Canadian Treasurer

February 25, 2011

Profits rise at ATB Financial as margins continue to improve

EDMONTON--Third-quarter profits at ATB Financial (ATB) rose $30.8 million, or 86.2 per cent, as margins and loan volumes improved and credit losses reduced.

Net income for the quarter ending December 31, 2010 was $66.6 million, compared to $35.8 million during the same quarter last year. Adjusted net income - which excludes a recovery on asset-backed commercial paper - was $58.9 million, an increase of $20.4 million over last year's third quarter.

Net interest income was particularly strong as a result of a stabilized interest rate environment and a 4.0% increase in average loan volumes. Net interest income reached $193.8 million, up $16.1 million, or 9.0 per cent from the same quarter last year.

The organization also recorded gains in its securitization program as increasing longer-term interest rates boosted the value of assets related to the program. A $10-million recovery on provisions for asset-backed commercial paper was also recorded. As anticipated, the risk of loss is decreasing and the estimated value of the investment has improved.

Profits for the first nine months of the 2010-2011 fiscal year outpaced the previous year by 34.9%, largely because of increased margins on ATB products and lower provisions for credit losses.

"As the effects of the recession on our customers start to reverse, we're beginning to deliver improved financial results to Albertans," said Dave Mowat, ATB's President and CEO.

"Our loan portfolio, a bellwether for the province, is increasingly resilient, and that's good news for both ATB and Alberta."

Operational Highlights

Retail Financial Services (RFS) - ATB's largest line of business includes branches and agencies throughout Alberta. Assets, primarily consisting of loans, stood at $15.7 billion at the end of the third quarter. Operating revenue was $108.5 million. (Comparables to last year's third quarter have not been disclosed, as 2009-10 results for this line comprised both RFS and a realigned line of business, Independent Business and Agriculture.)

Independent Business and Agriculture financial services (IB&Ag) - This line of business, newly created in the first quarter of the fiscal year, provides services to Alberta's small businesses, farmers and other agriculture customers. Its assets stood at $4.0 billion at the end of the third quarter. Operating revenue was $65.3 million. During the third quarter, IB&Ag was officially launched to Albertans as a dedicated line of business through the Ingredients for Success campaign which focused on Alberta entrepreneurs.

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 assets increased $173.1 million over the last year to $5.3 billion. Operating revenue was $56.4 million, an increase over last year of $2.6 million or 4.9 per cent.

ATB Investor Services (IS) - This line of business is responsible for growing and protecting wealth for more than 52,000 customers. Investor Services continues to build assets under management and administration, which increased to $5.9 billion this quarter, up $1.1 billion, or 22.9%, from the third quarter last year.

ATB in the Community - In October 2010, ATB's associates across Alberta held their annual fundraising campaign for the United Way. Including 50% corporate matching from ATB Financial, ATB's associates raised a total of $620,000. ATB also sponsored the All-Albertan Song Contest through its community website Nearly 200 entries were received and Calgary's Danny Vacon won top prize, including $10,000 cash, for his song Gold and Green, which will be included in Alberta Music's 2012 Showcase CD.

ATB Financial is the largest Alberta-based financial institution, with assets of $26.5 billion. It provides Retail Financial Services, Independent Business and Agriculture Financial Services, Investor Services, and Corporate Financial Services to more than 680,000 Albertans in 243 communities. It provides service through 166 branches and 130 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.





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