Bank of N.T. Butterfield & Son Ltd

For the period ended Dec 31, 2023. Filed Feb 21, 2024.

About this filing

The yearly report of a company based outside the US. It covers much of what a 10-K does, and may follow accounting rules other than US ones.

FY2023 · Filed Feb 21, 2024

NTB$54.74+0.2%Stored close · as of Nov 6, 2026

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Contents

E. Selected Statistical Data

The following tables present select statistical information as required by subpart 1400 of Regulation S-K.

Distribution of Assets, Liabilities and Shareholders' Equity; Interest Rates and Interest Differential

Average Balance Sheet and Interest Rates

The following table presents average consolidated balance sheets and net interest income for the years indicated:

2023 · 2022 · 2021
(in millions of $) · Averagebalance · Interestincome(expense) · Averageyield/rate · Averagebalance · Interestincome(expense) · Averageyield/rate · Averagebalance · Interestincome(expense) · Averageyield/rate
Assets
Cash and cash equivalents — Interest bearing	1,704.1		67.3		3.95%		1,903.9	19.8	1.04%		2,615.4		0.5	0.02%
Securities purchased under agreement to resell	81.7		4.6		5.62%		118.2	2.5	2.12%		148.1		0.9	0.60%
Short-term investments	862.9		40.3		4.67%		1,110.6	10.9	0.98%		1,208.7		0.1	0.01%
Available-for-sale	1,925.3		35.6		1.85%		2,581.8	38.9	1.51%		3,105.4		48.4	1.56%
Held-to-maturity	3,604.8		80.5		2.23%		3,476.3	76.9	2.21%		2,587.8		53.5	2.07%
Investment in securities(1)	5,530.1		116.1		2.10%		6,058.1	115.8	1.91%		5,693.2		101.9	1.79%
Commercial loans	1,393.9		93.1		6.68%		1,477.5	76.7	5.19%		1,585.8		72.1	4.55%
Consumer loans	3,519.8		224.2		6.37%		3,616.0	172.7	4.78%		3,614.0		149.5	4.14%
Total loans, net of allowance for credit losses(2)	4,913.7		317.4		6.46%		5,093.5	249.4	4.90%		5,199.9		221.5	4.26%
Interest-earning assets	13,092.5		545.6		4.17%		14,284.3	398.4	2.79%		14,865.3		324.9	2.19%
Other assets	409.1					370.3			367.4
Total assets	13,501.5					14,654.6			15,232.7
Liabilities
Deposits	9,410.9		(170.5)		(1.81)%		10,269.1	(45.2)	(0.44)%		10,845.3		(15.5)	(0.14)%
Securities sold under agreement to repurchase	1.4		(0.1)		(5.59)%		0.6	—	(3.95)%		—		—	—%
Long-term debt	129.2		(8.1)		(6.26)%		172.1	(9.6)	(5.58)%		171.7		(9.6)	(5.59)%
Interest bearing liabilities	9,541.4		(178.7)		(1.87)%		10,441.8	(54.8)	(0.52)%		11,016.9		(25.1)	(0.23)%
Non-interest bearing current accounts	2,803.6					3,033.3			2,895.0
Other liabilities	248.2					284.3			295.1
Total liabilities	12,593.2					13,759.3			14,207.0
Shareholders' equity	908.3					895.3			1,025.7
Total liabilities and shareholders' equity	13,501.5					14,654.6			15,232.7
Non-interest bearing funds net of non-interest-earning assets (free balance)	3,551.1					3,842.5			3,848.4
Net interest margin		367.0		2.80%			343.6	2.41%		299.8		2.02%
Net interest spread			2.62%				2.32%		1.95%
Ratio of average interest earning asset/ interest bearing liabilities	137.2%				136.8%			134.9%

(2)Interest income and rates on loans include loan fees (2023: $5.1 million; 2022: $6.3 million and 2021: $7.0 million). Additionally, average non-accrual loans were included in the average loan balances used to determine the average yield on loans in all of the periods presented. Interest income on non-accrual loans is recognized only to the extent it is received in cash. See "Note 2: Significant accounting policies" of our audited consolidated financial statements for further information.

