Butterfield Bank Q1 2017 Net Income: $35.9M

April 25, 2017 | 1 Comment

The Bank of N.T. Butterfield today announced net income for the first quarter ended 31 March 2017 of $35.9 million, an increase of $0.5 million compared to $35.4 million earned in the fourth quarter of 2016 and an increase of $9.1 million compared to $26.8 million earned in the same quarter a year ago.

Core earnings for the first quarter ended 31 March 2017 were $38.5 million, an increase of $1.4 million compared to the prior quarter, and an increase of $2.5 million from the same quarter a year ago.

Michael Collins, Butterfield’s Chief Executive Officer, said, “As shown by our strong results for the first quarter of 2017, we continue to successfully execute our strategy of growing community banking market share while investing in the expansion of our wealth management business. I am pleased with Butterfield’s performance this quarter as it reinforces our ability to produce consistently high risk-adjusted returns relative to our US regional bank peers.

“During the first quarter, we launched our UK residential mortgage business, Butterfield Mortgages Limited [“BML”], following completion of the orderly wind-down of our private banking business in London.

“BML has retained a highly experienced team of residential mortgage specialists with strong connections in the London real estate market who will continue to assist high net worth families, based in the UK and internationally, with the acquisition of high-end UK properties. From a balance sheet perspective, BML will provide our highly liquid Guernsey bank with low-risk, floating rate Sterling loans to invest its Sterling deposits.

“In February, the Bank completed a well-received secondary offering of common shares. As a result, the Carlyle Group [“Carlyle”] no longer holds any common shares of Butterfield and the Investment Agreement between Butterfield and Carlyle has ceased.

“Carlyle’s support was instrumental in our success over the last several years as we refocused on the core markets where we have scale. We are pleased that James Burr and David Zwiener, Board members nominated to serve by Carlyle, have agreed to stand for re-election at the next Annual General Meeting to continue their service for another year.

“As evidence of our commitment to a balanced capital return policy, the Board declared a common dividend of $0.32 per common share for Q1 2017. This is three times the quarterly dividend paid to common shareholders for the first quarter of 2016.”

Michael Schrum, Butterfield’s Chief Financial Officer, said, “Butterfield’s solid performance continued in the first quarter of 2017, with year-over-year improvements in both non-interest income and net interest income.

“Net interest income for the quarter rose by $5.6 million over Q1 2016, due primarily to higher interest earned on investments as a result of higher balances in the Bermuda and Cayman portfolios plus increased yields on the investment portfolio.

“The $4.0 million year-over-year increase in non-interest income is mainly a result of the addition of HSBC Bermuda’s private banking investment management and trust businesses, which drove increases in trust and asset management revenue. In addition, banking fees increased due to revised fee schedules in particular jurisdictions, increased volumes on foreign exchange transactions and increased volumes on credit card transactions.

“The Bank’s investment portfolio increased slightly in Q1 2017 to $4.5 billion, compared to $4.4 billion at the end of Q4 2016. The increase was due primarily to $0.2 billion in assets allocated to the held-to-maturity portfolio through the purchase of US government and federal agency securities. Meanwhile, average deposits of $10.0 billion remained flat as compared to the fourth quarter of 2016.

“Our asset quality continues to be strong, with 94% of the Bank’s investment portfolio invested in A-or-better-rated securities.”

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  1. aceboy says:

    Collins and Schrum should be given the unfettered opportunity to take on Bermuda’s economy. Make these guys joint Finance Ministers!!

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