Laurentian Bank hikes dividend makes acquisition

Laurentian Bank of Canada (TSX:LB) boosted its quarterly dividend and announced a major acquisition Wednesday as it beat expectations by earning $33.9 million in the second quarter.The Montreal-based bank said its quarterly dividend will rise two cents, or four per cent, to 47 cents per common share, payable Aug. 1.It also announced that its subsidiary B2B Trust will acquire the trust operations of Toronto-based AGF Management Ltd., with the deal set to close in August.Laurentian says it recorded its best ever second quarter by earning $1.22 per share for the period ended April 30, up from $1.17 per share, or $31 million in the prior year.Revenues increased to $198.7 million from $183.2 million in the year-ago period. Return on common shareholders’ equity was 12.1 per cent, down from 12.7 per cent in the second quarter of 2011.Excluding transaction and integration costs related to its previously announced acquisition of the MRS Companies, net income grew 17 per cent  to $36.3 million or $1.31 diluted per share.The bank was expected to earn $1.19 per share on $194 million of revenues, according to analysts polled by Thomson Reuters.In the latest expansion for Laurentian, the bank’s B2B Trust announced it will pay $415.5 million to acquire the trust operation of AGF Management Ltd. (TSX:AGF.B), a Toronto-based mutual fund and wealth management company.AGF Trust currently provides investment products such as guaranteed investment certificates and lends money for investment and real-estate transactions. It has been operating through about 20,500 financial advisers and 1,050 mortgage brokers across the country.Laurentian said its provision for loan losses decreased 37 per cent to $7.5 million in the quarter, reflecting strong credit conditions in Canada and the quality of the its loan portfolios. However, the bank said remains cautious amid the ongoing economic uncertainty.