Western Financial Group Reports Second Quarter Financial Results

High River, Alberta – August 11, 2008 (TSX – WES ) - Western Financial Group (“the Company”) announced today its strongest quarterly net income result, as well as operating and financial results for the six months ended June 30, 2008.

FINANCIAL HIGHLIGHTS	Three months ended June 30				Six months ended June 30
(in $ thousands)	2008	2007	% Change		2008	2007	% Change
THE NETWORK
Revenue ($)	21,872	17,739	23.3	%	38,361	32,282	18.8	%
Operating income ($)	7,943	6,755	17.6	%	11,793	11,136	5.9	%
BANK WEST
Interest and investment income ($)	4,609	2,760	67.0	%	9,551	5,320	79.5	%
Net interest income ($)	1,506	934	61.2	%	3,052	1,913	59.5	%
Operating income (loss) ($)	435	(42)	1135.7	%	1,132	246	360.2	%
WESTERN LIFE
Premium and investment income ($)	7,488	5,245	42.8	%	15,492	12,135	27.7	%
Operating income ($)	1,260	948	32.9	%	2,436	1,781	36.8	%
CORPORATE AND ALL OTHER
Revenue ($)	402	901	(55.4)	%	1,069	1,467	(27.1)	%
Operating income ($)	(1,491)	(1,475)	1.1	%	(3,221)	(3,089)	4.3	%
CONSOLIDATED
Revenue ($)	34,371	26,645	29.0	%	64,473	51,204	25.9	%
Net income ($)	5,839	4,090	42.8	%	8,225	6,635	24.0	%
Earnings per share
- basic ($)	$ 0.08	$ 0.08	(0.0)	$ 0.13	$ 0.14	(7.1)
- diluted ($)	$ 0.08	$ 0.07	14.3		$ 0.13	$ 0.12	8.3

“After an encouraging start to the year, our second quarter was the strongest in our history,” said Scott Tannas, President and CEO. “Performance has been driven on a broad base of strong organic revenue growth, low loan loss provisions, and the widening of our Network’s margins. We continue to be on target for growth in revenue, earnings, and market share for 2008.”

2008 OBJECTIVES

Same Store Revenue 7%-10% growth

Bank Assets 10% growth

EPS 8%-12% growth

The Network continued to increase market share, with same store sales up again from 8.1% to 9.5% year over year. Products per customer held steady at 2.2, and EBITDA margins improved to 36% in the quarter.

Bank West decreased its loan book slightly from $283.6 million in the first quarter to $281.2 million in the second quarter. “We continue to maintain a conservative risk profile,” said Bob Marshall, President of Bank West. “The opportunities for growth are plentiful in the current market, however we continue to seek customer relationships in areas that fit our strategic goals rather than transactions that may only provide short term profitability.” The Bank’s operating income grew to $1.1 million for the six months of 2008 compared to $246,000 for the same period in 2007.

Western Life’s income posted a record first 6 months in its history, the result of stable claims ratios and strong new sales. Policy/certificate count increased from 23,952 to 26,992, premium and investment income increased 28% to $15.5 million while operating income increased 37% to $2.4 million for the period ending June 30, 2008.

The Company’s strategic partnership portfolio, including Jennings Capital, HED, Falkins Insurance and Harvard Western, all showed expected returns in the second quarter.

Conference Call

Western Financial Group will host a conference call to discuss the Company's second quarter results on Tuesday, August 12, 2008 at 2:00 pm Mountain time (4:00 pm Eastern time). To participate in the live conference call, please dial either (416) 644-3431 or (866) 250-4909. A replay of the call will be available from August 12th at 4:00 pm MT until August 26th at 11:59 PM MT. To access the replay please dial either (416) 640-1917 or (877) 289-8525 and enter the passcode 21279764 followed by the pound sign. The conference will also be broadcast live over the internet and archived through the Company's website at www.westernfinancialgroup.ca.

Western Financial Group is a leader in providing insurance, financial services and banking services in over 90 communities, to more than 400,000 individuals and businesses in Western Canada through its WFG Agency Network locations, its affiliated insurance brokers, Western Life Assurance Company and Bank West.

The Company’s Financial Report for the second quarter of 2008 will be filed on SEDAR on or before August 11, 2008.

