Second Quarter Results
Six months ended September 30, 2000
ATB
Leads in Small Business Lending in Alberta
Message
to Stakeholders
Alberta Treasury
Branches (ATB) continued to maintain strong earnings reporting net income of
$43.3 million for the quarter ended September 30, 2000. This is an increase of
$4.7 million, or 12.21% from the previous quarter. These results increased ATB’s
retained earnings to $354.6 million, as at September 30, 2000.
"The personalized customer service we provide is a hallmark of ATB and
we measure our success by the competitive products and services we
provide," says Paul G. Haggis, President & CEO of ATB. "We
continue to augment the services we offer, providing more choice and continually
looking for ways to improve our operations to meet the changing needs of our
customers. Our customers appreciate having options and continue to demonstrate
their loyalty to ATB as their first choice financial services provider."
Financial Highlights
- Core net interest income of $90.3 million; an increase of 20.70% over the
$74.8 million reported for the same quarter last year.
- Non-interest expenses of $61.8 million; an increase of 2.72% over the
$60.2 million for the same quarter last year.
- ATB’s efficiency ratio (non-interest expenses as a percentage of total
core revenues) was 57.41%; compared to 62.95% for the same six-month period
last year.
- The allowance for credit losses (including specific and general loan loss
allowances) exceeds gross impaired loans by $48.5 million. Net impaired
loans represent a negative 0.51% of total loans at September 30, 2000,
compared to a negative 0.59% at September 30, 1999.
- Total assets at $11.2 billion; an increase of 10.16% over last year.
- Total loans at $9.4 billion; increased 11.39% over last year.
- Customer deposits at $10.6 billion; increased 8.48% over last year.
Products and Services
Small business is a core focus for ATB and we continue to dedicate a
tremendous effort to support this market. A national survey recently released by
the Canadian Federation of Independent Business confirmed ATB’s initiatives to
better support Alberta small business are on track. The survey found that ATB’s
share of the small business market now leads all major financial institutions in
the province.
The survey, conducted in the spring of 2000, cited quality of service as the
top reason for small business changing financial institutions, followed by
availability of credit.
Century GIC (Series One) - A 5-year Redeemable Century Guaranteed
Investment Certificate (GIC) was introduced to commemorate Alberta’s
centennial in 2005. The 2000 Redeemable Century GIC is the first of six annual
Century GICs that will be issued for a limited time in October each year.
Purchasers of the 5-year Redeemable Century GIC will also qualify for a $100,000
draw in December 2005. Due to overwhelming customer demand, ATB extended the
sale of the Series One Century GIC to November 11, 2000.
The Alberta Gold My Rewards MasterCardâ , a credit card loyalty program to accumulate points that can be redeemed
for travel or merchandise, was introduced in late September.
The differentiating feature of the Alberta Gold My Rewards
MasterCardâ is that points for travel can be
redeemed anytime, anywhere, with any airline. As well, any combination of points
and cash can be used for travel.
Customers earn one point for every dollar charged and points will not expire.
A program catalogue outlining travel features and merchandise is available on
ATB’s website, www.atb.com.
The AgriBusinessCard is being well accepted, with continued
interest from our customers. The card is designed for customers with lower loan
requirements. Many customers with operating loans now use the AgriBusinessCard
for this purpose.
The total number of AgriBusinessCards issued has almost doubled since March
2000, while the card’s share of the small agri-industry portfolio increased by
over 16.5%.
The roll-out of a new tool to assist in credit decision making continues. All
MasterCardâ consumer applications are now evaluated
using this tool. The result is faster turnaround of credit approvals. New
functionality will be added over the next six months to support the full product
line.
We are also committed to upgrading our branch network. Two branches relocated
during the quarter. The Grande Prairie Northview branch opened in late August.
The branch relocated from the Grande Prairie Mall to a new 4,500 square foot
facility at 11507 – 99th Street. At the end of September, the
Calgary Sunridge branch relocated to a new 6,500 square foot free-standing
building at the Spectrum Shopping Centre, 2555 – 32nd Street, in
Northeast Calgary. Both new branches provide increased convenience and improved
accessibility for their customers.
