Bank of N T Butterfield & Son : Butterfield Q4 2025 Earnings

About this update from Bank Of N.t. Butterfield & Son Limited (the) Voting

Fourth Quarter and Year-End 2025 The Bank of N.T. Butterfield & Son Limited Earnings Presentation February 10, 2026 Agenda and Overview Presenters Agenda Butterfield Overview Michael Collins Chairman and Chief Executive Officer Michael Schrum President and Group Chief Financial Officer Bri Hidalgo Group Chief Risk Officer Overview Full Year 2025 Highlights Fourth Quarter 2025 Financials Q&A Leading Bank in Attractive Markets Strong Capital Generation and Return Resilient, Capital Efficient, Diversified Fee Revenue Model Efficient, Conservative Balance Sheet Experienced Leadership Team Sustainability Ten International Locations Leading market positions in Bermuda & Cayman Expanding retail offerings in The Channel Islands Well-secured lending in all markets Award winning banking and wealth management offerings Awards 3 Financials Full Year 2025 Highlights (In US$ millions) vs 2024 2025 $ % Net Interest Income $ 364.1 $ 12.9 Non-Interest Income 242.9 12.9 Provision for Credit Losses (0.2) 1.4 Non-Interest Expenses* (374.9) (11.2) Other Gains (Losses) - (0.4) Net Income $ 231.9 $ 15.6 7.2 % Non-Core Items** 5.6 3.0 Core Net Income** $ 237.5 $ 18.6 8.5 % Net income of $231.9 million, or $5.47 per share Core net income** of $237.5 million, or $5.60 per share Return on average common equity of 21.7%; core return on average tangible common equity** of 24.2% Net Interest Margin of 2.69%, cost of deposits of 1.50% Tangible book value per share** of $26.41, an increase of $4.71 per share or 21.7% from the end of 2024 Active capital management with aggregate annual dividends of $1.88 per share in addition to share repurchases of 3.5 million shares for a total of $146.7 million Meroe Park appointed as Independent Director Return on Equity 25.7% 24.2% 24.0% 24.2% 21.4% 21.7% 16.8% 18.7% 28.6% 27.0% Net Income (In US$ millions) 2021 2022 2023 2024 2025 Return on Equity Core Return on Average Tangible Common Equity** $214.0 $215.7 $225.5 $231.5 $216.3 $218.9 $231.9 $237.5 $162.7 $163.6 2021 2022 2023 2024 2025 Net income Core Net Income** * Includes income taxes 5 ** See the Appendix for a reconciliation of non-GAAP measures Fourth Quarter 2025 Highlights (In US$ millions) vs. Q3 2025 vs. Q4 2024 Q4 2025 $ % $ % Net Interest Income $ 92.6 $ (0.1) $ 4.0 Non-Interest Income 66.3 5.1 3.0 Provision for Credit Losses 0.2 0.7 0.4 Non-Interest Expenses* (95.3) (3.1) (3.1) Other Gains (Losses) - - (0.1) Net Income $ 63.8 $ 2.7 4.5 % $ 4.2 7.1 % Non-Core Items** - 2.2 - Core Net Income** $ 63.8 $ 0.5 0.8 % $ 4.2 7.1 % Net income and core net income** of $63.8 million or $1.54 per share Return on average common equity of 22.7%; core return on average tangible common equity** of 24.6% Net Interest Margin of 2.69%, cost of deposits of 1.37% Quarterly cash dividend of $0.50 per common share Repurchases of 0.6 million shares at a total cost of $29.6 million New share repurchase authorization for up to 3.0 million common shares Return on Equity 22.9% 20.9% 22.7% 22.3% 22.5% 20.3% 25.2% 24.2% 25.5% 24.6% Net Income $59.6 $59.6 $61.1 $63.3 $63.8 $63.8 $53.8 $56.7 $53.3 $53.7 (In US$ millions) Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Return on Equity Core Return on Average Tangible Common Equity** Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Net income Core Net Income** * Includes income taxes 6 ** See the Appendix for a reconciliation of non-GAAP measures Income Statement Net Interest Income $88.6 $92.6 (In US$ millions) $92.7 (In US$ millions) Q4 2025 vs Q3 2025 Avg. Balance Yield Avg. Balance Yield Net Interest Margin & Yields Net Interest Income before Provision for