Butterfield Bank today reported first-quarter net income of $23.2 million — up more than 74 percent from the same period last year.

Increasing business volumes and further cost cutting helped the bank to achieve the improvement from last year’s first-quarter profit of $13.2 million.

The group, which has operations in Cayman, the UK and Guernsey, as well as Bermuda, said it employed 1,120 staff on a full-time equivalency basis at the end of March — 54 fewer than 12 months earlier.

Shareholders will receive a quarterly dividend of one cent per share — unchanged from the previous quarter.

In Bermuda, the bank said provisions for credit losses were $3.7 million, down from $4.3 million in the first quarter of 2013.

The bank said there was an increase in residential mortgages that were “non-performing” — that is, past due by 90 days or more — reflecting continuing financial difficulties for some borrowers.

However, the bank’s total of non-performing loans dropped $8.1 million in the first quarter to total $108.6 million as at 31 March 2014, driven by the proceeds from the first-quarter sale of a hospitality loan that was in receivership. A bank spokesman later confirmed that the property sold was the Pink Beach Club.

As at 31 March 2014, the Bank had gross non-accrual loans of $90.4 million representing 2.2 percent of total gross loans, reflecting an improvement from the $104.1 million, or 2.5 percent, of total loans at year-end 2013.

Butterfield’s chairman and chief executive officer Brendan McDonagh said: “We are pleased to report another strong quarter of double-digit core returns to common shareholders at 12.9 percent. Our strategy of managing our balance sheet, investing in our core businesses, and our focus on business development and cost efficiency resulted in year-on-year core earnings growth of $7.9 million or 51.6 percent.

“Capital management is a key pillar of Butterfield’s strategy to maximise shareholder value. Butterfield has continued to build organic capital over and above already very high capital ratios. We deploy excess capital to enhance shareholder returns and liquidity, through the payment of dividends and share buy-backs, and to acquisitions that will strengthen our business in our core markets.

“The acquisition of Legis Group’s trust and fiduciary services business in Guernsey is an example of the latter.

“During the first quarter, the bank retired $90 million in subordinated capital, repurchased $3.5 million of common and preference shares, and paid $11 million in common dividends to shareholders. These capital actions, combined with core earnings growth, resulted in a doubling of the core cash earnings per common share to four cents for the first quarter of 2014 from two cents for the same quarter last year.”

Butterfield chief financial officer John Maragliano said: “Both net income and core earnings are showing meaningful year-over-year improvement due to a combination of increased business volumes, cost containment and the continued focus on prudent asset and liability management strategies that targets a stable net interest margin throughout the interest rate cycle.

“These activities are driving revenue growth and creating a more stable and efficient expense base that when combined with steady provisions for loan losses, are resulting in significant improvement in the bank’s performance ratios.

“The core efficiency ratio improved to 69.5 percent, down 570 basis points from the first quarter of 2013. Our balance sheet grew $140 million off the back of deposit growth from targeted business segments but loan demand is lagging and volumes declined to $4 billion from $4.1 billion last quarter.”