Butterfield reports net income of $78.2 million (Update)

It could be another sign of economic recovery.

The Bank Butterfield reported  core earnings for 2013 of $76.6 million, an improvement of $21.7 million over the $54.9 million earned in 2012.  

Net income for the year ended December 31, 2013 was $78.2 million ($0.11 per share on a fully diluted basis) compared to $25.6 million ($0.01 per share on a fully diluted basis) in 2012, up $52.6 million year over year. 

Brendan McDonagh, Butterfield’s chairman and CEO, said in a release: “Our focus on improving shareholder value through disciplined management of capital and expenses while prudently investing in our core businesses to generate revenue growth and sustainable returns is showing results. By virtually all measures, Butterfield delivered enhanced value to shareholders. Building upon the significant improvements we achieved in 2013, we will continue to pursue business opportunities under this strategic course.

“The Bank maintained strong capital ratios while actively managing and optimizing its capital structure. In 2013, the Bank retired $53 million in subordinated capital, repurchased $20.3 million of common and preference shares and paid $38.5 million in common dividends to shareholders, declaring interim dividends each quarter.

“Subsequent to year end, we announced our intention to expand our trust and fiduciary services presence in Guernsey — one of our core markets — through the acquisition of Legis Group’s trust business; Butterfield’s first acquisition in seven years.  

“Legis Group was recently recognised as one of the leading international finance firms at the Citywealth International Finance Centre Awards and named Guernsey’s 2013 Trust Company of the Year. The transaction, which is expected to be completed during the current quarter, will enhance our trust client base and associated long-term revenues without the need to expand our geographic footprint.

“Improving financial performance has allowed Butterfield to continue to contribute to important causes within our communities. During 2013, in all of our major markets, we were proud to support local organizations that are working to enhance prosperity, foster social progress and enrich the quality of lives.  

“The Bank’s financial support of local events and charities was complemented by the involvement of our employees, who lent their time and expertise to worthy causes.”

Under the Bank’s share buy-back programmes, the total shares acquired or purchased for cancellation during the year ended December 31, 2013, amounted to four million common shares to be held as treasury shares at an average cost of $1.39 per share (total cost of $5.6 million), and 11,972 preference shares purchased for cancellation at a cost of $14.7 million.

The Board declared quarterly dividends of $20 per share on the Bank’s 8% non-cumulative perpetual voting preference shares, to be paid on March 17, 2014 to preference shareholders of record on March 1, 2014. 

The Board also declared a fourth interim dividend of $0.01 per common and contingent value convertible preference share and a special dividend of $0.01 per common and contingent value convertible preference share, both to be paid on March 28, 2014 to shareholders of record on March 14, 2014.

In 2013, the Bank called $53 million (20%) of subordinated debt capital.  Subsequent to year end, the Bank also called a $90 million (35%) tranche of subordinated debt bringing the outstanding subordinated debt balance to $117 million from $260 million at the end of 2012. 

Editor’s note: In accordance with Media Council transparency rules, Don Burgess is a shareholder in the Bank of Butterfield. 

Download the full report: Butterfield Report