Hamilton, Bermuda–14 December
2011: The Bank of N.T. Butterfield & Son Limited (“Butterfield” or the
“Bank”) announced that, in a rating update dated 13 December 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.
S&P also increased the rating of the Bank’s preferred shares to BBB.
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
its latest update. That report highlights the strengths of the Bank’s
balance sheet and views favourably the Bank’s risk-averse strategy. During
a time when we have seen some of the largest banks in the world downgraded on
increasingly stringent ratings criteria, we believe S&P’s report helps validate
that we are continuing to do the right things to strengthen the franchise and
manage customer relationships during times of economic uncertainty.”
In affirming the Bank’s ratings, S&P cited Butterfield’s strong capital and
earnings and above-average funding, relative to other banks in Bermuda.
At 30 September 2011, Butterfield’s total capital ratio was 22.5%, its tier 1
capital ratio was 16.8% and its tangible common equity ratio stood at
6.5%. Butterfield reported profits of $31.4 million for the first
nine months of 2011.
Commenting on the strength of Butterfield’s balance sheet, the S&P update
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 cited Butterfield’s maintenance of a large proportion of core deposits,
which more than fully funds the loan portfolio, and highly liquid investment
securities as factors in assessing the Bank as having “above average” funding
and “adequate” liquidity relative to the average bank in Bermuda.
S&P also commented on the stability of Butterfield’s deposit base: “Gathered
largely through its community banking businesses, customer deposits constitute
the majority of the bank’s funding, which we view as stable
and with low customer concentration.”
The 13 December update notes that S&P expects Butterfield to remain
profitable in 2012 and 2013,
based on its forecasts of low loan loss provisions, gradually improving net
interest margins, growth in fee-based revenue and
additional expense reductions.
Media Contact: Sheree Ebanks Tel: (345) 815 7543, Email: