In general, Canada’s smaller deposit-taking institutions have survived the global credit crisis in even better shape than their big-bank counterparts.

In fact, some, such as Edmon-ton-based Canadian Western Bank, took advantage of the crisis by picking up personnel and making acquisitions. Others, such as Cash Store Financial Services Inc., also of Edmonton, were able to continue expanding.

Here’s a closer look at the two:

> Canadian Western Bank. Michael Goldberg, an analyst with Desjardins Securities Inc. in Toronto, has a “buy” rating on CWB’s stock, with a 12-month target price of $29.50 a share — a 16.3% increase over the closing price of $25.36 on Oct. 29. He also expects the shares’ quarterly dividend to increase next year, to 13¢ from 11¢.

Says Goldberg: “[CWB] has very few unsecured loans and is, thus, more like a finance company than a bank.” As a result, although CWB’s non-performing loans increase in weak economic times, the bank doesn’t have to increase its loan-loss provisions. CWB’s target clients are business owners, for whom it also provides personal banking services.

Analysts with TD Newcrest, a division of TD Securities Inc. in Toronto, are less enthusiastic. They had a “hold” rating on CWB’s stock in a Sept. 3 report, with a target price of $27.They agree that the dividend could increase next year, but want to see improvements in loan growth before upgrading the stock to a “buy” rating.

Lending to oil and gas firms isn’t a major part of CWB’s business, but, Goldberg says, the bank clearly benefits from increased activity in this area through its financing of service providers and contractors involved in oilsands projects.

CWB made a major acquisition on Feb. 1, with its purchase of Winnipeg-based National Leasing Group Inc., which finances leases of equipment. This acquisition helped push CWB’s assets to $12.1 billion as of July 31 from $11.3 billion a year earlier. Revenue for the 12 months ended July 31 was $412.8 million, vs $311.9 million a year earlier. Net income was $154.9 million, vs $100.4 million.

National Leasing was a good fit for CWB because it didn’t have a presence in the big-equipment leasing market, but was already involved in small-equipment leasing. CWB president Larry Pollock says the bank had looked at the big-equipment leasing market and concluded it would be too expensive to enter from scratch. National Leasing will continue to operate independently.@page_break@CWB plans to open more branches, sticking to Western Canada, where Pollock sees considerable room for expansion. He adds that the bank would like to make more acquisitions, which could be companies, books of businesses or bank branches.

The firm’s other operations include a couple of trust companies, a property and casualty insurer, and controlling interest in two wealth-management firms.

CWB’s management team is strong and is focused on shareholder value, Goldberg says. The bank has share-purchase warrants outstanding that are exercisable at $14 until March 2, 2014. As this price is much lower than the current share price, the warrants are likely to be exercised, so the bank is buying back as many of these warrants as it can to minimize the anticipated dilution of the 66.6 million shares currently outstanding. As of July 27, there were 14.2 million warrants outstanding; CWB has the approval to purchase 1.47 million of them.

> Cash Store Financial Services Inc. Dylan Steuart, an analyst with Stonecap Securities Inc. in Toronto, recommends “overweighting” CFS’s stock in an Oct. 25 report. He also had a 12-month target price of $19. The 17 million outstanding shares closed at $15.72 on Oct. 29.

An Oct. 6 report from Jennings Capital Inc., also of Toronto, didn’t have a rating for CFS’s stock but said, “There are currently a number of attractive growth initiatives at CFS and positive developments on the regulatory front that are potentially being overlooked by the market.”

The Jennings report notes that reviews of payday lending — CFS is a payday-loan advance broker — have been completed in most provinces. This provides the “regulatory clarity to begin using its own balance sheet to lend to customers,” which CFS plans to do.

CFS has been expanding rapidly. It has 523 stores in Canada and plans to add 80 a year over the next two years. CFS chairman and CEO Gordon Reykdal thinks 700 to 750 branches is the right size for the firm. CFS has been offering bank accounts since March and has some ATMs.

CFS also has opened two stores in Britain and expects to open eight to 10 more in the next year, then ramp up expansion, aiming for several hundred a few years out. CFS also has an 18.4% interest in Cash Store Australia Holdings Inc., which has 61 stores; and a 16% interest in RTF Financial Holdings Inc., a Canadian holding company that’s in the business of micro-sized, short-term lending through mobile technology in northern Europe; that company is expected to go public down the road.

In 2008, CFS, which went by the name Rentcash Inc. at the time, spun off its furniture, appliances, electronics and computer rental division into a separate, publicly traded company known as Insta-Rent Inc. Reykdal says this allowed CFS’s management to focus on its core business.

CFS’s revenue was $172 million in the 12 months ended June 30, vs $150.5 million a year earlier. Net income was $18.8 million, vs $14.6 million. IE