Butterfield Reports Second Quarter 2025 Results
Financial highlights for the second quarter of 2025:
-
Net income of
$53.3 million $1.25 $53.7 million $1.26 -
Return on average common equity of
20.3% and core return on average tangible common equity1 of22.3% -
Net interest margin of
2.64% , cost of deposits of1.56% - Redemption of subordinated debt
-
Quarterly cash dividend rate increased by
14% to$0.50 -
Repurchases of 1.1 million shares at an average price of
$40.69 - New share repurchase authorization for up to 1.5 million common shares
- Andrew Henton appointed as Independent Director
Net income for the second quarter of 2025 was
The return on average common equity for the second quarter of 2025 was
The Bank also announced the appointment of a new Independent Director, Andrew Henton, a
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
"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
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
Net interest margin (“NIM”) for the second quarter of 2025 was
Non-interest income for the second quarter of 2025 was
Non-interest expenses were
Included in salaries and other employee benefits are non-core expenses of
Period end deposit balances were
Tangible book value per share at the end of the second quarter of 2025 was
The Board increased the quarterly cash dividend rate by
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 June 30, 2025 was
About Andrew Henton:
Andrew Henton brings more than three decades of wide-ranging experience and business-building success across the financial services sector in the
(1) |
See table "Reconciliation of US GAAP Results to Core Earnings" below for reconciliation of US GAAP results to non-GAAP measures. |
ANALYSIS AND DISCUSSION OF SECOND QUARTER RESULTS
Income statement |
|
Three months ended (Unaudited) |
|||||||
(in $ millions) |
|
June 30, 2025 |
|
March 31, 2025 |
|
June 30, 2024 |
|||
Non-interest income |
|
57.0 |
|
|
58.4 |
|
|
55.6 |
|
Net interest income before provision for credit losses |
|
89.4 |
|
|
89.3 |
|
|
87.4 |
|
Total net revenue before provision for credit losses and other gains (losses) |
|
146.4 |
|
|
147.8 |
|
|
143.1 |
|
Provision for credit (losses) recoveries |
|
(0.2 |
) |
|
0.4 |
|
|
(0.5 |
) |
Total other gains (losses) |
|
0.1 |
|
|
— |
|
|
0.1 |
|
Total net revenue |
|
146.3 |
|
|
148.2 |
|
|
142.7 |
|
Non-interest expenses |
|
(91.8 |
) |
|
(93.2 |
) |
|
(91.1 |
) |
Total net income before taxes |
|
54.5 |
|
|
54.9 |
|
|
51.5 |
|
Income tax benefit (expense) |
|
(1.2 |
) |
|
(1.2 |
) |
|
(0.9 |
) |
Net income |
|
53.3 |
|
|
53.8 |
|
|
50.6 |
|
|
|
|
|
|
|
|
|||
Net earnings per share |
|
|
|
|
|
|
|||
Basic |
|
1.28 |
|
|
1.26 |
|
|
1.11 |
|
Diluted |
|
1.25 |
|
|
1.23 |
|
|
1.09 |
|
|
|
|
|
|
|
|
|||
Per diluted share impact of other non-core items 1 |
|
0.01 |
|
|
0.07 |
|
|
0.02 |
|
Core earnings per share on a fully diluted basis 1 |
|
1.26 |
|
|
1.30 |
|
|
1.11 |
|
|
|
|
|
|
|
|
|||
Adjusted weighted average number of participating shares on a fully diluted basis (in thousands of shares) |
|
42,653 |
|
|
43,592 |
|
|
46,298 |
|
|
|
|
|
|
|
|
|||
Key financial ratios |
|
|
|
|
|
|
|||
Return on common equity |
|
20.3 |
% |
|
20.9 |
% |
|
20.7 |
% |
Core return on average tangible common equity 1 |
|
22.3 |
% |
|
24.2 |
% |
|
23.3 |
% |
Return on average assets |
|
1.5 |
% |
|
1.6 |
% |
|
1.5 |
% |
Net interest margin |
|
2.64 |
% |
|
2.70 |
% |
|
2.64 |
% |
Core efficiency ratio 1 |
|
61.1 |
% |
|
59.8 |
% |
|
61.8 |
% |
| (1) | See table "Reconciliation of US GAAP Results to Core Earnings" below for reconciliation of US GAAP results to non-GAAP measures. |
