Butterfield Bank said its acquisition of Canadian Imperial Bank of Commerce Caribbean is on course to close in the first half of 2027, with the Bermudian-based bank emphasising that the $1.8 billion deal is about building its regional presence rather than delivering rapid cost cuts.

The update came as Butterfield reported higher third-quarter profit and maintained a quarterly dividend of 50 cents per share.

Michael Collins, Butterfield’s chairman and chief executive, said the bank had had a positive response as it worked through approvals for the transaction across the region.

“We have gotten a very warm welcome from all the governments and central banks,” Mr Collins said during the bank’s third-quarter earnings call on Wednesday.

Butterfield said CIBC Caribbean shareholders have approved the transaction and that the required regulatory applications have been submitted. Integration teams have also begun planning for the transition, while Butterfield prepares to issue debt to help finance the purchase.

The bank has previously said the combined company would have about $29 billion of assets, $25 billion of deposits and more than $400 million in annual run-rate earnings.

Mr Collins said Butterfield saw scope to increase its presence in the new markets over time, particularly where it has a smaller share of banking business than in Bermuda and the Cayman Islands.

“There is a real opportunity there to grow some of that in line with GDP,” he said.

He pointed to potential expansion in retail banking, residential mortgage lending, collateral-backed lending and other services. Executives said the acquired bank’s investment portfolio and loan book had been extensively reviewed and broadly met Butterfield’s risk expectations.

However, Mr Collins said that the strategy would not be based on a large programme of job cuts or immediate expense savings.

“We are not projecting a lot of cost synergies,” he said. “Our focus is to support the governments and communities.”

That approach is due to the transaction’s complexity, with operations across several Caribbean jurisdictions and commitments to employees, customers and local communities. Mr Collins said Butterfield expected the deal to create value over time but would take a measured approach.

Butterfield’s chief financial officer, Michael Schrum, said the bank was also reviewing whether parts of CIBC Caribbean’s balance sheet should be adjusted after completion. While much of the investment book comprises United States Treasuries, the acquired bank also holds sovereign securities in The Bahamas and Barbados.

Mr Schrum said Butterfield would assess those holdings after closing, which was consistent with its conservative approach to investment risk.

The earnings call also addressed a planned $500 million deposit outflow, involving private trust and corporate liquidation funds. Butterfield said the outflow was expected and would be funded from cash and short-term securities, leaving its liquidity position unaffected.

The bank expects deposit balances to return to a range of $12 billion to $12.5 billion. Management said net interest income and net interest margin should remain broadly flat in the near term, with a modest benefit expected as higher interest rates work through the balance sheet.

Butterfield expects core quarterly non-interest expenses to return to a range of $93 million to $95 million before the CIBC Caribbean transaction closes.