Bank Of N.t. Butterfield & Son Limited (the) Voting · NYSE:NTB
Bank Of N.t. Butterfield & Son Limited (the) Voting — Bank of N.T. Butterfield & Son Limited (The) — Q3 2023 Earnings Presentation
25 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Oct 25, 2023
Slide 1: Third Quarter 2023 Earnings Presentation
Third Quarter 2023 The Bank of N.T. Butterfield & Son Limited Earnings Presentation October 25, 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 • Third Quarter 2023 Financials • Strong Capital Generation and Return Craig Bridgewater • Q&A • Resilient, Capital Efficient, Diversified F
Slide 4: Third Quarter 2023 Highlights
Third Quarter 2023 Highlights • Net income of $48.7 million, or $0.99 per share (In US$ millions) vs. Q2 2023 vs. Q3 2022 • Core net income** of $57.0 million, or $1.16 per share Q3 2023 $ % $ % • Return on average common equity of 20.6%; core return on Net Interest Income $ 90.2 $ (2.3) $ (1.0) ave
Slide 5: Financials
Financials
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 2023 vs. Q2 2023 (In US$ millions) Avg. Balance Yield Avg. Balance Yield $91.2 $92.5 Cash, S/T Inv. & Repos $ 2,559.2 4.47 % $ 71.0 0.41 % $90.2 Invest
Slide 7: Income Statement: Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) Q3 2023 vs. Q2 2023 $52.0 $49.9 $50.2 Asset management $ 8.0 $ (0.2) Banking 14.1 1.5 Foreign exchange revenue 11.4 0.1 Trust 14.7 0.4 Custody and other 3.3 — Other 0.6 0.1 Total Non-Interest Income $
Slide 8: Income Statement: Non-Interest Expenses
Income Statement Non-Interest Expenses Core Non-Interest Expense* Trend Core Non-Interest Expenses* vs. Q2 2023 (In US$ millions) (In US$ millions) Q3 2023 $ % $81.8 $83.6 $84.3 Salaries & Benefits** $ 43.4 $ 0.8 1.9 % Technology & Comm. 16.0 1.1 7.1 % Professional & O/S Services 4.3 (0.5) (9.9)% Pr
Slide 9: Balance Sheet
Balance Sheet Total Assets vs Q4 2022 (In US$ millions) Q3 2023 Q4 2022 % (In US$ billions) Cash and cash equivalents $ 1,750 $ 2,101 (17)% $13.7 $13.5 Reverse Repos & S/T Investments 893 944 (5)% $13.2 Investments 5,319 5,727 (7)% Loans (net) 4,750 5,096 (7)% Other Assets 468 437 7% $5.8 $5.5 $5.3
Slide 10: Deposit Composition by Segment
Deposit Composition by Segment Group (US$ Billions) Bermuda (US$ Billions) $12.5 $13.0 $12.3 $12.2 $11.9 $4.5 $4.5 $4.5 $4.6 $4.5 21% 24% 27% 27% 30% 14% 15% 15% 17% 18% 44% 45% 43% 44% 45% 55% 53% 49% 49% 48% 42% 40% 42% 39% 37% 24% 23% 24% 23% 22% Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q3 2022 Q4
Slide 11: Loans
Loans Residential Mortgage Loans (US$ Billions) Commercial Loans (US$ Billions) $3.2 $3.4 $3.6 $3.6 $3.3 $1.7 $1.6 $1.4 $1.4 $1.3 48% 49% 50% 49% 48% 45% 49% 48% 46% 47% 18% 18% 21% 23% 23% 22% 18% 18% 21% 22% 34% 32% 2% 5% 7% 29% 29% 29% 9% 8% 32% 29% 26% 24% 23% 2019 2020 2021 2022 Q3 2023 2019 20
Slide 12: Balance Sheet Asset Mix
Balance Sheet Asset Mix Liquidity: Cash & Cash Equivalents** to Total Assets Loan-to-Deposit Ratio 67% 68% 65% 62% 21% 20% 18% 19% 19% 40% 39% 41% 41% 40% 5% 4% 5% 4% Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 NTB US Peer Median* NTB US Peer Median* • Butterfield
Slide 13: Asset Quality
Asset Quality Non-Accrual Loans Investment Portfolio (In US$ millions) Loan Distribution Rating Distribution A 0.4% $60.9 $59.4 Consumer $58.1 3.8% AAA 0.3% Res Mtg 69.5% Comm’l R/E 12.6% Other Comm’l 8.3% AA 99.3% Government 5.8% $4.7 $5.3 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 billion billion 0.2
