Butterfield Reports 2025 Second Quarter Results
The Bank of N.T. Butterfield & Son Limited announced financial results for the quarter ended June 30, 2025.
A spokesperson said, “Net income for the second quarter of 2025 was $53.3 million, or $1.25 per diluted common share, compared to net income of $53.8 million, or $1.23 per diluted common share, for the previous quarter and $50.6 million, or $1.09 per diluted common share, for the second quarter of 2024. Core net income1 for the second quarter of 2025 was $53.7 million, or $1.26 per diluted common share, compared to $56.7 million, or $1.30 per diluted common share, for the previous quarter and $51.4 million, or $1.11 per diluted common share, for the second quarter of 2024.
“The return on average common equity for the second quarter of 2025 was 20.3% compared to 20.9% for the previous quarter and 20.7% for the second quarter of 2024. The core return on average tangible common equity1 for the second quarter of 2025 was 22.3%, compared to 24.2% for the previous quarter and 23.3% for the second quarter of 2024. The efficiency ratio for the second quarter of 2025 was 61.3%, compared to 61.8% for the previous quarter and 62.4% for the second quarter of 2024. The core efficiency ratio1 for the second quarter of 2025 was 61.1% compared with 59.8% in the previous quarter and 61.8% for the second quarter of 2024.
“The Bank also announced the appointment of a new Independent Director, Andrew Henton, a UK and offshore financial services sector expert, with longstanding experience in the Channel Islands.”
Michael Collins, Butterfield’s Chairman and Chief Executive Officer, commented, “This strong second quarter performance underscores the consistency of our high risk-adjusted returns, supported by disciplined risk management and high-quality client relationships. Butterfield’s proven business model and sustained through-cycle profitability gives our Board the confidence to increase the quarterly cash dividend rate by 14% and authorize a new share repurchase program. As we rebalance our capital return strategy, we continue to evaluate selective, feebased acquisition opportunities.
“On behalf of the Board of Directors, I am pleased to welcome Andrew Henton to the Group Board, and thank him for his continuing contribution to Butterfield’s subsidiary banking business in the Channel Islands, where he also currently serves as a Director. Andrew brings significant experience in governance, private banking, private equity and investment banking. I look forward to working with Andrew and am confident that he will help to further Butterfield’s strategic growth and value creation.”
A spokesperson added, “Net income and core net income1 were down in the second quarter of 2025 versus the prior quarter. Net income was down in the second quarter of 2025 compared to the prior quarter, primarily due to a volume driven decrease in foreign exchange revenue and higher allowance for credit losses offset by decreases in non-interest expenses due to lower non-income tax and other non-interest expenses. Core net income1 was down in the second quarter of 2025 primarily due to a volume driven decrease in foreign exchange revenue, higher allowance for credit losses and higher salaries and other employee benefits.
“Net interest income [“NII”] for the second quarter of 2025 was $89.4 million, a marginal increase over NII of $89.3 million in the previous quarter and $2.0 million higher compared to $87.4 million in the second quarter of 2024. NII was higher during the second quarter of 2025 compared to the second quarter of 2024, primarily due to a lower cost of deposits from prior quarters’ central bank rate cuts, higher yield on investments offset by lower yields on loan and treasury assets following the aforementioned central bank rate cuts.
“Net interest margin [“NIM”] for the second quarter of 2025 was 2.64%, a decrease of 6 basis points from the previous quarter at 2.70% and consistent with 2.64% in the second quarter of 2024. NIM in the second quarter of 2025 decreased compared to the prior quarter primarily due to lower treasury yields and the early redemption of the Bank’s subordinated debt, which resulted in the accelerated amortization of the related unamortized issuance costs of $1.2 million [2 basis points impact on NIM].
“Non-interest income for the second quarter of 2025 was $57.0 million, a decrease of $1.4 million from $58.4 million in the previous quarter and $1.4 million higher than $55.6 million in the second quarter of 2024. The decrease in the second quarter of 2025 compared to the prior quarter was due to lower foreign exchange volumes and lower custody and other administrative fees partially offset by higher trust revenue and other non-interest income. Noninterest income in the second quarter of 2025 was higher than the second quarter of 2024 primarily due to higher banking fees from both card volume and incentive programs, higher trust income, increases in asset management fees, and offset by lower foreign exchange volume.
“Non-interest expenses were $91.8 million in the second quarter of 2025, compared to $93.2 million in the previous quarter and $91.1 million in the second quarter of 2024. Core non-interest expenses1 of $91.4 million in the second quarter of 2025 were higher compared to the $90.3 million incurred in the previous quarter and the $90.3 million in the second quarter of 2024. Core non-interest expenses1 in the second quarter of 2025 were higher compared to the prior quarter due to increased salary and other employee benefits offset by lower non-income taxes and other non-interest expenses. Core non-interest expenses1 in the second quarter of 2025 were higher compared to the second quarter of 2024, due to increased salary and other employee benefits, and increased property maintenance cost offset by lower technology and communications cost and professional and outside services cost.
“Included in salaries and other employee benefits are non-core expenses of $0.4 million which relates to costs arising from a group-wide voluntary early retirement and redundancy programs executed in the first and second quarter of 2025, respectively
“Period end deposit balances were $12.8 billion, an increase of 0.7% compared to $12.7 billion at December 31, 2024, primarily due to deposit increases in the Channel Islands and UK segment driven by a stronger Pound Sterling versus the US dollar. Average deposits were $12.7 billion in the quarter ended June 30, 2025, which is higher than the $12.5 billion in the prior quarter.
“Tangible book value per share at the end of the second quarter of 2025 was $23.77 per share, higher than $22.94 per share at the end of the prior quarter and an increase over the $20.03 at the end of the second quarter of 2024.
“The Board increased the quarterly cash dividend rate by 14% or $0.06 per common share to $0.50 per common share to be paid on August 25, 2025 to shareholders of record on August 11, 2025. During the second quarter of 2025, Butterfield repurchased 1.1 million common shares under the Bank’s existing share repurchase program. On July 28, 2025, the Board approved a new share repurchase program authorizing the purchase of up to 1.5 million common shares through to December 31, 2025.
“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 2 June 30, 2025 was 26.2%, compared to 25.8% as at December 31, 2024. Both of these ratios remain conservatively above the minimum regulatory requirements applicable to the Bank.”
