Offshore banking group Butterfield Bank (NYSE: NTB) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 6.3% year on year to $153.3 million. Its non-GAAP profit of $1.51 per share was 15% above analysts’ consensus estimates.
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Butterfield Bank (NTB) Q3 CY2025 Highlights:
- Net Interest Income: $92.7 million vs analyst estimates of $92.05 million (5.3% year-on-year growth, 0.7% beat)
- Net Interest Margin: 2.7% vs analyst estimates of 2.7% (5.5 basis point beat)
- Revenue: $153.3 million vs analyst estimates of $148.8 million (6.3% year-on-year growth, 3% beat)
- Efficiency Ratio: 56.2% vs analyst estimates of 60.7% (450 basis point beat)
- Adjusted EPS: $1.51 vs analyst estimates of $1.31 (15% beat)
- Tangible Book Value per Share: $25.06 vs analyst estimates of $24.52 (14.4% year-on-year growth, 2.2% beat)
- Market Capitalization: $1.72 billion
Michael Collins, Butterfield's Chairman and Chief Executive Officer, commented, “Butterfield’s strong third quarter performance demonstrates the resilience of our business model as we improved efficiency across the organization. We delivered higher banking and foreign exchange fees, while our net interest income and margin improved as a result of lower deposit costs and a conservative asset mix. Our proactive capital management continued to deliver strong shareholder returns through a quarterly cash dividend and share repurchases. Together, these outcomes underscore the effectiveness of our strategy and commitment to build long-term value for clients and shareholders.”
Company Overview
Founded in 1784 as one of the oldest banks in the Western Hemisphere, Butterfield Bank (NYSE: NTB) provides banking, wealth management, and trust services to individuals and businesses in select offshore financial centers including Bermuda, Cayman Islands, and the Channel Islands.
Sales Growth
Net interest income and and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities. Regrettably, Butterfield Bank’s revenue grew at a mediocre 3% compounded annual growth rate over the last five years. This was below our standard for the banking sector and is a tough starting point for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Butterfield Bank’s recent performance shows its demand has slowed as its annualized revenue growth of 1.1% over the last two years was below its five-year trend. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Butterfield Bank reported year-on-year revenue growth of 6.3%, and its $153.3 million of revenue exceeded Wall Street’s estimates by 3%.
Net interest income made up 79.6% of the company’s total revenue during the last five years, meaning lending operations are Butterfield Bank’s largest source of revenue.
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.
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Tangible Book Value Per Share (TBVPS)
Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.
When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.
Butterfield Bank’s TBVPS grew at a solid 6.7% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 18.9% annually over the last two years from $17.73 to $25.06 per share.
Over the next 12 months, Consensus estimates call for Butterfield Bank’s TBVPS to grow by 9.9% to $27.55, solid growth rate.
Key Takeaways from Butterfield Bank’s Q3 Results
It was good to see Butterfield Bank beat analysts’ EPS expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 4.2% to $43.75 immediately after reporting.
Indeed, Butterfield Bank had a rock-solid quarterly earnings result, but is this stock a good investment here? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
