Net income per share for the fourth quarter was 93 cents per share, up 5 cents on the third quarter. For the full year under review net income per share increased by 55.4%, or $1.23, to $3.45 per share. Reflecting the Group's continuing strong earnings performance and commitment to enhancing shareholder value the Board has decided to increase the quarterly dividend by 2 cents (+6.7%), to 32 cents per share, resulting in a 54.7% increase in the annual dividend to $1.16, and also to make a one for ten bonus share issue effective 14 August 2001.
Commenting on the Bank's performance, Calum Johnston, President & Chief Executive Officer said, "It is very pleasing to report, once again, a year of record profits. For the third consecutive year Bank of Butterfield recorded the highest level of net profit in its long history and again all our financial targets were met or surpassed. In particular Return on Equity was 22.7%, up from 16.4% last year, and the efficiency ratio improved from 67.1% a year ago to 62.2%. In addition, we no longer have any loans outstanding in respect of discontinued operations and in the fourth quarter saw some recoveries from loans previously written off. The financial year was one of substantial progress and we continue to follow our documented strategy of building on our strengths to produce long term sustainable and profitable growth, as evidenced by the acquisition last month of the Guernsey operations of the Canadian Imperial Bank of Commerce".
Richard Ferrett, Executive Vice President & Chief Financial Officer stated that "All our core businesses produced record earnings. There was significant improvement in the profitability of our Community Banking business in Bermuda, with an increase in net income by 43.4% to $26.65 million. The Bermuda based Asset Management & Administration group of businesses, comprising Butterfield Asset Management, Butterfield Trust and Butterfield Corporate Services, increased net income by 60.4% to $11.72 million and earnings from Real Estate totaled $0.56 million. Overseas, our Cayman operation recorded its thirteenth consecutive year of record earnings, with net income of $22.57 million, up 5.6%. In Guernsey net income was up 31.4% to $3.85 million, the eleventh consecutive year of net income growth and our Hong Kong operation continued to build on its return to profitability, recording net income of $1.02 million, up 151.8% on last year. Our UK business, Bank of Butterfield (UK) Limited, contributed net income of $0.36 million for the five months since its acquisition in February this year."
"Net interest income, at $100.21 million, is up year on year by $2.73 million, or 2.8%, primarily reflecting the increase in customer deposits to $4.46 billion, together with the continuing success in reducing the Group's non-accrual loans. These have now reduced from $18.78 million a year ago to $9.54 million as at 30 June 2001." said Mr. Ferrett.
"Non-interest income grew by 10.1%, to $91.78 million, and now represents 47.8% of total income. Notable increases were seen in the Group's corporate services revenues, up 20.8%, and investment services fees, up 14.6%. Total expenses decreased by $0.71 million, or 0.6%, to $125.26 million."
Other Financial Highlights of the financial year (after losses from discontinued operations) were:
· The return on assets improved year on year from 0.88% to 1.23%.
· Total assets as at 30 June 2001 were $5.20 billion, compared to $4.79 billion a year ago, driven in particular by the increase achieved in customer deposits.
· Total loans increased year on year by $167.55 million, or 13.0%, to $1.45 billion. The loan portfolio now represents 27.9% of total assets.
· The balance sheet remains highly liquid, with some 68.8% of assets employed in either deposits with banks or in investments. Deposits with banks increased by $176.6 million, or 11.7%, as a direct result of the increase in customer deposits. The Group's investment portfolios, which are primarily in high quality floating rate notes, increased by $51.2 million, or 2.8%.
· Shareholders' equity increased year on year by 14.5% to $286.5 million, reflecting the increase in retained earnings less share buybacks. The Group's total capital ratio continues to remain strong at 14.9%.
· The Stock Option Trust now holds 1,864,547 shares, representing 9.6% of the Bank's total issued shares, at a cost of $31.37 million, an average of $16.82 per share, to satisfy current and future obligations under an Employees Stock Option Plan. In addition, under the Bank's share buyback programme 420,637 shares were purchased at a cost of $8.58 million during the course of fiscal 2001 at an average of $20.42 per share.
· At the current share price of $32.00 the Bank's price earnings multiple is 9.3, based on earnings per share of $3.45 for the year ended 30 June 2001.
The Board has decided to increase the quarterly dividend in respect of the fourth quarter by 2 cents, to 32 cents per share, payable on 22 August 2001 to shareholders of record on 14 August 2001. In addition, the Board has approved a one for ten bonus share issue, which equates to a 10% stock dividend, effective 14 August 2001. Such new shares will not rank for the fourth quarter dividend and thus are not reflected in the earnings per share amounts quoted above. Cash payments will be made in lieu of fractional entitlements using a price per share equal to the Dividend Reinvestment Plan price calculated for the same record date.
Note to Editors:
The Bank's results, which are unaudited, are stated in accordance with accounting principles generally accepted in Bermuda and Canada. Bank of Butterfield Group is a vital community bank in both Bermuda and Cayman and a specialist offshore financial services company. Established in 1858, the Bank offers a full range of banking, credit, investment, treasury, trust and custody services through its headquarters in Bermuda and in Cayman, Guernsey, Hong Kong and the United Kingdom.
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.