Butterfield Reports Third Quarter 2017 Results

October 25, 2017 | 1 Comment

The Bank of Butterfield announced financial results for the quarter ended 30 September 2017.

Third quarter core net income was $40.7 million, or $0.73 per diluted common share, compared to $37.5 million, or $0.67 per diluted common share for the second quarter of 2017 and $33.4 million, or $0.60 per diluted common share, for the third quarter of 2016.

The return on average assets for the third quarter of 2017 was 1.5%, up from 1.3% in the previous quarter and 0.9% in the third quarter of 2016.

The core return on average tangible common equity1 for the third quarter of 2017 was 22.2%, up from 21.6% in the previous quarter and 19.0% in the third quarter of 2016. The core efficiency ratio1 for the third quarter of 2017 was 62.8% compared with 66.1% in the previous quarter and 65.3% in the third quarter of 2016.

“Butterfield delivered solid results this quarter as lending margins improved and expenses began to return to a more normal level,” said Michael Collins, Chairman and Chief Executive Officer.

“Today, we are also pleased to announce an agreement to acquire the Global Trust Solutions business from Deutsche Bank. This acquisition will add scale and talent to our existing trust operations in Switzerland, Guernsey and Cayman and add a profitable and strategically important private trust platform in Singapore. We expect it to generate stable trust fee income for the Bank and be accretive once integrated.”

Collins added, “This is our fourth significant acquisition since 2014 and is consistent with our strategy to grow by acquiring complementary businesses in select jurisdictions.”

Net interest income [“NII”] for the third quarter of 2017 was $74.3 million, an increase of $2.8 million compared with NII of $71.5 million in the second quarter of 2017 and an increase of $9.3 million compared with NII of $65.0 million in the third quarter of 2016. Improvements in NII were driven by higher yields on the investment portfolio and on the adjustable-rate loan portfolio.

Net interest margin [“NIM”] for the third quarter of 2017 was 2.81%, up 15 basis points from the NIM of 2.66% in the previous quarter and up 42 basis points from the NIM of 2.39% in the third quarter of 2016. Improvements in NIM were driven by increases in NII and deposit costs which decreased slightly to 10 basis points from 11 basis points in the previous quarter.

Results for the third quarter of 2017 included a release of provision for credit losses of $0.7 million compared with a provision for credit losses of $0.5 million in the previous quarter and a provision for credit losses of $0.3 million in the third quarter of 2016.

Non-interest income was $38.2 million for the third quarter of 2017, compared with $38.7 million in the previous quarter and $36.3 million in the third quarter of 2016.

Non-interest expenses were $73.6 million in the third quarter of 2017, compared with $75.3 million in the previous quarter and $77.3 million in the third quarter of 2016. Non-interest expenses are expected to continue to normalize over the next quarter as various temporary expenses abate.

Capital Management

The current total capital ratio as at 30 September 2017 was 19.9% as calculated under Basel III, which was effective for reporting purposes beginning on 1 January 2016. As of 31 December 2016, the Bank reported its total capital ratio under Basel III at 17.6%. Both of these ratios are significantly above regulatory requirements.

The Board remains committed to a balanced capital return policy. The Board declared an interim dividend of $0.32 per common share to be paid on 27 November 2017 to shareholders of record on 13 November 2017.

Share via email

Read More About

Category: All, Business

Comments (1)

Trackback URL | Comments RSS Feed

  1. Happy Days says:

    Is this because of the high Maintenance and Compliance fees?

Leave a Reply

="banner728-container bottom clearfix">