Bank Of N.t. Butterfield & Son Limited (the) Voting · NYSE:NTB
Bank Of N.t. Butterfield & Son Limited (the) Voting — The Bank of N.T. Butterfield & Son — Q4 2017 Earnings Presentation
21 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Feb 15, 2018
Slide 1: Fourth Quarter and Year-End 2017 Earnings Presentation
Fourth Quarter and Year-End 2017 Earnings Presentation The Bank of N.T. Butterfield & Son Limited February 15, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements: Certain of the statements made in this presentation are “forward-looking statements” within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Slide 3: Fourth Quarter and Year-End 2017 Earnings Call
Fourth Quarter and Year-End 2017 Earnings Call Presenters Agenda Six International Locations Michael Collins • Overview Chairman and Chief Executive Officer • Financials Michael Schrum • Summary Chief Financial Officer • Q&A Dan Frumkin Chief Operating Officer Butterfield Overview • Leading Bank in
Slide 4: 2017 Highlights
2017 Highlights Core Net Income* • Record net income of $153.3 million, or $2.76 per share • Core Net Income* of $158.9 million, or $2.86 per share • Net Interest Margin of 2.73%, cost of deposits of 0.11% $158.9 • Return on average common equity of 19.9%; core return on $138.6 average tangible comm
Slide 5: Financials
Financials
Slide 6: Fourth Quarter 2017 Highlights
Fourth Quarter 2017 Highlights • Net income of $40.3 million, or $0.72 per share • Core Net Income** of $42.2 million, or $0.76 per share vs. Q3 2017 vs. Q4 2016 • Net Interest Margin of 2.87%, cost of deposits of 0.12% Q4 2017 $ % $ % • Return on average common equity of 19.7%; core return on Net I
Slide 7: Income Statement Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend $42.4 vs. Q3 2017 $37.3 $38.8 $38.2 Q4 $ % Asset management $ 6.6 $ 0.3 3.9% Banking 12.0 1.2 11.1% 34.2% FX Revenue 8.8 1.3 16.6% Trust 11.3 0.4 3.6% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Custody and Other 2.2 0.1 6.0% 2015 2016 2017 Other 1.4 0.9
Slide 8: Income Statement Non-Interest Expenses
Income Statement Non-Interest Expenses Non-Interest Expense Trend *** Core Non-Interest Expenses* vs. Q3 2017 Q4 $ % Salaries & Benefits $ 42.2 $ 5.0 0.3 % $87.9 Technology & Comm. 14.3 1.2 (1.5)% $80.8 Property 4.5 (0.6) (3.8)% $71.9 $73.8 Professional & O/S Services 6.7 1.1 (1.8)% Indirect Taxes 4
Slide 9: Capital Requirements and Return
Capital Requirements and Return Regulatory Capital (Basel III) - Leverage Capital Total Capital Ratio 19.9% 8.8% 8.3% 0.6% 1.2% 8.2% 15.1% 7.1% 14.9% Butterfield - Current US Peer Median * Butterfield Current BMA 2017 Required US Peer Average * TCE/TA TCE/TA Ex Cash • Capital management remains cons
Slide 10: Balance Sheet
Balance Sheet Total Assets Q4 2017 Q3 2017 Cash & Equivalents $ 1,535 $ 1,546 $11.1 $10.8 $10.3 $10.6 S/T Inv. & Reverse Repos 429 418 Loans (net) 3,777 3,664 Investments 4,706 4,613 Other Assets 332 338 $4.4 $4.6 $4.7 $4.0 Total Assets $ 10,779 $ 10,578 $3.6 $3.7 $3.8 $3.2 Int. Bearing Deposits $ 7
Slide 11: Asset Quality
