Laurentian Bank reports record net income and growth for fiscal 2009 results
and increases its dividend

MONTREAL , Dec. 9 /CNW Telbec/ -

    
    -------------------------------------------------------------------------
    Laurentian Bank of Canada's audited Consolidated Financial Statements
    (including Notes to the Consolidated Financial Statements) for the year
    ended October 31, 2009, and accompanying Management's Discussion and
    Analysis are available at www.laurentianbank.ca.
    -------------------------------------------------------------------------

    Fiscal 2009 Highlights              Highlights of the fourth quarter 2009

    - Record net income up 10% to       - Net income of $38.2 million
      $113.1 million                    - Return on common shareholders'
    - Total operating revenue up 6% to    equity of 15.3%
      $666.5 million                    - Net interest income up 14% year
    - Return on common shareholders'      over year
      equity of 11.4%                   - Continued solid growth in all
    - Record loan and deposit growth      business segments
    - Solid levels of capital
                                        See page 3 for further information on
                                        fourth quarter results.
    

For the year ended October 31, 2009 , Laurentian Bank reported net income of $113.1 million , or diluted earnings of $4.23 per common share, compared with $102.5 million , or diluted earnings of $3.80 per common share in 2008. Return on common shareholders' equity was 11.4% in 2009, compared with 11.0% in 2008.

Net income in 2009 includes income from discontinued operations of $11.5 million , or $0.48 diluted per common share, related to the sale of asset management activities in fiscal 2005. Net income in 2008 included income from discontinued operations of $4.4 million , or $0.19 diluted per common share. Income from continuing operations was $101.7 million in 2009, or $3.75 diluted per common share, compared with $98.1 million , or $3.61 diluted per common share in 2008.

The increase in earnings over last year mainly results from record growth in personal and commercial loan and deposit portfolios, as well as higher revenue from brokerage operations. However, higher loan losses resulting from poor market and economic conditions throughout the year and losses on securities have dampened the Bank's results.

Commenting on the Bank's financial results for 2009, Réjean Robitaille, President and Chief Executive Officer, mentioned: "We reached all our objectives for 2009 and completed another record year at Laurentian, despite weaker economic conditions in Canada . The Bank continued to perform well, as we have succeeded in taking advantage of certain market opportunities in an unsettled environment. Furthermore, with solid liquidity and capital levels, we maintained a strong financial position throughout the year. However, higher loan losses, as a consequence of the recession, have weighed on our profitability in 2009."

Mr. Robitaille added, with regard to operations: "Record increases in loan and deposit portfolios, as well as core operating revenue growth and prudent expense management, contributed to the sound performance of all our business segments. Our confidence in the Bank's future performance and our solid balance sheet prompted us to recommend a $0.02 per share, or 6%, increase in the quarterly dividend to $0.36 per common share."

Financial review

The following sections present a summary analysis of the Bank's operating results for the year ended October 31, 2009 , as well as for the fourth quarter ended October 31, 2009 . The analysis should be read in conjunction with the unaudited financial information for the fourth quarter of 2009. Audited Annual Consolidated Financial Statements and accompanying Management's Discussion and Analysis for 2009 are also available on the Bank's Web site at www.laurentianbank.ca.

2009 Financial Performance

The Bank met all of its published objectives for fiscal 2009, as illustrated in the table below. Considering the prevailing market conditions, this is a significant achievement. Furthermore, the Bank continued to generate strong internal growth and maintain a solid financial position.

    
    Performance Indicators for 2009
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                                         2009 Objectives   2009 Performance
    -------------------------------------------------------------------------
    Return on common shareholders'
     equity                                10.0% to 12.0%              11.4%
    Diluted net income per share          $3.70 to $4.40              $4.23
    Total revenue                              + 2% to 5%               + 6%
                                   ($645 to $665 million)   ($666.5 million)
    Efficiency ratio                           73% to 70%              70.8%
    Tier 1 capital ratio                  Minimum of 9.5%              11.0%
    -------------------------------------------------------------------------
    

Net income totalled $113.1 million in 2009, as compared with $102.5 million last year. Net income in 2009 includes income from discontinued operations of $11.5 million related to the sale of asset management activities in fiscal 2005, while earnings for 2008 included income from discontinued operations of $4.4 million . Income from continuing operations was $101.7 million in 2009, compared with $98.1 million in 2008.

Loans and bankers' acceptances totalled $15.9 billion as of October 31, 2009 , a $1.6 billion increase over 2008. Growth in residential mortgage loans reached $1.0 billion dollars for fiscal 2009 as a result of successful ongoing underwriting initiatives. Growth in commercial mortgages and commercial loan, including customers' liabilities under acceptances, reached $352 million and $208 million respectively for fiscal 2009 as the Bank capitalised on new business opportunities. Personal deposits reached $15.1 billion at year-end, a $2.7 billion growth compared to last year. B2B Trust's new High Interest Investment Account (HIIA) grew by $3.1 billion in 2009. In addition, significant increases in retail and commercial deposits have helped to reduce the Bank's use of money market funding and other term deposits.

Total revenue improved to $666.5 million for fiscal 2009, from $630.5 million for fiscal 2008. This $36 million increase results from higher net interest income, reflecting record growth in the retail and commercial business activity as highlighted above and strategic repricing initiatives, as well as strong increases in fee income and brokerage revenues. These were partially offset by lower revenues from treasury and financial market operations, which were affected by net losses on securities amounting to $9.0 million in 2009. Revenues for 2008 included a $12.9 million gain on sale of Montreal Exchange shares, partially offset by net losses of $10.3 million , mainly on certain U.S. and international financial institution fixed-income securities.

