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Bank of N.T. Butterfield & Son (NTB)
NYSE:NTB
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Bank of NT Butterfield & Son
(NYSE:NTB)
Rating:83Outperform
Price Target:―
Positive Factors
Capital Returns
NTB is viewed as a top capital return story due to its conservative balance sheet, high dividend payout, and regular share repurchases.
Mergers and Acquisitions
M&A activities are anticipated to contribute significantly to EPS growth, with management actively pursuing opportunities.
Negative Factors
Corporate Tax Risk
The introduction of a 15% corporate tax in 2025 is identified as a major risk for Bermuda.
Earnings
Earnings are expected to be stagnant for the coming quarters due to the asset-sensitive and largely static balance sheet.
Bank of NT Butterfield & Son (NTB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.80B
Dividend Yield4.13%
Average Volume (3M)178.96K
Price to Earnings (P/E)8.6
Beta (1Y)0.82
Revenue Growth2.65%
EPS Growth16.06%
CountryUS
Employees1,295
SectorFinancial
Sector Strength67
IndustryBanks - Diversified
Share Statistics
EPS (TTM)1.25
Shares Outstanding41,203,102
10 Day Avg. Volume206,945
30 Day Avg. Volume178,960
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.30
Enterprise Value/Revenue0.72
Enterprise Value/Gross Profit1.86
Enterprise Value/Ebitda2.15
Forecast
1Y Price Target
$51.33Price Target Upside16.50% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Bank of NT Butterfield & Son Business Overview & Revenue Model
Company DescriptionThe Bank of NT Butterfield & Son Limited (NTB) is a leading financial services institution headquartered in Hamilton, Bermuda. Established in 1858, the bank operates primarily in the banking and wealth management sectors, offering a comprehensive range of financial products and services. These include personal and commercial banking, asset management, trust services, and treasury solutions. With a strong presence in Bermuda, Cayman Islands, and the Channel Islands, NTB serves a diverse clientele, including individuals, businesses, and high-net-worth individuals.
How the Company Makes MoneyThe Bank of NT Butterfield & Son generates revenue through multiple streams, primarily from its core banking operations and wealth management services. Key revenue sources include interest income from loans and advances to customers, as well as income from securities and investments. Additionally, the bank earns fee-based income from various services such as asset management, trust and fiduciary services, and transaction banking. The bank's geographic diversification across Bermuda, the Cayman Islands, and the Channel Islands helps it capture a wide market and mitigate regional risks. Strategic partnerships and the provision of bespoke financial solutions to high-net-worth individuals also contribute significantly to its earnings, enhancing its competitive positioning in the financial services industry.
Bank of NT Butterfield & Son Earnings Call Summary
Earnings Call Date:Jul 28, 2025
(Q2-2025)
| % Change Since: 0.18%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook with strong financial results and strategic capital management, including a dividend increase and share repurchase program. However, there were challenges such as a modest decline in net interest margin and noninterest income.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Butterfield reported net income of $53.3 million and core net income of $53.7 million with core earnings per share of $1.26. The core return on average tangible common equity was 22.3%.
Increased Dividend
A 14% increase in the quarterly cash dividend rate to $0.50 per share was approved, reflecting strong capital management and profitability.
Share Repurchase Program
A new share repurchase authorization of 1.5 million shares was announced, following the completion of the current program, with 1.1 million shares repurchased in Q2 at an average price of $40.69 per share.
Asset Quality and Balance Sheet Strength
Nonaccrual loans as a percentage of gross loans decreased by 30 basis points to 2%, while the allowance for credit losses coverage ratio remained at 0.6%.
Economic Growth in Key Markets
Positive economic indicators were observed in Bermuda and Cayman, with strong performance in tourism, real estate, and international business sectors.
Negative Updates
Decline in Net Interest Margin
Net interest margin decreased modestly to 2.64% from 2.7% in the prior quarter, impacted by lower treasury yields and the accelerated amortization of unamortized subordinated debt issuance costs.
Noninterest Income Decline
Noninterest income totaled $57 million, a decline of $1.4 million quarter-over-quarter, due to seasonal reductions in banking fees and foreign exchange revenue.
High Capital Levels
CET1 capital level is now closer to 26%, considered excessive, and there is ongoing discussion about appropriate capital deployment given the current environment.
