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 — Q3 2020 Earnings Presentation
26 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Oct 29, 2020
Slide 1: Third Quarter Earnings Presentation
Third Quarter Earnings Presentation The Bank of N.T. Butterfield & Son Limited October 29, 2020
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 • Third Quarter 2020 Highlights • Strong Capital Generation and Return Michael Schrum • COVID-19 Update • Resilient, Diversified Fee Revenue
Slide 4: Third Quarter 2020 Highlights
Third Quarter 2020 Highlights (In US$ millions) vs. Q2 2020 vs. Q3 2019 • Net income of $30.5 million, or $0.61 per share • Core Net Income** of $36.5 million, or $0.73 per share Q3 2020 $ % $ % • Return on average common equity of 12.3%; core return on average Net Interest Income $ 75.3 $ (3.8) $ (
Slide 5: COVID-19 Update
COVID-19 Update* Market Segment Update** Customer*** Mortgage Assistance Program Final Deferral Participation Bermuda Cayman Channel Islands Rate Active COVID-19 Cases 4 12 55 April - June (Opt-out) 75% Total COVID-19 Cases 185 225 745 July - September (Opt-in) 34% Deaths 9 1 48 • Bermuda & Cayman p
Slide 6: Financials
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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) (In US$ millions) Q3 2020 vs. Q2 2020 $86.3 Avg. Balance Yield Avg. Balance Yield $79.1 Cash, S/T Inv. & Repos $ 3,543.6 0.11 % $ 185.2 (0.02)% $75.3 Inv
Slide 8: Income Statement: Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) Q3 2020 vs. Q2 2020 $46.6 $46.9 Asset management $ 6.8 $ (0.6) $41.7 Banking 13.4 4.2 FX Revenue 9.0 0.9 Trust 12.9 0.6 Custody and Other 3.6 0.3 Q3 Q4 Q1 Q2 Q3 Other 1.2 (0.2) 2019 2020 Total Non-Inte
Slide 9: Income Statement: Non-Interest Expenses
Income Statement Non-Interest Expenses Core Non-Interest Expense Trend* Core Non-Interest Expenses* vs. Q2 2020 (In US$ millions) (In US$ millions) Q3 2020 $ % $84.0 $84.6 $81.9 Salaries & Benefits** $ 42.2 $ 0.7 1.7 % Technology & Comm. 16.3 0.1 0.5 % Property 7.5 0.4 5.1 % 66.7% 68.0% 62.1% Profes
Slide 10: Capital Requirements and Return
Capital Requirements and Return Regulatory Capital (Basel III) - Total Capital Ratio*** Leverage Capital 9.6% 20.8% 1.2% 8.0% 1.3% 16.3% 8.4% 13.9% 6.7% Butterfield - Current US Peer Median * Butterfield Current BMA 2020 Required US Peer Median * TCE/TA TCE/TA Ex Cash • Strong capital levels remain
Slide 11: Balance Sheet
Balance Sheet Total Assets (In US$ millions) Q3 2020 Q4 2019 $14.2 (In US$ billions) Cash & Equivalents $ 2,161 $ 2,550 $13.2 $13.5 Reverse Repos & S/T Investments 1,134 1,361 Investments 4,725 4,436 Loans (net) 5,035 5,143 Other Assets 406 432 Total Assets $ 13,461 $ 13,922 $4.7 $4.7 $4.4 Int. Bear
Slide 12: Asset Quality
Asset Quality Non-Accrual Loans Investment Portfolio (In US$ millions) $73.3 $74.8 Loan Distribution Rating Distribution AA 0.3% A 0.5% $51.9 Consumer Res Mtg 4.4% BBB 0.1% 64.9% Comm’l R/E 14.8% Other Comm’l 10.5% Gov’t AAA 99.1% 5.4% $5.0 billion $4.7 billion Q3 Q4 Q1 Q2 Q3 2019 2020 0.10% • Inves
Slide 13: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Average Balances (US$Mil) Weighted Average 19.0% Life Q3 2020 vs. Q2 2020 Duration vs. Q2 2020 11.4% 9.3% 9.9% Cash & Reverse 6.4% Repos & S/T Invest. 3,543.6 185.2 < 0.2 N/A N/A AFS 2,273.3 (67.6) 2.5 (0.1) 4.2 (3.1
Slide 14: Appendix
