Butterfield Bank Financial Results For 2019 Q2
The Bank of Butterfield today announced financial results for the second quarter ended June 30, 2019.
Net income for the second quarter was $38.6 million or $0.72 per diluted common share, compared to $52.1 million or $0.96 per common share for the previous quarter and $49.7 million, or $0.89 per common share in the second quarter of 2018.
Second quarter core net income was $51.1 million, or $0.95 per diluted common share, compared to $51.7 million, or $0.95 per diluted common share, in the previous quarter and $51.7 million, or $0.93 per diluted common share, for the second quarter of 2018. Net income in the quarter was negatively impacted by a number of cost restructuring initiatives.
The core return on average tangible common equity for the second quarter of 2019 was 24.6%, compared to 25.6% for the previous quarter and 27.6% for second quarter of 2018. The core efficiency ratio for the second quarter of 2019 was 60.3% compared with 60.1% in the previous quarter and 59.0% in the second quarter of 2018.
“Butterfield delivered strong financial results in the second quarter of 2019, with increasing non-interest income, growth in investments and continued expense management,” said Michael Collins, Butterfield’s Chairman and Chief Executive Officer.
“We continue to focus on maintaining industry leading profitability throughout the interest rate cycle and have taken demonstrable actions with improving operating leverage, capital management and growth through acquisitions. Last week we announced the closing of the ABN AMRO [Channel Islands] acquisition and are very pleased with the closing process and the quality of new employees and customers to Butterfield in Guernsey.
“We expect the full operational integration of banking platforms to take up to 12 months. Importantly, this acquisition will elevate Butterfield’s stature and growth prospects in the Channel Islands and, as a consequence of our larger presence, we expect to achieve market synergies and consolidation benefits. We remain committed to disciplined and balanced capital management and believe the combined dividend and share-buyback represent an attractive and sustainable return profile for our shareholders.”
Net interest income [“NII”] for the second quarter of 2019 was $85.2 million, a decrease of $2.8 million compared with NII of $88.0 million in the previous quarter and $87.4 million in the second quarter of 2018. The decrease in NII in the second quarter of 2019 compared to the prior quarter was due primarily to lower short-term and reinvestment market rates, while customer deposit levels remained stable.
Net interest margin [“NIM”] for the second quarter of 2019 was 3.18%, a decrease of 13 basis point from the NIM of 3.31% in the previous quarter and down 2 basis points from the NIM of 3.20% in the second quarter of 2018. NIM declined in the second quarter of 2019 compared to the prior quarter due to new, lower margin foreign currency deposits in the Channel Islands, lower US dollar interest rates and marginally higher costs from term deposits.
Non-interest income was $44.2 million for the second quarter of 2019, compared with $43.4 million in the previous quarter and $41.9 million in the second quarter of 2018. The increase over the prior quarter was attributable primarily to higher banking revenue due to increased credit card fee income and, improved asset management, trust and custody services fees.
Non-interest expenses were $91.7 million in the second quarter of 2019 compared to $80.9 million in the previous quarter and $78.2 million in the second quarter of 2018. Core non-interest expenses were $79.2 million in the second quarter of 2019, compared with $80.3 million in the previous quarter and $77.7 million in the second quarter of 2018. Non-interest expenses were elevated in the second quarter of 2019 due to the closure of a bank branch in Bermuda, a voluntary early retirement program and the costs associated with the departure of a former senior group executive.
