Butterfield Bank has reported net income of $24 million in the third-quarter, down $4.8 million year-on-year.

However, its core earnings improved to $33.4 million, up $4.1 million. The bank has announced an interim dividend of 10 cents per common share.

It is the first set of results Butterfield has issued since it listed on the New York Stock Exchange on September 16.

The bank’s bottom line was affected by option vesting costs from a legacy 2010 employee stock options programme related to the private equity recapitalisation of the bank.

In a statement today, the bank said this was now fully vested, which resulted in $8.8 million of expenses, including related payroll taxes.

The stock options plan was triggered by the valuation achieved at the initial public offering last month, which priced the stock at $23.50 per share. At the end of the first day of trading on the NYSE, Butterfield’s shares stood at $24.75.

During the third-quarter, the bank faced additional restructuring costs as it wound down its investment management business in the United Kingdom.

Michael Collins, chief executive officer, said: “During the quarter, Butterfield completed a successful public offering of common shares on the New York Stock Exchange. This is an important milestone in the bank’s history, and we believe the market’s enthusiastic response to the public offering is validation of our strategy. The ownership of the bank now includes a strong institutional ownership profile, which will form long-term partnerships with the bank.

“The public offering consisted of 12,234,042 common shares; 5,957,447 shares sold by Butterfield and 6,276,595 shares sold by the institutional shareholders who participated in the bank’s 2010 recapitalisation, including The Carlyle Group. We appreciate the support we received from those shareholders while the bank went through the process of de-risking its balance sheet and rationalising its business model.

“The Carlyle Group remains a significant shareholder, and David Zwiener joined the Butterfield board as the second Carlyle representative in August. Wendall Brown, who had served as a director since 2013, retired from the Board in August.

“Subsequent to quarter-end, Richard Venn, who had served as a director since 2010 also retired from the board. We thank both Wendall and Richard for their many contributions to the bank.

“Butterfield is focused on growth as a leading community bank in Bermuda and the Cayman Islands and through the provision of wealth management services. This model continues to generate strong profits and good returns for our shareholders. Capital raised in the public offering will be deployed in the continued development and expansion of our businesses in our core markets.”

Mr Collins said the bank was pleased with the performance of its shares following the public offering in terms of volume and price stability.

For the third-quarter, the bank had earnings per share of $0.41, down 11 cents when compared with the same period in 2015, while core earnings per share increased seven cents to $0.60.

Michael Schrum, Butterfield’s chief financial officer, said: “Net interest income before provisions for credit losses during the quarter increased by $5 million year over year, on a combination of growth in the Bermuda commercial loan book and an increase in the size of the investment portfolio, complemented by lower deposit expenses across the group. The lower deposit expenses were helped largely by the repayment of the remaining deposits in the UK jurisdiction.

“Growth in non-interest income, composed primarily of increases in trust revenues and asset management fees, was attributable largely to the beneficial impact of the acquisition of the private banking trust and investment management business of HSBC Bermuda, which was completed earlier in the year.”

Mr Schrum added: “The quality of our loan book remains strong, though provisions for credit losses were increased, year-on-year, to $5.3 million from $3.1 million due to a specific provision established for a loan on a single Bermuda commercial property, as well as adjustments to our general provisions arising from changes to sovereign credit ratings in the UK and Bermuda.

“While overall operating expenses increased by $16.1 million to $80.6 million, this was largely due to the non-core items discussed above. Quarterly core operating expenses also increased by $3.4 million over the same quarter last year largely as a result of increase compliance-related costs, but expenses as a percentage of core revenues decreased.”

He said the core efficiency ratio improved from 66.8 per cent in the third-quarter of 2015 to 65.3 per cent.

Today, Butterfield Bank’s shares closed at $25.50, up 18 cents, on the New York Stock Exchange, while on The Royal Gazette/BSX Index, the bank’s shares closed at $25.10, up 10 cents.

Disclosure: The writer owns shares in Butterfield Bank