Canadian Western Bank is reporting strong earnings for the third quarter of ended July 31, despite a substantial increase in tax expense.

Earnings before income taxes were up 26% for the third quarter compared with the third quarter 2000, and up 33% on a year to date basis.

Net income before income taxes was $12.12 million compared with $9.66 million a year ago, an increase of 26%. Net income from operations was $8.48 million compared with $8.15 million.

Earnings per share from operations were 68¢ for the quarter, compared with 73¢. Net interest income and other income (excluding deduction for credit loss provision) was $26.8 million compared with $23.2 million, an increase of 16%.

The bank’s efficiency ratio improved to 49.1% from 52.5%. Total assets at quarter end were $3,357 million compared with $2,953 million a year ago, an increase of 14%.

Larry Pollock, president and CEO, said that the excellent third quarter results were achieved despite a more than 100% increase in income tax expense. He noted that the principal highlights for the quarter included continued growth in the loan portfolio, maintenance of high credit quality and a further drop in the efficiency ratio which, at 49.1%, is the best in the Canadian banking industry.

Pollock added that the strong growth in earnings has largely offset the impact of an increase in the estimated effective income tax rate in fiscal 2001 to 32% from 15% in fiscal 2000. He noted that this strong performance was achieved through organic growth, which is expected to continue at approximately the same rate going forward. Among the particularly notable achievements are a substantial and beneficial increase in branch deposits and an increase in total revenues at Canadian Western Trust.