Laurentian Bank reports second quarter earnings and increases dividend by $0.01 per share

Laurentian Bank reports second quarter earnings and increases dividend by 
$0.01 per share 
Highlights of the second quarter 2013 


    --  Net income of $35.1 million, return on common shareholders'
        equity of 10.3%, and diluted earnings per share of $1.10
    --  Total revenue up 8% year-over-year
    --  Loan losses remain low at $9.0 million and impaired loans
        continue to improve
    --  Continued effective cost control


--  Excluding adjusting items:
  o Adjusted net income of $40.5 million, up 12% year-over-year
  o Adjusted return on common shareholders' equity of 12.1%
  o Adjusted diluted earnings per share of $1.29 
MONTREAL, June 5, 2013 /CNW Telbec/ - Laurentian Bank of Canada reported net 
income of $35.1 million or $1.10 diluted per share for the second quarter 
ended April 30, 2013, compared with $33.9 million or $1.22 diluted per share 
for the second quarter of 2012. Return on common shareholders' equity was 
10.3% for the second quarter of 2013, compared with 12.0% for the same period 
in 2012. Excluding adjusting items(1), net income was up 12% to $40.5 million 
or $1.29 diluted per share for the second quarter of 2013, compared to $36.3 
million or $1.31 diluted per share for the same period in 2012. Adjusted 
return on common shareholders' equity was12.1% for the second quarter of 
2013, compared with 13.0% for the same period in 2012. 
For the six months ended April 30, 2013, net income totalled $69.2 million or 
$2.22 diluted per share, compared with $64.8 million or $2.38 diluted per 
share in 2012. Return on common shareholders' equity was 10.3% for the six 
months ended April 30, 2013, compared with 11.8% for the same period in 2012. 
Excluding adjusting items, net income was up 17% to $81.0 million or $2.63 
diluted per share for the six months ended April 30, 2013, compared with $69.2 
million or $2.56 diluted per share for the same period in 2012. Adjusted 
return on common shareholders' equity was 12.2% for the six months ended April 
30, 2013, compared with 12.7% for the same period in 2012. 
Commenting on the Bank's financial results for the second quarter of 2013, 
Réjean Robitaille, President and Chief Executive Officer, mentioned: "We 
delivered solid revenue and earnings growth and again generated positive 
operating leverage. Our acquisitions and other growth strategies have 
contributed to expanding the Bank's revenue base over the past year, while the 
excellent credit quality of the loan portfolio and disciplined control over 
expenses also yielded good results. In the midst of slowing loan demand and 
compressed margins, we continue to focus on growing the more profitable 
segments of our portfolios and are particularly directing our attention toward 
the integration of our recently acquired businesses." 
Mr. Robitaille concluded: "In this environment, we remain committed to 
enhancing value for our shareholders and we are working diligently to unlock 
the value in each of our business segments. I am therefore pleased to announce 
that the Board of Directors has approved an increase in our quarterly common 
share dividend of $0.01 to $0.50 per share." 


               

(1 ) Certain analyses presented throughout this document are based on
     the Bank's core activities and therefore exclude the effect of
     certain amounts designated as adjusting items. Refer to the
     Adjusting items and Non-GAAP financial measures sections for
     further details.

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. Forward-looking statements 
include, but are not limited to, statements regarding the Bank's business plan 
and financial objectives. The forward-looking statements contained in this 
document are used to assist the Bank's security holders and financial analysts 
in obtaining a better understanding of the Bank's financial position and the 
results of operations as at and for the periods ended on the dates presented 
and may not be appropriate for other purposes. Forward-looking 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 can give 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 
Annual Report under the title "Integrated Risk Management Framework" and other 
public filings available at www.sedar.com.

With respect to the anticipated benefits from the acquisitions of the MRS 
Companies(1) and AGF Trust Company (AGF Trust) and the Bank's statements with 
regards to these transactions being accretive to earnings, such factors also 
include, but are not limited to: the fact that synergies may not be realized 
in the time frame anticipated; the ability to promptly and effectively 
integrate the businesses; reputational risks and the reaction of B2B Bank's or 
MRS Companies' and AGF Trust's customers to the transactions; and diversion of 
management time on acquisition-related issues.

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.
             

(1 ) The MRS Companies include the renamed B2B Bank Financial Services
     Inc., B2B Bank Securities Services Inc. and B2B Bank Intermediary
     Services Inc. (B2B Bank Dealer Services), as well as MRS Trust,
     which was amalgamated with B2B Trust (now B2B Bank) as of
     April 16, 2012.
    Highlights
                         FOR THE THREE MONTHS ENDED                  FOR THE SIX MONTHS ENDED

In thousands of                                                                      
Canadian
dollars, except
per share
and percentage
amounts           APRIL 30       APRIL 30                   APRIL 30       APRIL 30
(Unaudited)           2013           2012      VARIANCE         2013           2012      VARIANCE

Profitability                                                                                    

  Total revenue $  214,850     $  198,670           8 %   $  428,764     $  392,414           9 %

  Net income    $   35,139     $   33,863           4 %   $   69,229     $   64,825           7 %

  Diluted                                                 $              $
  earnings per
  share         $     1.10     $     1.22        (10) %         2.22           2.38         (7) %

  Return on                                                               
  common
  shareholders'
  equity ([1])        10.3 %         12.0 %                     10.3 %         11.8 %            

  Net interest                                                            
  margin ([1])        1.68 %         1.73 %                     1.66 %         1.74 %            

  Efficiency                                                              
  ratio ([1])         74.4 %         74.0 %                     74.9 %         73.9 %            
                                                                                                 

Adjusted
measures                                                                                         

  Adjusted net                                            $              $
  income ([1])  $   40,547     $   36,302          12 %       80,965         69,221          17 %

  Adjusted                                                               $
  diluted
  earnings per
  share ([1])   $     1.29     $     1.31         (2) %         2.63           2.56           3 %

  Adjusted                                                                
  return on
  common
  shareholders'
  equity ([1])        12.1 %         13.0 %                     12.2 %         12.7 %            

  Adjusted                                                                
  efficiency                                                                           
  ratio ([1])         71.5 %         72.4 %                     71.7 %         72.4 %            
                                                                                                 

Per common
share                                                                                            

  Share price                                                                                    
    High        $    45.41     $    47.65                 $    45.97     $    48.68              
    Low         $    42.57     $    43.90                 $    42.57     $    41.12              
    Close       $    44.21     $    44.03     — %   $    44.21     $    44.03     — %

  Price /                                                                 
  earnings
  ratio
  (trailing
  four
  quarters)                                                     9.2x           9.9x              

  Book value (                                                           $
  [1])                                                    $    43.96          41.37           6 %

  Market to                                                                            
  book value                                                     101 %          106 %            

  Dividends                                               $              $
  declared      $     0.49     $     0.45           9 %         0.98           0.90           9 %

  Dividend                                                                             
  yield ([1])         4.43 %         4.09 %                     4.43 %         4.09 %            

  Dividend                                                                
  payout ratio                                                                         
  ([1])               44.5 %         37.0 %                     44.1 %         37.8 %            
                                                                                                 

Financial
position (in
millions of
Canadian
dollars)                                                                                         

  Balance sheet                                           $              $
  assets                                                      34,474         30,708          12 %

  Loans and                                               $              $
  acceptances                                                 27,035         23,121          17 %

  Deposits                                                $   23,809     $   21,061          13 %
                                                                                                 

Basel III
regulatory
capital ratios
- All-in basis
([2])                                                                                            

  Common Equity                                                           
  Tier I                                                         7.6 %         n.a.              

  Tier 1                                                         9.1 %         n.a.              

  Total                                                         12.6 %         n.a.              
                                                                                                 

Other
information                                                                                      

  Number of                                                               
  full-time
  equivalent
  employees                                                    4,254          4,003              

  Number of                                                               
  branches                                                       154            158              

  Number of                                                               
  automated
  banking
  machines                                                       423            426              

[1] Refer to the non-GAAP financial measures section.
[2] As defined in OSFI 2013 Capital Adequacy Requirements Guideline.

Review of Business Highlights

Laurentian Bank's financial services boutiques were recently recognized by the 
Chain Store Age magazine's international Retail Store of the Year 
competition. The concept of financial services boutiques was developed by 
the Bank almost 10 years ago with the aim of improving client experience and 
satisfaction. These boutiques offer customers a warm and user-friendly 
environment and are based on the Bank's core values of proximity, 
accessibility and simplicity. Today, 40 branches deploy this concept, 
contributing to the 95% client satisfaction level.

With the CRM (client relationship management) system well entrenched in Retail 
operations, the Bank is now leveraging this tool. The CRM system was adapted 
to the SME sector and was recently rolled out to SME account managers. With 
this capability, SME clients will be better served and the Bank's strong 
growth in this sector will be perpetuated. The next step will be to further 
adapt the CRM system to the Real Estate and Commercial segment. This tool 
provides the Bank with a competitive advantage, particularly in the Québec 
market.

The mutual fund distribution agreement with Mackenzie Financial Corporation 
entered its second year and continues to be a win/win partnership. The RRSP 
season demonstrated good momentum in mutual fund sales as clients are pleased 
with the fund offering. Year-to-date sales were more than 50% ahead of the 
level attained a year earlier and mutual funds, as at April 30, 2013, totalled 
$2.4 billion, an 18% increase from a year ago.

B2B Bank's focus on MRS has resulted in the integration being almost complete 
and on time and on budget. With B2B Bank having completed a satisfying RRSP 
campaign, achieving its RRSP volume objectives, it will now turn its attention 
to the AGF integration. Activities such as reviewing mortgage processes, 
credit reviews, program analysis and more are underway so as to gradually 
realize the expected synergies.

A hallmark of the client centric approach utilized in the Commercial and Real 
Estate segment relates to turn around time for loan approvals being among the 
best in the industry. A continuous review and streamlining of processes is 
resulting in improved efficiency for the segment and even faster and better 
service for the Bank's clients. This is evidenced by real estate loans and 
acceptances growing sequentially by 4% (excluding the sale of the $94.7 
million real estate portfolio in the second quarter of 2013).

Laurentian Bank Securities' client focus is contributing to its good 
performance with all business lines ahead of last year, despite a very 
challenging environment. Execution remains strong and business development is 
ongoing. In particular, with its good pipeline of investment banking 
transactions, LBS is well positioned to take advantage of a market recovery.

In March of this year, Isabelle Courville assumed her role as Chairwoman of 
the Bank's Board of Directors. Ms. Courville has been a director of the Bank 
since 2007. An engineer and a lawyer by profession, she was, until recently, 
President of Hydro-Québec Distribution. Her extensive knowledge of the Bank, 
combined with her impressive career accomplishments, make her an ideal 
candidate for the Chair's position.

Management's Discussion and Analysis

This Management's Discussion and Analysis (MD&A) is a narrative explanation, 
through the eyes of management, of the Bank's financial condition as at 
April30, 2013, and of how it performed during the three-month and six-month 
periods then ended. This MD&A, dated June 5, 2013, should be read in 
conjunction with the unaudited condensed interim consolidated financial 
statements for the period ended April30, 2013, prepared in accordance with 
IAS34Interim financial reporting, as issued by the International 
Accounting Standards Board (IASB). Supplemental information on risk 
management, critical accounting policies and estimates, and off-balance sheet 
arrangements is also provided in the Bank's 2012 Annual Report.