Analysis of Changes in Volume and Rate on Interest Income and Interest Expense

The following table presents the amount of changes in interest income and interest expense from December 31, 2022 to December 31, 2023 and from December 31, 2021 to December 31, 2022, due to changes in both average volume and average rate. Changes not solely due to volume or rate have been allocated to volume.

2023 compared to 2022 · 2022 compared to 2021
(in millions of $) · Increase/(Decrease)due toChanges in · NetIncrease/(Decrease) · Increase/(Decrease)due toChanges in · NetIncrease/(Decrease)
Volume · Rate · Volume · Rate
Interest income related to:
Cash and cash equivalents — Interest bearing	(7.82)	55.32	47.50	(7.45)	26.75	19.30
Securities purchased under agreement to resell	(2.03)	4.13	2.10	(0.65)	2.25	1.60
Short-term investments	(11.60)	41.00	29.40	(0.98)	11.78	10.80
Available-for-sale	(12.09)	8.79	(3.30)	(7.91)	(1.59)	(9.50)
Held-to-maturity	2.79	0.81	3.60	19.68	3.72	23.40
Total investment in securities(1)	(9.30)	9.60	0.30	11.77	2.13	13.90
Commercial loans	(5.61)	22.01	16.40	(5.67)	10.27	4.60
Consumer loans	(6.18)	57.68	51.50	0.09	23.11	23.20
Total loans, net of allowance for credit losses(2)	(11.79)	79.69	67.90	(5.58)	33.38	27.80
Total interest-earning assets	(42.54)	189.74	147.20	(2.89)	76.29	73.40
Interest expenses related to:
Deposits	15.59	(140.89)	(125.30)	2.53	(32.23)	(29.70)
Long-term debt	2.68	(1.18)	1.50	(0.02)	0.02	—
Total interest bearing liabilities	18.27	(142.07)	(123.80)	2.51	(32.21)	(29.70)
Change in net interest income	(24.27)	47.67	23.40	(0.38)	44.08	43.70

Investment Portfolio

The following table presents an analysis of the weighted average yields for interest bearing debt securities as at December 31, 2023:

	Remaining term to maturity
	Within1 year	1 to 5years	After 5 through 10years	After 10years	No specific or singlematurity	Total
Available-for-sale (measured at fair value)
US government and federal agencies	1.27%	1.08%	—%	—%	2.74%	2.01%
Non-US governments debt securities	0.49%	0.58%	—%	—%	—%	0.52%
Asset-backed securities - Student loans	—%	—%	—%	—%	1.69%	1.69%
Residential mortgage-backed securities	—%	—%	—%	—%	3.23%	3.23%
Weighted average yield(1)	0.94%	1.00%	—%	—%	2.75%	1.83%
Held-to-maturity (measured at amortized cost)
US government and federal agencies	—%	—%	—%	—%	2.50%	2.50%
Weighted average yield(1)	—%	—%	—%	—%	2.50%	2.50%
Total Weighted average yield(1)	0.94%	1.00%	—%	—%	2.55%	2.26%

Loan Portfolio

Maturity Profile of the Loan Portfolio

The following table presents certain items in our loan portfolio by contractual maturity as at December 31, 2023:

