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 2017 Earnings Presentation
21 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Jul 26, 2017
Slide 1: 2017 Q2 Analyst Call
2017 Q2 Analyst Call The Bank of N.T. Butterfield & Son Limited July 26, 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: Q2 2017 Earnings Call
Q2 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 Risk Officer Butterfield Overview • Leading Bank in Attractive Markets • Strong Capi
Slide 4: Q2 2017 Highlights
Q2 2017 Highlights • NIM expansion to 2.66%, a 8 bps increase over Q1 2017, due Core Net Income** to mortgage repricing and increased portfolio yields. • Stability of non-interest income supported by diversified $38.5 $37.5 $37.1 $36.0 financial services businesses. $33.4 $32.1 • Robust originations
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 Q2 2017 vs. Q1 2017 Avg. Balance Yield Avg. Balance Yield Cash, S/T Inv. & Repos 2,636.9 0.68% 160.2 0.11 % $71.5 Investments 4,539.2 2.20% (17.2) 0.03 % $67.9 Loans (net)
Slide 7: Income Statement Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend vs. Q1 2017 $38.5 $38.7 Q2 $ % $34.1 $34.5 Asset management 5.9 0.1 1.9 % 36.1% 35.1% Banking 10.9 0.9 8.9 % FX Revenue 7.5 (0.8) (9.3)% Trust 11.3 (0.1) (1.2)% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Custody and Other 1.9 (0.1) (4.5)% 2015 2016 2
Slide 8: Income Statement Non-Interest Expenses
Income Statement Non-Interest Expenses Non Interest Expense Trend vs. Q1 2017 Q2 $ % Salaries & Other Emp. Benefits 37.4 1.4 3.9 % IT & Communications 13.4 0.4 3.4 % $75.6 Professional Services 6.1 (0.2) (2.5)% $70.2 $71.2 Property 5.4 0.4 8.7 % $65.7 Indirect Taxes 4.5 0.3 7.4 % 66.8% 66.1% Restruc
Slide 9: Capital Requirements and Return
Capital Requirements and Return Regulatory Capital (Basel III) - Leverage Capital Total Capital Ratio 9.0% 8.0% 0.8% 19.1% 6.6% 1.3% 1.6% 8.2% 6.7% 5.0% 15.9% Butterfield - Pre IPO Butterfield - Current US Peer Median * 15.1% Period Ending Butterfield Current BMA 2017 Required US Peer Average * TCE/
Slide 10: Balance Sheet
Balance Sheet Total Assets June 30, 2017 March 31, 2017 Cash & Equivalents $ 1,720 $ 1,867 $11.3 $10.9 $10.7 $10.1 S/T Inv. & Reverse Repos 478 605 Loans (net) 3,588 3,573 Investments 4,558 4,549 Other Assets 335 350 $4.6 Total Assets $ 10,679 $ 10,944 $3.6 Int. Bearing Deposits $ 7,150 $ 7,586 Non-
Slide 11: Asset Quality
Asset Quality Loan Distribution Non-Performing and Non-Accrual Loans $101.4 Gov’t: 3.0% Other Comm’l: 9.0% $79.5 $61.8 Comm’l R/E: 16.7% $3.6 billion $57.8 Res Mtg: 65.9% Consumer: 5.4% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 Non-Performing Loans Non-Accrual Loans Net Charge-Off Ratio Investmen
Slide 12: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity** Average Balances ($bn) 12.7% Q2 2017 vs. Q1 2017 Spot Duration vs. Q1 2017 6.2% 4.5% 5.7% Cash 2,273.1 406.0 1,719.8 N/A N/A S/T Invest. 363.8 (245.8) 293.7 0.2 0.1 (6.4)% AFS 3,312.1 (46.7) 3,254.4 2.2 (0.3) (13.9
Slide 13: Summary, Q&A, Appendices
Summary Q&A Appendices
Slide 14: Balance Sheet Trends
Appendix Balance Sheet Trends 2017 2016 2015 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Assets Cash & Equivalents $ 1,720 $ 1,867 $ 2,102 $ 1,485 $ 2,655 $ 1,774 $ 2,289 $ 2,262 $ 2,101 $ 2,060 Reverse Repos 184 63 149 186 — — — — — — S/T Investments 294 542 520 995 436 425 409 331 380 342 Investments 4,558 4,54
Slide 15: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends 2017 - Q2 2017 - Q1 2016 - Q4 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 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Net Interest Income $ 71.5 $ 67.9 $ 66.8 $ 65.0 $ 64.3 $ 62.3 $ 61.2 $ 60.0 $ 59.3 $ 58.8 Non-Interest Income 38.7 38.5 38.8 36.3 37.9 34.5 37.3 34.2 34.5 34.1 Prov. for Credit Losses (0.5) (0.3) (0.9) 0.3 5.3 (0.3) 2.6 0.
Slide 17: Non-Interest Income & Expense Trends
Appendix Non-Interest Income & Expense Trends 2017 2016 2015 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Non-Interest Income Trust $ 11.3 $ 11.4 $ 11.5 $ 11.6 $ 10.8 $ 10.1 $ 10.3 $ 9.9 $ 10.2 $ 10.0 Asset Management 5.9 5.8 6.0 5.6 5.3 4.2 5.3 4.7 4.6 4.3 Banking 10.9 10.0 11.0 9.7 10.0 8.7 10.2 8.5 8.2 8.3 FX R
Slide 18: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense Trends 2017 2016 2015 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Salaries & Benefits $ 37.1 $ 35.9 $ 34.0 $ 33.6 $ 31.5 $ 29.6 $ 31.0 $ 31.4 $ 32.1 $ 31.8 Technology & Comm. 13.3 12.8 14.4 14.2 13.8 13.9 14.4 14.6 13.6 13.8 Property 5.3 4.9 5.5 5.3 5.0 5.0 5.5 5.7 5.2 5.2 Profe
Slide 19: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2017 2016 2015 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Net income A $ 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) (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 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Core return on average tangible assets Total average assets L $ 10,981.8 $ 10,982.6 $ 11,106.3 $ 11,207.4 $ 10,794.8 $ 10,243.3 $10,083.5 $ 10,102.8 $ 9,870.
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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