Butterfield Bank’s second quarter results were marked by positive market reaction, reflecting investor approval of its higher adjusted earnings despite a small revenue miss versus Wall Street expectations. Management credited the performance to stable net interest income, disciplined expense management, and increased fee income from wealth management and trust services. CEO Michael Collins cited Butterfield’s “focus on sustainable profitability and creating shareholder value,” highlighting the franchise’s resilience within its core offshore markets. The quarter also saw an improved credit profile as nonaccrual loans declined and the allowance for credit losses remained steady.
Is now the time to buy NTB? Find out in our full research report (it’s free).
Butterfield Bank (NTB) Q2 CY2025 Highlights:
- Revenue: $146.5 million vs analyst estimates of $147.6 million (2.4% year-on-year growth, 0.7% miss)
- Adjusted EPS: $1.26 vs analyst estimates of $1.22 (3.3% beat)
- Adjusted Operating Income: $54.8 million (37.4% margin, 4.8% year-on-year growth)
- Market Capitalization: $1.85 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Butterfield Bank’s Q2 Earnings Call
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David Pipkin Feaster (Raymond James) asked about changes to Butterfield’s bond investment strategy amid shifting yield curves. President and Group Chief Risk Officer Michael Schrum explained that the bank is gradually shortening portfolio duration and reinvesting at higher rates, but remains cautious given market volatility.
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Feaster (Raymond James) also inquired about the status of temporary or transitory deposits. CFO Craig Bridgewater said some large deposits may still exit over time, with movements somewhat disguised by currency fluctuations, but overall deposit normalization is ongoing.
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Feaster (Raymond James) questioned the capital return strategy shift and M&A priorities. CEO Michael Collins clarified that dividend growth is now slightly favored over buybacks, but M&A remains a key priority, with a focus on disciplined dealmaking.
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Timur Felixovich Braziler (Wells Fargo) probed Butterfield’s elevated capital ratios and the timeline for reducing them. Schrum responded that it will take years to reach target levels, as capital is retained for potential deals and ongoing regulatory shifts.
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Braziler (Wells Fargo) asked about deposit cost trends. Bridgewater said further reductions are possible but will be slower, while Schrum noted the bank is nearing the lower bound for deposit costs, increasing exposure if rates fall further.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) Butterfield’s progress in executing accretive M&A, particularly in private trust and fund administration; (2) the pace at which capital ratios are normalized through dividends, buybacks, and deal activity; and (3) management’s ability to sustain noninterest income growth amid evolving fee and market dynamics. Monitoring shifts in interest rates and deposit flows will also be critical for assessing future margin trends.
Butterfield Bank currently trades at $45.09, up from $44.52 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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