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Bank of N.T. Butterfield & Son (NTB)
NYSE:NTB
RESEARCH TOOLSreports
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Bank of NT Butterfield & Son
(NYSE:NTB)
83Outperform
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. S&P 500 (SPY)
Market Cap
$1.75B
Dividend Yield4.29%
Average Volume (3M)181.09K
Price to Earnings (P/E)8.3
Beta (1Y)0.92
Revenue Growth5.36%
EPS Growth9.07%
CountryUS
Employees1,295
SectorFinancial
Sector Strength86
IndustryBanks - Diversified
Share Statistics
EPS (TTM)1.23
Shares Outstanding42,920,685
10 Day Avg. Volume201,101
30 Day Avg. Volume181,095
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap-0.11
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$46.00Price Target Upside12.83% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Bank of NT Butterfield & Son Business Overview & Revenue Model
Company DescriptionThe Bank of N.T. Butterfield & Son Limited provides a range of community, commercial, and private banking services to individuals and small to medium-sized businesses. It accepts retail and corporate checking, savings, term, and interest bearing and non-interest bearing deposits, as well as certificate of deposits. The company's lending portfolio includes residential mortgage lending, automobile lending, consumer financing, credit cards, overdraft facilities, commercial real estate lending, and commercial and industrial loans. It also offers investment products and services; and cash and liquidity management, foreign exchange, custody administration, and settlement services. In addition, the company provides personal and property/auto insurance products; letters of credit; and cash management, payroll, remote banking, money market, advisory, brokerage, trust, estate, company management, and fiduciary services. Further, it offers debit cards; automated teller machines; and personal and business deposit, merchant acquiring, and mobile and internet banking services. The company operates through offices in the Cayman Islands, Guernsey, Jersey, the United Kingdom, The Bahamas, Switzerland, Singapore, Mauritius, and Canada. It also operates through 3 branches in Bermuda and 4 branches in the Cayman Islands. The Bank of N.T. Butterfield & Son Limited was founded in 1858 and is headquartered in Hamilton, Bermuda.
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 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.―
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
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.―
| 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 | EBIT |
| 220.80M | 281.80M | 177.52M | 165.80M | 149.60M | EBITDA |
| 220.80M | 262.47M | 257.88M | 235.25M | 0.00 | Net Income Common Stockholders |
| 216.30M | 225.49M | 214.02M | 162.67M | 147.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.67B | 2.29B | 2.98B | 3.38B | 4.11B | Total Assets |
| 14.23B | 13.37B | 14.31B | 15.34B | 14.74B | Total Debt |
| 98.72M | 98.49M | 172.00M | 172.00M | 171.00M | Net Debt |
| -1.90B | -1.55B | -1.93B | -2.01B | -3.12B | 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
Positive
40.77
Price Trends
37.89
Positive
37.25
Positive
36.67
Positive
Market Momentum
0.92
Negative
67.29
Neutral
63.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTB, the sentiment is Positive. The current price of 40.77 is above the 20-day moving average (MA) of 38.28, above the 50-day MA of 37.89, and above the 200-day MA of 36.67, indicating a bullish trend. The MACD of 0.92 indicates Negative momentum. The RSI at 67.29 is Neutral, neither overbought nor oversold. The STOCH value of 63.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $1.75B | 8.33 | 21.11% | 4.29% | 5.36% | 9.07% | |
77 Outperform | $51.48B | 8.74 | 13.70% | 4.17% | 18.85% | 14.85% | |
75 Outperform | $63.02B | 9.66 | 11.92% | 4.97% | 4.07% | 9.97% | |
74 Outperform | $56.74B | 8.30 | 9.36% | 2.65% | 11.33% | 47.74% | |
73 Outperform | $81.61B | 7.75 | 18.77% | 4.43% | 30.24% | 28.90% | |
71 Outperform | $11.94B | 10.52 | 15.66% | 2.55% | 9.03% | 5.81% | |
64 Neutral | $12.52B | 9.82 | 7.95% | 16985.69% | 12.70% | -4.60% |
* Financial Sector Average
Performance Comparison
NTB
Bank of NT Butterfield & Son
40.77
7.11
21.12%
BBVA
Banco Bilbao
14.22
3.76
35.95%
BCS
Barclays
15.95
5.55
53.37%
EWBC
East West Bancorp
87.40
11.35
14.92%
ING
ING Groep
20.09
3.82
23.48%
NWG
NatWest Group
12.79
5.10
66.32%
Bank of NT Butterfield & Son Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 7.60%|
Next Earnings Date:Jul 28, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, strategic expansions, and effective cost management. However, challenges such as decreased noninterest income, deposit outflows, and economic uncertainties were also noted. The positive aspects slightly outweigh the negative, indicating confidence in the company's future plans.Q1-2025 Updates
Positive Updates
Strong Financial Results
Butterfield reported net income of $53.8 million and core net income of $56.7 million for Q1 2025, with core earnings per share of $1.30 and a core return on average tangible common equity of 24.2%.
Net Interest Margin Improvement
The net interest margin increased by nine basis points to 2.7% compared to the prior quarter.
Successful Early Retirement Program
A group-wide voluntary early retirement program was successfully executed, resulting in a moderate reduction in future expenses.
Share Buyback and Dividend
The company repurchased 1.1 million shares at an average price of $37.78 per share and approved a quarterly cash dividend of $0.44 per share.
Asset Quality and Regulatory Capital
Butterfield maintains a low-risk investment portfolio, with a regulatory capital ratio improvement of 1.9% due to Basel IV rule changes.
Channel Islands and Singapore Expansion
Growth in retail presence in the Channel Islands and successful integration of Credit Suisse in Singapore, with over $10 billion in assets under trust.
Negative Updates
Decreased Noninterest Income
Noninterest income decreased to $58.4 million due to lower transaction volume and incentive fees.
Deposit Outflows
Period-end deposit balances decreased by $238 million, partially offset by FX translation gains, with expected further customer outflows.
Impact of Economic Uncertainty
Economic uncertainty from global trade discussions and inflationary risks could impact costs and interest rates, affecting overall performance.
Elbow Beach Property Resolution
The resolution of the Elbow Beach Hotel property receivership will impact NII due to penalty rates no longer accruing.
Company Guidance
During the first quarter of 2025, The Bank of N.T. Butterfield & Son Limited reported strong financial results, including a net income of $53.8 million and core net income of $56.7 million. The bank achieved core earnings per share of $1.30 and a core return on average tangible common equity of 24.2%. The net interest margin increased to 2.7%, reflecting a nine basis point improvement from the previous quarter, while the cost of deposits decreased by 13 basis points to 160 basis points. The bank's board approved a quarterly cash dividend of $0.44 per share, and Butterfield repurchased 1.1 million shares at an average price of $37.78 per share. Noninterest income totaled $58.4 million, with a fee income ratio of 394%, despite a seasonal decline from the previous quarter. Butterfield maintained a conservative balance sheet with $12.6 billion in deposits and a low-risk density of 30%. The bank's asset quality remained strong, with 2.3% of gross loans and an allowance for credit losses coverage ratio of 0.6%. The bank's expenses were well-managed, with core noninterest expenses at $90.3 million, and it implemented a group-wide voluntary early retirement program to further reduce costs.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.