Butterfield Bank reported a profit of $200,000 during the second quarter of 2010 compared to a net income of $10.3 million in the same period last year.

But after adjusting for preference share dividends, the bank made a net loss of $4.3 million or one cent per share.

Brad Kopp, Butterfield Bank’s president and CEO, said: “Butterfield continues to operate in difficult economies with continued historically low interest rates compressing margins and yielding lower investment returns.

“Against this backdrop, the bank remains focused on expense management. We also took further steps in the quarter to de-risk the balance sheet, selling one of our remaining structured investment vehicle investments, thereby reducing our exposure by $31.6 million and realising a gain of $5 million.

“This was offset by additional required reserves on two hospitality loans. Such actions further strengthen our balance sheet and help position us for future growth.”

For full report see tomorrow’s business section.