The provision for loan losses amounted to $56.0 million for fiscal 2009, compared to $48.5 million for fiscal 2008, which included an $8.0 million increase in general provisions. The increase reflects the effect of the ongoing challenging credit environment resulting from weaker economic conditions and higher unemployment rates, as well as the growth in loan volumes. Gross impaired loans have increased by $35.6 million since the beginning of the year, to $137.5 million as at October 31, 2009 . Net impaired loans amounted to $23.0 million as at October 31, 2009 (representing 0.14% of total loans, bankers' acceptances and assets purchased under reverse repurchase agreements), compared with $8.4 million as at July 31, 2009 and -$10.6 million as at October 31, 2008 . Overall, the loan portfolio performance remains satisfactory in light of the current economic conditions.

Non-interest expenses totalled $472.0 million for fiscal 2009, compared to $446.0 million for fiscal 2008. The increase is principally attributable to higher employee compensation, partially offset by lower pension costs, as well as increases in advertising expenses, tax charges and provisions related to specific operational issues. The efficiency ratio remained relatively unchanged at 70.8% for fiscal 2009, compared with 70.7% for fiscal 2008.

For fiscal 2009, the income tax expense was $36.8 million and the effective income tax rate was 26.6%, compared to $37.9 million and 27.9% for fiscal 2008. Results for fiscal 2008 included the effect of a $5.6 million unfavourable tax adjustment resulting from federal income tax rate reductions and partly offset by the lower income taxes on certain capital gains.

    
    Fourth quarter ended October 31, 2009 compared to fourth quarter ended
    October 31, 2008
    

Net income for the fourth quarter ended October 31, 2009 was $38.2 million , compared to $27.3 million for the same period last year. Net income for the fourth quarter of 2009 includes income from discontinued operations of $11.5 million related to the sale of asset management activities in fiscal 2005, while earnings for the fourth quarter of 2008 included income from discontinued operations of $4.4 million . Income from continuing operations was $26.8 million for the fourth quarter of 2009, compared with $22.9 million for the fourth quarter of 2008.

Total revenue increased 17% to $178.5 million in the fourth quarter of 2009, from $152.8 million in the fourth quarter of 2008. Net interest income increased by $14.9 million to $118.2 million in the fourth quarter of 2009, from $103.3 million in the fourth quarter of 2008, mainly as a result of higher loan and deposit volumes. Net interest margin in the fourth quarter recovered to 2.19% after being under pressure at the beginning of the year. Net interest margin was 2.15% in the fourth quarter of 2008. During the year, the Bank has held a relatively higher level of lower yielding liquid assets fuelled by record personal deposit growth. This additional flexibility, in the context of the uncertain economic conditions secured the Bank's funding needs and enabled it to take advantage of growth opportunities.

Other income totalled $60.3 million in the fourth quarter of 2009, compared with $49.5 million in the fourth quarter of 2008. Income from brokerage operations improved markedly by $11.5 million , to $16.9 million , compared with the same period last year, as a result of continued strong performance from the Institutional Fixed Income division of Laurentian Bank Securities and recovering equity markets. Fees and commissions on loans and deposits also improved by $2.3 million , as a result of the overall increase in business activity. The contribution from treasury and financial market operations was hampered by net losses on securities of approximately $3.5 million for the fourth quarter of 2009. Income from treasury and financial market operations for the fourth quarter of 2008 included net losses of $8.3 million , mainly on certain U.S. and international financial institution fixed-income securities. Revenues from securitization activities were $5.6 million for the fourth quarter of 2009, including net gains of $6.2 million on the sale of $269 million of residential mortgages. Securitization revenues were $9.4 million for the fourth quarter of 2008. Other activities yielded generally comparable year-over-year results.

The provision for loan losses amounted to $16.0 million in the fourth quarter of 2009, compared with $10.5 million in the fourth quarter of 2008. The year-over-year increase reflects the effect of overall economic deterioration on most portfolios.

Non-interest expenses totalled $128.1 million for the fourth quarter of 2009, compared to $113.0 million for the fourth quarter of 2008. Salaries and employee benefits increased by $7.5 million , mainly as a result of higher variable compensation, partially offset by lower pension expenses. Other expenses increased by $6.5 million , mainly as a result of tax charges and provisions related to specific operational issues. Premises and technology costs remained relatively unchanged year-over-year. The efficiency ratio (non-interest expenses divided by total revenue) improved to 71.8% in the fourth quarter of 2009, compared from 74.0% in the fourth quarter of 2008.

For the quarter ended October 31, 2009 , income tax expense related to continuing operations was $7.6 million and the effective tax rate was 22.1%. For the quarter ended October 31, 2008 , income tax expense related to continuing operations was $6.4 million and the effective tax rate was 21.7%.

    
    Three months ended October 31, 2009 compared to three months ended
    July 31, 2009
    

Net income was $38.2 million for the fourth quarter ended October 31, 2009 and includes income from discontinued operations of $11.5 million related to the sale of asset management activities in fiscal 2005. Excluding this gain, income from continuing operations was $26.8 million for the fourth quarter of 2009, compared with $28.7 million for the third quarter of 2009. Net interest income improved by $5.5 million as a result of higher loan and deposit volumes and improvement in net interest margin. Other revenue decreased by $3.6 million , essentially as a result of lower securitization revenues. Non-interest expenses increased by $9.1 million , reflecting higher employee compensation, increases in tax charges and provisions related to specific operational issues.

