Bank of N.T. Butterfield & Son Limited, the parent company of Butterfield Bank (Cayman) Limited, has reported net income for the second quarter ended 30 June 2005 of $30.1 million, up 47.7 per cent year on year.
This brings the year to date net income to $54.4 million, an 18.2 per cent increase year on year.
Diluted earnings per share were $1.28, up 41 cents year on year and up 24 cents on the previous quarter. Other financial highlights of the quarter include:
Return on equity of 27.3 per cent, up from 20.1per cent a year ago
Net interest income of $45.8 million, up 30.2per cent year on year
Non-interest income of $44.7 million, up 8.6per cent year on year
Total assets up 13.0per cent year on year to $9.1 billion
Assets under administration up 36.7per cent year on year to $94.2 billion
Assets under investment management up 16.5per cent year on year to $9.9 billion.
Butterfield Bank (Cayman) Limited recorded record net income of income of $12.7 million, up year on year by $5.8 million. Total income was up 53.3per cent to $21.7 million, reflecting increases of 34.6per cent and 73.3per cent respectively in non-interest income and interest income. The quarter saw credit recoveries of $1.1 million, following a further review of the loan portfolio post Hurricane Ivan. Operating expenses increased by a lower percentage than for total revenues, up 24.3per cent to $9.1 million, reflecting increased headcount to support business growth. Total assets increased year on year by 11.4per cent to $2.3 billion. Client assets under investment management increased year on year by 24.3per cent to $1.6 billion and client assets under administration were $31.0 billion at 30 June 2005, up from $19.0 billion a year ago.
Reflecting the Group’s continuing strong earnings performance and commitment to enhancing shareholder value the board has approved a one-for-10 bonus share issue, which equates to a 10per cent stock dividend, effective Friday, in addition to maintaining the quarterly dividend at 41 cents per share.
The cash dividend is payable on Thursday 18 August 2005 to shareholders of record on Friday 5 August 2005. The bonus shares will be eligible for dividends commencing November 2005.
Alan Thompson, president and chief executive officer, said, ‘These results yet again demonstrate the continuing effectiveness of our business model in a highly competitive environment. Our strategic focus on developing our core businesses has resulted in growth across the jurisdictions in which we operate. Aiding a strong performance for our operations in Cayman, the speed and strength of the jurisdiction’s recovery has enabled us to reduce the loan loss reserve set aside post-Hurricane Ivan and also see a healthy return on our equity investment in Island Heritage Insurance. Our Bermuda businesses are continuing to do well with Corporate Banking, especially, showing how quality customer service can attract and retain business. Retail also had a strong quarter and confirmed Butterfield Bank’s position as a premier community banking partner, with the roll-out of security tokens for Butterfield Direct Internet Banking, which have set a new standard of security in Bermuda for online banking. In the United Kingdom, our London subsidiary has made significant progress since the acquisition of Leopold Joseph in April of 2004; net interest income and fee income have increased while expenses are being carefully managed as the strategic marketing plan is being implemented. Guernsey has also performed well this quarter, reflecting the benefit of the Leopold Joseph acquisition as well as a result of strong earnings from its wealth management businesses. Overall, our results reflect the commitment and professionalism of our employees and I am proud to see their continuing dedication to excellent customer service, which is a key driver in our success.’
Richard Ferrett, Executive Vice President & Chief Financial Officer, said: ‘Our return on equity for the quarter was very pleasing, at 27.3per cent compared to 20.1per cent for the same quarter a year ago and consistent with our target to achieve a return exceeding 20per cent. Significant increases were seen year on year in the Group’s revenue generation with net interest income increasing by 30.2per cent and revenues from trust and investment services, and investment and pension fund administration increasing by 20.5per cent and 13.9per cent respectively. During the quarter the Bank successfully issued US$150 million of subordinated capital notes in the US private placement market, which reflects investor long term confidence in the Bank and will support our growth going forward.’
Conor O’Dea, Managing Director, Butterfield Bank (Cayman) Limited, said: ‘We are very pleased with the strength of the Group’s performance and the very significant contribution which the Cayman operations made in the first half of 2005. It has been a challenging time for both our customers and our employees as Cayman recovers from Hurricane Ivan, we are pleased to have played our part in the successful recovery to date and will continue to do so.’