Bank of Butterfield made a profit of $36.1 million during the second quarter of the year.

That is $0.2 million higher than the net income achieved for the first three months of the year.

And in tandem with the release of its earnings results, the bank has announced that Michael Collins, chief executive officer, will now also serve as chairman. This follows the retirement of E. Barclay Simmons, who had been chairman since 2015.

The bank also reported that it hosted more than 800 clients at cup races and related functions during the 35th America’s Cup in May and June. Butterfield was the official supplier and official Bermuda bank of the event.

During the second quarter net income per share was $0.65. The bank has declared an interim dividend of $0.32 per share to be paid next month.

During the three months to June 30, the Butterfield’s core net income was $37.5 million, a drop of $1 million from the previous three months.

In a statement, Mr Collins thanked Mr Simmons for his contributions as chairman, and as a director during the past six years.

“Barclay led us through our initial and secondary public offerings on the New York Stock Exchange, providing the bank with access to global capital and a diverse, long-term shareholder base,” said Mr Collins.

“Barclay’s leadership has positioned Butterfield well for continued growth as an independent bank and trust company located in six international financial centres.”

He also thanked Wolfgang Schoellkopf, who retired as a director today, for his service to the board since 2010.

In another change, David Zwiener, an independent director, has been named lead independent director on the board. He has extensive experience as a board member with several publicly listed financial institutions.

Mr Collins said the second quarter results demonstrated that the bank’s strategy to grow wealth management through acquisitions “is a sound approach for generating above-market returns”.

He added: “We continue to see the beneficial impact of previous wealth management acquisitions on both fees and net interest income.

“The stable deposit base and market share we enjoy as the leading bank in both Bermuda and Cayman has enabled us to adjust our floating rate loans and grow net interest margin in line with Fed short-term interest rate increases, driving a 230 basis point improvement in Return on Equity over the past year to 19 per cent.”

Regarding the bank’s role as an official sponsor of the America’s Cup, and its hosting of more than 800 clients and guests during the event, Mr Collins said: Our sponsorship required one-time expenditures but yielded unparalleled opportunities for business development and retention, as well as significant goodwill within the Bermuda community for helping make AC35 so successful.

“America’s Cup focused the world on Bermuda as a travel destination and sailing venue; exposure that will improve tourism and the economy from which the bank will benefit.”

Michael Schrum, chief financial officer, said: “During the second quarter we saw a $7.1 million year-over-year improvement in net interest income from higher interest earned on cash, investments and loan assets.

“Non-interest income in the quarter showed modest year-on-year growth of $0.8 million to $38.7 million, reflecting the stability and retention of wealth client relationships from the HSBC Bermuda wealth management acquisition last year. Non-interest income was bolstered somewhat on significantly higher card transaction volumes during the America’s Cup in Bermuda.

“Non-interest expenses increased by $4.3 million from Q1, offsetting income gains and leading to net income for the quarter of $36.1 million. A portion of the increase reflects non-recurring expenses associated with preparations for and hosting of the America’s Cup sponsor and client activities in the quarter.”

Salaries and benefits costs for the quarter were $37.4 million, which included increased usage of temporary and contract staff who are assisting in the implementation of new AML Compliance processes and systems.

Mr Schrum said: “These will enable the bank to respond to evolving regulatory requirements. As new systems and processes are embedded, we expect that temporary staffing requirements will abate, and a number of permanent compliance roles will be housed in our Support Centre in Halifax, thereby stabilising overall compliance-related expenses going forward.”

The bank’s total capital ratio at June 30 was 19.1 per cent, as calculated under Basel III, which is significantly above regulatory requirements.

Ahead of the release of the earnings report, the bank’s shares closed at $34.78, up 37 cents, on the New York Stock Exchange.

Disclosure: the author owns shares in Bank of Butterfield.