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 — Q4 2018 Earnings Presentation
23 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Feb 20, 2019
Slide 1: Fourth Quarter and Year-End 2018 Earnings Presentation
Fourth Quarter and Year-End 2018 Earnings Presentation The Bank of N.T. Butterfield & Son Limited February 20, 2019
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: 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: Full Year 2018 Highlights
Full Year 2018 Highlights Core Net Income** • Record net income of $195.2 million, or $3.50 per share • Core Net Income** of $197.0 million, or $3.53 per share • Net Interest Margin of 3.25%, cost of deposits of 0.18% $197.0 • Return on average common equity of 23.1%; core return on average tangible
Slide 5: Financials
Financials
Slide 6: Fourth Quarter 2018 Highlights
Fourth Quarter 2018 Highlights Core Net Income** • Net income of $50.9 million, or $0.92 per share (In US$ millions) • Core Net Income** of $51.1 million, or $0.92 per share $51.7 $51.1 • Return on average common equity of 23.4%; core return $49.1 $45.0 on average tangible common equity** of 25.8% $
Slide 7: 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) Q4 2018 vs. Q3 2018 (In US$ millions) Avg. Balance Yield Avg. Balance Yield Cash, S/T Inv. & Repos $ 1,719.2 1.40 % $ 51.2 0.02 % $88.3 $87.4 Investments
Slide 8: Customer Deposits
Customer Deposits Deposit Composition By Currency Average Deposit Volume and Cost of Deposits 5.0% 6.0% 7.0% 5,000 (in $USD millions) 13.0% 11.0% 13.0% 82.0% 83.0% 80.0% 4,000 1.12% 3,000 0.83% Q4 Q1 Q2 Q3 Q4 2017 2018 USD / USD Pegged GBP 2,000 Other 0.46% 0.27% 1,000 0.20% By Type 0.12% 0.04% 18.0
Slide 9: Income Statement Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) Q4 2018 vs. Q3 2018 $45.7 $42.4 $41.3 Asset management $ 6.5 $ 0.1 Banking 12.8 2.3 FX Revenue 8.6 0.8 Trust 13.8 0.6 Custody and Other 2.4 0.1 Other 1.6 0.6 Q4 Q1 Q2 Q3 Q4 Total Non-Interest Income $
Slide 10: Income Statement Non-Interest Expenses
Income Statement Non-Interest Expenses Core Non-Interest Expense Trend* Core Non-Interest Expenses* vs. Q3 2018 (In US$ millions) (In US$ millions) Q4 2018 $ % Salaries & Benefits** $ 43.7 $ — 0.3 % $83.3 $83.1 $78.5 Technology & Comm. 14.8 (0.7) (1.5)% Property 6.1 0.8 (3.8)% 65.4% 63.2% 61.5% Prof
Slide 11: Capital Requirements and Return
Capital Requirements and Return Regulatory Capital (Basel III) - Leverage Capital Total Capital Ratio 9.3% 22.4% 8.9% 0.4% 1.8% 15.6% 8.5% 7.5% 14.0% Butterfield Current BMA 2018 Required US Peer Average * Butterfield - Current US Peer Median * TCE/TA TCE/TA Ex Cash • Expanded quarterly dividends, s
Slide 12: Balance Sheet
Balance Sheet Total Assets (In US$ millions) Q4 2018 Q4 2017 (In US$ billions) Cash & Equivalents $ 2,054 $ 1,535 $10.8 $10.4 $10.8 S/T Investments 52 250 Reverse Repos 27 179 Loans (net) 4,044 3,777 Investments 4,255 4,706 $4.7 $4.6 $4.3 Other Assets 340 332 Total Assets $ 10,773 $ 10,779 $4.1 $4.0
Slide 13: Asset Quality
Asset Quality Non-Accrual Loans Loan Distribution (In US$ millions) Gov’t: 2.6% Other Comm’l: 13.4% $48.7 $43.9 $44.2 $4.0 billion Res Mtg: 65.3% Comm’l R/E: 14.2% Consumer: 4.5% Q4 Q1 Q2 Q3 Q4 2017 2018 Investment Portfolio Rating Distribution Net Charge-Off Ratio 0.10% BBB: 0.2% 0.08% A: 2.0% AA:
Slide 14: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity 6.8% Average Balances (US$Mil) 4.0% 3.7% 2.1% Q4 2018 vs. Q3 2018 Duration vs. Q3 2018 Cash & Reverse Repos 1,616.6 56.9 N/A N/A (3.7)% S/T Invest. 102.7 (5.7) 0.2 — (8.2)% AFS 2,310.9 (431.8) 3.1 (0.1) -100bps +100b
Slide 15: Appendix
Appendix
Slide 16: Balance Sheet Trends
Appendix Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2018 2017 2016 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Assets Cash & Equivalents $ 2,054 $ 1,259 $ 1,756 $ 1,846 $ 1,535 $ 1,546 $ 1,720 $ 1,867 $ 2,102 Reverse Repos 27 72 89 198 179 210 184 63 149 S/T Investments 52 76 79 100
Slide 17: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2018 - Q4 2018 - Q3 2018 - Q2 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash due from banks
Slide 18: Income Statement Trends
Appendix Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2018 2017 2016 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Net Interest Income $ 87.4 $ 88.3 $ 87.4 $ 79.9 $ 76.1 $ 74.3 $ 71.5 $ 67.9 $ 66.8 Non-Interest Income 45.7 41.3 41.9 39.8 42.4 38.2 38.7 38.5 38.8 Prov. for Credit Reco
Slide 19: Non-Interest Income & Expense Trends
Appendix Non-Interest Income & Expense Trends (in millions of US Dollars, unless otherwise indicated) 2018 2017 2016 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Non-Interest Income Trust $ 13.8 $ 13.1 $ 13.2 $ 10.9 $ 11.3 $ 10.9 $ 11.3 $ 11.4 $ 11.5 Asset Management 6.5 6.5 6.2 6.4 6.6 6.3 5.9 5.8 6.0 Banking 12.8 1
Slide 20: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense Trends (in millions of US Dollars, unless otherwise indicated) 2018 2017 2016 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Salaries & Benefits* $ 43.7 $ 43.8 $ 40.9 $ 37.0 $ 42.2 $ 37.2 $ 37.1 $ 35.9 $ 34.0 Technology & Comm. 14.8 15.4 14.9 14.6 14.3 13.1 13.3 12.8 14.4 Property 6.1
Slide 21: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2018 2017 Q4 Q3 Q2 Q1 Q4 Net income A $ 50.9 $ 50.4 $ 44.2 $ 40.3 Non-core (gains), losses and expenses Non-core (gains) losses Gain on disposal of a pass-through note investment (formerly a SIV) — (0.2) (0.1) (
Slide 22: Non-GAAP Reconciliation (cont'd)
Appendix Non-GAAP Reconciliation (cont’d) (in millions of US Dollars, unless otherwise indicated) 2018 2017 Q4 Q3 Q2 Q1 Q4 Tangible equity to tangible assets Shareholders' equity $ 882.3 $ 871.7 $ 848.6 $ 824.2 $ 822.9 Less: goodwill and intangible assets (74.7) (76.9) (77.3) (90.9) (60.6) Tangible
Slide 23: 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 23
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