Butterfield Bank today reported first-quarter net income of $8.4 million, compared to a net loss of $176.3 million in the same period in 2010, as it slashed operating costs by 18 percent.In a statement, the bank said operating expenses fell almost $16 million to $71.9 million, as headcount was reduced by 122 over the past 12 months to 1,477.Brad Kopp, Butterfield’s president and chief executive officer, said: ”We are pleased to report a first-quarter profit following a difficult transitional year. The fact that we are able to do so whilst operating in a challenging, low-interest rate economy, reflects the underlying strength of our franchise, as illustrated by the stability of deposit and loan balances, and increased focus on balance sheet management.”Credit provisions increased from $1 million in 2010 to $3.8 million in the current year.In its statement, the bank said the increase was “largely a reflection of the ongoing difficulties in the economies in which the Bank operates, but remains well controlled at an annual rate of under 40 basis points (0.4 percent)”.Non-accrual loans, which reflect borrowers falling behind with repayments, totalled $146.9 million, down from $159.5 million at the end of 2010, equivalent to 3.6 percent of total loans, with specific provisions for such loans of $34.5 million.Chief financial officer Brad Rowse said: “With the sale in 2010 of securities, Butterfield had a significant amount of excess liquidity which we began to invest in higher-yielding, low risk securities in the last quarter of the 2010. We are beginning to see the benefit of that strategy and, despite the low-rate environment in which we are currently operating, our quarterly net interest income before provision for credit losses, at $51.4 million, was up over 20 percent year on year.”