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Butterfield net income falls to $26.4m

Rising profits: Butterfield's second-quarter earnings rose by $1.8 million

The Bank of Butterfield yesterday reported second-quarter profits of $26.4 million compared to $27.5 million in the second quarter of 2014 — a drop of $1.1 million.

And the bank’s board declared an interim dividend of one cent a share.

Bank chairman and CEO Brendan McDonagh said: “The second quarter proved to be an exceptionally successful and busy quarter for the bank.

“In addition to negotiating and completing the purchase and retirement of a large part of Canadian Imperial Bank of Commerce (CIBC) shares in the bank, we continued to grow our business and deposit base, with our average deposits growing by $0.6 billion during the quarter.”

Mr McDonagh added: “The cancellation of 80 million shares previously held by CIBC part way through the quarter, representing 14.4 per cent of shares outstanding, is having a positive effect on both returns on equity and earnings per share, an impact we expect to see continue in future quarters, where the full reduction in outstanding shares will be reflected.”

Mr McDonagh added that the bank had reduced non-performing loan levels — from $103.5 million at the end of last year to $91.8 million in the second quarter.

And he said the bank had continued to benefit from major acquisitions made last year, like the trust and fiduciary services business of Legis in Guernsey and the select banking and credit business from HSBC Cayman, which increased net income in both jurisdictions.

Mr McDonagh added that the June announcement that the bank was looking at the possibility of going public on an international exchange to increase available capital and liquidity for shareholders.

He said: “While there can be no assurance that the bank will be successful in this effort, the bank has engaged an internationally recognised investment bank to lead these efforts on its behalf and is continuing to actively explore this possibility.”