Dividend increase

At its meeting on December 9, 2009 , the Board of Directors approved a $0.02 per common share or 6% increase in the quarterly dividend, to $0.36 per common share. This increase reflects management and Board confidence in the Bank's ability to pursue its growth and maintain its strong financial position, while demonstrating the Bank's focus on shareholder value.

Measuring 2010 Performance

The following table presents Management's objectives for 2010.

    
    2010 Objectives
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    - Revenue growth                                               5% to 10%
    - Efficiency ratio                                            70% to 67%
    - Return on common shareholders' equity                   10.0% to 12.0%
    - Diluted net income per share                           $4.00 to $4.70
    - Tier 1 capital ratio                                   Minimum of 9.5%
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Key assumptions supporting the Bank's objectives

The following assumptions are the most significant items considered in setting the Bank's strategic priorities and in determining its financial objectives. Other factors such as those detailed in the Caution Regarding Forward-Looking Statements section herein below and the Integrated Risk Management Framework section of the Management's Discussion and Analysis for 2009 could also cause future results to differ materially from these objectives.

The objectives for 2010 presented above assume that the Canadian economy will resume growth in 2010, but that unemployment will remain high and will maintain pressure on loan losses. These objectives also assume continued loan growth at a rate similar to 2009, reduced securitization gains and the absence of further income from discontinued operations. Generating core operating earnings growth remains at the forefront of the Bank's strategies for 2010.

    
    Segmented information

    Retail & SME Quebec

                      For the three months ended        For the year ended
                  ----------------------------------  -----------------------
    (in million     October        July     October     October     October
     of $)         31, 2009    31, 2009    31, 2008    31, 2009    31, 2008
    -------------------------------------------------------------------------
    Net interest
     income            77.4        77.8        76.6       306.0       299.3
    Other income       30.9        31.2        29.7       120.0       115.9
    -------------------------------------------------------------------------
    Total revenue     108.3       109.1       106.3       425.9       415.2
    Provision for
     loan losses       11.8        12.4         7.9        41.9        33.6
    Non-interest
     expense           83.4        84.7        82.5       333.5       326.9
    -------------------------------------------------------------------------
                       13.1        11.9        16.0        50.6        54.8
    Income taxes        3.0         2.3         4.2        10.9        13.8
    -------------------------------------------------------------------------
    Income from
     continuing
     operations        10.0         9.7        11.8        39.6        41.0
    Discontinued
     operations        11.5           -         4.4        11.5         4.4
    -------------------------------------------------------------------------
    Net income         21.5         9.7        16.2        51.1        45.4
    -------------------------------------------------------------------------
    

2009 Financial Performance

The Retail & SME Quebec business segment's contribution to net income improved $5.7 million , or 13%, to $51.1 million in 2009, compared with $45.4 million in 2008. Net income for 2009 includes income from discontinued operations of $11.5 million related to the sale of asset management activities in fiscal 2005, while earnings for 2008 included income from discontinued operations of $4.4 million . Income from continuing operations was $39.6 million in 2009, compared with $41.0 million in 2008.

Total revenue increased by 3% or $10.7 million , from $415.2 million in 2008 to $425.9 million in 2009, as a result of continued growth in loan and deposit volumes. Loan losses were higher, at $41.9 million in 2009, compared with $33.6 million in 2008, reflecting ongoing weaker credit conditions. Non-interest expenses increased by 2% or $6.6 million , from $326.9 million in 2008 to $333.5 million in 2009, due mainly to increases in salaries and advertising expenses.

    
    Fourth quarter ended October 31, 2009 compared to fourth quarter ended
    October 31, 2008
    

The business segment's contribution to net income improved by $5.3 million , or 33%, to $21.5 million for the fourth quarter of 2009, compared with $16.2 million for the fourth quarter of 2008. Net income for the fourth quarter of 2009 includes income from discontinued operations of $11.5 million , while earnings for the fourth quarter of 2008 included income from discontinued operations of $4.4 million . Income from continuing operations was $10.0 million in 2009, compared with $11.8 million in 2008.

Total revenue increased by $2.0 million , from $106.3 million in the fourth quarter of 2008 to $108.3 million in the fourth quarter of 2009, as overall growth drove net interest income and fee revenues upward. Loan losses were higher, at $11.8 million in the fourth quarter of 2009, compared with $7.9 million in the fourth quarter of 2008, mainly in lines of credit, credit cards and SME lending. Non-interest expenses increased by $0.9 million , from $82.5 million in the fourth quarter of 2008 to $83.4 million in the fourth quarter of 2009, due mainly to increases in salaries and advertising expenses.

