Canadian Western Bank shares sank after the firm delayed its fiscal fourth-quarter earnings release Friday morning and left investors guessing why.

Shares of the Alberta-based bank dropped as much as 12 per cent, the most intraday since the early days of the COVID pandemic in March 2020, before paring some of those losses. The lender issued a news release at 2:40 a.m. New York time saying it plans to report the results by mid-December and canceling a scheduled conference call. The shares declined 5.1 per cent to $55.76 as of 12:26 p.m.

Separately, the bank boosted its quarterly dividend by three per cent.

“It’s not normal,” said Dan Rohinton, a vice president and portfolio manager with iA Global Asset Management Inc. who invests in financial sector stocks.

Rohinton’s fund doesn’t own CWB, but said Friday’s share price drop is likely being exacerbated by merger-arb funds betting on a slightly lower likelihood that the takeover by National Bank of Canada will be completed as expected. National Bank won approval for the deal in September from Canada’s competition body, but still needs the federal government to sign off.

“Don’t underestimate the ‘shoot first, ask questions later’ to something like this,” Rohinton said, noting that it was a “very last minute” change of plans for the bank.

Rohinton said investors are trying to parse what could have caused the delay, from potential “gremlins” in the accounting to the possibility that a small bank with 2,500 employees was working to close a deal, finish an audit and report results “and it went all the way to the 11th hour.”

Neither Canadian Western Bank nor National Bank responded to requests for comment. National Bank shares fell as much as three per cent Friday morning.

Bloomberg.com