Additional information about the Laurentian Bank of Canada, including the 
Annual Information Form, is available on the Bank's website 
www.laurentianbank.ca and on SEDAR at www.sedar.com.

Economic Outlook

In North America, the U.S. economic recovery has continued to gain traction, 
but there are still some signs of weakness coming mostly from the labour 
market and the public sector, still deleveraging. Consequently, monetary 
policy should remain highly stimulative. The outlook for Canada remains 
unchanged: the economic recovery has lost momentum and is still expected to 
remain modest owing to a smaller contribution to growth from the public sector 
and a declining housing market. In that respect, the Bank expects the slowdown 
in the housing market to continue throughout 2013 since there are still 
imbalances between supply and demand. However, fundamentals should support 
demand over time and prevent a sharp correction in prices. In addition, the 
transition from economic growth driven by households and governments to growth 
driven by the external sector and private investment could take longer than 
anticipated. Private investment decisions in some key sectors may be delayed 
because of less favourable conditions and falling commodity prices. This 
situation has not put significant downward pressure on the Canadian dollar 
which remains elevated and contributes to preventing exports from edging 
higher. That said, the Bank has slightly revised downwards its forecasts and 
now expects real GDP to grow only by 1.5% in 2013 and 2.2% in 2014.

All in all, in the current environment, interest rates will remain lower for 
longer. With inflation expected to reach the 2% target only by mid-2015, the 
Bank anticipates the overnight target rate to remain on hold until at least 
the end of 2014. By that point, economic growth should have re-accelerated and 
"some modest withdrawal of monetary stimulus" would become more appropriate.

2013 Financial Objectives

The following table presents management's financial objectives for 2013 and 
the Bank's performance to date. These financial objectives are based on the 
assumptions noted on page 37 of the Bank's 2012 Annual Report under the title 
"Key assumptions supporting the Bank's objectives" and exclude adjusting 
items(1).

2013 FINANCIAL OBJECTIVES                   
([1])                                                                  
                                                                       
                                             FOR THE SIX MONTHS ENDED
                           2013 OBJECTIVES             APRIL 30, 2013  
                                                                       

Revenue growth                        > 5%                          9 %

Adjusted efficiency ratio                   
([1])                       72.5% to 69.5%                       71.7 %

Adjusted net income (in                     
millions of dollars) (
[1])                      $145.0 to $165.0                      $81.0  

Adjusted return on common                   
shareholders' equity(
[1])                        10.5% to 12.5%                       12.2 %

Common Equity Tier I                        
capital ratio - All-in
basis                               > 7.0%                        7.6 %

[1] Refer to the non-GAAP financial measures section.

Based on the results for the six months ended April 30, 2013 and current 
forecasts, management believes that the Bank is in line to meet its objectives 
as set out at the beginning of the year. Strong revenue growth stemming mainly 
from the AGF Trust acquisition, combined with a disciplined control of 
expenses and continued excellent credit quality have contributed to the 
overall good performance.

Analysis of Consolidated Results

CONSOLIDATED
RESULTS                                                                    
                                                       FOR THE SIX MONTHS
                    FOR THE THREE MONTHS ENDED               ENDED

In thousands
of Canadian
dollars,
except per
share
amounts        APRIL 30   JANUARY 31     APRIL 30     APRIL 30    APRIL 30
(Unaudited)        2013         2013         2012         2013        2012
                                                                          

Net interest                                                      
income       $  140,430   $  142,344   $  128,324   $  282,774   $ 258,953

Other income     74,420       71,570       70,346      145,990     133,461

Total
revenue         214,850      213,914      198,670      428,764     392,414

Gain on
acquisition
and
amortization
of net
premium on
purchased
financial
instruments     (1,224)      (1,056)      —      (2,280)     —

Provision
for loan
losses            9,000        8,000        7,500       17,000      17,500

Non-interest
expenses        159,853      161,314      147,111      321,167     290,131

Income
before
income taxes     44,773       43,544       44,059       88,317      84,783

Income taxes      9,634        9,454       10,196       19,088      19,958


                                                            
Net income   $   35,139   $   34,090   $   33,863   $   69,229   $  64,825 
Preferred
share
dividends,
including
applicable
taxes             4,059        2,533        3,165        6,592       6,331 
Net income
available to
common                                                          
shareholders $   31,080   $   31,557   $   30,698   $   62,637   $  58,494 
Earnings per
share                                                                      
Basic      $     1.10   $     1.12   $     1.22   $     2.22   $    2.38 
Diluted    $     1.10   $     1.12   $     1.22   $     2.22   $    2.38 
Adjusting items 
The Bank has designated certain amounts as adjusting items and has adjusted 
GAAP results to facilitate understanding of its underlying business 
performance and related trends. Adjusting items are included in the B2B Bank 
business segment's results. The Bank assesses performance on a GAAP basis and 
on an adjusted basis and considers both to be useful to investors and analysts 
in obtaining a better understanding of the Bank's financial results and 
analyzing its growth and profit potential more effectively. Adjusted results 
and measures are non-GAAP measures. Comments on the uses and limitations of 
such measures are disclosed in the Non-GAAP Financial Measures section.   
IMPACT OF
ADJUSTING
ITEMS, NET OF
INCOME TAXES                                                                     
                    FOR THE THREE MONTHS ENDED          FOR THE SIX MONTHS 
                                                               ENDED 
In thousands
of Canadian
dollars,
except per
share amounts    APRIL 30     JANUARY 31     APRIL 30     APRIL 30     APRIL 30
(Unaudited)          2013           2013         2012         2013         2012 
                                                                            
Impact on net
income                                                                          
Reported net   $   35,139   $     34,090   $   33,863   $   69,229   $   64,825
income 
Adjusting
items, net of
income taxes (
[1])                                                                            
Gain on
acquisition
and
amortization
of net premium
on purchased
financial
instruments                                                                     
Amortization
  of net
  premium on
  purchased
  financial 
  instruments         902            778      —        1,680      — 
Costs related
to business
combinations
and other (
[2])                                                                            
MRS
  Companies
  transaction
  and
  integration
  related
  costs             1,332          4,318        2,439        5,650        4,396 
AGF Trust
  transaction
  and
  integration
  related
  costs             3,174          1,232      —        4,406      — 
                5,408          6,328        2,439       11,736        4,396 
Adjusted net
income ([1])   $   40,547   $     40,418   $   36,302   $   80,965   $   69,221 
                                                                            
