Butterfield Reports Strong Third Quarter 2025 Results Driven by Higher Revenue and Improved Efficiency
HAMILTON, Bermuda — October 29, 2025 — The Bank of N.T. Butterfield & Son Limited (“Butterfield” or the “Bank”) (BSX: NTB.BH; NYSE: NTB) today announced financial results for the third quarter ended September 30, 2025, highlighted by higher earnings, improved efficiency, and strong capital ratios.
Net income for the quarter was $61.1 million, or $1.46 per diluted common share, compared with $53.3 million ($1.25 per share) in the second quarter of 2025 and $52.7 million ($1.16 per share) in the third quarter of 2024. Core net income (1) rose to $63.3 million, or $1.51 per diluted share, from $53.7 million ($1.26 per share) in the prior quarter.
The Bank’s return on average common equity climbed to 22.5%, up from 20.3% in both the prior quarter and the same period last year. Core return on average tangible common equity (1) strengthened to 25.5%, compared with 22.3% last quarter and 22.5% a year ago.
Butterfield’s efficiency ratio improved to 57.7%, down from 61.3% in the second quarter and 60.3% in Q3 2024, while the core efficiency ratio (1) further declined to 56.2%, reflecting continued progress on cost discipline.
CEO Commentary
Michael Collins, Butterfield’s Chairman and Chief Executive Officer, said:
Butterfield’s strong third-quarter results demonstrate the resilience of our business model and our ability to execute efficiently across market cycles. We delivered higher banking and foreign exchange fees while improving our net interest margin through disciplined deposit management and a conservative asset mix. Our continued capital management, including dividends and share repurchases, reinforces our commitment to delivering sustainable value for clients and shareholders.
Quarterly Performance Drivers
Butterfield’s third-quarter earnings growth was driven by increased banking and foreign exchange revenues, lower deposit costs, and improved margins following the redemption of subordinated debt in the prior quarter.
Net interest income (NII) rose to $92.7 million, up $3.3 million from Q2 2025 and $4.7 million higher than Q3 2024. The increase reflected reduced funding costs as global central banks lowered market rates and the benefit from the debt redemption.
The net interest margin (NIM) expanded to 2.73%, compared with 2.64% in the prior quarter and 2.61% a year earlier, driven by lower deposit costs and optimized asset allocation.
Non-interest income totaled $61.2 million, an increase of $4.2 million from Q2 and $5.1 million from Q3 2024. Growth was led by stronger banking fees from higher card transaction volumes and incentive programs, as well as increased foreign exchange activity.
Non-interest expenses were $90.8 million, down $1.0 million sequentially, while core non-interest expenses (1) declined to $88.5 million from $91.4 million in Q2. Cost reductions were achieved through lower employee benefits, property and tax expenses, and other overheads.
Included in salaries and benefits were $2.2 million in non-core expenses related to senior executive departures. Excluding these items, the expense base remained stable compared to last year, underscoring the Bank’s continued operating efficiency.
Balance Sheet Highlights
Butterfield maintained a strong balance sheet position through the quarter, ending with total assets of $14.1 billion, compared with $14.2 billion at year-end 2024. The Bank held $9.2 billion, or 65% of total assets, in cash, deposits, and liquid investments, reflecting a highly conservative liquidity stance.
Loans, net of allowances, stood at $4.47 billion, essentially unchanged from $4.47 billion at December 31, 2024. The allowance for credit losses was steady at $25.7 million, while non-accrual loans rose modestly to 2.0% of total loans, primarily due to one residential mortgage facility in the Channel Islands and UK segment.
The investment portfolio increased to $5.68 billion, up $0.2 billion from year-end, with all holdings rated A or better. Unrealized losses on available-for-sale securities improved significantly to $101.5 million, down $61.8 million from December 2024, driven by favorable market movements.
Deposit balances remained stable at $12.7 billion, consistent with year-end levels. Average deposits for the quarter were $12.6 billion, slightly lower than the previous quarter.
Tangible book value per share improved to $25.06, up from $23.77 in Q2 2025 and $21.70 at year-end 2024, benefiting from retained earnings and a continued reduction in other comprehensive income (OCI) losses.
Capital and Dividends
Butterfield’s capital position remained robust under the Bermuda Monetary Authority’s Basel III framework. As of September 30, 2025, the Common Equity Tier 1 (CET1) and Tier 1 capital ratios were both 26.9%, while the total capital ratio was 27.0%, compared with 25.8% at December 31, 2024. The leverage ratio increased to 7.5%, up from 7.3% at year-end, and the tangible common equity ratio improved to 7.3%.
The Bank’s Board declared a quarterly cash dividend of $0.50 per common share, payable November 25, 2025, to shareholders of record as of November 11, 2025. During the quarter, Butterfield also repurchased 0.7 million common shares under its ongoing share buyback program, further enhancing shareholder returns.
Operational Developments
During the quarter, the Bank adopted the Basel Committee on Banking Supervision’s revised standardized approach for credit risk, as required by the Bermuda Monetary Authority. The updated framework enhances risk sensitivity and better aligns regulatory capital requirements with the Bank’s risk profile.
The Bank also continued optimizing its property footprint, including property consolidation in the Channel Islands, resulting in lower facility expenses.
Assets under administration in Butterfield’s trust and custody businesses reached $135.9 billion and $29.2 billion, respectively, as of September 30, 2025. Assets under management totaled $6.5 billion, up from $6.0 billion at year-end 2024, reflecting continued client confidence and market growth
Outlook
Butterfield remains well-positioned for sustained performance amid a moderating interest-rate environment. The Bank continues to prioritize disciplined balance sheet management, organic growth in banking and wealth services, and prudent capital deployment. CEO Michael Collins concluded:“Our consistent profitability, strong capital levels, and disciplined risk management give us the flexibility to invest in future growth while returning meaningful value to shareholders. We remain focused on delivering sustainable results and maintaining our leadership in our core markets.
