Bank Of N.t. Butterfield & Son Limited (the) Voting · NYSE:NTB
Bank Of N.t. Butterfield & Son Limited (the) Voting — Bank of N.T. Butterfield & Son Limited (The) — Q1 2023 Earnings Presentation
25 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Apr 25, 2023
Slide 1: First Quarter 2023 Earnings Presentation
First Quarter 2023 The Bank of N.T. Butterfield & Son Limited Earnings Presentation April 25, 2023
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 • First Quarter 2023 Financials • Strong Capital Generation and Return Craig Bridgewater • Q&A • Resilient, Capital Efficient, Diversified F
Slide 4: First Quarter 2023 Highlights
First Quarter 2023 Highlights • Net income and Core net income** of $62.2 million, or $1.24 (In US$ millions) vs. Q4 2022 vs. Q1 2022 per share Q1 2023 $ % $ % • Return on average common equity of 28.0%; core return on Net Interest Income $ 97.4 $ 2.8 $ 21.5 average tangible common equity** of 30.5%
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) Q1 2023 vs. Q4 2022 (In US$ millions) $97.4 $94.6 Avg. Balance Yield Avg. Balance Yield Cash, S/T Inv. & Repos $ 2,943.9 3.74 % $ 405.5 0.93 % Investments
Slide 7: Income Statement: Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) Q1 2023 vs. Q4 2022 $54.9 $49.9 $50.2 Asset management $ 7.9 $ 0.5 Banking 13.6 (3.9) Foreign exchange revenue 10.7 (0.8) Trust 12.8 (0.9) Custody and other 3.3 — Other 1.8 0.3 Total Non-Interest Incom
Slide 8: Income Statement: Non-Interest Expenses
Income Statement Non-Interest Expenses Core Non-Interest Expense* Trend Core Non-Interest Expenses* vs. Q4 2022 (In US$ millions) (In US$ millions) Q1 2023 $ % $81.6 $84.5 $84.1 Salaries & Benefits** $ 43.7 $ (1.0) (2.2)% Technology & Comm. 13.9 (0.4) (2.8)% Professional & O/S Services 5.0 0.8 18.6
Slide 9: Balance Sheet
Balance Sheet Total Assets vs Q4 2022 (In US$ millions) Q1 2023 Q4 2022 % (In US$ billions) Cash and cash equivalents $ 1,345 $ 2,101 (36)% $15.3 $14.3 $13.7 Reverse Repos & S/T Investments 1,263 944 34 % Investments 5,665 5,727 (1)% Loans (net) 5,022 5,096 (2)% Other Assets 438 437 —% $6.1 $5.7 $5.
Slide 10: Deposit Composition by Segment
Deposit Composition by Segment Group (US$ Billions) Bermuda (US$ Billions) $13.9 $13.1 $12.5 $13.0 $12.3 $4.9 $4.6 $4.5 $4.5 $4.5 21% 21% 21% 24% 27% 14% 14% 14% 15% 15% 48% 45% 44% 45% 43% 57% 56% 55% 53% 49% 38% 41% 42% 40% 42% 22% 23% 24% 23% 24% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2022 Q2
Slide 11: Loans
Loans Residential Mortgage Loans (US$ Billions) Commercial Loans (US$ Billions) $3.2 $3.4 $3.6 $3.6 $3.5 $1.7 $1.6 $1.4 $1.4 $1.3 48% 49% 50% 49% 49% 45% 49% 48% 46% 47% 18% 18% 21% 23% 23% 22% 18% 18% 21% 21% 34% 32% 2% 5% 7% 29% 29% 28% 9% 9% 32% 29% 26% 24% 23% 2019 2020 2021 2022 Q1 2023 2019 20
Slide 12: Balance Sheet Asset Mix
Balance Sheet Asset Mix Liquidity: Cash & Cash Equivalents** to Total Assets Loan-to-Deposit Ratio 65% 60% 62% 56% 24% 20% 21% 18% 19% 10% 6% 39% 40% 39% 41% 5% 36% 4% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 NTB US Peer Median* NTB US Peer Median* • Butterfiel
Slide 13: Asset Quality
Asset Quality Non-Accrual Loans Investment Portfolio (In US$ millions) Loan Distribution Rating Distribution AA 4.2% $63.1 $58.7 Consumer $55.5 A 0.4% 3.7% Res Mtg 70.3% Comm’l R/E 12.2% Other Comm’l 8.3% Government 5.5% AAA 95.4% $5.0 $5.7 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 billion billion 0.2