    
    Real Estate & Commercial

                      For the three months ended        For the year ended
                  ----------------------------------  -----------------------
    (in million     October        July     October     October     October
     of $)         31, 2009    31, 2009    31, 2008    31, 2009    31, 2008
    -------------------------------------------------------------------------
    Net interest
     income            19.6        18.4        13.6        67.6        55.2
    Other income        6.4         6.6         4.7        22.9        16.2
    -------------------------------------------------------------------------
    Total revenue      26.0        25.0        18.4        90.5        71.4
    Provision for
     loan losses        2.9         2.1         1.9         9.8         5.4
    Non-interest
     expense           12.0         6.8         6.5        31.0        23.3
    -------------------------------------------------------------------------
                       11.2        16.1        10.0        49.7        42.7
    Income taxes        3.5         5.0         3.3        15.5        14.1
    -------------------------------------------------------------------------
    Net income          7.7        11.1         6.7        34.1        28.6
    -------------------------------------------------------------------------
    

2009 Financial Performance

The Real Estate & Commercial business segment's contribution to net income improved by $5.5 million , or 20%, to $34.1 million in 2009, compared with $28.6 million in 2008.

Total revenue increased by 27% or $19.1 million , from $71.4 million in 2008 to $90.5 million in 2009, as a result of strong loan growth and recent initiatives to grow deposit volumes, as well as sound pricing strategies. Loan losses, essentially in Commercial lending, were higher at $9.8 million in 2009, compared with $5.4 million in 2008. Non-interest expenses increased by 33% or $7.7 million , from $23.3 million in 2008 to $31.0 million in 2009, due mainly to increases in salaries and variable compensation and provisions related to specific operational issues.

    
    Fourth quarter ended October 31, 2009 compared to fourth quarter ended
    October 31, 2008
    

The business segment's contribution to net income improved by $1.0 million , or 15%, to $7.7 million for the fourth quarter of 2009, compared to $6.7 million for the fourth quarter of 2008.

Total revenue increased by $7.6 million , from $18.4 million in the fourth quarter of 2008 to $26.0 million in the fourth quarter of 2009, as a result of higher net interest income due to growth in both loan volumes and margins, as well as higher fees. Loan losses were slightly higher at $2.9 million in the fourth quarter of 2009, compared with $1.9 million in the fourth quarter of 2008. Given current economic conditions, loan losses in these portfolios remained well under control during the quarter. Non-interest expenses increased by $5.4 million to $12.0 million in the fourth quarter of 2009, from $6.5 million in the fourth quarter of 2008, essentially as a result of higher employee compensation and provisions related to specific operational issues.

    
    B2B Trust

                      For the three months ended        For the year ended
                  ----------------------------------  -----------------------
    (in million     October        July     October     October     October
     of $)         31, 2009    31, 2009    31, 2008    31, 2009    31, 2008
    -------------------------------------------------------------------------
    Net interest
     income            24.1        23.9        21.0        90.7        87.3
    Other income        2.3         2.5         2.4         9.6        10.5
    -------------------------------------------------------------------------
    Total revenue      26.4        26.4        23.4       100.3        97.8
    Provision for
     loan losses        1.3         1.5         0.8         4.3         1.5
    Non-interest
     expense           14.2        12.3        12.1        49.0        43.7
    -------------------------------------------------------------------------
                       10.9        12.7        10.6        47.0        52.6
    Income taxes        3.5         4.0         3.6        14.9        17.7
    -------------------------------------------------------------------------
    Net income          7.5         8.7         7.0        32.1        34.9
    -------------------------------------------------------------------------
    

2009 Financial Performance

The B2B Trust business segment's contribution to net income declined by $2.8 million , or 8%, to $32.1 million in 2009, compared with $34.9 million in 2008.

Total revenue increased by $2.5 million , from $97.8 million in 2008 to $100.3 million in 2009. Net interest income increased by $3.4 million year-over-year, essentially as a result of higher loan and deposit volumes. While net interest income was under pressure at the beginning of the year, the relative easing of funding conditions during the last six months of 2009 and the gradual reduction in the introductory promotional interest rate on B2B Trust's HIIA contributed to restore the net interest margin in the latter part of the year.

Deposits reached $9.1 billion as at October 31, 2009 , up $3.0 billion since the beginning of the year. The sharp increase resulted mainly from the new HIIA, which provided the Bank with an additional reliable retail funding source to support growth initiatives. Loans also continued their progression, with the average level increasing by $375 million over the last twelve months.

Provision for loan losses related to B2B Trust's various loan portfolios increased to $4.3 million in 2009, compared with $1.5 million in 2008, reflecting the effect of the recent economic slowdown on borrowers' ability to fully service their debt. However, the level of loan losses remains low considering the size of the underlying portfolios. In line with increased business activity, non-interest expenses rose $5.3 million , from $43.7 million in 2008 to $49.0 million in 2009.

    
    Fourth quarter ended October 31, 2009 compared to fourth quarter ended
    October 31, 2008
    

The business segment's contribution to net income increased by $0.5 million , or 6%, to $7.5 million in the fourth quarter of 2009, compared with $7.0 million in the fourth quarter of 2008.

Total revenue increased by $3.0 million , from $23.4 million in the fourth quarter of 2008 to $26.4 million in the fourth quarter of 2009. Net interest income increased by $3.1 million year-over-year, mainly as a result of higher loan and deposit volumes. Net interest margins have recovered during the last six months, which contributed to the overall good fourth quarter performance.

Loan losses remained low at $1.3 million in the fourth quarter of 2009, compared with $0.8 million in the fourth quarter of 2008. Due to heightened business development costs, non-interest expenses increased to $14.2 million in the fourth quarter of 2009, compared with $12.1 million in the fourth quarter of 2008.

