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 2020 Earnings Presentation
27 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Feb 11, 2021
Slide 1: Fourth Quarter and Year-End 2020 Earnings Presentation
Fourth Quarter and Year-End 2020 Earnings Presentation The Bank of N.T. Butterfield & Son Limited February 11, 2021
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 • Full Year 2020 Highlights • Strong Capital Generation and Return Michael Schrum • COVID-19 Update • Resilient, Diversified Fee Revenue Mod
Slide 4: Full Year 2020 Highlights
Full Year 2020 Highlights (In US$ millions) vs. 2019 • Net income of $147.2 million, or $2.90 per share • Core Net Income** of $154.5 million, or $3.04 per share 2020 $ % • Return on average common equity of 15.0%; core return on average Net Interest Income 317.6 $ (28.1) tangible common equity** of
Slide 5: COVID-19 Update
COVID-19 Update* Market Segment Update** Mortgage Assistance Program Progression*** Q2 2020 Q3 2020 Q4 2020 Bermuda Cayman Channel Islands Actual Participation Rate 75% 34% — Call Program Indication Ready to Resume Payment in 4Q20 — 98% — Active COVID-19 Cases 10 35 408 Actual Customers Current — —
Slide 6: Financials
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Slide 7: Fourth Quarter 2020 Highlights
Fourth Quarter 2020 Highlights (In US$ millions) vs. Q3 2020 vs. Q4 2019 Q4 2020 $ % $ % • Net income of $42.1 million, or $0.84 per share Net Interest Income $ 75.6 $ 0.3 $ (10.7) • Core Net Income** of $42.9 million, or $0.86 per share Non-Interest Income 47.8 0.9 (1.9) • Return on average common
Slide 8: Income Statement: Net Interest Income
Income Statement Net Interest Income Net Interest Margin & Yields Net Interest Income before Provision for Credit Losses - Trend (In US$ millions) (In US$ millions) Q4 2020 vs. Q3 2020 $86.2 Avg. Balance Yield Avg. Balance Yield Cash, S/T Inv. & Repos $ 3,539.4 0.07 % $ (4.1) (0.04)% $75.3 $75.6 Inv
Slide 9: Income Statement: Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) Q4 2020 vs. Q3 2020 $49.7 $46.9 $47.8 Asset management $ 7.2 $ 0.4 Banking 13.6 0.3 Foreign exchange revenue 9.3 0.3 Trust 13.3 0.4 Custody and other 3.4 (0.1) Other 0.9 (0.3) Q4 Q1 Q2 Q3 Q4 2019 2020
Slide 10: Income Statement: Non-Interest Expenses
Income Statement Non-Interest Expenses Core Non-Interest Expense Trend* Core Non-Interest Expenses* vs. Q3 2020 (In US$ millions) $91.6 (In US$ millions) Q4 2020 $ % $84.6 $82.4 Salaries & Benefits** $ 40.6 $ (1.6) (3.7)% Technology & Comm. 16.1 (0.2) (1.3)% Property 7.4 (0.2) (2.4)% 66.3% 68.0% 65.
Slide 11: Capital Requirements and Return
Capital Requirements and Return Regulatory Capital (Basel III) - Total Capital Ratio** Leverage Capital 9.3% 0.8% 7.8% 19.8% 1.7% 8.5% 14.2% 6.1% 13.5% Butterfield - Current US Peer Median * Butterfield Current BMA 2020 Minimum US Peer Median * TCE/TA TCE/TA Ex Cash Dividend Payout Ratio • Strong ca
Slide 12: Balance Sheet
Balance Sheet Total Assets (In US$ millions) Q4 2020 Q4 2019 (In US$ billions) $14.7 $13.9 Cash & Equivalents $ 3,290 $ 2,550 $13.5 Reverse Repos & S/T Investments 1,020 1,361 Investments 4,863 4,436 Loans (net) 5,161 5,143 Other Assets 405 432 Total Assets $ 14,739 $ 13,922 $4.7 $4.9 $4.4 $5.1 $5.0
Slide 13: Asset Quality
Asset Quality Non-Accrual Loans Investment Portfolio (In US$ millions) $74.8 $72.5 Loan Distribution Rating Distribution AA 0.3% A 0.5% $50.4 Consumer 4.4% Res Mtg BBB 0.1% 65.5% Comm’l R/E 14.6% Other Comm’l 10.0% Government AAA 99.2% 5.4% $5.2 billion $4.9 billion Q4 Q1 Q2 Q3 Q4 2019 2020 0.20% •
Slide 14: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Average Balances 22.6% (US$Mil) Weighted Average Life Q4 2020 vs. Q3 2020 Duration vs. Q3 2020 11.9% 11.5% 8.9% Cash & Reverse 5.8% Repos & S/T Invest. 3,539.4 (4.1) < 0.2 N/A N/A AFS 2,451.3 178.1 2.8 0.2 4.1 (3.4)%
Slide 15: Appendix
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Slide 16: Current Expected Credit Losses (CECL)