Credit Losses -Trend Interest Bearing Liabilities 10,126.3 (1.73)% 109.1 0.12 % Net Interest Margin 2.69 % (0.04)% Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Cash, S/T Inv. & Repos $ 3,588.7 3.44 % $ 114.0 (0.20)% Investments 5,686.1 2.72 % 160.0 0.05 % Loans (net) 4,396.3 6.01 % (74.6) (0.23)% Interest Earning Assets 13,671.1 3.97 % 199.4 (0.14)% Net interest income ("NII") remained relatively flat compared to the prior quarter Net interest margin ("NIM") was lower at 2.69% compared to 2.73% in the prior quarter, primarily due to lower treasury and loan yields as central banks cut market interest rates Average investment volumes continue to increase as assets were deployed into higher yielding available-for-sale investment securities Average loan volumes continued to decrease as amortizations and paydowns outpaced originations 7 Income Statement Non-Interest Income (In US$ millions) Q4 2025 vs. Q3 2025 $63.2 Non-Interest Income Trend (In US$ millions) $61.2 $66.3 Asset management $ 10.4 $ 0.5 Banking 19.7 1.9 Foreign exchange revenue 13.7 0.5 Trust 17.6 1.3 Custody and other 4.0 0.9 Other 0.8 - Total Non-Interest Income $ 66.3 $ 5.1 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Total non-interest income increased $5.1 million versus the prior quarter, primarily due to: higher banking fees due to seasonal increases in card volumes and third party incentive programs; higher trust income from new clients and fee increases; volume-driven increase in foreign exchange fees; and higher asset management revenue driven by increased asset valuations The fee income ratio was 41.7% in the fourth quarter of 2025 which compares favorably to historical peer* averages * Includes US banks identified by management as a peer group. Please see the Appendix for a list of these banks. 8 Income Statement Non-Interest Expenses Core Non-Interest Expenses* vs. Q3 2025 (In US$ millions) Q4 2025 $ % Salaries & Benefits** $ 46.7 $ 0.8 1.8 % Technology & Comm. 16.7 0.6 3.8 % Professional & O/S Services 6.4 1.4 28.6 % Property 8.4 0.2 2.8 % Indirect Taxes 5.4 0.1 1.3 % Marketing 1.9 0.6 40.1 % Intangible Amortization 2.2 0.2 9.5 % Other 5.4 0.6 12.7 % Total Core Non-Interest Expenses* $ 93.1 $ 4.5 5.1 % Non-Core Expenses* - (2.2) >100% Non-Interest Expenses $ 93.1 $ 2.3 2.6 % Core Non-Interest Expense* Trend (In US$ millions) $90.6 $88.5 $93.1 58.2% 56.2% 57.2% Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Core Efficiency Ratio* Core Non-Interest Expenses* Core non-interest expenses* increased compared to the prior quarter with the following underlying movements: higher professional and outside services fees; higher salaries and benefits due to higher staff incentive accrual in-line with positive operating results; and higher marketing expenses from event costs and sponsorship Core efficiency ratio* of 57.2% increased compared to the prior quarter and was favorable to the Bank's through-cycle core efficiency ratio target of 60% * See the Appendix for a reconciliation of non-GAAP measures ** Includes Non-Service Employee Benefits Expense 9 Balance Sheet (In US$ millions) Q4 2025 Q4 2024 % (In US$ billions) Cash and cash equivalents Reverse Repos & S/T Investments $ 1,709 $ 1,853 1,998 1,785 (15)% 4 % $14.2 Investments 5,688 5,513 3 % Loans (net) 4,382 4,474 (2)% Other Assets 462 462 - % vs Q4 2024 Total Assets $14.1 $14.1 Total Assets $ 14,095 $ 14,231 (1)% $5.5 $5.7 $5.7 Int. Bearing Deposits $ 9,997 $ 10,058 (1)% $4.5 $4.5 $4.4 Non-Int. Bearing Deposits 2,701 2,688 1 % Other Liabilities 255 465 (45)% Shareholders' Equity 1,142 1,021 12 % Total Liab. & Equity $ 14,095 $ 14,231 (1)% Total Deposits (In US$ billions) $12.7 $12.7 $12.7 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 10 