HAMILTON, Bermuda--(BUSINESS WIRE)--The Bank of N.T. Butterfield & Son Limited ("Butterfield" or the "Bank") (BSX: NTB.BH; NYSE: NTB) today announced financial results for the quarter and year ended December 31, 2024.
Net income for the year ended December 31, 2024 was $216.3 million, or $4.71 per diluted common share, compared to $225.5 million, or $4.58 per diluted common share, for the year ended December 31, 2023. Core net income1 for the year ended December 31, 2024 was $218.9 million, or $4.77 per diluted common share, compared to $231.5 million, or $4.70 per diluted common share, for the year ended December 31, 2023.
The return on average common equity for the year ended December 31, 2024 was 21.4% compared to 24.2% for the year ended December 31, 2023. The core return on average tangible common equity1 for the year ended December 31, 2024 was 24.0%, compared to 27.0% for the year ended December 31, 2023. The efficiency ratio for the year ended December 31, 2024 was 60.4% compared with 59.8% for the year ended December 31, 2023. The core efficiency ratio1 for the year ended December 31, 2024 was 60.0% compared with 58.1% for the year ended December 31, 2023.
Michael Collins, Butterfield's Chairman and Chief Executive Officer, commented, "During 2024, we continued to deliver strong returns through our diversified fee income, low credit risk, Treasury/Agency investment portfolio, and effective capital management. We had an excellent finish to the year with seasonally higher non-interest income, lower funding costs, and a steady net interest margin driving a higher tangible book value per share. The positive performance in the last quarter can also be attributed to the seasonal strength of both Cayman tourism and consumer credit card spend."
"As we position the Bank for sustainable growth in 2025, we continue to manage expenses by expanding our Halifax service center while investing in the technology required to provide an enhanced client experience. Butterfield is committed to increasing shareholder value by returning excess capital, improving our operating efficiency, and exploring offshore bank and fee business acquisitions."
Net income for the fourth quarter of 2024 was $59.6 million, or $1.34 per diluted common share, compared to net income of $52.7 million, or $1.16 per diluted common share, for the previous quarter and $53.5 million, or $1.11 per diluted common share, for the fourth quarter of 2023. Core net income1 for the fourth quarter of 2024 was $59.6 million, or $1.34 per diluted common share, compared to $52.8 million, or $1.16 per diluted common share, for the previous quarter and $55.3 million, or $1.15 per diluted common share, for the fourth quarter of 2023.
The return on average common equity for the fourth quarter of 2024 was 22.9% compared to 20.3% for the previous quarter and 22.5% for the fourth quarter of 2023. The core return on average tangible common equity1 for the fourth quarter of 2024 was 25.2%, compared to 22.5% for the previous quarter and 25.4% for the fourth quarter of 2023. The efficiency ratio for the fourth quarter of 2024 was 58.2%, compared to 60.3% for the previous quarter and 61.7% for the fourth quarter of 2023. The core efficiency ratio1 for the fourth quarter of 2024 was 58.2% compared with 60.2% in the previous quarter and 60.5% for the fourth quarter of 2023.
Net income and core net income1 were up in the fourth quarter of 2024 versus the prior quarter primarily due to higher non-interest income, higher net interest income, and lower provision for credit losses, which were partially offset by higher non-interest expenses.
Net interest income (“NII”) for the fourth quarter of 2024 was $88.6 million, or $0.6 million higher compared with NII of $88.1 million in the previous quarter and $1.7 million higher from $86.9 million in the fourth quarter of 2023. NII was higher during the fourth quarter of 2024 compared to the third quarter of 2024, primarily due to lower cost of deposits and higher investment yields partially offset by lower loan and treasury yields following interest rate cuts by central banks during the quarter. Compared to the fourth quarter of 2023, the increased NII in the fourth quarter of 2024 was primarily due to higher treasury and investment volumes.
Net interest margin (“NIM”) for the fourth quarter of 2024 remained constant with the previous quarter at 2.61% and down 12 basis points from 2.73% in the fourth quarter of 2023. NIM in the fourth quarter of 2024 decreased compared to the fourth quarter of 2023 due to lower treasury and loan yields, partially offset by increased yields on investments.
