Butterfield Reports Third Quarter 2024 Results
The Bank of N.T. Butterfield & Son Limited today announced financial results for the quarter ended September 30, 2024.
A spokesperson said, “Net income for the third quarter of 2024 was $52.7 million, or $1.16 per diluted common share, compared to net income of $50.6 million, or $1.09 per diluted common share, for the previous quarter and $48.7 million, or $0.99 per diluted common share, for the third quarter of 2023. Core net income1 for the third quarter of 2024 was $52.8 million, or $1.16 per diluted common share, compared to $51.4 million, or $1.11 per diluted common share, for the previous quarter and $57.0 million, or $1.16 per diluted common share, for the third quarter of 2023.
“The return on average common equity for the third quarter of 2024 was 20.3% compared to 20.7% for the previous quarter and 20.6% for the third quarter of 2023. The core return on average tangible common equity1 for the third quarter of 2024 was 22.5%, compared to 23.3% for the previous quarter and 26.1% for the third quarter of 2023. The efficiency ratio for the third quarter of 2024 was 60.3%, compared to 62.4% for the previous quarter and 64.1% for the third quarter of 2023. The core efficiency ratio1 for the third quarter of 2024 was 60.2% compared with 61.8% in the previous quarter and 58.3% for the third quarter of 2023.
Michael Collins, Chairman and Chief Executive Officer, commented, “Butterfield delivered strong results in the third quarter of 2024 through improved efficiency, stable non-interest income, and focused capital management. We have a high fee/income ratio and will continue to increase the proportion of fee revenue over time through acquisitions, while returning excess capital to our shareholders. Economic conditions in Bermuda, the Cayman Islands, and the Channel Islands remain favorable, with strong demand and contributions from both international business and tourism. As we enter a period of easing financial conditions, we expect to see better affordability for borrowing customers and a general pick-up in business activity.”
A spokesperson added, “Net income was up in the third quarter of 2024 versus the prior quarter primarily due to higher net interest income and lower non-interest expense, as well as a modest increase in non-interest income.
“Net interest income [“NII”] for the third quarter of 2024 was $88.1 million, or $0.6 million higher compared with NII of $87.4 million in the previous quarter and down $2.1 million from $90.2 million in the third quarter of 2023. NII was higher during the third quarter of 2024 compared to the second quarter of 2024, primarily due to higher average investable asset volume, which was partially offset by higher deposit costs and lower treasury yields. Compared to the third quarter of 2023, the decreased NII in the third quarter of 2024 was due to higher deposit costs, that were slightly offset by higher yielding interest earning assets and a larger balance sheet.
“Net interest margin [“NIM”] for the third quarter of 2024 was 2.61%, a decrease of 3 basis points from 2.64% in the previous quarter and down 15 basis points from 2.76% in the third quarter of 2023. NIM in the third quarter of 2024 decreased compared to the prior quarter and third quarter of 2023 due to mix shift to term deposits and lower treasury yields, partially offset by increased yields on investments.
“Non-interest income for the third quarter of 2024 was $56.0 million, an increase of $0.4 million from $55.6 million in the previous quarter and $4.0 million higher than $52.0 million in the third quarter of 2023. The increase in the third quarter of 2024 compared to the prior quarter was due to higher card volume, one-off loan prepayment fees, and growth in asset management fees due to higher asset valuations. The increases were partially offset by lower unclaimed balances recognized into income. Non-interest income in the third quarter of 2024 was higher than the third quarter of 2023 primarily due to increases in asset management fees, as well as increased trust income from assets acquired from Credit Suisse.
“Non-interest expenses were $88.8 million in the third quarter of 2024, compared to $91.1 million in the previous quarter and $92.5 million in the third quarter of 2023. Core non-interest expenses1 of $88.6 million in the third quarter of 2024 were lower than the $90.3 million incurred in the previous quarter and higher than the $84.3 million incurred in the third quarter of 2023. Core non-interest expenses1 in the third quarter of 2024 were lower compared to the prior quarter due to decreased professional and outside services costs. Compared to the third quarter of 2023, core non-interest expenses1 were higher due to performance-based remuneration accruals and inflationary increases in staff healthcare costs and property cost; and increased expense arising from the recently implemented core banking software.
“Period end deposit balances were $12.7 billion, an increase of 6.3% compared to $12.0 billion at December 31, 2023, primarily due to deposit increases in the Channel Islands, as well as a strengthened British pound. Average deposits were $12.4 billion in the quarter ended September 30, 2024, in-line with the prior quarter.
“Tangible book value per share improved by $1.87 or 9.3% this quarter to $21.90 per share.
“The Bank maintained its balanced capital return policy. The Board again declared a quarterly dividend of $0.44 per common share to be paid on November 19, 2024 to shareholders of record on November 5, 2024. During the third quarter of 2024, Butterfield repurchased 1.0 million common shares under the Bank’s existing share repurchase program.
“The current total regulatory capital ratio as at September 30, 2024 was 24.3% as calculated under Basel III, compared to 25.4% as at December 31, 2023. Both of these ratios remain conservatively above the minimum Basel III regulatory requirements applicable to the Bank.”
