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 — Q2 2019 Earnings Presentation
22 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Jul 24, 2019
Slide 1: Second Quarter 2019 Earnings Presentation
Second Quarter 2019 Earnings Presentation The Bank of N.T. Butterfield & Son Limited July 24, 2019
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. You can identify these forward-looking statements through our use of words such as “ma
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 • Financials • Strong Capital Generation and Return Michael Schrum • Summary • Efficient, Conservative Balance Sheet Chief Financial Officer
Slide 4: Second Quarter 2019 Highlights
Second Quarter 2019 Highlights • Net income of $38.6 million, or $0.72 per share (In US$ millions) vs. Q1 2019 vs. Q2 2018 • Core Net Income** of $51.1 million, or $0.95 per share Q2 2019 $ % $ % • Return on average common equity of 17.1%; core return on Net Interest Income $ 85.2 $ (2.8) $ (2.2) 14
Slide 5: Financials
Financials — - and — Butterfield
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) Q2 2019 vs. Q1 2019 (In US$ millions) Avg. Balance Yield Avg. Balance Yield $87.4 $88.0 Cash, S/T Inv. & Repos $ 2,265.5 1.46 % $ (175.6) (0.19)% $85.2 I
Slide 7: Customer Deposits
Customer Deposits Deposit Composition By Currency Average Deposit Volume and Cost of Deposits 6.0% 6.1% 6.4% 5,000 (In US$ millions) 1.52% 11.0% 14.7% 14.1% 1.41% 83.0% 79.2% 79.6% 4,000 3,000 Q2 Q3 Q4 Q1 Q2 2018 2019 USD / USD Pegged GBP 2,000 0.63% Other 0.42% 0.38% 1,000 By Type 0.14% 0.09% 0.07%
Slide 8: Income Statement Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) Q2 2019 vs. Q1 2019 Asset management $ 6.9 $ 0.1 $41.9 $43.4 $44.2 Banking 12.1 0.9 FX Revenue 8.4 (0.4) Trust 13.0 0.4 Custody and Other 3.1 0.4 Q2 Q3 Q4 Q1 Q2 Other 0.9 (0.5) 2018 2019 Total Non-Inte
Slide 9: Income Statement Non-Interest Expenses
Income Statement Non-Interest Expenses Core Non-Interest Expense Trend* Core Non-Interest Expenses* vs. Q1 2019 (In US$ millions) (In US$ millions) Q2 2019 $ % Salaries & Benefits** $ 41.1 $ (1.7) (3.9)% Technology & Comm. 15.2 0.6 4.0 % $77.7 $80.3 $79.2 Property 5.7 0.4 6.6 % Professional & O/S Se
Slide 10: Capital Requirements and Return
Capital Requirements and Return Regulatory Capital (Basel III) - Leverage Capital Total Capital Ratio 9.4% 9.7% 22.7% 0.7% 1.7% 16.3% 9.0% 7.7% 15.1% Butterfield Current BMA 2019 Required US Peer Average * Butterfield - Current US Peer Median * TCE/TA TCE/TA Ex Cash • Efficient and conservative capi
Slide 11: Balance Sheet
Balance Sheet Total Assets (In US$ millions) Q2 2019 Q4 2018 (In US$ billions) Cash & Equivalents $ 2,011 $ 2,054 $11.6 $11.0 $11.2 S/T Investments 163 52 Reverse Repos 166 27 Loans (net) 4,000 4,044 Investments 4,524 4,255 $4.7 $4.4 $4.5 Other Assets 364 340 Total Assets $ 11,229 $ 10,773 $4.0 $4.0
Slide 12: Asset Quality
Asset Quality Investment Portfolio Non-Accrual Loans Loan Distribution Rating Distribution (In US$ millions) $55.9 $53.8 Gov’t: 2.8% Other Comm’l: $44.0 BBB: 0.2% 11.6% A: 1.9% AA: 1.1% Comm’l R/E: 13.5% Res Mtg: 67.8% AAA: Consumer: 96.8% 4.3% $4.0 billion $4.5 billion Q2 Q3 Q4 Q1 Q2 2018 2019 Net
Slide 13: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Average Balances (US$Mil) 8.7% 5.3% 5.3% Q2 2019 vs. Q1 2019 Duration vs. Q1 2019 2.9% Cash & Reverse Repos 2,212.8 (149.0) N/A N/A (3.8)% S/T Invest. 52.7 (26.6) 0.3 0.1 (9.8)% AFS 2,237.1 56.2 2.7 (0.2) -100bps +10
Slide 14: Appendix
Appendix — - — AG Butterfield
Slide 15: Balance Sheet Trends
Appendix Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2019 2018 2017 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Assets Cash & Equivalents $ 2,011 $ 2,601 $ 2,054 $ 1,259 $ 1,756 $ 1,846 $ 1,535 $ 1,546 $ 1,720 Reverse Repos 166 72 27 72 89 198 179 210 184 S/T Investments 163 215 52 7
Slide 16: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2019 - Q2 2019 - Q1 2018 - Q2 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash due from banks
Slide 17: Income Statement Trends
Appendix Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2019 2018 2017 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Net Interest Income $ 85.2 $ 88.0 $ 87.4 $ 88.3 $ 87.4 $ 79.9 $ 76.1 $ 74.3 $ 71.5 Non-Interest Income 44.2 43.4 45.7 41.3 41.9 39.8 42.4 38.2 38.7 Prov. for Credit Reco
Slide 18: Non-Interest Income & Expense Trends
Appendix Non-Interest Income & Expense Trends (in millions of US Dollars, unless otherwise indicated) 2019 2018 2017 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Non-Interest Income Trust $ 13.0 $ 12.6 $ 13.8 $ 13.1 $ 13.2 $ 10.9 $ 11.3 $ 10.9 $ 11.3 Asset Management 6.9 6.7 6.5 6.5 6.2 6.4 6.6 6.3 5.9 Banking 12.1 1
Slide 19: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense* Trends (in millions of US Dollars, unless otherwise indicated) 2019 2018 2017 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Salaries & Benefits** $ 41.1 $ 42.8 $ 43.7 $ 43.8 $ 40.9 $ 37.0 $ 42.2 $ 37.2 $ 37.1 Technology & Comm. 15.2 14.6 14.8 15.4 14.9 14.6 14.3 13.1 13.3 Property 5
Slide 20: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2019 2018 Q2 Q1 Q4 Q3 Q2 Net income A $ 38.6 $ 52.1 $ 50.9 $ 50.4 $ 49.7 Non-core (gains), losses and expenses Non-core (gains) losses Gain on disposal of a pass-through note investment (formerly a SIV) — (1.0)
Slide 21: Non-GAAP Reconciliation (cont'd)
Appendix Non-GAAP Reconciliation (cont’d) (in millions of US Dollars, unless otherwise indicated) 2019 2018 Q2 Q1 Q4 Q3 Q2 Tangible equity to tangible assets Shareholders' equity $ 928.7 $ 896.2 $ 882.3 $ 871.7 $ 848.6 Less: goodwill and intangible assets (72.2) (74.1) (74.7) (76.9) (77.3) Tangible
Slide 22: 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 22
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