Laurentian Bank reports record 2013 results

 ________________________________________________________________________________
|The Bank's Annual Report, which includes the Audited Annual Consolidated        |
|Financial Statements and accompanying Management's Discussion and Analysis for  |
|2013, is also available on the Bank's website at                                |
|www.laurentianbank.ca.|
|________________________________________________________________________________| 
2013 highlights 
--  Adjusted financial measures for 2013 are as follows:
  o Record adjusted net income of $156.0 million, up 11% year-over-year
  o Adjusted return on common shareholders' equity of 11.6%
  o Adjusted diluted earnings per share of $5.09 


    --  Reported net income of $124.7 million, return on common
        shareholders' equity of 9.1%, and diluted earnings per share of
        $3.99
    --  Total revenue up 9% year-over-year, reflecting improvements
        across all revenue streams
    --  Excellent credit quality as evidenced by loan losses of $36.0
        million or 0.13% of average loans
    --  Solid growth in the commercial loan portfolio, up 17%
        year-over-year

Highlights of the fourth quarter 2013
    --  Quarterly common share dividend raised by $0.01 to $0.51 per
        share
    --  Adjusted financial measures for the fourth quarter of 2013 are


    as follows:
  o Adjusted net income of $35.2 million
  o Adjusted return on common shareholders' equity of 10.2%
  o Adjusted diluted earnings per share of $1.14 


    --  Reported net income of $27.2 million, return on common
        shareholders' equity of 7.7%, and diluted earnings per share of
        $0.86
    --  Loan losses remain low at $10.0 million
    --  One-time restructuring charges in the quarter of $6.3 million
        or $0.16 diluted per share

MONTREAL, Dec. 11, 2013 /CNW Telbec/ - Laurentian Bank of Canada reported 
record adjusted net income up 11% to $156.0 million or $5.09 diluted per share 
for the year ended October 31, 2013, compared with $140.7 million or $4.98 
diluted per share in 2012. Adjusted return on common shareholders' equity was 
11.6% for the year ended October 31, 2013, compared with 12.0% in 2012. When 
including adjusting items(1), net income was $124.7 million or $3.99 diluted 
per share for the year ended October 31, 2013, compared with $140.5million 
or $4.98 diluted per share in 2012. Return on common shareholders' equity was 
9.1% for the year ended October 31, 2013, compared with 12.1% in 2012.

Adjusted net income totalled $35.2 million or $1.14 diluted per share for the 
fourth quarter of 2013, compared with $36.2 million or $1.17 diluted per share 
for the same period in 2012. Adjusted return on common shareholders' equity 
was10.2% for the fourth quarter of 2013, compared with 10.9% for the same 
period in 2012. When including adjusting items, net income totalled $27.2 
million or $0.86 diluted per share for the fourth quarter ended October 31, 
2013, compared with $45.7 million or $1.51 diluted per share for the fourth 
quarter of 2012. Return on common shareholders' equity was 7.7% for the fourth 
quarter of 2013, compared with 14.2% for the same period in 2012. Notably, net 
income in the fourth quarter of 2013 was adversely impacted by restructuring 
charges of $6.3 million before income taxes ($4.6 million after income taxes), 
or $0.16 diluted per share, related to the optimization of certain activities.

Commenting on the Bank's financial results for 2013, Réjean Robitaille, 
President and Chief Executive Officer, mentioned: "We successfully delivered 
solid earnings throughout the year and reached record revenues and adjusted 
net earnings as we leveraged our acquisitions to expand the Bank's geographic 
reach and client base in an environment of slowing consumer loan demand and 
compressed margins. The continued excellent credit quality of the loan 
portfolio and disciplined control over expenses also contributed to our strong 
performance."

Mr. Robitaille added: "In a challenging and rapidly evolving business and 
regulatory environment, we will continue to execute strategies to maximize 
operating leverage going forward, with a constant focus on profitable growth, 
controlling costs and optimizing the Bank's operations, and delivering the 
synergies related to our acquired businesses."

Mr. Robitaille concluded: "In this environment, we remain committed to 
enhancing value for our shareholders and we are working diligently to create 
positive operating leverage 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 $0.51 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 "Risk Appetite and 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(2) (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.

(2) AGF Trust was amalgamated with B2B Bank as of September 1, 2013.

Highlights
                       FOR THE THREE MONTHS ENDED                    FOR THE YEAR ENDED

In thousands of                                                                   
Canadian
dollars, except
per share and
percentage       OCTOBER 31    OCTOBER 31               OCTOBER 31    OCTOBER 31
amounts
(Unaudited)            2013          2012   VARIANCE          2013          2012    VARIANCE
                                                                                            

Profitability                                                                               

  Total revenue $ 215,531     $ 210,396        2 %     $ 865,337     $ 796,643           9 %

  Net income    $  27,167     $  45,685     (41) %     $ 124,680     $ 140,508        (11) %

  Diluted
  earnings per
  share         $    0.86     $    1.51     (43) %     $    3.99     $    4.98        (20) %

  Return on
  common
  shareholders'
  equity ([1])        7.7 %        14.2 %                    9.1 %        12.1 %            

  Net interest
  margin ([1])       1.66 %        1.62 %                   1.66 %        1.69 %            

  Efficiency
  ratio ([1])        79.3 %        78.6 %                   77.1 %        75.9 %            

  Operating
  leverage(
  [1])              (0.2) %       (2.5) %                  (1.7) %       (6.1) %            
                                                                                            

Per common                                                                                  
share                      

  Share price                                                                               
    High        $   47.15     $   47.80                $   47.15     $   48.68              
    Low         $   44.25     $   43.77                $   42.41     $   40.66              
    Close       $   46.55     $   44.45        5 %     $   46.55     $   44.45           5 %

  Price /
  earnings
  ratio
  (trailing
  four
  quarters)                                                 11.6 x         8.9 x            

  Book value (
  [1])                                                 $   44.73     $   42.81           4 %

  Market to                                                                       
  book value                                                 104 %         104 %            

  Dividends
  declared      $    0.50     $    0.47        6 %     $    1.98     $    1.84           8 %

  Dividend
  yield ([1])        4.30 %        4.23 %                   4.25 %        4.14 %            

  Dividend
  payout ratio
  ([1])              58.0 %        31.2 %                   49.6 %        37.0 %            
                                                                                            

Adjusted                                                                                    
financial
measures                   

  Adjusted net
  income ([1])  $  35,220     $  36,186      (3) %     $ 156,032     $ 140,660          11 %

  Adjusted
  diluted
  earnings per
  share ([1])   $    1.14     $    1.17      (3) %     $    5.09     $    4.98           2 %

  Adjusted
  return on
  common
  shareholders'
  equity ([1])       10.2 %        10.9 %                   11.6 %        12.0 %            

  Adjusted
  efficiency
  ratio ([1])        74.7 %        74.4 %                   72.7 %        73.1 %            

  Adjusted
  operating
  leverage (
  [1])              (2.9) %       (1.9) %                    0.7 %       (3.9) %            

  Adjusted
  dividend
  payout ratio
  ([1])              43.7 %        40.2 %                   38.8 %        36.9 %            
                                                                                            

Financial                                                                                   
position (in
millions of
Canadian
dollars)                   

  Balance sheet
  assets                                               $  33,926     $  34,937         (3) %

  Loans and
  acceptances                                          $  27,229     $  26,781           2 %

  Deposits                                             $  23,927     $  24,041     — %
                                                                                            

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

  Common Equity                                                                             
  Tier I                                                     7.6 %        n.a.

  Tier 1                                                     9.1 %        n.a.              

  Total                                                     12.7 %        n.a.              
                                                                                            

Other                                                                                       
information                

  Number of                                                                                 
  full-time
  equivalent
  employees                                                3,987         4,201

  Number of                                                                                 
  branches                                                   153           157

  Number of                                                                                 
  automated
  banking
  machines                                                   422           426

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

[2] As defined in OSFI 2013 Capital Adequacy Requirements Guideline.
    Financial Review

The following sections present a summary analysis of the Bank's financial 
condition as at October31, 2013, and of how it performed during the 
three-month period and year then ended. The analysis should be read in 
conjunction with the unaudited financial information for the fourth quarter of 
2013 presented below.

Audited Annual Consolidated Financial Statements and accompanying Management's 
Discussion and Analysis for 2013 are also available on the Bank's website at 
www.laurentianbank.ca. Additional information about the Laurentian Bank of 
Canada, including the Annual Information Form, is available on the Bank's 
website at www.laurentianbank.ca and on SEDAR at www.sedar.com.

2013 Financial Performance

The following table presents management's financial objectives for 2013 and 
the Bank's performance for the year then ended. 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])                                        
                                         2013 OBJECTIVES   2013 RESULTS
                                                                       

Revenue growth                                      > 5%            9 %

Adjusted efficiency ratio ([1])           72.5% to 69.5%         72.7 %

Adjusted net income (in millions of                       
dollars) ([1])                          $145.0 to $165.0         $156.0

Adjusted return on common shareholders'                   
equity( [1])                              10.5% to 12.5%         11.6 %

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

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


The Bank met its revenue growth, adjusted net income, adjusted return on 
common shareholders' equity and Common Equity Tier 1 capital ratio objectives 
for the year 2013 and successfully delivered record adjusted earnings. 
Strong revenue growth stemming from the AGF Trust acquisition and the Bank's 
strategies to diversify its revenue base, combined with a disciplined 
management of expenses and continued excellent credit quality have contributed 
to the overall good performance and to the attainment of the revenue growth, 
capital and profitability objectives. However, the Bank's adjusted efficiency 
ratio was marginally higher than the originally targeted range, in part as a 
result of one-time restructuring charges in the fourth quarter of 2013. When 
excluding these charges totalling $6.3 million, the adjusted efficiency ratio 
stood at 71.9%, within the range set at the onset of the year. 
_______________________________ 
(1) Refer to Adjusting items and Non-GAAP financial measures sections for 
further details. 
Analysis of Consolidated Results 
CONDENSED                                                                  
CONSOLIDATED
RESULTS 
               FOR THE THREE MONTHS ENDED           FOR THE YEAR ENDED 
In thousands OCTOBER 31     JULY 31   OCTOBER 31    OCTOBER 31   OCTOBER 31
of Canadian
dollars,           2013        2013         2012          2013         2012
except per
share
amounts
(Unaudited) 
                                                                        