Forward-looking statements involve numerous assumptions, risks and uncertainties, including the risk that prediction and other forward-looking statements may not prove to be accurate. We caution the reader not to place undue reliance on these disclosures, as a number of important factors could cause actual results to differ materially from the estimates and comments expressed in them. Such factors may include, but are not limited to: changing financial and economic conditions in Canada, particularly in Western Canada; regulatory developments; competition industry trends and availability of capital resources; and our anticipated success in managing our risks. We caution readers that the foregoing list is not exhaustive. Except required by law, we do not undertake to update any forward-looking statements, written or oral, that we may make from time to time regarding our operations and performance.

For further information, please contact:

Arlene Beggs, Assistant to the President

Western Financial Group

403-652-2663

WESTERN FINANCIAL GROUP

CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except for per share amounts)
As at June 30	As at December 31
2008	2007
ASSETS
Cash and cash equivalents	$ 24,612	$ 36,033
Marketable securities – held-for-trading	52,836	46,886
Marketable securities – available-for-sale	27,495	51,104
Accounts receivable	27,863	26,680
Prepaid expenses	6,070	5,960
Income taxes receivable	-	2,191
Future income taxes	401	584
Other assets	1,262	1,489
Equity investments	38,092	26,100
Mortgages and loans	279,257	288,202
Capital assets	15,065	12,141
Intangible assets	27,200	27,166
Goodwill	99,889	98,165
	$ 600,042	$ 622,701
LIABILITIES
Accounts payable and accrued liabilities	$ 48,345	$ 55,685
Actuarial liabilities	37,254	38,042
Provision for unpaid and unreported claims	9,077	8,653
Income taxes payable	27	-
Customer deposits	255,638	283,299
Long term debt	36,685	33,389
Future income taxes	5,260	5,274
	$ 392,286	$ 424,342
SHAREHOLDERS' EQUITY
Share capital (Note 6)	173,733	168,693
Other paid in capital	-	51
Contributed surplus	1,896	1,849
Retained earnings	33,361	28,015
Accumulated other comprehensive loss	(1,234)	(249)
Total Shareholders’ Equity	207,756	198,359
	$ 600,042	$ 622,701

WESTERN FINANCIAL GROUP

CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (unaudited)
(in thousands, except for per share amounts)
Three months ended June 30		Six months ended June 30
	2008	2007	2008	2007
REVENUE
Commission and other customer income	$ 22,129	$ 17,973	$ 38,927	$ 32,932
Premium income	7,717	6,383	14,878	12,631
Interest income on customer loans	4,610	2,760	9,551	5,320
Investment income
Change in fair value of held-for-trading assets	(615)	(1,451)	(158)	(1,496)
Realized gain (loss) on sales of held-for-trading assets	(25)	(162)	(4)	(162)
Other net investment income	555	1,142	1,279	1,979
	34,371	26,645	64,473	51,204
EXPENSES
Operating expenses	20,210	16,916	39,138	32,540
Policyholder benefits	2,782	1,447	6,487	4,856
Interest expense – customer deposits	3,103	1,826	6,499	3,407
Provision for credit losses	129	270	209	327
Income before the following	8,147	6,186	12,140	10,074
Income from long-term investments	845	832	1,458	1,594
Gain on sale of intangible assets	598	-	598	-
Interest and financing costs on long-term debt	(553)	(901)	(1,136)	(1,427)
Amortization of intangible assets	(278)	(206)	(630)	(410)
Amortization of capital assets	(841)	(373)	(1,356)	(753)
Income before income taxes	7,918	5,538	11,074	9,078
Income taxes	(2,079)	(1,448)	(2,849)	(2,443)
NET INCOME FOR THE PERIOD	5,839	4,090	8,225	6,635
Retained earnings, beginning of period as previously reported	$ 29,923	$ 21,383	$ 28,015	$ 18,538
Cumulative effect of adopting new accounting policies	-	-	-	300
Retained earnings, beginning of period as restated	29,923	21,383	28,015	18,838
Preferred share dividends	(1,908)	(501)	(1,908)	(501)
Common share dividends	(493)	(443)	(971)	(443)
Retained earnings, end of period	33,361	24,529	33,361	24,529
Earnings per share (Note 7)
Basic	$ 0.08	$ 0.08	$ 0.13	$ 0.14
Diluted	$ 0.08	$ 0.07	$ 0.13	$ 0.12