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 2017 Earnings Presentation
21 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Oct 25, 2017
Slide 1: 2017 Q3 Analyst Call
2017 Q3 Analyst Call The Bank of N.T. Butterfield & Son Limited October 25, 2017
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: Q3 2017 Earnings Call
Q3 2017 Earnings Call Presenters Agenda Six International Locations Michael Collins • Overview Chairman & Chief Executive Officer • Financials Michael Schrum • Summary Chief Financial Officer • Q&A Dan Frumkin Chief Operating Officer Butterfield Overview • Leading Bank in Attractive Markets • Strong
Slide 4: Q3 2017 Highlights
Q3 2017 Highlights • Net income of $41.1 million, or $0.74 per share Core Net Income** • Core Net Income** of $40.7 million, or $0.73 per share $40.7 $38.5 $37.5 • Net Interest Margin of 2.81%, cost of deposits of 0.10% $37.1 • Return on average common equity of 20.7%; core return on $33.4 average t
Slide 5: Financials
Financials
Slide 6: Income Statement Net Interest Income
Income Statement Net Interest Income Net Interest Income before Provision for Credit Losses - Net Interest Margin & Yields Trend Q3 2017 vs. Q2 2017 Avg. Balance Yield Avg. Balance Yield $74.3 Cash, S/T Inv. & Repos $ 2,241.5 0.81% $ (395.3) 0.13% $71.5 Investments 4,561.9 2.22% 22.7 0.02% Loans (ne
Slide 7: Income Statement Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend vs. Q2 2017 $38.7 $38.2 Q3 $ % $36.3 $34.2 Asset management $ 6.3 $ 0.4 6.5 % Banking 10.8 (0.1) (1.3)% 34.0% FX Revenue 7.6 — 0.3 % Trust 10.9 (0.3) (2.7)% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Custody and Other 2.0 0.1 6.5 % 2015 2016 2017 Other
Slide 8: Income Statement Non-Interest Expenses
Income Statement Non-Interest Expenses Non Interest Expense Trend *** Core Non-Interest Expenses* vs. Q2 2017 Q3 $ % Salaries & Benefits $ 37.2 $ 0.1 0.3 % Technology & Comm. 13.1 (0.2) (1.5)% $77.5 $75.6 $73.8 Property 5.1 (0.2) (3.8)% Professional & O/S Services 5.6 (0.1) (1.8)% $67.6 Indirect Tax
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% 6.6% 1.3% 1.6% 8.2% 15.1% 7.0% 14.9% 5.0% Butterfield - Pre IPO Butterfield - Current US Peer Median * Butterfield Current BMA 2017 Required US Peer Average * TCE/TA TCE/TA Ex C
Slide 10: Balance Sheet
Balance Sheet Total Assets Q3 2017 Q2 2017 Cash & Equivalents $ 1,546 $ 1,720 $11.0 $10.7 $10.6 $10.2 S/T Inv. & Reverse Repos 418 478 Loans (net) 3,664 3,588 Investments 4,613 4,558 Other Assets 338 335 $4.6 $4.6 $4.0 $4.1 Total Assets $ 10,578 $ 10,679 $3.8 $3.6 $3.7 $3.3 Int. Bearing Deposits $ 7
Slide 11: Asset Quality
Asset Quality Loan Distribution Non-Performing and Non-Accrual Loans Gov’t: 2.9% $90.1 Other Comm’l: 9.7% $83.0 $61.8 $61.8 Comm’l R/E: 16.3% $3.7 billion Res Mtg: 66.0% Consumer: 5.1% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016 2017 Non-Performing Loans Non-Accrual Loans Net Charge-Off Ratio Investment Po
Slide 12: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity** Average Balances ($bn) 12.7% Q3 2017 vs. Q2 2017 Duration vs. Q2 2017 6.2% 4.5% 6.0% Cash 1,984.8 (288.2) N/A N/A S/T Invest. 256.7 (107.1) 0.1 (0.1) (6.4)% AFS 3,265.0 (47.1) 2.4 0.2 (13.6)% HTM 1,296.1 69.7 5.8 (
Slide 13: Summary Q&A Appendices
Summary Q&A Appendices
Slide 14: Balance Sheet Trends
Appendix Balance Sheet Trends 2017 2016 2015 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Assets Cash & Equivalents $ 1,546 $ 1,720 $ 1,867 $ 2,102 $ 1,485 $ 2,655 $ 1,774 $ 2,289 $ 2,262 $ 2,101 $ 2,060 Reverse Repos 210 184 63 149 186 — — — — — — S/T Investments 208 294 542 520 995 436 425 409 331 380 342 Inv
Slide 15: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends 2017 - Q3 2017 - Q2 2017 - Q1 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 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Net Interest Income $ 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 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 Losses (0.7) 0.5 (0.3) (0.9) 0
Slide 17: Non-Interest Income & Expense Trends
Appendix Non-Interest Income & Expense Trends 2017 2016 2015 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Non-Interest Income Trust $ 10.9 $ 11.3 $ 11.4 $ 11.5 $ 11.6 $ 10.8 $ 10.1 $ 10.3 $ 9.9 $ 10.2 $ 10.0 Asset Management 6.3 5.9 5.8 6.0 5.6 5.3 4.2 5.3 4.7 4.6 4.3 Banking 10.8 10.9 10.0 11.0 9.7 10.0 8.7 10
Slide 18: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense Trends 2017 2016 2015 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Salaries & Benefits $ 37.2 $ 37.1 $ 35.9 $ 34.0 $ 33.6 $ 31.5 $ 29.6 $ 31.0 $ 31.4 $ 32.1 $ 31.8 Technology & Comm. 13.1 13.3 12.8 14.4 14.2 13.8 13.9 14.4 14.6 13.6 13.8 Property 5.1 5.3 4.9 5.5 5.3 5.0 5.0 5.
Slide 19: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2017 2016 2015 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Net income A $ 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) (4.1) (4.1)
Slide 20: Non-GAAP Reconciliation (cont'd)
Appendix Non-GAAP Reconciliation (cont’d) (in millions of US Dollars, unless otherwise indicated) 2017 2016 2015 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Core return on average tangible assets Total average assets L $10,744.8 $10,981.8 $10,982.6 $11,106.3 $11,207.4 $10,794.8 $10,243.3 $10,083.5 $10,102.8 $
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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