Laurentian Bank of Canada (LB.TO) | Investment Case

1. Company Snapshot

1.a. Company Description

Laurentian Bank of Canada, together with its subsidiaries, provides various financial services to personal, business, and institutional customers in Canada and the United States.It operates through three segments: Personal Banking, Commercial Banking, and Capital Markets.The company offers notice, demand, and term deposits; commercial, residential mortgage, and personal loans; real estate, and equipment and inventory financing; and credit life and disability insurance products.

It also provides investment securities services; research, market analysis, and advisory services; corporate underwriting services for debt and equity; and administrative, foreign exchange, and trustee services.The company sells its products through the bank's financial clinics, advisors, broker channels, and digital platforms.Laurentian Bank of Canada was founded in 1846 and is headquartered in Montréal, Canada.

Show Full description

1.b. Last Insights on LB

Laurentian Bank of Canada's recent performance was driven by a strong second quarter 2025 earnings release, which reported net income of $32.3 million and diluted earnings per share of $0.69. This represents a significant improvement from the second quarter of 2024, where the company reported a net loss of $117.5 million and a diluted loss per share of $2.71. Additionally, the company declared a regular quarterly dividend of 47 cents per share on its common shares, payable on August 1, 2025, to the holders of record at the close of business on July 1, 2025.

1.c. Company Highlights

Last Price	39.86
Change Percentage	-0.10%
Open	39.82
Previous Close	39.9
Market Cap ( Millions)	1766
Volume	561567
Year High	40.01
Year Low	24.37
M A 50	33.39
M A 200	30.3

FCF Yield	37.06%
Dividend Yield	4.72%
ROE	5.23%
Debt / Equity	683.78%
Net Debt / EBIDTA	8031.13%
Price To Book	0.62
Price Earnings Ratio	11.84
Price To FCF	2.7
Price To sales	0.75
EV / EBITDA	88.1

2. Laurentian Bank's Q3 2025 Earnings: A Review of Financial Performance

Laurentian Bank reported Q3 2025 revenues of $246.8 million, with adjusted net income of $39.6 million and diluted EPS of $0.78. The actual EPS was $0.846, beating estimates of $0.783. The bank's net interest margin (NIM) stood at 1.82%, and the CET1 capital ratio was 11.3%. The bank's efficiency ratio was 75.7%, indicating room for improvement in cost control.

Publication Date: Sep -23

                                    📋 Highlights
                                    Financial Performance:
                                                Total revenue $246.8M, adjusted net income $39.6M, and diluted EPS $0.78 (down 11% YoY, up 7% QoQ).
Efficiency & Capital:
                                                Adjusted efficiency ratio 75.7% (target <60% by 2025); CET1 ratio 11.3% (up 30 bps sequentially).
Commercial Loan Growth:
                                                $1.1B YoY increase in commercial loans, driven by 5% QoQ growth in commercial real estate (85% collateralized) and stable inventory financing (41% utilization).
Credit Risk Management:
                                                Provision for credit losses 12 bps; allowances declined to $189.9M amid disciplined underwriting and 95% collateral coverage for impaired loans.
Liquidity & Strategy:
                                                $500M sequential deposit growth, high liquidity coverage, and $1.5M quarterly NII potential from U.S. rate cuts if inventory finance recovers.

                                

Valuation Metrics

Laurentian Bank's current valuation metrics indicate a Price-to-Tangible Book Value (P/TBV) that needs to be assessed in the context of its peers, a Dividend Yield of 5.69%, suggesting an attractive return for income-seeking investors. The bank's Return on Equity (ROE) is 5.23%, a metric that will be closely watched for signs of improvement.

Financial Highlights

The bank's commercial loans grew by $1.1 billion year-over-year, driven by a 5% sequential growth in commercial real estate. Inventory financing utilization remained at 41%, below historical averages. The provision for credit losses was 12 basis points, supported by robust underwriting. The bank's liquidity coverage remained at the industry high end, with $500 million sequential deposit growth.

Strategic Initiatives

Laurentian Bank is prioritizing strategic initiatives, including simplifying operations, enhancing system redundancy, and pursuing partnerships to expand commercial specialization. The bank is also investing in technology, including a shift to cloud infrastructure, to drive long-term efficiency gains. Management anticipates stable NIM and efficiency ratios in Q4, with CET1 expected to stay above 10%.

Outlook

The bank remains focused on executing its strategy to strengthen market positioning and achieve midterm profitability goals. Analysts expect revenue growth of 3.0% next year. The bank's capital position is expected to remain strong, with a CET1 ratio of 11.3%, providing flexibility to fund high-margin opportunities.

