Butterfield reports fifth consecutive quarter of profit

MONDAY, APRIL 30: The Bank of Butterfield reported its net income up 75.4 per cent for the first quarter of 2012 compared to 2011.

With a net income of $14.7m, the bank has recorded five straight quarters of profit.

Bradford Kopp, Butterfield’s president and CEO, said: “We are pleased to be able to report a fifth consecutive quarter of profit and a first quarter performance that is substantially improved over last year.

“This is a significant achievement in an environment of continued low interest rates and protracted economic recovery that creates challenges for all banks.”

Improvements in our first quarter net income, which increased by $6.3 million or 75.4 per cent versus the same three-month period last year, were largely the result of increases in net interest income of $4.5 million, driven by improved yields on the bank’s investments and ongoing discipline in deposit pricing. 

“Taking a more strategic view of our investment portfolio, coupled with ongoing diligence in the management of credit quality, operational risks and expenses, Butterfield has made significant strides in rebuilding profits and positioning the Bank for improvements in Shareholder value.

“As such, these are the major themes that will continue to shape our business strategy going forward.”

Butterfield reported net interest income at $52.1m, which is up 9.5 per cent. Return on equity is up 6.3 per cent.

Bradley Rowse, executive vice president and CFO said: “Like most banks, Butterfield continues to experience decreased volumes and demand for some services — foreign exchange and transactional business, for example— as a consequence of the economic slowdown. But our stable deposit base and unique mix of retail and international wealth management revenue streams mean that Butterfield is in a better position than many financial services institutions to continue to generate increasing revenues in a difficult market.

“In addition, whilst our efficiency ratio remains high at just under 80 per cent, we are pleased with the 3 per cent improvement from the prior year, especially given temporary increases in costs during the quarter related to the 2011 launch of our new banking system in Bermuda and Cayman.

“With our strong balance sheet and improving efficiency, we have built a platform for sustainable growth.”

Net income from the various locations Butterfield does business includes: Bermuda ($5.8m), Cayman ($5.8m), Guernsey ($2.5m), UK ($0.8m).

The board of directors declared $4.0 million of dividends on the bank’s 8% Non-Cumulative Perpetual Voting Preference Shares to be paid on June 15,2012 to Preference Shareholders of record on June 1, 2012. No Common dividend was declared.

• In keeping with Media Council protocol in transparency, Don Burgess is a shareholder in Butterfield Bank.