Butterfield posts $225.5m profit for the year
Butterfield Bank has declared net income of $225.5 million for the year ended December 31, compared with $214.0 million in 2022.
The results included a fourth-quarter profit of $53.5 million, as the board of directors declared a quarterly dividend of 44 cents a share and approved a new share repurchase authorisation for up to 3.5 million common shares.
For the year, the bank had a return on average common equity of 24.2 per cent, and core return on average tangible common equity of 27.0 per cent. The results included a net interest margin of 2.80 per cent, and the cost of deposits was 1.40 per cent.
Michael Collins, Butterfield's chairman and chief executive, said: “Butterfield's strong performance in 2023 was driven by active balance sheet management and an enhanced focus on long-term client relationships.
“Our conservative and profitable business model, characterised by limited credit risk, a high fee income ratio, and strong cash liquidity, was validated during the systemic challenges faced by US regional banks last year. Butterfield also benefited from a resilient deposit base diversified across jurisdictions, sectors and currencies.
"During the fourth quarter, we upgraded our core banking system in the Cayman Islands, which was well received, and completed onboarding the final tranche of the Credit Suisse trust clients.
“In December, we announced the approval of a new share repurchase programme for 2024, with an authorisation to purchase up to 3.5 million common shares.
“After a successful year, Butterfield is well positioned to continue generating strong risk-adjusted returns and excess capital while providing market-leading products and financial services."
During the fourth quarter of 2023, Butterfield repurchased 1.2 million common shares under the bank's share repurchase programme. The board approved a new share repurchase programme on December 5 to replace its expiring programme, authorising the purchase of up to 3.5 million common shares through to December 31, 2024. The new share repurchase authorisation took effect on December 15 last year.
The present total regulatory capital ratio as at December 31, 2023 was 25.4 per cent as calculated under Basel III, compared with 24.1 per cent as at December 31, 2022. Both ratios remain conservatively above the minimum Basel III regulatory requirements applicable to the bank.
Period-end deposit balances were $12.0 billion, a decrease of 7.7 per cent, compared with $13.0 billion at December 31, 2022, primarily owing to deposit declines across all banking jurisdictions, as normal commercial movements saw customers activate their funds and seek higher-yielding products.
Average deposits were $11.8 billion in the quarter ended December 31, 2023, compared with $12.1 billion in the prior quarter.
Investing.com noted that the bank’s fourth-quarter earnings per share of $1.15 is three cents better than the analyst estimate of $1.12, while revenue for the quarter came in at $144.9 million, ahead of the consensus estimate of $141.32 million.
The bank’s stock price closed at $30.08, up 8.98 per cent in the past three months and down 8.62 per cent in the past 12.
• For the media release of Butterfield’s Q4 and Full Year 2023 results, see Related Media
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