3. NewsRoom

Correction To TSX Closer: Up For the First Time This Week, Back To Near Last Friday's Record Close

Dec -04

Source:

Equitable Bank parent EQB to buy PC Financial from Loblaw

Dec -04

Source:

TSX Closer: Up For the First Time This Week, Back To Near Last Friday's Record Close

Dec -03

Source:

Laurentian Bank to sell operations to Fairstone Bank, National Bank of Canada

Dec -03

Source:

Why Analysts See Laurentian Bank Undervalued as Its Story Shifts After Fairstone Deal

Dec -03

Source:

TSX Down 130 Points at Midday With Energy The Biggest Decliner

Dec -02

Source:

Fairstone Bank to buy Laurentian Bank of Canada for $1.9 billion

Dec -02

Source:

Laurentian Bank to be Acquired by Fairstone Bank, Will Sell Retail/SME Portfolios to National Bank

Dec -02

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Banking and Related Activities

Expected Growth: 4.0%

Laurentian Bank of Canada's 4.0% growth in Banking and Related Activities is driven by increased lending activities, improved deposit growth, and enhanced digital banking capabilities. Additionally, strategic acquisitions, cost savings initiatives, and a favorable interest rate environment have contributed to this growth.

7. Detailed Products

Personal Banking

Laurentian Bank of Canada offers a range of personal banking services, including chequing and savings accounts, credit cards, loans, and investment products.

Business Banking

Laurentian Bank of Canada provides business banking services, including commercial loans, lines of credit, and cash management solutions.

Wealth Management

Laurentian Bank of Canada offers wealth management services, including investment advice, portfolio management, and estate planning.

Mortgage Solutions

Laurentian Bank of Canada provides mortgage solutions, including residential and commercial mortgages, and mortgage insurance.

Credit Cards

Laurentian Bank of Canada offers a range of credit cards, including cashback, rewards, and low-interest credit cards.

Investment Products

Laurentian Bank of Canada offers a range of investment products, including mutual funds, exchange-traded funds, and guaranteed investment certificates.

Insurance Services

Laurentian Bank of Canada offers insurance services, including life insurance, disability insurance, and home and auto insurance.

8. Laurentian Bank of Canada's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Laurentian Bank of Canada is medium, as there are alternative financial institutions and digital payment methods available to customers.

Bargaining Power Of Customers

The bargaining power of customers is low, as individual customers have limited negotiating power, and the bank has a large customer base.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low, as the bank has a diverse range of suppliers and can negotiate favorable terms.

Threat Of New Entrants

The threat of new entrants is low, as there are significant barriers to entry in the banking industry, including regulatory hurdles and high capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high, as the Canadian banking industry is highly competitive, with several major players competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	87.48%
Debt Cost	10.35%
Equity Weight	12.52%
Equity Cost	10.35%
WACC	10.35%
Leverage	698.71%

11. Quality Control: Laurentian Bank of Canada passed 1 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Laurentian Bank

A-Score: 6.9/10

Value: 7.1

Growth: 5.1

Quality: 3.5

Yield: 9.0

Momentum: 7.5

Volatility: 9.3

1-Year Total Return ->

Citizens & Northern

A-Score: 6.6/10

Value: 6.0

Growth: 4.9

Quality: 7.4

Yield: 8.0

Momentum: 5.0

Volatility: 8.3

1-Year Total Return ->

Hawthorn Bancshares

A-Score: 6.2/10

Value: 6.1

Growth: 5.2

Quality: 6.0

Yield: 5.0

Momentum: 8.5

Volatility: 6.7

1-Year Total Return ->

Flushing Financial

A-Score: 5.6/10

Value: 8.3

Growth: 2.7

Quality: 3.9

Yield: 10.0

Momentum: 3.5

Volatility: 5.3

1-Year Total Return ->

ACNB

A-Score: 5.6/10

Value: 4.5

Growth: 5.2

Quality: 5.8

Yield: 6.0

Momentum: 5.0

Volatility: 7.0

1-Year Total Return ->

BayFirst

A-Score: 4.9/10

Value: 9.3

Growth: 7.3

Quality: 5.9

Yield: 4.0

Momentum: 1.0

Volatility: 2.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

9.56%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.35%

Laurentian Bank of Canada - CA51925D1069

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on LB

1.c. Company Highlights

Weak Momentum

Higher Yield

Lower Growth

Earnings Miss

Revenues Beats

Earnings Beats

Lower Quality

Revenues Miss

Medium Volatility

Less Volatile

2. Laurentian Bank's Q3 2025 Earnings: A Review of Financial Performance

Valuation Metrics

Financial Highlights

Strategic Initiatives

Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Banking and Related Activities

Expected Growth: 4.0%

7. Detailed Products

Personal Banking

Business Banking

Wealth Management

Mortgage Solutions

Credit Cards

Investment Products

Insurance Services

8. Laurentian Bank of Canada's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Laurentian Bank of Canada passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

39.86$

Current Price

39.86$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA