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 2018 Earnings Presentation
21 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Jul 25, 2018
Slide 1: Second Quarter 2018 Earnings Presentation
Second Quarter 2018 Earnings Presentation The Bank of N.T. Butterfield & Son Limited July 25, 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 of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements through our use of words such a
Slide 3: Presenters and Agenda; Butterfield Overview
Second Quarter 2018 Earnings Presentation 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 C
Slide 4: Second Quarter 2018 Highlights
Second Quarter 2018 Highlights Core Net Income** • Net income of $49.7 million, or $0.89 per share (In US$ millions) • Core Net Income** of $51.7 million, or $0.93 per share $51.7 • Return on average common equity of 23.9%; core return on average tangible common equity** of 27.6% $45.0 $40.7 $42.2 •
Slide 5: Financials
Financials
Slide 6: Income Statement Net Interest Income
Income Statement Net Interest Income Net Interest Margin & Yields Net Interest Income before Provision for Credit Losses - Trend (In US$ millions) Q2 2018 vs. Q1 2018 (In US$ millions) Avg. Balance Yield Avg. Balance Yield Cash, S/T Inv. & Repos 1.36 % $ 174.2 0.42% $87.4 $ 2,348.0 Investments 4,665
Slide 7: Income Statement Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) $41.9 $38.7 $39.8 Q2 2018 vs. Q1 2018 Asset management $ 6.2 $ (0.2) Banking 10.8 (0.1) FX Revenue 8.3 0.1 Trust 13.2 2.4 Custody and Other 2.4 0.2 Other 1.1 (0.2) Q2 Q3 Q4 Q1 Q2 Total Non-Interest Inc
Slide 8: Income Statement Non-Interest Expenses
Income Statement Non-Interest Expenses Non-Interest Expense Trend Core Non-Interest Expenses* vs. Q1 2018 (In US$ millions) (In US$ millions) Q2 2018 $ % Salaries & Benefits** $ 40.9 $ 3.9 0.3 % $77.4 $78.2 Technology & Comm. 14.9 0.3 (1.5)% $75.3 Property 5.3 0.2 (3.8)% 66.1% Professional & O/S Ser
Slide 9: Capital Requirements and Return
Capital Requirements and Return Regulatory Capital (Basel III) - Leverage Capital Total Capital Ratio 8.9% 22.3% 8.4% 0.5% 1.3% 8.4% 7.1% 15.5% 14.1% Butterfield - Current US Peer Median * Butterfield Current BMA 2018 Required US Peer Average * TCE/TA TCE/TA Ex Cash • Successful issuance of $75 mill
Slide 10: Balance Sheet
Balance Sheet Total Assets (In US$ millions) Q2 2018 Q4 2017 (In US$ billions) Cash & Equivalents $ 1,756 $ 1,535 $11.0 $11.0 $10.7 S/T Inv. & Reverse Repos 167 429 Loans (net) 3,986 3,777 Investments 4,727 4,706 Other Assets 367 332 $4.6 $4.5 $4.7 Total Assets $ 11,002 $ 10,779 $3.6 $4.0 $4.0 Int.
Slide 11: Asset Quality
Asset Quality Loan Distribution Non-Accrual Loans (In US$ millions) Gov’t: 5.1% $54.2 Other Comm’l: 12.9% $44.0 $4.0 billion Res Mtg: 62.8% $42.4 Comm’l R/E: 14.7% Consumer: 4.5% Q2 Q3 Q4 Q1 Q2 2017 2018 Investment Portfolio Rating Distribution Net Charge-Off Ratio 0.10% BBB: 0.5% 0.08% A: 1.8% AA:
Slide 12: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Average Balances (US$Mil) 10.5% Q2 2018 vs. Q1 2018 Duration vs. Q1 2018 5.2% 4.8% 2.8% Cash 2,227.2 260.7 N/A N/A S/T Invest. 120.9 (86.4) 0.4 0.3 (4.2)% AFS 2,921.9 (199.6) 3.2 0.4 (10.6)% HTM 1,742.4 290.4 6.1 — -
Slide 13: Appendix
Appendix
Slide 14: Balance Sheet Trends
Appendix Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2018 2017 2016 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Assets Cash & Equivalents $ 1,756 $ 1,846 $ 1,535 $ 1,546 $ 1,720 $ 1,867 $ 2,102 $ 1,485 $ 2,655 Reverse Repos 89 198 179 210 184 63 149 186 — S/T Investments 79 100 250 2
Slide 15: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2018 - Q2 2018 - Q1 2017 - Q2 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash due from banks
Slide 16: Income Statement Trends
Appendix Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2018 2017 2016 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Net Interest Income $ 87.4 $ 79.9 $ 76.1 $ 74.3 $ 71.5 $ 67.9 $ 66.8 $ 65.0 $ 64.3 Non-Interest Income 41.9 39.8 42.4 38.2 38.7 38.5 38.8 36.3 37.9 Prov. for Credit Reco
Slide 17: Non-Interest Income & Expense Trends
Appendix Non-Interest Income & Expense Trends (in millions of US Dollars, unless otherwise indicated) 2018 2017 2016 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Non-Interest Income Trust $ 13.2 $ 10.9 $ 11.3 $ 10.9 $ 11.3 $ 11.4 $ 11.5 $ 11.6 $ 10.8 Asset Management 6.2 6.4 6.6 6.3 5.9 5.8 6.0 5.6 5.3 Banking 10.8 1
Slide 18: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense Trends (in millions of US Dollars, unless otherwise indicated) 2018 2017 2016 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Salaries & Benefits* $ 40.9 $ 37.0 $ 42.2 $ 37.2 $ 37.1 $ 35.9 $ 34.0 $ 33.6 $ 31.5 Technology & Comm. 14.9 14.6 14.3 13.1 13.3 12.8 14.4 14.2 13.8 Property 5.3
Slide 19: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2018 2017 Q2 Q1 Q4 Q3 Q2 Net income to common shareholders A $ 49.7 $ 44.2 $ 40.3 $ 41.1 $ 36.1 Non-core (gains), losses and expenses Non-core (gains) losses Gain on disposal of a pass-through note investment (f
Slide 20: Non-GAAP Reconciliation (cont'd)
Appendix Non-GAAP Reconciliation (cont’d) (in millions of US Dollars, unless otherwise indicated) 2018 2017 Q2 Q1 Q4 Q3 Q2 Tangible equity to tangible assets Shareholders' equity $ 848.6 $ 824.2 $ 822.9 $ 802.4 $ 769.9 Less: goodwill and intangible assets (77.3) (90.9) (60.6) (61.4) (61.5) Tangible
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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