Butterfield Bank Reports 2013 Full Year Results

The Bank of N.T. Butterfield & Son Limited today [Feb 25] announced core earnings for 2013 of $76.6 million, an improvement of $21.7 million over the $54.9 million earned in 2012.

Net income for the year ended 31 December 2013 was $78.2 million [$0.11 per share on a fully diluted basis] compared to $25.6 million [$0.01 per share on a fully diluted basis] in 2012, up $52.6 million year over year. The core cash return on average tangible common equity ratio improved to 10.3% in 2013 compared to 6.6% in 2012.

Brendan McDonagh, Butterfield’s Chairman & Chief Executive Officer, said, “Our focus on improving shareholder value through disciplined management of capital and expenses while prudently investing in our core businesses to generate revenue growth and sustainable returns is showing results.

“By virtually all measures, Butterfield delivered enhanced value to shareholders. Building upon the significant improvements we achieved in 2013, we will continue to pursue business opportunities under this strategic course.

“The Bank maintained strong capital ratios while actively managing and optimising its capital structure. In 2013, the Bank retired $53 million in subordinated capital, repurchased $20.3 million of common and preference shares and paid $38.5 million in common dividends to shareholders, declaring interim dividends each quarter.

“Subsequent to year end, we announced our intention to expand our trust and fiduciary services presence in Guernsey—one of our core markets—through the acquisition of Legis Group’s trust business; Butterfield’s first acquisition in seven years.

“Legis Group was recently recognised as one of the leading international finance firms at the Citywealth International Finance Centre Awards and named Guernsey’s 2013 Trust Company of the Year.

“The transaction, which is expected to be completed during the current quarter, will enhance our trust client base and associated long-term revenues without the need to expand our geographic footprint.

“Improving financial performance has allowed Butterfield to continue to contribute to important causes within our communities. During 2013, in all of our major markets, we were proud to support local organisations that are working to enhance prosperity, foster social progress and enrich the quality of lives.

“The Bank’s financial support of local events and charities was complemented by the involvement of our employees who lent their time and expertise to worthy causes.”

Financial highlights of the year ended 31 December 2013 [with comparisons to year-end 2012]:

• Net income of $78.2 million, up $52.6 million from $25.6 million
• Core earnings of $76.6 million, up $21.7 million from $54.9 million
• Core non-interest expenses improved by $18.1 million or 6.7%
• Core cash return on average tangible common equity of 10.3%, up from 6.6%
• Core cash return on average assets of 0.9%, up from 0.6%
• Core efficiency ratio of 71.6%, improved from 78.4%

John Maragliano, Butterfield’s Chief Financial Officer, said “We are pleased with the continued progress our businesses are making in delivering improved core results.

“Year over year growth in net income and core earnings drove significant improvements in our key performance ratios, most notably the core cash return on average tangible common equity of 10.3%, core cash return on average assets of 0.9%, and the core efficiency ratio of 71.6%.

“The increase in core earnings in 2013 was driven primarily by two factors: lower expenses due to improved operating efficiency; and enhanced revenue performance in the investment portfolio.

“Butterfield ended the year with a very strong capital position, a highly liquid balance sheet and improved asset quality, which positions us well.”

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