Balance Sheet |
|
As at |
||||
(in $ millions) |
|
June 30, 2025 |
|
December 31, 2024 |
||
Cash and cash equivalents |
|
1,450 |
|
|
1,998 |
|
Securities purchased under agreements to resell |
|
1,135 |
|
|
1,205 |
|
Short-term investments |
|
1,112 |
|
|
580 |
|
Investments in securities |
|
5,458 |
|
|
5,513 |
|
Loans, net of allowance for credit losses |
|
4,578 |
|
|
4,474 |
|
Premises, equipment and computer software, net |
|
159 |
|
|
154 |
|
Goodwill and intangibles, net |
|
92 |
|
|
90 |
|
Accrued interest and other assets |
|
201 |
|
|
218 |
|
Total assets |
|
14,185 |
|
|
14,231 |
|
|
|
|
|
|
||
Total deposits |
|
12,838 |
|
|
12,746 |
|
Long-term debt |
|
— |
|
|
99 |
|
Securities sold under agreements to repurchase |
|
— |
|
|
93 |
|
Accrued interest and other liabilities |
|
278 |
|
|
273 |
|
Total liabilities |
|
13,116 |
|
|
13,211 |
|
Common shareholders’ equity |
|
1,069 |
|
|
1,021 |
|
Total shareholders' equity |
|
1,069 |
|
|
1,021 |
|
Total liabilities and shareholders' equity |
|
14,185 |
|
|
14,231 |
|
|
|
|
|
|
||
Key Balance Sheet Ratios: |
|
June 30, 2025 |
|
December 31, 2024 |
||
Common equity tier 1 capital ratio 2 |
|
26.0 |
% |
|
23.5 |
% |
Tier 1 capital ratio 2 |
|
26.0 |
% |
|
23.5 |
% |
Total capital ratio 2 |
|
26.2 |
% |
|
25.8 |
% |
Leverage ratio |
|
7.3 |
% |
|
7.3 |
% |
Risk-Weighted Assets (in $ millions) |
|
4,063 |
|
|
4,539 |
|
Risk-Weighted Assets / total assets |
|
28.6 |
% |
|
31.9 |
% |
Tangible common equity ratio |
|
6.9 |
% |
|
6.6 |
% |
Book value per common share (in $) |
|
26.01 |
|
|
23.78 |
|
Tangible book value per share (in $) |
|
23.77 |
|
|
21.70 |
|
Non-accrual loans/gross loans |
|
2.0 |
% |
|
1.7 |
% |
Non-performing assets/total assets |
|
0.8 |
% |
|
1.1 |
% |
Allowance for credit losses/total loans |
|
0.6 |
% |
|
0.6 |
% |
| (2) | Effective January 1, 2025, the Bank has adopted the BCBS's revised standardized approach for credit risk framework as required by the BMA. Comparatives were prepared under the prior credit risk framework. |
QUARTER ENDED JUNE 30, 2025 COMPARED WITH THE QUARTER ENDED MARCH 31, 2025
Net Income
Net income for the quarter ended June 30, 2025 was
The change in net income during the quarter ended June 30, 2025 compared to the previous quarter is attributable to the following:
-
$1.4 million $0.4 million $1.7 million $0.4 million $0.7 million $0.5 million -
$0.6 million -
$1.5 million $0.6 million $0.7 million
Non-Core Items1
Non-core items resulted in expenses, net of gains, of
Management does not believe that comparative period expenses, gains or losses identified as non-core are indicative of the results of operations of the Bank in the ordinary course of business.
| (1) | See table "Reconciliation of US GAAP Results to Core Earnings" below for reconciliation of US GAAP results to non-GAAP measures. |
BALANCE SHEET COMMENTARY AT JUNE 30, 2025 COMPARED WITH DECEMBER 31, 2024
Total Assets
Total assets of the Bank were
Loans Receivable
The loan portfolio totaled
The allowance for credit losses at June 30, 2025 totaled
The loan portfolio represented
As at June 30, 2025, the Bank had gross non-accrual loans of
Investment in Securities
The investment portfolio was
The investment portfolio is made up of high-quality assets with
Deposits
Average total deposit balances were
Average Balance Sheet2
|
For the three months ended |
||||||||||||||||
|
June 30, 2025 |
|
March 31, 2025 |
|
June 30, 2024 |
||||||||||||
(in $ millions) |
Average balance ($) |
Interest ($) |
Average rate (%) |
|