	Remaining term to average contractual maturity
(in millions of $)	Within1 year	1 to 5years	After 5years through 15 years	After 15 years	No specific maturity(1)	Total
Commercial loans
Government	16.9	6.4	251.7	—	—	275.0
Commercial and industrial	75.6	192.5	12.3	1.7	—	282.1
Commercial overdrafts	118.8	—	—	—	—	118.8
Total Commercial loans	211.3	198.9	264.0	1.7	—	675.9
Commercial real estate loans
Commercial mortgage	13.5	167.2	408.0	8.1	—	596.8
Construction	1.6	7.3	2.0	—	—	10.9
Total Commercial real estate loans	15.1	174.5	410.0	8.1	—	607.7
Consumer loans
Automobile financing	1.0	16.8	1.1	—	—	18.9
Credit card	85.6	—	—	—	—	85.6
Overdrafts	42.7	—	—	—	—	42.7
Other consumer	9.8	19.1	13.0	2.6	—	44.5
Total Consumer loans	139.1	35.9	14.1	2.6	—	191.7
Total Residential mortgages	446.3	946.6	810.4	1,096.9	—	3,300.2
Non-interest bearing items without a contractual maturity(1)	—	—	—	—	(3.9)	(3.9)
Total	811.8	1,355.9	1,498.5	1,109.3	(3.9)	4,771.6

The following table presents our loan portfolio by maturity and type of interest as at December 31, 2023:

	Remaining term to average contractual maturity
(in millions of $)	Within1 year	1 to 5years	After 5years through 15 years	After 15 years	No specific maturity(1)	Total
Loans with fixed interest rates:
Commercial loans	1.9	59.9	259.1	—	—	320.9
Commercial real estate loans	0.3	105.1	267.7	6.2	—	379.3
Consumer loans	1.3	4.4	3.7	1.2	—	10.6
Residential mortgages	141.2	573.3	336.2	669.8	—	1,720.5
Total Loans with fixed interest rates	144.7	742.7	866.7	677.2	—	2,431.3
Loans with floating or adjustable interest rates:
Commercial loans	209.4	139.0	4.9	1.7	—	355.0
Commercial real estate loans	14.8	69.4	142.3	1.9	—	228.4
Consumer loans	137.8	31.5	10.4	1.3	—	181.0
Residential mortgages	305.1	373.3	474.2	427.2	—	1,579.8
Total loans with floating or adjustable interest rates	667.1	613.2	631.8	432.1	—	2,344.2
Non-interest bearing items without a contractual maturity(1)	—	—	—	—	(3.9)	(3.9)
Total loans	811.8	1,355.9	1,498.5	1,109.3	(3.9)	4,771.6

(1)Included here are items without a contractual maturity such as deferred loans fees and fair value adjustments.

Credit Ratios

The following table presents our credit ratios for the years indicated:

(in millions of $)	2023	2022	2021
Allowance for credit losses to total loans outstanding:
Allowance for credit losses	25.8	25.0	28.1
Total loans outstanding	4,771.6	5,121.4	5,268.7
	0.5%	0.5%	0.5%
Non-accrual loans to total loans outstanding:
Non-accrual loans	61.0	63.1	61.0
Total loans outstanding	4,771.6	5,121.4	5,268.7
	1.3%	1.2%	1.2%
Allowance for credit losses to non-accrual loans:
Allowance for credit losses	25.8	25.0	28.1
Non-accrual loans	61.0	63.1	61.0
	42.2%	39.6%	46.0%
Net charge-offs (recoveries) during the period to average loans outstanding:
Commercial loans
Net charge-offs (recoveries) during the period	1.5	1.3	0.0
Average amount outstanding	678.7	741.4	758.1
	0.22%	0.18%	0.01%
Commercial real estate loans
Net charge-offs (recoveries) during the period	0.0	0.0	0.0
Average amount outstanding	608.2	647.3	747.0
	—%	—%	—%
Consumer loans
Net charge-offs (recoveries) during the period	0.8	1.6	(0.1)
Average amount outstanding	188.0	195.7	211.1
	0.43%	0.80%	(0.05)%
Residential Mortgages
Net charge-offs (recoveries) during the period	1.5	2.7	2.5
Average amount outstanding	3,431.1	3,514.8	3,516.9
	0.04%	0.08%	0.07%
Total loans
Net charge-offs (recoveries) during the period	3.8	5.5	2.5
Average amount outstanding	4,913.7	5,093.5	5,199.9
	0.08%	0.11%	0.05%

Allowance for credit losses to loans outstanding remained flat at 0.5% in 2023 and 2022.

