Calum Johnston, Chief Executive Officer said, "We are pleased that our strategy of structuring the Bank in order to achieve a superior return on shareholders' equity continues to have a positive effect. Employees at all levels in the Bank in Bermuda and abroad have contributed to producing our thirteenth consecutive quarter of record earnings. Our pleasure, however, is tempered by the tragic events of 11 September. Many good friends of the Bank died as a result of the terrorist action and our thoughts and prayers are with the victims and their families. It is possible that the coming months will be difficult for Bermuda. Bank of Butterfield is a community bank at heart; one that is highly liquid and strongly capitalised. We will deal responsibly to assist as best we can any customers in difficulty whilst continuing to recognise our duty to shareholders, the vast majority of whom are Bermudian."
Richard Ferrett, Executive Vice President & Chief Financial Officer, commenting on the Bank's financial performance, stated that: "It is pleasing in the current economic environment, with declining interest rates and reducing stock market valuations, that the Bank is able to report record first quarter 2001/02 net income of $17.20 million, up 20.4% on the corresponding quarter last year and 4.6% up on the preceding quarter. Return on Equity, at 23.7%, is the highest the bank has achieved since 1982 and has increased from 22.2% at the same stage a year ago. Also particularly noteworthy is the performance of our Guernsey business, where net income is up year on year by 43.3% to $1.39 million, reflecting the Bank's successful acquisition strategy in that important jurisdiction."
"Net interest income across the Group, at $26.40 million, is up year on year by $2.73 million, or 11.5%. This reflects significant growth in customer deposits, which have increased by $585 million, or 14.4%, to $4.64 billion over the past year and also in the loan portfolio, which is up $260 million, or 19.9%, to $1.57 billion " said Mr. Ferrett. "Non-interest income grew by 22.1%, to $26.03 million, with notable increases seen in trust and executorship fees, up 44.0%, and corporate services revenues, up 28.8%. As a result total income earned increased by 16.5% to $52.43 million."
"The growth in total expenses year on year was at a lower rate than that for total income; with the cost base increasing by 14.4% to $34.95 million," added Mr. Ferrett. "The size of the increase in costs reflects the acquisitions of Matheson Bank in February 2001 and CIBC Guernsey in August 2001, which together increased the Group's headcount by 130 employees."
Financial Highlights of the First Quarter were:
· Return on equity was 23.7% compared to 22.2% at the same stage last year and 23.4% for the fourth quarter last fiscal year.
· Earnings per share increased year on year by 15 cents to $0.89 and were up 4 cents on last quarter.
· The return on assets improved by 0.1% to 1.3% compared to a year ago.
· Total loans increased year on year by $260 million, reflecting in particular the acquisitions in both Guernsey and the United Kingdom. The loan portfolio, at $1.57 billion, represents some 28% of balance sheet footings, in line with that a year ago.
· Cash and deposits with banks increased by $318 million, or 20.3%, to $1.88 billion reflecting the growth in customer deposits.
· Total assets as at 30 September 2001 were a record $5.50 billion, up from $4.88 billion a year ago; again reflecting the acquisitions in Guernsey and the United Kingdom
· Income from discontinued operations totalled $0.24 million compared to $0.29 million the previous quarter and nil a year ago. This income relates to recoveries from loans previously written off in respect of businesses the Bank exited in 1997. There are no loans from discontinued operations remaining in the Bank's portfolio.
· Shareholders' equity increased year on year by 11.5% to $288.23 million, reflecting the increase in retained earnings less share buybacks. The loan to the Stock Option Trust increased by $8.24 million in the quarter under review. The Bank has now purchased for the Stock Option Trust 9.9% of the total shares in issue, at a cost of $39.61 million, to satisfy its current and future obligations under the Employees' and Directors' Stock Option Plans. In addition, during the quarter under review the Bank bought back and cancelled 102,427 shares at a cost of $3.23 million.
The Board has declared a quarterly dividend of 32 cents per share payable on Thursday 15 November 2001 to shareholders of record on Tuesday 6 November 2001. Taking into account the €˜1 for 10' stock dividend shareholders received in August 2001 this represents a 10% increase in the quarterly dividend, evidencing the Bank's continuing commitment to enhancing shareholder value.
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, as well as offices in Barbados, Cayman Islands, 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.