ATB Financial reports strong loan growth, solid profits despite economic down<br>cycle

EDMONTON, May 26 /CNW/ - ATB Financial ("ATB"), the largest Alberta-based financial institution, strengthened and grew its loan portfolio and recorded solid profits despite the challenges faced by the province's economy in 2009-10, according to financial results released today.

Net income rebounded to $127.5 million from the previous year, which saw substantial provisions for asset-backed commercial paper.

After record loan growth in 2008-09, gross loans (including securitized mortgages) grew a further 6.3 per cent this year to $24.2 billion, as ATB continued to support Alberta businesses and households.

"We produced solid profits and good loan growth this year in an economic down cycle, and the future looks very promising, as we replace our banking system and commit even more focus to areas such as ATB Investor Services and our new Independent Business and Agriculture line of business," said ATB President and CEO Dave Mowat.

ATB's adjusted net income slipped 28.6 per cent from the previous year, primarily because of lower interest rates, drops in other income, and a $16.2-million increase in provisions for credit losses.

Mowat said while ATB's provision increased, actual credit losses are in fact better than the industry average. "We're watching the portfolio closely as the economy turns, and we're confident in the quality of our loan book," he said.

Though ATB's banking system replacement ("Core") will cost more than originally budgeted, the project did not significantly impact ATB's profits this year, as Core's portion of non-interest expenses was $15 million this year versus $11 million last year.

    
    Other highlights:

    -   Total personal and business deposits dropped 4.7 per cent year-over-
        year to $20 billion, the result of low interest rates and an
        extremely competitive deposit market.

    -   ATB Investor Services reached a milestone in 2009-10, seeing the
        funds it manages break the $5-billion mark.

    -   ATB recorded a payment in lieu of tax to its provincial government
        shareholder of $38.1 million.
    

For the second year in a row, performance pay for executives was reduced.

    
    Operational Highlights
    ----------------------
    

Retail Financial Services (RFS) - ATB's largest line of business includes branches and agencies throughout Alberta. Assets, primarily consisting of loans, grew $1.8 billion, or 10.3 per cent, over the last year. Operating revenue increased by $19.7 million, or 3.2 per cent. RFS opened one new branch in Alberta in 2009-10, a "Branch of the Future" facility - at Windermere in Edmonton - that captured national attention. It is building new branches in Sylvan Lake, Calgary, Edmonton, Lethbridge, Red Deer and Medicine Hat.

Independent Business and Agriculture (IB and Ag) - During this fiscal year, ATB established IB and Ag as a fourth line of business, providing a dedicated focus on Alberta's business and agriculture sectors. Financial results for this line of business are included with Retail Financial Services for the 2009-10 fiscal year.

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. CFS's operating revenue increased last year by $74.9 million, or 55.6 per cent.

ATB Investor Services (IS) - This line of business is responsible for growing and protecting wealth for more than 50,000 customers. At year-end, ATBIS increased the funds it managed by 32.7 per cent to $5.1 billion. Operating revenue increased by $4.0 million, or 9.7 per cent from last year.

ATB in the Community - ATB's associates contributed more than $2.7 million through a combination of charitable donations, fundraising and volunteer time. Highlights included associate-led campaigns for the United Way (through which ATB raised a record of more than $720,000), STARS Air Ambulance, Habitat for Humanity, and its Teddy for a Toonie Campaign, through which more than $550,000 was raised for the Stollery and Alberta Children's Hospital foundations. Readers of Alberta Venture magazine named ATB Financial Alberta's Most Respected Corporation in the area of Corporate Social Responsibility.

About ATB Financial - ATB Financial is the largest Alberta-based financial institution, with assets of $25.4 billion. It provides Retail Financial Services, Independent Business and Agriculture services, Investor Services, and Corporate Financial Services to more than 685,000 Albertans in 242 communities. It provides service through 165 branches and 131 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. ATB has been named one of Canada's 50 Best Employers by Report on Business Magazine, one of the 75 Best Workplaces in Canada by the Great Place to Work Institute, and one of Canada's Top 100 Employers and Alberta's Top 50 Employers by Mediacorp Canada Inc.

For complete year-end financial results, please visit www.atb.com

For further information: Shawn Ohler, Director of External and Media Relations, ATB Financial, [phone] (cell), [phone] (office), e-mail: [email protected]