Net interest $            $           $              $ 568,760   $  531,028
income          141,437     144,549      142,411     
Other income     74,094      76,493       67,985       296,577      265,615 
Total           215,531                                         
revenue                     221,042      210,396       865,337      796,643 
Gain on                                                         
acquisition
and
amortization
of net
premium on
purchased
financial
instruments     (1,006)     (1,140)       23,795       (4,426)       23,795 
Provision        10,000                                         
for loan
losses                        9,000        8,000        36,000       33,000 
Non-interest    170,873                                         
expenses                    174,928      165,377       666,968      604,463 
Income           33,652                                         
before
income taxes                 35,974       60,814       157,943      182,975 
Income taxes      6,485       7,690       15,129        33,263       42,467 
Net income   $   27,167   $  28,284   $   45,685     $ 124,680   $  140,508 
Preferred         2,637                                         
share
dividends,
including
applicable
taxes                         2,520        3,273        11,749       12,768 
Net income   $            $           $              $ 112,931   $  127,740
available to
common
shareholders     24,530      25,764       42,412     
Earnings per                                                    
share                                                                       
Basic      $     0.86   $    0.91   $     1.51     $    3.99   $     4.98 
Diluted    $     0.86   $    0.91   $     1.51     $    3.99   $     4.98 
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 
                 FOR THE THREE MONTHS ENDED         FOR THE YEAR ENDED 
In thousands   OCTOBER 31     JULY 31   OCTOBER 31   OCTOBER 31   OCTOBER 31
of Canadian
dollars,             2013        2013         2012         2013         2012
except per
share amounts
(Unaudited) 
                                                                         
Impact on net                                                               
income 
Reported net
income         $   27,167   $  28,284   $   45,685   $  124,680   $  140,508 
Adjusting                                                                   
items, net of
income taxes (
[1]) 
Gain on                                                                     
acquisition
and
amortization
of net premium
on purchased
financial
instruments 
Gain on
  acquisition     —     —     (16,382)      —     (16,382) 
Amortization
  of net
  premium on
  purchased
  financial
  instruments         744         840          400        3,264          400 
Costs related
to business
combinations
and other (
[2])                                                                  
MRS
  Companies
  transaction
  and
  integration
  related
  costs             2,028       3,977        4,739       11,655       13,936 
AGF Trust
  transaction
  and
  integration
  related
  costs             5,281       6,746        1,744       16,433        2,198 
                8,053      11,563      (9,499)       31,352          152 
Adjusted net
income ([1])   $   35,220   $  39,847   $   36,186   $  156,032   $  140,660 
                                                                         
Impact on
diluted
earnings per
share                                                                 
Reported
diluted
earnings per
share          $     0.86   $    0.91   $     1.51   $     3.99   $     4.98 
Adjusting
items ([1])          0.28        0.41       (0.34)         1.11      — 
Adjusted
diluted
earnings per
share ([1]
[3])           $     1.14   $    1.31   $     1.17   $     5.09   $     4.98 
[1] Refer to the Non-GAAP Financial Measures section. 
[2] Also referred to as Transaction and Integration Costs (T&I Costs). 
The impact of adjusting items on a per share basis does not add due
[3] to rounding for the quarter ended July 31, 2013 and for the year 
ended October 31, 2013. 
Year ended October 31, 2013 compared to year ended October 31, 2012 
Net income was $124.7 million, or $3.99 diluted per share, for the year ended 
October 31, 2013, compared with $140.5 million, or $4.98 diluted per share, in 
2012. Adjusted net income was up 11% year-over-year to $156.0 million for the 
year ended October 31, 2013, compared with $140.7million in 2012, while 
adjusted diluted earnings per share was $5.09, compared with $4.98 diluted per 
share, in 2012. The increase in net income is mainly attributable to the 
full-year contribution of AGF Trust. 
The acquisition of AGF Trust, in the fourth quarter of 2012, contributed to 
the Bank's earnings growth throughout the year in 2013 compared with a single 
quarter of contribution in 2012. As AGF Trust systems and account integration 
is well underway, results for AGF Trust now form part of B2B Bank's earnings. 
Total revenue 
Total revenue increased by $68.7 million or 9% to $865.3 million for the year 
ended October 31, 2013, compared with $796.6million for the year ended 
October 31, 2012. The increase mainly results from the full-year contribution 
of AGF Trust, along with strong growth in other income. 
Net interest income increased by 7% to $568.8 million for the year ended 
October 31, 2013, compared with $531.0 million for the same period in 2012, 
and is mainly explained by the loan and deposit volume purchased through the 
AGFTrust transaction, which more than offset the effect of continuing net 
interest margin pressure over the same period, which was down 3 basis points 
to 1.66%. 
Other income was $296.6 million for the year ended October 31, 2013, compared 
with $265.6 million for the same period in 2012, a 12% year-over-year increase 
reflecting improvements across all revenue streams, notably in fees and 
commissions on loans and deposits originating from increased business volume 
and pricing initiatives. In addition, income from brokerage operations 
increased by $5.8 million as the Bank's brokerage subsidiary capitalized on 
growth opportunities in the fixed income market and benefited from stronger 
equity markets compared to a year ago. Income from sales of mutual funds 
increased by $4.5 million or 25%, as the Bank's continued efforts resulted in 
record mutual fund sales and growth in assets under administration. 
Gain on acquisition and amortization of net premium on purchased financial 
instruments 
For the year ended October 31, 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 $4.4 million. For the year ended October 31, 2012, 
the line-item amounted to $23.8 million, which included a $24.3 million 
pre-tax gain ($16.4 million after income taxes) resulting from the acquisition 
of AGF Trust. Refer to Note 28 to the annual consolidated financial statements 
for additional information on this item. 
Provision for loan losses 
PROVISION FOR                                                                 
LOAN LOSSES 
                 FOR THE THREE MONTHS ENDED           FOR THE YEAR ENDED 
In thousands
of Canadian
dollars,
except
percentage     OCTOBER 31     JULY 31   OCTOBER 31   OCTOBER 31   OCTOBER 31
amounts
(Unaudited)          2013        2013         2012         2013         2012   
                                                                           
