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 2018 Earnings Presentation
21 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Oct 24, 2018
Slide 1: Third Quarter 2018 Earnings Presentation
Third Quarter 2018 Earnings Presentation The Bank of N.T. Butterfield & Son Limited October 24, 2018
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: Third Quarter 2018 Earnings Presentation
Third Quarter 2018 Earnings Presentation 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 • Summary • Efficient, Conservative Balance Sheet Ch
Slide 4: Third Quarter 2018 Highlights
Third Quarter 2018 Highlights Core Net Income** • Net income of $50.4 million, or $0.90 per share (In US$ millions) • Core Net Income** of $49.1 million, or $0.88 per share $51.7 • Return on average common equity of 23.2%; core return on $49.1 $45.0 average tangible common equity** of 24.9% $40.7 $4
Slide 5: Financials
Financials
Slide 6: Income Statement Net Interest Income
Income Statement Net Interest Income Net Interest Income before Provision for Credit Losses - Net Interest Margin & Yields Trend (In US$ millions) (In US$ millions) Q3 2018 vs. Q2 2018 Avg. Balance Yield Avg. Balance Yield $87.4 $88.3 Cash, S/T Inv. & Repos $ 1,668.0 1.38 % $ (680.0) 0.02 % Investme
Slide 7: Income Statement Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) $41.9 $41.3 Q3 2018 vs. Q2 2018 $38.2 Asset management $ 6.5 $ 0.3 Banking 10.6 (0.2) FX Revenue 7.8 (0.4) Trust 13.1 (0.1) Custody and Other 2.2 (0.2) Other 1.0 (0.1) Q3 Q4 Q1 Q2 Q3 Total Non-Interest
Slide 8: Income Statement Non-Interest Expenses
Income Statement Non-Interest Expenses Non-Interest Expense Trend Core Non-Interest Expenses* vs. Q2 2018 (In US$ millions) (In US$ millions) Q3 2018 $ % $82.2 Salaries & Benefits** $ 43.8 $ 2.9 0.3 % $78.2 Technology & Comm. 15.4 0.5 (1.5)% $73.6 Property 5.3 — (3.8)% Professional & O/S Services 6.
Slide 9: Capital Requirements and Return
Capital Requirements and Return Regulatory Capital (Basel III) - Leverage Capital Total Capital Ratio 23.3% 8.9% 8.7% 0.4% 1.0% 8.5% 7.7% 15.6% 14.0% Butterfield - Current US Peer Median * Butterfield Current BMA 2018 Required US Peer Average * TCE/TA TCE/TA Ex Cash • Conservative capital management
Slide 10: Balance Sheet
Balance Sheet Total Assets (In US$ millions) Q3 2018 Q4 2017 (In US$ billions) Cash & Equivalents $ 1,259 $ 1,535 $10.6 $11.0 S/T Investments 76 250 $10.4 Reverse Repos 72 179 Loans (net) 4,092 3,777 Investments 4,576 4,706 $4.6 $4.7 $4.6 Other Assets 355 332 Total Assets $ 10,430 $ 10,779 $4.0 $4.1
Slide 11: Asset Quality
Asset Quality Loan Distribution Non-Accrual Loans (In US$ millions) Gov’t: 5.9% Other Comm’l: 12.2% $48.7 $44.0 $44.2 $4.1 billion Res Mtg: 63.0% Comm’l R/E: 14.5% Consumer: 4.4% Q3 Q4 Q1 Q2 Q3 2017 2018 Investment Portfolio Rating Distribution Net Charge-Off Ratio 0.10% BBB: 0.5% 0.08% A: 1.9% AA:
Slide 12: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity 7.3% Average Balances (US$Mil) 4.0% 3.7% 2.1% Q3 2018 vs. Q2 2018 Duration vs. Q2 2018 Cash & Reverse Repos 1,559.6 (667.5) N/A N/A (3.7)% S/T Invest. 108.4 (12.5) 0.2 (0.2) (9.2)% AFS 2,742.7 (179.3) 3.2 — -100bps +
Slide 13: Appendix
Appendix
Slide 14: Balance Sheet Trends
Appendix Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2018 2017 2016 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Assets Cash & Equivalents $ 1,259 $ 1,756 $ 1,846 $ 1,535 $ 1,546 $ 1,720 $ 1,867 $ 2,102 $ 1,485 Reverse Repos 72 89 198 179 210 184 63 149 186 S/T Investments 76 79 100 2
Slide 15: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2018 - Q3 2018 - Q2 2017 - Q3 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash due from banks
Slide 16: Income Statement Trends
Appendix Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2018 2017 2016 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Net Interest Income $ 88.3 $ 87.4 $ 79.9 $ 76.1 $ 74.3 $ 71.5 $ 67.9 $ 66.8 $ 65.0 Non-Interest Income 41.3 41.9 39.8 42.4 38.2 38.7 38.5 38.8 36.3 Prov. for Credit Reco
Slide 17: Non-Interest Income & Expense Trends
Appendix Non-Interest Income & Expense Trends (in millions of US Dollars, unless otherwise indicated) 2018 2017 2016 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Non-Interest Income Trust $ 13.1 $ 13.2 $ 10.9 $ 11.3 $ 10.9 $ 11.3 $ 11.4 $ 11.5 $ 11.6 Asset Management 6.5 6.2 6.4 6.6 6.3 5.9 5.8 6.0 5.6 Banking 10.6 1
Slide 18: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense Trends (in millions of US Dollars, unless otherwise indicated) 2018 2017 2016 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Salaries & Benefits* $ 43.8 $ 40.9 $ 37.0 $ 42.2 $ 37.2 $ 37.1 $ 35.9 $ 34.0 $ 33.6 Technology & Comm. 15.4 14.9 14.6 14.3 13.1 13.3 12.8 14.4 14.2 Property 5.3
Slide 19: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2018 2017 Q3 Q2 Q1 Q4 Q3 Net income to common shareholders A $ 50.4 $ 49.7 $ 44.2 $ 40.3 $ 41.1 Non-core (gains), losses and expenses Non-core (gains) losses Gain on disposal of a pass-through note investment (f
Slide 20: Non-GAAP Reconciliation (cont'd)
Appendix Non-GAAP Reconciliation (cont’d) (in millions of US Dollars, unless otherwise indicated) 2018 2017 Q3 Q2 Q1 Q4 Q3 Tangible equity to tangible assets Shareholders' equity $ 871.7 $ 848.6 $ 824.2 $ 822.9 $ 802.4 Less: goodwill and intangible assets (76.9) (77.3) (90.9) (60.6) (61.4) Tangible
Slide 21: 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 21
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