Average balance ($) |
Interest ($) |
Average rate (%) |
|
Average balance ($) |
Interest ($) |
Average rate (%) |
||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents and short-term investments |
3,634.3 |
33.6 |
|
3.71 |
|
|
3,519.3 |
34.5 |
|
3.98 |
|
|
3,468.8 |
41.4 |
|
4.78 |
|
Investment in securities |
5,452.0 |
36.2 |
|
2.67 |
|
|
5,462.6 |
36.1 |
|
2.68 |
|
|
5,172.6 |
29.6 |
|
2.30 |
|
Available-for-sale |
2,292.6 |
18.3 |
|
3.21 |
|
|
2,247.5 |
17.8 |
|
3.21 |
|
|
1,797.1 |
10.8 |
|
2.41 |
|
Held-to-maturity |
3,159.4 |
17.9 |
|
2.27 |
|
|
3,215.1 |
18.3 |
|
2.31 |
|
|
3,375.4 |
18.8 |
|
2.24 |
|
Loans |
4,517.7 |
71.0 |
|
6.31 |
|
|
4,455.3 |
69.4 |
|
6.32 |
|
|
4,622.7 |
76.6 |
|
6.65 |
|
Commercial |
1,290.7 |
21.1 |
|
6.55 |
|
|
1,320.3 |
20.6 |
|
6.32 |
|
|
1,342.8 |
21.7 |
|
6.50 |
|
Consumer |
3,227.0 |
50.0 |
|
6.21 |
|
|
3,135.0 |
48.8 |
|
6.32 |
|
|
3,279.9 |
54.8 |
|
6.71 |
|
Interest earning assets |
13,603.9 |
140.9 |
|
4.15 |
|
|
13,437.3 |
140.0 |
|
4.23 |
|
|
13,264.1 |
147.6 |
|
4.46 |
|
Other assets |
417.6 |
|
|
|
430.7 |
|
|
|
430.4 |
|
|
||||||
Total assets |
14,021.5 |
|
|
|
13,868.0 |
|
|
|
13,694.5 |
|
|
||||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
||||||
Deposits - interest bearing |
10,051.2 |
(49.2 |
) |
(1.96 |
) |
|
9,853.4 |
(49.1 |
) |
(2.02 |
) |
|
9,807.6 |
(58.7 |
) |
(2.40 |
) |
Securities sold under agreements to repurchase |
1.9 |
— |
|
(5.94 |
) |
|
16.3 |
(0.2 |
) |
(4.42 |
) |
|
2.9 |
— |
|
(4.83 |
) |
Long-term debt |
77.7 |
(2.3 |
) |
(11.92 |
) |
|
98.7 |
(1.4 |
) |
(5.63 |
) |
|
98.6 |
(1.4 |
) |
(5.58 |
) |
Interest bearing liabilities |
10,130.8 |
(51.5 |
) |
(2.04 |
) |
|
9,968.5 |
(50.7 |
) |
(2.06 |
) |
|
9,909.1 |
(60.1 |
) |
(2.43 |
) |
Non-interest bearing current accounts |
2,602.5 |
|
|
|
2,622.4 |
|
|
|
2,636.8 |
|
|
||||||
Other liabilities |
253.4 |
|
|
|
263.6 |
|
|
|
243.8 |
|
|
||||||
Total liabilities |
12,986.7 |
|
|
|
12,854.4 |
|
|
|
12,789.6 |
|
|
||||||
Shareholders’ equity |
1,034.9 |
|
|
|
1,013.5 |
|
|
|
904.9 |
|
|
||||||
Total liabilities and shareholders’ equity |
14,021.5 |
|
|
|
13,868.0 |
|
|
|
13,694.5 |
|
|
||||||
Non-interest bearing funds net of non-interest earning assets (free balance) |
3,473.2 |
|
|
|
3,468.8 |
|
|
|
3,355.0 |
|
|
||||||
Net interest margin |
|
89.4 |
|
2.64 |
|
|
|
89.3 |
|
2.70 |
|
|
|
87.4 |
|
2.64 |
|
| (2) | Averages are based upon a daily averages for the periods indicated. |
Assets Under Administration and Assets Under Management
Total assets under administration for the trust and custody businesses were
Reconciliation of US GAAP Results to Core Earnings
The table below shows the reconciliation of net income in accordance with US GAAP to core earnings, a non-GAAP measure, which excludes certain significant items that are included in our US GAAP results of operations. We focus on core net income, which we calculate by adjusting net income to exclude certain income or expense items that are not representative of our business operations, or “non-core”. Core net income includes revenue, gains, losses and expense items incurred in the normal course of business. We believe that expressing earnings and certain other financial measures excluding these non-core items provides a meaningful base for period-to-period comparisons, which management believes will assist investors in analyzing the operating results of the Bank and predicting future performance. We believe that presentation of these non-GAAP financial measures will permit investors to assess the performance of the Bank on the same basis as management.
