Laurentian Bank of Canada (LB) investor relations material

Executive summary

• Reported a net loss of $20.6 million and diluted loss per share of $0.50 for Q2 2026, compared to net income of $32.3 million and EPS of $0.69 in Q2 2025.

• Adjusted net income was $22.6 million and adjusted EPS was $0.46, down from $34.0 million and $0.73 year-over-year.

• Significant adjusting items of $58.8 million ($43.2 million after tax) in Q2 2026, mainly related to transactions with Fairstone Bank and National Bank, including restructuring, impairment, and transaction costs.

• Strategic shift underway to become a specialty commercial bank, with progress on major transactions and business repositioning.

• Major transactions: sale of retail/SME and syndicated loan portfolios to National Bank; acquisition by Fairstone Bank expected to close by late 2026.

Financial highlights

• Adjusted total revenue for Q2 2026 was $236.2 million, down 3% year-over-year and 6% sequentially; total revenue was $213.7 million, down 12% year-over-year, mainly due to lower other income.

• Net interest income increased by $2.8 million (2%) to $185.0 million; net interest margin stable at 1.84%.

• Provision for credit losses rose to $26.9 million (31 bps of average loans), up from $16.7 million (19 bps) in Q2 2025, driven by higher impaired commercial loans.

• Adjusted non-interest expenses increased 1% year-over-year to $183.2 million; reported non-interest expenses rose to $219.5 million, reflecting restructuring and transaction costs.

• Efficiency ratio worsened to 102.7% (reported) and 77.6% (adjusted), up from 76.1% and 75.2% respectively.

Outlook and guidance

• Confident in closing transactions with Fairstone Bank and National Bank by late 2026, pending regulatory approvals.

• Additional transaction-related charges of approximately $40 million pre-tax expected in Q3 2026.

• Loans projected to decline by 2%-3% in Q3, mainly due to seasonal reduction in inventory financing and residential mortgages.

• Net interest margin expected to decrease, with efficiency ratio and PCLs to remain aligned with Q2.

• Management remains confident in the strategic repositioning and expects continued high-quality growth in core commercial businesses.