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 2022 Earnings Presentation
24 slides from Bank Of N.t. Butterfield & Son Limited (the) Voting's earnings presentation, Nov 1, 2022
Slide 1: Third Quarter 2022 Earnings Presentation
Third Quarter 2022 Earnings Presentation The Bank of N.T. Butterfield & Son Limited November 1, 2022
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 2022 Financials • Strong Capital Generation and Return Craig Bridgewater • Q&A • Resilient, Capital Efficient, Diversified F
Slide 4: Third Quarter 2022 Highlights
Third Quarter 2022 Highlights • Net income of $57.4 million, or $1.15 per share (In US$ millions) vs. Q2 2022 vs. Q3 2021 • Core net income** of $57.6 million or $1.16 per share Q3 2022 $ % $ % • Return on average common equity of 28.5%; core return on average Net Interest Income $ 91.2 $ 9.2 $ 15.5
Slide 5: Financials
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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) (In US$ millions) Q3 2022 vs. Q2 2022 $91.2 Avg. Balance Yield Avg. Balance Yield Cash, S/T Inv. & Repos $ 2,818.4 1.40 % $ (546.1) 0.90 % $82.0 Investme
Slide 7: Income Statement: Non-Interest Income
Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) $51.8 Q3 2022 vs. Q2 2022 $49.0 $49.9 Asset management $ 7.4 $ — Banking 14.1 1.1 Foreign exchange revenue 11.8 (0.2) Trust 12.6 (0.7) Custody and other 3.3 — Other 0.7 (2.1) 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 2022 (In US$ millions) (In US$ millions) Q3 2022 $ % $84.2 $81.9 $81.8 Salaries & Benefits** $ 42.0 $ 0.7 1.7 % Technology & Comm. 14.3 0.3 2.0 % Professional & O/S Services 4.7 (0.7) (13.3)% P
Slide 9: Capital Requirements and Dividend Return
Capital Requirements and Dividend Return Regulatory Capital (Basel III) - Total Capital Ratio* Leverage Capital 22.7% 7.8% 0.4% 5.6% 0.6% 7.4% 14.1% 5.0% 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 10: Balance Sheet
Balance Sheet Total Assets vs Q4 2021 (In US$ millions) Q3 2022 Q4 2021 % (In US$ billions) Cash & Equivalents $ 1,485 $ 2,180 (32)% $15.3 $14.3 $13.7 Reverse Repos & S/T Investments 995 1,295 (23)% Investments 5,805 6,237 (7)% Loans (net) 4,992 5,241 (5)% Other Assets 422 382 10 % $6.0 $6.0 $5.8 To
Slide 11: Balance Sheet Movements
Balance Sheet Movements Deposit Movements Deposit Currency by Segment (in US$ millions) (in US$ billions) FX $4.5 Volume $4.3 Translation $0.2 $0.2 $0.1 $0.2 $3.7 $0.3 Change vs Q2 2022 $(610) (350) (260) $1.6 $3.1 $2.0 $2.5 $— $1.3 $1.0 Change vs Q4 2021 $(1,400) (800) (600) Bermuda Cayman UK and C
Slide 12: Asset Quality
Asset Quality Non-Accrual Loans Investment Portfolio (In US$ millions) Loan Distribution Rating Distribution $63.8 $62.2 AA 3.8% $60.9 Consumer 3.9% A 0.4% Res Mtg 68.3% Comm’l R/E 12.8% Other Comm’l 9.1% Government 5.9% AAA 95.8% $5.0 billion $5.8 billion Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 0.2
Slide 13: Interest Rate Sensitivity
Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Average Balances (US$Mil) Weighted Average Life 9.3% Q3 2022 vs. Q2 2022 Duration vs. Q2 2022 5.4% 4.2% Cash & Reverse 2.1% Repos & S/T Invest. 2,818.4 (546.1) 0.2 <0.02 N/A AFS 2,140.1 (619.9) 3.7 (0.2) 4.8 HTM** 3,
Slide 14: Appendix
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Slide 15: Deposits
