Butterfield Reports 2025 First Quarter Results
The Bank of N.T. Butterfield & Son Limited announced financial results for the quarter ended March 31, 2025.
A spokesperson said, “Net income for the first quarter of 2025 was $53.8 million, or $1.23 per diluted common share, compared to net income of $59.6 million, or $1.34 per diluted common share, for the previous quarter and $53.4 million, or $1.13 per diluted common share, for the first quarter of 2024. Core net income1 for the first quarter of 2025 was $56.7 million, or $1.30 per diluted common share, compared to $59.6 million, or $1.34 per diluted common share, for the previous quarter and $55.0 million, or $1.17 per diluted common share, for the first quarter of 2024.
“The return on average common equity for the first quarter of 2025 was 20.9% compared to 22.9% for the previous quarter and 21.5% for the first quarter of 2024. The core return on average tangible common equity1 for the first quarter of 2025 was 24.2%, compared to 25.2% for the previous quarter and 24.5% for the first quarter of 2024. The efficiency ratio for the first quarter of 2025 was 61.8%, compared to 58.2% for the previous quarter and 60.9% for the first quarter of 2024. The core efficiency ratio1 for the first quarter of 2025 was 59.8% compared with 58.2% in the previous quarter and 59.8% for the first quarter of 2024.”
Michael Collins, Butterfield’s Chairman and Chief Executive Officer, commented, “Our strong performance in the first quarter of 2025 continued to demonstrate the resilience of our balance sheet with an expanding net interest margin, higher net interest income, stable core efficiency and effective capital management. We remain committed to managing Butterfield for the long-term benefit of our clients and communities, while creating value for shareholders across more pronounced economic and interest rate cycles.”
A spokesperson added, “Net income and core net income1 were down in the first quarter of 2025 versus the prior quarter. Net income was down in the first quarter of 2025 compared to the prior quarter primarily due to lower non-interest income from banking services with higher non-interest expenses due to the impact of a group-wide voluntary early retirement program executed during the quarter offset by higher net interest income and lower allowance for credit losses. Core net income1 was down in the first quarter of 2025 primarily due to lower non-interest income from banking services offset by higher net interest income and lower allowance for credit losses and non-interest expenses.
“Net interest income [“NII”] for the first quarter of 2025 was $89.3 million, or $0.7 million higher compared with NII of $88.6 million in the previous quarter and $2.2 million higher from $87.1 million in the first quarter of 2024. NII was higher during the first quarter of 2025 compared to the previous quarter and first quarter of 2024, primarily due to a lower cost of deposits driven by a positive mix shift in deposits to demand from term and higher yields on investments as fixed rate investments continued to reprice. These were partially offset by lower yields on loan and treasury assets following interest rate cuts by central banks during the fourth quarter of 2024, as well as a lower day count in the first quarter of 2025 compared to the fourth quarter of 2024.
“Net interest margin [“NIM”] for the first quarter of 2025 was 2.70%, an increase of 9 basis points from the previous quarter at 2.61% and up 2 basis points from 2.68% in the first quarter of 2024. NIM in the first quarter of 2025 increased compared to the prior quarter and first quarter of 2024 due to a lower cost of deposits, partially offset by a lower volume of interest earning assets in the previous quarter in addition to the asset yield dynamics noted above.
“Non-interest income for the first quarter of 2025 was $58.4 million, a decrease of $4.8 million from $63.2 million in the previous quarter and $3.3 million higher than $55.1 million in the first quarter of 2024. The decrease in the first quarter of 2025 compared to the prior quarter was due to lower card volume due to seasonality and lower third party volume incentives offset by higher foreign exchange volume, trust income and asset management fees. Non-interest income in the first quarter of 2025 was higher than the first quarter of 2024 primarily due to higher card volume, and increases in asset management fees, foreign exchange volume and trust fees.
“Non-interest expenses were $93.2 million in the first quarter of 2025, compared to $90.6 million in the previous quarter and $88.5 million in the first quarter of 2024. Core non-interest expenses1 of $90.3 million in the first quarter of 2025 were comparable to the $90.6 million incurred in the previous quarter and higher than the $86.9 million incurred in the first quarter of 2024. Core non-interest expenses1 in the first quarter of 2025 were higher compared to the first quarter of 2024 due to higher salary and other employee benefits, seasonally higher payroll taxes and increased marketing expenses. Included in salaries and other employee benefits are non-core expenses of $2.9 million which relates to costs arising from a group-wide voluntary early retirement program executed in the first quarter of 2025.
“Period end deposit balances were $12.6 billion, a decrease of 1.1% compared to $12.7 billion at December 31, 2024, primarily due to deposit decreases in Bermuda which were partially offset by increases in the Channel Islands and UK segment due principally to a weaker US dollar. Average deposits were $12.5 billion in the quarter ended March 31, 2025, which is consistent with the prior quarter.
“Tangible book value per share at the end of the first quarter of 2025 is $22.94 per share, higher than $21.70 per share at the end of the prior quarter and an increase over the $19.45 at the end of the first quarter of 2024.
“Butterfield maintained its balanced capital return policy. The Board again declared a quarterly dividend of $0.44 per common share to be paid on May 21, 2025 to shareholders of record on May 7, 2025. During the first quarter of 2025, Butterfield repurchased 1.1 million common shares under the Bank’s existing share repurchase program.
“Effective January 1, 2025, the Bank has adopted the Basel Committee on Banking Supervision’s ["BCBS"] revised standardized approach for credit risk framework as required by the Bermuda Monetary Authority ["BMA"]. Comparatives were prepared under the prior credit risk framework. The current total regulatory capital ratio as at March 31, 2025 was 27.7% , compared to 25.8% as at December 31, 2024. Both of these ratios remain conservatively above the minimum regulatory requirements applicable to the Bank.”
