Laurentian Bank of Canada today reported a big jump in third quarter income, due in part to an $11 million tax adjustment in the third quarter of 2006.

The Montreal-based bank reported net income of $23.2 million, or 85¢ diluted per share, for the third quarter ended July 31, compared to $6.2 million, or 13¢ diluted per share, for the same period in 2006.

Return on common shareholders’ equity was 10.5% for the quarter, compared to 1.7% for the same period in 2006.

Results for the third quarter of 2006 included an unfavorable tax adjustment of $11 million (47¢ diluted per share). Excluding this tax adjustment, net income for the third quarter of 2006 would have stood at $17.2 million, or 60¢ diluted per share.

Compared to the third quarter of 2006 and considering this adjustment, net income for the third quarter of 2007 improved by $6 million, or 35%, and diluted earnings per share rose by 25¢, or 42%.

The bank said the unusual tax item had “no significant effect on the results for the nine-month period ended July 31, 2006, as it was offset by a favorable $10.7 million net tax adjustment recorded during the second quarter of 2006.”

Total revenue increased by $13 million, or 9%, to $151 million in the third quarter of 2007, compared to $138 million in the third quarter of 2006.

The provision for credit losses was stable at $10 million, or 0.23% of average assets, in the third quarter of 2007 when compared to the third quarter of 2006, even though loan volumes have increased by more than 10% over the last 12 months, the bank said.

“The bank’s performance for the third quarter was very solid. The strong retail loan growth, especially over the last quarter, and steady improvement in net income are good indications of our ability to develop our business,” said Réjean Robitaille, president and CEO, in a release.

“The recent turmoil related to the liquidity crisis has certainly retained our attention over the last month. However, the Bank has a very limited exposure to conduits issuing asset-backed commercial paper,” Robitaille added.