    
    Laurentian Bank Securities

                      For the three months ended        For the year ended
                  ----------------------------------  -----------------------
    (in million     October        July     October     October     October
     of $)         31, 2009    31, 2009    31, 2008    31, 2009    31, 2008
    -------------------------------------------------------------------------
    Total revenue      17.7        16.1         6.4        54.7        32.4
    Non-interest
     expense           13.2        11.5         6.4        41.6        29.7
    -------------------------------------------------------------------------
                        4.5         4.6           -        13.1         2.7
    Income taxes        2.0         1.4         0.2         4.6         1.0
    -------------------------------------------------------------------------
    Net income          2.5         3.2        (0.2)        8.6         1.7
    -------------------------------------------------------------------------
    

2009 Financial Performance

The Laurentian Bank Securities (LBS) business segment's contribution to net income improved significantly to $8.6 million in 2009, compared with $1.7 million in 2008. The strong performance of the Institutional Fixed Income division and improving market conditions contributed to the excellent revenue performance. Non-interest expenses increased markedly to $41.6 million in 2009, from $29.7 million in 2008, primarily due to higher employee compensation.

    
    Fourth quarter ended October 31, 2009 compared to fourth quarter ended
    October 31, 2008
    

The business segment's contribution to net income improved to $2.5 million in the fourth quarter of 2009, compared with a negative contribution of $0.2 million in the fourth quarter of 2008. The strong earnings of the quarter resulted from the improved performance of all LBS divisions. Non-interest expenses increased to $13.2 million in the fourth quarter of 2009, from $6.4 million in the fourth quarter of 2008, primarily due to higher variable compensation costs.

    
    Other Sector

                      For the three months ended        For the year ended
                  ----------------------------------  -----------------------
    (in million     October        July     October     October     October
     of $)         31, 2009    31, 2009    31, 2008    31, 2009    31, 2008
    -------------------------------------------------------------------------
    Total revenue       0.2           -        (1.7)       (4.9)       13.6
    Provision for
     loan losses          -           -           -           -         8.0
    Non-interest
     expense            5.4         3.7         5.6        16.9        22.4
    -------------------------------------------------------------------------
                       (5.2)       (3.7)       (7.3)      (21.8)      (16.8)
    Income taxes       (4.4)        0.2        (4.9)       (9.1)       (8.8)
    -------------------------------------------------------------------------
    Net income         (0.8)       (4.0)       (2.4)      (12.7)       (8.0)
    -------------------------------------------------------------------------
    

2009 Financial Performance

The Other segment posted a negative contribution to net income of $12.7 million in 2009, compared with a negative contribution of $8.0 million in 2008.

Total revenue decreased by $18.5 million , as a result of the lower overall interest rate environment, the higher funding costs at the beginning of the year and higher net losses on securities incurred in 2009. Treasury and financial market revenues for 2008 included a $12.9 million gain on the sale of Montréal Exchange shares.

Results for 2008 also included an additional general provision for loan losses of $8.0 million and a $5.6 million income tax charge arising from a reduction of federal income tax rates, partly offset by the lower income taxes on certain capital gains.

    
    Fourth quarter ended October 31, 2009 compared to fourth quarter ended
    October 31, 2008
    

The Other segment posted a negative contribution to net income of $0.8 million in the fourth quarter of 2009, compared with a negative contribution of $2.4 million in the corresponding quarter of 2008.

Total revenue increased slightly to $0.2 million fourth quarter of 2009, compared with -$1.7 million for the fourth quarter of 2008, mainly as a result of the lower level of losses on securities in 2009, compared to 2008.

About Laurentian Bank

Laurentian Bank of Canada is a banking institution operating across Canada and offering its clients diversified financial services. Differentiating itself through excellence in service, as well as through its simplicity and proximity, the Bank serves individual consumers and small and medium-sized businesses. The Bank also offers its products to a wide network of independent financial intermediaries through B2B Trust, as well as full-service brokerage solutions through Laurentian Bank Securities.

Laurentian Bank is well established in the Province of Quebec , operating the third-largest retail branch network. Elsewhere throughout Canada , it operates in specific market segments where it holds an enviable position. Laurentian Bank of Canada has more than $22 billion in balance sheet assets and more than $14 billion in assets under administration. Founded in 1846, the Bank employs more than 3,500 people.

Non-GAAP Financial Measures

The Bank uses both generally accepted accounting principles ("GAAP") and certain non-GAAP measures to assess performance, such as return on common shareholders' equity, net interest margin, book value per common share and efficiency ratios. In addition, net income excluding significant items has been presented at certain points in this document. Non-GAAP measures do not have any standardized meaning prescribed by GAAP and are unlikely to be comparable to any similar measures presented by other companies. The Bank believes that these non-GAAP financial measures provide investors and analysts with useful information so that they can better understand financial results and analyze the Bank's growth and profitability potential more effectively.

Caution Regarding Forward-looking Statements

In this document and in other documents filed with Canadian regulatory authorities or in other communications, Laurentian Bank of Canada may from time to time make written or oral forward-looking statements within the meaning of applicable securities legislation, including statements regarding the Bank's business plan and financial objectives. These statements typically use the conditional, as well as words such as prospects, believe, estimate, forecast, project, expect, anticipate, plan, may, should, could and would, or the negative of these terms, variations thereof or similar terminology.

