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 — Q1 2019 Earnings Presentation
22 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Apr 25, 2019
Slide 1: First Quarter 2019 Earnings Presentation
First Quarter 2019 Earnings Presentation The Bank of N.T. Butterfield & Son Limited April 25, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements: Certain of the statements made in this presentation 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 a
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 • Acquisition Overview • Efficient, Conservative Balance Sheet Chief Fina
Slide 4: First Quarter 2019 Highlights
First Quarter 2019 Highlights Core Net Income** • Net income of $52.1 million, or $0.96 per share • Core Net Income** of $51.7 million, or $0.95 per share (In US$ millions) • Return on average common equity of 23.7%; core return on $51.7 $51.1 $51.7 average tangible common equity** of 25.6% $49.1 $4
Slide 5: Financials
Financials
Slide 6: Income Statement Net Interest Income
Income Statement Net Interest Income Net Interest Margin & Yields Net Interest Income before Provision for Credit Losses - Trend (In US$ millions) Q1 2019 vs. Q4 2018 (In US$ millions) Avg. Balance Yield Avg. Balance Yield $87.4 $88.0 Cash, S/T Inv. & Repos $ 2,441.2 1.65 % $ 721.9 0.25 % $79.9 Inve
Slide 7: Customer Deposits
Customer Deposits Deposit Composition By Currency Average Deposit Volume and Cost of Deposits 5.0% 7.0% 6.1% 5,000 (in $USD millions) 1.41% 13.0% 13.0% 14.7% 82.0% 80.0% 79.2% 4,000 1.12% 3,000 Q1 Q2 Q3 Q4 Q1 2018 2019 USD / USD Pegged GBP 2,000 0.51% Other 0.38% 0.27% 1,000 By Type 0.12% 0.09% 0.04
Slide 8: Income Statement Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) Q1 2019 vs. Q4 2018 $45.7 $43.4 $39.8 Asset management $ 6.7 $ 0.2 Banking 11.2 (1.7) FX Revenue 8.8 0.2 Trust 12.6 (1.2) Custody and Other 2.7 0.3 Other 1.4 (0.2) Q1 Q2 Q3 Q4 Q1 Total Non-Interest Inc
Slide 9: Income Statement Non-Interest Expenses
Income Statement Non-Interest Expenses Core Non-Interest Expense Trend* Core Non-Interest Expenses* vs. Q4 2018 (In US$ millions) (In US$ millions) Q1 2019 $ % Salaries & Benefits** $ 42.8 $ (1.0) 0.3 % $83.1 $80.3 Technology & Comm. 14.6 (0.2) (1.5)% $75.7 Property 5.4 (0.7) (3.8)% 62.3% 61.5% 60.1
Slide 10: Capital Requirements and Return
Capital Requirements and Return Regulatory Capital (Basel III) - Leverage Capital Total Capital Ratio 9.2% 9.1% 22.0% 0.5% 2.1% 16.3% 8.6% 15.4% 7.1% Butterfield Current BMA 2019 Required US Peer Average * Butterfield - Current US Peer Median * TCE/TA TCE/TA Ex Cash • Disciplined capital management
Slide 11: Balance Sheet
Balance Sheet Total Assets (In US$ millions) Q1 2019 Q4 2018 (In US$ billions) Cash & Equivalents $ 2,601 $ 2,054 $11.6 $11.0 $10.8 S/T Investments 215 52 Reverse Repos 72 27 Loans (net) 3,986 4,044 Investments 4,393 4,255 $4.5 $4.3 $4.4 Other Assets 374 340 Total Assets $ 11,643 $ 10,773 $4.0 $4.0
Slide 12: Asset Quality
Asset Quality Non-Accrual Loans Loan Distribution (In US$ millions) Gov’t: 2.8% $53.8 $48.7 Other Comm’l: 11.6% $42.4 $4.0 billion Comm’l R/E: 13.9% Res Mtg: 67.3% Consumer: 4.4% Q1 Q2 Q3 Q4 Q1 2018 2019 Investment Portfolio Rating Distribution Net Charge-Off Ratio 0.10% BBB: 0.2% 0.08% A: 2.0% AA:
Slide 13: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Average Balances (US$Mil) 8.8% 4.8% 4.6% Q1 2019 vs. Q4 2018 Duration vs. Q4 2018 2.9% Cash & Reverse Repos 2,361.9 745.3 N/A N/A (3.4)% S/T Invest. 79.3 (23.4) 0.2 — (9.8)% AFS 2,180.9 (130.0) 2.9 (0.2) -100bps +100
Slide 14: Appendix
Appendix
Slide 15: Balance Sheet Trends
Appendix Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2019 2018 2017 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Assets Cash & Equivalents $ 2,601 $ 2,054 $ 1,259 $ 1,756 $ 1,846 $ 1,535 $ 1,546 $ 1,720 $ 1,867 Reverse Repos 72 27 72 89 198 179 210 184 63 S/T Investments 215 52 76 79
Slide 16: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2019 - Q1 2018 - Q4 2018 - Q3 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash due from banks
Slide 17: Income Statement Trends
Appendix Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2019 2018 2017 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Net Interest Income $ 88.0 $ 87.4 $ 88.3 $ 87.4 $ 79.9 $ 76.1 $ 74.3 $ 71.5 $ 67.9 Non-Interest Income 43.4 45.7 41.3 41.9 39.8 42.4 38.2 38.7 38.5 Prov. for Credit Reco
Slide 18: Non-Interest Income & Expense Trends
Appendix Non-Interest Income & Expense Trends (in millions of US Dollars, unless otherwise indicated) 2019 2018 2017 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Non-Interest Income Trust $ 12.6 $ 13.8 $ 13.1 $ 13.2 $ 10.9 $ 11.3 $ 10.9 $ 11.3 $ 11.4 Asset Management 6.7 6.5 6.5 6.2 6.4 6.6 6.3 5.9 5.8 Banking 11.2 1
Slide 19: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense* Trends (in millions of US Dollars, unless otherwise indicated) 2019 2018 2017 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Salaries & Benefits** $ 42.8 $ 43.7 $ 43.8 $ 40.9 $ 37.0 $ 42.2 $ 37.2 $ 37.1 $ 35.9 Technology & Comm. 14.6 14.8 15.4 14.9 14.6 14.3 13.1 13.3 12.8 Property 5
Slide 20: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2019 2018 Q1 Q4 Q3 Q2 Q1 Net income A $ 52.1 $ 50.9 $ 50.4 $ 49.7 $ 44.2 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 21: Non-GAAP Reconciliation (cont'd)
Appendix Non-GAAP Reconciliation (cont’d) (in millions of US Dollars, unless otherwise indicated) 2019 2018 Q1 Q4 Q3 Q2 Q1 Tangible equity to tangible assets Shareholders' equity $ 896.2 $ 882.3 $ 871.7 $ 848.6 $ 824.2 Less: goodwill and intangible assets (74.1) (74.7) (76.9) (77.3) (90.9) Tangible
Slide 22: 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 22
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