Provision for                                                                 
loan losses 
Personal
  loans        $   10,020   $   6,135   $    7,568   $   31,668   $   25,328   
Residential
  mortgage
  loans             1,789       4,645        1,416        8,713        3,454   
Commercial
  mortgage
  loans           (1,648)     (3,141)      (1,929)      (3,640)        1,527   
Commercial
  and other
  loans
  (including
  acceptances)      (161)       1,361          945        (741)        2,691   
           $   10,000   $   9,000   $    8,000   $   36,000   $   33,000   
As a % of
average loans
and
acceptances          0.15 %      0.13 %       0.12 %       0.13 %       0.14 % 
The provision for loan losses amounted to $36.0 million for the year ended 
October 31, 2013, an increase of $3.0 million or 9% from $33.0 million for the 
year ended October 31, 2012. Loan losses on AGF Trust's personal loan and 
residential mortgage loan portfolios for the full year contributed to the 
increase in these portfolios. Provisions on residential mortgage loans also 
reflect the higher loan volume and additional collective provisions required 
on medium-sized residential real estate properties and projects to better 
reflect the risk profile of these loans. Notwithstanding the prudent 
management of the level of provisioning and the close monitoring of the loan 
portfolios, favourable settlements and overall improvements in the commercial 
mortgage loan and commercial loan portfolios contributed to a net credit in 
loan losses of $4.4 million over the last twelve months. The continued low 
level of loan losses reflects the quality of the Bank's loan portfolios and 
the prolonged favourable credit conditions in Canada. 
Non-interest expenses 
Non-interest expenses totalled $667.0 million for the year ended October 31, 
2013, compared with $604.5 million for the year ended October 31, 2012. Taking 
into account realized synergies from the integration of the MRS Companies, the 
increase in the Bank's adjusted non-interest expenses was limited to 
approximately 4% when excluding the additional operating expenses related to 
AGF Trust. T&I Costs increased by $16.2 million to $38.2million for the year 
ended October 31, 2013 compared with $22.0 million for the year ended October 
31, 2012. 
Salaries and employee benefits increased by $30.8 million or 10% to $351.4 
million compared with the year ended October 31, 2012, mainly due to increased 
headcount from the acquisition of AGF Trust, as well as to regular salary 
increases, restructuring costs of $6.3 million, and higher performance-based 
compensation and pension costs. These were partly offset by synergies realized 
from the integration of the MRS Companies and AGF Trust, lower group insurance 
costs and savings resulting from restructurings in the retail banking 
operations in 2012. 
Totalling $171.3 million for the year ended October 31, 2013, premises and 
technology costs increased by $18.4 million compared with the year ended 
October 31, 2012, mainly stemming from rental and IT costs resulting from the 
operations at AGF Trust, as well as higher rental costs related to additional 
square footage of leased premises for IT project teams. Higher IT costs from 
ongoing business growth and amortization expenses as major IT development 
projects were completed, including a $1.6 million impairment charge for 
discontinued IT projects, also contributed to the increase. 
Other non-interest expenses decreased by $2.9 million to $106.1 million for 
the year ended October 31, 2013, from $108.9 million for the same period of 
2012. The decrease is mainly due to lower taxes for the year ended October 31, 
2013, as well as realized cost synergies and overall expense control over 
other expenses, partly offset by the additional nine months of other 
non-interest expenses of AGF Trust. Expenses for the year ended October 31, 
2012 included MRS Companies' outsourcing expenses prior to their integration 
within B2B Bank in 2012. 
T&I Costs for the year ended October 31, 2013 totalled $38.2 million and 
mainly related to IT systems conversions costs, employee relocation costs, 
salaries, professional fees and other expenses for the integration of AGF 
Trust and the MRS Companies. The integration process is progressing according 
to plan and should be completed in 2014. 
The adjusted efficiency ratio was 72.7% for the year ended October 31, 2013, 
compared with 73.1% for the year ended October 31, 2012. On the same adjusted 
basis and despite higher restructuring costs in 2013, operating leverage was 
slightly positive year-over-year, as the addition of AGF Trust and higher 
other income combined with continued cost control measures, aimed at slowing 
expense growth, more than compensated for the impact of compressing margins. 
Income taxes 
For the year ended October 31, 2013, the income tax expense was $33.3 million 
and the effective tax rate was 21.1%. 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 year ended October 31, 2012, the income tax expense was $42.5 million 
and the effective tax rate was 23.2%. When compared with the prior year, the 
lower income tax rate for the year ended October 31, 2013 reflects the 
relatively lower level of revenues from higher-taxed domestic operations when 
including the gain on acquisition of AGF Trust in 2012. 
Three months ended October 31, 2013 compared to three months ended October 31, 
2012 
Net income was $27.2 million, or $0.86 diluted per share, for the fourth 
quarter of 2013, compared with $45.7 million, or $1.51diluted per share, for 
the fourth quarter of 2012. Adjusted net income was down 3% year-over-year to 
$35.2 million for the fourth quarter ended October 31, 2013, compared with 
$36.2 million in 2012, while adjusted diluted earnings per share was $1.14, 
compared with $1.17 diluted per share, in 2012. Notably, net income in the 
fourth quarter of 2013 was adversely impacted by one-time restructuring 
charges of $6.3 million before income taxes ($4.6 million after income taxes), 
or $0.16 diluted per share, related to the optimization of certain activities. 
Total revenue 
Total revenue increased by $5.1 million or 2% to $215.5 million in the fourth 
quarter of 2013, compared with $210.4 million in the fourth quarter of 2012. 
Net interest income decreased by $1.0 million to $141.4 million for the fourth 
quarter of 2013, from $142.4 million in the fourth quarter of 2012, 
essentially reflecting a reduced level of higher margin personal loans, partly 
offset by slightly improved margins. When compared to the fourth quarter of 
2012, margins increased by 4 basis points to 1.66% for the fourth quarter of 
2013. The reduction in lower-yielding liquid assets compared to a year ago and 
the maturing of high-coupon securitization liabilities mainly contributed to 
the increase. These factors more than compensated for tighter loan and deposit 
margins stemming from the repricing of maturing loans and deposits in the very 
low interest rate environment. 
Other income totalled $74.1 million in the fourth quarter of 2013, compared 
with $68.0 million in the fourth quarter of 2012, a$6.1million or 9% 
increase reflecting better performance in most revenue streams. During the 
quarter, fees and commissions on loans and deposits benefitted from increased 
activity as well as from commercial mortgage loan prepayment penalties 
amounting to $2.0 million. Continued solid income from sales of mutual funds 
as well as higher income from investment accounts also contributed to the 
increase year-over-year, partly offset by lower income from treasury and 
financial markets due to lower net realized security gains in the quarter when 
compared to a year earlier. 
Gain on acquisition and amortization of net premium on purchased financial 
instruments 
For the fourth 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 $1.0million. For the fourth quarter of 2012, the 
line-item amounted to $23.8 million, which included a $24.3 million pre-tax 
gain ($16.4 million after income taxes) resulting from the acquisition of AGF 
Trust. Refer to Note 28 to the annual consolidated financial statements for 
additional information on this item. 
Provision for loan losses 
The provision for loan losses increased by $2.0 million to $10.0 million in 
the fourth quarter of 2013 from $8.0 million in the fourth quarter of 2012. 
Albeit at a very low level, the provision for loan losses is congruent with 
the Bank's continued prudent approach to loan loss provisioning but 
nonetheless reflects the overall underlying quality of the Bank's loan 
portfolios. Loan losses on personal loans increased by $2.5 million compared 
with the fourth quarter of 2012, mainly driven by additional collective 
provisions on the AGF Trust portfolios. Loan losses on residential mortgage 
loans increased marginally by $0.4 million year-over-year. Moreover, during 
the fourth quarter of 2013, favourable settlements and overall improvements 
led to a net credit of $1.8 million in loan losses on commercial mortgages and 
commercial loans. 
Non-interest expenses 
Non-interest expenses increased by $5.5 million to $170.9 million for the 
fourth quarter of 2013, compared with $165.4 million for the fourth quarter of 
2012. This mainly resulted from certain one-off charges incurred in the fourth 
quarter of 2013, as detailed below. 
Salaries and employee benefits increased by $2.0 million or 2% to $89.1 
million for the fourth quarter of 2013, compared with the fourth quarter of 
2012. Salaries for the fourth quarter of 2013 include $6.3 million of 
restructuring charges related to the optimization of certain activities, 
compared with a similar but unrelated $2.5million charge in the fourth 
quarter of 2012. Higher pension costs also contributed to the increase 
year-over-year. These were partly offset by lower performance-based 
compensation accruals in the fourth quarter of 2013 and savings related to 
group insurance programs where the Bank co-insures risk. 
Premises and technology costs increased by $6.2 million or 16% to $45.3 
million compared with the fourth quarter of 2012, mostly stemming from higher 
IT costs related to ongoing business growth, including integrated MRS 
Companies expenses, periodic expenses to support the delivery of certain 
projects and higher amortization expense related to completed IT development 
projects. Higher rental costs related to additional square footage of leased 
premises for IT development teams also contributed to the increase. 
Other non-interest expenses decreased by $3.8 million to $26.5 million for the 
fourth quarter of 2013, from $30.3 million for the fourth quarter of 2012. The 
decrease is mainly attributable to lower taxes, professional service fees and 
advertising expenses compared with last year, as the Bank continued to 
exercise disciplined control over expenses in light of a slower growth 
environment for interest income. Expenses for the fourth quarter of 2012 also 
included non-recurring advertising expenses related to the conversion of B2B 
Trust to B2B Bank. 
T&I Costs for the fourth quarter of 2013 totalled $10.0 million and mainly 
related to IT systems conversions costs, employee relocation costs, salaries, 
professional fees and other expenses, as noted above. 
The adjusted efficiency ratio was 74.7% in the fourth quarter of 2013, 
compared with 74.4% in the fourth quarter of 2012. Excluding $6.3 million of 
restructuring charges incurred in the fourth quarter of 2013, the adjusted 
efficiency ratio was 71.7%. On the same basis, the Bank generated over 2% 
positive operating leverage year-over-year, mainly due to higher other income, 
integration synergies, and the Bank's continued cost control initiatives. As 
suggested by these measures, significant efforts are made to streamline 
operations. However, management remains committed to ensuring growth and 
continues to invest in strategic initiatives in each of its business segments. 
Income taxes 
For the quarter ended October 31, 2013, the income tax expense was $6.5 
million and the effective tax rate was 19.3%. 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 October 31, 2012, the income tax expense was $15.1 
million and the effective tax rate was24.9%. Year-over-year, the lower 
income tax rate for the fourth quarter ended October 31, 2013 results from a 
relatively higher level of non-taxable dividend income and a relatively lower 
level of domestic taxable income considering the gain on acquisition of AGF 
Trust in the quarter ended October 31, 2012. 
Three months ended October 31, 2013 compared to three months ended July 31, 
2013 
Net income was $27.2 million or $0.86 diluted per share for the fourth quarter 
of 2013 compared with $28.3 million or $0.91diluted per share for the third 
quarter of 2013. Adjusted net income was $35.2 million, or $1.14 diluted per 
share, compared with $39.8million or $1.31 diluted per share for the third 
quarter of 2013. 
Total revenue decreased to $215.5 million in the fourth quarter of 2013, 
compared with $221.0 million in the previous quarter. Net interest income 
decreased by $3.1 million sequentially to $141.4million in the fourth 
quarter of 2013, as net interest margins decreased by 2 basis points from 
1.68% in the third quarter of 2013 to 1.66% in the fourth quarter of 2013. The 
sequential drop in net interest margin mainly resulted from a seasonally lower 
volume of residential mortgage loan prepayment penalties, partly offset by the 
maturing of higher-coupon securitization liabilities halfway through the third 
quarter. Margins on loans and deposits have stabilized sequentially, 
reflecting a reduced impact of the repricing of loans and deposits in the 
ongoing very low interest rate environment. 
Other income decreased by $2.4 million sequentially, largely due to lower 
income from treasury and financial market operations after a particularly 
strong performance of treasury activities in the third quarter of 2013. The 
decrease was partly offset by commercial mortgage loan prepayment penalties 
amounting to $2.0 million. 
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 $1.0 
million in the fourth quarter of 2013, compared to a $1.1 million charge for 
the last quarter. Refer to Note 28 to the annual consolidated financial 
statements for additional information on this item. 
The provision for loan losses remained low at $10.0 million for the fourth 
quarter of 2013, compared with $9.0 million for the third quarter of 2013, 
reflecting the continued excellent quality of the portfolio. The sequential 
increase is mainly due to higher provisions required on AGF Trust personal 
loans. In the third quarter of 2013, the Bank had also benefited from a $3.5 
million favourable settlement on a single commercial loan exposure, while 
favourable settlements and overall improvements led to a further net credit of 
$1.8 million in loan losses on commercial mortgages and commercial loans in 
the fourth quarter of 2013. 
Non-interest expenses amounted to $170.9 million for the fourth quarter of 
2013, compared with $174.9 million for the third quarter of 2013. T&I Costs 
decreased to $10.0 million in the fourth quarter of 2013, compared with $14.6 
million in the third quarter of 2013. Excluding T&I Costs and $6.3 million of 
restructuring charges incurred in the fourth quarter of 2013, non-interest 
expenses decreased sequentially by 4%, as the Bank continued to carefully 
control costs in the midst of a more muted growth environment for net interest 
income. 
Financial condition 
CONDENSED BALANCE SHEET                                               
                              AS AT OCTOBER 31   AS AT OCTOBER 31
In thousands of Canadian dollars
(Unaudited)                                   2013               2012 


                                                                     

ASSETS                                                               

  Cash and deposits with other    $                  $
  banks                                    208,838            571,043

  Securities                             4,480,525          6,142,961

  Securities purchased under             1,218,255
  reverse repurchase agreements                               631,202

