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8 September 2011
S&P Affirms Butterfield's Ratings

The Bank of N.T. Butterfield & Son Limited (“Butterfield” or the “Bank”) today announced that, in a report dated 31 August 2011, credit rating agency Standard & Poor’s (“S&P”) has affirmed Butterfield’s long-term credit rating at A- and its short-term customer deposit rating at A-2.


In its report, S&P cited Butterfield’s strong competitive positions in Bermuda and the Cayman Islands, the Bank’s improved capital position and its first and second quarter 2011 profits as positive factors contributing to the ratings affirmation.


Butterfield reported profits of $20.2 million for the first six months of 2011.  At 30 June 2011, Butterfield’s total capital ratio was 22.8%, its tier 1 capital ratio was 16.7% and its tangible common equity ratio stood at 6.19%.


Commenting on the strength of Butterfield’s balance sheet, the S&P report noted that Butterfield’s “loan performance has improved in recent quarters, notably in the hospitality loan portfolio, despite a weakening local economy.”  S&P also made positive reference to Butterfield’s strong liquidity, citing a “large and highly liquid portfolio of investment securities” and relatively low loan-to-deposit ratio.


S&P  also wrote that they “expect the Bank to remain profitable for the remainder of 2011 and through 2012” based on its forecast of gradually improving net interest margins, growth in fee-based revenue and additional expense reductions.


Butterfield’s net interest margin improved from 184 basis points in the second quarter of 2010 to 233 basis points in the second quarter of 2011.


Brad Kopp, Butterfield’s President & Chief Executive Officer, said, “We are pleased that S&P has affirmed our short-term and long-term deposit ratings in their latest report on the Bank.  The ratings validate that, against a backdrop of economic difficulties in our key markets, Butterfield has done and continues to do the right things to strengthen our capital position, manage risks and liquidity and trim expenses.  Those actions, and adhering to our strategy of focused investment in our core businesses of retail banking and wealth management, have returned the Bank to profitability in 2011 and position us for continued growth.”


The full S&P report is available on the S&P website via:

The S&P authors are Robert Hansen and Kevin Cole, copyright date 31 August 2011, published by The Bank of N.T Butterfield & Son Limited.  This material is reproduced with permission of Standard and Poor's Financial Services LLC.

Standard & Poor's Financial Services LLC (S&P) does not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and is not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of ratings. S&P GIVES NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. S&P SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES, or LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS) IN CONNECTION WITH ANY USE OF RATINGS. S&P’s ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the market value of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice.





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