Butterfield Bank’s profit for the fourth quarter was $42.1 million, or 84 cents per share, about $1.8 million less than the same period in 2019.

For the full year, it had net income of $147.2 million, or $2.90 per share, compared to $177.1 million the year before.

The Bermudian-headquartered bank’s earnings from its Cayman operations surpassed those from Bermuda for a second consecutive year.

As of December 31, Butterfield had gross non-accrual loans of $72.5 million, representing 1.4 per cent of total gross loans, an increase of $22.1 million from the year before. It said the increase was driven by a commercial loan in collateral dispute litigation and a small number of residential mortgages in Bermuda.

The bank finished the year with a strong fourth quarter, according to Michael Collins, chairman and chief executive officer of Butterfield Bank.

“Our primary operating jurisdictions in Bermuda, Cayman and the Channel Islands have managed Covid-19 relatively well. Butterfield reacted quickly with no significant disruption of services, even during periods of government mandated lockdowns and strict employee and customer safety protocols,” Mr Collins said.

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"We also implemented a broad-based mortgage loan deferral programme to help our customers manage through the initial impacts of the pandemic. Given the economic headwinds, we have increased credit monitoring and remain cautiously confident that our conservative underwriting and an improving economic outlook are evolving into relatively mild deterioration in credit quality. We recognise that the pandemic is not over and will continue to work with customers who experience difficulty.

“Facing challenging trading conditions and historically low market interest rates, we improved operating efficiencies through voluntary separation and early retirement programs, targeted redundancies, and service role migrations to lower cost jurisdictions.”

Butterfield had assets of $14.7 billion at the end of 2020, an increase of $800 million from the end of 2019. Its loan portfolio totalled $5.2 billion on December 31, which represented 35 per cent of its total assets.

The bank’s long-term debt increased to $187.8 million from $143.5 million, year-on-year.

Reflecting on the year, Mr Collins said: “We reached important strategic milestones this year. In the Channel Islands, we achieved meaningful market share growth and successfully completed the full integration of the acquired ABN AMRO business. It was also notable that, while all jurisdictions performed well, contributions to annual earnings from our Cayman segment have now surpassed Bermuda for two years running.”

“Finally, during 2020 we enhanced our management team and board through new appointments, with exceptional banking, compliance, risk management and communications experience. I would like to thank all of our stakeholders, including our dedicated staff and loyal customers, for their continued commitment to Butterfield’s ongoing success.”

The bank has declared a 44 cents per share dividend for the quarter. A new 2021 share repurchase programme of up to two million common shares has been approved.

Disclosure: the writer owns shares in Butterfield Bank.