The Bank of N.T. Butterfield & Son Limited has reported 2008 first quarter net income of $36.3 million, the second highest on record for the group and up 1.8% year on year.
Pre-tax net income, at $37.8 million was up 1.4% on a year ago. The return on equity for the quarter, at 22.9%, exceeds our target of achieving a return of over 20%. Diluted earnings per share were $0.38, up 1 cent on 2007 when restated for the impact of the stock split in August 2007 and the stock dividend in February 2008.
Other financial highlights include: Non-interest income up 16.4% at $58.9 million; Record net interest income up 13.6% at $67.3 million; Record customer loans up 11.0% at $4.2 billion; Record total assets up 13.0% at $12.8 billion; Assets under administration up 14.8% to $143.3 billion; Assets under management up 4.9% to $11.3 billion; Net interest margin improved to 2.24% from 2.19%.
The board has decided to maintain the quarterly dividend at 16 cents per share payable on 19 May 2008, to shareholders of record on 5 May 2008.
“Against a backdrop of ongoing instability in financial markets, we continue to be pleased with the group’s performance. There were certainly economic challenges in many international markets during the quarter, involving decreasing interest rates and a general widening of credit spreads across most industry sectors, but Butterfield Bank Group’s core businesses generated satisfactory results.
“We saw solid increases in loans and deposits, and good revenue growth in our Asset Management, Fund Administration, and Trust and Custody businesses. We also made good progress integrating the Bentley Reid Group businesses into the Butterfield Bank Group operating model. Although greenfield expansion into established markets is often difficult, we continue to be pleased with the business development efforts of our Swiss wealth management offices,” says Alan Thompson, president and CEO, Butterfield Bank.
“We are pleased to report that, despite the impact of declining markets, the value of assets administered by the group actually rose by nearly 15% year on year, primarily reflecting business growth in our trust and fund administration businesses. This contributed to strong growth in non-interest income, up some 16.4%. Interest income during the quarter was a record $67.5 million, thanks in part to good growth in the loan book and a 5 basis point widening in our net interest margin.
“As we look ahead to what promises to be a challenging remainder of 2008, we do so with a strong and highly liquid balance sheet,” adds Richard Ferrett, executive vice president and chief financial officer, Butterfield Bank.