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) — Q4 2023 Earnings Presentation
27 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Feb 13, 2024
Slide 1: Fourth Quarter and Year-End 2023 Earnings Presentation
Fourth Quarter and Year-End 2023 The Bank of N.T. Butterfield & Son Limited Earnings Presentation February 13, 2024
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 2023 Highlights • Strong Capital Generation and Return Craig Bridgewater • Fourth Quarter 2023 Financials • Resilient, Capital E
Slide 4: Full Year 2023 Highlights
Full Year 2023 Highlights • Net income of $225.5 million, or $4.58 per share (In US$ millions) vs 2022 • Core net income** of $231.5 million, or $4.70 per share 2023 $ % • Return on average common equity of 24.2%; core return on Net Interest Income $ 367.0 $ 23.4 average tangible common equity** of
Slide 5: Financials
Financials
Slide 6: Fourth Quarter 2023 Highlights
Fourth Quarter 2023 Highlights • Net income of $53.5 million, or $1.11 per share (In US$ millions) vs. Q3 2023 vs. Q4 2022 • Core net income** of $55.3 million, or $1.15 per share Q4 2023 $ % $ % • Return on average common equity of 22.5%; core return on Net Interest Income $ 86.9 $ (3.3) $ (7.7) av
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) Q4 2023 vs. Q3 2023 (In US$ millions) Avg. Balance Yield Avg. Balance Yield $94.6 Cash, S/T Inv. & Repos $ 2,603.6 4.72 % $ 44.4 0.25 % $90.2 $86.9 Invest
Slide 8: Income Statement: Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) $60.0 Q4 2023 vs. Q3 2023 $54.9 $52.0 Asset management $ 8.3 $ 0.3 Banking 18.6 4.5 Foreign exchange revenue 12.8 1.4 Trust 16.0 1.3 Custody and other 3.3 — Other 1.0 0.4 Total Non-Interest Income $ 60
Slide 9: Income Statement: Non-Interest Expenses
Income Statement Non-Interest Expenses Core Non-Interest Expense* Trend Core Non-Interest Expenses* vs. Q3 2023 (In US$ millions) (In US$ millions) Q4 2023 $ % $90.4 $84.5 $84.3 Salaries & Benefits** $ 46.2 $ 2.8 6.5 % Technology & Comm. 17.2 1.2 7.8 % Professional & O/S Services 4.9 0.6 14.3 % Prop
Slide 10: Balance Sheet
Balance Sheet Total Assets vs Q4 2022 (In US$ millions) Q4 2023 Q4 2022 % (In US$ billions) Cash and cash equivalents $ 1,647 $ 2,101 (22)% $14.3 Reverse Repos & S/T Investments 1,225 944 30 % $13.2 $13.4 Investments 5,292 5,727 (8)% Loans (net) 4,746 5,096 (7)% Other Assets 464 437 6% Total Assets
Slide 11: Deposit Composition by Segment
Deposit Composition by Segment Group (US$ Billions) Bermuda (US$ Billions) $13.0 $12.3 $12.2 $11.9 $12.0 $4.5 $4.5 $4.6 $4.5 $4.5 24% 27% 27% 30% 31% 15% 15% 17% 18% 22% 45% 43% 44% 45% 42% 53% 49% 49% 48% 47% 40% 42% 39% 37% 36% 23% 24% 23% 22% 22% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q4 2022 Q1
Slide 12: Loans
Loans Residential Mortgage Loans (US$ Billions) Commercial Loans (US$ Billions) $3.2 $3.4 $3.6 $3.6 $3.3 $1.7 $1.6 $1.4 $1.4 $1.3 48% 49% 50% 49% 49% 45% 49% 48% 46% 48% 18% 18% 21% 23% 22% 22% 18% 18% 21% 22% 34% 32% 2% 5% 7% 29% 29% 29% 9% 9% 32% 29% 26% 24% 21% 2019 2020 2021 2022 2023 2019 2020
Slide 13: Balance Sheet Asset Mix
Balance Sheet Asset Mix Liquidity: Cash & Cash Equivalents** to Total Assets Loan-to-Deposit Ratio 67% 68% 68% 65% 41% 41% 40% 40% 39% 21% 20% 21% 19% 19% 5% 4% 4% 3% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 NTB US Peer Median* NTB US Peer Median* • Butterfield
Slide 14: Asset Quality
Asset Quality Non-Accrual Loans Investment Portfolio (In US$ millions) Loan Distribution Rating Distribution $63.1 $61.0 AAA 0.3% $59.4 Consumer 4.0% Res Mtg 69.2% Comm’l R/E 12.7% Other Comm’l 8.3% AA 99.7% Government 5.8% $4.7 $5.3 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 billion billion 0.20% • In
