Butterfield Bank made a profit of $50.4 million in the third quarter, but missed analysts’ expectations.

The profit equated to 90 cents per diluted share, five cents lower than the predicted estimate of a consensus of market analysts. It was $10.3 million higher than for the same period a year ago.

Michael Collins, Butterfield’s chief executive officer, said: “During the third quarter, we continued to generate strong results from our core businesses, capital efficient non-interest income and higher loan balances.

“Expense management is a priority for us, particularly as we integrate the previously announced acquisitions. Our strategy continues to generate industry leading returns with an attractive risk profile.

“We remain focused on pursuing additional growth through accretive acquisitions of trust businesses and banking in existing jurisdictions.”

Core net income was $49.1 million, or 88 cents per share. There was a jump in non-interest expenses to $82.2 million, which was up from $78.2 million in the previous quarter, and $8.5 million higher than a year ago. This increase was said to be primarily due to severance costs of $2.4 million associated with management restructuring, and a $700,000 expense related to setting up a new bank in Jersey.

As it announced its results, the bank said David Zwiener has decided to retire from the board. He has served as a director since August 2016, and as lead independent director since July last year. James Burr, who has been a director since June 2016, has been appointed lead independent director.

Mr Collins thanked Mr Zwiener for his “guidance and dedication to the interests” of board and shareholders and wished him luck in his future endeavours.

He added: “I am pleased that Jim Burr has agreed to serve as lead independent director. Jim has a longstanding relationship with the bank, and his financial expertise has made him a valuable member of Butterfield’s board.”

Butterfield’s net interest income and net interest margin both improved in the third quarter, while average customer deposit balances were $9.4 billion, a drop of $300 million year-on-year, and down $700 million on the second quarter.

Butterfield has $44.3 million of non-performing loans as of the end of September, compared with $43.9 million at the end of 2017. It said it “continues to engage proactively with clients who experience financial difficulty”.

The bank’s investment portfolio stood at $4.6 billion at the end of last month, down $100 million since the start of the year. It has total net unrealised losses of $121.8 million, compared with unrealised net losses of $19.2 million at the end of 2017 — the bank said the increase is largely attributable to rising treasury rates this year.

Return on average common equity was 23.2 per cent.

Butterfield’s capital ratio at the end of September was 23.3 per cent, as calculated under Basel III.

The bank has declared an interim dividend of 38 cents per share to be paid next month. Butterfield currently has board approval to repurchase up to one million shares for capital management. During the third quarter it did not repurchase any common shares.

Ahead of the earnings report, Butterfield Bank’s shares closed at $51.15, down 59 cents, on the New York Stock Exchange.

This article has been updated to correct the analysts’ estimate to 95 cents per share. The original article incorrectly gave the analysts’ estimate figure as 89 cents.