Slide 14: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Average Balances (US$Mil) Weighted 5.4% Average 3.0% Life 2.4% Q1 2023 vs. Q4 2022 Duration vs. Q4 2022 1.2% Cash & Reverse Repos & S/T Invest. $ 2,943.9 $ 405.5 0.2 (0.1) N/A (2.4)% AFS 2,005.6 (69.0) 3.4 (0.2) 4.4
Slide 15: Capital Requirements and Dividend Return
Capital Requirements and Dividend Return Regulatory Capital (Basel III) - Total Capital Ratio* Leverage Capital 26.2% 7.6% 7.0% 0.1% 0.7% 7.5% 6.3% 13.5% 14.0% Butterfield - Current US Peer Median*** Butterfield Current BMA Minimum US Peer Median*** TCE/TA TCE/TA Ex Cash Dividend Payout Ratio** • Re
Slide 16: Appendix
Appendix
Slide 17: Balance Sheet Movements
Balance Sheet Movements Deposit Movements (US$ millions) Deposit Composition by Currency (US$ billions) $13.9 $13.0 $12.3 FX 5% 6% 6% Volume Translation 21% 20% 19% Change vs Q4 -690 +50 73% 74% 75% $(640) 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 USD / USD Pegged GBP Other Total deposits Loan Mo
Slide 18: Balance Sheet Trends
Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2023 2022 2021 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Assets Cash and cash equivalents $ 1,345 $ 2,101 $ 1,485 $ 1,340 $ 2,103 $ 2,180 $ 2,310 $ 2,766 $ 2,582 Reverse Repos & S/T Investments 1,263 944 995 1,516 1,601 1,295 1,446 1,651
Slide 19: Average Balance Sheet Trends
Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) Q1 2023 Q4 2022 Q1 2022 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash and cash equivalents, reverse
Slide 20: Income Statement Trends
Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2023 2022 2021 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Net Interest Income $ 97.4 $ 94.6 $ 91.2 $ 82.0 $ 75.9 $ 74.5 $ 75.7 $ 74.7 $ 74.9 Non-Interest Income 50.2 54.9 49.9 51.8 49.9 52.7 49.0 48.8 47.6 Prov. for Credit (Losses) Reco
Slide 21: Non-Interest Income & Expense Trends
Non-Interest Income & Expense Trends (in millions of US Dollars, unless otherwise indicated) 2023 2022 2021 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Non-Interest Income Asset Management $ 7.9 $ 7.4 $ 7.4 $ 7.4 $ 7.5 $ 7.6 $ 7.4 $ 7.4 $ 7.4 Banking 13.6 17.5 14.1 12.9 12.7 15.4 12.6 12.5 11.4 FX Revenue 10.7 11.5
Slide 22: Core Non-Interest Expense Trends
Core Non-Interest Expense* Trends (in millions of US Dollars, unless otherwise indicated) 2023 2022 2021 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Salaries & Benefits** $ 43.7 $ 44.7 $ 42.0 $ 41.2 $ 41.0 $ 41.1 $ 42.0 $ 41.8 $ 39.0 Technology & Comm. 13.9 14.3 14.3 14.0 14.1 15.7 16.3 15.7 16.1 Professional & O/S
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2023 2022 Q1 Q4 Q3 Q2 Q1 Net income A $ 62.2 $ 63.1 $ 57.4 $ 49.1 $ 44.4 Non-core expenses Early retirement program, voluntary separation, redundancies and other non-core compensation costs — — — 1.0 — Tax compliance rev
Slide 24: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) (in millions of US Dollars, unless otherwise indicated) 2023 2022 Q1 Q4 Q3 Q2 Q1 Tangible equity to tangible assets Shareholders' equity K $ 936.9 $ 864.8 $ 754.9 $ 802.4 $ 841.8 Less: goodwill and intangible assets (74.1) (74.4) (71.9) (77.5) (82.9) Tangible comm
Slide 25: Peer Group
Peer Group Our peer group includes the following banks, noted by their ticker symbols: • First Hawaiian, Inc. (FHB) • Trustmark Corporation (TRMK) • Bank of Hawaii Corporation (BOH) • International Bancshares Corporation (IBOC) • East West Bancorp, Inc. (EWBC) • Community Bank System, Inc. (CBU) • C
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