London, Ont.-based Pacific & Western Credit Corp. reported on Thursday that it had a loss of $2.2 million in the quarter ended April 30 compared with a loss of $601,000 for the same period a year ago.

On a year-to-date basis, the firm has posted a loss of $4.9 million compared with a loss of $65,000 for the same period a year ago. Its loss was impacted by a decrease in net interest income, which was $1.5 million for the quarter compared with $1.1 million for the previous quarter and $2.9 million for the same period a year ago.

Meanwhile, net interest income (on a year-to-date basis) was $2.6 million compared with $8 million for the same period a year ago. The decrease in net interest income from a year ago was due primarily to a compression of spreads caused by a rapid decline in interest rates associated with its interest earning assets that was not equalled by a similar decline in the interest rates on our deposits.

Despite the compression of spreads, the the firm has maintained its focus on low-risk lending and investing opportunities and does not have any direct exposure to the North American subprime lending market or to asset-backed commercial paper.

As of April 30, total assets were $1.6 billion compared to $1.3 billion a year ago and $1.5 billion at the end of the previous quarter. Lending assets were $1 billion at the end of the quarter compared with $990 million a year ago and $1.1 billion at the end of the previous quarter. Credit quality remains strong with a ratio of gross impaired loans as a percentage of assets of 0.49% at the end of the quarter compared to 0.53% at the end of the previous quarter.

Total revenue (teb), which is comprised of net interest income after the provision for credit losses and other income and/or charges, was $1.2 million for the quarter compared to $311,000 for the previous quarter and $3 million a year ago.

On a year-to-date basis, total revenue was $1.6 million compared with $8 million a year ago. The decrease in total revenue from a year ago was due primarily to a decrease in net interest income and charges totalling $786,000 included in other income (charges) recorded in the current year relating to a mark-to-market adjustments on interest rate swap contracts that had been entered into for interest risk management purposes.