Appendix Current Expected Credit Losses (CECL) ACL / Total Loans ACL by Loan Type 0.46% 0.81% 0.66% (In US$ millions) Q4 2020 Q3 2020 Q2 2020 $41.0 Loans $34.1 Commercial $ 11.6 $ 16.3 $ 14.9 Commercial Real Estate 2.1 2.3 2.2 $23.6 Consumer 4.5 5.2 5.5 Residential Mortgage 15.9 17.2 17.6 Total $ 34
Slide 17: Deposits
Appendix Customer Deposits Average Deposit Volume and Cost of Deposits Deposit Composition By Currency (In US$ millions) 3,500 10.2% 6.0% 6.5% 20.3% 20.1% 20.2% 3,000 69.6% 73.7% 73.4% 2,500 2,000 1.38% Q4 Q1 Q2 Q3 Q4 Desposits 2019 2020 USD / USD Pegged GBP Other 1,500 0.50% 0.78% 0.71% By Type 0.1
Slide 18: Residential Mortgage Loans and Commercial Loans
Appendix Residential Mortgage Loans (US$ Billions) Commercial Loans (US$ Billion) $2.3 $2.5 $2.7 $3.2 $3.4 $1.1 $1.1 $1.2 $1.7 $1.6 25% 32% 37% 45% 52% 47% 49% 48% 49% 57% 23% 22% 21% 9% 14% 3% 22% 18% 52% 18% 18% 10% 46% 2% 2% 2% 5% 42% 42% 34% 32% 31% 33% 32% 29% 2016 2017 2018 2019 2020 2016 2017
Slide 19: Balance Sheet Trends
Appendix Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2020 2019 2018 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Assets Cash & Equivalents $ 3,290 $ 2,161 $ 2,228 $ 1,978 $ 2,550 $ 3,605 $ 2,011 $ 2,601 $ 2,054 Reverse Repos & S/T Investments 1,020 1,133 1,136 1,240 1,361 855 330 288
Slide 20: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) Q4 2020 Q3 2020 Q4 2019 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash due from banks, reve
Slide 21: Income Statement Trends
Appendix Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2020 2019 2018 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Net Interest Income $ 75.6 $ 75.3 $ 79.1 $ 87.6 $ 86.2 $ 86.3 $ 85.2 $ 88.0 $ 87.4 Non-Interest Income 47.8 46.9 41.7 47.6 49.7 46.6 44.2 43.4 45.7 Prov. for Credit Reco
Slide 22: Non-Interest Income & Expense Trends
Appendix Non-Interest Income & Expense Trends (in millions of US Dollars, unless otherwise indicated) 2020 2019 2018 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Non-Interest Income Asset Management $ 7.2 $ 6.8 $ 7.4 $ 7.8 $ 7.8 $ 7.4 $ 6.9 $ 6.7 $ 6.5 Banking 13.6 13.4 9.1 11.2 14.0 12.1 12.1 11.2 12.8 FX Revenue 9.
Slide 23: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense* Trends (in millions of US Dollars, unless otherwise indicated) 2020 2019 2018 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Salaries & Benefits** $ 40.6 $ 42.2 $ 41.4 $ 44.1 $ 46.6 $ 42.8 $ 41.1 $ 42.8 $ 43.7 Technology & Comm. 16.1 16.3 16.3 16.4 16.5 16.3 15.2 14.6 14.8 Profession
Slide 24: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2020 2019 Q4 Q3 Q2 Q1 Q4 Net income A $ 42.1 $ 30.5 $ 34.3 $ 40.3 $ 43.9 Non-core (gains), losses and expenses Non-core (gains) losses Distribution from equity method investment — (0.7) — — — Total non-core (gai
Slide 25: Non-GAAP Reconciliation (cont'd)
Appendix Non-GAAP Reconciliation (cont'd) (in millions of US Dollars, unless otherwise indicated) 2020 2019 Q4 Q3 Q2 Q1 Q4 Tangible equity to tangible assets Shareholders' equity K $ 981.9 $ 988.9 $ 990.3 $ 980.5 $ 963.7 Less: goodwill and intangible assets (92.8) (90.7) (89.7) (91.2) (96.5) Tangibl
Slide 26: Commentary on Factors Influencing COVID-19 Implications
Appendix Commentary on Factors Influencing COVID-19 Implications The short and medium/long-term implications of the pandemic on our business, financial condition, liquidity and results of operations will depend on factors such as, but not limited to, the following: • The duration and scope of the pa
Slide 27: Peer Group
Appendix Peer Group Our peer group includes the following banks, noted by their ticker symbols: • First Republic Bank (FRC) • First Hawaiian, Inc. (FHB) • SVB Financial Group (SIVB) • Bank of Hawaii Corporation (BOH) • East West Bancorp, Inc. (EWBC) • Trustmark Corporation (TRMK) • Cullen/Frost Bank
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