Impact on
diluted
earnings per
share                                                                           
Reported
diluted
earnings per
share          $     1.10   $       1.12   $     1.22   $     2.22   $     2.38 
Adjusting
items ([1])          0.19           0.22         0.10         0.42         0.18 
Adjusted
diluted
earnings per
share ([1]
[3])           $     1.29   $       1.34   $     1.31   $     2.63   $     2.56 
[1] Refer to the Non-GAAP Financial Measures section.
[2] Also referred to as Transaction and Integration Costs (T&I Costs).
[3] The impact of adjusting items on a per share basis does not add due to
rounding for the quarter ended April 30, 2012 and for the six months ended
April 30, 2013. 
Three months ended April 30, 2013 compared to three months ended April 30, 2012 
Net income was $35.1 million, or $1.10 diluted per share, for the second 
quarter of 2013, compared with $33.9 million, or $1.22diluted per share, for 
the second quarter of 2012. 
Adjusted net income was up 12% year-over-year to $40.5 million for the second 
quarter ended April 30, 2013, compared with $36.3 million in 2012, while 
adjusted diluted net income per share was $1.29, compared to $1.31 diluted per 
share, in 2012. The calculation of diluted net income per share in the second 
quarter of 2013 includes a full second quarter dividend of $1.0 million 
related to the recently issued Series 11 preferred shares, as well as the 
regular dividend on Series 10 preferred shares and a final dividend on the 
Series 9 preferred shares redeemed in March. 
Total revenue 
Total revenue increased by $16.2 million or 8% to $214.9 million in the second 
quarter of 2013, compared with $198.7 million in the second quarter of 2012. 
The contribution from AGF Trust to total revenue amounted to $18.8 million for 
the second quarter of 2013, including $18.3 million reported in the B2B Bank 
business segment results and $0.5 million related to treasury activities 
presented in the Other business segment's results. 
Net interest income was up 9% to $140.4 million for the second quarter of 
2013, from $128.3 million in the second quarter of 2012, essentially 
reflecting loan and deposit growth year-over-year, mainly from the purchased 
portfolios of AGF Trust, partly offset by lower margins. When compared to the 
second quarter of 2012, margins decreased by 5 basis points to 1.68% for the 
second quarter of 2013 and continued to be adversely impacted by the very low 
interest rate environment. Overall margin compression was muted by the 
maturing of high-coupon securitization liabilities, as well as the 
higher-yielding loans in the AGF Trust portfolios. 
Other income totalled $74.4 million in the second quarter of 2013, compared to 
$70.3 million in the second quarter of 2012, a$4.1million or 6% increase 
reflecting improvements across most revenue streams. Higher fees and 
commissions on loans and deposits due to increased card service activity and 
fees, higher income from mutual funds reflecting new sales and improved 
financial markets, as well as better credit insurance income mainly 
contributed to the increase year-over-year. In addition, during the second 
quarter of 2013, consistent with its syndication strategy, the Bank completed 
the sale of $94.7 million of commercial mortgage loans which led to the 
recognition of a $3.7 million gain in other income, including $3.1 million 
reported in the Real Estate & Commercial business segment results and $0.6 
million related to treasury activities presented in the Other business 
segment's results. In a similar transaction, a $3.1 million gain on sale of a 
$77.0 million commercial mortgage portfolio was recorded during the second 
quarter of 2012. These increases were partly offset by lower income from 
treasury and financial market operations, mainly due to lower net security 
gains. 
Gain on acquisition and amortization of net premium on purchased financial 
instruments 
For the second quarter of 2013, the charge related to the amortization of net 
premium on purchased financial instruments, presented on the line-item "Gain 
on acquisition and amortization of net premium on purchased financial 
instruments", amounted to $1.2 million. Refer to Note 12 to the unaudited 
condensed interim financial statements for additional information on this item. 
Provision for loan losses 
The provision for loan losses increased by $1.5 million to $9.0 million in the 
second quarter of 2013 from $7.5 million in the second quarter of 2012. This 
remains a very low level, considering the additional charge of $2.5 million 
related to the AGF Trust loan portfolios. The overall level of losses reflects 
stable employment and business conditions in Canada and the underlying quality 
of the Bank's loan portfolios. 
Non-interest expenses 
Non-interest expenses increased by $12.7 million to $159.9 million for the 
second quarter of 2013, compared to $147.1 million for the second quarter of 
2012. This resulted from the addition of current operating expenses of $7.8 
million related to AGF Trust and higher T&ICosts, as detailed below. 
Otherwise, the Bank's comparable non-interest expenses were up only 1% over 
the same period. 
Salaries and employee benefits increased by $5.9 million or 7% to $85.2 
million for the second quarter of 2013, compared to the second quarter of 
2012. A $4.6 million portion of the increase was due to the additional 
headcount resulting from the acquisition of AGF Trust. Regular salary 
increases, higher performance-based compensation, as well as higher pension 
costs, partly offset by lower other employee benefits costs, also impacted 
costs for the quarter. 
Premises and technology costs increased by $4.6 million or 12% to $42.6 
million compared to the second quarter of 2012, mostly stemming from higher 
rental costs related to additional square footage of leased premises for IT 
teams as well as higher IT costs and amortization expense related to completed 
IT development projects. As well, additional rental and IT costs totalling 
$1.7million resulted from the acquisition of AGF Trust. 
Other non-interest expenses decreased by $0.6 million to $25.9 million for the 
second quarter of 2013, from $26.5 million for the second quarter of 2012. The 
decrease is mainly attributable to favourable adjustments to sales taxes 
recorded in the second quarter of 2013, as well as the Bank's continued cost 
control efforts. The decrease was partly offset by $1.6 million of other 
non-interest expenses that AGF Trust incurred in the second quarter of 2013. 
T&I Costs for the second quarter of 2013 totalled $6.1 million and mainly 
related to salary, professional fees and other expenses for the integration of 
AGF Trust of $4.3 million, including a $1.9 million charge related to an 
ongoing project to relocate all B2BBank's employees in a single location. 
T&I Costs also included professional fees, salaries, IT systems conversions 
costs and other expenses for the integration of the MRS Companies. With 
regards to the MRS Companies, the integration process is progressing according 
to plan and overall budget. With only a few steps of the MRS Companies 
integration yet to be completed, B2BBank has now turned to the execution of 
its integration plans for AGF Trust, which should be ongoing over the next 
four quarters. 
The adjusted efficiency ratio was 71.5% in the second quarter of 2013, 
compared to 72.4% in the second quarter of 2012. On the same adjusted basis, 
at 1.2% year-over-year, operating leverage was again slightly positive for the 
second consecutive quarter, mainly due to the addition of AGF Trust, higher 
other income and the Bank's continued cost control initiatives. 
Income taxes 
For the quarter ended April 30, 2013, the income tax expense was $9.6 million 
and the effective tax rate was 21.5%. The lower tax rate, compared to the 
statutory rate, mainly resulted from the favourable effect of holding 
investments in Canadian securities that generate non-taxable dividend income 
and the lower taxation level on revenues from foreign insurance operations. 
For the quarter ended April 30, 2012, the income tax expense was $10.2 million 
and the effective tax rate was23.1%. Year-over-year, the lower income tax 
rate for the second quarter ended April 30, 2013 results from the higher level 
of revenues from foreign insurance operations. 
Six months ended April 30, 2013 compared to six months ended April 30, 2012 
Net income was $69.2 million, or $2.22 diluted per share, for the six months 
ended April 30, 2013, compared with $64.8 million, or $2.38 diluted per share, 
in 2012. 
Adjusted net income was up 17% year-over-year to $81.0 million for the six 
months ended April 30, 2013, compared with $69.2million in 2012, while 
adjusted diluted net income per share was up 3% to $2.63, compared to $2.56 
diluted per share, in 2012. The calculation of diluted net income per share 
for the six months ended April 30, 2013 includes a $6.6 million dividend 
charge related to preferred shares Series 9 and 10, as well as to the recently 
issued preferred shares Series 11, net of a one-time $1.1million favourable 
adjustment to reflect changes in taxation. 
Total revenue 
Total revenue increased $36.4 million or 9% to $428.8 million for the six 
months ended April 30, 2013, compared with $392.4million for the six months 
ended April 30, 2012. The contribution from AGF Trust to total revenue 
amounted to $38.6 million for the six months ended April 30, 2013, including 
$37.4million reported in the B2B Bank business segment results and 
$1.2million related to treasury activities included in the Other business 
segment's results. 
Net interest income increased 9% to $282.8 million for the six months ended 
April 30, 2013, compared with $259.0 million for the same period in 2012, and 
is mainly explained by strong loan and deposit volume growth year-over-year 
from the purchased AGFTrust portfolios, which more than offset the effect of 
a decrease in net interest margin of 8 basis points over the same period. As 
noted above, the compression in net interest margin mainly resulted from the 
very low interest rate environment. 
Other income was $146.0 million for the six months ended April 30, 2013, 
compared to $133.5 million for the same period in 2012, a 9% year-over-year 
increase stemming from improvements in most revenue streams, as noted above. 
In addition, mainly during the first quarter, income from brokerage operations 
increased by $3.1 million as the Bank capitalized on growth opportunities in 
the fixed income market and benefited from stronger equity markets compared to 
a year ago. Also, income from investment accounts added $1.3 million to the 
increase over the same period, mainly as a result of a full six-month 
contribution from B2BBank Dealer Services in 2013. Finally, as noted above, 
the Bank recognized a $3.7million gain on sale of a commercial mortgage 
portfolio during the second quarter of 2013, compared to a $3.1 million gain 
in the second quarter of 2012. 
Gain on acquisition and amortization of net premium on purchased financial 
instruments 
For the six months ended April 30, 2013, the charge related to the 
amortization of net premium on purchased financial instruments, presented on 
the line-item "Gain on acquisition and amortization of net premium on 
purchased financial instruments", amounted to $2.3 million. Refer to Note 12 
to the unaudited condensed interim financial statements for additional 
information on this item. 
Provision for loan losses 
The provision for loan losses amounted to $17.0 million for the six months 
ended April 30, 2013, a decrease of $0.5 million or 3% from $17.5 million for 
the six months ended April 30, 2012, despite a 17% increase in the loan 
portfolio stemming mainly from the AGF Trust acquisition. Provisions for the 
six months ended April 30, 2013 included a $5.8million charge related to the 
AGF Trust loan portfolios. This reflects the continued excellent credit 
conditions in the Canadian market and the quality of the Bank's loan 
portfolios. In addition, favourable settlements and overall improvements led 
to a net credit of $1.9million in loan losses in the commercial loan 
portfolio for the six months ended April 30, 2013. 
Non-interest expenses 
Non-interest expenses totalled $321.2 million for the six months ended April 
30, 2013, compared to $290.1 million for the six months ended April 30, 2012. 
Excluding current operating expenses related to AGF Trust of $16.8million 
and T&I Costs of $13.7million, non-interest expenses decreased by $6.5 
million or 2%. 
Salaries and employee benefits increased by $18.3 million or 12% to $174.6 
million compared to the six months ended April 30, 2012, mainly due to 
increased headcount from the acquisition of AGF Trust, as well as to regular 
salary increases, higher performance-based compensation and pension costs. 
These were partly offset by lower employee benefits costs and by savings from 
restructurings in 2012. 
Premises and technology costs increased by $6.3 million compared to the six 
months ended April 30, 2012, mainly stemming from rental and IT costs 
resulting from the acquisition of AGF Trust. Higher IT costs related to 
ongoing business growth and amortization expense related to completed IT 
development projects also contributed to the increase. 
Other non-interest expenses decreased by $1.3 million to $51.4 million for the 
six months ended April 30, 2013, from $52.6 million for the same period of 
2012. The decrease is mainly attributable to expenses incurred in the early 
stage of the acquisition of the MRS Companies prior to their integration 
within B2B Bank in 2012, as well as to favourable adjustments to sales taxes 
for the six months ended April 30, 2013, compared to a year ago. These were 
partly offset by other non-interest expenses of AGF Trust for the six months 
ended April 30, 2013. 
T&I Costs for the six months ended April 30, 2013 totalled $13.7 million of 
which $7.7 million related to IT, legal and communication expenses for the 
integration of the MRS Companies and $6.0 million for salary, professional 
fees and other expenses for the integration of AGF Trust. 
The adjusted efficiency ratio was 71.7% for the six months ended April 30, 
2013, compared to 72.4% for the six months ended April 30, 2012. On the same 
adjusted basis, operating leverage was slightly positive year-over-year, as 
the addition of AGF Trust and continued cost control measures aimed at slowing 
expense growth combined with higher other income more than compensated for the 
impact of compressing margins. 
Income taxes 
For the six months ended April 30, 2013, the income tax expense was $19.1 
million and the effective tax rate was 21.6%. The lower tax rate, compared to 
the statutory rate, mainly resulted from the favourable effect of holding 
investments in Canadian securities that generate non-taxable dividend income 
and the lower taxation level on revenues from foreign insurance operations. 
For the six months ended April 30, 2012, the income tax expense was $20.0 
million and the effective tax rate was 23.5%. Year-over-year, as noted above, 
the lower income tax rate for the six months ended April 30, 2013 reflects the 
higher level of revenues from foreign insurance operations, as well as 
miscellaneous tax recoveries. 
Three months ended April 30, 2013 compared to three months ended January 31, 
2013 
Net income was $35.1 million or $1.10 diluted per share for the second quarter 
of 2013 compared with $34.1 million or $1.12diluted per share for the first 
quarter of 2013. 
Adjusted net income was $40.5 million, or $1.29 diluted per share, compared to 
$40.4million or $1.34 diluted per share for the first quarter ended January 
31, 2013. The calculation of diluted net income per share for the first 
quarter of 2013 included a one-time $1.1 million favourable adjustment to 
preferred share dividends to reflect changes in taxation, and only a partial 
dividend on the recently issued Series 11 preferred shares. 
Total revenue increased slightly to $214.9 million in the second quarter of 
2013, compared to $213.9 million in the previous quarter. Net interest income 
decreased by $1.9 million sequentially to $140.4million in the second 
quarter, mainly as a result of the three fewer days in the second quarter. Net 
interest margins increased sequentially by 5 basis points from 1.63% in the 
first quarter of 2013 to 1.68% in the second quarter of 2013. This resulted 
mainly from the maturing, halfway through the first quarter, of a high-coupon 
securitization liability and lower levels of lower-yielding securities. These 
items compensated for the lower sequential margins on loans and deposits 
related to the ongoing very low interest rate environment. 
Other income increased by $2.9 million sequentially, largely due to a $3.7 
million gain on sale of a $94.7 million commercial mortgage loan portfolio 
during the second quarter, as well as higher credit insurance income resulting 
from a lower level of claims, partly offset by lower income from brokerage 
operations after a strong first quarter. 
The charge related to amortization of net premium on purchased financial 
instruments, presented on the "Gain on acquisition and amortization of net 
premium on purchased financial instruments" line-item, amounted to $1.2 
million in the second quarter of 2013, compared to a $1.1 million charge for 
the last quarter. Refer to Note 12 to the unaudited condensed interim 
financial statements for additional information on this item. 
The provision for loan losses remained low at $9.0 million for the second 
quarter of 2013, compared to $8.0 million for the first quarter of 2013, 
reflecting the continued excellent quality of the portfolio. In the first 
quarter of 2013, the Bank had benefited from a $2.0 million favourable 
settlement on a single commercial loan exposure while there was no single 
significant settlement during the second quarter. 
Non-interest expenses amounted to $159.9 million for the second quarter of 
2013, compared to $161.3 million for the first quarter of 2013. Excluding T&I 
Costs of $6.1 million in the second quarter of 2013 and of $7.6 million in the 
first quarter of 2013, non-interest expenses were essentially unchanged 
sequentially, as the Bank continued to apply tight cost control measures. 
Financial condition 
CONDENSED BALANCE
SHEET                                                                
In thousands of                             AS AT
Canadian dollars    AS AT APRIL 30     OCTOBER 31     AS AT APRIL 30
(Unaudited)                   2013           2012               2012 


                                                                    

ASSETS                                                              

  Cash and
  deposits with
  other banks     $        317,013   $    571,043   $        696,280

  Securities             5,756,762      6,142,961          5,294,610

  Securities
  purchased under
  reverse
  repurchase
  agreements               545,974        631,202            978,063

  Loans and
  acceptances,
  net                   26,920,674     26,663,337         22,982,601

  Other assets             933,172        928,283            756,920
                  $     34,473,595   $ 34,936,826   $     30,708,474
                                                                    

LIABILITIES AND
SHAREHOLDERS'
EQUITY                                                              

  Deposits        $     23,808,825   $ 24,041,443   $     21,060,754

  Other
  liabilities            3,265,478      2,873,563          3,075,005

  Debt related to
  securitization
  activities             5,473,470      6,037,097          5,051,652

  Subordinated
  debt                     444,469        443,594            243,426

  Shareholders'
  equity                 1,481,353      1,541,129          1,277,637
                  $     34,473,595   $ 34,936,826   $     30,708,474

Balance sheet assets stood at $34.5 billion at April30, 2013, down $0.5 
billion from year-end2012. Over the last twelve months, balance sheet assets 
increased by $3.8 billion or 12%, mainly due to the acquisition of AGF Trust.

