The Bank of Butterfield has announced profits of $77.7 million for 2015, down by $30.5 million compared to the previous year.

The profit represents earnings per share of 12 cents, down from the 16 cents recorded in 2014.

Michael Collins, Butterfield’s chief executive officer, said the bank was “encouraged” by improving conditions, with a 6 per cent increase in deposits, core earnings of $113.9 million and a core return on equity of 18.4 per cent.

Core earnings strip out the impact of one-off gains and costs.

“Over the past few months, Butterfield implemented a number of changes that will position the bank for stronger and increasingly predictable earnings going forward,” he added.

“We realised non-core charges, primarily in the fourth quarter, related to the exploration of a US stock exchange listing, management restructuring, US tax compliance remediation and the planned wind-down of our private banking business in the UK.

“These items contributed to non-core charges of $36.2 million for the year, which significantly reduced our net income.”

But Mr Collins said: “Although there will be some additional non-core charges associated with these projects, our actions will deliver an improved core run rate throughout 2016 and beyond.”

And he said the bank would continue to focus resources on markets where Butterfield already had a strong presence and history of success.

“Building upon our recent acquisitions in Bermuda, Cayman and Guernsey, we continue to strengthen our unique trust and wealth management platform.”

He added the buyout of HSBC Bermuda’s private banking trust and investment management business, expected to close in the second quarter of this year, along with the end of its own private banking operation in London were “manifestations of a strategy that will further contribute to improvements in the bank’s run rate”.

Mr Collins said that the board continued to look at the bank’s capital allocation strategy with a view to “maintaining conservative and prudent capital levels, while rewarding shareholders for their investment in the bank”.

Butterfield last year allocated dividends totalling four cents for common shares and $80 for preference shares and also repurchased $5 million worth of common shares for treasury, as well as $120 million in shares for cancellation from shareholder CIBC, at a price of $1.50 a share.

Mr Collins said: “In order to preserve capital to enable the bank to act upon beneficial opportunities, similar to the aforementioned acquisitions, the board has decided to forego the declaration of a special dividend from 2015 earnings.”

But he added: “However, over time, the integration of complementary, acquired businesses, the anticipated economic improvement in our core markets as well as implementing our capital financing strategy, should drive earnings growth that will enable us to progressively increase our cash dividend payments.”

Mr Collins said the bank had recruited Michael Schrum, formerly of HSBC, as chief financial officer and Beth Bauman as head of human resources last year.

Conor O’Dea, president and chief operating officer of the bank, will retire from his executive positions in the second quarter of this year and become chairman of the board at Butterfield’s Cayman operation and will stand for election to the Butterfield Group board in April.

Mr Schrum said the bank had restructured its investment portfolio over last year, weighing it more heavily in shorter duration securities, bringing portfolio duration down to about three-and-a-half years.

He explained that allowed the bank to improve performance in volatile markets and the bank will also benefit from anticipated interest rate increase this year and beyond.