Butterfield has reported another solid quarter as the Bermudian-based bank reshapes its business model to lean into founder‑owned private trust acquisitions in places such as Guernsey.

The company’s first-quarter net income was $62.6 million – up more than 16 per cent year over year. The bank also achieved a $4 million year-over-year increase in net interest income to $93.3 million.

In an earnings call yesterday, Michael Collins, chief executive of Butterfield, said the acquisitions are an effort to deepen Butterfield’s presence in key offshore centres and to gain more stable fee income.

The bank’s recent acquisition of the R&H Guernsey adds about 50 staff, 71 client groups and roughly £9 billion (about $12 billion) in assets under trusteeship, taking Butterfield to about $146 billion in assets under administration and trusteeship and adding an expected £8 million to £10 million in annualised fee income.

Mr Collins explained the reasoning: “The client base is very similar to ours. We’ve been in the private trust business for 70 years, and this was a founder‑owned trust company that we’ve looked at for years in Guernsey. So we know quite well the client base. I think [they] will be very comfortable with our approach.”

He stressed that the transaction brings both high‑quality clients and limited risk.

“It’s incremental in terms of fee income. It helps quite a bit, but it gives us 70 new client groups which are very high quality. So we’re very happy with it,” he added.

The acquisition continues a strategy Butterfield has pursued for several years, targeting smaller, relationship-driven trust businesses being shed by larger institutions. In 2018, the bank acquired trust assets from Deutsche Bank in the Channel Islands, marking an early step in expanding its fiduciary footprint beyond Bermuda.

Each acquisition like the one in Guernsey nudges Butterfield’s fee‑income ratio slightly higher from its level around 40 per cent.

Mr Collins also sketched out how he sees the offshore trust landscape. At one end are the founder‑owned private trust companies like R&H Guernsey. These are typically smaller, relationship‑driven and closely aligned with Butterfield’s business.

There are also trust companies owned by large global banks like HSBC and Royal Bank of Canada, which may still be motivated sellers under regulatory and strategic pressure.

Then there are the large, private‑equity‑backed platforms that combine private trusts with fund and corporate administration. Butterfield is deliberately avoiding those, he said.

“We’ve looked at those. We’re sort of hesitant to go into those sorts of businesses because we’re really focused on private trust. And also, if you’re the third buyer from private equity, it’s probably not the best price,” he said.

“So there’s a lot of opportunities [with] founder‑owned, and big onshore bank‑owned offshore trust companies. And we just have to be patient and stick to our guns. So we’re not going to really pay above eight or nine times Ebitda [earnings before interest, taxes, depreciation and amortisation].”

Executives said they hoped that combination of niche focus and pricing discipline would resonate with investors.

On the risk side, management also addressed a recent uptick in non‑performing loans and provisions, driven not by the core Bermuda or Cayman mortgage books but by prime central London residential loans. Michael Schrum, chief financial officer, said the move was not alarming.

“We are patient lenders, as you know, and so we continue to work with borrowers facing temporary liquidity issues. So I think bottom line, it’s a little bit elevated right now, but we expect for that to normalise, either through refinancing or through repayment when the property is sold,” Mr Schrum said.

Those London mortgages are typically underwritten at 60 to 65 per cent loan‑to‑value, leaving what the bank describes as “a lot of equity in these loans”, even as he said policy changes and a thin buyer pool weigh on Britain’s prime and super‑prime markets.