Butterfield Bank today reported net income of $98.3 million for 2014, up by more than 25 per cent from the previous year.

The results represented a fourth consecutive year of earnings growth for Butterfield.

Chairman and chief executive officer Brendan McDonagh said: “That progress was driven by a continued focus on prudent expansion within our core businesses and markets and diligent management of capital, expenses and risks.

“As a result of our focused strategy, Butterfield is a much stronger bank, our core earnings are stable and growing, and asset quality is solid.”

The Butterfield board declared a quarterly dividend of one cent per share, plus a special dividend of one cent per share, payable on March 27 to shareholders of record at March 13.

Mr McDonagh added that the acquisitions of the Legis Group trust and corporate business in Guernsey and some deposit and credit business from HSBC in the Cayman Islands had boosted income.

Total net revenue was $371.2 million, up $29.5 million, or 8.6 per cent from 2013.

The bank’s core efficiency ratio improved to 67.7 per cent from 71.6 per cent.

Butterfield said that headcount on a full-time equivalency basis at year end was 1,164 people, up by 31 from the a year earlier, as a result of the acquisitions. The bank has major operations in Cayman, Guernsey and the UK, as well as Bermuda.

Net interest income increased by $14.7 million to $238.5 million, as the bank achieved a higher investment return on investments.

Non-interest income rose by $8.8 million to $134.8 million mainly due to trust business from the Legis acquisition.

The Bermuda operations saw provisions for credit losses halve to $6.4 million, largely because impairment of non-performing hospitality loans and residential mortgages was greater in 2013.

Across the whole group, non-performing loans, which include gross non-accrual loans and accruing loans past due by 90 days or more, totalled $103.5 million as at 31 December 2014, down $13.1 million from year-end 2013.

The Bermuda business’s net income after gains and losses was $60.2 million, up from $37.4 million in 2013. Operating expenses in Bermuda declined by $5.3 million to $145.7 million in 2014, “due to operational losses and restructuring initiatives in 2013, all partially offset by higher professional fees and fraud provisions”.

Butterfield’s loan portfolio totalled $4 billion at the end of 2014, down by $69 million from a year earlier. Loan balances in Bermuda ended the year at $2.1 billion, flat from 2013.

Finance Minister Bob Richards last week criticised local banks for their lack of lending and their cutting of jobs in the annual Budget statement for the second successive year.

Core salaries and benefits costs were $124.2 million in 2014, up $1.6 million from 2013 from a $3.2 million increase in staff costs from the consolidation of the acquisitions, offset by cost savings from a full-year benefit of the early retirement and redundancy programme.

The Cayman operation posted net income of $33.5 million, up $7.6 million from 2013. The Guernsey unit made $5.1 million, down $2.3 million from the previous year, while the UK business’s profit fell to $0.9 million, sliding from $4.2 million in 2013.

The bank repurchased 8.6 million of its own shares at a cost $17 million during the year, as well as 560 of its 8 per cent preference shares for $0.7 million.

John Maragliano, Butterfield’s chief financial officer, said: “By all financial measures, Butterfield has delivered a fourth consecutive year of solid earnings growth and continued balance sheet strength.”

He added: “The growth in deposits of $1 billion in 2014 further improved the loan to deposit ratio to only 46 per cent affording the bank flexibility to capitalise on lending and investment opportunities going into 2015.”