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Total assets Investments Loans Period end deposit balances remained relatively flat compared to the prior year end at $12.7 billion Average deposit balances increased to $12.8 billion in Q4 2025 from $12.5 billion at the prior year end Butterfield's balance sheet remained low in risk density (risk weighted assets/total assets) at 28.3% Asset Quality Res Mtg 70.6% Loan Distribution Consumer 4.4% Comm'l R/E 12.8% Investment Portfolio Rating Distribution AAA 0.2% $76.7 Non-Accrual Loans (In US$ millions) $91.7 $91.3 Government 6.3% $4.4 billion Other Comm'l 5.9% AA 99.8% $5.7 billion Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 0.20% 0.15% 0.10% 0.05% 0.00% 0.04% Net Charge-Off Ratio 0.01% 0.00% 71% of the total loan portfolio consists of full-recourse residential mortgages of which 79% have loans-to-values below 70% Non-accrual loans were relatively flat for the quarter at 2.1% Allowance for credit losses at $25.4 million represented an ACL/Total loans ratio of 0.6%, consistent with the prior quarter The net charge-off ratio remained at a negligible level as a % of total gross loans Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 11 Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Weighted Average Balances (US$Mil) Average 3.3% 6.6% 2.7% Invest. $ 3,588.7 $ 114.0 0.1 - N/A AFS 2,657.1 227.0 2.9 (0.2) 3.4 (5.3)% Cash & Reverse Repos & S/T Q4 2025 vs. Q3 2025 Duration vs. Q3 2025 Life (1.7)% 1.3% HTM** 3,029.0 (66.9) 7.0 (0.1) 8.0 -100bps +100bps +200bps NTB US Peer Median * Total investment portfolio duration decreased to 4.9 years in line with the fixed portfolio maturing down, partially offset by forward rates rising Interest rate sensitivity has increased against the prior quarter driven by updates to deposit beta assumptions Net unrealized losses on AFS securities improved to $89.4 million as at December 31, 2025 compared with net unrealized losses of $101.5 million as at the end of the third quarter of 2025 Based on implied forward rates, the AFS OCI expected to further improve by 28% in the next 12 months * Includes US banks identified by management as a peer group. Please see the Appendix for a list of these banks. Q3 2025 comparative data is used as Q4 2025 peer information was not widely available at time of publication. ** The HTM portfolio is comprised of securities with negative convexity which typically exhibit lower prepayment speeds when assuming higher future rates. 12 Capital Requirements and Dividend Return Regulatory Capital - Total Capital Ratio* 27.8% 8.6% Leverage Capital 12.4% 11.9% 0.5% 7.5% 1.1% 15.4% 13.5% Butterfield - Current US Peer Median** Butterfield Current BMA Minimum US Peer Median*** TCE/TA TCE/TA Ex Cash Combined Payout Ratio $3.9 $79.9 $77.7 $86.2 $87.3 $88.6 $146.7 $155.3 43% 78% 109% 97% 2022 2023 2024 2025 Regulatory capital levels remain conservatively above minimum requirements Quarterly dividend rate of $0.50 per common share TCE/TA ratio*** of 7.5%, conservatively above the targeted range of 6.0% to 6.5% Tangible book value per share*** increased by 5.4% compared to the prior quarter at $26.41 New Basel 4 rules effective on January 1, 2025 resulted in lower risk weighted assets and improved the regulatory capital ratio by 1.9% Combined Payout Ratio Share Repurchases Cash Dividend * Effective January 1, 2025, the Bank has adopted the BCBS's revised standardized approach for credit risk framework as required by the BMA. 13 ** Includes US banks identified by management as a peer group. Please see the Appendix for a list of these banks. Q3 2025 comparative data is used as Q4 2025 peer information was not widely available at time of publication. *** See the Appendix for a reconciliation of non-GAAP