Liquid assets

Liquid assets, including cash, deposits with other banks, securities and 
securities purchased under reverse repurchase agreements, totalled $6.6 
billion at April30, 2013, a $0.7 billion decrease compared to October31, 
2012. This decrease is mainly due to the replacement assets used to reimburse 
$0.8 billion of matured debt related to securitization activities during the 
first quarter 2013. Liquid assets as a percentage of total assets decreased 
marginally to 19% from 21% as at October31, 2012. The Bank continues to 
prudently manage its liquidity levels and maintains sufficient cash resources 
in order to meet its current and future financial obligations, under both 
normal and stressed conditions.

Loans

Net loans and bankers' acceptances stood at $26.9 billion as at April30, 
2013, a $0.3 billion increase compared to October31, 2012. Residential 
mortgage loans increased by $330.2 million or 2% over the same period, 
reflecting a modest slowing in mortgage loan demand in a cooling housing 
market. Commercial loans, including bankers' acceptances, increased by $133.9 
million or 6% from October31, 2012 as the Bank capitalized on increased 
demand from its business clients. Commercial mortgage loans were relatively 
unchanged, as growth of $85.6 million was more than offset by a loan sale of 
$94.7 million during the second quarter. Personal loans decreased by $200.8 
million or 3% since October31, 2012, mainly due to attrition in the acquired 
AGF Trust portfolios and more modest consumer loan demand.

Deposits

Personal deposits stood at $19.5 billion as at April30, 2013, relatively 
unchanged from October31, 2012. Business and other deposits, which include 
institutional deposits, were down $0.4 billion since October31, 2012 to $4.3 
billion as at April30, 2013, as the Bank reduced the level of high-priced 
wholesale deposits as part of its funding management.

The Bank continues to actively manage its liquidity levels and to maintain 
diversified funding sources. It focuses its efforts on retail deposit 
gathering through its Retail & SME-Québec and B2BBank business segments, 
which represented 82% of total deposits as at April30, 2013. This solid 
funding base is a valuable asset in light of future regulatory liquidity 
requirements.

Other Liabilities

Debt related to securitization activities stood at $5.5 billion as at 
April30, 2013, a net $0.6 billion decrease since the beginning of the year 
considering the maturity of two issuances. During the six months ended April 
30, 2013, the Bank also securitized $493.7 million of residential mortgage 
loans, of which $301.3 million was sold as part of a new Canada Mortgage Bond 
issuance and $192.4 million was sold as Replacement Assets. Subordinated debt 
stood at $444.5 million as at April30, 2013, relatively unchanged from 
October31, 2012.

Shareholders' equity

Shareholders' equity stood at $1,481.4 million as at April30, 2013, compared 
with $1,541.1 million as at October31, 2012. This decrease mainly resulted 
from the repurchase on March 15, 2013 of the Class A Preferred Shares, 
Series9, at par for $100million, partly offset by internal capital 
generation as well as from the issuance of 213,957 new common shares under the 
Shareholder Dividend Reinvestment and Share Purchase Plan. The Bank's book 
value per common share, excluding accumulated other comprehensive income, 
appreciated to $43.96 as at April30, 2013 from $42.81 as at October31, 
2012. There were 28,351,668 common shares and 30,000 share purchase options 
outstanding as at May 29, 2013.

Capital Management

New regulatory capital requirements

In December 2012, the Office of the Superintendent of Financial Institutions 
Canada (OSFI) issued the final revised version of the Capital Adequacy 
Requirements Guideline (the Guideline) drawn on the Basel Committee on Banking 
Supervision (BCBS) capital guidelines, commonly referred to as Basel III. 
These new requirements took effect in January 2013 and generally provide more 
stringent capital adequacy standards. Institutions are expected to meet 
minimum risk-based capital requirements for exposure to credit risk, 
operational risk and, where they have significant trading activity, market 
risk.

Under the Guideline, minimum Common Equity Tier 1, Tier 1 and Total capital 
ratios were set at 3.5%, 4.5% and 8.0% respectively for 2013. These ratios 
include phase-in of certain regulatory adjustments between 2013 and 2019 and 
phase-out of non-qualifying capital instruments between 2013 and 2022 (the 
"transitional" basis). Starting in 2014, the Guideline also provides for 
annual increases in minimum capital ratio requirements, which will reach 7.0%, 
8.5% and 10.5% in 2019, including the effect of capital conservation buffers.

In its Guideline, OSFI indicated that it expects deposit-taking institutions 
to attain target capital ratios without transition arrangements equal to or 
greater than the 2019 minimum capital ratios plus conservation buffer levels 
(the "all-in" basis) early in the transition period, including a minimum 7.0% 
Common Equity Tier 1 ratio target by the first quarter of 2013. Furthermore, 
certain banks in Canada have been designated by OSFI as Domestic Systemically 
Important Banks (or D-SIBs). Under this designation, these banks will be asked 
to hold a further 1% of Tier 1 Common Equity by January 1, 2016. Laurentian 
Bank, however, has not been so designated. The "all-in" basis includes all of 
the regulatory adjustments that will be required by 2019 but retains the 
phase-out rules for non-qualifying capital instruments. OSFI also requires 
that Canadian deposit-taking financial institutions maintain an Asset to 
Capital Multiple.

The Guideline provides additional guidance regarding the treatment of 
non-qualifying capital instruments and specifies that certain capital 
instruments no longer qualify fully as capital as of January 1, 2013. The 
Bank's non-common capital instruments are considered non-qualifying capital 
instruments under Basel III and are therefore subject to a 10% phase-out per 
year beginning in 2013. These non-common capital instruments include Series 9, 
10 and 11 preferred shares, as well as Series 2010-1 and 2012-1 subordinated 
Medium Term Notes. The Bank redeemed at par on March 15, 2013 the Series9 
preferred shares which were non-qualifying instruments under Basel III.

As detailed in the table below, on an "all-in" basis, the Common Equity Tier 
1, Tier 1 and Total capital ratios stood at 7.6%, 9.1% and 12.6%, 
respectively, as at April30, 2013. These ratios meet all present minimum 
requirements.

REGULATORY
CAPITAL                                                              
                  Basel III (
                     [1])                       Basel II ([2])       

In thousands of
Canadian
dollars, except
percentage              AS AT            AS AT
amounts              APRIL 30       OCTOBER 31       AS AT APRIL 30
(Unaudited)              2013             2012                 2012  
                                                                     

Regulatory
capital                                                              

  Common Equity
  Tier 1
  capital (A)   $   1,018,515             n.a.                 n.a.  

  Tier 1
  capital (B)   $   1,223,661     $  1,460,253     $      1,245,326  

  Total capital
  (C)           $   1,698,448     $  1,974,060     $      1,543,140  
                                                                     

Total
risk-weighted
assets (D)      $  13,428,594     $ 13,436,433     $     11,935,860  
                                                                     

Regulatory
capital ratios                                                       

  Common Equity
  Tier 1
  capital ratio
  (A/D)                   7.6 %           n.a.                 n.a.  

  Tier 1
  capital ratio
  (B/D)                   9.1 %           10.9 %               10.4 %

  Total capital
  ratio (C/D)            12.6 %           14.7 %               12.9 %

[1] The amounts are presented on an "all-in" basis.
[2] The amounts are presented in accordance with Basel II as filed
with OSFI.

The Common Equity Tier 1 capital ratio increased by approximately ten basis 
points from 7.5% as at January 31, 2013 to 7.6% as at April 30, 2013. The 
improvement is mainly explained by internal capital generation during the 
quarter which increased total equity, while total risk-weighted assets 
remained unchanged.

The Bank uses the Standardized Approach in determining credit risk capital and 
to account for operational risk. In 2012, the Bank initiated the process to 
adopt the advanced internal ratings-based (AIRB) approach to determine credit 
risk capital under Basel II. Currently, the Bank's capital requirements for 
credit risk under the Standardized Approach are not calculated on the same 
basis as its industry peers, as larger Canadian financial institutions 
predominantly use the more favourable AIRB approach. The Bank's adoption of 
the AIRB approach should strengthen its credit risk management, improve 
comparability, optimize regulatory capital and provide a level-playing field 
for credit underwriting activities.

Proposal for new liquidity regulatory measures

In December 2009, the BCBS published proposals on new liquidity requirements, 
which introduced new global liquidity standards. The BCBS liquidity guidelines 
include minimum requirements for two regulatory measures, the Liquidity 
Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR), which are scheduled 
for implementation in January 2015 and January 2018, respectively. The LCR 
establishes a common measure of liquidity risk and requires institutions to 
maintain sufficient liquid assets to cover a minimum of 30 days of cash flow 
requirements in a stressed situation. The NSFR describes a second common 
measure of liquidity establishing a minimum acceptable amount of stable 
funding based on the liquidity characteristics of a financial institution's 
assets and activities over a one-year horizon. Updates were also published in 
December 2010 and January 2013, providing additional information. At this 
stage, it is still too early to determine their definitive impact on liquidity 
requirements, considering some aspects of the proposals are yet to be 
finalized at both the international (BCBS) and national (OSFI) levels and may 
further change between now and when the final rules take effect. Nevertheless, 
the Bank is in the process of assessing differences between the current 
liquidity requirements and its liquidity data and reporting systems.

Dividends

On May 22, 2013, the Board of Directors declared regular dividends on the 
various series of preferred shares to shareholders of record on June 7, 2013. 
At its meeting on June 5, 2013, given the Bank's solid balance sheet and 
capital position as well as its confidence in the Bank's strategies going 
forward, the Board of Directors approved an increase of $0.01 per share, or 
2%, to the quarterly dividend and declared a dividend of $0.50 per common 
share, payable on August 1, 2013, to shareholders of record on July 2, 2013.

