Third Quarter Results
Nine months ended December 31, 2000
ATB
Continues to Grow
Message
to Stakeholders
Alberta Treasury Branches (ATB) reported solid third quarter earnings with net income of $41.4 million for the period
ending December 31, 2000, compared to $53.4 million reported for the same period last
year. Last year’s results included a number of non-recurring items and unusual recoveries, such as interest income received on past impaired loans, sale of share options, and a reduction in pension liability. Excluding these items, loan loss recoveries and a decrease in the general loan loss allowance, core earnings for the third quarter last year were $31.0 million.
This quarter’s results increased ATB’s retained earnings to $395.9 million, as at December 31, 2000.
"ATB continues to offer flexible products and services that truly meet the financial services needs of our customers," said Paul G. Haggis, President and CEO of ATB. "We serve our customers the way they want to be served, by providing a multitude of channels to access our services. Our customers appreciate having a choice and continue to demonstrate their loyalty toward
ATB."
Financial Highlights
- Core net interest income of $92.4 million is an increase of 18.00% over the
$78.3 million for the same quarter last year.
- Core non-interest expenses of $67.1 million is an increase of 12.40% over
the $59.7 million for the same quarter last year.
- ATB’s efficiency ratio, non-interest expenses as a percentage of total
core revenues, was 57.81% compared to 62.16% for the same nine-month period
last year.
- The allowances for credit losses, including specific and general loan loss
allowances, exceed gross impaired loans by $57.1 million. Net impaired loans
represent a negative 0.58% of total loans at December 31, 2000, compared to a
negative 0.66% at December 31, 1999.
- Total assets of $11.5 billion is an increase of 14.00% over last year.
- Total loans at $9.6 billion is an increase of 10.59% over last year.
- Customer deposits of $10.8 billion is an increase of 12.66% over last year.
Products and Services
Strong third quarter deposit growth was led by a tremendous response to ATB’s Century GIC product. Demand was strong and the sales period extended to accommodate customer demand.
ATB continues to create innovative products to meet the unique demands of Albertans. This year, ATB’s RSP product line-up includes a Springboard GIC and three Equity-linked GICs, including a special Western Canadian-based Equity-linked product. ATB’s RSP product line-up provides flexibility of term, redeemability and growth potential.
Six linked RSP GICs have matured, where returns were based on major stock indices and commodity
price levels that provided ATB customers with one-time interest payments with returns ranging from 12.12% to a high of 83.69%. These linked products provide customers with the added benefit of a guarantee to their principal.
A new line-up of saving and chequing account products was introduced to provide customers with a realm of choices. Whether our customers prefer personalized services, the convenience of electronic banking, or all-inclusive packaged accounts, ATB is uniquely positioned to respond to how our customers choose to deal with us.
An alliance was formed with the Alberta Chambers of Commerce to offer merchant services to their members across the province. This partnership opens the door for Alberta businesses across the province who belong to their local Chamber, to take advantage of discount rates and flexible options with ATB’s Merchant MasterCardâ and Direct Payment system.
Sales of the Alberta Business MasterCardâ continue to be very strong and over 50 percent of ATB’s small revolving loans are now delivered through this product. The ATB Internet Banking business-banking product continues to grow at a rapid pace, with over 3,100 businesses now using this platform to perform more than 35,000 transactions per month. Customer reaction to the new Business Financial Services Centre in Calgary has been extremely positive and local businesses from across the city have been taking advantage of the 24-hour automated depository service.
Our commitment to providing services is demonstrated by our investment in the branch network,
with the relocation of a branch in Sherwood Park to new freestanding premises at the Lakeland Ridge shopping centre. Grand
openings were held in November for recently relocated branches at Calgary Sunridge and Grande Prairie Northview.
These grand openings featured customer promotions, free refreshments and community fundraisers to support local causes.
This year, we will opennew branches in Calgary, Edmonton, and Red Deer, relocate five branches to new premises, and undertake renovations at seven branches.
Bursaries totaling $20,000 were awarded to 10 post-secondary students who applied for financial services with ATB between May and October 2000. Random draws were held regionally across Alberta, from these Alberta post-secondary students enrolled in a full-time program at an approved Canadian post-secondary institution.
Supporting our Communities
ATB is a strong supporter of numerous community events throughout Alberta. Our employees give back to the communities where they work and live by volunteering and supporting many local activities.
For example, ATB sponsored the opening ceremonies of the Canadian Finals Rodeo (CFR) during November. This sponsorship included a customer contest for free CFR tickets and a $1,000 ATB MasterCardâ credit.
ATB employees contributed a record amount to various United Way campaigns across Alberta. ATB employees raised a total of $127,000 for the United Way campaign, when combined with a corporate
donation.
Edmonton and area branches once again supported the annual Christmas Bureau by accepting donations to support families in need, sponsoring families, and providing a corporate donation for the fundraising campaign.
We are well positioned for further profitable growth. ATB operates on sound banking and business principles, providing fair value to its customers in meeting their financial services needs in the Alberta marketplace. We appreciate the loyalty of our customers and believe that ATB truly does offers an alternative in the financial services landscape.
