Laurentian Bank of Canada’s third-quarter earnings missed market expectations, hurt by costs related to restructuring, lower margins and a fall in residential mortgage sales, sending its shares to the lowest level since January, 2016.

The Montreal-based lender reported an 18-per-cent decline in earnings per share, excluding one-time items, to $1.34 in the third quarter ended July 31. Analysts had, on average, estimated earnings of $1.45, according to Thomson Reuters I/B/E/S.

Its shares, which have fallen by nearly 30 per cent since it announced “documentation issues and client misrepresentations with some mortgages” last December, were trading down 4.7 per cent to $44.35 on Tuesday morning in Toronto, having earlier hit a low of $44.25, down 4.9 per cent.

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Laurentian said it had completed a review of mortgages incorrectly sold to Canada’s federal housing agency and an unnamed buyer and repurchased mortgages from those parties during the quarter.

“On the positive front, the bank’s mortgage portfolio review is complete with repurchases looking to come within guidelines,” CIBC analyst Robert Sedran said in a research note.

“Our more pressing concern was earnings power and the downward drift in our estimates of late. The news on that front was more problematic, with higher expenses and lower net interest income,” he said.

During the quarter, the bank repurchased $135-million of mortgages that had been sold to the Canada Mortgage and Housing Corporation’s (CMHC) securitization programs and $115-million of mortgages sold to an unnamed party. Both buybacks were in line with its past guidance.

Mortgage lending practices have been under scrutiny in Canada since problems related to underwriting procedures were identified at alternative lender Home Capital Group.