Butterfield Bank Q1 Net Income: $8.4 Million
The Bank of N.T. Butterfield & Son Limited today [Apr.26] reported first quarter net income of $8.4 million.
This compares to a net loss of $176.3 million [net income of $3.8 million on a normalised basis] in the first quarter of 2010. The first quarter of 2010 included an other-than-temporary impairment loss of $60.5 million and realised losses on securities of $113.8 million.
Brad Kopp, Butterfield’s President & Chief Executive Officer, commented, ”We are pleased to report a first quarter profit following a difficult transitional year. The fact that we are able to do so whilst operating in a challenging, low-interest rate economy, reflects the underlying strength of our franchise, as illustrated by the stability of deposit and loan balances, and increased focus on balance sheet management.”
Mr. Kopp said, “Over the past twelve months we have concentrated our efforts on de-risking the balance sheet and rationalising our business model. We emerged from 2010 with a strong balance sheet, over $1 billion of capital, and an executive management team that is focused on developing our core businesses of community banking and wealth management. Although the protracted economic recovery and persistent low interest rates are challenging for the Bank, with our first quarter profit, we are already seeing the benefit of that restructuring and rationalisation.”
Brad Rowse, Chief Financial Officer, commented, “With the sale in 2010 of securities, Butterfield had a significant amount of excess liquidity which we began to invest in higher-yielding, low risk securities in the last quarter of the 2010. We are beginning to see the benefit of that strategy and, despite the low-rate environment in which we are currently operating, our quarterly net interest income before provision for credit losses, at $51.4 million, was up over 20% year on year.”
Mr. Rowse continued, “Non-interest income was down in Q1 2011 versus the same period in 2010 by 16.8% due principally to lower foreign exchange and asset management revenues, down 14.0% and 6.1%, respectively, which are reflective of current economic circumstances in our markets, as well as the comparative impact of non-recurring items that occurred last year.”
The Board declared $4.0 million of dividends on the Bank’s 8% Non-Cumulative Perpetual Limited Voting Preference Shares to be paid on 15 June 2011 to Preference shareholders of record on 1 June 2011. No common share dividend was declared.
Overall, the Bank said there was an 18.1% reduction in expenses as the prior year included fees related to the stand-by line of credit of $7.0 million, $3.3 million of organisational change costs and $5.8 million of expenses on vesting of stock options on the change of control.
Last month, the Bank of Butterfield confirmed that 25 staff members were made redundant, with the Bank saying it was due to “internal reorganization.”
The full 7-page report is below, click ‘Fullscreen’ on the bottom for greater clarity:
I know there will be few comments here because most of you lot have no idea what is going on with Butterfield.
Effectively, they are saying that they got the bank cheap with PLP sponsored assistance then wrote off the bad loans and charged that to the existing shareholders -mostly conservative UBP voting white folk- and now are happy to dividend a bunch of dollars out to all the new folks who bought the pref shares they issued with the government’s help. (BTW government did get paid a handsome fee for this. These are mostly people we don’t know, but some lucky locals (gosh, who I wonder?) did get in on this at the first floor.
If you are a common shareholder, hang tight. There should be another sale in a year or two.
The net income was half that. BNTB was naughty to say the net income was $8mm. Net income is suppose to be net of preferred dividends…and that $8MM was gross of that. We are being mislead. Period. Net income is suppose to be net income attributable to common share holders.
If you a common shareholder, buy more shares. It appears the bank has turned the corner. If you are not a shareholder, buy some shares. Trading at near $1.25..Carlyle WILL rebuild this bank and look to unload its investment within 5 years..Just look at their record. This is merely an intermediate term investment. Bermudian jobs, Bermudian mortgages, Bermudian careers mean nothing. Increasing stock value is what drives.
I was stunned that Carlyle also have the nerve to charge the bank $4mm a year for advice on balance sheet management. An absolute joke.
That $4mm was a finders fee…..nothing to do with managing the balance sheet.