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% in Q1 2013 compared to 7.57% in Q1 2012 reflecting higher common equity in the current quarter.
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Brendan McDonagh, Butterfield’s Chairman & Chief Executive Officer, said, "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."
Financial highlights of the first quarter ended 31 March 2013 (with comparisons to the first quarter of 2012):
- Core earnings of $15.3 million, up 5.0%
- Net interest margin at 2.47%, down from 2.60%
- Total non-interest expenses improved by $5.0 million, 7.3%
- Core cash return on tangible common equity of 7.41%
- Core efficiency ratio of 75.23%, improved from 79.74%
Brad Rowse, Butterfield’s Chief Financial Officer, 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% lower than one year ago. In spite of lower interest rates and slower economic activity, our core efficiency ratio is now 75% as the 6% 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 1 May 2012 to 31 March 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. During the quarter ended 31 March 2013 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.
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By GlobalDataThe Board declared quarterly dividends of $20 per Share on the Bank’s 8% Non-Cumulative Perpetual Voting Preference Shares, to be paid on 18 June 2013 to Preference Shareholders of record on 1 June 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 23 May 2013 to shareholders of record on 9 May 2013.