By their very nature, forward-looking statements are based on assumptions and involve inherent risks and uncertainties, both general and specific in nature. It is therefore possible that the forecasts, projections and other forward-looking statements will not be achieved or will prove to be inaccurate. Although the Bank believes that the expectations reflected in these forward-looking statements are reasonable, it provides no assurance that these expectations will prove to have been correct.

The Bank cautions readers against placing undue reliance on forward-looking statements when making decisions, as the actual results could differ considerably from the opinions, plans, objectives, expectations, forecasts, estimates and intentions expressed in such forward-looking statements due to various material factors. Among other things, these factors include capital market activity, changes in government monetary, fiscal and economic policies, changes in interest rates, inflation levels and general economic conditions, legislative and regulatory developments, competition, credit ratings, scarcity of human resources and technological environment. The Bank further cautions that the foregoing list of factors is not exhaustive. For more information on the risks, uncertainties and assumptions that would cause the Bank's actual results to differ from current expectations, please also refer to the Bank's public filings available at www.sedar.com.

The Bank does not undertake to update any forward-looking statements, whether oral or written, made by itself or on its behalf, except to the extent required by securities regulations.

Conference Call

Laurentian Bank invites media representatives and the public to listen to the conference call with financial analysts to be held at 2 p.m. Eastern Time on Wednesday, December 9, 2009 . The live, listen-only, toll-free call-in number is 1-866-223-7781. You can listen to the call on a delayed basis at any time from 6:00 p.m. on Wednesday, December 9, 2009 , until midnight on December 30, 2009 , by dialling the following playback number: 1-800-408-3053 Code 8127463. The conference call can also be heard through the Investor Relations section of the Bank's Web site at www.laurentianbank.ca. The Bank's Website also offers additional financial information.

    
    FINANCIAL
    HIGHLIGHTS
                    FOR THE THREE                 FOR THE YEAR
                     MONTHS ENDED                     ENDED
                 -------------------           -------------------
    IN MILLIONS
     OF DOLLARS,
    UNLESS
     OTHERWISE
     INDICATED    OCTOBER   OCTOBER             OCTOBER   OCTOBER
     (UNAUDITED)  31 2009   31 2008  VARIANCE   31 2009   31 2008  VARIANCE
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings
    Net income    $  38.2   $  27.3        40 % $ 113.1   $ 102.5        10 %
    Income from
     continuing
     operations   $  26.8   $  22.9        17 % $ 101.7   $  98.1         4 %
    Net income
     available
     to common
     sharehol-
     ders         $  35.2   $  24.4        44 % $ 101.0   $  90.7        11 %
    Return on
     common
     sharehol-
     ders'
     equity(1)       15.3 %    11.5 %              11.4 %    11.0 %
    Per common
     share
    Diluted net
     income       $  1.47   $  1.02        44 % $  4.23   $  3.80        11 %
    Diluted
     income from
     continuing
     operations   $  0.99   $  0.84        18 % $  3.75   $  3.61         4 %
    Dividends
     declared     $  0.34   $  0.34         - % $  1.36   $  1.30         5 %
    Book value(1)                               $ 38.68   $ 35.84         8 %
    Share price -
     close                                      $ 39.53   $ 40.88        (3)%
    Financial
     position
    Balance
     sheet assets                               $22,165   $19,579        13 %
    Assets under
     administra-
     tion                                       $14,256   $14,428        (1)%
    Loans,
     bankers'
     acceptances
     and assets
     purchased
     under
     reverse
     repurchase
     agreements,
     net                                        $16,354   $14,924        10 %
    Personal
     deposits                                   $15,139   $12,430        22 %
    Sharehol-
     ders'
     equity and
     debentures                                 $ 1,321   $ 1,233         7 %
    Number of
     common
     shares -
     end of
     period (in
     thousands)                                  23,914    23,848         - %
    Net impaired
     loans as a %
     of loans,
     bankers'
     acceptances
     and assets
     purchased
     under
     reverse
     repurchase
     agreements                                    0.14 %   (0.07)%
    Risk-weighted
     assets                                     $ 9,481   $ 9,629        (2)%
    Capital
     ratios
    Tier I BIS
     capital
     ratio                                         11.0 %    10.0 %
    Total BIS
     capital
     ratio                                         13.0 %    12.0 %
    Assets to
     capital
     multiple                                      18.0 x    17.0 x
    Tangible
     common
     equity as a
     percentage
     of risk-
     weighted
     assets(2)                                      9.1 %     8.2 %
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    FINANCIAL
     RATIOS
    Per common
     share
    Price /
     earnings
     ratio                                          9.3 x    10.7 x
    Market to
     book value                                     102 %     114 %
    Dividend
     yield           3.44 %    3.33 %              3.44 %    3.18 %
    Dividend
     payout ratio    23.1 %    33.3 %              32.1 %    34.2 %
    As a
     percentage
     of average
     assets
    Net interest
     income          2.19 %    2.15 %              2.07 %    2.21 %
    Provision
     for credit
     losses          0.30 %    0.22 %              0.27 %    0.26 %
    Profitability
    Efficiency
     ratio (non-
     interest
     expenses as
     a % of total
     revenue)        71.8 %    74.0 %              70.8 %    70.7 %
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    OTHER
     INFORMATION
    Number of
     full-time
     equivalent
     employees                                    3,528     3,393
    Number of
     branches                                       156       156
    Number of
     automated
     banking
     machines                                       408       342
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) With regard to the calculation of the Return on common shareholders'
        equity ratio, the Bank considers that net income is the best measure
        of profitability and that common shareholders' equity, excluding
        accumulated other comprehensive income, would be used as a capital
        measure. The calculation of the Bank's book value is also based on
        common shareholders' equity, excluding accumulated other
        comprehensive income.
    (2) Tangible common equity is defined as common shareholders' equity,
        excluding accumulated other comprehensive income, less goodwill and
        contractual and customer relationships.


