Butterfield Bank has reported net income for the first quarter of 2023 of $62.2 million.

That compares to net income of $63.1 million for the previous quarter and $44.4 million for the first quarter of 2022.

The bank said net income was down in the first quarter of 2023 versus the prior quarter primarily due to expected lower non-interest income driven by seasonally higher fees in the previous quarter, coupled with increased interest expenses offset by improved interest income as a result of higher market interest rates.

Michael Collins, Butterfield's chairman and chief executive officer, said: "The first quarter of 2023 was a strong start to the year.

“Butterfield continues to have a highly liquid and well-funded balance sheet with a diverse client base across multiple jurisdictions, sectors, and currencies.

“We are thoughtful and strategic in our management of the balance sheet and maintain a conservative liquidity and capital posture.”

He added: “With regards to M&A, we are pleased to report the completion of the first closing of the acquisition of trust assets from Credit Suisse, which strengthens our presence in the Singapore market.

“In this first tranche, we acquired 180 high quality, long-term client relationships. We continue to make progress on closing The Bahamas and the second tranche of Singapore clients, followed by Guernsey in the coming quarters."

The return on average common equity was 28 per cent compared to 31.6 per cent for the previous quarter and 19.7 per cent for the first quarter of 2022.

The efficiency ratio was 56 per cent, compared to 55.7 per cent for the previous quarter and 64 per cent for the first quarter of 2022.

Net interest income was $97.4 million, an increase of $2.8 million compared with NII of $94.6 million in the previous quarter and up $21.5 million from $75.9 million in the first quarter of 2022.

Net interest margin was 2.88 per cent, an increase of 9 basis points from 2.79 per cent in the previous quarter and up 85 basis points from 2.03 per cent in the first quarter of 2022.

Non-interest income of $50.2 million was $4.8 million lower than the $54.9 million earned in the previous quarter and $0.3 million higher than $49.9 million in the first quarter of 2022.

Non-interest expenses were $84.1 million compared to $84.7 million in the previous quarter and $82 million in the first quarter of 2022.

Period end deposit balances were $12.3 billion, a decrease of 4.6 per cent compared to $13 billion at December 31, 2022, primarily due to deposit outflows in the Channel Islands driven by client activation of funds for investment purposes.

Average deposits were $12.8 billion in the quarter ended March 31, compared to $12.5 billion in the fourth quarter of 2022.

The board declared a quarterly dividend of $0.44 per common share to be paid May 22 to shareholders of record May 8.

The current total regulatory capital ratio as at March 31 was 26.2 per cent as calculated under Basel III, compared to 24.1 per cent as at December 31, 2022.

Both of these ratios remain significantly above the minimum Basel III regulatory requirements applicable to the bank, the bank said.