The Bank of NT Butterfield & Son reported $61.0 million of net income in the second quarter 2023, up from $49.1 million in the second quarter of 2022.

Interest income rose while non-interest income fell. All major metrics moved in the right direction, with return on assets, return on equity and the net interest margin up (to 2.83 per cent).

Core non-interest expenses were up on year due to inflation and costs related to technology.

Total assets declined in the second quarter of 2023 compared with the second quarter of 2022, while deposits were also down, with the total at $9.3 billion by the end of the second quarter.

On quarter, net income was down from $62.2 million in the first quarter of the year. The net interest margin also fell on quarter.

The bank said that net income fell on quarter because of a fall in deposits and the need to increase rates on deposits to keep savers.

It added that total deposits fell as savers withdrew money seeking higher returns. Rates paid on deposits have been increasing as central banks globally tighten money supply to fight inflation.

Michael Collins, the Butterfield chairman and CEO, said: “In Bermuda, we successfully implemented the upgrade of our core banking system and online platform and inaugurated our new flagship retail banking centre in Hamilton.”

He added that in the second quarter the bank completed the second closing of the acquisition of Credit Suisse trust assets, noting that 374 relationships representing $21.1 billion of assets had been transferred to the bank, increasing its business in Asia. Due diligence was being conducted on the next tranche, he added.

The bank declared a dividend of 44 cents per share. It will be paid on August 28 to shareholders of record as of August 14. During the second quarter, the bank repurchased 700,000 shares.

As of June 30, the regulatory capital ratio was 25.1 per cent, compared with 24.1 per cent at the end of last year.

“Both of these ratios remain significantly above the minimum Basel III regulatory requirements applicable to the bank,” according to the earning release.

Mr Collins added: “During the quarter, we were pleased to have Moody’s assign an A3 long-term deposit rating with a stable outlook to our Cayman subsidiary in addition to reaffirming our group rating. This demonstrates the strength of our Cayman business model and ability to support the Cayman Islands market, which has benefited from steady economic growth, driven by resurgent tourism and a healthy financial services sector.”

The Bank of NT Butterfield & Son trades on the New York Stock Exchange, closing Monday at $32.13, down from the peak above $53 hit in 2018.