Brendan McDonagh, Butterfield’s chairman and CEO. *File photo
Brendan McDonagh, Butterfield’s chairman and CEO. *File photo

The Bank of NT Butterfield reported a first quarter net income of $13.3 million.

It also declared a $0.01 cent dividend to common share holders and $20 per share for the Bank’s 8% Non-Cumulative Perpetual Voting Shares.

Brendan McDonagh, Butterfield’s chairman and CEO, said in a press release: “We are pleased with our core earnings improvement in today’s environment. We have taken steps to manage our capital levels through the share repurchase programme and the payment of a Common dividend during the quarter. 

“As a result of our Q1 2013 financial performance, I am pleased to announce that the Board has declared a first interim dividend of $0.01 per Common share. The Bank is committed to its strategy of restoring long-term sustainable profitability. This requires us to continue to focus on our key geographies and customer segments.”

The Bank had core earnings for the quarter which ended on March 31, 2013 of $15.3 million, compared to $14.6 million in 2012.

Net income for the quarter was $13.3 million, including non-core redundancy and early retirement costs of $2.0 million, compared to net income of $14.7 million in Q1 2012. The core cash return on average tangible common equity was 7.41 per cent in Q1 2013 compared to 7.57 per cent in Q1 2012 reflecting higher common equity in the current quarter.

Brad Rowse, Butterfield’s CFO, said: “Our core earnings improvements were led by strong expense management. Excluding the non-core early retirement and redundancy costs, expenses were $62.6 million or more than 10 per cent lower than one year ago. In spite of lower interest rates and slower economic activity, our core efficiency ratio is now 75 per cent as the six per cent drop in revenue was outpaced by the decisive action taken to achieve expense savings.  Our focus on all aspects of our businesses allowed the favourable overall result, despite the challenging economic conditions.”

Under the Bank’s Share Buy-back Programmes, the total shares acquired or purchased for cancellation from May 1, 2012 to March 31, 2013 amounted to 8.2 million Common Shares at an average price of $1.25 per Share (total cost of $10.2 million) and 4,639 Preference Shares at a cost of $5.7 million. 

Cancelled

During the last quarter the Bank acquired 0.9 million Common Shares to be held as Treasury Shares at an average price of $1.32 per Share (total cost of $1.2 million), and purchased for cancellation 217 Preference Shares at a cost of $0.3 million. 

The Board cancelled the existing Common Share Buy-back Programme effective 1 April 2013 and implemented a new programme for the purchase of up to 10 million Common Shares. The Board today approved the renewal of the Preference Share Buy-back Programme for the purchase and cancellation of up to 8,000 Preference Shares.

 The Board declared quarterly dividends of $20 per Share on the Bank’s 8% Non-Cumulative Perpetual Voting Preference Shares, to be paid on June 18, 2013 to Preference Shareholders of record on June 1, 2013. 

 

The Board also declared a first interim common dividend of $0.01 per Common and Contingent Value Convertible Preference Share to be paid on May 23, 2013 to shareholders of record on May 9, 2013.

Editor’s note: In accordance with Media Council transparency rules, Don Burgess is a shareholder in the Bank of Butterfield.