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 — Q3 2021 Earnings Presentation
24 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Oct 28, 2021
Slide 1: Third Quarter 2021 Earnings Presentation
Third Quarter 2021 Earnings Presentation The Bank of N.T. Butterfield & Son Limited October 28, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements: Certain of the statements made in this release are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements with respect to our beliefs, plans, obje
Slide 3: Agenda and Overview
Agenda and Overview Presenters Agenda Butterfield Overview Michael Collins • Overview • Leading Bank in Attractive Markets Chairman and Chief Executive Officer • Third Quarter 2021 Financials • Strong Capital Generation and Return Michael Schrum • Q&A • Resilient, Capital Efficient, Diversified Fee
Slide 4: Third Quarter 2021 Highlights
Third Quarter 2021 Highlights (In US$ millions) vs. Q2 2021 vs. Q3 2020 • Net income of $39.8 million, or $0.80 per share Q3 2021 $ % $ % • Core net income** of $40.0 million, or $0.80 per share Net Interest Income $ 75.7 $ 1.0 $ 0.4 • Return on average common equity of 16.2%; core return on average
Slide 5: Financials
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Slide 6: Income Statement: Net Interest Income
Income Statement Net Interest Income Net Interest Margin & Yields Net Interest Income before Provision for Credit Losses - Trend (In US$ millions) (In US$ millions) Q3 2021 vs. Q2 2021 Avg. Balance Yield Avg. Balance Yield Cash, S/T Inv. & Repos $ 4,210.8 0.03 % $ 29.1 0.01 % Investments 5,785.6 1.7
Slide 7: Income Statement: Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) $48.8 $49.0 Q3 2021 vs. Q2 2021 $46.9 Asset management $ 7.4 $ — Banking 12.6 0.1 Foreign exchange revenue 10.8 0.3 Trust 12.9 (0.1) Custody and other 3.7 (0.1) Other 1.5 — Total Non-Interest Income $
Slide 8: Income Statement: Non-Interest Expenses
Income Statement Non-Interest Expenses Core Non-Interest Expense* Trend Core Non-Interest Expenses* vs. Q2 2021 (In US$ millions) (In US$ millions) Q3 2021 $ % $84.6 $83.4 $84.2 Salaries & Benefits** $ 42.0 $ 0.2 0.4 % Technology & Comm. 16.3 0.6 4.1 % Property 7.8 0.2 2.2 % Professional & O/S Servi
Slide 9: Capital Requirements and Dividend Return
Capital Requirements and Dividend Return Regulatory Capital (Basel III) - Total Capital Ratio*** Leverage Capital 9.7% 1.7% 20.4% 6.9% 1.1% 8.0% 15.1% 5.8% 13.5% Butterfield - Current US Peer Median* Butterfield Current BMA Minimum US Peer Median* TCE/TA TCE/TA Ex Cash Dividend Payout Ratio** • Regu
Slide 10: Balance Sheet
Balance Sheet Total Assets (In US$ millions) Q3 2021 Q4 2020 (In US$ billions) $15.7 $15.3 Cash & Equivalents $ 2,310 $ 3,290 $13.5 Reverse Repos & S/T Investments 1,446 1,020 Investments 5,984 4,863 Loans (net) 5,204 5,161 Other Assets 389 405 $5.6 $6.0 Total Assets $ 15,332 $ 14,739 $4.7 $5.0 $5.2
Slide 11: Asset Quality
Asset Quality Non-Accrual Loans Investment Portfolio (In US$ millions) $74.8 Loan Distribution Rating Distribution $66.1 $63.8 AA 0.2% Consumer 4.0% A 0.4% Res Mtg 67.8% Comm’l R/E 14.1% Other Comm’l 9.3% AAA 99.4% Government 4.8% $5.2 billion $6.0 billion Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 0.2
Slide 12: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Average Balances 16.1% 14.8% 14.4% (US$Mil) Weighted Average Life 7.6% Q3 2021 vs. Q2 2021 Duration vs. Q2 2021 6.6% Cash & Reverse Repos & S/T Invest. 4,210.8 29.1 <0.03 N/A N/A AFS 3,061.0 64.6 4.1 0.3 5.3 (5.0)% H
Slide 13: Appendix
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Slide 14: Deposits
Appendix Customer Deposits Average Deposit Volume and Cost of Deposits Deposit Composition (In US$ millions) By Currency 6.0% 5.8% 5.4% 4,000 20.3% 21.1% 21.7% 3,500 73.7% 73.1% 72.9% 3,000 2,500 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Deposits USD / USD Pegged GBP Other 2,000 0.78% By Type 0.63% 0.
