First Quarter Results
Three months ended June 30, 2000
Message
to Stakeholders
Alberta Treasury Branches (ATB) had strong first quarter results reporting net
income of $38.6 million for the period ended June 30, 2000. This is an increase
of $9.8 million or 34.19% from a year ago. These results increased ATB’s
retained earnings to $311.2 million, as at June 30, 2000.
"ATB continues to grow and achieve financial gains that strengthen and
position the organization for the future," says Paul G. Haggis, President
and Chief Executive Officer. "We are a strong competitor in the Alberta
financial services marketplace and we will continue to offer personalized
service, while adapting to the changing needs of our agri-industry, independent
business and retail customers."
Financial Highlights
- Net interest income of $87.2 million is an increase of 19.24% over the
$73.1 million for the same quarter last year.
- Non-interest expenses of $65.0 million is an increase of 13.11% over the
$57.5 million for the same quarter last year.
- ATB’s efficiency ratio (non-interest expenses as a percentage of total
revenues) improved to 59.26%, compared to 62.49% for the same quarter last
year.
- The allowance for credit losses (including specific and general loan loss
allowances) exceeds gross impaired loans by $58.1 million. Net
impaired loans represent a negative 0.62% of total loans at June 30, 2000,
compared to a negative 0.48% at June 30, 1999.
- Total assets at $10.9 billion, increased 10.47% in the year.
- Total loans at $9.2 billion, increased 11.47% in the year.
- Customer deposits at $10.4 billion, increased 8.14% in the year.
Products and Services
ATB partnered with Corillian Corp., a leading provider of eFinance solutions for
the Internet, to provide ATB customers with real-time Internet access to their
accounts. The online service, ATB Internet Banking for retail customers, will be available
to customers on October 15, 2000. Initially, five functions representing 85% of
typical transactions, can be performed online, including: balance inquiries,
bill payments, transferring funds to another account, obtaining an account
history, and stop payments. More features and expanded functionality are
scheduled in the near future. This new channel provides ATB with added
flexibility in delivering innovative products and services. The number of
electronic transactions performed by our customers has increased 25% over last
year, with transactions conducted through telephone banking up 48% and direct
payments using debit cards up 22%.
We developed a new line of competitively priced savings and chequing account
products to provide more choice and expanded flexibility for our retail,
business and agri-industry customers. Effective October 1, 2000 customers can
choose an account type to match their banking transaction frequency, their
preferred banking service access method, at a price to match their need.
Customers are being advised of the changes starting August 1, 2000.
ATB continues to open new branches and provide full-service, in-branch banking
to our customers. During the quarter, new branches opened in Lloydminster and
Sherwood Park (Wye Garden). The Barrhead branch was significantly
renovated.
In mid-August, the first ATB Business Financial Services Centre opened in
Calgary on Glenmore Trail S.E. This pilot project offers business clients access
to a state-of-the-art facility with services catering to their business needs. A
mobile salesforce of five teams of relationship managers and account managers
will be based at the Centre to provide assistance to clients. The
2,500-square-foot kiosk operates from 8 am to 6 pm, Monday to Friday, and is
equipped with meeting rooms, training facilities, video-conferencing, and
Internet access. A 24-hour ABM featuring a large volume depository to accept
deposit bags and links to business accounts, is the first of its kind in
Alberta.
The introduction of a three-year Optimum Rate Guaranteed Investment Certificate
(GIC) during the quarter generated substantial interest and attracted in excess
of $100 million in new deposits from customers and non-customers alike.
Board Appointments
On July 26, 2000, a provincial Order in Council appointed the following 12
members to the ATB Board of Directors for a two-year term: Ron Triffo, Chairman
(Edmonton); Robert Brawn (Calgary); Gary Campbell (Edmonton); Jack Halpin
(Calgary); Brian Hesje (Edmonton); Brian Heidecker (Coronation); David Hughes
(Lethbridge); Ian Macdonald (Fairview); Brian McCook (Lloydminster); Allison O’Brien
(Edmonton); Ralph Scurfield (Banff); and Gail Surkan (Red Deer).