  Loans and acceptances, net            27,113,107         26,663,337

  Other assets                             904,955            928,283
                                  $     33,925,680   $     34,936,826
                                                                     

LIABILITIES AND SHAREHOLDERS'                     
EQUITY                                                               

  Deposits                        $     23,927,350   $     24,041,443

  Other liabilities                      3,091,150          2,873,563

  Debt related to securitization         4,974,714
  activities                                                6,037,097

  Subordinated debt                        445,473            443,594

  Shareholders' equity                   1,486,993          1,541,129
                                  $     33,925,680   $     34,936,826


Balance sheet assets amounted to $33.9 billion at October31, 2013, down $1.0 
billion or 3% from year-end2012. This decrease is essentially related to a 
lower level of liquid assets held by the Bank and the maturity of debt related 
to securitization activities, as loan growth continued. 
Liquid assets 
Liquid assets, including cash, deposits with other banks, securities and 
securities purchased under reverse repurchase agreements, totalled $5.9 
billion at October31, 2013, a $1.4 billion decrease compared to the 
relatively high level held on October31, 2012. This decrease is mainly due 
to a reduction in low-yielding replacement assets that were used to reimburse 
$1.6 billion of matured debt related to securitization activities during the 
year ended October31, 2013. In addition, the Bank reduced the overall level 
of liquid assets over the past twelve months to fund its loan growth. The 
relatively higher level of liquidity in 2012 was due to the acquisition of AGF 
Trust, as well as the Bank's issuance of capital instruments prior to the 
initial Basel III implementation on January 1(st), 2013. As a result, liquid 
assets were relatively lower and decreased to 17% as a percentage of total 
assets, from 21% as at October31, 2012. Overall, the Bank continues to 
maintain diverse funding sources, to prudently manage the level of liquid 
assets and to hold sufficient cash resources in order to meet its current and 
future financial obligations, under both normal and stressed conditions. 
Loans 
Loans and bankers' acceptances, net of allowances stood at $27.1 billion as at 
October31, 2013, up $0.4billion or 2% from October31, 2012. The increase 
in the Bank's loan portfolios was fuelled by the strong organic growth in the 
higher-margin commercial loan portfolios, as retail loans were up marginally. 
Commercial loans, including bankers' acceptances, increased by $397.1 million 
or 17% since October31, 2012, as the Bank capitalized on increased demand 
from its business clients, while the increase in commercial mortgage loans was 
partly offset by a loan sale of $94.7million during the second quarter of 
2013. Personal loans decreased by $560.6 million since October31, 2012, 
mainly reflecting attrition in the acquired portfolios, point-of-sale 
financing loans and lower demand for other personal loans as clients continue 
to deleverage. Residential mortgage loans increased by $566.1 million or 4% 
from October31, 2012, reflecting a slower demand compared to a year ago due 
in part to the tightening of mortgage lending rules introduced by the federal 
government in the second half of 2012. 
Deposits 
Personal deposits decreased slightly to $19.3 billion as at October31, 2013 
compared with $19.4 billion as at October31, 2012, in line with the more 
modest growth in the loan portfolios. Business and other deposits, which 
include institutional deposits also decreased marginally since October31, 
2012 to $4.6 billion as at October31, 2013. The Bank continues to maintain 
diversified funding sources and to actively manage its liquidity levels. As 
such, the Bank took advantage of favourable market conditions and raised 
$200.0 million of five-year senior deposit notes in the second quarter of 2013 
and also raised an additional $275.0million of five-year senior deposit 
notes during the fourth quarter of 2013. Moreover, in light of future 
regulatory liquidity requirements, the Bank continues to focus its efforts on 
retail deposit gathering and maintaining its solid retail funding base. 
Personal deposits represented 81% of total deposits as at October31, 2013, 
unchanged from a year ago. 
Other Liabilities 
Debt related to securitization activities decreased by a net $1.1 billion 
compared with October31, 2012 and stood at $5.0 billion as at October31, 
2013, mainly as four higher-coupon issuances came to maturity. Since the 
beginning of the year, the Bank also funded itself through the securitization 
of $1.2 billion of new residential mortgage loans. The Bank sold $738.5 
million as part of new Canada Mortgage Bond issuances and $416.2 million as 
replacement assets in existing securitization structures. Subordinated debt 
stood at $445.5million as at October31, 2013, relatively unchanged from 
October31, 2012. 
Shareholders' equity 
Shareholders' equity stood at $1,487.0 million as at October31, 2013, 
compared with $1,541.1 million as at October31, 2012. This decrease mainly 
resulted from the repurchase of the Class A Preferred Shares, Series9, for 
$100million, partly offset by internal capital generation, as well as by the 
issuance of 384,892 new common shares under the Shareholder Dividend 
Reinvestment and Share Purchase Plan and 30,000 new common shares under the 
Share purchase option plan. Accumulated other comprehensive income decreased 
by $28.7 million compared to a year-ago, essentially as a result of deferred 
gains on derivatives designated as cash flow hedges that were recognized into 
income. The Bank's book value per common share, excluding accumulated other 
comprehensive income, appreciated to $44.73 as at October31, 2013 from 
$42.81 as at October31, 2012. There were 28,532,569 common shares and 20,000 
share purchase options outstanding as at December 9, 2013. 
Measuring performance in 2014 
The following table presents the Bank's objectives for 2014. 
2014 FINANCIAL OBJECTIVES (                      
[1])                                                                    
                         2013 RESULTS ([2])   2014 OBJECTIVES( [3]) 
                                                                    
Adjusted return on common                        
shareholders' equity( [1])                11.6%          10.5% to 12.5% 
Adjusted net income (in                          
millions of dollars) ([1])               $156.0        $145.0 to $165.0 
Adjusted efficiency ratio (                      
[1])                                      72.7%          72.5% to 69.5% 
Adjusted operating leverage                      
([1])                                      0.7%                Positive 
Common Equity Tier I capital                     
ratio — All-in basis                 7.6%                  > 7.0% 
[1] Refer to the non-GAAP financial measures section. 
In 2014, the comparative results of 2013 will include the impact of
[2] adopting an amended version of IAS 19, which is expected to reduce 
the adjusted net income presented in the table by approximately 


    $5.3 million.

[3] These objectives for 2014 should be read concurrently with the
    following paragraphs on key assumptions.


Over the recent years, the Bank has continuously improved its profitability 
and has significantly increased the size of its operations. Management remains 
committed to delivering profitable growth. These improvements will be further 
consolidated as the Bank enters into 2014. 
The persisting very low interest rate environment and consumer deleveraging 
pose a challenge and should temporarily constrain net interest income growth. 
Anticipated expense growth due to pension costs and ongoing investments in 
2014 related to strategic initiatives and regulatory requirements should also, 
in the short term, put pressure on expenses. To balance the impact of these 
expected conditions in 2014, the Bank will emphasize the distribution of 
higher-margin products mainly through its commercial activities and continue 
to focus on growing income from non-interest sensitive sources. In addition, 
continuous rigorous cost controls and the delivery of the remaining cost 
synergies from its acquired businesses should contribute to containing 
expenses and produce operating leverage. 
Key assumptions supporting the Bank's objectives 
The following assumptions are the most significant items considered in setting 
the Bank's strategic priorities and financial objectives. The Bank's 
objectives do not constitute guidance and are based on certain key planning 
assumptions. Other factors such as those detailed in the Caution Regarding 
Forward-Looking Statements section and in the Risk Appetite and Risk 
Management Framework section of the annual MD&A could also cause future 
results to differ materially from these objectives. 
Considering the environment described above, management believes the following 
factors will underlie its financial outlook for 2014: 


    --  Good organic growth to continue, fuelled by higher-margin
        commercial businesses
    --  Some attrition in the investment loan portfolios, as consumers
        continue to deleverage
    --  Stable margins from the 2013 year-end level
    --  Strategies to grow and diversify other income to be maintained
    --  Loan loss provisions to progressively return to normalized
        levels from 2013 low levels
    --  Relatively stable housing market
    --  Stable interest rate environment
    --  Expenses to be tightly controlled, below the inflation rate
        level, despite the anticipated increase in pension costs
        resulting from changes in accounting standards
    --  Integration of MRS Companies/AGF Trust to be completed in 2014
        with further cost synergies to fully materialize in the second
        half of 2014

These objectives exclude expected integration costs pertaining to acquisitions 
and amortization of acquisition-related net premium on purchased financial 
instruments as well as potential changes in the fair value of the 
acquisition-related contingent consideration.

Medium term outlook beyond 2014

In the medium term, the Bank is expecting that, even with this current rate 
environment, the pressure on the Bank's net interest margin should diminish 
and eventually reverse as the Bank continues to put more emphasis on 
higher-margin products growth. The recent launches of the Bank's leasing 
activities combined with its expanded alt-A mortgage offering through B2B Bank 
is directly in line with this strategy. Also, upon completion of the 
integration process, B2B Bank management will redirect their attention towards 
maximizing the revenue potential.

Furthermore, the Bank's medium term strategic vision is to:
    --  Grow B2B Bank as the dominant bank to Canada's financial
        advisor community
    --  Increase its footprint in commercial banking with targeted
        offerings such as lease financing and other banking solutions
        to niche segments
    --  Pursue the development of its virtual offering
    --  Advance the Bank's pan-Canadian presence
    --  Implement the internal ratings-based approach and optimize its
        regulatory capital

These strategic objectives translate into the following medium term financial 
objectives:
    --  Grow net income per share by 5% to 10% annually
    --  Gradually bring the efficiency ratio below 68%
    --  Generate positive operating leverage
    --  Maintain strong capital ratios that exceed regulatory
        requirements

Capital Management

Regulatory capital

The regulatory capital calculation is determined based on the guidelines 
issued by the Office of the Superintendent of Financial Institutions (OSFI) 
originating from the Basel Committee on Banking Supervision (BCBS) regulatory 
risk based capital framework. As of January 2013, the Bank adopted OSFI's new 
Capital Adequacy Requirements Guideline (the CAR Guideline) drawn on the BCBS 
capital guidelines initially issued in December 2010, and commonly referred to 
as Basel III. Under this new framework, Tier 1 capital, the most permanent and 
subordinated forms of capital, must be more predominantly composed of common 
equity. Tier 1 capital now consists of two components: Common equity Tier 1 
and Additional Tier 1, to ensure that risk exposures are backed by a high 
quality capital base and to provide transparency. Tier 2 capital consists of 
supplementary capital instruments and will continue to contribute to the 
overall strength of a financial institution as a going concern.

