Butterfield Bank’s net income improved to $41.6 million, or 83 cents per share, in the first quarter, which compared to $40.3 million for the same period a year ago.

It reduced its non-interest expenses by $2.3 million, to $80.9 million, when compared with the previous quarter. For the same three months in 2020, non-interest expenses were $88.1 million.

The bank said non-interest expenses fell due to lower salaries and benefits costs following restructuring initiatives announced in the second half of last year.

Michael Collins, Butterfield's chairman and chief executive officer said: "The first quarter of 2021 was a positive start to the year, with solid non-interest income, favourable expense trends, continued focus on capital management, and a constructive interest rate outlook. We continue to target top quartile risk adjusted returns, while maintaining a strong return and credit risk profile.

"As our core markets begin to recover, we remain confident that our strong risk discipline and underwriting expertise has reduced the residual risk of credit losses. We continue to actively communicate with our clients, responding quickly to instances of payment difficulties and working with clients to find a way forward.

"We are responsible stewards of capital, and balance regulatory requirements with growth opportunities and shareholder returns. Our capital management philosophy continues to emphasise a sustainable quarterly cash dividend, organic growth, potential inorganic growth, as well as share repurchases. We target a through-cycle dividend payout ratio of 50 per cent, with flexibility around share buybacks, depending on market conditions and potential M&A opportunities."

There was a $2.3 million decrease in non-accrual loans to $72.5 million, which was driven by payoffs of residential mortgages in Bermuda. Non-accrual loans continued to represent 1.4 per cent of the bank’s total gross loans.

Average deposits in the first quarter were $13.4 billion, up $1.2 billion on the previous quarter.

The bank has declared a quarterly dividend of 44 cents per share to be paid on May 26 to shareholders of record on May 12.

Disclosure: the writer owns shares in Butterfield Bank