Laurentian Bank of Canada today reported weaker first quarter results due to an unfavourable tax adjustment of $5.6 million.

The Montreal-based bank said net income for the quarter ended January 31 was $19.1 million, or 68¢ a share,, compared to net income of $20.6 million, or 74¢ a share, for the first quarter of 2007.

Return on common shareholder’s equity was 8.1% for this first quarter of 2008, compared to 9.4% for the same period in 2007.

Results for the first quarter of 2008 include an unfavourable tax adjustment of $5.6 million ($0.23 diluted per common share), reflecting the decrease in Laurentian’s future income tax assets as a result of further reductions in federal income tax rates considered to be substantively enacted in December 2007.

Excluding this tax adjustment, net income would have stood at $24.7 million, or 91¢ per common share, and return on common shareholders’ equity would have been 10.9%.

Results for the first quarter of 2007 included a $0.9-million favourable adjustment to income taxes (4¢ a share); excluding this adjustment, net income would have stood at $19.7 million, or 70¢ diluted per common share.

Excluding these tax adjustments, net income improved by $5 million or 25% compared to the first quarter of 2007 and net income per common share rose by 21¢, or 30%.

Commenting on first-quarter results, Réjean Robitaille, president and CEO, stated: “Results for the first quarter are very satisfactory considering the prevailing financial market conditions and the uncertain economic environment. The continued growth in loan and deposit volumes, as well as effective cost control, enabled us to maintain strong core results.”

Total revenue increased 7% to $151.1 million for the first quarter of 2008, compared with $141.6 million for the first quarter of 2007.

The provision for credit losses stood at $9.5 million for the first quarter of 2008 compared to $10 million for the first quarter of 2007.