Alpha is read and properly utilized.
On a related note, not all images can be read even if the format is supported. So if you try to load a PNG (or any image) and get an error, try saving it with another program. I personally use Paint.NET since it has never given me any issues but still provides good PNG compression.
This error is a pretty rare occurrence, but can be tough to find if you don't know about it, so figured it is worth mentioning.