    CONSOLIDATED
    BALANCE SHEET
                                                        AS AT         AS AT
                                                   OCTOBER 31    OCTOBER 31
    IN THOUSANDS OF DOLLARS (UNAUDITED)                  2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    ASSETS
    Cash and non-interest-bearing deposits with
     other banks                                 $     61,010  $     54,410
                                                -----------------------------
    Interest-bearing deposits with other banks        239,606        94,291
                                                -----------------------------
    Securities accounts
      Available-for-sale                            1,424,043     1,302,137
      Held-for-trading                              1,391,313     1,069,197
      Designated as held-for-trading                1,616,827     1,118,838
                                                -----------------------------
                                                    4,432,183     3,490,172
                                                -----------------------------
    Assets purchased under reverse repurchase
     agreements                                       536,064       661,391
                                                -----------------------------
    Loans
      Personal                                      5,655,055     5,694,574
      Residential mortgage                          7,219,830     6,182,871
      Commercial mortgage                           1,285,012       932,688
      Commercial and other                          1,555,956     1,454,799
                                                -----------------------------
                                                   15,715,853    14,264,932
      Allowance for loan losses                      (114,546)     (112,434)
                                                -----------------------------
                                                   15,601,307    14,152,498
                                                -----------------------------
    Other
      Customers' liabilities under acceptances        216,817       110,342
      Tangible capital assets                          58,163        59,927
      Derivative financial instruments                253,661       237,704
      Goodwill                                         53,790        53,790
      Other intangible assets                         103,386        96,458
      Other assets                                    608,793       568,489
                                                -----------------------------
                                                    1,294,610     1,126,710
                                                -----------------------------
                                                 $ 22,164,780  $ 19,579,472
                                                -----------------------------
                                                -----------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Deposits
      Personal                                   $ 15,138,637  $ 12,430,038
      Business, banks and other                     3,161,329     2,903,774
                                                -----------------------------
                                                   18,299,966    15,333,812
                                                -----------------------------
    Other
      Obligations related to assets sold short      1,054,470       819,236
      Obligations related to assets sold under
       repurchase agreements                          284,988     1,136,096
      Acceptances                                     216,817       110,342
      Derivative financial instruments                174,859       147,469
      Other liabilities                               812,454       799,082
                                                -----------------------------
                                                    2,543,588     3,012,225
                                                -----------------------------
    Subordinated debentures                           150,000       150,000
                                                -----------------------------
    Shareholders' equity
      Preferred shares                                210,000       210,000
      Common shares                                   259,208       257,462
      Contributed surplus                                 209           173
      Retained earnings                               665,538       596,974
      Accumulated other comprehensive income           36,271        18,826
                                                -----------------------------
                                                    1,171,226     1,083,435
                                                -----------------------------
                                                 $ 22,164,780  $ 19,579,472
                                                -----------------------------
                                                -----------------------------
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENT
    OF INCOME

