TUESDAY, OCT. 30: The Bank of NT Butterfield & Son reported third quarter core earnings of $11.5 million compared to $11.3 million in 2011. Total net income for the third quarter was $18.8 million, which included $7.3 million of net income from discontinued operations primarily from the sale of a Barbados subsidiary. 

Year-to-date core earnings for the nine months ending September 30 were $37.9 million, up 38.5 per cent compared to $27.3 million for the same period in 2011.

During the quarter, Butterfield sold its wholly-owned Barbados subsidiary, Butterfield Bank (Barbados) Limited, to Trinidad and Tobago-based First Citizens Bank Limited (“First Citizens”) for a net gain of $7.2 million.

Brendan McDonagh, Butterfield’s chairman and CEO, said in a press release: “The board and management team are focused on improving Shareholder value as our key priority. To that end, we have emphasized our focus on core earnings to drive sustainable value.

“We completed the sale of our subsidiary in Barbados to effect a shift of capital to initiatives and businesses that offer the potential for greater Shareholder return. 

In addition, we continued to repurchase shares under the Share Buyback Programme announced in May, providing enhanced market liquidity to benefit shareholders.” 

“We were pleased to receive a report from Standard & Poor’s affirming the Bank’s A-/A-2 ratings at the end of the quarter, which highlighted Butterfield’s strong and improving capital position, very conservative liquidity position and the improving quality of our loan portfolio against a backdrop of ongoing economic difficulties.  We view that report as a solid endorsement of our strategy.”

Bradley Rowse, Butterfield’s CFO, said: “During the third quarter of 2012, Butterfield, like all banks, operated in a continuing environment of low and decreasing interest rates and ongoing economic challenges in our markets.

“Against that backdrop, by exercising disciplined deposit pricing and liquidity management, conservative investing and loan strategies, and our ongoing focus on managing expenses, Butterfield achieved a substantially improved ROE.”

Under the Share Buyback Programme, up to six million common shares and 2,000 preference shares may be repurchased.

In the third quarter of 2012, 1,682,937 Shares were purchased by the Bank at an average price of $ 1.23 per Share.  Since inception of the Programmme, a total of 2,216,351 Shares have been repurchased at an average price of $1.23.

The Board declared $4.0 million of dividends on the Bank’s 8 per cent non-cumulative perpetual voting preference shares to be paid on 15 December 15, 2012 to preference shareholders of record on December 1. No common dividend was declared.

In the interest of full disclosure, Don Burgess is a shareholder in Butterfield Bank.