Former Chairman Marshall Williams leaves a legacy of a revived financial
institution that is dynamic and financially sound. We thank him and previous
Members of the Board Garnett Millard and Ray Nelson, for their leadership,
guidance and commitment to ATB over the past four years.
Outlook
As we look ahead, we are encouraged by the buoyant Alberta economy. With the
strong first quarter results, we anticipate positive results throughout the
year.
We recognize that the diligence and commitment of our employees play a
significant part in our continued success. The relationships they develop with
our customers is at the heart of our plans to be Albertans’ first choice in
financial services. We thank our customers for choosing ATB.
Ron P. Triffo
Chairman of the Board
Paul G. Haggis
President &
Chief Executive Officer
top of page...
Consolidated Balance Sheet (unaudited)
|
|
|
|
|
|
|
| ($ in thousands) |
|
As at
June 30
2000
|
|
As at
March 31
2000
|
|
As at
June 30
1999
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash resources
|
|
|
|
|
|
|
|
Cash and non-interest bearing deposits with banks
|
$
|
117,072
|
$
|
89,829
|
$
|
106,447
|
|
Interest bearing deposits with banks
|
|
649,576
|
|
557,132
|
|
696,187
|
|
Cheques and other items in transit, net
|
|
-
|
|
-
|
|
29,199
|
| |
|
|
|
|
|
|
| |
|
766,648
|
|
646,961
|
|
831,833
|
| |
|
|
|
|
|
|
|
Securities
|
|
752,187
|
|
630,224
|
|
634,498
|
| |
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
|
|
Residential mortgages
|
|
3,743,203
|
|
3,651,396
|
|
3,396,819
|
|
Personal
|
|
1,370,087
|
|
1,326,961
|
|
1,172,285
|
|
Credit Card
|
|
115,369
|
|
94,770
|
|
43,465
|
|
Business and other
|
|
3,921,315
|
|
3,851,564
|
|
3,595,635
|
| |
|
|
|
|
|
|
| |
|
9,149,974
|
|
8,924,691
|
|
8,208,204
|
| |
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
Capital assets
|
|
61,452
|
|
63,616
|
|
54,967
|
|
Other assets
|
|
165,610
|
|
166,451
|
|
133,300
|
| |
|
|
|
|
|
|
| |
|
227,062
|
|
230,067
|
|
188,267
|
| |
|
|
|
|
|
|
| |
$
|
10,895,871
|
$
|
10,431,943
|
$
|
9,862,802
|
| |
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
Personal
|
$
|
5,825,372
|
$
|
5,657,036
|
$
|
5,338,891
|
|
Business and other
|
|
4,524,473
|
|
4,267,590
|
|
4,232,331
|
| |
|
|
|
|
|
|
| |
|
10,349,845
|
|
9,924,626
|
$
|
9,571,222
|
| |
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
Other liabilities
|
|
214,126
|
|
218,445
|
|
211,145
|
|
Cheques and other items in transit, net
|
|
3,213
|
|
8,715
|
|
-
|
| |
|
217,339
|
|
227,160
|
|
211,145
|
| |
|
|
|
|
|
|
|
Subordinated debenture
|
|
17,444
|
|
7,519
|
|
7,519
|
| |
|
|
|
|
|
|
|
Equity
|
|
311,243
|
|
272,638
|
|
72,916
|
| |
|
|
|
|
|
|
| |
$
|
10,895,871
|
$
|
10,431,943
|
$
|
9,862,802
|
top of page...