COMMON
SHARE
DIVIDENDS
AND PAYOUT
RATIO                                                                                                                   
                                                                                                                            
                                                               FOR THE SIX
                        FOR THE THREE MONTHS ENDED         MONTHS ENDED                        FOR THE YEARS ENDED

In Canadian
dollars,
except
payout
ratios        APRIL 30       JANUARY 31       APRIL 30       APRIL 30       OCTOBER 31       OCTOBER 31       OCTOBER 
31
(Unaudited)       2013             2013           2012           2013             2012             2011             
2010  
                                                                                                                        


Dividends
declared
per
common
share       $     0.49     $       0.49     $     0.45     $     0.98     $       1.84     $       1.62     $       
1.44   
Dividend
payout
ratio ([1]
[2])              44.5 %           43.7 %         37.0 %         44.1 %           37.0 %           34.8 %           
31.1 % 
[1] Refer to the Non-GAAP Financial Measures section.
[2] The ratio for 2010 is presented in accordance with previous Canadian GAAP. 
Risk Management 
The Bank is exposed to various types of risks owing to the nature of its 
activities. These risks are mainly related to the use of financial 
instruments. In order to manage these risks, controls such as risk management 
policies and various risk limits have been implemented. These measures aim to 
optimize the risk/return ratio in all operating segments. For additional 
information regarding the Bank's Integrated Risk Management Framework, please 
refer to the 2012 Annual Report. 
Credit risk 
The following sections provide further details on the credit quality of the 
Bank's loan portfolios. 
PROVISION FOR LOAN                                                             
LOSSES 
                   FOR THE THREE MONTHS ENDED      FOR THE SIX MONTHS ENDED 
In thousands   APRIL 30     JANUARY 31      APRIL 30     APRIL 30      APRIL 30
of Canadian         2013          2013          2012          2013         2012
dollars,
except
percentage
amounts
(Unaudited) 
                                                                            
Provision for                                                                  
loan losses 
Personal     $ 7,455     $   8,058     $   5,856     $  15,513     $ 12,045  
  loans 
Residential      872         1,407           498         2,279          782  
  mortgage
  loans 
Commercial        48         1,101         2,555         1,149        3,443  
  mortgage
  loans 
Commercial       625       (2,566)       (1,409)       (1,941)        1,230  
  and other
  loans
  (including
  acceptances) 
           $ 9,000     $   8,000     $   7,500     $  17,000     $ 17,500   
As a % of         0.14 %        0.12 %        0.13 %        0.13 %       0.16 %
average loans
and
acceptances 
The provision for loan losses amounted to $9.0 million in the second quarter 
of 2013, an increase of $1.0 million from the first quarter of 2013 and of 
$1.5 million compared to a year ago, albeit remaining at a very low level. 
This overall level of loan losses reflects the excellent credit quality of the 
Bank's loan portfolios and prolonged favourable credit conditions in the 
Canadian market. 
The year-over-year increase of $1.6 million in loan losses on personal loans 
includes losses on the AGF Trust loan portfolios, partly offset by 
improvements in B2B Bank's collateralized investment loan portfolio. The 
provision on residential mortgage loans also increased by $0.4 million 
compared to the second quarter of 2012, consistent with the higher loan volume. 
Loan losses on commercial mortgages and commercial loans remained at a very 
low level during the second quarter of 2013, but increased by a combined $2.1 
million sequentially. The Bank had benefitted from a $2.0 million favourable 
settlement on a single commercial loan exposure in the first quarter of 2013. 
The prolonged low level of loan losses continues to reflect the very strong 
credit quality of this portfolio. 
IMPAIRED LOANS                                                          
In thousands of Canadian
dollars, except
percentage amounts       AS AT APRIL 30 AS AT OCTOBER 31 AS AT APRIL 30
(Unaudited)                        2013             2012           2012 


                                                                       

Gross impaired loans                                                   

  Personal               $   21,243     $   16,863       $   15,926    

  Residential mortgages      21,972         21,971           14,717    

  Commercial mortgages       32,251         36,672           60,394    

  Commercial and other       42,200         52,517           56,284    
  (including
  acceptances)
                         $  117,666     $  128,023       $  147,321    
                                                                       

Allowances for loan                                                    
losses against impaired
loans

  Individual allowances  $ (39,487)     $ (47,849)       $ (67,003)    

  Collective allowances    (12,802)       (12,492)         (11,592)    
                         $ (52,289)     $ (60,341)       $ (78,595)    
                                                                       

Net impaired loans ([1]) $   65,377     $   67,682       $   68,726    
                                                                       

Collective allowances    $ (62,079)     $ (57,201)       $ (60,274)    
against other loans
                                                                       

Impaired loans as a % of                                               
loans and acceptances

  Gross                        0.44 %         0.48 %           0.64 %

  Net                          0.24 %         0.25 %           0.30 %

[1] Net impaired loans are now calculated as gross impaired loans less
individual allowances and collective allowances against impaired loans.

Gross impaired loans amounted to $117.7 million as at April30, 2013, down 8% 
from $128.0 million as at October31, 2012 as credit quality remained strong 
during the quarter. The decrease since October31, 2012 resulted from 
improvement in the retail and commercial loan portfolios, as borrowers 
continued to benefit from the favourable low interest rate environment, as 
well as the prevailing business conditions in Canada, partly offset by the 
impact of the purchased AGF Trust personal and residential mortgage loan 
portfolios.

Since the beginning of the year, individual allowances decreased by $8.4 
million to $39.5 million, as a result of favourable settlements and overall 
improvement in the commercial loan portfolio.Net impaired loans, now 
calculated as gross impaired loans less individual allowances and collective 
allowances against impaired loans, amounted to $65.4 million as at April 30, 
2013, compared to $67.7 million as at October31,2012, and totalled 0.24% 
of loans and acceptances, a slight decrease from October31, 2012 and 
reflecting the prudent level of provisioning of impaired loans.

Liquidity and funding risk

Liquidity and funding risk represents the possibility that the Bank may not be 
able to gather sufficient cash resources, when required and on reasonable 
conditions, to meet its financial obligations. There have been no material 
changes to the Bank's liquidity and funding risk management framework from 
year-end 2012. The Bank continues to maintain liquidity and funding that is 
appropriate for the execution of its strategy, with liquidity and funding risk 
remaining well within its risk appetite.

Market risk

Market risk represents the financial losses that the Bank could incur 
following unfavourable fluctuations in the value of financial instruments 
subsequent to changes in the underlying factors used to measure them, such as 
interest rates, exchange rates or equity prices. This risk is inherent to the 
Bank's financing, investment, trading and asset and liability management (ALM) 
activities.

The purpose of ALM activities is to manage structural interest rate risk, 
which corresponds to the potential negative impact of interest rate movements 
on the Bank's revenues and economic value. Dynamic management of structural 
risk is intended to maximize the Bank's profitability while protecting the 
economic value of common shareholders' equity from sharp interest rate 
movements. As at April30, 2013, the effect on the economic value of common 
shareholders' equity and on net interest income before taxes of a sudden and 
sustained 1% increase in interest rates across the yield curve was as follows.

STRUCTURAL INTEREST RATE SENSITIVITY                 
ANALYSIS                                                              

In thousands of Canadian dollars     AS AT APRIL 30   AS AT OCTOBER 31
(Unaudited)                                    2013               2012
                                                                      

Increase in net interest income              15,640   $         16,701
before taxes over the next 12 months $               

Decrease in the economic value of          (15,764)   $       (19,710)
common shareholders' equity (Net of
income taxes)                        $               


As shown in the table above, the Bank maintained its short-term ALM 
sensitivity compared to October31, 2012. These results reflect management's 
efforts to take advantage in the movement of short-term and long-term interest 
rates, while maintaining the sensitivity to these fluctuations within approved 
risk limits. 
Segmented Information 
This section outlines the Bank's operations according to its organizational 
structure. Services to individuals, businesses, financial intermediaries and 
institutional clients are offered through the following business segments: 
- Retail & SME-Québec      - Laurentian Bank Securities & Capital 


                           Markets

- Real Estate & Commercial - Other

- B2B Bank                  
    Retail & SME-Québec
                      FOR THE THREE MONTHS ENDED        FOR THE SIX MONTHS ENDED

In thousands    APRIL 30                    APRIL 30                    APRIL 30
of Canadian         2013                        2012                        2012
dollars,
except
percentage
amounts                     JANUARY 31                    APRIL 30
(Unaudited)                       2013                        2013
                                                                                

Net interest $             $             $  76,096     $ 149,545     $ 154,821  
income          72,690        76,855  

Other income    38,260        35,436        33,422        73,696        65,225  

Total                                      109,518       223,241       220,046  
revenue        110,950       112,291  

Provision                                    4,855        11,990        11,071  
for loan
losses           5,924         6,066  

Non-interest                                91,268       186,367       182,528  
expenses        93,386        92,981  

Income                                      13,395        24,884        26,447  
before
income taxes    11,640        13,244  

Income taxes     1,978         2,034         2,737         4,012         5,368  

Net income   $   9,662     $  11,210     $  10,658     $  20,872     $  21,079  

Efficiency
ratio ([1])       84.2 %        82.8 %        83.3 %        83.5 %        82.9 %

[1] Refer to
the non-GAAP
financial                                                                       
measures
section.

The Retail & SME-Québec business segment's contribution to net income was 
$9.7 million in the second quarter of 2013, a 9% decrease compared with $10.7 
million in the second quarter of 2012.

Total revenue increased $1.4 million from $109.5 million in the second quarter 
of 2012 to $111.0 million in the second quarter of 2013, as growth in other 
income compensated for lower net interest income. Net interest income 
decreased by $3.4 million, as growth in loan and deposit volumes 
year-over-year, notably in the residential mortgage, home-equity lines of 
credit and SME loan portfolios, did not fully compensate for the decline in 
net interest margin stemming from the persistently low interest rate 
environment. Other income increased by 14% from $33.4 million in the second 
quarter of 2012 to $38.3 million for the same period in 2013 mainly due to 
higher fees on deposits as well as to higher income from sales of mutual funds 
reflecting new sales and better market performance compared to a year ago. 
Higher credit insurance income and higher revenues from card services due to 
increased activity also contributed to the increase year-over-year.

Loan losses increased from $4.9 million in the second quarter of 2012 to $5.9 
million in the second quarter of 2013. This increase mainly reflects higher 
provisions on the SME portfolio, which benefitted from the reversal of 
provisions a year ago, partly offset by lower provisions required for personal 
lines of credit. Non-interest expenses increased by $2.1 million or 2%, from 
$91.3million in the second quarter of 2012 to $93.4 million in the second 
quarter of 2013. Higher salaries due to regular salary increases and 
additional headcount to enhance the SME-Québec sales force, as well as higher 
pension costs, mainly accounted for the increase, partly attenuated by the 
effect of restructurings in 2012.

The efficiency ratio was 84.2% in the second quarter of 2013, compared with 
83.3% in the second quarter of 2012. The overall low interest rate environment 
is weighing on the segment's efficiency ratio, despite the segment maintaining 
its focus on SME segment growth, generating fee income and controlling costs.

Compared to the first quarter of 2013, net income decreased, mainly as the 
fewer number of days in the quarter impacted net interest income, as well as 
because of higher HST costs incurred since January 2013.

For the six months ended April 30, 2013, net income decreased by 1% to $20.9 
million essentially due to the combined effect of lower interest margins which 
more than offset growth in loan and deposit volumes and increased other 
income, as explained above. Owing to continued cost control initiatives, 
non-interest expenses for the six months ended April 30, 2013 were up only 2% 
year-over-year.

