Western Financial Group Reports Six Month Revenue Up 32.0%, Net Income Up 88.3%, EPS Up 27.3%



    /THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO ANY UNITED STATES NEWS
    SERVICE OR OTHERWISE IN THE UNITED STATES/

    HIGH RIVER, AB, Aug. 13 /CNW/ - (TSX-WES) - Western Financial Group ("the
Company") today announced its operating and financial results for the six
months ended June 30, 2007. For the six months, revenue increased 32.0% to
$51.2 million from $38.8 million compared to the same period in 2006 and net
income increased 88.3%. Basic earnings per share amounted to $0.14 (diluted
$0.12) per share from $0.11 (diluted $0.10) in the same period in 2006.

    
    Financial Highlights
                                  Three months ended        Six months ended
                                             June 30                 June 30
    (in $ thousands)            2007    2006 % change   2007    2006 % change
    -------------------------------------------------------------------------
    THE NETWORK
    Revenue ($)               17,739  12,694   39.7%  32,282  22,653   42.5%
    Operating income($)        6,755   4,841   39.5%  11,136   7,445   49.6%

    BANK WEST
    Interest & investment
     income ($)                2,760   1,874   47.3%   5,320   3,416   55.7%
    Net interest & investment
     income ($)                  934     682   37.0%   1,913   1,264   51.3%
    Operating income($)          (42)    (55)  23.6%     246     (21) 1271.4%

    WESTERN LIFE
    Premium income($)          6,402   5,525   15.9%  12,662  10,710   18.2%
    Investment income ($)     (1,157)    717 (261.4%)   (527)  1,343 (139.2%)
    Operating income($)          948     728   30.2%   1,781   1,126   58.2%

    CORPORATE AND ALL OTHER
    Revenue ($)                  901     186  384.4%   1,467     666  120.3%
    Operating income($)       (1,475) (1,847)  20.1%  (3,089) (2,990)   3.3%

    OVERALL
    Revenue ($)               26,645  20,996   26.9%  51,204  38,788   32.0%
    Net Income ($)             4,090   2,379   71.9%   6,635   3,524   88.3%
    Earnings per share
      - basic ($)              $0.08   $0.08    0.0%   $0.14   $0.11   27.3%
      - diluted ($)            $0.07   $0.06   16.7%   $0.12   $0.10   20.0%
    -------------------------------------------------------------------------
    

    "We had a strong first half this year, and I am pleased that we continue
to see our business units and our equity investments perform well ahead of the
same period last year", said Scott Tannas, President and CEO. "Our equity
investments have enjoyed another outstanding quarter, and our Network same
store sales indicator reached a new level of 8.1%."

    WFG Agency Network
    The Network's revenue showed a 42.5% increase, through new acquisitions
and from strong gains in same store sales (up 8.1%).

    Bank West
    The Bank in Q2 grew its loan book by a record amount, up $24.0 million to
$178.1 million at June 30. Specific loan losses for the quarter remain
exceptionally low. The loan approval pipeline remains strong, and the Bank
expects to continue to grow the loan book over the coming quarter.

    Western Life Assurance
    Western Life continues to show strength in premium income and in
operating income with a growth of 15.9% and 30.2% respectively. The decrease
in investment income is a result of adopting the new accounting standards for
financial instruments. With the increase in interest rates in 2007 we saw a
market drop in bonds resulting in a decrease in investment income and a
corresponding decrease in actuarial expense.

    Equity Investments
    Western Financial Group's portfolio of equity partner investments
performed well with Jennings Capital again showing continued strong
performance.

    Conference Call

    Western Financial Group will host a conference call to discuss the
Company's second quarter results on August 17, 2007 at 9:00 am Mountain Time
(11:00 am Eastern time). Participants are asked to call either 800-733-7560 or
416-644-3414 (Toronto). An archived recording of the call will be available
until Friday, August 31, 2007 by calling 1-877-289-8525 or 416-640-1917
(Toronto) with the passcode 21243076 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 a leader in providing insurance, financial
services and banking services in over 80 communities, to more than 400,000
individuals and businesses in Western Canada through its WFG Agency Network
locations, its affiliated insurance brokers, Western Life Assurance Company
and Bank West.
    The Company's Financial Report for the three and six months of 2007 will
be filed on SEDAR on August 13, 2007.

    Forward-looking statements involve numerous assumptions, risks and
uncertainties, including the risk that prediction and other forward-looking
statements may not prove to be accurate. We caution the reader not to place
undue reliance on these disclosures, as a number of important factors could
cause actual results to differ materially from the estimates and comments
expressed in them. Such factors may include, but are not limited to: changing
financial and economic conditions in Canada, particularly in Western Canada;
regulatory developments; competition industry trends and availability of
capital resources; and our anticipated success in managing our risks. We
caution readers that the foregoing list is not exhaustive. Except required by
law, we do not undertake to update any forward-looking statements, written or
oral, that we may make from time to time regarding our operations and
performance.


