ATB Financial today reported third quarter earnings of $43.1 million for the period the third quarter ended Dec. 31. 2007, down 37.74% from the prior year.

This reduction is a result of a $29.3 million provision for potential losses on third-party asset-backed commercial paper (ABCP).

Excluding the ABCP provision, ATB’s operating results for the quarter were $3.2 million higher than the prior year.

Operating revenue for the qurter was $181.4 million, down 6.08%.

Total assets for the quarter rose 15.67% to $22.9 billion, up 15.67%.

Net loans during the quarter were $18.9 billion, up 14.39%.

Investor Services assets under administration and management were $4 billion up 16.8%.

ATB Financial said its efficiency ratio (non-interest expenses as a percentage of operating revenues) decreased to 63.22% from 63.00%, excluding all ABCP-related provisions.

“Although the restructuring process under the Montreal Accord continues to make good progress, with an agreement in principle in place and an expectation that the restructuring will be substantially complete by March 31, 2008, we have determined that an additional provision against our current ABCP holdings is required,” says Dave Mowat, president and CEO of ATB Financial.

“As the restructuring process evolves, we continue to analyze more details regarding the expected outcome and other detailed information on which to base our valuation. This information is not complete, but with what we know, we have determined that it is prudent to record an additional provision this quarter of $29.3 million. This increases ATB’s total provision from 6.9% of our holdings of impacted ABCP at September 30, 2007 to 10.2% at December 31, 2007.

“Our expectation is that the restructuring will succeed — but the question is still at what ultimate cost to investors. In December 2007, our holdings of $91.9 million in Skeena Capital Trust were successfully restructured with a net write-down of $0.6 million – or 0.69%.

“Notwithstanding the challenge of ABCP, we remain focused on ATB Financial’s key business – and are pleased to report that despite the additional provision this quarter, we generated net income of $43.1 million, with both loan and deposit growth exceeding that experienced last year at this time.”