Company Guidance
During the second quarter of 2025, The Bank of N.T. Butterfield & Son Limited reported strong financial performance, with a net income of $53.3 million and core net income of $53.7 million. The company achieved core earnings per share of $1.26 and a core return on average tangible common equity of 22.3%. Despite a slight decline in the net interest margin to 2.64%, driven by lower treasury yields and a one-time negative impact from the early redemption of $100 million in subordinated debt, the bank maintained a stable balance sheet and prudent expense management. Noninterest income totaled $57 million, and total noninterest expenses were $91.4 million. The bank also announced a 14% increase in its quarterly cash dividend to $0.50 per share and a new share repurchase authorization of 1.5 million shares. Butterfield's balance sheet remained liquid, with a period-end deposit balance of $12.8 billion and a low risk density of 28.6%. The bank continues to focus on sustainable profitability, capital efficiency, and strategic growth through potential acquisitions in private trust, while maintaining a conservative credit posture.Bank of NT Butterfield & Son Financial Statement Overview
Summary
Bank of NT Butterfield & Son shows strong financial health across all key financial statement aspects. The company exhibits robust profitability, efficient cash flow management, and conservative leverage, supported by consistent revenue growth. While the equity ratio is on the lower side, the overall financial position remains solid, providing a strong foundation for future growth and stability.Income Statement
The income statement reflects strong profitability with a TTM gross profit margin of 76.6% and a net profit margin of 33.4%. Revenue growth is positive at 11.5% over the past year, indicating a robust upward trajectory. The EBIT and EBITDA margins are solid at 41.9% and 31.8%, respectively, showcasing operational efficiency. Overall, the company demonstrates strong revenue growth and profitability, though the slight dip in net income compared to the previous year suggests potential areas for improvement.85
Very Positive
Balance Sheet
The balance sheet is stable with a low debt-to-equity ratio of 0.09, indicating conservative leverage. The return on equity is high at 20.5%, reflecting effective use of shareholder funds. The equity ratio stands at 7.5%, suggesting a modest level of equity relative to total assets, typical for the banking industry. While the financial leverage is manageable, the lower equity ratio could be a potential risk if asset quality deteriorates.78
Positive
Cash Flow
Cash flow metrics reveal a strong position with a TTM free cash flow growth rate of 12.0%. The operating cash flow to net income ratio is healthy at 1.38, indicating robust cash generation relative to reported profits. Additionally, the free cash flow to net income ratio of 1.26 suggests efficient conversion of earnings to cash flow. Overall, the company's cash generation and growth are strong, supporting its operational and financial activities.82
Very Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 581.60M | 578.60M | 551.70M | 496.50M | 502.70M |
| Gross Profit | 0.00 | 404.60M | 551.70M | 496.50M | 502.70M |
| EBITDA | 220.80M | 262.47M | 257.88M | 235.25M | 0.00 |
| Net Income | 216.30M | 225.49M | 214.02M | 162.67M | 147.22M |
Balance Sheet | |||||
| Total Assets | 14.23B | 13.37B | 14.31B | 15.34B | 14.74B |
| Cash, Cash Equivalents and Short-Term Investments | 4.67B | 2.29B | 2.98B | 3.38B | 4.11B |
| Total Debt | 98.72M | 98.49M | 172.00M | 172.00M | 171.00M |
| Total Liabilities | 13.21B | 12.37B | 13.44B | 14.36B | 13.76B |
| Stockholders Equity | 1.02B | 1.00B | 865.00M | 977.00M | 982.00M |
Cash Flow | |||||
| Free Cash Flow | 243.90M | 246.02M | 192.40M | 235.63M | 167.58M |
| Operating Cash Flow | 265.43M | 300.29M | 219.27M | 251.35M | 188.15M |
| Investing Cash Flow | -581.02M | 681.80M | 292.02M | -1.91B | -41.71M |
| Financing Cash Flow | 735.56M | -1.45B | -506.81M | 535.78M | 546.45M |
Bank of NT Butterfield & Son Technical Analysis
Neutral
44.06
Price Trends
44.35
Negative
41.88
Positive
39.18
Positive
Market Momentum
-0.02
Positive
45.92
Neutral
15.13
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTB, the sentiment is Neutral. The current price of 44.06 is below the 20-day moving average (MA) of 44.61, below the 50-day MA of 44.35, and above the 200-day MA of 39.18, indicating a neutral trend. The MACD of -0.02 indicates Positive momentum. The RSI at 45.92 is Neutral, neither overbought nor oversold. The STOCH value of 15.13 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NTB.
Bank of NT Butterfield & Son Risk Analysis
Bank of NT Butterfield & Son disclosed 54 risk factors in its most recent earnings report. Bank of NT Butterfield & Son reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Bank of NT Butterfield & Son Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $1.80B | 8.58 | 21.21% | 4.13% | 2.65% | 16.06% | |
80 Outperform | $13.95B | 11.83 | 15.47% | 2.32% | 5.87% | 9.84% | |
78 Outperform | $70.45B | 9.31 | 9.83% | 2.13% | 16.06% | 64.31% | |
77 Outperform | $59.44B | 9.59 | 13.80% | 4.35% | 10.03% | 29.51% | |
75 Outperform | $110.36B | 9.76 | 18.32% | 4.14% | 25.64% | 17.13% | |
75 Outperform | $73.91B | 11.48 | 12.08% | 4.72% | 1.13% | -1.14% | |
68 Neutral | $17.57B | 11.64 | 10.45% | 3.85% | 9.71% | 1.93% |
* Financial Sector Average
Performance Comparison
NTB
Bank of NT Butterfield & Son
44.06
9.27
26.65%
BBVA
Banco Bilbao
18.93
9.10
92.57%
BCS
Barclays
20.12
8.60
74.65%
EWBC
East West Bancorp
101.22
22.92
29.27%
ING
ING Groep
24.69
8.19
49.64%
NWG
NatWest Group
14.82
6.13
70.54%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.