measures Appendix Deposit Composition by Segment Group (US$ Billions) Bermuda (US$ Billions) $12.7 $12.6 $12.8 $12.7 $12.7 21% 20% 20% 20% 21% 44% 48% 49% 49% 49% 31% 31% 31% 31% 35% Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 $4.8 $4.5 $4.5 $4.8 $4.5 35% 35% 36% 33% 35% 40% 44% 46% 44% 45% 21% 19% 20% 20% 26% Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Cayman (US$ Billions) Channel Islands (US$ Billions) $4.0 $3.9 $4.0 $3.8 $4.1 30% 28% 26% 26% 27% 44% 47% 50% 50% 46% 27% 25% 24% 24% 27% Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 $4.0 $4.2 $4.3 $4.2 $4.2 48% 1% 1% 1% 53% 49% 1% 1% 52% 54% 46% 50% 48% 45% 51% Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 15 Loans Residential Mortgage Loans (US$ Billions) Commercial Loans (US$ Billions) 50% 49% 49% 50% 54% 21% 23% 22% 21% 19% 29% 29% 29% 28% 27% $3.6 $3.6 $3.3 $3.1 $3.1 25% 6% 18% 23% 21% 24% 26% 9% 10% 9% 7% 22% 18% 22% 21% 51% 46% 48% 46% 48% $1.3 $1.4 $1.4 $1.3 $1.1 2021 2022 2023 2024 2025 Bermuda Cayman UK and Channel Islands 2021 2022 2023 2024 2025 Commercial and Industrial Commercial Overdrafts Government Commercial Real Estate 55% 53% 49% 57% 43% 42% Loan Portfolio Composition by Originating Segment (US$ Billions) Fixed vs. Floating Rate Loans (US$ Billions) $5.2 $5.1 $4.7 $4.5 $4.4 $5.2 $5.1 $4.7 $4.5 $4.4 20% 41% 19% 81% 37% 37% 25% 24% 38% 39% 45% 43% 47% 51% 33% 34% 39% 24% 24% 2021 2022 2023 2024 2025 Bermuda Cayman UK and Channel Islands 2021 2022 2023 2024 2025 Fixed Floating 16 Balance Sheet Movements Deposit Movements (US$ millions) Deposit Composition by Currency (US$ billions) 7% 6% 6% 71% 71% 72% 23% 23% 21% +5 -25 FX Translation Volume $12.7 $12.7 $12.7 Change vs Q3 2025 $-20 Change vs Q4 2024 $-50 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 +310 -360 USD / USD Pegged GBP Other Total deposits Loan Movements (US$ millions) Loan Composition by Currency (US$ billions) -% -% 42% 42% 58% 58% 61% 1% 39% -90 +5 $4.5 $4.5 $4.4 Change vs Q3 2025 $-85 Change vs Q4 2024 $-90 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 -220 +130 USD / USD Pegged GBP Other Total loans 17 Balance Sheet Asset Mix 36% 36% 35% 35% 35% NTB US Peer Median* NTB US Peer Median* Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 70% 71% 71% 71% Liquidity: Cash & Cash Equivalents** to Total Assets Loan-to-Deposit Ratio 27% 26% 26% 25% 4% 5% 5% 5% 25% Butterfield takes a conservative approach to managing the liquidity and funding risk profile of its balance sheet. This involves the retention of a significant liquidity holding of cash or cash equivalent balances, comprised of interbank deposits and short-dated sovereign Canadian, UK and US Treasury Bills, as well as maintaining significant liquidity facilities with correspondent banks Butterfield also maintains capital, liquidity and funding buffers conservatively in excess of regulatory requirements * Includes US banks identified by management as a peer group. Please see the Appendix for a list of these banks. Q4 2025 peer information was not widely available at time of publication and therefore not included. ** Includes securities purchased under agreements to resell and short-term investments. 18 Balance Sheet Trends Q2 Q1 Q4 Q 1,450 $ 2,097 $ 1,998 $ 2,067 2,247 1,498 1,785 1,750 5,458 5,448 5,513 5,468 4,578 4,518 4,474 4,648 453 458 462 441 14,185 $ 14,020 $ 14,231 $ 14,373 12,838 $ 12,608 $ 12,746 $ 12,738 - 99 99 99 278 256 366 472 13,116 $ 12,962 $ 13,211 $ 13,309 1,069 $ 1,058 $ 1,021 $ 1,064 1,069 $ 1,058 $ 1,021 $ 1,064 14,185 $ 14,020 $ 14,231 $ 14,373 Q4 Q Assets Cash and cash equivalents $ 1,709 $ 1,501 Reverse Repos & S/T Investments 1,853 1,987 Investments 5,688 5,675 Loans, Net 4,382 4,468 Other Assets 462 456 Total Assets $ 14,095 $ 