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 2022 Earnings Presentation
25 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Feb 14, 2023
Slide 1: Fourth Quarter and Year-End 2022 Earnings Presentation
Fourth Quarter and Year-End 2022 Earnings Presentation The Bank of N.T. Butterfield & Son Limited February 14, 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 • Full Year 2022 Highlights • Strong Capital Generation and Return Craig Bridgewater • Fourth Quarter 2022 Financials • Resilient, Capital E
Slide 4: Full Year 2022 Highlights
Full Year 2022 Highlights (In US$ millions) vs. 2021 • Net income of $214.0 million, or $4.29 per share • Core Net Income** of $215.7 million, or $4.33 per share 2022 $ % • Return on average common equity of 25.7%; core return on average Net Interest Income $ 343.6 $ 43.8 tangible common equity** of
Slide 5: Financials
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Slide 6: Fourth Quarter 2022 Highlights
Fourth Quarter 2022 Highlights • Net income of $63.1 million, or $1.26 per share (In US$ millions) vs. Q3 2022 vs. Q4 2021 • Core net income** of $63.2 million or $1.27 per share Q4 2022 $ % $ % • Return on average common equity of 31.6%; core return on average Net Interest Income $ 94.6 $ 3.4 $ 20.
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) Q4 2022 vs. Q3 2022 $94.6 Avg. Balance Yield Avg. Balance Yield $91.2 Cash, S/T Inv. & Repos $ 2,538.4 2.81 % $ (280.1) 1.41 % Investme
Slide 8: Income Statement: Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) Q4 2022 vs. Q3 2022 $54.9 $52.7 $49.9 Asset management $ 7.4 $ — Banking 17.5 3.4 Foreign exchange revenue 11.5 (0.3) Trust 13.7 1.2 Custody and other 3.4 — Other 1.4 0.7 Total Non-Interest Income $ 54
Slide 9: Income Statement: Non-Interest Expenses
Income Statement Non-Interest Expenses Core Non-Interest Expense* Trend Core Non-Interest Expenses* vs. Q3 2022 (In US$ millions) (In US$ millions) Q4 2022 $ % $83.7 $81.8 $84.5 Salaries & Benefits** $ 44.7 $ 2.8 6.6 % Technology & Comm. 14.3 — 0.2 % Professional & O/S Services 4.2 (0.5) (9.7)% Prop
Slide 10: Capital Requirements and Dividend Return
Capital Requirements and Dividend Return Regulatory Capital (Basel III) - Total Capital Ratio* Leverage Capital 24.1% 6.5% 6.5% 0.9% 0.3% 5.6% 6.2% 13.5% 13.8% Butterfield - Current US Peer Median*** Butterfield Current BMA Minimum US Peer Median*** TCE/TA TCE/TA Ex Cash Dividend Payout Ratio • Regu
Slide 11: Balance Sheet
Balance Sheet Total Assets vs Q4 2021 (In US$ millions) Q4 2022 Q4 2021 % (In US$ billions) Cash and cash equivalents $ 2,101 $ 2,180 (4)% $15.3 $14.3 $13.7 Reverse Repos & S/T Investments 944 1,295 (27)% Investments 5,727 6,237 (8)% Loans (net) 5,096 5,241 (3)% Other Assets 437 382 14 % $6.2 $5.8 $
Slide 12: Balance Sheet Movements
Balance Sheet Movements Deposit Movements Deposit Currency by Segment (in US$ millions) (in US$ billions) FX $4.5 Volume $4.3 Translation $4.2 $0.3 $0.1 $0.2 $0.2 $0.4 $1.0 Change vs Q3 2022 $530 +290 +240 $1.5 $2.2 $3.1 $2.5 $1.6 Change vs Q4 2021 $(870) (500) (370) Bermuda Cayman UK and Channel Is
Slide 13: Asset Quality
Asset Quality Non-Accrual Loans Investment Portfolio (In US$ millions) Loan Distribution Rating Distribution AA 4.1% $61.0 $60.9 $63.1 Consumer 3.9% A 0.4% Res Mtg 69.7% Comm’l R/E 12.2% Other Comm’l 8.6% Government 5.5% AAA 95.5% $5.1 billion $5.7 billion Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 0.2
