Butterfield Reports Second Quarter 2026 Results
The Bank of N.T. Butterfield & Son Limited today announced financial results for the quarter ended June 30, 2026.
A spokesperson said, “Net income for the second quarter of 2026 was $46.9 million, or $1.16 per diluted common share, compared to net income of $62.6 million, or $1.53 per diluted common share, for the previous quarter and $53.3 million, or $1.25 per diluted common share, for the second quarter of 2025. Core net income1 for the second quarter of 2026 was $63.9 million, or $1.58 per diluted common share, compared to $63.2 million, or $1.55 per diluted common share, for the previous quarter and $53.7 million, or $1.26 per diluted common share, for the second quarter of 2025.
“The return on average common equity for the second quarter of 2026 was 16.6% compared to 22.1% for the previous quarter and 20.3% for the second quarter of 2025. The core return on average tangible common equity1 for the second quarter of 2026 was 25.0%, compared to 24.1% for the previous quarter and 22.3% for the second quarter of 2025. The efficiency ratio for the second quarter of 2026 was 67.6%, compared to 56.8% for the previous quarter and 61.3% for the second quarter of 2025. The core efficiency ratio1 for the second quarter of 2026 was 57.0% compared with 56.4% in the previous quarter and 61.1% for the second quarter of 2025.”
Michael Collins, Butterfield’s Chairman and Chief Executive Officer, commented, “Our second quarter results reflect the continued strength of our core banking franchise. Core net income improved from the first quarter, supported by higher net interest income and the initial contribution of trust fees from our acquisition of Rawlinson & Hunter Guernsey. The net interest margin remained stable, while deposit costs were well managed despite the competitive operating environment.
“During the quarter, we announced the acquisition of CIBC Caribbean, a compelling opportunity that we expect will double our size and strengthen Butterfield’s position as a leading independent financial services provider across the Caribbean and international financial centers. We have already completed our initial regulatory filings across the relevant jurisdictions and continue to expect closing to occur in the first half of 2027, adding scale and new growth opportunities for Butterfield. We look forward to serving our new island communities with the same commitment we have brought to clients across Bermuda, Cayman, Guernsey, and Jersey, building on a heritage that began with our founding in Bermuda in 1858.
“I am pleased with the strong underlying core performance of our business. We remain focused on serving our clients, maintaining our disciplined approach to risk management and capital allocation, and executing on the opportunities before us. The combination of resilient core earnings, a strong balance sheet, and the addition of the R&H Guernsey business positions us well to create long-term value for our shareholders.”
A spokesperson added, “The reported net income for the second quarter of 2026 included $16.9 million of non-core, deal-related expenses, primarily associated with the acquisition of CIBC Caribbean and, to a lesser extent, integration-related costs for the R&H Guernsey business. Core net income¹ was up in the second quarter of 2026 compared to the prior quarter due to higher net interest income [“NII”], new trust income from R&H Guernsey and other gains from the sale of collateral, partially offset by higher core non-interest expenses.
“NII for the second quarter of 2026 was $95.6 million, an increase compared to $93.3 million in the previous quarter and $6.2 million higher than $89.4 million in the second quarter of 2025. NII increased during the second quarter of 2026 compared to the prior quarter due to higher day count and growth in interest-earning asset volumes, partially offset by higher deposit costs associated with increased funding volumes. NII was higher during the second quarter of 2026 compared to the second quarter of 2025 due to lower cost of deposits following a reduction in market interest rates, increased investment yields with assets deployed into higher yielding available-for-sale investment securities and the redemption of subordinated debt in the second quarter of 2025, partially offset by lower loan and treasury yields.
“Net interest margin [“NIM”] for the second quarter of 2026 was 2.74%, a decrease of 1 basis point from the previous quarter and compared favorably to 2.64% in the second quarter of 2025. NIM in the second quarter of 2026 remained relatively stable compared with the prior quarter. NIM in the second quarter of 2026 increased compared to the second quarter of 2025 due to lower cost of deposits and higher investment yields, partially offset by lower treasury and loan yields as central banks decreased market interest rates.
“Non-interest income for the second quarter of 2026 was $63.4 million, an increase of $0.7 million from $62.6 million in the previous quarter and $6.3 million higher than the $57.0 million in the second quarter of 2025. The increase in the second quarter of 2026 compared to the prior quarter resulted from new trust revenue from the R&H Guernsey acquisition, partially offset by lower foreign exchange revenue due to decreased volume and lower banking fees. Non-interest income in the second quarter of 2026 was higher than the second quarter of 2025 due to higher trust revenue from the new R&H Guernsey business, higher foreign exchange revenue due to increased volume, higher banking fees due to credit card volume and timing of the incentive program, higher asset management fees from increased valuations and higher custody fees from additional business.
“Non-interest expenses were $109.8 million in the second quarter of 2026, compared to $90.5 million in the previous quarter and $91.8 million in the second quarter of 2025, primarily attributable to acquisition-related, non-core expenses associated with CIBC Caribbean and R&H Guernsey. Core non-interest expenses1 of $92.9 million in the second quarter of 2026 were higher compared to the $89.9 million incurred in the previous quarter and the $91.4 million in the second quarter of 2025. Excluding the additional expenses associated with the R&H Guernsey business, core non-interest expenses1 in the second quarter of 2026 increased compared with the prior quarter, primarily driven by higher salaries and benefits, as well as technology and communications costs. Relative to the second quarter of 2025, core non-interest expenses1 , excluding the incremental costs of the R&H Guernsey business, were lower, mainly reflecting reduced property-related expenses. Approximately $1.9 million of the quarter-over-quarter increase in core expenses during the quarter was attributable to the integration of the R&H Guernsey business.
“Period end deposit balances were higher at $12.9 billion compared to December 31, 2025. Average deposits were $13.1 billion in the quarter ended June 30, 2026, an increase from the prior quarter.
“Tangible book value per share1 at the end of the second quarter of 2026 was $26.19 per share, slightly lower than $26.56 per share at the end of the prior quarter. The tangible book value per share1 decreased this quarter due to the recognition of goodwill and intangibles associated with the R&H Guernsey business.
“The Board declared a quarterly cash dividend of $0.50 per common share to be paid on August 26, 2026 to shareholders of record on August 12, 2026. During the second quarter of 2026, Butterfield repurchased 0.3 million common shares under the Bank’s existing share repurchase program. The program was paused following the May 28, 2026 announcement of Butterfield’s agreement to buy CIBC Caribbean from CIBC.
“The current total regulatory capital ratio as at June 30, 2026 was 27.5%, compared to 27.8% as at December 31, 2025. Both of these ratios remain conservatively above the minimum regulatory requirements applicable to the Bank.”
