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 2019 Earnings Presentation
23 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Oct 23, 2019
Slide 1: Third Quarter 2019 Earnings Presentation
Third Quarter 2019 Earnings Presentation The Bank of N.T. Butterfield & Son Limited October 23, 2019 Butterfield
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. You can identify these forward-looking statements through our use of words such as “ma
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 • ABN AMRO (Channel Islands) • Efficient, Conservative Balance Sheet Acqu
Slide 4: Third Quarter 2019 Highlights
Third Quarter 2019 Highlights • Net income of $42.4 million, or $0.79 per share (In US$ millions) vs. Q2 2019 vs. Q3 2018 • Core Net Income** of $48.8 million, or $0.91 per share Q3 2019 $ % $ % • Return on average common equity of 17.8%; core return on Net Interest Income $ 86.3 $ 1.2 $ (1.9) 14.2
Slide 5: Financials
Financials — - and — Butterfield
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) Q3 2019 vs. Q2 2019 (In US$ millions) Avg. Balance Yield Avg. Balance Yield $88.3 $86.3 Cash, S/T Inv. & Repos $ 4,434.4 1.12 % $ 2,168.9 (0.34)% $85.2 I
Slide 7: Customer Deposits
Customer Deposits Deposit Composition By Currency Average Deposit Volume and Cost of Deposits 6.0% 6.4% 5,000 (In US$ millions) 1.52% 11.0% 14.1% 14.0% 1.48% 19.0% 83.0% 79.6% 4,000 67.0% 3,000 Q3 Q4 Q1 Q2 Q3 2018 2019 0.83% USD / USD Pegged GBP 2,000 0.54% Other 0.42% 0.28% 1,000 By Type 0.20% 0.07
Slide 8: Income Statement Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) Q3 2019 vs. Q2 2019 $44.2 $46.6 Asset management $ 7.4 $ 0.5 $41.3 Banking 12.1 0.1 FX Revenue 10.0 1.7 Trust 12.7 (0.3) Custody and Other 3.6 0.6 Q3 Q4 Q1 Q2 Q3 Other 0.8 (0.1) 2018 2019 Total Non-Int
Slide 9: Income Statement Non-Interest Expenses
Income Statement Non-Interest Expenses Core Non-Interest Expense Trend* Core Non-Interest Expenses* vs. Q2 2019 (In US$ millions) (In US$ millions) Q3 2019 $ % Salaries & Benefits** $ 42.8 $ 1.6 4.0 % $84.0 $83.3 Technology & Comm. 16.3 1.1 7.4 % $79.2 Property 6.1 0.3 5.7 % Professional & O/S Servi
Slide 10: Capital Requirements and Return
Capital Requirements and Return Regulatory Capital (Basel III) - Total Capital Ratio Leverage Capital 9.1% 8.3% 19.6% 0.6% 2.1% 16.3% 8.5% 13.9% 6.2% Butterfield Current BMA 2019 Required US Peer Average * Butterfield - Current US Peer Median * TCE/TA TCE/TA Ex Cash Dividend Payout Ratio** • Prudent
Slide 11: Balance Sheet
Balance Sheet Total Assets (In US$ millions) Q3 2019 Q4 2018 (In US$ billions) Cash & Equivalents $ 3,605 $ 2,054 $14.2 S/T Investments 793 52 Reverse Repos 62 27 $11.2 $10.4 Loans (net) 4,673 4,044 Investments 4,662 4,255 Other Assets 420 340 $4.6 $4.5 $4.7 Total Assets $ 14,216 $ 10,773 $4.7 $4.1
Slide 12: Asset Quality
Asset Quality Non-Accrual Loans Investment Portfolio (In US$ millions) Loan Distribution Rating Distribution $55.9 Gov’t: $51.9 3.4% $44.2 Other Comm’l: BBB: 0.1% A: 0.5% 11.5% AA: 0.8% Comm’l R/E: Res Mtg: 14.3% 65.5% AAA: Consumer: 98.6% 5.3% $4.7 billion $4.7 billion Q3 Q4 Q1 Q2 Q3 2018 2019 Net
Slide 13: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Average Balances (US 10.1% $Mil) Weighted 6.8% 5.6% Average 3.2% Q3 2019 vs. Q2 2019 Duration vs. Q2 2019 Life Cash & Reverse Repos 4,083.9 1,871.1 N/A N/A N/A (3.3)% (7.8)% S/T Invest. 350.5 297.8 0.3 - N/A -100bps
Slide 14: ABN AMRO (Channel Islands) Ltd. Acquisition Update
ABN AMRO (Channel Islands) Ltd. Acquisition Update April 25, 2019 September 30, 2019 Deal Announcement Paid: £161mn in cash (US$201m) Closing Initial Price: £161mn in cash (US$208m) • Deal closed ahead of Closed on July 15, 2019 schedule with improved US Expense savings of ~$7.5mn pre-tax (~30% $ pr
Slide 15: Appendix
Appendix — - — AG Butterfield
Slide 16: Balance Sheet Trends
Appendix Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2019 2018 2017 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Assets Cash & Equivalents $ 3,605 $ 2,011 $ 2,601 $ 2,054 $ 1,259 $ 1,756 $ 1,846 $ 1,535 $ 1,546 Reverse Repos 62 166 72 27 72 89 198 179 210 S/T Investments 793 163 215 5
Slide 17: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) Q3 2019 Q2 2019 Q3 2018 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash due from banks, reve
Slide 18: Income Statement Trends
Appendix Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2019 2018 2017 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Net Interest Income $ 86.3 $ 85.2 $ 88.0 $ 87.4 $ 88.3 $ 87.4 $ 79.9 $ 76.1 $ 74.3 Non-Interest Income 46.6 44.2 43.4 45.7 41.3 41.9 39.8 42.4 38.2 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) 2019 2018 2017 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Non-Interest Income Trust $ 12.7 $ 13.0 $ 12.6 $ 13.8 $ 13.1 $ 13.2 $ 10.9 $ 11.3 $ 10.9 Asset Management 7.4 6.9 6.7 6.5 6.5 6.2 6.4 6.6 6.3 Banking 12.1 1
Slide 20: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense* Trends (in millions of US Dollars, unless otherwise indicated) 2019 2018 2017 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Salaries & Benefits** $ 42.8 $ 41.1 $ 42.8 $ 43.7 $ 43.8 $ 40.9 $ 37.0 $ 42.2 $ 37.2 Technology & Comm. 16.3 15.2 14.6 14.8 15.4 14.9 14.6 14.3 13.1 Property 6
Slide 21: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2019 2018 Q3 Q2 Q1 Q4 Q3 Net income A $ 42.4 $ 38.6 $ 52.1 $ 50.9 $ 50.4 Non-core (gains), losses and expenses Non-core (gains) losses Gain on disposal of a pass-through note investment (formerly a SIV) — — (1.0
Slide 22: Non-GAAP Reconciliation (cont'd)
Appendix Non-GAAP Reconciliation (cont’d) (in millions of US Dollars, unless otherwise indicated) 2019 2018 Q3 Q2 Q1 Q4 Q3 Tangible equity to tangible assets Shareholders' equity $ 964.6 $ 928.7 $ 896.2 $ 882.3 $ 871.7 Less: goodwill and intangible assets (93.4) (72.2) (74.1) (74.7) (76.9) 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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