Slide 14: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Average Balances (US$Mil) Weighted 5.4% Average 3.3% Life 2.9% Q4 2022 vs. Q3 2022 Duration vs. Q3 2022 1.6% Cash & Reverse Repos & S/T Invest. $ 2,538.4 $ (280.1) 0.3 0.1 N/A (2.9)% AFS 2,074.5 (65.5) 3.6 (0.1) 4.7
Slide 15: Appendix
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Slide 16: Deposits
Appendix Deposits Average Deposit Volume and Cost of Deposits Deposit Composition (In US$ millions) By Currency 5.8% 5.4% 5.7% 4,000 21.5% 19.1% 20.0% 2.54% 3,500 72.6% 75.5% 74.3% 3,000 2,500 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Deposits 1.17% 0.78% USD / USD Pegged GBP Other 2,000 0.64% 0.34% B
Slide 17: Residential Mortgage and Commercial Loans
Appendix Residential Mortgage Loans (US$ Billions) Commercial Loans (US$ Billion) $2.7 $3.2 $3.4 $3.6 $3.6 $1.2 $1.7 $1.6 $1.4 $1.4 37% 48% 49% 50% 49% 47% 45% 49% 48% 46% 21% 18% 23% 9% 18% 21% 3% 22% 21% 18% 18% 42% 2% 5% 7% 34% 32% 9% 29% 29% 42% 32% 29% 26% 24% 2018 2019 2020 2021 2022 2018 2019
Slide 18: Balance Sheet Trends
Appendix Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2022 2021 2020 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Assets Cash and cash equivalents $ 2,101 $ 1,485 $ 1,340 $ 2,103 $ 2,180 $ 2,310 $ 2,766 $ 2,582 $ 3,290 Reverse Repos & S/T Investments 944 995 1,516 1,601 1,295 1,446 1,6
Slide 19: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) Q4 2022 Q3 2022 Q4 2021 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash and cash equivalents
Slide 20: Income Statement Trends
Appendix Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2022 2021 2020 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Net Interest Income $ 94.6 $ 91.2 $ 82.0 $ 75.9 $ 74.5 $ 75.7 $ 74.7 $ 74.9 $ 75.6 Non-Interest Income 54.9 49.9 51.8 49.9 52.7 49.0 48.8 47.6 47.8 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) 2022 2021 2020 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Non-Interest Income Asset Management $ 7.4 $ 7.4 $ 7.4 $ 7.5 $ 7.6 $ 7.4 $ 7.4 $ 7.4 $ 7.2 Banking 17.5 14.1 12.9 12.7 15.4 12.6 12.5 11.4 13.6 FX Revenue 1
Slide 22: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense* Trends (in millions of US Dollars, unless otherwise indicated) 2022 2021 2020 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Salaries & Benefits** $ 44.7 $ 42.0 $ 41.2 $ 41.0 $ 41.1 $ 42.0 $ 41.8 $ 39.0 $ 40.6 Technology & Comm. 14.3 14.3 14.0 14.1 15.7 16.3 15.7 16.1 16.1 Profession
Slide 23: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2022 2021 Q4 Q3 Q2 Q1 Q4 Net income A $ 63.1 $ 57.4 $ 49.1 $ 44.4 $ 41.7 Non-core expenses Early retirement program, voluntary separation, redundancies and other non-core compensation costs — — 1.0 — — Tax compl
Slide 24: Non-GAAP Reconciliation (cont'd)
Appendix Non-GAAP Reconciliation (cont'd) (in millions of US Dollars, unless otherwise indicated) 2022 2021 Q4 Q3 Q2 Q1 Q4 Tangible equity to tangible assets Shareholders' equity K $ 864.8 $ 754.9 $ 802.4 $ 841.8 $ 977.5 Less: goodwill and intangible assets (74.4) (71.9) (77.5) (82.9) (86.1) Tangibl
Slide 25: 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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