Non-accrual loans to total loan outstanding ratio remained relatively flat at 1.3% in 2023 from 2022.

Net charge-off (recoveries) ratio decreased from 0.11% to 0.08% in 2023 from 2022 mainly due to a reduction in consumer loan and residential mortgage charge-offs.

Allocation of the Allowance for Credit Losses

(in millions of $)	Amount	Percent of loans in each category to total loans
Balance at End of Period Applicable to:
Commercial	11.2	14%
Commercial real estate	1.4	13%
Consumer	3.1	4%
Residential Mortgage	10.0	69%
	25.8	100%

See "Note 6: Loans" to our audited consolidated financial statements as at December 31, 2023 for the breakdown of allowance for credit losses by each loan category.

The following table presents our deposits by category for the years indicated:

	2023		2022		2021
(in millions of $)	Averagebalance	Averagerate	Averagebalance	Averagerate	Averagebalance	Averagerate
Interest bearing deposits
Bermuda
Demand	1,936.2	0.23%	2,120.7	(0.01)%	2,151.8	(0.02)%
Term	771.0	3.10%	658.5	0.89%	654.5	0.52%
Total Bermuda	2,707.2		2,779.2		2,806.3
Non-Bermuda
Demand	4,062.8	0.80%	5,308.4	0.18%	5,853.8	(0.04)%
Term	2,640.8	4.15%	2,181.5	1.35%	2,185.2	0.68%
Non-Bermuda	6,703.6		7,489.9		8,039.0
Total interest bearing deposits	9,410.8		10,269.1		10,845.3
Non-interest bearing demand deposits
Bermuda	1,730.2		1,878.8		1,810.0
Non-Bermuda	1,073.4		1,154.5		1,085.0
Total non-interest bearing deposits	2,803.6		3,033.3		2,895.0

The following table presents the amount of uninsured deposits by reportable segment:

(in millions of $)	2023	2022
Bermuda(1)	4,235.2	4,252.6
Cayman(2)	4,005.1	4,292.8
Channel Islands and the UK(3)(4)	3,456.3	4,161.9
	11,696.6	12,707.3

(1)The Bermuda Deposit Insurance Scheme covers only BMD deposits up to a maximum of $25,000 per group of depositor relationships. Eligibility is limited to individuals; sole proprietors; partnerships; unincorporated associations; charities; and companies registered in the Register of Small Businesses maintained by the Bermuda Economic Development Corporation.

(2)Cayman Islands currently has no deposit insurance scheme in place.

(3)The Guernsey DCS covers deposits up to a maximum of £50,000 per qualifying claimant which is defined as a natural person; the trustee of a Guernsey Retirement Annuity Trust; the executor or administrator of a deceased person's estate; or a Guernsey-registered charity. The total amount of compensation is capped at £100 million in any 5-year period. Claims exceeding this cap will be reduced pro rata.

(4)The Jersey DCS covers deposits up to a maximum of £50,000 per qualifying depositor per Jersey banking group. Qualifying depositors are defined as private individuals and charities. The total amount of compensation is capped at £100 million in any 5-year period.

The following table presents the amount of uninsured time deposits by reportable segment and time to maturity as at December 31, 2023:

	Remaining term to contractual maturity
(in millions of $)	Within3 months	3 to 6months	6 to 12months	Over 12months	Total
Time deposits in excess of insured limit:
Bermuda	31.6	17.6	30.6	28.9	108.7
Channel Islands and the UK	156.2	49.9	72.2	—	278.3
Total time deposits in excess of insured limit	187.8	67.5	102.8	28.9	387.0
Time deposits in uninsured accounts:
Bermuda	652.6	37.7	130.7	45.7	866.7
Cayman	839.5	141.6	47.9	4.5	1,033.5
Channel Islands and the UK	983.6	218.7	179.2	—	1,381.5
Total time deposits in uninsured accounts	2,475.7	398.0	357.8	50.2	3,281.7
Total uninsured time deposits	2,663.5	465.5	460.6	79.1	3,668.7

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