Appendix Deposits Average Deposit Volume and Cost of Deposits Deposit Composition (In US$ millions) By Currency 5.4% 5.6% 5.4% 4,000 21.7% 20.5% 19.1% 3,500 72.9% 73.8% 75.5% 3,000 2,500 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Deposits 1.17% USD / USD Pegged GBP Other 2,000 0.64% 0.72% 0.34% By Type
Slide 16: Residential Mortgage Loans and Commercial Loans
Appendix Residential Mortgage Loans (US$ Billions) Commercial Loans (US$ Billion) $2.7 $3.2 $3.4 $3.6 $3.4 $1.2 $1.7 $1.6 $1.4 $1.4 37% 48% 49% 50% 46% 47% 45% 49% 48% 46% 21% 18% 23% 9% 18% 21% 3% 22% 21% 18% 18% 42% 2% 5% 7% 34% 32% 8% 29% 30% 42% 32% 29% 26% 25% 2018 2019 2020 2021 Q3 2022 2018 2
Slide 17: Balance Sheet Trends
Appendix Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2022 2021 2020 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Assets Cash & Equivalents $ 1,485 $ 1,340 $ 2,103 $ 2,180 $ 2,310 $ 2,766 $ 2,582 $ 3,290 $ 2,161 Reverse Repos & S/T Investments 995 1,516 1,601 1,295 1,446 1,651 1,236 1,
Slide 18: Average Balance Sheet Trends
Appendix Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) Q3 2022 Q2 2022 Q3 2021 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash due from banks, reve
Slide 19: Income Statement Trends
Appendix Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2022 2021 2020 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Net Interest Income $ 91.2 $ 82.0 $ 75.9 $ 74.5 $ 75.7 $ 74.7 $ 74.9 $ 75.6 $ 75.3 Non-Interest Income 49.9 51.8 49.9 52.7 49.0 48.8 47.6 47.8 46.9 Prov. for Credit Reco
Slide 20: Non-Interest Income & Expense Trends
Appendix Non-Interest Income & Expense Trends (in millions of US Dollars, unless otherwise indicated) 2022 2021 2020 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Non-Interest Income Asset Management $ 7.4 $ 7.4 $ 7.5 $ 7.6 $ 7.4 $ 7.4 $ 7.4 $ 7.2 $ 6.8 Banking 14.1 12.9 12.7 15.4 12.6 12.5 11.4 13.6 13.4 FX Revenue 1
Slide 21: Core Non-Interest Expense Trends
Appendix Core Non-Interest Expense* Trends (in millions of US Dollars, unless otherwise indicated) 2022 2021 2020 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Salaries & Benefits** $ 42.0 $ 41.2 $ 41.0 $ 41.1 $ 42.0 $ 41.8 $ 39.0 $ 40.6 $ 42.2 Technology & Comm. 14.3 14.0 14.1 15.7 16.3 15.7 16.1 16.1 16.3 Profession
Slide 22: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2022 2021 Q3 Q2 Q1 Q4 Q3 Net income A $ 57.4 $ 49.1 $ 44.4 $ 41.7 $ 39.8 Non-core expenses Early retirement program, voluntary separation, redundancies and other non-core compensation costs — 1.0 — — — Tax compl
Slide 23: Non-GAAP Reconciliation (cont'd)
Appendix Non-GAAP Reconciliation (cont'd) (in millions of US Dollars, unless otherwise indicated) 2022 2021 Q3 Q2 Q1 Q4 Q3 Tangible equity to tangible assets Shareholders' equity K $ 754.9 $ 802.4 $ 841.8 $ 977.5 $ 973.9 Less: goodwill and intangible assets (71.9) (77.5) (82.9) (86.1) (87.3) Tangibl
Slide 24: Peer Group
Appendix Peer Group Our peer group includes the following banks, noted by their ticker symbols: • First Republic Bank (FRC) • First Hawaiian, Inc. (FHB) • SVB Financial Group (SIVB) • Bank of Hawaii Corporation (BOH) • East West Bancorp, Inc. (EWBC) • Trustmark Corporation (TRMK) • Cullen/Frost Bank
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