14,086 Liabilities and Equity Total Deposits $ 12,698 $ 12,721 Long-Term Debt Other Liabilities - 255 - 259 Total Liabilities $ 12,953 $ 12,980 Common Equity $ 1,142 $ 1,106 Total Equity $ 1,142 $ 1,106 (in millions of US Dollars, unless otherwise indicated) 2025 2024 2023 3 3 Q2 Q1 Q4 $ $ 2,390 $ 1,746 $ 1,647 1,289 1,480 1,225 5,168 5,168 5,292 4,585 4,644 4,746 506 490 464 $ $ 13,939 $ 13,528 $ 13,374 $ $ 12,548 $ 12,131 $ 11,987 99 99 98 293 304 285 $ $ 12,940 $ 12,533 $ 12,370 $ $ 999 $ 995 $ 1,004 $ $ 999 $ 995 $ 1,004 Total Liabilities and Equity $ 14,095 $ 14,086 $ $ 13,939 $ 13,528 $ 13,374 Key Metrics CET 1 Ratio 27.6 % 26.9 % 26.0 % 25.2 % 23.5 % 22.1 % 22.5 % 22.6 % 23.0 % Total Tier 1 Capital Ratio 27.6 % 26.9 % 26.0 % 25.2 % 23.5 % 22.1 % 22.5 % 22.6 % 23.0 % Total Capital Ratio 27.8 % 27.0 % 26.2 % 27.7 % 25.8 % 24.3 % 24.8 % 24.9 % 25.4 % Leverage ratio 7.6 % 7.5 % 7.3 % 7.4 % 7.3 % 7.1 % 7.3 % 7.5 % 7.6 % Risk-Weighted Assets (in $ millions) 3,991 4,014 4,063 4,207 4,539 4,776 4,668 4,648 4,541 Risk-Weighted Assets / total assets 28.3 % 28.5 % 28.6 % 30.0 % 31.9 % 33.2 % 33.5 % 34.4 % 34.0 % Tangible common equity ratio 7.5 % 7.3 % 6.9 % 6.9 % 6.6 % 6.8 % 6.5 % 6.7 % 6.8 % Book value per common share (in $) 28.58 27.25 26.01 25.07 23.78 24.09 22.12 21.53 21.39 Tangible book value per share (in $) 26.41 25.06 23.77 22.94 21.70 21.90 20.03 19.45 19.29 Non-accrual loans/gross loans 2.1 % 2.0 % 2.0 % 2.3 % 1.7 % 1.9 % 1.5 % 1.3 % 1.3 % Non-performing assets/total assets 0.8 % 1.0 % 0.8 % 1.1 % 1.1 % 1.5 % 1.1 % 1.2 % 1.0 % Allowance for credit losses/total loans 0.6 % 0.6 % 0.6 % 0.6 % 0.6 % 0.6 % 0.5 % 0.5 % 0.5 % * Effective January 1, 2025, the Bank has adopted the BCBS's revised standardized approach for credit risk framework as required by the BMA. Comparatives were prepared under the prior credit risk framework. 19 Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) Q4 2025 Q3 2025 Q4 2024 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash and cash equivalents, reverse investments $ 3,588.7 $ 31.1 3.44 % $ 3,474.7 $ 31.9 3.64 % $ 3,441.1 $ 36.9 4.25 % Investment in securities 5,686.1 39.0 2.72 % 5,526.0 37.2 2.67 % 5,457.3 34.5 2.51 % AFS 2,657.1 21.9 3.27 % 2,430.1 19.8 3.24 % 2,173.0 15.8 2.89 % HTM 3,029.0 17.1 2.24 % 3,095.9 17.4 2.23 % 3,284.3 18.6 2.25 % Loans 4,396.3 66.6 6.01 % 4,470.9 70.3 6.24 % 4,573.2 74.1 6.43 % Commercial 1,188.6 18.3 6.11 % 1,226.6 20.3 6.57 % 1,321.9 21.2 6.36 % Consumer 3,207.7 48.3 5.98 % 3,244.3 50.0 6.11 % 3,251.3 52.9 6.45 % Total interest earning assets 13,671.1 136.8 3.97 % 13,471.6 139.4 4.11 % 13,471.6 145.5 4.28 % Other assets 444.9 445.4 429.8 Total assets $ 14,116.0 $ 13,917.0 $ 13,901.4 Liabilities Deposits - interest bearing $ 10,125.1 $ (44.1) (1.73)% $ 10,017.1 $ (46.7) (1.85)% $ 9,943.7 $ (54.4) (2.17)% Securities sold under agreement to repurchase 1.2 - (4.53)% - - - % 97.8 (1.1) (4.27)% Long-term debt - - - % - - - % 98.7 (1.4) (5.51)% Interest bearing liabilities 10,126.3 (44.2) (1.73)% 10,017.1 (46.7) (1.85)% 10,140.2 (56.8) (2.22)% Non-interest bearing customer deposits 2,645.9 2,616.7 2,509.5 Other liabilities 238.2 231.2 245.3 Total liabilities $ 13,010.3 $ 12,865.0 $ 12,895.0 Shareholders' equity 1,105.6 1,052.0 1,006.4 Total liabilities and shareholders' equity $ 14,116.0 $ 13,917.0 $ 13,901.4 repurchase agreements and short-term Non-interest bearing funds net of non- interest earning assets (free balance) $ 3,544.8 $ 3,454.5 $ 3,331.5 Net interest margin $ 92.6 2.69 % $ 92.7 2.73 % $ 88.6 2.61 % 20 Attention : This is an excerpt of the original content. To continue reading it, access the original document here .

View stock analysis, news, and events for Bank Of N.t. Butterfield & Son Limited (the) Voting