Commenting on the Bank's performance, Calum Johnston, President & Chief Executive Officer said, "I am pleased to report the eleventh consecutive quarter of earnings growth and that all our businesses, both in Bermuda and abroad, continue to perform in line with, or better than, expectations. The need to recognise a loss of $6.28 million from discontinued operations in the third quarter results from a review of the overall level of provisions required for the portfolio of loans remaining from our former businesses in the United Kingdom, which the Group exited in 1997. These loans have continued to prove difficult to collect. As a result the decision was taken to write off all of these loans. Accounting convention requires this loss to be deducted from net income from continuing operations for the quarter under review. Most significant," said Mr. Johnston, "is that there are now no loans remaining from these former businesses."
"Also pleasing to note is that our book of non-performing loans has reduced year on year from $21.06 million to $8.86 million as at 31 March 2001, against which we have specific provisions of $3.78 million, or 42.7%", said Mr. Johnston. "In addition, we have general provisions of $18.88 million in respect of our book of performing loans, representing 1.34% of the loan portfolio. The third quarter was also notable for our successful acquisition of Matheson Bank Limited in the United Kingdom, in February, and the launch of Butterfield Direct Internet Banking, Bermuda's first Internet banking service, in March. Butterfield Direct is an important innovation that reinforces the Bank's commitment to meeting the needs of our customers."
Richard Ferrett, Executive Vice President & Chief Financial Officer, stated that "Third quarter earnings per share, after discontinued operations, of 88 cents was a record for the Bank; representing an increase of 32 cents, or 57.1%, on the corresponding period in 2000. As a result
earnings per share, including discontinued operations, at the nine months stage increased by 57.5%, or 92 cents, to $2.52. Return on shareholder's equity was 22.4% for the nine months and 22.8% for the third quarter, compared to 16.0% and 16.7% respectively at the same stage a year ago."
"Total income, at $139.70 million for the first nine months, is up year on year by $3.95 million, or 2.9%. This reflects improved non interest income revenues, up year on year by $3.15 million, or 4.9%, to $67.28 million," said Mr. Ferrett. "The third quarter saw notable increases in corporate services and foreign exchange revenues, up year on year by 22.0% and 7.3% respectively. Total expenses for the year to date have decreased by $2.70 million, or 2.9%, reflecting a credit taken in the third quarter as a result of a review of the Pension Plan by the Bank's actuaries. The efficiency ratio continues to improve from 67.6% a year ago to 63.8% for the current year to date."
"All businesses continue to produce significantly increased earnings. In Bermuda the third quarter saw both the Community Banking and Asset Management businesses outperforming the previous two quarters," commented Mr. Ferrett. "We were particularly proud that for the fourth year running the Bank won a prestigious award from Standard & Poor's. The AAAm rated Butterfield Money Market Fund GBP class was placed first in the World over five years for the third consecutive year and the Bank also won second place in the World for the One Year Performance of its whole family of in-house managed mutual funds. Overseas, year on year increases in net income for the nine months year to date of 15.7% by Cayman, 37.9% by Guernsey and 189.4% by Hong Kong were achieved."
Other Financial Highlights of the Third Quarter were:
· The return on assets has improved year on year by 0.5% to 1.4%.
· Total assets as at 31 March 2001 were a record $5.21 billion, compared to $4.82 billion a year ago, the increase of 8.1% reflecting continued growth in customer deposits and the Matheson Bank acquisition, which has increased balance sheet footings by $332 million as at 31 March 2001.
· Total loans increased year on year by $90 million, or 6.7%, to $1.43 billion and the portfolio now represents 27.3% of balance sheet footings.
· The balance sheet remains highly liquid, with 69.2% of assets employed in either deposits with banks or in investments. The Group's investments portfolios, which are primarily in high quality floating rate notes, increased by $240 million, or 13.7%, and deposits with banks increased by $46 million, or 2.9%, both as a direct result of increased customer deposits.
· The Bank remains strongly capitalised with shareholders' equity increasing year on year by 12.2% to $277.38 million, reflecting the increase in retained earnings less share buybacks. During the quarter under review 58,924 shares were acquired under the Bank's share buyback programme at an average price of $24.36 and at a cost of $1.44 million.
· The Board has decided to increase the quarterly dividend by 2 cents, to 30 cents per share, payable on Tuesday 15 May 2001 to shareholders of record on Tuesday 1 May 2001.
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 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, 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.
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