By: Benj Gallander
Published: Sept 9, 2025
A few years ago, we wrote about Laurentian Bank, just before it announced it was looking to be acquired. Alas, that did not happen, and since then it has been a desultory investment at best, down from our respective purchase prices of just shy of $40. Might it prove to be a better play at this point in time?
Perhaps the website may be attractive to many viewers. It features a good-looking woman on a scooter looking like she has never had so much fun in her life. “Turn your ‘someday’ into ‘I’m on my way’ with the help of our advisors,” the site says. Um, whatever.
But as an investment, will LB help investors get on their way? Currently the stock trades at around $31.50, about half of where it was less than a decade ago. Hmm, that is not a good return on investment for this enterprise founded in 1846 and headquartered in Montreal.
Instability has certainly been a factor hurting the share price. CEO Rania Llewellyn resigned in October, 2023, after a mainframe outage that fall. She had been at the helm less than three years.
Éric Provost was named CEO and president, and it was presented as a “formal” succession process, but one can be cynical about that.
Still, the numbers seem to be getting better. Recently reported quarterly results showed net income of $37.5-million, or 73 cents per share, up from $34.1-million or 67 cents a year ago. Not bad indeed. When looking at the nine-month tally, the change is dramatic: from a loss of $46.2-million a year ago to a gain of $108.4-million. We like these apples better.
In addition, it is very positive news that deposits are increasing, up by $1.1-billion over those nine months to $24.3-billion as of July 31, 2025, from $23.2-billion as of Oct. 31, 2024. Evidently, people are showing confidence in this institution and willing to put money there. Attracting more money is a key success variable for this outfit.
Back in 2020, LB paid a dividend of 40 cents a quarter. It has gone up four times since then, and we suspect it will increase further before the end of 2026. That should boost the stock price somewhat while adding to investors’ returns.
Some investors may prefer to opt for the preferred shares, which trade around $34 and currently offer a payout of around 6 per cent. However, our feeling is that the upside is more muted since the stock trades near a 10-year high.
One other important thing worth noting. Sometimes, when an enterprise puts itself up for sale and is unsuccessful, a suitor arrives seemingly out of the blue to scoop it up. Given the huge profits at the banks, grabbing LB may be a worthy place to spend their cash and would likely be immediately accretive to the bottom line.
The Big Five – or Big Six if you want to include National Bank could be looking for a tasty morsel to expand. LB would fit nicely into that category, and any of them could digest Laurentian without even so much as a burp.
If it happens, it could add a tasty premium to the current share price, and we can see it happening before the end of next year. Previously we opined that it could be north of $50, and we are sticking to that view.
A bidding war, by the way, is not out of the question. If we did not already own so much, we would consider adding more to our positions, and a takeover price north of $50 would not surprise us.
Meanwhile, the common shares fall into our “buy” category, and we will continue to hold and stuff the dividend into our piggy banks. It is very respectable, close to 6 per cent.