First Quarter Results
for the three months ended June 30, 1996
Financial Overview
ATB reported net income for the quarter ended June 30, 1996, of $5,728,000, down from
$9,077,000 in 1995. We expect to eliminate ATB's deficit during this fiscal year.
ATB's loan assets are $295 million less than one year ago. This reduction comes from a
combination of loan repayments, lost business and the imposition of a decision to limit
ATB's credit risk on large loans. To recover our asset base we will increase our efforts in
focusing on consumer, independent business and agricultural financing.
In addition to the decrease in loans, slightly lower interest spreads have also contributed
to lower net interest income. ATB's net interest spread for the period was 2.76% compared
to 2.81% in 1995. The decrease was largely due to the effect of lower interest rates. With
careful asset liability management we expect our margins to recover and surpass last year's
levels in the second quarter.
The charge to the provision for credit impairment is $15,475,000 as compared to
$15,819,000 in 1995. The provision for credit impairment for the first quarter is at 0.81%
of average loans as compared to 0.82% for the year ended March 31, 1996. Management
continues to work to improve the credit quality of the loan portfolio to achieve lower
provisions for credit impairment in future periods.
Other income was $15,806,000, up 6.8% from June 1995. The increase was accomplished
without an increase in fees and charges to our customers and can be attributed mainly to
higher transaction volumes.
Non-interest expense was $53,405,000, up 4.4% from June 1995. The increase reflects our
continued commitment to improve financial service delivery systems through branch
automation.
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Operating Highlights
With the proclamation of Treasury Branches Amendment Act, 1995, a new governance
structure has been created for Alberta Treasury Branches. On June 12, 1996, a Board of
Directors received the authority to oversee operations of ATB and the Provincial Treasurer
has appointed Mr. Marshall Williams as Chairman of the Board.
On August 19, 1996, Mr. Paul Haggis was appointed Chief Executive Officer and
Superintendent of Alberta Treasury Branches, effective September 16, 1996. He will also be a
member of the Board of Directors.
In June 1996, ATB opened a new Calgary Main Branch located on Stephen Avenue in downtown
Calgary. The Branch and Agency Network now totals 277 outlets in over 240 communities, 100
of which have no other financial institution represented.
E.S. Leahy
A/Superintendent
M. Williams
Chairman of the Board
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