    
    CONSOLIDATED BALANCE SHEET (unaudited)
    (in thousands, except for per share amounts)
                                                          As at        As at
                                                        June 30  December 31
                                                           2007         2006
    -------------------------------------------------------------------------
    ASSETS

    Cash and cash equivalents                         $  20,378    $   9,085
    Marketable securities                                     -       85,243
    Marketable securities - held-for-trading             41,999            -
    Marketable securities - available-for-sale           30,639            -
    Accounts receivable                                  24,365       23,510
    Prepaid expenses                                      4,675        7,340
    Income taxes receivable                                 314          388
    Future income taxes                                   1,137        1,271
    Deferred charges                                         60          714
    Other assets                                          4,398        2,235
    Equity investments                                   20,976       23,501
    Mortgages and loans                                 179,739      149,051
    Capital assets                                       10,449        8,844
    Intangible assets                                    23,594       14,175
    Goodwill                                             83,855       59,565
    -------------------------------------------------------------------------
                                                        446,578      384,922
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    Accounts payable and accrued liabilities             46,120       35,944
    Actuarial liabilities                                35,718       34,754
    Provision for unpaid and unreported claims            7,653        6,637
    Deferred gain on investments                              -        1,295
    Customer deposits                                   165,933      147,118
    Long-term debt                                       42,982       25,164
    Future income taxes                                   6,146        2,790
    -------------------------------------------------------------------------
                                                        304,552      253,702
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

    Share capital                                       115,081      110,607
    Other paid in capital                                   152          152
    Contributed surplus                                   1,981        1,923
    Retained earnings                                    24,529       18,538
    Accumulated other comprehensive income                  283            -
    -------------------------------------------------------------------------
                                                        142,026      131,220
    -------------------------------------------------------------------------
                                                      $ 446,578    $ 384,922
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS (unaudited)
    FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2007 AND 2006
    (in thousands, except for per share amounts)

                                    Three months ended      Six months ended
                                               June 30               June 30
                                       2007       2006       2007       2006
    Revenue
    Commission and other customer
     income                        $ 17,973   $ 12,891   $ 32,932   $ 23,071
    Premium income                    6,383      5,448     12,631     10,791
    Interest income on customer
     loans                            2,760      1,874      5,320      3,416
    Investment income
      Change in fair value of
       held-for- trading assets      (1,451)         -     (1,496)         -
      Realized loss on sales of
       available-for-sale and
       held-for-trading assets         (162)         -       (162)         -
      Other net investment income     1,142        783      1,979      1,510
    -------------------------------------------------------------------------
                                     26,645     20,996     51,204     38,788
    -------------------------------------------------------------------------

    Expenses
      Operating expenses             16,916     12,800     32,540     24,107
      Policyholder benefits           1,447      3,088      4,856      6,608
      Interest expense -
       customer deposits              1,826      1,192      3,407      2,152
      Provision for credit losses       270        249        327        361
    -------------------------------------------------------------------------
    Income before the following       6,186      3,667     10,074      5,560

      Income from long-term
       investments                      832        643      1,594      1,354
      Interest and financing costs
       on long- term debt              (901)      (729)    (1,427)    (1,474)
      Amortization of intangible
       assets                          (206)       (95)      (410)      (189)
      Amortization of capital assets   (373)      (428)      (753)      (749)
    -------------------------------------------------------------------------
    Income before income taxes        5,538      3,058      9,078      4,502
    Income taxes                     (1,448)      (679)    (2,443)      (978)
    -------------------------------------------------------------------------
    NET INCOME FOR THE PERIOD         4,090      2,379      6,635      3,524
    -------------------------------------------------------------------------

    Retained earnings, beginning of
     period as previously reported   21,383     12,206     18,538     11,061
    Cumulative effect of adopting
     new accounting policies              -          -        300          -
    -------------------------------------------------------------------------
    Retained earnings, beginning
     of period as restated           21,383     12,206     18,838     11,061
    -------------------------------------------------------------------------
      Preferred share dividends        (501)         -       (501)         -
    -------------------------------------------------------------------------
      Common share dividends           (443)         -       (443)         -
    -------------------------------------------------------------------------
    Retained earnings, end of
     period                        $ 24,529   $ 14,585   $ 24,529   $ 14,585
    -------------------------------------------------------------------------

    Earnings per share
    Basic                          $   0.08   $   0.08   $   0.14   $   0.11
    -------------------------------------------------------------------------
    Diluted                        $   0.07   $   0.06   $   0.12   $   0.10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME, AND ACCUMULATED OTHER
    COMPREHENSIVE INCOME (unaudited)
    FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2007 AND 2006
    (in thousands, except for per share amounts)

                                    Three months ended      Six months ended
                                               June 30               June 30
    COMPREHENSIVE INCOME               2007       2006       2007       2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net income for the period      $  4,090   $  2,379   $  6,635   $  3,524
    Other comprehensive loss,
     net of tax                        (264)         -       (413)         -
    -------------------------------------------------------------------------
    Comprehensive income           $  3,826   $  2,379   $  6,222   $  3,524
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                                    Three months ended      Six months ended
                                               June 30               June 30
    ACCUMULATED OTHER
    COMPREHENSIVE INCOME (LOSS)        2007       2006       2007       2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Balance, beginning of
     period                        $    547   $      -   $      -   $      -
    Impact of fair value
     measurement of  available-for-
     sale financial instruments at
     January 1, 2007 (net of tax
     of $168)                             -          -        696          -
                                   ------------------------------------------
    Balance, as a result of
     accounting policy change
     (Note 1)                           547          -        696          -
      Unrealized net loss on
       available-for-sale financial
       securities arising during
       the period (net of tax of $54
       - 3 months; net of tax of
       ($24) - 6 months)               (294)         -       (443)         -
      Reclass to net income on sale
       of available-for-sale
       securities (net of tax of
       ($11))                            30          -         30          -
    -------------------------------------------------------------------------
      Total other comprehensive
       loss                            (264)         -       (413)         -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Balance, end of period         $    283   $      -   $    283   $      -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    %SEDAR: 00007536E




For further information:

For further information: Arlene Beggs, Assistant to the President,
Western Financial Group, (403) 652-2663, info@westernfinancialgroup.net


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890