The Bermuda-headquartered bank’s fourth-quarter and full-year earnings report for 2025 saw an increase in net income.
Butterfield’s chairman and CEO, Michael Collins, said the bank’s deposit business had benefited from lower US rates, “Net interest income benefited from lower deposit costs.” Of course, lower rates also mean that Butterfield charges borrowers less, but Collins said the bank redeployed the capital to “higher-yielding assets”.
Net interest income “was higher during the fourth quarter of 2025 compared to the fourth quarter of 2024 due to a lower cost of deposits as central banks have reduced market interest rates and investment yields have increased as assets were deployed into higher yielding available-for-sale investment securities, which were partially offset by lower loan and treasury yields”.
Between September 2025 and December 2025, the US Federal Reserve made three cuts to the federal funds rate, bringing it down to 3.50%-3.75% from 4.25%-4.50%.
Non-interest income
Collins also hailed the impact of the bank’s “relationship focused banking and private trust businesses” in growing non-interest income. Cayman is a key jurisdiction for Butterfield in trusts and private banking.
“Non-interest income in the fourth quarter of 2025 was higher than the fourth quarter of 2024 due to higher trust revenue from new clients and fee increases and increased asset management fees from higher valuation, partially offset by lower banking revenue.”
At the end of 2025, total assets under administration for Butterfield’s trust and custody businesses were US$134.7 billion and US$32.3 billion, up from US$131.3 billion and US$30.5 billion respectively the year before. While assets under management were US$6.9 billion on 31 Dec. 2025 compared to US$6.0 billion the previous year.
In December 2025, global credit ratings agency Moody’s raised Butterfield’s baseline credit assessment to baa1 from baa2. On 9 Feb., Butterfield’s shares on the NYSE closed at US$53.40, up 7.44% from US$49.70 at the start of the year.
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