Notes to the Interim Consolidated Financial Statements
(unaudited)
1. Basis of Presentation
These interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements for the year ended March 31, 2003, as set out on pages 51 to 68 of the 2003 Annual Report. These unaudited interim Consolidated Financial Statements have been prepared in accordance with Canadian generally accepted accounting principles using the same significant accounting policies outlined in the notes to the Consolidated Financial Statements for the year ended March 31, 2003.
2. Allowance for Credit Losses
Allowance for credit losses recorded in the Consolidated Balance Sheet is maintained at the level that management considers adequate to absorb credit-related losses for all on - and off - balance sheet items. Changes in the allowance for credit losses are as follows:
For the three months ended
($ in thousands)
June 30, 2003 $ 181,323 (2,434) 7,367 23,128 $ 209,384
June 30, 2002 $ 228,442 (3,868) 2,764 1,340 $ 228,678
Balance at beginning of year Write-offs Recoveries Provision for credit losses Balance at end of period
3. Guarantees ($ in thousands)
A guarantee is a contract that contingently requires the guarantor to make payments to a third party, based on changes in an underlying variable, including the occurrence or non-occurrence of an event, on another entity’s failure to perform related to its indebtedness, or on the occurrence of an event stipulated under the terms of an indemnification agreement. Significant guarantees provided to third parties include: a) b) c) Loan guarantees and standby letters of credit (discussed in Note 16 to the Consolidated Financial Statements for the year ended March 31, 2003) totalling $100,542 (2002: $440,266) as at June 30. Foreign exchange forward contracts (discussed in Note 17 to the Consolidated Financial Statements for the year ended March 31, 2003) totalling $ 4,702 (2002: $2,982) as at June 30. Indemnification agreements are entered into in the ordinary course of business, such as purchase contracts, service agreements, or sale of assets. A maximum potential liability cannot be estimated, but historically ATB has not made any significant payments under such guarantees.
4. Segmented Information
Prior to the year ended March 31, 2003, ATB conducted its business through market segments, offering different products and services designed specifically for each particular group of customers: individual, agricultural and independent business and commercial. Historical results for these market segments are presented in Note 21 to the Consolidated Financial Statements for the year ended March 31, 2003. During fiscal 2003, ATB re-organized its operations and activities in to three primary business segments: Personal and Business Banking, Energy and Commercial Banking, and Investor Services. Results for these segments for the three months ended June 30, 2003 are presented below and are based on ATB’s internal financial reporting systems. Comparable information for fiscal 2003 is not re-stated, since the lines of business are new and comparable information is not available.
For the three months ended June 30, 2003
($ in thousands)
Personal and Business $ 85,269 24,186 109,455 4,630 $ $ $ 104,825 70,544 34,281 10,212,795 $ $ $ $
Energy and Commercial 8,700 2,352 11,052 7,250 3,802 1,612 2,190 1,486,213 $ $ $ $
Investor Services 646 646 646 2,712 (2,066) $ $ $ $
Other* 6,539 1,839 8,378 11,248 (2,870) 6,528 (9,398) 1,960,139 $ $ $ $
Total 100,508 29,023 129,531 23,128 106,403 81,396 25,007 13,659,147
Net Interest Income Other income Total Revenue Provision for credit losses Net interest and other income Non-interest expenses Net income (loss) Total Assets *
Comprised of business of a corporate nature such as investment, risk management, asset liability management and treasury operations, as well as expenses and general allowances and recoveries for credit losses not expressly attributed to the market segments.