Core Earnings |
Three months ended |
|||||||
(in $ millions except per share amounts) |
June 30, 2025 |
|
March 31, 2025 |
|
June 30, 2024 |
|||
Net income |
53.3 |
|
|
53.8 |
|
|
50.6 |
|
Non-core items |
|
|
|
|
|
|||
Non-core expenses |
|
|
|
|
|
|||
Early retirement program, voluntary separation, redundancies and other non-core compensation costs |
0.4 |
|
|
2.9 |
|
|
0.2 |
|
Restructuring charges and related professional service fees |
— |
|
|
— |
|
|
0.6 |
|
Total non-core expenses |
0.4 |
|
|
2.9 |
|
|
0.8 |
|
Total non-core items |
0.4 |
|
|
2.9 |
|
|
0.8 |
|
Core net income |
53.7 |
|
|
56.7 |
|
|
51.4 |
|
|
|
|
|
|
|
|||
Average common equity |
1,055.0 |
|
|
1,041.3 |
|
|
979.4 |
|
Less: average goodwill and intangible assets |
(91.2 |
) |
|
(89.2 |
) |
|
(95.3 |
) |
Average tangible common equity |
963.8 |
|
|
952.1 |
|
|
884.1 |
|
Core earnings per share fully diluted |
1.26 |
|
|
1.30 |
|
|
1.11 |
|
Return on common equity |
20.3 |
% |
|
20.9 |
% |
|
20.7 |
% |
Core return on average tangible common equity |
22.3 |
% |
|
24.2 |
% |
|
23.3 |
% |
|
|
|
|
|
|
|||
Shareholders' equity |
1,069.1 |
|
|
1,057.8 |
|
|
999.1 |
|
Less: goodwill and intangible assets |
(92.2 |
) |
|
(89.7 |
) |
|
(94.4 |
) |
Tangible common equity |
977.0 |
|
|
968.1 |
|
|
904.7 |
|
Basic participating shares outstanding (in millions) |
41.1 |
|
|
42.2 |
|
|
45.2 |
|
Tangible book value per common share |
23.77 |
|
|
22.94 |
|
|
20.03 |
|
|
|
|
|
|
|
|||
Non-interest expenses |
91.8 |
|
|
93.2 |
|
|
91.1 |
|
Less: non-core expenses |
(0.4 |
) |
|
(2.9 |
) |
|
(0.8 |
) |
Less: amortization of intangibles |
(2.0 |
) |
|
(1.9 |
) |
|
(1.9 |
) |
Core non-interest expenses before amortization of intangibles |
89.4 |
|
|
88.4 |
|
|
88.4 |
|
Core revenue before other gains and losses and provision for credit losses |
146.4 |
|
|
147.8 |
|
|
143.1 |
|
Core efficiency ratio |
61.1 |
% |
|
59.8 |
% |
|
61.8
|
%
|
Conference Call Information:
Butterfield will host a conference call to discuss the Bank’s results on Tuesday, July 29, 2025 at 10:00 a.m. Eastern Time. Callers may access the conference call by dialing +1 (844) 855-9501 (toll-free) or +1 (412) 858-4603 (international) ten minutes prior to the start of the call and referencing the Conference ID: Butterfield Group. A live webcast of the conference call, including a slide presentation, will be available in the investor relations section of Butterfield’s website at www.butterfieldgroup.com. A replay of the call will be archived on the Butterfield website for 12 months.
About Non-GAAP Financial Measures:
Certain statements in this release involve the use of non-GAAP financial measures. We believe such measures provide useful information to investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with US GAAP; however, our non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with US GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. See "Reconciliation of US GAAP Results to Core Earnings" for additional information.
Forward-Looking Statements:
Certain of the statements made in this release are forward-looking statements within the meaning of the
All forward-looking statements in this disclosure are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our SEC reports and filings, including under the caption "Risk Factors" in our most recent Form 20-F. Such reports are available upon request from Butterfield, or from the Securities and Exchange Commission ("SEC"), including through the SEC’s website at https://www.sec.gov. Any forward-looking statements made by Butterfield are current views as at the date they are made. Except as otherwise required by law, Butterfield assumes no obligation and does not undertake to review, update, revise or correct any of the forward-looking statements included in this disclosure, whether as a result of new information, future events or other developments. You are cautioned not to place undue reliance on the forward-looking statements made by Butterfield in this disclosure. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, and should only be viewed as historical data. BF-All
Presentation of Financial Information:
Certain monetary amounts, percentages and other figures included in this report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total
About Butterfield:
Butterfield is a full-service bank and wealth manager headquartered in
BF-All
View source version on businesswire.com: https://www.businesswire.com/news/home/20250728864778/en/
Investor Relations Contact:
Noah Fields
Investor Relations
The Bank of N.T. Butterfield & Son Limited
Phone: (441) 299 3816
E-mail: noah.fields@butterfieldgroup.com
Media Relations Contact:
Nicky Stevens
Group Strategic Marketing & Communications
The Bank of N.T. Butterfield & Son Limited
Phone: (441) 299 1624
E-mail: nicky.stevens@butterfieldgroup.com
Source: The Bank of N.T. Butterfield & Son Limited
