Laurentian Bank of Canada today reported a drop in third-quarter earnings from a year ago due to an income tax charge.

The Montreal-based bank said it earned $6.2 million, or 13¢ a share, in the quarter ended July 31, down from $15.8 million, or 54¢, in the same quarter a year earlier.

The bank said excluding the tax charge of $11 million, or 47¢ a share, its net income would have risen 9% to $17.2 million, or 60¢ a share.

The income tax charge reflects the reduction in future tax assets as a result of lower federal tax rates for the years 2008 and beyond, Laurentian said.

Third-quarter return on equity, a key measure of profitability, would have been 7.7% excluding the tax charge, which is within its 2006 objective of 7% to 8%.

Total revenue rose 3.6% to $135.8 million from $131.1 million a year earlier on increases in net interest margins and loan volumes.

Non-interest expenses rose 2.6% to $101.1 million, from $98.5 million a year earlier.

Laurentian said its provision for credit losses rose slightly to $10 million in the quarter, from $9.8 million.

“I am encouraged with the improvement in operating results for the quarter. After nine months, income from continuing operations improved by more than 20%,
compared to last year. The strong loan growth that we have experienced and our overall results are valuable indicators of our performance and a tribute to the efforts we have made to optimize the operations of all our business segments,” said Raymond McManus, president and CEO, in a news release.