Bank of Butterfield Cuts Bermuda Dollar Base Rate to 5.00%,

Hamilton, Bermuda, 28 June 2001 - Bank of Butterfield announced today that it is reducing its Bermuda Dollar Base Rate by 0.25%, to 5.00%, with effect from Monday 9 July 2001. "We are continuing 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 introduction in April 1994."

"The Bank will be giving 90 days notice to existing customers with variable rate mortgages of a further decrease in their interest rate by 0.25%, this to take effect from Monday 1 October 2001. Customers with personal loans and mortgages at fixed rates of interest are unaffected by the change."

"The Bank is also pleased to announce that it has decided not to reduce the interest rates paid to customers with Bermuda Dollar Strata Savings accounts for the time being." said Mr. Ferrett. "These are our most popular savings accounts and we recognise their importance to a large section of our customer base. The rates on these accounts will remain unchanged at 3.75% for balances up to B$25,000 and 4.25% for balances of B$25,000 and over. We will look to maintain the current interest rate levels paid on these accounts for as long as possible. The interest rate paid on all US$ Strata and Passbook Savings accounts will reduce by 0.25%, with effect from Monday 9 July 2001, as will that paid on Bermuda Dollar Passbook Savings accounts."

Note to Editors:

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