Bank of Butterfield Cuts Bermuda Dollar Base Rate by 0.50% to 4.50%

Hamilton, Bermuda: 18 September 2001 - Bank of Butterfield has advised the Bermuda Stock Exchange today that it is reducing its Bermuda Dollar Base Rate by 0.50%, to 4.50%, with effect from Friday 21 September 2001. "We are pleased to pass on the benefits of lower US interest rates to our customers who borrow from us at rates linked to the Bank's Bermuda Dollar Base Rate", said Richard Ferrett, Executive Vice President and Chief Financial Officer. "This is the lowest level that the Bank's Bermuda Dollar Base Rate has been since its inception in April 1994. We are also reducing our US Dollar Prime Rate to 6.00% effective the same date."

"Whilst our Bermuda Dollar Strata Savings rates have remained unchanged since 5 February 2001, since which time the Bank's Bermuda Dollar Base Rate has already been reduced by 0.75%, we have decided that these rates too require reducing to reflect current market conditions," commented Mr. Ferrett. "However, this will only be by 0.50%, not the entire 1.25% reduction which will benefit customers borrowing at rates linked to the Bank's Bermuda Dollar Base Rate."

"As a result, the interest rate paid on Bermuda Dollar Strata Savings accounts for balances up to $24,999 will change to 3.25% and balances of $25,000 or more will attract an interest rate of 3.75%. The Bermuda Dollar Passbook Savings rate will reduce by 0.50%, to 1.25%. The Bank's US$ Strata and Passbook Savings rates will also be reduced by 0.50%. All these rate changes to take effect from Friday 21 September 2001."

€˜The Bank will also be giving notice to customers with variable rate mortgages of a further decrease in their interest rate by 0.50%, this to take effect from Friday 21 December 2001. Customers with loans directly linked to the Bank's Bermuda Dollar Base Rate will benefit from a 0.50% reduction in their borrowing costs from this Friday", said Mr. Ferrett. "Customers with personal loans and mortgages at fixed rates of interest will be unaffected by the change."

Note to Editors:

Bank of Butterfield is a publicly traded corporation with its shares listed on the Bermuda and Cayman Islands stock exchanges. A list of its Savings Rates is attached for information. Further information concerning the Bank can be obtained on our web site at: www.bankatbutterfield.com.

# # #

For further information contact:

Investor Relations:

Richard Ferrett

Chief Financial Officer

Phone: (441)299-1643

Fax: (441) 295-1220

e-mail:richardferrett@bntb.bm

Media Relations:

Karla Lacey-Minors

Head of Marketing

Phone:(441)298-6484

Fax: (441) 295-3878

e-mail:klacey@bntb.bm

For more information, contact Joanne MacPhee at the Bermuda Stock Exchange at phone 1-441-292-7212 or fax 1-441-292-7619. Information is also available at www.bsx.com, on Bloomberg at BSX , and on Reuters at THE BSX.

The Bermuda Stock Exchange is a fully-electronic offshore securities market founded in 1971. The BSX lists more than 300 securities -- including equities, mutual funds and bonds, as well as depository receipts -- and is recognized by the U.S. SEC.