Under the CAR 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 CAR 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 CAR Guideline, OSFI indicated that it expected 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. 
Refer to the Management's Discussion and Analysis for 2013 for additional 
information on this item.

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 12.7%, 
respectively, as at October31, 2013. These ratios meet all present minimum 
requirements.

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

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

Regulatory                                                             
capital

  Common Equity
  Tier 1
  capital (A)   $      1,017,659   $   1,013,588                 n.a.  

  Tier 1        $      1,222,863   $   1,218,734     $      1,460,253  
  capital (B)

  Total capital
  (C)           $      1,694,167   $   1,701,438     $      1,974,060  
                                                                       

Total
risk-weighted
assets (D) (
[3])            $     13,379,834   $  13,471,849     $     13,436,433  
                                                                       

Regulatory                                                             
capital ratios

  Common Equity
  Tier 1
  capital ratio
  (A/D)                      7.6 %           7.5 %               n.a.  

  Tier 1
  capital ratio
  (B/D)                      9.1 %           9.0 %               10.9 %

  Total capital
  ratio (C/D)               12.7 %          12.6 %               14.7 %

[1] The amounts are presented on an "all-in" basis.

[2] The amounts are presented in accordance with Basel II as filed with
    OSFI.

[3] Using the Standardized Approach in determining credit risk capital
    and to account for operational risk.


The Common Equity Tier 1 capital ratio increased by 0.1%, from 7.5% as at 
July31, 2013 to 7.6% as at October31, 2013. The increase mainly resulted 
from initiatives to manage risk-weighted assets, as well as to a decrease in 
the personal loan portfolio. 
The Bank has been investing in the last two years to develop the advanced 
internal ratings-based (AIRB) approach of calculating risk-weighted assets and 
evolve away from the more penalizing standardized methodology. Implementation 
was scheduled in the 2015-2018 time frame and included two deliveries. 
However, as there is growing uncertainty and discussions around the world 
about a more risk sensitive, simple and comparable methodology, management has 
decided to reduce the speed of the AIRB implementation and complete the 
project in 2018 into one single delivery. 
Impact of the adoption of changes to employee benefits accounting on 
regulatory capital 
Effective November 1, 2013, the Bank adopted an amended version of IAS 19, 
Employee Benefits. The amendments eliminate the option to defer the 
recognition of gains and losses resulting from defined benefit pension plans, 
known as the "corridor method", which was historically used by the Bank, and 
requires that remeasurements be recorded in shareholders' equity. The adoption 
of this standard will reduce shareholder's equity by approximately $53.6 
million as at November 1, 2013 and, on a pro forma basis, would have reduced 
the Common Equity Tier 1 capital ratio as at October 31, 2013 by approximately 
0.2% to 7.4%. In preparation for this change, the Bank has taken proactive 
measures to mitigate the volatility associated with these remeasurements and 
changes in future market-driven assumptions in order to maintain a strong 
capital position going forward. 
Regulatory developments concerning liquidity 
In December 2010, the BCBS issued the Basel III: International framework for 
liquidity risk measurement, standards and monitoring, which outlines two new 
liquidity requirements in addition to other supplemental reporting metrics. 
This document prescribes the Liquidity Coverage Ratio (LCR) and Net Stable 
Funding Ratio (NSFR) as minimum regulatory standards effective January 2015 
and January 2018, respectively. Further updates regarding the LCR and 
liquidity risk monitoring tools were published in January 2013. In April 2013, 
the BCBS issued a new guideline regarding intraday liquidity management. 
In November 2013, OSFI issued a comprehensive domestic liquidity adequacy 
guideline in draft form that reflects the aforementioned BCBS liquidity 
standards and monitoring tools and formalized the use of the Net Cumulative 
Cash Flow (NCCF) supervisory tool. This guideline will ensure that the Basel 
liquidity guidance is properly applied by institutions in accordance with 
OSFI's requirements. The guideline is to be finalized in 2014 and the 
application date of the chapters pertaining to LCR, NCCF and liquidity 
monitoring tools will be as of January 1, 2015. The date of implementation of 
other areas of clarity related to the intraday liquidity management and the 
NSFR has not yet been determined, but will not be before January 1, 2015. 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 November 6, 2013, the Board of Directors declared regular dividends on the 
various series of preferred shares to shareholders of record on December 9, 
2013. At its meeting on December 11, 2013, given the ongoing progress in the 
Bank's profitability and its confidence in the Bank's future, the Board of 
Directors approved a $0.01 per share increase to the quarterly dividend and 
thus declared a dividend of $0.51 per common share, payable on February 1, 
2014, to shareholders of record on January 2, 2014. 
COMMON SHARE DIVIDENDS AND PAYOUT                                                                              
RATIO 
                                                                                                            
                 FOR THE THREE MONTHS ENDED                                   FOR THE YEARS ENDED 
In Canadian
dollars,
except
payout      OCTOBER 31     JULY 31     OCTOBER 31     OCTOBER 31     OCTOBER 31     OCTOBER 31     OCTOBER 31
ratios
(Unaudited)       2013        2013           2012           2013           2012           2011           2010   


                                                                                                               

Dividends
declared
per common
share       $     0.50     $  0.50     $     0.47     $     1.98     $     1.84     $     1.62     $     1.44  

Dividend
payout
ratio ([1]
[2])              58.0 %      55.0 %         31.2 %         49.6 %         37.0 %         34.8 %         31.1 %

Adjusted
dividend
payout
ratio ([1]
[2])              43.7 %      38.0 %         40.2 %         38.8 %         36.9 %         32.9 %         31.1 %

[1] Refer to the Non-GAAP Financial Measures section.

[2] The ratio for 2010 is presented in accordance with previous
    Canadian GAAP.
    Segmented Information

This section outlines the Bank's operations according to the organizational 
structure in effect throughout 2013. During the year, services to individuals, 
businesses, financial intermediaries and institutional clients were offered 
through the business segments presented in the table below.
    --  Retail & SME-Québec          --  Laurentian Bank Securities &
    --  Real Estate & Commercial         Capital Markets
    --  B2B Bank                     --  Other
    Retail & SME-Québec
                        FOR THE THREE MONTHS ENDED             FOR THE YEAR ENDED

In thousands
of Canadian
dollars,
except
percentage   OCTOBER 31       JULY 31     OCTOBER 31     OCTOBER 31     OCTOBER 31
amounts
(Unaudited)        2013          2013          20 12           2013           2012  
                                                                                    

Net interest                                                           
income       $   76,031     $  77,799     $   75,792     $  303,375     $  310,776  

Other income     39,126        40,897         35,234        153,719        135,121  

Total                                                                  
revenue         115,157       118,696        111,026        457,094        445,897  

Provision                                                              
for loan
losses            6,599         8,349          6,433         26,938         23,978  

Non-interest                                                           
expenses         98,093        96,984         93,359        381,444        366,994  

Income                                                                 
before
income taxes     10,465        13,363         11,234         48,712         54,925  

Income taxes      1,699         2,339          1,941          8,050         11,018  

Net income   $    8,766     $  11,024     $    9,293     $   40,662     $   43,907  
                                                                                    

Efficiency                                                             
ratio ([1])        85.2 %        81.7 %         84.1 %         83.4 %         82.3 %

[1] Refer to the non-GAAP financial measures section.
    Year ended October 31, 2013

The Retail & SME-Québec business segment's contribution to net income was 
$40.7 million for the year ended October 31, 2013 compared with $43.9 million 
for the year ended October 31, 2012.

Total revenue increased by $11.2 million from $445.9 million for the year 
ended October 31, 2012 to $457.1 million for the year ended October 31, 2013, 
as a result of strong growth in other income. Net interest income decreased by 
$7.4 million, as growth in loan and deposit volumes year-over-year did not 
fully compensate for lower margins stemming from the repricing of loans and 
deposits in the sustained very low interest rate environment. Other income 
increased by 14% from $135.1 million for the year ended October 31, 2012 to 
$153.7 million for the year ended October 31, 2013 reflecting improved 
performance in all revenue streams. Higher fees on deposits, higher income 
from sales of mutual funds reflecting record sales and improved equity markets 
compared to a year ago, as well as higher card service revenues and credit 
insurance income all contributed to the increase year-over-year.

Loan losses increased from $24.0 million for the year ended October 31, 2012 
to $26.9 million for the year ended October 31, 2013, consistent with the 
higher loan volume and driven by additional collective provisions required on 
medium-sized residential real estate properties and projects to better reflect 
the risk profile of these loans. Non-interest expenses increased by $14.5 
million or 4%, from $367.0 million for the year ended October 31, 2012 to 
$381.4 million for the year ended October 31, 2013. Higher pension costs, 
restructuring charges, as well as higher premises and technology costs mainly 
accounted for the increase, partly offset by savings resulting from 
restructurings in the retail banking operations in 2012.

The efficiency ratio was 83.4% for the year ended October 31, 2013, compared 
with 82.3% for the year ended October 31, 2012. Despite strong growth in other 
income and an increased focus on containing costs, the impact of the prolonged 
very low interest rate environment continues to weigh on the segment's 
efficiency ratio. However, management remains committed to ensuring continued 
revenue growth and significant efforts are being made to streamline 
operations. Notably, in October the Bank optimized certain processes and 
activities in order to manage the ongoing costs in serving the evolving needs 
of its clients.

Three months ended October 31, 2013

The Retail & SME-Québec business segment's contribution to net income was 
$8.8 million in the fourth quarter of 2013 compared with $9.3 million in the 
fourth quarter of 2012. Notably, net income in the fourth quarter of 2013 was 
adversely impacted by one-time restructuring charges of $4.2 million before 
income taxes ($3.1 million after income taxes) related to the optimization of 
certain activities.

