Western Financial Group reports net income up 64.7% with a revenue increase of 24%



    HIGH RIVER, AB, March 15 /CNW/ - (TSX - WES, WES.DB.A) - Western
Financial Group ("the Company") announced today its operating and financial
results for the year ended December 31, 2006. For the year, revenue increased
24% to $82.6 million, while net income increased 64.7% to $7.9 million.

    
    Financial Highlights

    (in $ thousands)                             2006       2005   % change
    -------------------------------------------------------------------------
    THE NETWORK
    Revenue ($)                                46,674     41,515       12.4%
    Operating income ($)                       14,308     14,376      (0.5)%

    BANK WEST
    Interest and investment income ($)          8,214      4,284       91.7%
    Net interest income                         2,236        959      133.2%
    Operating income (loss) ($)                   218       (894)     124.4%

    WESTERN LIFE(1)
    Premium and investment income ($)          25,686     18,741       37.1%
    Operating income ($)                        2,581      2,372        8.8%

    CORPORATE AND ALL OTHER
    Revenue ($)                                 2,069      2,101      (1.5)%
    Operating income ($)                       (5,457)    (6,235)      12.5%

    CONSOLIDATED
    Revenue ($)                                82,643     66,641       24.0%
    Net Income ($)                              7,988      4,849       64.7%
    Earnings per share
      - basic ($)                               $0.22      $0.17       29.4%
      - diluted ($)                             $0.20      $0.15       33.3%
    -------------------------------------------------------------------------
    (1) Acquired February 28, 2005
    

    "Operationally and financially we accomplished what we set out to do in
2006," said Scott Tannas, President and CEO. "We saw good growth in all areas
of the company, reaching our next level of profitability with an EPS of $0.22
and net income up to $8.0 million. In fact we overshot our target."

    WFG Agency Network
    The Network realized steady growth in market share through gains in same
store sales of 6.9%, and a products per customer account increase to 2.29
items.

    Bank West
    The Bank posted its first pre-tax profit, increasing its loan book by
$57.9 to $149.4 million and grew at an average rate of $4.8 million per month.

    Western Life Assurance
    Western Life posted its strongest year in the company's 20 year history,
both in terms of profitability and premiums. Revenues grew to $25.7 million as
its policy and certificate count grew by 15.0% in the year.

    Equity Investments
    Western Financial Group's portfolio of equity partner investments
performed well with Jennings Capital showing continued strong performance.
Both Falkins Insurance and Harvard Western Ventures also showed increased
income over the previous year. New additions to the portfolio in 2006,
Northcountry Insurance and H.E.D. performed as expected.

    Conference Call
    Western Financial Group will host a conference call to discuss the
Company's year end financial results on March 26, 2007 at 12:00 pm Mountain
Time (2:00 pm Eastern Time). Participants are asked to call either
888-789-9572 or 416-695-7806 (Toronto) with the passcode 9641835. An archived
recording of the call will be available until April 2, 2007 by calling
888-509-0081 or 416-695-5275 (Toronto) with the passcode 641835 followed by
the number sign. The conference will also be broadcast live over the internet
and archived through the Company's website at www.westernfinancialgroup.net.

    Western Financial Group is one of the leading western-based financial
service companies in Western Canada. With offices in towns and small cities
across the West, the Company provides more than 350,000 individuals and
businesses with insurance, investment and banking products through WFG Agency
Network, Western Life, and Bank West.
    The Company's 2006 Financial Report will be filed on SEDAR on or before
March 19, 2007.

    
                         CONSOLIDATED BALANCE SHEETS

                       AS AT DECEMBER 31, 2006 AND 2005
                 (in thousands, except for per share amounts)

                                                            2006        2005
    -------------------------------------------------------------------------
    ASSETS

      Cash                                              $  9,085    $ 10,416
      Marketable securities(Note 4)                       85,243      67,077
      Accounts receivable(Note 5)                         23,510      23,076
      Prepaid expenses                                     7,340       5,462
    -------------------------------------------------------------------------

    Income taxes receivable                                  388           -
    Future income taxes(Note 20)                           1,271       1,411
    Deferred charges(Note 6)                                 714         720
    Other assets(Note 7)                                   2,235       2,451
    Equity investments(Note 8)                            23,501       8,251
    Mortgages and loans(Note 9)                          149,051      90,841
    Capital assets(Note 10)                                8,844       9,333
    Intangible assets(Note 11)                            14,175      10,497
    Goodwill(Note 12)                                     59,565      50,164
    -------------------------------------------------------------------------
                                                         384,922     279,699
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

      Demand loans(Note 13)                                    -       5,100
      Accounts payable and accrued liabilities            35,944      25,099
      Actuarial liabilities(Note 14)                      34,754      33,507
      Provision for unpaid and unreported
       claims(Note 14)                                     6,637       6,065
      Deferred gain on investments                         1,295         861
      Income taxes payable(Note 20)                            -         285
    -------------------------------------------------------------------------

    Customer deposits(Note 15)                           147,118      95,341
    Long-term debt(Note 16)                               25,164      37,707
    Future income taxes(Note 20)                           2,790       3,015
    -------------------------------------------------------------------------
                                                         253,702     206,980
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

    Share capital(Note 17)                               110,607      59,676
    Other paid in capital                                    152         206
    Contributed surplus                                    1,923       1,776
    Retained earnings                                     18,538      11,061
    -------------------------------------------------------------------------
                                                         131,220      72,719
    -------------------------------------------------------------------------
                                                        $384,922    $279,699
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



           CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
               FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
                 (in thousands, except for per share amounts)

                                                            2006       2005
    -------------------------------------------------------------------------
    Revenue
    Commissions and other customer income               $ 47,983    $ 43,206
    Premium income                                        22,785      16,343
    Interest income on Customer loans                      8,214       4,284
    Investment income                                      3,661       2,808
    -------------------------------------------------------------------------
                                                          82,643      66,641
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Expenses
      Operating expenses                                  51,420      43,759
      Policyholder benefits                               13,595       9,564
      Interest expense - Customer deposits                 5,223       2,924
      Provision for credit losses                            755         401
      Amortization of start up and reorganization costs        -         374
    -------------------------------------------------------------------------

    Income before the following                           11,650       9,619
      Income from long-term investments                    2,323       1,357
      Gain on sale of goodwill and capital assets            566         630
      Interest and financing costs on long-term debt      (2,616)     (2,653)
      Amortization of intangible assets                     (439)       (329)
      Amortization of capital assets                      (1,506)     (1,406)
    -------------------------------------------------------------------------
    Income before income taxes                             9,978       7,218
    Income taxes (Note 20)                                (1,990)     (2,369)
    -------------------------------------------------------------------------

    NET INCOME FOR THE YEAR                                7,988       4,849
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Retained earnings, beginning of year                  11,061       6,212
      Preferred share dividends                             (511)          -
    -------------------------------------------------------------------------
    Retained earnings, end of year                        18,538      11,061
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share(Note 21)
      Basic                                             $   0.22    $   0.17
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Diluted                                           $   0.20    $   0.15
    

    %SEDAR: 00007536E




For further information:

For further information: Jodi Greig, Corporate Communications Manager,
Western Financial Group, (403) 652-2663, info@westernfinancialgroup.net

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Western Financial Group

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