Real Estate & Commercial
                     FOR THE THREE MONTHS ENDED      FOR THE SIX MONTHS ENDED

In thousands   APRIL 30    JANUARY 31     APRIL 30      APRIL 30     APRIL 30
of Canadian        2013          2013         2012          2013         2012
dollars,
except
percentage
amounts
(Unaudited)
                                                                             

Net interest $ 20,179     $  21,555     $ 22,049     $  41,734     $ 44,261  
income

Other income   10,503         8,086       10,451        18,589       18,457  

Total          30,682        29,641       32,500        60,323       62,718  
revenue

Provision        (74)       (1,464)        1,755       (1,538)        4,606  
for loan
losses

Non-interest    8,383         8,414        7,484        16,797       15,240  
expenses

Income         22,373        22,691       23,261        45,064       42,872  
before
income taxes

Income taxes    5,974         6,059        6,292        12,033       11,597  

Net income   $ 16,399     $  16,632     $ 16,969     $  33,031     $ 31,275  

Efficiency
ratio ([1])      27.3 %        28.4 %       23.0 %        27.8 %       24.3 %

[1] Refer to
the non-GAAP
financial                                                                    
measures
section.

The Real Estate & Commercial business segment's contribution to net income 
slightly decreased by $0.6million or 3% to $16.4million in the second 
quarter of 2013, compared with $17.0 million in the second quarter of 2012.

Total revenue decreased by $1.8million, from $32.5 million in the second 
quarter of 2012 to $30.7 million in the second quarter of 2013. This decrease 
is mainly explained by a reduction in net interest income, which was impacted 
by compressed margins in the second quarter of 2013. Other income for the 
quarter was relatively unchanged compared to last year. Consistent with the 
Bank's syndication strategy, the sale of a $94.7 million commercial mortgage 
portfolio was completed during the quarter, which led to the recognition of a 
$3.1 million gain in other income. In a similar transaction, a $3.1 million 
gain on the sale of a $77.0million portfolio was also recorded during the 
second quarter of 2012. Loan losses decreased by $1.8 million compared to a 
year ago and generated a net credit of $0.1million in the second quarter of 
2013, reflecting the sound quality of the commercial mortgage loan portfolio 
as well as prolonged good credit conditions in Canada. Non-interest expenses 
increased by $0.9million to $8.4million in the second quarter of 2013 
compared with $7.5 million in the second quarter of 2012 essentially due to 
regular salary increases and higher allocated costs year-over-year.

Compared to the first quarter of 2013, net income was slightly down, 
essentially as a result of the fewer number of days in the second quarter 
which impacted net interest income and slightly less favourable loan losses, 
which more than offset the gain on the sale of commercial mortgage loans.

For the six months ended April 30, 2013, net income increased by $1.8million 
or 6% to $33.0 million, mostly driven by improvements in loan losses, partly 
offset by lower net interest income due to lower margins as well as lower 
revenues from foreign exchange operations resulting from a more stable 
currency environment. Non-interest expenses increased by $1.6million 
compared to the six months ended April 30, 2012, mainly due to increased 
salaries and benefits and allocated costs as explained above.

B2B Bank
                      FOR THE THREE MONTHS ENDED       FOR THE SIX MONTHS ENDED

In thousands                                              APRIL 30
of Canadian                                                   2013
dollars,
except
percentage
amounts        APRIL 30     JANUARY 31      APRIL 30                    APRIL 30
(Unaudited)         2013          2013          2012                        2012
                                                                                

Net interest                  49,412                                            
income       $  47,195     $             $  30,689     $  96,607     $  61,653

Other income     8,884         9,056         9,116        17,940        17,259  

Total                                                               
revenue         56,079        58,468        39,805       114,547        78,912  

Gain on                                                             
acquisition
and
amortization
of net
premium
on purchased
financial
instruments    (1,224)       (1,056)       —       (2,280)       —  

Provision                                                           
for loan
losses           3,150         3,398           890         6,548         1,823  

Non-interest                                                        
expenses        32,175        32,960        24,483        65,135        47,905  

Costs                                                               
related to
business
combinations
and other (
[1])             6,136         7,557         3,350        13,693         6,010  

Income                                                              
before
income taxes    13,394        13,497        11,082        26,891        23,174  

Income taxes     3,557         3,583         2,953         7,140         6,174  

Net income   $   9,837     $   9,914     $   8,129     $  19,751     $  17,000  

Adjusted net                  16,242                                            
income ([2]) $  15,245     $             $  10,568     $  31,487     $  21,396

Efficiency
ratio ([2])       68.3 %        69.3 %        69.9 %        68.8 %        68.3 %

Adjusted                             %             %             %  
efficiency
ratio ([2])       57.4 %        56.4          61.5          56.9          60.7 %

[1] Integration costs related to the acquisition of the MRS Companies and AGF
Trust.
[2] Refer to the non-GAAP financial measures section.

B2BBank business segment's contribution to adjusted net income was $15.2 
million in the second quarter of 2013, up $4.7million or 44% from $10.6 
million in the second quarter of 2012. Reported net income for the second 
quarter of 2013 was $9.8 million compared to $8.1 million a year ago. The 
improvement essentially stems from the addition of the portion of AGF Trust's 
net income reported in B2BBank's business segment, which totalled $5.9 
million in the second quarter of 2013, which more than offset the effect of 
tighter net interest margins.

Total revenue increased to $56.1 million in the second quarter of 2013 
compared with $39.8 million in the second quarter of 2012. Net interest income 
increased by $16.5million compared to last year, to $47.2million in the 
second quarter of 2013, mainly due to higher loan and deposit volumes related 
to the acquisition of AGF Trust, which added $17.8 million to net interest 
income in the quarter. Other income decreased by $0.2million to $8.9 million 
in the second quarter of 2013, mostly as a result of slightly lower B2B Bank 
Dealer Services-sourced fees on investment accounts, partly offset by a $0.5 
million contribution from AGF Trust.

As shown above, the charge related to amortization of net premium on purchased 
financial instruments, presented on the line-item "Gain on acquisition and 
amortization of net premium on purchased financial instruments", amounted to 
$1.2 million in the second quarter of 2013, compared to a $1.1 million charge 
for the first quarter of 2013. Refer to Note 12 to the unaudited condensed 
interim financial statements for additional information on this item.

Loan losses increased from $0.9million in the second quarter of 2012 to $3.2 
million in the second quarter of 2013, mainly as a result of an additional 
$2.5 million charge related to the AGF Trust portfolios, partly offset by 
lower loan losses in B2B Bank's collateralized investment loan portfolio.

Non-interest expenses, as shown in the table above, increased by $7.7million 
to $32.2 million in the second quarter of 2013, compared with $24.5 million in 
the second quarter of 2012. This increase includes current operating costs of 
$7.8 million related to AGF Trust. Otherwise, expenses were essentially 
unchanged year-over-year, as higher allocated costs, as well as increased 
salary and pension costs, were offset by realized cost synergies. T&I Costs 
amounted to $6.1 million for the second quarter of 2013, $4.3 million from 
salaries, professional fees and other expenses for the integration of AGF 
Trust, including a $1.9 million charge related to an ongoing project to 
relocate all B2B Bank's employees in a single location, and $1.8million of 
expenses incurred for the integration of the MRS Companies.

Compared to the first quarter of 2013, adjusted net income was slightly down, 
mainly as the fewer number of days in the quarter impacted net interest 
income, while other revenues and expenses remained relatively unchanged(1).

For the six months ended April 30, 2013, adjusted net income was $31.5 
million, $10.1 million higher than the same period of 2012, essentially as a 
result of the $11.0 million operating contribution of AGF Trust while cost 
synergies achieved on the MRS Companies transaction compensated for a decline 
in B2B Bank's contribution compared to last year. Reported net income for the 
six months ended April 30, 2013 was $19.8 million, a 16% increase.
             

(1) During the second quarter of 2013, the Bank's Corporate Treasury
    retroactively adjusted its loan transfer pricing with regards to
    the recently acquired AGF Trust insured mortgage loan portfolio.
    As a result, net interest income related to AGF Trust amounting to
    $1.0 million for the first quarter ended January 31, 2013, which
    was previously reported in the Other sector, was reclassified to
    the B2B Bank's business segment. This change generated a $0.7
    million increase in B2B Bank's net income in the first quarter of
    2013.
    Laurentian Bank Securities & Capital Markets
                    FOR THE THREE MONTHS ENDED         FOR THE SIX MONTHS
                                                              ENDED

In thousands  APRIL 30    JANUARY 31     APRIL 30    APRIL 30      APRIL 30
of Canadian        2013         2013         2012         2013         2012
dollars,
except
percentage
amounts
(Unaudited)
                                                                           

Total        $ 16,967     $ 17,083     $ 16,265     $ 34,050     $ 30,920  
revenue

Non-interest   12,959       13,474       12,530       26,433       24,690  
expenses

Income          4,008        3,609        3,735        7,617        6,230  
before
income taxes

Income taxes    1,033          928          956        1,961        1,576  

Net income   $  2,975     $  2,681     $  2,779     $  5,656     $  4,654  
                                                                           

Efficiency
ratio ([1])      76.4 %       78.9 %       77.0 %       77.6 %       79.9 %

[1] Refer to
the non-GAAP
financial                                                                  
measures
section.

Laurentian Bank Securities & Capital Markets business segment's contribution 
to net income increased to $3.0 million in the second quarter of 2013, 
compared to $2.8 million in the second quarter of 2012.

Total revenue was up 4% to $17.0 million in the second quarter of 2013 
compared with $16.3 million for the same quarter of 2012. During the second 
quarter of 2013, the business segment benefited from improved market 
conditions for trading and retail brokerage activities compared to a year ago. 
Non-interest expenses increased by $0.4million to $13.0 million in the 
second quarter of 2013, mainly due to slightly higher performance-based 
compensation, commissions and transaction fees, in-line with increased 
market-driven income.

For the six months ended April 30, 2013, net income increased by $1.0million 
or 22% compared to the same period last year. Operating leverage was positive 
year-over-year, as a result of higher revenues from better markets compared to 
a year ago.

Other Sector
                  FOR THE THREE MONTHS ENDED        FOR THE SIX MONTHS
                                                           ENDED

In thousands APRIL 30   JANUARY 31    APRIL 30    APRIL 30      APRIL 30
of Canadian       2013        2013        2012         2013         2012
dollars
(Unaudited)
                                                                        

Net interest $   (704)   $ (6,159)   $ (1,206)   $  (6,863)   $  (2,987)
income

Other income       876       2,590       1,788        3,466        2,805

Total              172     (3,569)         582      (3,397)        (182)
revenue

Non-interest     6,814       5,928       7,996       12,742       13,758
expenses

Loss before    (6,642)     (9,497)     (7,414)     (16,139)     (13,940)
income taxes

Income taxes   (2,908)     (3,150)     (2,742)      (6,058)      (4,757)
recovery

Net loss     $ (3,734)   $ (6,347)   $ (4,672)   $ (10,081)   $  (9,183)


The Other sector posted a negative contribution to net income of $3.7 million 
in the second quarter of 2013 compared to a negative contribution of $4.7 
million in the second quarter of 2012 and a revised negative contribution of 
$6.3million in the first quarter of 2013(1). 
Net interest income slightly improved to negative $0.7 million in the second 
quarter of 2013, compared to negative $1.2 million in the second quarter of 
2012, mainly as a result of the maturing of high-coupon securitization 
liabilities which more than offset a less favourable market positioning 
compared to a year ago. Other income for the second quarter of 2013 decreased 
to $0.9 million, compared to $1.8million for the second quarter of 2012, 
essentially as a result of lower realized security gains. 
Non-interest expenses were down to $6.8 million in the second quarter of 2013 
compared to $8.0 million in 2012. The decrease was largely due to lower 
employee benefits costs, combined with favourable adjustments to sales taxes 
recorded in the second quarter of 2013. 
On a sequential basis, net interest income improved by $5.5million to 
negative $0.7 million from negative $6.2million for the first quarter ended 
January31, 2013 mainly due to the maturing, halfway through the first 
quarter, of a high-coupon securitization liability and a lower level of liquid 
assets. 
For the six months ended April 30, 2013, the negative contribution to net 
income was $10.1 million, compared to negative $9.2million for the six 
months ended April 30, 2012, as the decrease in net interest income mainly 
resulting from a high level of lower-yielding liquid assets early in the 
period more than offset the decrease in non-interest expenses, mainly due to 
the same reasons as noted above. 