Total revenue increased by $4.1 million from $111.0 million in the fourth 
quarter of 2012 to $115.2 million in the fourth quarter of 2013, mainly driven 
by growth in other income. Net interest income was up marginally, as growth in 
loan and deposit volumes year-over-year compensated for the sustained pressure 
on loan and deposit margins and lower loan prepayment penalties. Other income 
increased by 11% from $35.2 million in the fourth quarter of 2012 to $39.1 
million in the fourth quarter of 2013, as higher fees on deposits and 
continued solid income from sales of mutual funds mainly contributed to the 
increase year-over-year.

Loan losses increased marginally by $0.2 million from $6.4 million in the 
fourth quarter of 2012 to $6.6 million in the fourth quarter of 2013, a very 
low level reflecting the overall underlying quality of the Bank's loan 
portfolios. Non-interest expenses increased by $4.7 million, from 
$93.4million in the fourth quarter of 2012 to $98.1 million in the fourth 
quarter of 2013. Excluding the restructuring charges of $4.2 million incurred 
in the fourth quarter of 2013, compared with a similar $1.0 million charge in 
the fourth quarter of 2012, non-interest expenses were up 2% year-over-year. 
Higher pension costs as well as higher premises and technology costs mainly 
accounted for the increase, offset by lower other expenses.

The efficiency ratio was 85.2% in the fourth quarter of 2013, compared with 
84.1% in the fourth quarter of 2012. Excluding $4.2million of restructuring 
charges incurred in the fourth quarter of 2013, the adjusted efficiency ratio 
was 81.6%. On the same basis, the segment generated 2% positive operating 
leverage year-over-year, mainly due to higher other income and continued cost 
control initiatives.

Compared to the third quarter of 2013, net income decreased by $2.3million 
from $11.0million to $8.8million in the fourth quarter of 2013, mainly due 
to the restructuring charges of $4.2 million ($3.1 million after income taxes) 
incurred in the fourth quarter of 2013. The decrease in total revenue of $3.5 
million is mainly attributable to lower net interest income resulting from 
seasonally lower residential mortgage loan prepayment penalties, as well as 
from lower revenues from card services. This decrease was partly offset by 
lower provisions for loan losses and other expenses.

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

In thousands                                                                        
of Canadian
dollars,
except
percentage   OCTOBER 31       JULY 31     OCTOBER 31     OCTOBER 31     OCTOBER 31
amounts
(Unaudited)        2013          2013           2012           2013           2012
                                                                                    

Net interest                                                           
income       $   21,422     $  21,310     $   21,833     $   84,466     $   87,825  

Other income      9,949         8,931          7,646         37,469         34,430  

Total                                                                  
revenue          31,371        30,241         29,479        121,935        122,255  

Provision                                                              
for loan
losses          (2,082)       (1,880)        (2,040)        (5,500)          3,002  

Non-interest                                                           
expenses         10,210         8,946          8,586         35,953         31,582  

Income                                                                 
before
income taxes     23,243        23,175         22,933         91,482         87,671  

Income taxes      6,206         6,188          6,204         24,427         23,716  

Net income   $   17,037     $  16,987     $   16,729     $   67,055     $   63,955  
                                                                                    

Efficiency                                                             
ratio ([1])        32.5 %        29.6 %         29.1 %         29.5 %         25.8 %

[1] Refer to the non-GAAP financial measures section.
    Year ended October 31, 2013

The Real Estate & Commercial business segment's contribution to net income 
increased by $3.1million or 5% to $67.1 million in 2013, compared with $64.0 
million in 2012.

Total revenue was nearly unchanged at $121.9 million in 2013 compared with 
$122.3 million in 2012. Net interest income decreased by $3.4 million compared 
with 2012, as revenues resulting from volume growth, notably in the commercial 
loan portfolio, were more than offset by margin compression stemming from the 
persistently low interest rates. Other income increased by $3.0 million or 9% 
in 2013, mainly as a result of ongoing underwriting activity and revenues of 
$2.0 million from prepayments on commercial mortgage loans. Loan losses 
decreased by $8.5 million compared with the year ended October 31, 2012 and 
generated a net credit of $5.5 million in 2013, explained by overall 
improvements in both the commercial mortgage loan and commercial loan 
portfolios. This reflects the excellent credit quality of the commercial 
portfolios and is further evidenced by the significantly lower level of 
impaired loans. Non-interest expenses increased by $4.4million compared to 
the year ended October 31, 2012, mainly due to higher salaries and benefits.

Three months ended October 31, 2013

The Real Estate & Commercial business segment's contribution to net income 
increased by $0.3million to $17.0million in the fourth quarter of 2013, 
compared with $16.7 million in the fourth quarter of 2012.

Total revenue increased by $1.9million or 6% to $31.4 million in the fourth 
quarter of 2013, as growth in other income compensated for lower net interest 
income. Net interest income decreased by $0.4 million compared to the fourth 
quarter of 2012 as revenues resulting from growth in commercial loan 
portfolios were more than offset by compressed margins in the fourth quarter 
of 2013. Other income increased by $2.3 million or 30% compared to the fourth 
quarter of 2012, mainly due to revenues of $2.0 million resulting from 
prepayments of commercial mortgage loans. Loan losses in the fourth quarter of 
2013 represented a net credit of $2.1 million, the same result as a year ago, 
and continued to reflect the excellent quality of the commercial loan 
portfolio. Non-interest expenses increased by $1.6million to $10.2million 
in the fourth quarter of 2013 compared with $8.6 million in the fourth quarter 
of 2012 essentially due to a $1.1 million charge related to the optimization 
of certain processes and activities in the fourth quarter of 2013.

Compared to the third quarter of 2013, net income was up marginally as higher 
other income due to revenues from prepayment of commercial mortgage loans and 
lower loan losses were offset by higher non-interest expenses mainly due to 
the optimization charge mentioned above.

B2B Bank
                        FOR THE THREE MONTHS ENDED             FOR THE YEAR ENDED

In thousands OCTOBER 31       JULY 31     OCTOBER 31     OCTOBER 31     OCTOBER 31  
of Canadian
dollars,           2013          2013           2012           2013           2012
except
percentage
amounts
(Unaudited)
                                                                                    

Net interest                                                           
income       $   46,072     $  48,249     $   49,821     $  190,928     $  143,593  

Other income      9,406         9,359          8,923         36,705         34,590  

Total                                                                  
revenue          55,478        57,608         58,744        227,633        178,183  

Gain on                                                                
acquisition
and
amortization
of net
premium   
on purchased
financial
instruments     (1,006)       (1,140)         23,795        (4,426)         23,795  

Provision                                                              
for loan
losses            5,483         2,531          3,607         14,562          6,020  

Non-interest                                                           
expenses         31,843        31,114         35,259        128,092        106,077  

Costs                                                                  
related to
business
combinations
and other (
[1])              9,951        14,600          8,830         38,244         21,997  

Income                                                                 
before
income taxes      7,195         8,223         34,843         42,309         67,884  

Income taxes      2,035         2,240          9,650         11,415         18,436  

Net income   $    5,160     $   5,983     $   25,193     $   30,894     $   49,448  
                                                                                    

Adjusted net                                                           
income ([2]) $   13,213     $  17,546     $   15,694     $   62,246     $   49,600  
                                                                                    

Efficiency                                                             
ratio ([2])        75.3 %        79.4 %         75.1 %         73.1 %         71.9 %

Adjusted                                                               
efficiency
ratio ([2])        57.4 %        54.0 %         60.0 %         56.3 %         59.5 %

[1] Integration costs related to the acquisition of the MRS Companies
    and AGF Trust.

[2] Refer to the non-GAAP financial measures section.
    Year ended October 31, 2013

The B2BBank business segment's contribution to adjusted net income was 
$62.2million for the year ended October 31, 2013, up $12.6 million or 25% 
from $49.6million for the year ended October 31, 2012. The improvement 
essentially stems from the addition of nine more months of AGF Trust's net 
income, which contributed to earnings growth throughout the year compared with 
a single quarter of contribution in 2012. As AGF Trust systems and account 
integration is well underway, results for AGF Trust now form part of B2B 
Bank's earnings. The segment's reported net income for the year ended October 
31, 2013 was $30.9million compared with $49.4million a year ago, 
essentially as a result of the initial gain resulting from the acquisition of 
AGF Trust in 2012 and the higher level of integration costs.

Total revenue increased to $227.6million for the year ended October 31, 2013 
compared with $178.2million for the year ended October 31, 2012. Net 
interest income increased by $47.3million compared to last year, mostly from 
the additional contribution of AGF Trust to net interest income, and totalled 
$190.9million for the year ended October 31, 2013. Notwithstanding the 
impact of the acquired businesses, margin compression given the low interest 
rate environment and investor deleveraging have hampered results throughout 
the year. Other income increased by $2.1million to $36.7million for the 
year ended October 31, 2013, mostly as a result of higher B2B Bank Dealer 
Services-sourced income from investment accounts.

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 
$4.4million for the year ended October 31, 2013. For the year ended October 
31, 2012, the line-item amounted to $23.8 million, which included a 
$24.3million pre-tax gain ($16.4 million after income taxes) resulting from 
the acquisition of AGF Trust. Refer to Note 28 to the annual consolidated 
financial statements for additional information on this item.

Loan losses increased from $6.0million for the year ended October 31, 2012 
to $14.6million for the year ended October 31, 2013, mainly as a result of 
loan losses related to the AGF Trust loan portfolios.

Non-interest expenses, as shown in the table above, increased by 
$22.0million to $128.1million for the year ended October 31, 2013, 
compared with $106.1million for the year ended October 31, 2012. This 
increase includes the full year addition of AGF Trust to current operating 
costs. Otherwise, expenses decreased by approximately 1% year-over-year, 
mainly due to integration synergies from the MRS Companies. T&I Costs for the 
year ended October 31, 2013 totalled $38.2 million and mainly related to IT 
systems conversions costs, employee relocation costs, salaries, professional 
fees and other expenses for the integration of AGF Trust and the MRS Companies.