Asset Quality Loan Distribution Non-Accrual Loans Gov’t: 4.0% Other Comm’l: 10.3% $65.3 $3.8 billion Comm’l R/E: 15.4% Res Mtg: 65.4% $48.5 $48.7 $43.9 Consumer: 4.9% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2017 Non-Accrual Loans Investment Portfolio Rating Distribution Net Charge-Off Ratio 0.4% BBB: 1
Slide 12: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity** 11.7% Average Balances ($bn) 6.0% 4.5% 6.0% Q4 2017 vs. Q3 2017 Duration vs. Q3 2017 Cash 1,936.2 (116.4) N/A N/A S/T Invest. 199.6 10.6 0.2 0.1 (6.4)% AFS 3,326.1 61.0 2.3 (0.1) (13.8)% HTM 1,310.7 14.6 5.6 (0.2)
Slide 13: Summary Q&A Appendices
Summary Q&A Appendices
Slide 14: Balance Sheet Trends
Appendix Balance Sheet Trends 2017 2016 2015 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Assets Cash & Equivalents $ 1,535 $ 1,546 $ 1,720 $ 1,867 $ 2,102 $ 1,485 $ 2,655 $ 1,774 $ 2,289 $ 2,262 $ 2,101 $ 2,060 Reverse Repos 179 210 184 63 149 186 — — — — — — S/T Investments 250 208 294 542 520 995 436 425
Slide 15: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends 2017 - Q4 2017 - Q3 2017 - Q2 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash due from banks, reverse repurchase agreements and short-term investmen
Slide 16: Income Statement Trends
Appendix Income Statement Trends 2017 2016 2015 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Net Interest Income $ 76.1 $ 74.3 $ 71.5 $ 67.9 $ 66.8 $ 65.0 $ 64.3 $ 62.3 $ 61.2 $ 60.0 $ 59.3 $ 58.8 Non-Interest Income 42.4 38.2 38.7 38.5 38.8 36.3 37.9 34.5 37.3 34.2 34.5 34.1 Prov. for Credit Recovery (Losse
Slide 17: Non-Interest Income & Expense Trends
Appendix Non-Interest Income & Expense Trends 2017 2016 2015 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Non-Interest Income Trust $ 11.3 $ 10.9 $ 11.3 $ 11.4 $ 11.5 $ 11.6 $ 10.8 $ 10.1 $ 10.3 $ 9.9 $ 10.2 $ 10.0 Asset Management 6.6 6.3 5.9 5.8 6.0 5.6 5.3 4.2 5.3 4.7 4.6 4.3 Banking 12.0 10.8 10.9 10.0 1
Slide 18: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense Trends 2017 2016 2015 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Salaries & Benefits $ 42.2 $ 37.2 $ 37.1 $ 35.9 $ 34.0 $ 33.6 $ 31.5 $ 29.6 $ 31.0 $ 31.4 $ 32.1 $ 31.8 Technology & Comm. 14.3 13.1 13.3 12.8 14.4 14.2 13.8 13.9 14.4 14.6 13.6 13.8 Property 4.5 5.1 5.3 4.9
Slide 19: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2017 2016 2015 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Net income A $ 40.3 $ 41.1 $ 36.1 $ 35.9 $ 35.4 $ 24.0 $ 29.8 $ 26.8 $ (2.3) $ 28.8 $ 23.3 $ 28.0 Dividends and guarantee fee of preference shares — — — — (3.4)
Slide 20: Non-GAAP Reconciliation (cont'd)
Appendix Non-GAAP Reconciliation (cont’d) (in millions of US Dollars, unless otherwise indicated) 2017 2016 2015 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Core return on average tangible assets Total average assets L $10,851.0 $10,744.8 $10,981.8 $10,982.6 $11,106.3 $11,207.4 $10,794.8 $10,243.3 $10,083.5
Slide 21: Peer Group
Appendix Peer Group Our peer group includes the following banks, noted by their ticker symbols: • FRC • SIVB • EWBC • CFR • ASB • WTFC • CBSH • IBKC • UMBF • FHB • BOH • TRMK • IBOC • CBU • BPFH • FFIN • WABC 21
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