Consolidated Statement of Income (unaudited)
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|
|
|
|
|
|
| ($ in thousands) |
|
For the three months ended
|
|
|
June 30
2000
|
|
March 31
2000
|
|
June 30
1999
|
|
Interest income
|
|
|
|
|
|
|
|
Loans
|
$
|
173,152
|
$
|
163,130
|
|
147,561
|
|
Securities
|
|
8,984
|
|
6,125
|
|
6,467
|
|
Deposits with banks
|
|
8,212
|
|
7,405
|
|
7,099
|
| |
|
|
|
|
|
|
| |
|
190,348
|
|
176,660
|
|
161,127
|
| |
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
Deposits
|
|
103,030
|
|
95,413
|
|
87,982
|
|
Subordinated debenture
|
|
103
|
|
103
|
|
-
|
| |
|
|
|
|
|
|
| |
|
103,133
|
|
95,516
|
|
87,982
|
| |
|
|
|
|
|
|
|
Net interest income
|
|
87,215
|
|
81,144
|
|
73,145
|
|
Provision (recovery) for credit losses
|
|
6,079
|
|
(43,755)
|
|
5,726
|
| |
|
|
|
|
|
|
|
Net interest income after provision (recovery) for credit losses
|
|
81,136
|
|
124,899
|
|
67,419
|
| |
|
|
|
|
|
|
|
Other income
|
|
|
|
|
|
|
|
Service charges
|
|
9,654
|
|
10,939
|
|
8,665
|
|
Credit fees
|
|
5,461
|
|
3,410
|
|
5,126
|
|
Commission and other
|
|
3,416
|
|
13,348
|
|
2,746
|
|
Card fees
|
|
2,475
|
|
1,738
|
|
1,585
|
|
Foreign exchange
|
|
1,470
|
|
1,028
|
|
697
|
| |
|
|
|
|
|
|
| |
|
22,476
|
|
30,463
|
|
18,819
|
| |
|
|
|
|
|
|
|
Net interest and other income
|
|
103,612
|
|
155,362
|
|
86,238
|
| |
|
|
|
|
|
|
|
Non-interest expenses
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
32,459
|
|
31,202
|
|
29,581
|
|
Premises and equipment, including amortization
|
|
10,220
|
|
11,009
|
|
9,053
|
|
Communications and electronic processing
|
|
12,365
|
|
14,452
|
|
11,403
|
|
Other
|
|
9,963
|
|
11,991
|
|
7,433
|
| |
|
|
|
|
|
|
| |
|
65,007
|
|
68,654
|
|
57,470
|
| |
|
|
|
|
|
|
|
Net income
|
$
|
38,605
|
$
|
86,708
|
$
|
28,768
|
top of page...
Consolidated Statement of Cash Flows (unaudited)
|
($ in thousands)
|
|
For the three months ended
|
|
|
June 30
2000
|
|
June 30
1999
|
|
Cash flows from operating activities
|
|
|
|
|
|
Net income
|
$
|
38,605
|
$
|
28,768
|
|
Adjustments to determine net cash flows:
|
|
|
|
|
Provision for credit losses
|
|
6,079
|
|
5,726 |
Amortization
|
|
3,533
|
|
2,865
|
Net changes in accrued interest receivable and payable
|
|
13,245
|
|
12,064
|
Other items, net
|
|
(16,867)
|
|
(21,573)
|
|
|
|
|
|
|
|
44,595
|
|
27,850
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
Net change in deposits
|
|
425,214
|
|
548,762
|
|
Issue of subordinated debenture
|
|
9,925
|
|
7,519
|
|
|
|
|
|
|
|
435,139
|
|
556,281
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
Net change in interest bearing deposit balances with banks
|
|
(92,518)
|
|
(195,655)
|
|
Purchase of investment securities
|
|
(1,327,991)
|
|
(1,268,140)
|
|
Maturity of investment securities
|
|
1,206,028
|
|
1,102,121
|
|
Net change in loans
|
|
(231,292)
|
|
(177,192)
|
|
Net purchases of capital assets
|
|
(1,369)
|
|
(3,661)
|
|
|
|
|
|
|
|
(447,142)
|
|