Slide 14: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Average Balances 3.0% (US$Mil) Weighted Average 1.7% Life 0.4% 0.9% Q3 2023 vs. Q2 2023 Duration vs. Q2 2023 Cash & Reverse Repos & S/T Invest. $ 2,559.2 $ 71.0 0.3 0.1 N/A (1.8)% AFS 1,926.0 (44.7) 3.5 0.2 4.4 (3.4)
Slide 15: Capital Requirements and Dividend Return
Capital Requirements and Dividend Return Regulatory Capital (Basel III) - Total Capital Ratio* Leverage Capital 25.8% 7.5% 7.8% 0.1% 1.0% 7.7% 6.5% 14.6% 13.5% Butterfield - Current US Peer Median*** Butterfield Current BMA Minimum US Peer Median*** TCE/TA TCE/TA Ex Cash Dividend Payout Ratio** • Re
Slide 16: Appendix
Appendix
Slide 17: Balance Sheet Movements
Balance Sheet Movements Deposit Movements (US$ millions) Deposit Composition by Currency (US$ billions) FX $12.5 $12.2 $11.9 Volume Translation 5% 6% 6% 19% 19% 19% Change vs Q2 -220 -110 $(330) 2023 76% 75% 75% Change vs Q4 -1,140 +10 $(1,130) 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 USD / USD
Slide 18: Balance Sheet Trends
Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2023 2022 2021 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Assets Cash and cash equivalents $ 1,750 $ 1,795 $ 1,345 $ 2,101 $ 1,485 $ 1,340 $ 2,103 $ 2,180 $ 2,310 Reverse Repos & S/T Investments 893 729 1,263 944 995 1,516 1,601 1,295 1,44
Slide 19: Average Balance Sheet Trends
Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) Q3 2023 Q2 2023 Q3 2022 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash and cash equivalents, reverse
Slide 20: Income Statement Trends
Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2023 2022 2021 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Net Interest Income $ 90.2 $ 92.5 $ 97.4 $ 94.6 $ 91.2 $ 82.0 $ 75.9 $ 74.5 $ 75.7 Non-Interest Income 52.0 50.2 50.2 54.9 49.9 51.8 49.9 52.7 49.0 Prov. for Credit (Losses) Reco
Slide 21: Non-Interest Income & Expense Trends
Non-Interest Income & Expense Trends (in millions of US Dollars, unless otherwise indicated) 2023 2022 2021 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Non-Interest Income Asset Management $ 8.0 $ 8.2 $ 7.9 $ 7.4 $ 7.4 $ 7.4 $ 7.5 $ 7.6 $ 7.4 Banking 14.1 12.6 13.6 17.5 14.1 12.9 12.7 15.4 12.6 FX Revenue 11.4 11.3
Slide 22: Core Non-Interest Expense Trends
Core Non-Interest Expense* Trends (in millions of US Dollars, unless otherwise indicated) 2023 2022 2021 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Salaries & Benefits** $ 43.4 $ 42.6 $ 43.7 $ 44.7 $ 42.0 $ 41.2 $ 41.0 $ 41.1 $ 42.0 Technology & Comm. 16.0 14.9 13.9 14.3 14.3 14.0 14.1 15.7 16.3 Professional & O/S
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2023 2022 Q3 Q2 Q1 Q4 Q3 Net income A $ 48.7 $ 61.0 $ 62.2 $ 63.1 $ 57.4 Non-core (gains), losses and expenses Non-core (gains) losses Liquidation settlement from an investment previously written-off — (4.0) — — — Total
Slide 24: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) (in millions of US Dollars, unless otherwise indicated) 2023 2022 Q3 Q2 Q1 Q4 Q3 Tangible equity to tangible assets Shareholders' equity K $ 922.9 $ 950.3 $ 936.9 $ 864.8 $ 754.9 Less: goodwill and intangible assets (70.6) (74.0) (74.1) (74.4) (71.9) Tangible comm
Slide 25: Peer Group
Peer Group Our peer group includes the following banks, noted by their ticker symbols: • First Hawaiian, Inc. (FHB) • Trustmark Corporation (TRMK) • Bank of Hawaii Corporation (BOH) • International Bancshares Corporation (IBOC) • East West Bancorp, Inc. (EWBC) • Community Bank System, Inc. (CBU) • C
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