ATB Financial records continuing growth in first quarter

    EDMONTON, Aug. 29 /CNW/ - Operating revenue, loan and deposit growth
resulted in ATB Financial ("ATB") recording a $56.7-million profit in the
first quarter of 2008-2009.
    At June 30, 2008, ATB reached record highs in assets ($24.5 billion, up
14.4% from last year's first quarter), net loans ($19.8 billion, up 11.9%) and
deposits, excluding wholesale ($18.7 billion, up 8.8%).
    Operating revenue for the quarter was $220.3 million, up 6.3% from the
first quarter last year, while net income of $56.7 million was down 12.1%,
largely due to a decrease in the margin earned on assets (net interest
spread). This was driven by the decrease in the Canadian bank prime lending
rate and the competitive deposit market.
    "ATB continues to benefit from a strong Alberta economy, from products
and services that work for Albertans, and from the passion and commitment of
our more than 4,800 associates," said Dave Mowat, ATB's President and CEO.
    "We are pleased to report continued growth in our loans, deposits, and
operating revenue, but, like all Canadian financial institutions, we are well
aware of the impact of lower interest rates and the current uncertainty in the
marketplace. We will be monitoring those trends carefully throughout the
    The fair value of ATB's asset-backed commercial paper ("ABCP")
investments improved slightly over the quarter. The financial institution's
ABCP holdings - purchased at an original cost of $1.15 billion - have an
estimated fair value of $922.7 million at June 30, 2008, an improvement of
$20.4 million from March 31, 2008. This is due largely to an improvement in
financial market credit spreads.
    The Pan-Canadian Investors Committee, which includes ATB, has been
working toward an orderly restructuring of these investments during the
standstill period outlined by the Montreal Accord. On August 18, a three-judge
panel of the Ontario Court of Appeal ruled that the restructuring plan is fair
and legal.
    "We are very pleased with the Court's decision. Our intention all along
has been to contribute to a resolution that is fair and amenable to Canadian
investors, and in the best interests of ATB," Mowat said.
    Mowat said ATB ultimately expects to recover nearly all of its principal
investment, plus interest, once the ABCP is converted to longer-term notes
that reach maturity in six to nine years.
    ATB's equity position also improved at quarter's end to $1.73 billion.

    Operational Highlights

    Personal and Business Financial Services (PBFS) - ATB's largest line of
business includes 160 branches and 133 agencies, telephone and Internet
banking, its Customer Contact Centre, direct sales, and mortgage brokers. In
the quarter ended June 30, 2008, PBFS assets grew by $520.3 million (or 3.3%),
which compares to growth of $489.0 million (or 3.6%) in the first quarter last
year. Operating revenue increased from the first quarter last year by
$7.0 million (or 4.9%). During the quarter, PBFS opened new branches in Grande
Prairie and Jasper.

    Corporate Financial Services (CFS) - This line of business provides
services to Alberta's mid- and senior-market companies in three sub-lines -
Energy, Commercial, and Food & Forestry. In the quarter ended June 30, 2008,
CFS assets grew by $74.7 million (or 1.8%), which compares to growth of
$94.8 million (or 2.7%) in the first quarter last year. Operating revenue
increased from the first quarter last year by $4.5 million (or 19.3%).

    ATB Investor Services (IS) - This line of business is responsible for
growing, protecting, and transferring wealth for more than 45,000 customers.
In the quarter ended June 30, 2008, client assets under management and
administration grew to $4.1 billion.

    ATB in the Community - ATB's associates and customers, through the annual
Teddy for a Toonie campaign, raised $0.6 million for the Stollery Children's
Hospital in Edmonton and the Alberta Children's Hospital in Calgary. The
campaign exceeded its goal of $0.5 million. Since 2000, the Teddy for a Toonie
campaign has raised $2.5 million for Alberta children's health and wellness.

    About ATB Financial - ATB Financial is the largest Alberta-based
financial institution, with assets of $24.5 billion. It provides Personal and
Business Financial Services, Investor Services, and Corporate Financial
Services to more than 660,000 Albertans in 244 communities. It provides
service through 160 branches and 133 agencies, telephone and Internet banking,
a Customer Contact Centre, and Automated Banking Machines. ATB Financial was
established in 1938 and has been a provincial Crown corporation since 1997.

    For complete first-quarter financial results, including Management's
Discussion and Analysis, please visit


                                                  For the three months ended
                                       June 30       March 31        June 30
                                          2008           2008           2007

    Operating results
     ($ in thousands)

    Interest income               $    309,872   $    330,160   $    302,346
    Interest expense                   142,843        163,181        143,461
    Net interest income                167,029        166,979        158,885
    Other Income                        51,984         45,358         48,282
    Recovery of (provision for)
     loss on ABCP                        1,285       (146,233)             -
    Total operating revenues           220,298         66,104        207,167
    Provision for credit losses          8,640          2,630          6,597
    Non-interest expenses              154,979        149,604        136,074
    Net income                    $     56,679   $    (86,130)  $     64,496

    Financial position
     ($ in thousands)

    Total loans, net of
     allowance for losses         $ 19,800,664   $ 19,443,517   $ 17,701,205
    Total assets                  $ 24,527,207   $ 23,343,153   $ 21,441,600
    Personal & business deposits  $ 18,679,678   $ 17,793,430   $ 17,161,744
    Wholesale deposits            $  3,571,131   $  3,382,286   $  2,139,923
    Equity                        $  1,727,682   $  1,668,452   $  1,665,631

    Key Performance Measures
     (in per cent)

    Operating revenue growth(1)           6.34         (66.26)         17.35
    Operating revenue
     growth(1)&(3)                        5.72           8.36          17.35
    Net interest margin(2)                2.81           2.93           3.07
    Net interest spread on
     average earning assets(2)            2.90           3.01           3.14
    Other income to operating
     revenue                             23.60          68.62          23.31
    Other income to operating
     revenue(3)                          23.74          21.36          23.31
    Non-interest expenses to
     operating revenue                   70.35         226.32          65.68
    Non-interest expenses to
     operating revenue(3)                70.76          70.46          65.68
    Return on average assets(2)           0.95          (1.51)          1.25
    Return on average
     assets(2)&(3)                        0.93           1.05           1.25
    Operating expense growth(1)          13.89          10.43          20.28
    Net impaired loans to total
     gross loans                         (0.59)         (0.61)         (0.65)
    Credit losses to average loans(2)     0.18           0.05           0.15
    Net Loan growth(1)                   11.86          14.41          15.64
    Net Loan growth(4)                   13.24          14.41          15.64
    Deposit growth(1)                    15.28          16.01          13.74
    Asset growth(1)                      14.39          15.02          14.09
    Asset growth(1)&(3)                  15.45          16.26          14.09
    Asset growth(1)&(4)                  15.53          15.02          15.02

    (1) Calculated over trailing one-year period
    (2) Calculated as average over trailing three-month period
    (3) Excludes provision for loss on asset-backed commercial paper
    (4) Includes securitized mortgages

    This financial highlights table and this media release were approved by
ATB Financial's Board of Directors on August 28, 2008. For complete
first-quarter financial results, including Management's Discussion and
Analysis, please visit

For further information:

For further information: Shawn Ohler, Director of Media Relations, ATB
Financial, (780) 408-6529, e-mail:

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