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Slide 15: Current Expected Credit Losses (CECL)
Appendix Current Expected Credit Losses (CECL) ACL / Total Loans ACL by Loan Type 0.51% 0.79% 0.81% (In US$ millions) Q3 2020 Q2 2020 Q1 2020 $40.2 $41.0 Loans Commercial $ 16.3 $ 14.9 $ 15.5 Commercial Real Estate 2.3 2.2 2.6 $23.9 Consumer 5.2 5.5 4.6 Residential Mortgage 17.2 17.6 13.5 Total $ 41
Slide 16: Customer Deposits
Appendix Customer Deposits Average Deposit Volume and Cost of Deposits Deposit Composition By Currency (In US$ millions) 3,500 7.7% 6.0% 14.0% 20.7% 20.3% 19.0% 3,000 67.0% 71.6% 73.7% 2,500 1.48% 2,000 Q3 Q4 Q1 Q2 Q3 Desposits 2019 2020 USD / USD Pegged GBP Other 0.97% 1,500 0.54% 0.78% By Type 0.1
Slide 17: Residential Mortgage and Commercial Loans
Appendix Residential Mortgage Loans (US$ Billions) Commercial Loans (US$ Billion) $2.3 $2.5 $2.7 $3.2 $3.3 $1.1 $1.1 $1.2 $1.7 $1.6 25% 32% 37% 45% 52% 47% 48% 48% 48% 57% 23% 22% 21% 9% 14% 3% 22% 18% 52% 18% 18% 10% 46% 2% 2% 2% 4% 42% 42% 34% 34% 31% 33% 32% 31% 2016 2017 2018 2019 Q3 2020 2016 2
Slide 18: Balance Sheet Trends
Appendix Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2020 2019 2018 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Assets Cash & Equivalents $ 2,161 $ 2,228 $ 1,978 $ 2,550 $ 3,605 $ 2,011 $ 2,601 $ 2,054 $ 1,259 Reverse Repos & S/T Investments 1,133 1,136 1,240 1,361 855 330 288 80 148
Slide 19: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) Q3 2020 Q2 2020 Q3 2019 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash due from banks, reve
Slide 20: Income Statement Trends
Appendix Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2020 2019 2018 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Net Interest Income $ 75.3 $ 79.1 $ 87.6 $ 86.2 $ 86.3 $ 85.2 $ 88.0 $ 87.4 $ 88.3 Non-Interest Income 46.9 41.7 47.6 49.7 46.6 44.2 43.4 45.7 41.3 Prov. for Credit Reco
Slide 21: Non-Interest Income & Expense Trends
Appendix Non-Interest Income & Expense Trends (in millions of US Dollars, unless otherwise indicated) 2020 2019 2018 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Non-Interest Income Asset Management $ 6.8 $ 7.4 $ 7.8 $ 7.8 $ 7.4 $ 6.9 $ 6.7 $ 6.5 $ 6.5 Banking 13.4 9.1 11.2 14.0 12.1 12.1 11.2 12.8 10.6 FX Revenue 9.
Slide 22: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense* Trends (in millions of US Dollars, unless otherwise indicated) 2020 2019 2018 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Salaries & Benefits** $ 42.2 $ 41.4 $ 44.1 $ 46.6 $ 42.8 $ 41.1 $ 42.8 $ 43.7 $ 43.8 Technology & Comm. 16.3 16.3 16.4 16.5 16.3 15.2 14.6 14.8 15.4 Profession
Slide 23: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2020 2019 Q3 Q2 Q1 Q4 Q3 Net income A $ 30.5 $ 34.3 $ 40.3 $ 43.9 $ 42.4 Non-core (gains), losses and expenses Non-core (gains) losses Distribution from equity method investment (0.7) — — — — Total non-core (gai
Slide 24: Non-GAAP Reconciliation (cont'd)
Appendix Non-GAAP Reconciliation (cont'd) (in millions of US Dollars, unless otherwise indicated) 2020 2019 Q3 Q2 Q1 Q4 Q3 Tangible equity to tangible assets Shareholders' equity K $ 988.9 $ 990.3 $ 980.5 $ 963.7 $ 964.6 Less: goodwill and intangible assets (90.7) (89.7) (91.2) (96.5) (93.4) Tangibl
Slide 25: 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 p
Slide 26: 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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