Butterfield 4th Quarter & Full Year 2019 Results
The Bank of Butterfield today announced financial results for the fourth quarter and year ended December 31, 2019.
“Net income for the year ended December 31, 2019 was $177.1 million or $3.30 per diluted common share, compared to $195.2 million or $3.50 per diluted common share for the year ended December 31, 2018,” the company said.
“Core net income1 for the year ended December 31, 2019 was $197.9 million, or $3.69 per diluted common share, compared to $197.0 million, or $3.53 per diluted common share, for the year ended December 31, 2018.
“The core return on average tangible common equity1 for the year ended December 31, 2019 was 23.4%, compared to 25.6% for the year ended December 31, 2018. The core efficiency ratio1 for the year ended December 31, 2019 was 62.2% compared with 61.5% for the year ended December 31, 2018.”
Michael Collins, Butterfield’s Chairman and Chief Executive Officer commented, “2019 was an important year for Butterfield in terms of operational and financial achievements. We successfully acquired the ABN AMRO [Channel Islands] banking business, which significantly increased our presence in Guernsey.
“With a relatively small market share in the Channel Islands, we are now pursuing growth to complement and balance our profitable and well-established banking franchises in Bermuda and Cayman. With the acquisition, we now have a larger and more diversified balance sheet supported by investment grade credit ratings from S&P, Moody’s and KBRA.
“It was a more challenging US Dollar interest rate environment in the latter half of 2019 and we were able to achieve strong and stable core net income. Continued share repurchases helped achieve a core net income per diluted share improvement of 5% and core return on average tangible common equity1 remained at industry-leading levels. Throughout the year, we continued to emphasize cost management initiatives and furthered our plans to leverage Group service centers, which helped us achieve a core efficiency ratio of 62.2% in 2019.
“I would like to take this opportunity to congratulate the Butterfield team in Cayman for the successful opening of the new Camana Bay Banking Centre in Grand Cayman earlier this week. Camana Bay is a fantastic location and a great start to the roll out of our updated Butterfield brand. We are confident that this investment will solidify and grow our retail and mid-market corporate banking market share in the Cayman Islands for years to come. Our investment in this new branch signals our confidence in Cayman and the desire to further enhance our offerings in this important market.
“As we enter 2020, Butterfield’s strong balance sheet, capital efficient fee businesses, thoughtful capital management, and selective acquisition strategy should continue to provide long-term value for our shareholders. Finally, I would also like to thank our existing and new customers for their business and partnership with Butterfield during 2019 and to all Butterfield Group employees for their commitment to excellent customer service.”
The company added, “Net income for the fourth quarter was $43.9 million, or $0.82 per diluted common share, compared to $42.4 million, or $0.79 per common share, for the previous quarter and $50.9 million, or $0.92 per common share, in the fourth quarter of 2018. Fourth quarter core net income was $46.2 million, or $0.87 per diluted common share, compared to $48.8 million, or $0.91 per diluted common share, in the previous quarter and $51.1 million, or $0.92 per diluted common share, for the fourth quarter of 2018.
“Net income increased in the fourth quarter of 2019 versus the prior quarter due to the first full quarter of contribution from the ABN AMRO [Channel Islands] acquisition, as well as increased fee income from card services, which benefited from seasonal retail sales.
“The core return on average tangible common equity for the fourth quarter of 2019 was 21.1%, compared to 22.5% for the previous quarter and 25.8% for the fourth quarter of 2018. The core efficiency ratio for the fourth quarter of 2019 was 66.3% compared with 62.1% in the previous quarter and 61.5% in the fourth quarter of 2018. Net interest income [“NII”] for the fourth quarter of 2019 was $86.2 million, a decrease of $0.1 million compared with NII of $86.3 million in the previous quarter and $87.4 million in the fourth quarter of 2018.
“Net interest margin [“NIM”] for the fourth quarter of 2019 was 2.59%, an increase of 7 basis points from 2.52% in the previous quarter and down 79 basis points from 3.38% in the fourth quarter of 2018. NIM increased in the fourth quarter of 2019 compared to the prior quarter due a higher yielding asset mix.
“Non-interest income improved to $49.7 million for the fourth quarter of 2019, compared with $46.6 million in the previous quarter and $45.7 million in the fourth quarter of 2018. The increase over the prior quarter was attributable primarily to the seasonal increase in credit card transaction fees.
“Non-interest expenses were $93.9 million in the fourth quarter of 2019, compared to $90.4 million in the previous quarter and $83.5 million in the fourth quarter of 2018. Core non-interest expenses were $91.6 million in the fourth quarter of 2019, compared with $84.0 million in the previous quarter and $83.2 million in the fourth quarter of 2018.
“Non-interest expenses were higher in the fourth quarter of 2019 compared to the prior quarter due to Group service center expansion costs, continued integration and compliance review expenses from the Channel Islands acquisition, expenses related to opening a new branch in the Cayman Islands and global re-branding marketing costs.”
