543 basis points.

The net proceeds of the Offering are expected to qualify as Tier 1 capital of the Bank and will be used for general corporate purposes.

The Offering is scheduled to close on or about October 30, 2014 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange and other applicable securities regulatory authorities.

The Bank, a Canadian Schedule I chartered bank, raises deposits through various deposit brokers located across Canada and invests these deposits in loans, leases, commercial mortgages, residential development mortgages and debt of corporations.

The securities described above have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Not for distribution to U.S. news wire services or dissemination in the U.S.

A preliminary short form prospectus containing important information relating to these securities has been filed with securities commissions or similar authorities in the provinces of Ontario, Manitoba, Saskatchewan, Alberta and British Columbia. The preliminary short form prospectus is still subject to completion or amendment. Copies of the preliminary short form prospectus may be obtained from one of the dealers noted above. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release may contain 'forward-looking' statements regarding the plans, intentions, beliefs and current expectations of the Bank, its directors, or its officers with respect to the future business activities and operating performance of the Bank. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions, as they relate to the Bank, or its management, are intended to identify such forward-looking statements. Specific forward-looking statements in this press release include statements regarding the expected Closing Date of the Offering and the anticipated amount and use of the proceeds from the Offering. Investors are cautioned that any such forward-looking statements are not guarantees of the future business activities or performance and involve risks and uncertainties, and that the Bank's future business activities may differ materially from those in the forward-looking statements as a result of various factors. Such risks, uncertainties and factors are described in the periodic filings with the Canadian securities regulatory authorities, including the Bank's Annual Information Form and quarterly and annual Management Discussion & Analysis, which may be viewed on SEDAR at www.sedar.com. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. The closing of the Offering could be delayed if the Bank is not able to obtain the necessary regulatory approvals on the timelines planned. The Offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the Offering will not be completed within the anticipated time, or at all. Further, the intended use of the net proceeds of the Offering might change if the board of directors determines that it would be in the best interests of the Bank to deploy the proceeds for some other purpose. Although the Bank has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not anticipated, estimated or intended. The Bank does not intend, and does not assume any obligation, to update these forward-looking statements.

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