The Bank of N.T. Butterfield & Son has announced financial results for the quarter ended September 30, 2023.
Net income for the third quarter of 2023 was $48.7 million, or $0.99 per diluted common share, compared to net income of $61.0 million, or $1.22 per diluted common share, for the previous quarter and $57.4 million, or $1.15 per diluted common share, for the third quarter of 2022. Core net income 1 for the third quarter of 2023 was $57.0 million, or $1.16 per diluted common share, compared to $57.0 million, or $1.14 per diluted common share, for the previous quarter and $57.6 million, or $1.16 per diluted common share, for the third quarter of 2022.
The return on average common equity for the third quarter of 2023 was 20.6% compared to 25.9% for the previous quarter and 28.5% for the third quarter of 2022. The core return on average tangible common equity 1 for the third quarter of 2023 was 26.1%, compared to 26.3% for the previous quarter and 31.6% for the third quarter of 2022.
The efficiency ratio for the third quarter of 2023 was 64.1%, compared to 57.6% for the previous quarter and 57.1% for the third quarter of 2022. The core efficiency ratio for the third quarter of 2023 was 58.3% compared with 57.6% in the previous quarter and 57.0% for the third quarter of 2022.
Michael Collins (pictured), Butterfield’s Chairman and Chief Executive Officer, commented: “The Bank continues to produce earnings and a return on equity that reflect its overall financial strength and operational effectiveness. Our strong results demonstrate the continued focus on low risk density asset classes, while delivering consistent non-interest income and controlling expenses. As higher-for-longer interest rates have developed as the most likely scenario in the near term, competition for deposits has increased across our island jurisdictions, particularly in the Channel Islands. We continue to work closely with clients on both the loan and deposit product sets to ensure their financial services needs are met and that each relationship is appropriately managed.
“Reducing compensation-related expense is one of the key levers available to us as we navigate the current interest rate cycle, increasing competition, and inflation. In the third quarter, we made the difficult decision to initiate a group-wide restructuring program, which will reduce Butterfield’s global workforce by 9% in several phases. We expect annual cost savings of approximately $13 million once the restructuring is fully implemented in the first half of 2024, and we will continue to operate across all of our jurisdictions without changes to our products and services.
“Our efforts remain focused on navigating the various economic cycles for the success of the Bank and for the long-term benefit of all stakeholders.”
