But it was a Good Second Quarter
Total revenues increased by $21 million to $260 million from $238 million.And net income was $60 million or $1.34 per share compared to $1.19 per share for Q2 2017.And diluted earnings per share were $1.47 up from $1.39.And most importantly the quarterly dividend was raised $.01 to $.64 per share.In addition, they raised their Tier1 capital ratio went from 8.1 to 8.6% showing a higher degree of safety for shareholders.
LB made other changes as well.They sold their agriculture loan portfolio for a net gain of $5 million.Their loans to business customers was up almost 20% and they acquired Northpoint Commercial Finance (NCF) and CIT Canada.This brings their total assets to $48 billion and AUM(assets under management) to $31 billion.
More Work to Do
Investors have seen the quarterly report which came out on June 1 and have not bid the stock up.It is not likely that they were unimpressed with LB performance but perhaps not sure if there will be more underwriting problems on their mortgages.In effect, their underwriters have underestimated the risk of default.This blog suggests that investors need more time to see if these problems have been remedied and if their new acquisitions will be accretive also.However adjusted net income for the six months period was up 23% and adjusted net income per share up 5%.So it is likely that the stock price will move towards $48 by the third quarter report.Hopefully the underwriting problems will all be resolved by then. https://accweb.mouv.desjardins.com/identifiantunique/identification?domaineVirtuel=desjardins&langueCible=en;https://www.brookfield.com/