             

(1) During the second quarter of 2013, the Bank's Corporate Treasury
    retroactively adjusted its loan transfer pricing with regards to
    the recently acquired AGF Trust insured mortgage loan portfolio.
    As a result, net interest income related to AGF Trust amounting to
    $1.0 million for the first quarter ended January 31, 2013, which
    was previously reported in the Other sector, was reclassified to
    the B2B Bank's business segment. This change generated a $0.7
    million decrease in the Other sector's net income in the first
    quarter of 2013.
    Additional Financial Information - Quarterly Results

In thousands of                                                                                                  
Canadian
dollars, except
per share and
percentage
amounts            APRIL 30    JANUARY 31    OCTOBER 31       JULY 31      APRIL 30    JANUARY 31    OCTOBER 31       
JULY 31
(Unaudited)            2013          2013          2012          2012          2012          2012          2011         
 2011
                                                                                                                        
     

Net interest
income          $ 140,430     $ 142,344     $ 142,411     $ 129,664     $ 128,324     $ 130,629     $ 126,391     $ 
129,426  

Other income       74,420        71,570        67,985        64,169        70,346        63,115        56,031        
56,407  

Total revenue     214,850       213,914       210,396       193,833       198,670       193,744       182,422       
185,833  

Gain on
acquisition and
amortization of
net premium on
purchased
financial
instruments       (1,224)       (1,056)        23,795       —       —       —       —       —  

Provision for
loan losses         9,000         8,000         8,000         7,500         7,500        10,000        12,999        
14,640  

Non-interest
expenses          159,853       161,314       165,377       148,955       147,111       143,020       137,152       
133,896  

Income before
income taxes       44,773        43,544        60,814        37,378        44,059        40,724        32,271        
37,297  

Income taxes        9,634         9,454        15,129         7,380        10,196         9,762         5,562         
8,225  

Net income      $  35,139     $  34,090     $  45,685     $  29,998     $  33,863     $  30,962     $  26,709     $  
29,072  
                                                                                                                        
     

Earnings per
share                                                                                                                   
     

  Basic         $    1.10     $    1.12     $    1.51     $    1.06     $    1.22     $    1.16     $    0.99     $    
1.09  

  Diluted       $    1.10     $    1.12     $    1.51     $    1.06     $    1.22     $    1.16     $    0.99     $    
1.08  

Return on
common
shareholders'
equity ([1])         10.3 %        10.3 %        14.2 %        10.1 %        12.0 %        11.5 %         9.9 %        
11.2 %

Balance sheet
assets(in
millions of
Canadian
dollars)        $  34,474     $  34,249     $  34,937     $  31,416     $  30,708     $  29,921     $  28,963     $  
28,239  
                                                                                                                        
     

Adjusted
measures                                                                                                                
     

  Adjusted net
  income ([1])  $  40,547     $  40,418     $  36,186     $  35,253     $  36,302     $  32,919     $  33,375     $  
29,072  

  Adjusted
  diluted
  earnings per
  share ([1])   $    1.29     $    1.34     $    1.17     $    1.27     $    1.31     $    1.24     $    1.26     $    
1.08  

  Adjusted
  return on
  common
  shareholders'
  equity ([1])       12.1 %        12.2 %        10.9 %        12.1 %        13.0 %        12.4 %        12.7 %        
11.2 %

[1] Refer to the non-GAAP financial measures section.

Accounting Policies

A summary of the Bank's significant accounting policies is presented in Notes 
2 and 3 of the 2012 audited annual consolidated financial statements. Pages 71 
to 73 of the 2012 Annual Report also contain a discussion of critical 
accounting policies and estimates which refer to material amounts reported in 
the consolidated financial statements or require management's judgement. The 
unaudited condensed interim consolidated financial statements for the second 
quarter of 2013 have been prepared in accordance with these accounting 
policies.

Future accounting changes

The IASB has issued new standards and amendments to existing standards on 
financial instruments, consolidation, fair value measurement, employee 
benefits, offsetting and presentation of other comprehensive income. These 
future accounting changes will be applicable for the Bank in various annual 
periods beginning on November1,2013 at the earliest. The Bank is currently 
assessing the impact of the adoption of these standards on its financial 
statements. Additional information on the new standards and amendments to 
existing standards can be found in Note 3 to the unaudited condensed interim 
consolidated financial statements.

Corporate Governance and Changes in Internal Control over Financial Reporting

In accordance with Canadian securities law, management has limited the scope 
of internal control over financial reporting and disclosure controls and 
procedures evaluation and excluded the controls, policies and procedures of 
AGF Trust, acquired by the Bank on August 1, 2012. AGF Trust's results are 
included in the unaudited condensed interim consolidated financial statements 
of the Bank for the period ended April30, 2013. AGF Trust constituted 
approximately 10% of total assets, 9% of total liabilities, 9% of total 
revenue and 17% of total net income as at and for the six months ended April 
30, 2013.

During the last quarter ended April 30, 2013, there have been no changes in 
the Bank's policies or procedures and other processes that comprise its 
internal control over financial reporting which have materially affected, or 
are reasonably likely to materially affect, the Bank's internal control over 
financial reporting.

The Board of Directors and the Audit Committee of Laurentian Bank reviewed 
this press release prior to its release today.

Non-GAAP Financial Measures

The Bank uses both generally accepted accounting principles (GAAP) and certain 
non-GAAP measures to assess performance. 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. These non-GAAP financial 
measures are considered useful to investors and analysts in obtaining a better 
understanding of the Bank's financial results and analyzing its growth and 
profit potential more effectively. The Bank's non-GAAP financial measures are 
defined as follows:

Return on common shareholders' equity

Return on common shareholders' equity is a profitability measure calculated as 
the net income available to common shareholders as a percentage of average 
common shareholders' equity, excluding accumulated other comprehensive income.

Book value per common share

The Bank's book value per common share is defined as common shareholders' 
equity, excluding accumulated other comprehensive income, divided by the 
number of common shares outstanding at the end of the period.

Net interest margin

Net interest margin is the ratio of net interest income to total average 
assets, expressed as a percentage or basis points.

Efficiency ratio and operating leverage

The Bank uses the efficiency ratio as a measure of its productivity and cost 
control. This ratio is defined as non-interest expenses as a percentage of 
total revenue. The Bank also uses operating leverage as a measure of 
efficiency. Operating leverage is the difference between total revenue and 
non-interest expenses growth rates.

Dividend payout ratio

The dividend payout ratio is defined as dividends declared on common shares as 
a percentage of net income available to common shareholders.

Dividend yield

The dividend yield is defined as dividends declared per common share divided 
by the closing common share price.

Adjusted GAAP and non-GAAP measures

Certain analyses presented throughout this document are based on the Bank's 
core activities and therefore exclude the effect of certain amounts designated 
as adjusting items, as presented in the table in the Adjusting Items section.

Most of the adjusting items relate to gains and expenses that arise as a 
result of acquisitions. The gain on acquisition and ensuing amortization of 
net premium on purchased financial instruments are considered adjusting items 
since they represent, according to management, significant non-cash 
adjustments and due to their non-recurrence. Transaction and 
integration-related costs in respect of the MRS Companies and AGF Trust have 
been designated as adjusting items due to the significance of the amounts and 
the fact that some of these costs have been incurred with the intent to 
generate benefits in future periods.

About Laurentian Bank

Laurentian Bank of Canada is a pan-Canadian banking institution that has $34 
billion in balance sheet assets and $37 billion in assets under 
administration. Founded in 1846, Laurentian Bank was selected in 2012 as one 
of the 10 winners of the Canada's Passion Capitalists program in recognition 
of its sustained success through the promotion of passion within its ranks. 
The Bank employs more than 4,200 people.

Recognized for its excellent service, proximity and simplicity, Laurentian 
Bank serves more than one million clients in market segments in which it holds 
an enviable position. In addition to occupying a choice position among 
consumers in Québec, where it operates the third largest branch network, the 
Bank has built a solid reputation across Canada in the area of real estate and 
commercial financing thanks to its teams working out of more than 35 offices 
in Ontario, Québec, Alberta and British Columbia. Its subsidiary, B2B Bank, 
is a Canadian leader in providing banking products as well as investment 
accounts and services to financial advisors and brokers, while Laurentian Bank 
Securities is an integrated broker, widely recognized for its expertise and 
effectiveness nationwide.

Access to Quarterly Results Materials

Interested investors, the media and others may review this press release, 
unaudited condensed interim consolidated financial statements, supplementary 
financial information and our report to shareholders which are posted on our 
web site at www.laurentianbank.ca.

Conference Call

Laurentian Bank invites media representatives and the public to listen to the 
conference call with financial analysts to be held at 2:00p.m. Eastern Time 
on Wednesday, June 5, 2013. The live, listen-only, toll-free, call-in number 
is 416 695-7806 or 1888789-9572 Code5680517#.

You can listen to the call on a delayed basis at any time from 6:00 p.m. on 
Wednesday, June 5, 2013 until 11:59 p.m. on July6,2013, by dialing the 
following playback number: 905 694-9451 or 1800 408-3053 Code 3255829#. 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 Web site also offers 
additional financial information.

Unaudited Condensed Interim Consolidated Financial Statements

The unaudited condensed interim consolidated financial statements for the 
quarter ended April30, 2013, including the notes to consolidated financial 
statements, are also available on the Bank's Web site at www.laurentianbank.ca.

Consolidated Balance Sheet( )

In thousands of      AS AT APRIL 30   AS AT OCTOBER 31   AS AT APRIL 30
Canadian dollars               2013               2012             2012
(Unaudited)
                                                                       

ASSETS                                                                 

Cash and             $       83,512   $         90,860   $       72,029
non-interest-bearing
deposits with other
banks

Interest-bearing            233,501            480,183          624,251
deposits with other
banks

Securities                                                             

  Available-for-sale      2,151,551          2,822,588        2,055,991

  Held-to-maturity        1,030,366          1,446,751        1,056,657

  Held-for-trading        2,574,845          1,873,622        2,181,962
                          5,756,762          6,142,961        5,294,610

Securities purchased        545,974            631,202          978,063
under reverse
repurchase
agreements

Loans                                                                  

  Personal                7,605,244          7,806,067        6,116,400

  Residential            14,499,292         14,169,095       12,279,486
  mortgage

  Commercial              2,434,514          2,443,634        2,470,794
  mortgage

  Commercial and          2,239,842          2,150,953        2,087,886
  other

  Customers'                256,150            211,130          166,904
  liabilities under
  acceptances
                         27,035,042         26,780,879       23,121,470

  Allowances for          (114,368)          (117,542)        (138,869)
  loan losses
                         26,920,674         26,663,337       22,982,601

Other                                                                  

  Derivatives               156,308            167,643          161,807

  Premises and               72,108             71,871           66,308
  equipment

  Software and other        165,225            159,973          142,401
  intangible assets

  Goodwill                   64,077             64,077           64,077

  Deferred tax                4,690              4,751            2,467
  assets

  Other assets              470,764            459,968          319,860
                            933,172            928,283          756,920
                     $   34,473,595   $     34,936,826   $   30,708,474
                                                                       

LIABILITIES AND                                                        
SHAREHOLDERS' EQUITY

Deposits                                                               

  Personal           $   19,535,193   $     19,369,310   $   16,414,315

  Business, banks         4,273,632          4,672,133        4,646,439
  and other
                         23,808,825         24,041,443       21,060,754

Other                                                                  

  Obligations             1,679,095          1,349,932        1,352,007
  related to
  securities sold
  short

  Obligations               394,725            244,039          441,532
  related to
  securities sold
  under repurchase
  agreements

  Acceptances               256,150            211,130          166,904

  Derivatives                96,626            100,867          128,626

  Deferred tax               19,264             16,128            1,408
  liabilities

  Other liabilities         819,618            951,467          984,528
                          3,265,478          2,873,563        3,075,005

Debt related to           5,473,470          6,037,097        5,051,652
securitization
activities

Subordinated debt           444,469            443,594          243,426

Shareholders' equity                                                   

  Preferred shares          205,146            303,249          205,527

  Common shares             438,454            428,526          313,544

  Share-based                   136                227              227
  payment reserve

  Retained earnings         807,788            774,899          730,736

  Accumulated other          29,829             34,228           27,603
  comprehensive
  income
                          1,481,353          1,541,129        1,277,637
                     $   34,473,595   $     34,936,826   $   30,708,474
    Consolidated Statement of Income
                       FOR THE THREE MONTHS ENDED       FOR THE SIX MONTHS
                                                               ENDED

In thousands of  APRIL 30    JANUARY 31               APRIL 30
Canadian              2013         2013                    2013
dollars, except
per share
amounts                                    APRIL 30                APRIL 30
(Unaudited)                                    2012                    2012
                                                                           

Interest income                                                            

  Loans          $ 264,704   $  276,870   $ 240,943   $ 541,574   $ 486,026

  Securities        16,178       17,128      18,377      33,306      37,268

  Deposits with                                                    
  other banks          499          914       1,276       1,413       2,300

  Other,                                                           
  including
  derivatives       11,193       13,453      14,557      24,646      30,254
                   292,574      308,365     275,153     600,939     555,848

Interest expense                                                           

  Deposits         112,525      121,423     104,653     233,948     212,326

  Debt related                               39,508                
  to
  securitization
  activities        35,163       40,225                  75,388      79,180

  Subordinated                                2,374                
  debt               3,927        4,024                   7,951       4,777

  Other,                                        294                
  including
  derivatives          529          349                     878         612
                   152,144      166,021     146,829     318,165     296,895

Net interest                                128,324                
income             140,430      142,344                 282,774     258,953

Other income                                                               

  Fees and                                                         
  commissions on
  loans and
  deposits          31,724       31,330      29,657      63,054      58,168

  Income from                                                      
  brokerage
  operations        14,523       16,522      14,354      31,045      27,903

  Income from                                                      
  investment
  accounts           7,894        7,858       7,648      15,752      14,449

  Income from                                                      
  sales of
  mutual funds       5,415        5,140       4,488      10,555       8,817

  Income from                                                      
  treasury and
  financial
  market
  operations         4,601        5,341       5,856       9,942      10,570

  Credit                                                           
  insurance
  income             4,415        3,395       3,662       7,810       7,432

  Other income       5,848        1,984       4,681       7,832       6,122
                    74,420       71,570      70,346     145,990     133,461

Total revenue      214,850      213,914     198,670     428,764     392,414

Gain on                                                            
acquisition and
amortization of
net premium on
purchased
financial
instruments        (1,224)      (1,056)     —     (2,280)     —

Provision for                                                      
loan losses          9,000        8,000       7,500      17,000      17,500

Non-interest                                                     
expenses                                                                   

  Salaries and                                                     
  employee
  benefits          85,200       89,380      79,282     174,580     156,314

  Premises and                                                     
  technology        42,626       38,881      37,998      81,507      75,164

  Other             25,891       25,496      26,481      51,387      52,643

  Costs related                                                    
  to business
  combinations
  and other          6,136        7,557       3,350      13,693       6,010
                   159,853      161,314     147,111     321,167     290,131

Income before                                                      
income taxes        44,773       43,544      44,059      88,317      84,783

Income taxes         9,634        9,454      10,196      19,088      19,958

Net income       $  35,139   $   34,090   $  33,863   $  69,229   $  64,825

Preferred share                                                    
dividends,
including
applicable taxes     4,059        2,533       3,165       6,592       6,331

Net income       $               31,557   $  30,698   $  62,637   $
available to
common
shareholders        31,080   $                                       58,494

Average number                                                 
of common shares
outstanding (in
thousands)                                                                 

  Basic             28,287       28,169      25,235      28,227      24,573

  Diluted           28,297       28,182      25,253      28,239      24,591

Earnings per                                                   
share                                                                      

  Basic          $    1.10   $     1.12   $    1.22   $    2.22   $    2.38

  Diluted        $    1.10   $     1.12   $    1.22   $    2.22   $    2.38

Dividends                                                      
declared per
share                                                                      

  Common share   $    0.49   $     0.49   $    0.45   $    0.98   $    0.90

  Preferred      $                 0.38   $    0.38   $    0.75   $
  share - Series
  9                   0.38   $                                         0.75

  Preferred      $                 0.33   $    0.33   $    0.66   $
  share - Series
  10                  0.33   $                                         0.66

  Preferred      $                 0.16        n.a.        0.41    
  share - Series
  11                  0.25   $                        $                n.a.
    Consolidated Statement of Comprehensive Income
                           FOR THE THREE MONTHS ENDED        FOR THE SIX MONTHS
                                                                   ENDED

In thousands of      APRIL 30   JANUARY 31     APRIL 30   APRIL 30      APRIL 30
Canadian dollars                      2013         2012        2013         2012
(Unaudited)              2013

Net income           $ 35,139   $   34,090   $   33,863   $  69,229   $   64,825

Other comprehensive                                                             
income, net of
income taxes

Items that may                                                                  
subsequently be
reclassified to the
statement of income

  Unrealized net
  gains (losses) on
  available-for-sale
  securities            1,484        1,116      (3,751)       2,600      (5,234)

  Reclassification
  of net (gains)
  losses on
  available-for-sale
  securities to net
  income                (427)      (1,458)        (888)     (1,885)      (1,209)

  Net change in
  value of
  derivatives
  designated as cash
  flow hedges           4,929     (10,043)     (23,980)     (5,114)     (31,544)
                        5,986     (10,385)     (28,619)     (4,399)     (37,987)

Comprehensive income $ 41,125   $   23,705   $    5,244   $  64,830   $   26,838
    Consolidated Statement of Changes in Shareholders' Equity
                                                                                FOR THE SIX MONTHS ENDED APRIL 30, 2013
                                                                            AOCI RESERVES                              
                                                                                                   SHARE-         TOTAL
                                                           AVAILABLE-         CASH                  BASED        SHARE-

In thousands of       PREFERRED      COMMON     RETAINED     FOR-SALE         FLOW                PAYMENT      HOLDERS'
Canadian dollars
(Unaudited)              SHARES      SHARES     EARNINGS   SECURITIES       HEDGES        TOTAL   RESERVE        EQUITY
                                                                                                                       

Balance as at
October 31, 2012     $  303,249   $ 428,526   $  774,899   $   12,201   $   22,027   $   34,228   $   227   $ 1,541,129

Net income                                        69,229                                                         69,229

Other comprehensive
income (net of
income taxes)                                                                                                          

  Unrealized net
  gains (losses) on
  available-for-sale
  securities                                                    2,600                     2,600                   2,600

  Reclassification
  of net (gains)
  losses on
  available-for-sale
  securities to net
  income                                                      (1,885)                   (1,885)                 (1,885)

  Net change in
  value of
  derivatives
  designated as cash
  flow hedges                                                              (5,114)      (5,114)                 (5,114)

Comprehensive income                              69,229          715      (5,114)      (4,399)                  64,830

Issuance of share
capital                   (218)       9,928                                                          (91)         9,619

Repurchase of share
capital                (97,885)                  (2,115)                                                      (100,000)

Dividends                                                                                                              

  Preferred shares,
  including
  applicable taxes                               (6,592)                                                        (6,592)

  Common shares                                 (27,633)                                                       (27,633)

Balance as at
April 30, 2013       $  205,146   $ 438,454   $  807,788   $   12,916   $   16,913   $   29,829   $   136   $ 1,481,353
                                                                                                                       
                                                                                FOR THE SIX MONTHS ENDED APRIL 30, 2012
                                                                            AOCI RESERVES                              


                                                                                               SHARE-         TOTAL
In thousands of                                            AVAILABLE-         CASH                  BASED        SHARE-Canadian dollars      PREFERRED      COMMON     RETAINED     FOR-SALE         FLOW                PAYMENT      HOLDERS'
(Unaudited)              SHARES      SHARES     EARNINGS   SECURITIES       HEDGES        TOTAL   RESERVE        EQUITY 
                                                                                                                    
Balance as at
October 31, 2011     $  205,527   $ 252,601   $  694,371   $   22,216   $   43,374   $   65,590   $   227   $ 1,218,316 
Net income                                        64,825                                                         64,825 
Other comprehensive
income (net of
income taxes)                                                                                                           
Unrealized net
  gains (losses) on
  available-for-sale
  securities                                                  (5,234)                   (5,234)                 (5,234) 
Reclassification
  of net (gains)
  losses on
  available-for-sale
  securities to net
  income                                                      (1,209)                   (1,209)                 (1,209) 
Net change in
  value of
  derivatives
  designated as cash
  flow hedges                                                             (31,544)     (31,544)                (31,544) 
Comprehensive income                              64,825      (6,443)     (31,544)     (37,987)                  26,838 
Issuance of share
capital                              60,943                                                                      60,943 
Dividends                                                                                                               
Preferred shares,
  including
  applicable taxes                               (6,331)                                                        (6,331) 
Common shares                                 (22,129)                                                       (22,129) 
Balance as at
April 30, 2012       $  205,527   $ 313,544   $  730,736   $   15,773   $   11,830   $   27,603   $   227   $ 1,277,637 
Chief Financial Officer: Michel C. Lauzon, 514 284-4500 #7997 Media and 
Investor Relations contact: Gladys Caron, 514 284-4500 #7511;  cell 514 
893-3963 
SOURCE: Laurentian Bank of Canada 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/June2013/05/c3596.html 
CO: Laurentian Bank of Canada
ST: Quebec
NI: FIN ERN DIV CONF  
-0- Jun/05/2013 13:06 GMT
 
 
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