An additional 52 seats were added to the existing 130 seat Customer Contact
Centre located in Calgary, to handle inbound and outbound sales. This additional
capability will help to strengthen our relationship with our existing customers.
Community Involvement
ATB is a proud community sponsor and participated in a number of activities
throughout the summer. For example, in Calgary, we sponsored the Wild Cow
Milking Contest at the Calgary Stampede; and in Edmonton we presented the annual
Klondike Days Parade and Circusmania, a new family event during K-Days. ATB also
co-sponsored the Lethbridge International Air Show and the opening ceremonies of
the Alberta Summer Games in Grande Prairie.
A new concept for a parade float was developed with three modular pieces
representing technology, youth accounts, and community involvement. These floats
participated in 38 parades across Alberta, including Edmonton, Calgary, Red
Deer; and numerous rural communities from Manning in the north, to Lloydminster
in the east; Onoway in the west; and Bow Island in the south.
ATB is one of the leading lenders to the agri-industry in Alberta. We
recognize that young people are the future for the agri-industry in Alberta and
we support young people belonging to Alberta 4-H. During the quarter, the top 20
finishers in the ATB Provincial 4-H judging competition were awarded with team
jackets. These competitors will now compete in judging competitions in Canada
and the United States.
On behalf of the Board, Management and Staff of ATB, we appreciate your
loyalty and thank you for entrusting ATB with your business. With your continued
support we will maintain the momentum by meeting and exceeding your expectations
through profitable growth.
Ron P. Triffo
Chairman of the Board
Paul G. Haggis
President &
Chief Executive Officer
top of page...
| Caution Regarding Forward-Looking Statements
ATB from time to time may make forward-looking statements in written or
verbal communications. These statements include objectives for the short
and medium term and strategies to achieve those objectives. ATB cautions
readers not to place undue reliance on the forward-looking statements as
actual results may differ materially from plans, objectives and
expectations. By their very nature, forward-looking statements involve
uncertainties and can change due to a variety of reasons including
legislative or regulatory changes, competition, technological changes, and
changes in interest rates and general economic conditions. The foregoing
list is not exhaustive and when relying on forward-looking statements
these factors as well as other factors should be considered. |
Consolidated Balance Sheet (unaudited)
($ in thousands)
|
As at
|
|
Sept. 30
2000
|
|
June 30
2000
|
|
Sept. 30
1999
|
|
Assets
|
|
|
|
|
|
|
| |
|
Cash resources
|
|
|
|
|
|
|
|
Cash and non-interest bearing deposits with banks
|
$
|
91,209
|
$
|
117,072
|
$
|
126,131
|
|
Interest bearing deposits with banks
|
|
705,145
|
|
649,576
|
|
642,273
|
|
Cheques and other items in transit, net
|
|
-
|
|
-
|
|
23,371
|
| |
|
796,354
|
|
766,648
|
|
791,775
|
| |
|
|
|
|
|
|
|
Securities
|
|
759,539
|
|
752,187
|
|
721,700
|
| |
|
Loans, net of allowances for credit losses
|
|
|
|
|
|
|
|
Residential mortgages
|
|
3,862,414
|
|
3,743,203
|
|
3,502,787
|
|
Personal
|
|
1,401,175
|
|
1,370,087
|
|
1,205,684
|
|
Credit cards
|
|
133,772
|
|
115,369
|
|
63,262
|
|
Business and other
|
|
3,987,557
|
|
3,921,315
|
|
3,653,910
|
| |
|
9,384,918
|
|
9,149,974
|
|
8,425,643
|
| |
|
Other
|
|
|
|
|
|
|
|
Capital assets
|
|
62,221
|
|
61,452
|
|
56,800
|
|
Other assets
|
|
173,300
|
|
165,610
|
|
149,573
|
| |
|
235,521
|
|
227,062
|
|
206,373
|
| |
| |
$
|
11,176,332
|
$
|
10,895,871
|
$
|
10,145,491
|
| |
|
Liabilities and equity
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
Personal
|
$
|
5,892,008
|
$
|
5,825,372
|
$
|
5,373,482
|
|
Business and other
|
|
4,668,071
|
|
4,524,473
|
|
4,361,211
|
| |
|
10,560,079
|
|
10,349,845
|
|
9,734,693
|
| |
|
Other
|
|
|
|
|
|
|
|
Other liabilities
|
|
240,385
|
|
214,126
|
|
270,744
|
|
Cheques and other items in transit, net
|
|
3,862
|
|
3,213
|
|
-
|
| |
|
244,247
|
|
217,339
|
|
270,744
|
| |
|
|
|
|
|
|
|
Subordinated debenture
|
|
17,444
|
|
17,444
|
|
7,519
|
| |
|
Equity
|
|
354,562
|
|
311,243
|
|
132,535
|
| |
| |
$
|
11,176,332
|
$
|
10,895,871
|
$
|
10,145,491
|
top of page...