Slide 15: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Average Balances 3.1% (US$Mil) Weighted 2.5% Average 1.5% 1.7% Life Q4 2023 vs. Q3 2023 Duration vs. Q3 2023 Cash & Reverse Repos & S/T Invest. $ 2,603.6 $ 44.4 0.2 — N/A (1.5)% AFS 1,798.8 (127.2) 3.3 — 4.2 HTM** 3,
Slide 16: Capital Requirements and Dividend Return
Capital Requirements and Dividend Return Regulatory Capital (Basel III) - Total Capital Ratio* Leverage Capital 25.4% 7.8% 8.1% 0.1% 1.0% 8.0% 6.8% 14.7% 13.5% Butterfield - Current US Peer Median** Butterfield Current BMA Minimum US Peer Median** TCE/TA TCE/TA Ex Cash Dividend Payout Ratio • Regula
Slide 17: Credit Suisse Deal Summary
Credit Suisse Deal Summary Deal Timeline Deal Highlights • Establishes Butterfield as meaningful private trust provider in Singapore Revenues by location AUA by location • Series of closings commencing March 2023 with final closing in November 2023 Bahamas 10% • ~$9 million annual fee revenues Singa
Slide 18: Appendix
Appendix
Slide 19: Balance Sheet Movements
Balance Sheet Movements Deposit Movements (US$ millions) Deposit Composition by Currency (US$ billions) FX $13.0 $11.9 $12.0 Volume Translation 6% 6% 6% 20% 19% 19% Change vs Q3 -55 +130 $75 2023 74% 75% 75% Change vs Q4 -1,190 +140 $(1,050) 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 USD / USD Peg
Slide 20: Balance Sheet Trends
Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2023 2022 2021 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Assets Cash and cash equivalents $ 1,647 $ 1,750 $ 1,795 $ 1,345 $ 2,101 $ 1,485 $ 1,340 $ 2,103 $ 2,180 Reverse Repos & S/T Investments 1,225 893 729 1,263 944 995 1,516 1,601 1,29
Slide 21: Average Balance Sheet Trends
Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) Q4 2023 Q3 2023 Q4 2022 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash and cash equivalents, reverse
Slide 22: Income Statement Trends
Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2023 2022 2021 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Net Interest Income $ 86.9 $ 90.2 $ 92.5 $ 97.4 $ 94.6 $ 91.2 $ 82.0 $ 75.9 $ 74.5 Non-Interest Income 60.0 52.0 50.2 50.2 54.9 49.9 51.8 49.9 52.7 Prov. for Credit (Losses) Reco
Slide 23: Non-Interest Income & Expense Trends
Non-Interest Income & Expense Trends (in millions of US Dollars, unless otherwise indicated) 2023 2022 2021 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Non-Interest Income Asset Management $ 8.3 $ 8.0 $ 8.2 $ 7.9 $ 7.4 $ 7.4 $ 7.4 $ 7.5 $ 7.6 Banking 18.6 14.1 12.6 13.6 17.5 14.1 12.9 12.7 15.4 FX Revenue 12.8 11.4
Slide 24: Core Non-Interest Expense Trends
Core Non-Interest Expense* Trends (in millions of US Dollars, unless otherwise indicated) 2023 2022 2021 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Salaries & Benefits* $ 46.2 $ 43.4 $ 42.6 $ 43.7 $ 44.7 $ 42.0 $ 41.2 $ 41.0 $ 41.1 Technology & Comm. 17.2 16.0 14.9 13.9 14.3 14.3 14.0 14.1 15.7 Professional & O/S S
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2023 2022 Q4 Q3 Q2 Q1 Q4 Net income A $ 53.5 $ 48.7 $ 61.0 $ 62.2 $ 63.1 Non-core (gains), losses and expenses Non-core (gains) losses Liquidation settlement from an investment previously written-off — — (4.0) — — Total
Slide 26: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) (in millions of US Dollars, unless otherwise indicated) 2023 2022 Q4 Q3 Q2 Q1 Q4 Tangible equity to tangible assets Shareholders' equity K $ 1,003.6 $ 922.9 $ 950.3 $ 936.9 $ 864.8 Less: goodwill and intangible assets (98.9) (70.6) (74.0) (74.1) (74.4) Tangible co
Slide 27: 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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