The Bank of N.T. Butterfield & Son Limited today reported third quarter core earnings of $11.5 million ($0.01 per Share on a fully diluted basis) compared to $11.3 million in the third quarter of 2011.
Total net income for the third quarter was $18.8 million, including $7.3 million of net income from discontinued operations primarily from the sale of Barbados. Cash earnings (before amortisation of intangibles) for the period totalled $20.1 million compared to $12.6 million in the third quarter of 2011.
Year-to-date core earnings for the nine months ended 30 September 2012 were $37.9 million, up 38.5% compared to $27.3 million for the nine-month period ended 30 September 2011. Cash earnings (before amortisation of intangibles) for the period totalled $53.8 million, an increase of $18.2 million over the $35.6 million for the prior year.
“Year-to-date core earnings per Share of $0.05 on a fully diluted basis nearly doubled from the $0.03 per Share in the prior year. Book value per Share grew 9.4% year-on-year to end the quarter at $1.28 per Share compared to $1.17 per Share last year. The year-to-date cash return on tangible common equity nearly doubled to 8.6% from 4.4% a year ago.
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. As a result, the Barbados segment has been reported in discontinued operations (See Note (1) at the end of this News Release for details). The operating results from this business were immaterial on a per Share basis; however, year-to-date net income includes the $7.2 million net gain on the sale of the Barbados business, or $0.01 per Share.
Brendan McDonagh, Butterfield’s Chairman & Chief Executive Officer, said, “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.”
He added, “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.”