                     FOR THE THREE MONTHS ENDED         FOR THE YEAR ENDED
                 ----------------------------------- ------------------------
    IN THOUSANDS
     OF DOLLARS,
    EXCEPT PER
     SHARE
     AMOUNTS     OCTOBER 31     JULY 31  OCTOBER 31  OCTOBER 31  OCTOBER 31
     (UNAUDITED)       2009        2009        2008        2009        2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Interest
     income
      Loans       $ 179,730   $ 178,002   $ 206,157   $ 719,538   $ 837,532
      Securities     18,154      18,031      16,475      71,373      60,873
      Deposits
       with other
       banks            102         278       5,173       3,903      26,360
      Other,
       including
       derivative
       financial
       instru-
       ments         39,764      40,979      12,651     137,275      30,190
                 ------------------------------------------------------------
                    237,750     237,290     240,456     932,089     954,955
                 ------------------------------------------------------------
    Interest
     expense
      Deposits      117,048     122,119     128,170     493,812     508,403
      Other,
       including
       derivative
       financial
       instru-
       ments            516         455       7,047       6,765      33,547
      Subordi-
       nated
       debentures     1,951       1,950       1,946       7,735       7,742
                 ------------------------------------------------------------
                    119,515     124,524     137,163     508,312     549,692
                 ------------------------------------------------------------
    Net interest
     income         118,235     112,766     103,293     423,777     405,263
                 ------------------------------------------------------------
    Other income
      Fees and
       commis-
       sions on
       loans and
       deposits      26,403      26,768      24,138     101,445      91,913
      Income from
       brokerage
       operations    16,926      15,417       5,377      51,788      28,707
      Income from
       treasury
       and
       financial
       market
       operations       (99)         17      (1,279)     10,472      24,474
      Income from
       sales of
       mutual
       funds          3,383       3,225       3,329      12,429      14,170
      Credit
       insurance
       income         3,399       4,767       3,487      15,994      13,717
      Income from
       registered
       self-
       directed
       plans          1,887       2,056       1,939       7,960       8,736
      Securiti-
       zation
       income         5,551       9,771      10,246      34,441      35,865
      Other           2,855       1,870       2,281       8,196       7,636
                 ------------------------------------------------------------
                     60,305      63,891      49,518     242,725     225,218
                 ------------------------------------------------------------
    Total revenue   178,540     176,657     152,811     666,502     630,481
                 ------------------------------------------------------------
    Provision for
     loan losses     16,000      16,000      10,500      56,000      48,500
                 ------------------------------------------------------------
    Non-interest
     expenses
      Salaries
       and
       employee
       benefits      66,027      62,828      58,547     249,658     236,280
      Premises
       and
       technology    31,948      30,331      30,871     120,054     119,192
      Other          30,168      25,922      23,622     102,278      90,519
                 ------------------------------------------------------------
                    128,143     119,081     113,040     471,990     445,991
                 ------------------------------------------------------------
    Income from
     continuing
     operations
     before
     income taxes    34,397      41,576      29,271     138,512     135,990
    Income taxes      7,618      12,893       6,361      36,848      37,882
                 ------------------------------------------------------------
    Income from
     continuing
     operations      26,779      28,683      22,910     101,664      98,108
    Income from
     discontinued
     operations,
     net of
     income taxes    11,469           -       4,423      11,469       4,423
                 ------------------------------------------------------------
    Net income    $  38,248   $  28,683   $  27,333   $ 113,133   $ 102,531
                 ------------------------------------------------------------
                 ------------------------------------------------------------
    Preferred
     share
     dividends,
     including
     applicable
     taxes            3,066       2,824       2,954      12,116      11,818
                 ------------------------------------------------------------
    Net income
     available
     to common
     shareholders $  35,182   $  25,859   $  24,379   $ 101,017   $  90,713
                 ------------------------------------------------------------
                 ------------------------------------------------------------
    Average
     number of
     common
     shares
     outstanding
     (in
     thousands)
      Basic          23,878      23,854      23,846      23,858      23,837
      Diluted        23,903      23,872      23,889      23,876      23,880
                 ------------------------------------------------------------
    Income per
     common
     share from
     continuing
     operations
      Basic       $    0.99   $    1.08   $    0.84   $    3.75   $    3.62
      Diluted     $    0.99   $    1.08   $    0.84   $    3.75   $    3.61
                 ------------------------------------------------------------
    Net income
     per common
     share
      Basic       $    1.47   $    1.08   $    1.02   $    4.23   $    3.81
      Diluted     $    1.47   $    1.08   $    1.02   $    4.23   $    3.80
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENT
    OF COMPREHENSIVE INCOME

                              FOR THE THREE MONTHS         FOR THE YEAR
                                     ENDED                     ENDED
                             ----------------------- ------------------------
    IN THOUSANDS OF DOLLARS  OCTOBER 31  OCTOBER 31  OCTOBER 31  OCTOBER 31
     (UNAUDITED)                   2009        2008        2009        2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net income                $  38,248   $  27,333   $ 113,133   $ 102,531
                             ------------------------------------------------

    Other comprehensive
     income (loss), net of
     income taxes
      Net change in
       unrealized gains
       (losses) on available-
       for-sale securities        4,552     (17,764)     14,081     (23,347)
      Reclassification of
       realized (gains) and
       losses on available-
       for-sale securities to
       net income                 2,390       5,692       6,185      (4,376)
      Net gains (losses) on
       derivative instruments
       designated as cash
       flow hedges               (7,839)     18,303      (2,821)     45,672
                             ------------------------------------------------
                                   (897)      6,231      17,445      17,949
                             ------------------------------------------------
    Comprehensive income      $  37,351   $  33,564   $ 130,578   $ 120,480
                             ------------------------------------------------
                             ------------------------------------------------
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENT OF CHANGES
    IN SHAREHOLDERS' EQUITY
                                                      FOR THE YEAR ENDED
                                                -----------------------------
                                                   OCTOBER 31    OCTOBER 31
    IN THOUSANDS OF DOLLARS (UNAUDITED)                  2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Preferred shares
      Balance at beginning and end of year        $   210,000   $   210,000
                                                -----------------------------
    Common shares
      Balance at beginning of year                    257,462       256,445
      Issued during the year under share
       purchase option plan                             1,746         1,017
                                                -----------------------------
      Balance at end of year                          259,208       257,462
                                                -----------------------------
    Contributed surplus
      Balance at beginning of year                        173           105
      Stock-based compensation                             36            68
                                                -----------------------------
      Balance at end of year                              209           173
                                                -----------------------------
    Retained earnings
      Balance at beginning of year                    596,974       537,254
      Net income                                      113,133       102,531
      Dividends
        Preferred shares, including applicable
         taxes                                        (12,116)      (11,818)
        Common shares                                 (32,453)      (30,993)
                                                -----------------------------
      Balance at end of year                          665,538       596,974
                                                -----------------------------
    Accumulated other comprehensive income
      Balance at beginning of year                     18,826           877
      Other comprehensive income, net of income
       taxes                                           17,445        17,949
                                                -----------------------------
      Balance at end of year                           36,271        18,826
                                                -----------------------------
    Shareholders' equity                          $ 1,171,226   $ 1,083,435
                                                -----------------------------
                                                -----------------------------
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

For further information: Chief Financial Officer: Michel C. Lauzon, [phone], extension 7997; Media and Investor Relations contact: Gladys Caron, [phone], extension 7511, cell.: [phone]