Three months ended October 31, 2013

The B2BBank business segment's contribution to adjusted net income was $13.2 
million in the fourth quarter of 2013, down $2.5million from $15.7 million 
in the fourth quarter of 2012. Reported net income for the fourth quarter of 
2013 was $5.2 million compared to $25.2 million a year ago.

Total revenue decreased to $55.5 million in the fourth quarter of 2013 from 
$58.7 million in the fourth quarter of 2012. Net interest income decreased by 
$3.7million compared to last year, to $46.1million in the fourth quarter 
of 2013, essentially as a result of the margin compression stemming, in part, 
from the reduced level of higher-margin investment loans as investors 
deleverage. Other income increased by 5% to $9.4 million in the fourth quarter 
of 2013, mostly as a result of higher B2B Bank Dealer Services-sourced income 
from investment accounts.

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 
$1.0 million in the fourth quarter of 2013. For the fourth quarter of 2012, 
the line-item amounted to $23.8 million, which included a $24.3 million 
pre-tax gain ($16.4 million after income taxes) resulting from the acquisition 
of AGF Trust. Refer to Note 28 to the annual consolidated financial statements 
for additional information on this item.

Loan losses increased from $3.6million in the fourth quarter of 2012 to $5.5 
million in the fourth quarter of 2013, mainly driven by additional collective 
provisions on the AGF Trust portfolios. Non-interest expenses, as shown in the 
table above, decreased by $3.4million or 10% to $31.8 million in the fourth 
quarter of 2013, compared with $35.3 million in the fourth quarter of 2012, 
mainly as a result of integration synergies and lower performance-based 
compensation. Expenses for the fourth quarter of 2012 also included 
non-recurring advertising expenses related to the conversion of B2B Trust to 
B2B Bank. T&I Costs for the fourth quarter of 2013 totalled $10.0 million and 
related to IT systems conversions costs, employee relocation costs, salaries, 
professional fees and other expenses for the integration of AGF Trust and the 
MRS Companies.

Compared to the third quarter of 2013, adjusted net income decreased by $4.3 
million, essentially as a result of the sequential decrease in net interest 
income due to tighter margins and a seasonally lower level of loan prepayment 
penalties on mortgages, as well as higher provisions required on the AGF Trust 
personal loan portfolios.

Laurentian Bank Securities & Capital Markets
                       FOR THE THREE MONTHS ENDED             FOR THE YEAR ENDED

In thousands
of Canadian
dollars,
except
percentage   OCTOBER 31      JULY 31     OCTOBER 31     OCTOBER 31     OCTOBER 31
amounts
(Unaudited)        2013         2013           2012           2013           2012  
                                                                                   

Total                                                                 
revenue      $   17,741     $ 16,040     $   15,726     $   67,831     $   59,902  

Non-interest                                                          
expenses         13,919       13,055         12,081         53,407         48,439  

Income                                                                
before
income taxes      3,822        2,985          3,645         14,424         11,463  

Income taxes        913          698            953          3,572          2,941  

Net income   $    2,909     $  2,287     $    2,692     $   10,852     $    8,522  
                                                                                   

Efficiency                                                            
ratio ([1])        78.5 %       81.4 %         76.8 %         78.7 %         80.9 %

[1] Refer to the non-GAAP financial measures section.
    Year ended October 31, 2013

Laurentian Bank Securities & Capital Markets business segment's contribution 
to net income increased by $2.3 million or 27% to $10.9million for the year 
ended October 31, 2013, compared with $8.5million for the year ended October 
31, 2012.

Total revenue increased to $67.8million for the year ended October 31, 2013 
compared with $59.9million for the year ended October 31, 2012. During the 
year ended October 31, 2013, the business segment benefited from improved 
market conditions for trading and retail brokerage activities compared to a 
year ago and capitalized on growth opportunities in the fixed income and 
small-cap equity markets. Non-interest expenses increased by $5.0million to 
$53.4million for the year ended October 31, 2013, mainly due to higher 
headcount, performance-based compensation, commissions and transaction fees, 
in-line with increased market-driven income.

The business segment generated positive operating leverage year-over-year, 
mainly as a result of higher revenues from business initiatives and better 
financial markets compared to a year ago.

Three months ended October 31, 2013

Laurentian Bank Securities & Capital Markets business segment's contribution 
to net income increased to $2.9 million in the fourth quarter of 2013, 
compared to $2.7 million in the fourth quarter of 2012.

Total revenue increased by $2.0 million to $17.7 million in the fourth quarter 
of 2013 compared with $15.7 million for the same quarter of 2012, essentially 
as a result of higher underwriting fees from increased business activities in 
the fixed income market. Non-interest expenses increased by $1.8million to 
$13.9 million in the fourth quarter of 2013, mainly due to higher 
performance-based compensation, commissions and transaction fees, in-line with 
increased market-driven income.

Other Sector
                    FOR THE THREE MONTHS ENDED         FOR THE YEAR ENDED

In thousands
of Canadian  OCTOBER 31      JULY 31   OCTOBER 31   OCTOBER 31   OCTOBER 31
dollars
(Unaudited)        2013         2013         2012         2013         2012
                                                                           

Net interest                           $                        
income       $  (3,746)   $  (3,523)      (6,255)   $ (14,132)   $ (14,376)

Other income      (470)        1,980        1,676        4,976        4,782

Total                                                           
revenue         (4,216)      (1,543)      (4,579)      (9,156)      (9,594)

Non-interest                                                    
expenses          6,857       10,229        7,262       29,828       29,374

Loss before                                                     
income taxes   (11,073)     (11,772)     (11,841)     (38,984)     (38,968)

Income taxes                                                    
recovery        (4,368)      (3,775)      (3,619)     (14,201)     (13,644)

Net loss     $  (6,705)   $  (7,997)   $  (8,222)   $ (24,783)   $ (25,324)
    Year ended October 31, 2013

The Other sector posted a negative contribution to net income of $24.8 million 
for the year ended October 31, 2013 compared with a negative contribution of 
$25.3million for the year ended October 31, 2012.

Net interest income marginally improved from negative $14.4 million in 2012 to 
negative $14.1 million in 2013, mainly as a result of the maturing of 
high-coupon securitization liabilities and the reduction of lower-yielding 
liquid assets throughout the year, which more than offset the impact of less 
favourable market conditions compared to a year ago. Other income was $5.0 
million in 2013 compared with $4.8 million in 2012, as treasury activities 
were up marginally year-over-year. Non-interest expenses were up $0.5 million 
or 2% to $29.8 million in 2013 compared with $29.4 million in 2012. This 
increase includes $1.0million restructuring charges related to the 
optimization of certain processes and activities and a $1.6million 
impairment charge related to discontinued IT projects during the year. 
Premises and technology expenses also contributed to the increase due to 
higher unallocated amortization expense related to completed IT projects, as 
well as higher rental costs stemming from additional square footage of leased 
premises for IT project teams. These increases were more than offset by 
favourable adjustments to sales taxes and lower other expenses.

Three months ended October 31, 2013

The Other sector posted a negative contribution to net income of $6.7 million 
in the fourth quarter of 2013 compared to a negative contribution of $8.2 
million in the fourth quarter of 2012.

Net interest income improved to negative $3.7 million in the fourth quarter of 
2013, compared to negative $6.3 million in the fourth quarter of 2012, mainly 
as a result of a lower level of liquid assets compared to a year ago. Other 
income in the fourth quarter of 2013 decreased to negative $0.5 million, 
compared to $1.7million in the fourth quarter of 2012, mainly resulting from 
net losses on certain hedge positions. Non-interest expenses decreased to $6.9 
million in the fourth quarter of 2013 compared with $7.3 million in the fourth 
quarter of 2012. This decrease is due to lower other expenses and higher 
revenues from foreign insurance, which more than offset increases in premises 
and technology expenses and the restructuring charges as noted above.

On a sequential basis, other income declined by $2.5 million to negative $0.5 
million from $2.0 million in the third quarter ended July31, 2013, mainly 
due to the lower level of net gains realized on security positions after a 
particularly strong third quarter.

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. Quarterly growth rates are calculated 
sequentially (i.e.current period versus the immediately preceding period).

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 financial 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 banking institution whose activities extend 
across Canada. Recognized for its excellent service, proximity and simplicity, 
the Bank serves one and a half million clients throughout the country. Founded 
in 1846, it employs some 4,000 people who make it a major player in numerous 
market segments. The institution has $34 billion in balance sheet assets and 
more than $37 billion in assets under administration.

Laurentian Bank distinguishes itself through the excellence of its execution 
and its agility. Catering to the needs of retail clients via its extensive 
branch network and constantly evolving virtual offerings, the Bank has also 
earned a solid reputation among SMEs, larger businesses and real estate 
developers thanks to its growing presence across Canada and its teams in 
Ontario, Québec, Alberta and British Columbia. For its part, the 
organization's B2B Bank subsidiary is a Canadian leader in providing banking 
and investment products and services to financial advisors and brokers, while 
Laurentian Bank Securities is an integrated broker that is also widely known 
for its expert and effective services 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, December 11, 2013. The live, listen-only, toll-free, call-in 
number is 416 340-2217 or 1 888 789-9572 Code7232884#.

You can listen to the call on a delayed basis at any time from 6:00 p.m. on 
Wednesday, December 11, 2013 until 11:59 p.m. on January11,2014, by 
dialing the following playback number: 905 694-9451 or 1 800 408-3053 Code 
8978820#. 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 audited annual consolidated financial statements for the year ended 
October31, 2013, including the notes to consolidated financial statements, 
are also available on the Bank's Web site at www.laurentianbank.ca.

