Net income at ATB Financial plunged 41.6% in the first quarter thanks to credit loss provisions and lower interest rates, the company announced on Tuesday.

For the three months ended June 30th, ATB Financial earned profits of $33.1 million, down from $56.7 million in the same period last year.

During the quarter, the Alberta-based financial institution saw loans, including securitized mortgages, grow by 15.7% over last year’s first quarter to $23.2 billion, while retail deposits increased 10.9% to $20.7 billion.

“Put simply, we’re doing more business – and good business. However, interest rates are lower and our margins are tighter,” said Dave Mowat, ATB Financial’s president and CEO.

He noted that net income was impacted by a $10.4 million increase in ATB’s allowance for credit loss expense, which boosts ATB’s allowance for potential losses based on continuing economic uncertainty.

ATB’s largest line of business, personal and business financial services, saw assets grow by $1.5 million, or 9.7%, over last year.

Within the investor services line of business, which manages the wealth of more than 47,000 consumers, client assets under management and administration reached $4.2 billion, up $105.7 million, or 2.6%, from last year’s first quarter.

Mowat said that despite the current economic uncertainty, ATB was continuing to prepare for growth.

“We’re ramping up our capacity to serve strong Alberta businesses, and Alberta investors,” he said in a statement.

Although markets have improved in recent months, the company said its estimate of the fair value of its investments in asset-backed commercial paper remains unchanged.