Things are looking up for Butterfield Bank and its shareholders, according to LOM analysts.A report released yesterday by LOM Securities (Bermuda) Ltd rates Butterfield shares as “hold” with a price target of $1.40, 27 percent higher than yesterday’s closing price of $1.10.The report sees revenues and profits rising in 2012, with net income after the payment of preference share dividends expected to be $40 million, more than double the 2011 figure.Last year’s profit came on the heels of two annual losses of more than $200 million, largely driven by soured investments linked to US mortgages.LOM, which regularly analyses the financial figures, earnings projections and long-term growth potential of companies listed on the Bermuda Stock Exchange, said Butterfield went through the painful process of cleaning up its balance sheet during 2009 and 2010. The report’s authors find that by writing down troubled loans and investments, the bank was able to yield positive results and net a modest income last year.Also, LOM believes the complete senior management overhaul the bank has undergone over the last two years has been effective.“Management is performing well, especially given the tough economic environment,” said Grant Hopkins, a Chartered Financial Analyst for LOM. “Since the emergency capital raise two years ago, management has been tasked with cleaning up an impaired investment and loan book during a time when the global economy, and especially Bermuda, has hindered growth. Over these two years, management has turned the bank around.”The authors of the report say that with a healthier balance sheet, the bank has now started to focus on operating costs. But while their balance sheet is largely clean now, they’re not completely out of the woods just yet. And Butterfield shareholders shouldn’t expect dividend payouts anytime soon.“We do not believe that Butterfield is in a position to pay a dividend in 2012 and it is uncertain when the next dividend on common shares might be,” Mr Hopkins said. “In addition to or as an alternative to paying a dividend on common shares, the company could create value for shareholders by buying back common shares, subordinated debt, or preference shares.“In our opinion, this decision would not be made by the company until at least another year of profit and only if profits grew from current levels.”Analysts believe revenue growth is likely to face pressure due to the weak economic backdrop, and that low interest rates are likely to suppress net interest margins below historic averages for the foreseeable future.