Consolidated Balance Sheet( )


                              AS AT OCTOBER 31     AS AT OCTOBER 31
In thousands of Canadian
dollars (Unaudited)                           2013                 2012 
                                                                    
ASSETS                                                                  
Cash and non-interest-bearing                       
deposits with other banks       $           82,836   $           90,860 
Interest-bearing deposits with                      
other banks                                126,002              480,183 
Securities                                                              
Available-for-sale                     1,679,067            2,822,588 
Held-to-maturity                         648,874            1,446,751 
Held-for-trading                       2,152,584            1,873,622 
                                     4,480,525            6,142,961 
Securities purchased under                          
reverse repurchase agreements            1,218,255              631,202 
Loans                                                                   
Personal                               7,245,474            7,806,067 
Residential mortgage                  14,735,211           14,169,095 
Commercial mortgage                    2,488,826            2,443,634 
Commercial and other                   2,488,137            2,150,953 
Customers' liabilities under                      
  acceptances                              271,049              211,130 
                                    27,228,697           26,780,879 
Allowances for loan losses             (115,590)            (117,542) 


                                        27,113,107           26,663,337

Other                                                                  

  Derivatives                              126,617              167,643

  Premises and equipment                    73,261               71,871

  Software and other intangible                     
  assets                                   197,594              159,973

  Goodwill                                  64,077               64,077

  Deferred tax assets                        1,998                4,751

  Other assets                             441,408              459,968
                                           904,955              928,283
                                $       33,925,680   $       34,936,826
                                                                       

LIABILITIES AND SHAREHOLDERS'                       
EQUITY                                                                 

Deposits                                                               

  Personal                      $       19,282,042   $       19,369,310

  Business, banks and other              4,645,308            4,672,133
                                        23,927,350           24,041,443

Other                                                                  

  Obligations related to                            
  securities sold short                  1,464,269            1,349,932

  Obligations related to                            
  securities sold under
  repurchase agreements                    339,602              244,039

  Acceptances                              271,049              211,130

  Derivatives                              102,041              100,867

  Deferred tax liabilities                   9,845               16,128

  Other liabilities                        904,344              951,467
                                         3,091,150            2,873,563

Debt related to securitization                      
activities                               4,974,714            6,037,097

Subordinated debt                          445,473              443,594

Shareholders' equity                                                   

  Preferred shares                         205,204              303,249

  Common shares                            446,496              428,526

  Share-based payment reserve                   91                  227

  Retained earnings                        829,678              774,899

  Accumulated other                                 
  comprehensive income                       5,524               34,228
                                         1,486,993            1,541,129
                                $       33,925,680   $       34,936,826

Consolidated Statement of Income
                         FOR THE THREE MONTHS ENDED           FOR THE YEAR ENDED

In thousands of
Canadian
dollars, except
per share          OCTOBER 31     JULY 31   OCTOBER 31    OCTOBER 31    OCTOBER 31
amounts
(Unaudited)              2013        2013         2012          2013          2012
                                                                                  

Interest income                                                           

  Loans          $    269,927   $ 274,778   $  280,762   $ 1,086,279   $ 1,014,861

  Securities           10,845      13,053       17,250        57,204        71,320

  Deposits with                                                       
  other banks             601         314        1,544         2,328         6,148

  Other,                                                              
  including
  derivatives           9,475      10,217       14,529        44,338        59,240
                      290,848     298,362      314,085     1,190,149     1,151,569

Interest expense                                                                  

  Deposits            114,094     115,561      124,926       463,603       445,646

  Debt related                                                        
  to
  securitization
  activities           31,115      33,950       43,809       140,453       163,880

  Subordinated                                                        
  debt                  4,088       4,033        2,654        16,072         9,839

  Other,                                                              
  including
  derivatives             114         269          285         1,261         1,176
                      149,411     153,813      171,674       621,389       620,541

Net interest                                                          
income                141,437     144,549      142,411       568,760       531,028

Other income                                                                      

  Fees and                                                              
  commissions on
  loans and
  deposits             35,704      35,033       30,263       133,791       119,953

  Income from                                                           
  brokerage
  operations           15,113      14,449       14,386        60,607        54,806

  Income from                                                           
  investment
  accounts              8,693       8,249        7,440        32,694        29,079

  Income from                                                           
  sales of
  mutual funds          6,098       5,848        4,731        22,501        18,026

  Income from                                                           
  treasury and
  financial   
  market
  operations            2,095       5,840        4,563        17,877        17,531

  Credit                                                                
  insurance
  income                4,278       4,793        4,415        16,881        15,529

  Other income          2,113       2,281        2,187        12,226        10,691
                       74,094      76,493       67,985       296,577       265,615

Total revenue         215,531     221,042      210,396       865,337       796,643

Gain on                                                                 
acquisition and
amortization of
net premium on
purchased
financial
instruments           (1,006)     (1,140)       23,795       (4,426)        23,795

Provision for                                                           
loan losses            10,000       9,000        8,000        36,000        33,000

Non-interest                                                                      
expenses                                                                

  Salaries and                                                        
  employee
  benefits             89,121      87,680       87,112       351,381       320,603

  Premises and                                                        
  technology           45,277      44,491       39,111       171,275       152,919

  Other                26,524      28,157       30,324       106,068       108,944

  Costs related                                                       
  to business
  combinations
  and other             9,951      14,600        8,830        38,244        21,997
                      170,873     174,928      165,377       666,968       604,463

Income before                                                         
income taxes           33,652      35,974       60,814       157,943       182,975

Income taxes            6,485       7,690       15,129        33,263        42,467

Net income       $     27,167   $  28,284   $   45,685   $   124,680   $   140,508

Preferred share                                                       
dividends,
including
applicable taxes        2,637       2,520        3,273        11,749        12,768

Net income                                                            
available to
common
shareholders     $     24,530   $  25,764   $   42,412   $   112,931   $   127,740

Average number                                          
of common shares
outstanding (in
thousands)                                                                        

  Basic                28,474      28,385       28,118        28,329        25,634

  Diluted              28,481      28,393       28,135        28,338        25,652

Earnings per                                                          
share                                                                             

  Basic          $       0.86   $    0.91   $     1.51   $      3.99   $      4.98

  Diluted        $       0.86   $    0.91   $     1.51   $      3.99   $      4.98

Dividends                                                             
declared per
share                                                                             

  Common share   $       0.50   $    0.50   $     0.47   $      1.98   $      1.84

  Preferred                                                           
  share - Series
  9                      n.a.        n.a.   $     0.38   $      0.75   $      1.50

  Preferred                                                           
  share - Series
  10             $       0.33   $    0.33   $     0.33   $      1.31   $      1.31

  Preferred                                                           
  share - Series
  11             $       0.25   $    0.25   $  —   $      0.91   $   —
    Consolidated Statement of Comprehensive Income
                              FOR THE THREE MONTHS ENDED         FOR THE YEAR ENDED

In thousands of        OCTOBER 31      JULY 31   OCTOBER 31   OCTOBER 31   OCTOBER 31
Canadian dollars
(Unaudited)                  2013         2013         2012         2013         2012

Net income           $     27,167   $   28,284   $   45,685   $  124,680   $  140,508

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                2,764      (5,277)          307           87      (7,641)

  Reclassification                                                        
  of net (gains)
  losses on
  available-for-sale
  securities to net
  income                    (182)        (685)        (831)      (2,752)      (2,374)

  Net change in                                                           
  value of
  derivatives
  designated as cash
  flow hedges                 559     (21,484)      (3,577)     (26,039)     (21,347)
                            3,141     (27,446)      (4,101)     (28,704)     (31,362)

Comprehensive income $     30,308   $      838   $   41,584   $   95,976   $  109,146
    Consolidated Statement of Changes in Shareholders' Equity


                                                                                         FOR THE YEAR ENDEDOCTOBER 
31, 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                                           124,680                                                            
124,680 
Other comprehensive                                                                                                
income (net of income
taxes)                                                                                                                   
    
Unrealized net gains                                                                                             
  (losses) on
  available-for-sale
  securities                                                             87                        87                    
 87 
Reclassification of                                                                                              
  net (gains) losses on
  available-for-sale
  securities to net
  income                                                            (2,752)                   (2,752)                   
(2,752) 
Net change in value                                                                                              
  of derivatives
  designated as cash
  flow hedges                                                                   (26,039)     (26,039)                  
(26,039) 
Comprehensive income                                 124,680        (2,665)     (26,039)     (28,704)                   
95,976  
Issuance of share                                                                                                  
capital                       (160)      17,970                                                             (136)       
17,674  
Repurchase of share                                                                                                
capital                    (97,885)                  (2,115)                                                          
(100,000) 
Dividends                                                                                                                


       

  Preferred shares,                                                                                                
  including applicable
  taxes                                             (11,749)                                                           
(11,749)

  Common shares                                     (56,037)                                                           
(56,037)

Balance as at                                                                                                      
October 31, 2013        $   205,204   $ 446,496   $  829,678   $      9,536   $  (4,012)   $    5,524   $      91   $ 
1,486,993
                                                                                                                        
       


                                                                                        FOR THE YEAR ENDED OCTOBER 
31, 2012 


                                                                                  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, 2011        $   205,527   $ 252,601   $  694,371   $     22,216   $   43,374   $   65,590   $     227   $ 
1,218,316 
Net income                                           140,508                                                            
140,508 
Other comprehensive                                                                                                
income (net of income
taxes)                                                                                                                   
    
Unrealized net gains                                                                                             
  (losses) on
  available-for-sale
  securities                                                        (7,641)                   (7,641)                   
(7,641) 
Reclassification of                                                                                              
  net (gains) losses on
  available-for-sale   
  securities to net
  income                                                            (2,374)                   (2,374)                   
(2,374) 
Net change in value                                                                                              
  of derivatives
  designated as cash                                                                                     
  flow hedges                                                                   (21,347)     (21,347)                  
(21,347) 
Comprehensive income                                                                                                  
                                                 140,508       (10,015)     (21,347)     (31,362)                   
109,146 
Issuance of share                                                                                                  
capital                      97,722     175,925                                                                         
273,647 
Dividends                                                                                                                
    
Preferred shares,                                                                                                
  including applicable
  taxes                                             (12,768)                                                           
(12,768) 
Common shares                                     (47,212)                                                           
(47,212) 
Balance as at                                                                                                      
October 31, 2012        $   303,249   $ 428,526   $  774,899   $     12,201   $   22,027   $   34,228   $     227   $ 
1,541,129 

SOURCE  Laurentian Bank of Canada 
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 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/December2013/11/c7828.html 
CO: Laurentian Bank of Canada
ST: Quebec
NI: FIN ERN DIV  
-0- Dec/11/2013 13:40 GMT
 
 
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