Ron P. Triffo
Chairman of the Board
Paul G. Haggis
President &
Chief Executive Officer
February 2001
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Consolidated Balance Sheet (unaudited)
($ in thousands)
|
As at
|
|
Dec. 31
2000 |
|
Sept. 30
2000 |
|
Dec. 31
1999 |
|
Assets
|
|
|
|
|
|
|
| |
|
Cash resources
|
|
|
|
|
|
|
|
Cash and non-interest bearing deposits with banks
|
$
|
117,764 |
$
|
91,209 |
$
|
141,858 |
Interest bearing deposits with banks |
|
708,598 |
|
705,145 |
|
514,183
|
| |
|
826,362 |
|
796,364 |
|
656,041 |
| |
|
|
|
|
|
|
|
Securities
|
|
792,941 |
|
759,539 |
|
512,280 |
| |
|
Loans, net of allowances for credit losses
|
|
|
|
|
|
|
|
Residential mortgages
|
|
3,935,571 |
|
3,862,414 |
|
3,588,702 |
|
Personal
|
|
1,403,498 |
|
1,401,175 |
|
1,246,164 |
|
Credit cards
|
|
149,570 |
|
133,772 |
|
83,684 |
|
Business and other
|
|
4,109,703 |
|
3,987,557 |
|
3,760,588 |
| |
|
9,598,342 |
|
9,384,918 |
|
8,679,138 |
| |
|
Other
|
|
|
|
|
|
|
|
Capital assets
|
|
65,152 |
|
62,221 |
|
59,651 |
|
Other assets
|
|
180,968 |
|
173,300 |
|
149,237 |
| |
|
246,120 |
|
235,521 |
|
208,888 |
| |
| |
$
|
11,463,765 |
$
|
11,176,332 |
$
|
10,056,347 |
| |
|
Liabilities and equity
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
Personal
|
$
|
5,993,870 |
$
|
5,892,008 |
$
|
5,364,470 |
|
Business and other
|
|
4,791,691 |
|
4,668,071 |
|
4,209,069 |
| |
|
10,785,561 |
|
10,560,079 |
|
9,573,539 |
| |
|
Other
|
|
|
|
|
|
|
|
Other liabilities
|
|
259,982 |
|
240,385 |
|
284,628 |
|
Cheques and other items in transit, net
|
|
4,801 |
|
3,862 |
|
4,731 |
| |
|
264,783 |
|
244,247 |
|
289,359 |
| |
|
|
|
|
|
|
|
Subordinated debenture
|
|
17,444
|
|
17,444
|
|
7,519
|
| |
|
Equity
|
|
395,977 |
|
354,562 |
|
185,930 |
| |
| |
$
|
11,463,765 |
$
|
11,176,332 |
$
|
10,056,347 |
top of page...
Consolidated Statement of Income (unaudited)
($ in thousands)
| |
|
For the three months
ended |
For the nine months ended |
|
|
Dec. 31 2000 |
|
Sept. 30 2000 |
|
Dec. 31 1999 |
|
Dec. 31 2000 |
|
Dec. 31 1999 |
| |
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
|
|
|
|
|
|
|
Loans |
$
|
187,535 |
$
|
183,256 |
$
|
161,559 |
$
|
543,943 |
$
|
481,125 |
Securities |
|
11,623 |
|
11,103 |
|
7,343 |
|
31,710 |
|
21,960 |
Deposits with banks |
|
10,995 |
|
10,015 |
|
8,558 |
|
29,222 |
|
23,996 |
| |
|
210,153 |
|
204,374 |
|
177,460 |
|
604,875 |
|
527,081 |
Interest expense |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
117,441 |
|
113,807 |
|
94,783 |
|
334,278 |
|
276,148 |
Subordinated debentures |
|
265
|
|
265 |
|
103
|
|
633 |
|
206 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
117,706 |
|
114,072 |
|
94,886 |
|
334,911 |
|
276,354 |
| |
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
92,447 |
|
90,302 |
|
82,574 |
|
269,964 |
|
250,727 |
Provision for credit losses |
|
6,079
|
|
6,079
|
|
881 |
|
18,237 |
|
1,934 |
| |
|
|
|
|
|
|
|
|
|
|
Net interest income after provision for credit losses |
|
86,368 |
|
84,223 |
|
81,693 |
|
251,727 |
|
248,793 |
| |
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
Service charges |
|
11,282 |
|
9,595 |
|
10,019 |
|
30,531 |
|
27,648 |
Credit fees |
|
4,003 |
|
4,298 |
|
3,907 |
|
13,762 |
|
14,098 |
Commission and other |
|
2,679 |
|
3,515 |
|
8,248 |
|
9,610 |
|
14,276 |
Card fees |
|
2,821 |
|
2,321 |
|
1,993 |
|
7,617 |
|
5,444 |
Foreign exchange |
|
1,386 |
|
1,200 |
|
978 |
|
4,056 |
|
2,631 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
22,171 |
|
20,929 |
|
25,145 |
|
65,576 |
|
64,097 |
| |
|
|
|
|
|
|
|
|
|
|
Net interest and other income |
|
108,539 |
|
105,152 |
|
106,838 |
|
317,303 |
|
312,890 |
| |
|
|
|
|
|
|
|
|
|
|
Non-interest expenses |
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
34,005 |
|
30,789 |
|
21,610 |
|
97,253 |
|
80,474 |
Premises and equipment, including amortization |
|
9,764 |
|
9,522 |
|
9,299 |
|
29,506 |
|
27,667 |
Communications and electronic processing |
|
13,198 |
|
11,614 |
|
13,419 |
|
37,177 |
|
36,705 |
Other |
|
10,157 |
|
9,908 |
|
9,115 |
|
30,028 |
|
26,262 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
62,124 |
|
61,833 |
|
53,443 |
|
|