Slide 15: Residential Mortgage and Commercial Loans
Appendix Residential Mortgage Loans (US$ Billions) Commercial Loans (US$ Billion) $2.5 $2.7 $3.2 $3.4 $3.5 $1.1 $1.2 $1.7 $1.6 $1.5 32% 37% 45% 52% 47% 49% 50% 48% 49% 50% 22% 21% 9% 14% 3% 22% 18% 17% 18% 18% 20% 46% 2% 2% 5% 7% 42% 42% 34% 32% 33% 32% 29% 30% 26% 2017 2018 2019 2020 Q3 2021 2017 2
Slide 16: Balance Sheet Trends
Appendix Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2021 2020 2019 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Assets Cash & Equivalents $ 2,310 $ 2,766 $ 2,582 $ 3,290 $ 2,161 $ 2,228 $ 1,978 $ 2,550 $ 3,605 Reverse Repos & S/T Investments 1,446 1,651 1,236 1,020 1,133 1,136 1,240
Slide 17: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) Q3 2021 Q2 2021 Q3 2020 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash due from banks, reve
Slide 18: Income Statement Trends
Appendix Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2021 2020 2019 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Net Interest Income $ 75.7 $ 74.7 $ 74.9 $ 75.6 $ 75.3 $ 79.1 $ 87.6 $ 86.2 $ 86.3 Non-Interest Income 49.0 48.8 47.6 47.8 46.9 41.7 47.6 49.7 46.6 Prov. for Credit Reco
Slide 19: Non-Interest Income & Expense Trends
Appendix Non-Interest Income & Expense Trends (in millions of US Dollars, unless otherwise indicated) 2021 2020 2019 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Non-Interest Income Asset Management $ 7.4 $ 7.4 $ 7.4 $ 7.2 $ 6.8 $ 7.4 $ 7.8 $ 7.8 $ 7.4 Banking 12.6 12.5 11.4 13.6 13.4 9.1 11.2 14.0 12.1 FX Revenue 10
Slide 20: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense* Trends (in millions of US Dollars, unless otherwise indicated) 2021 2020 2019 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Salaries & Benefits** $ 42.0 $ 41.8 $ 39.0 $ 40.6 $ 42.2 $ 41.4 $ 44.1 $ 46.6 $ 42.8 Technology & Comm. 16.3 15.7 16.1 16.1 16.3 16.3 16.4 16.5 16.3 Profession
Slide 21: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2021 2020 Q3 Q2 Q1 Q4 Q3 Net income A $ 39.8 $ 39.6 $ 41.6 $ 42.1 $ 30.5 Non-core (gains), losses and expenses Non-core (gains) losses Distribution from equity method investment — — — — (0.7) Gain on transfer of
Slide 22: Non-GAAP Reconciliation (cont'd)
Appendix Non-GAAP Reconciliation (cont'd) (in millions of US Dollars, unless otherwise indicated) 2021 2020 Q3 Q2 Q1 Q4 Q3 Tangible equity to tangible assets Shareholders' equity K $ 973.9 $ 966.6 $ 936.5 $ 981.9 $ 988.9 Less: goodwill and intangible assets (87.3) (90.2) (91.5) (92.8) (90.7) Tangibl
Slide 23: Commentary on Factors Influencing COVID-19 Implications
Appendix Commentary on Factors Influencing COVID-19 Implications The continuing implications of the pandemic on our business, financial condition, liquidity and results of operations will depend on factors such as, but not limited to, the following: • The duration and scope of the pandemic • The eff
Slide 24: Peer Group
Appendix Peer Group Our peer group includes the following banks, noted by their ticker symbols: • First Republic Bank (FRC) • First Hawaiian, Inc. (FHB) • SVB Financial Group (SIVB) • Bank of Hawaii Corporation (BOH) • East West Bancorp, Inc. (EWBC) • Trustmark Corporation (TRMK) • Cullen/Frost Bank
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