Canadian Western Bank posted a 38% jump in profits in the second quarter as assets passed the $4-billion mark for the first time.

The Edmonton-based bank said net income was $8.9 million vs $6.4 million a year ago for the quarter ended April 30. Diluted earnings per share were 63¢ (70¢ basic), up 34% from 47¢ (51¢ basic), while net interest margin improved to 2.69% from 2.47%. Total revenues increased 24% to $32.1 million from $25.8 million.

President and CEO Larry Pollock said it is “particularly gratifying” that the results in the bank’s 60th consecutive profitable quarter approached the record levels achieved in the first quarter even though there were three fewer revenue earning days in the recent quarter.

“This substantial trend for earnings growth principally reflects the bank’s consistently increasing loan portfolio combined with its long history of low loan losses and its strong and improving efficiency ratio,” Pollock said in a statement. New loan opportunities continue to increase and that the outlook for the foreseeable future remains excellent, he said.

The bank said it is optimistic about the ability to grow in its target markets. “Acquisition opportunities, that may arise in the western Canadian marketplace from the consolidation or refocusing of business lines by banks and other financial institutions, also continue to be sought out.”

The bank said credit quality remained strong and stable. The provision for credit losses was 25 basis points of average loans in the quarter and year-to-date, compared with 26 pb for fiscal 2002. Meanwhile, loans increased 16% in the past 12 months and 7% since Oct.31 to total $3.48 billion at quarter end.

The bank’s efficiency ratio, which leads the Canadian industry, improved to 47.8% from 54.5%.
The board of directors declared a semi-annual dividend of 23¢ per common share payable on July 4, to the shareholders of record as of June 19.

This asset milestone represents a doubling in asset size in just over five years. The bank said that in those five years earnings growth outpaced asset growth, with net income before income taxes (not fully taxed until 2002) increasing more than threefold.