Non-interest income for the fourth quarter of 2024 was $63.2 million, an increase of $7.2 million from $56.0 million in the previous quarter and $3.2 million higher than $60.0 million in the fourth quarter of 2023. The increase in the fourth quarter of 2024 compared to the prior quarter was due to higher card volume due to seasonality, higher third-party volume incentives, and higher foreign exchange volume. Non-interest income in the fourth quarter of 2024 was higher than the fourth quarter of 2023 primarily due to higher card volume due to seasonality and volume incentives, and increases in asset management fees, as a result of increased asset valuations and assets under management.
Non-interest expenses were $90.6 million in the fourth quarter of 2024, compared to $88.8 million in the previous quarter and $92.2 million in the fourth quarter of 2023. Core non-interest expenses1 of $90.6 million in the fourth quarter of 2024 were higher than the $88.6 million incurred in the previous quarter and comparable to the $90.4 million incurred in the fourth quarter of 2023. Core non-interest expenses1 in the fourth quarter of 2024 were higher compared to the prior quarter due to higher marketing expenses related to credit card products and increased professional and outside services costs.
Period-end deposit balances were $12.7 billion, an increase of 6.3% compared to $12.0 billion at December 31, 2023, primarily due to deposit increases in Bermuda and the Channel Islands. Average deposits were $12.5 billion in the quarter ended December 31, 2024, which is higher than the prior quarter.
Tangible book value per share at the end of the fourth quarter of 2024 is $21.70 per share, slightly lower than $21.90 per share at the end of the prior quarter and an increase over the $19.29 at the end of the fourth quarter of 2023.
The Bank maintained its balanced capital return policy. The Board again declared a quarterly dividend of $0.44 per common share to be paid on March 10, 2025, to shareholders of record on February 24, 2025. During the fourth quarter of 2024, Butterfield repurchased 1.3 million common shares under the Bank's existing share repurchase program. On December 9, 2024, the Board approved a new share repurchase program to replace its expiring program, authorizing the purchase of up to 2.7 million common shares through to December 31, 2025. The new share repurchase authorization took effect on January 1, 2025.
The current total regulatory capital ratio as at December 31, 2024 was 25.8% as calculated under Basel III, compared to 25.4% as at December 31, 2023. Both of these ratios remain conservatively above the minimum Basel III regulatory requirements applicable to the Bank.
(1) See table "Reconciliation of US GAAP Results to Core Earnings" below for reconciliation of US GAAP results to non-GAAP measures.
ANALYSIS AND DISCUSSION OF FOURTH QUARTER RESULTS
| Income statement | Three months ended (Unaudited) | Year ended | |||||||||||||
| (in $ millions) | December 31, 2024 | September 30, 2024 | December 31, 2023 | ||||||||||||
| Non-interest income | 63.2 | 56.0 | 60.0 | 230.0 | 212.3 | ||||||||||
Conference Call Information:
Butterfield will host a conference call to discuss the Bank’s results on Tuesday, February 11, 2025 at 10:00 a.m. Eastern Time. Callers may access the conference call by dialing +1 (844) 855-9501 (toll-free) or +1 (412) 858-4603 (international) ten minutes prior to the start of the call and referencing the Conference ID: Butterfield Group. A live webcast of the conference call, including a slide presentation, will be available in the investor relations section of Butterfield’s website at www.butterfieldgroup.com. A replay of the call will be archived on the Butterfield website for 12 months.
About Non-GAAP Financial Measures:
Certain statements in this release involve the use of non-GAAP financial measures. We believe such measures provide useful information to investors that is supplementary to our financial condition, results of operations, and cash flows computed in accordance with US GAAP; however, our non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with US GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use...
Forward-Looking Statements:
Certain of the statements made in this release are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995...
About Butterfield:
Butterfield is a full-service bank and wealth manager headquartered in Hamilton, Bermuda, providing services to clients from Bermuda, the Cayman Islands, Guernsey and Jersey...