Commenting on the Bank's performance, Calum Johnston, President & Chief Executive Officer said, "All businesses continue to produce significantly increased contributions. We are particularly pleased that our strategy of structuring the Bank in order to achieve a superior return on shareholders' equity is having the desired effect, both in Bermuda and overseas."
Richard Ferrett, Executive Vice President & Chief Financial Officer stated that "First quarter 2000/01 net income, at $14.28 million, was a record for the Bank and represents an increase of 51.7% on the corresponding quarter in 1999 and 30.4% on the preceding quarter. Earnings per share for the quarter increased by 58.8% to 81 cents, 30 cents higher than for the same period the previous year. Return on Equity was the annualised equivalent of 22.2%, up from 15.4% a year ago, and is the highest the Bank has achieved since 1982".
"Net interest income, at $23.67 million, was up year on year by $3.37 million, or 16.6%. This reflects significant growth in customer deposits, increases in loans, investments and deposits with banks, together with the continuing success in reducing the Group's non-accrual loans. These have now reduced from $51.23 million a year ago to $14.86 million as at 30 September 2000, including $8.44 million of loans now remaining in respect of discontinued operations," said Mr. Ferrett.
"Non-interest income grew by 7.8%, to $21.33 million, with notable increases seen in the Group's investment services revenues, up 46.9%,
and corporate services fees, up 18.8%. Also particularly pleasing", said Mr. Ferrett, "was that total expenses increased by only $0.05 million, or 0.2%, to $30.72 million. As a direct result, the Group's efficiency ratio improved from 76.5% a year ago to 68.3%, the best level achieved by the Bank since 1986. The first quarter of the fiscal year saw strong performances from all the Group's businesses. In Bermuda quarterly earnings increased year on year by 67.2%, reflecting record performances by both the Community Banking and Asset Management businesses. Overseas, Cayman and Guernsey also achieved record earnings with year on year increases in net income of 50.3% and 61.3% achieved respectively. In addition, Hong Kong has continued its solid improvement and recorded its sixth successive positive quarterly earnings performance, with net income up 145% on the preceding quarter."
Other Financial Highlights of the First Quarter were:
· The return on assets improved by 0.4% to 1.2% compared to a year ago and the net interest margin widened to 2.1% from 1.9% last year.
· Total assets as at 30 September 2000 were $4.88 billion compared to $4.43 billion a year ago; reflecting the acquisition of the ANZ Bank (Guernsey) Limited in January this year. Over the past twelve months customer deposits have increased by 12.8%, with significant growth achieved in Bermuda and Cayman, as well as Guernsey.
· Total loans increased year on year by $36 million, in spite of a $55 million reduction in loans due to the sale of Davenham Group plc last fiscal year. The underlying increase of $91 million in our current businesses reflects the successful generation of new lending demand, particularly in our Community Banking business in Bermuda, and increased loan portfolios in both Cayman and Guernsey. The loan portfolio now represents 28% of balance sheet footings.
· Deposits with banks increased by $329 million, or 26.7%, as a direct result of the increase in customer deposits. In addition, investments increased by $96 million, or 5.5%, as part of the Bank's strategy to increase its holdings of high quality, floating rate note, securities.
· Shareholders' equity increased year on year by 5.9% to $248.49 million, reflecting the increase in retained earnings less share buybacks. The Group's total capital ratio continues to remain strong at 13.0%
· The Bank has now purchased for the Stock Option Trust 1,921,674 shares, representing 9.8% of its total issued shares, at a cost of $31.68 million to satisfy its obligations under an Employees Stock Option Plan. In
addition, during the quarter under review 125,394 shares were purchased under the Bank's share buyback programme at a cost of $2.03 million.
The Board has decided to increase the quarterly dividend by 3 cents, to 26 cents per share, payable on Thursday 16 November 2000 to shareholders of record on Tuesday 7 November 2000.
Note to Editors:
The Bank's results, which are unaudited, are stated in accordance with accounting principles generally accepted in Bermuda and Canada. The Bank of Butterfield Group is a vital community bank in both Bermuda and Cayman and a specialist offshore financial services company that has chosen its markets, knows them well, and uses its knowledge to benefit institutional and individual clients. The Bank, established in 1858, offers a full range of banking, credit, investment, treasury, trust and custody services through its headquarters in Bermuda, as well as offices in Cayman, Guernsey, and Hong Kong.
Bank of Butterfield is a publicly traded corporation with its shares listed on the Bermuda and Cayman Islands stock exchanges. The Bank's share price is published daily in The Royal Gazette and is also available on Bloomberg Financial Markets (symbol: NTB.BH) and The Bermuda Stock Exchange web site: www.bsx.com. Further details on the Bank can be obtained from its web site at: www.bankofbutterfield.com.