Consolidated Statement of Income (unaudited)
($ in thousands)
| |
|
For the three months
ended |
For the six months ended |
|
|
Sept. 30 2000
|
|
June 30 2000
|
|
Sept. 30 1999
|
|
Sept. 30 2000
|
|
Sept. 30 1999
|
| |
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
Loans |
$
|
183,256
|
$
|
173,152
|
$
|
172,005
|
$
|
356,408
|
$
|
319,566
|
Securities |
|
11,103
|
|
8,984
|
|
8,150
|
|
20,087
|
|
14,617
|
Deposits with banks |
|
10,015
|
|
8,212
|
|
8,339
|
|
18,227
|
|
15,438
|
| |
|
204,374
|
|
190,348
|
|
188,494
|
|
394,722
|
|
349,621
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
113,807
|
|
103,030
|
|
93,383
|
|
216,837
|
|
181,365
|
Subordinated debentures |
|
265
|
|
103
|
|
103
|
|
368
|
|
103
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
114,072
|
|
103,133
|
|
93,486
|
|
217,205
|
|
181,468
|
| |
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
90,302
|
|
87,215
|
|
95,008
|
|
177,517
|
|
168,153
|
Provision (recovery) for credit losses |
|
6,079
|
|
6,079
|
|
(4,673)
|
|
12,158
|
|
1,053
|
| |
|
|
|
|
|
|
|
|
|
|
Net interest income after provision (recovery) for credit losses |
|
84,223
|
|
81,136
|
|
99,681
|
|
165,359
|
|
167,100
|
| |
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
|
|
|
|
|
|
|
|
Service charges |
|
9,595
|
|
9,654
|
|
9,031
|
|
19,249
|
|
17,765
|
Credit fees |
|
4,298
|
|
5,461
|
|
5,065
|
|
9,759
|
|
10,191
|
Commission and other |
|
3,515
|
|
3,416
|
|
3,215
|
|
6,931
|
|
5,892
|
Card fees |
|
2,321
|
|
2,475
|
|
1,866
|
|
4,796
|
|
3,451
|
Foreign exchange |
|
1,200
|
|
1,470
|
|
956
|
|
2,670
|
|
1,653
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
20,929
|
|
22,476
|
|
20,133
|
|
43,405
|
|
38,952
|
| |
|
|
|
|
|
|
|
|
|
|
|
Net interest and other income
|
|
105,152
|
|
103,612
|
|
119,814
|
|
208,764
|
|
206,052
|
| |
|
|
|
|
|
|
|
|
|
|
|
Non-interest expenses
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
30,789
|
|
32,459
|
|
29,283
|
|
63,248
|
|
58,864
|
Premises and equipment, including amortization |
|
9,522
|
|
10,220
|
|
9,315
|
|
19,742
|
|
18,368
|
Communications and electronic processing |
|
11,614
|
|
12,365
|
|
11,883
|
|
23,979
|
|
23,286
|
Other |
|
9,908
|
|
9,963
|
|
9,714
|
|
19,871
|
|
17,147
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
61,833
|
|
65,007
|
|
60,195
|
|
126,840
|
|
117,665
|
| |
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
43,319
|
$
|
38,605
|
$
|
59,619
|
$
|
81,924
|
$
|
88,387
|
top of page...
Consolidated Statement of Cash Flows (unaudited)
($ in thousands)
|
|
For the six months ended |
| |
|
Sept. 30 2000
|
|
Sept. 30 1999
|
| |
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
Net income
|
$
|
81,924
|
$
|
88,387
|
|
Adjustmen | |
