S&P Affirms Butterfield’s Ratings

Hamilton, Bermuda – 14 December, 2011 - The Bank of N.T. Butterfield & Son Limited (“Butterfield”; Ticker: NTB.BH) today announced that, in a rating update dated 13 December 2011, credit rating agency Standard & Poor’s (“S&P”) has affirmed Butterfield’s long-term credit rating at A- and its short-term customer deposit rating at A-2.  S&P also increased the rating of the Bank’s preferred shares to BBB.

Brad Kopp, Butterfield’s President & Chief Executive Officer, said, “We are pleased that S&P has affirmed our short-term and long-term deposit ratings in its latest update.  That report highlights the strengths of the Bank’s balance sheet and views favourably the Bank’s risk-averse strategy. During a time when we have seen some of the largest banks in the world downgraded on increasingly stringent ratings criteria, we believe S&P’s report helps validate that we are continuing to do the right things to strengthen the franchise and manage customer relationships during times of economic uncertainty.”

In affirming the Bank’s ratings, S&P cited Butterfield’s strong capital and earnings and above-average funding, relative to other banks in Bermuda.

At 30 September 2011, Butterfield’s total capital ratio was 22.5%, its tier 1 capital ratio was 16.8% and its tangible common equity ratio stood at 6.5%. Butterfield reported profits of $31.4 million for the first nine months of 2011.

Commenting on the strength of Butterfield’s balance sheet, the S&P update noted that Butterfield’s “loan performance has improved in recent quarters, notably in the hospitality loan portfolio, despite a weakening local economy.”  S&P also cited Butterfield’s maintenance of a large proportion of core deposits, which more than fully funds the loan portfolio, and highly liquid investment securities as factors in assessing the Bank as having “above average” funding and “adequate” liquidity relative to the average bank in Bermuda. 

S&P also commented on the stability of Butterfield’s deposit base: “Gathered largely through its community banking businesses, customer deposits constitute the majority of the bank’s funding, which we view as stable and with low customer concentration.”

The 13 December update notes that S&P expects Butterfield to remain profitable in 2012 and 2013, based on its forecasts of low loan loss provisions, gradually improving net interest margins, growth in fee-based revenue and additional expense reductions.

The Bank of N.T. Butterfield & Son Limited (“Butterfield”) is Bermuda’s first and largest independent bank, and a specialist provider of international financial services. The Butterfield Group offers a full range of community banking services in Bermuda, Barbados and the Cayman Islands, encompassing retail and corporate banking and treasury activities. Butterfield also provides private banking, asset management and personal trust services from its headquarters in Bermuda and subsidiary offices in the Cayman Islands, Guernsey and the United Kingdom. In Switzerland and The Bahamas, Butterfield provides personal trust and company services.  Butterfield is a publicly traded corporation with shares listed on the Bermuda and Cayman Islands stock exchanges.  Butterfield’s share price is published daily in The Royal Gazette (www.theroyalgazette.com) and is also available on Bloomberg Financial Markets (symbol: NTB BH) and the Bermuda Stock Exchange website (www.bsx.com).  Further details on the Butterfield Group can be obtained from our website at: www.butterfieldgroup.com.

Investor Relations Contact:

John Maragliano

Senior Vice President, Finance

Phone: (441) 298-4758

Fax: (441) 295-2899                           E-mail: john.maragliano@butterfieldgroup.com

Media Relations Contact:

Mark Johnson

Vice President, Communications, Brand & Public Affairs

Phone: (441) 299 1624                       E-mail: mark.johnson@butterfieldgroup.com