Management Presentation June 2, 2017
Disclaimer Forward-Looking Statements : Certain of the statements made in this Release are “forward - looking statements” within the meaning and protections of Section 27 A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements with respect to our current beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Bank to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements due to a variety of factors, including worldwide economic conditions, success in business retention and obtaining new business and other factors. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “could,” “intend,” “target” and ot her similar words and expressions of the future. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our Securities and Exchange Commission (“SEC”) reports and filings. Such reports are available upon request from the Bank, or fro m t he SEC, including through the SEC’s Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made. About Non-GAAP Financial Measures : Certain statements in this release involve the use of non-GAAP financial measures. We believe such measures provide useful information to investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, our non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. Reconciliations of these non-GAAP measures to corresponding GAAP financial measures are provided in the Appendix of this presentation. 2 All information in $millions and as of 31 March 2017 unless otherwise indicated . Conversion rate: 1 BMD$ = 1 US$.
Management Presentation – June 2, 2017 Presenters Six International Locations Agenda Michael Collins • Overview Chief Executive Officer • Financials Michael Schrum • Summary Chief Financial Officer • Q&A Dan Frumkin Chief Risk Officer Butterfield Overview • Leading Bank in Attractive Markets • Strong Capital Generation and Return • Efficient, Conservative Balance Sheet • Visible Earnings 3
Who We Are and What We Do Our History 1758 1904 1971 2010-2016 Current Locations UK Guernsey Switzerland Bermuda Bahamas Cayman Exited Locations Nathaniel Butterfield Incorporated in Bermuda Listed on the Bermuda Barbados established and formally established Stock Exchange Hong Kong a trading firm in under a special act from Malta UK Bank Bermuda local Parliament Strategic repositioning Bermuda Cayman Bank of N.T. Butterfield grew with $550 million equity 3 wealth acquisitions Butterfield the Bermuda recapitalization from the (Legis, HSBC Cayman, established as insurance market Carlyle Group, CIBC, and HSBC Bermuda) Bermuda’s first bank existing investors due to impact of financial crisis 1858 1955-2004 2009-2010 2014-2016 4
Who We Are and What We Do Company Overview Business Line Banking Wealth Management Bermuda Cayman Islands Bermuda Cayman Islands Core Geographies Switzerland (30% of Group deposits 1 , (56% of Group deposits 1 , Guernsey 58% of Group loans 2 ) 22% of Group loans 2 ) The Bahamas Local residents Private trust clients Local residents Width: 29.7cm (11.69”) Height: 21.0cm (8.27”) Captive insurers Captive insurers Ultra-high net worth, multi- Clients Mid-market generational families from Europe, Hedge funds reinsurers Asia, Latin America, and Middle East Global deposits fund local mortgages Butterfield is Trustee: $91.7bn AUA 4 $9.8bn deposits, $3.6bn net loans Focus Areas / The trusts and beneficiaries require Key Statistics private banking and asset management 65% USD deposits, 19% USD-pegged Family deposits across generations 66% mortgages, 30% commercial loans 3 Organic Growth Potential / Industry Organic & Acquisition Growth Potential / Historically Higher Returns / Characteristics Lower Capital Requirements Limited Competition 1 Includes private banking deposits. 2 Based on gross loans. Based on country in which loan was originated. 3 Commercial loans includes government loans. 5 4 AUA for trust only, does not include custody. All information in $billions and as of 31-March-2017 unless noted otherwise. Conversion rate: 1 BMD$ = 1 US$.
Bermuda and Cayman Islands 2015 Statistics Bermuda Cayman Population 66,000 60,000 Leading Bank in Attractive Markets GDP per Capita $ 92,500 $ 56,100 Moody’s Sovereign Rating (1) A2 Aa3 Bermuda’s Insurance and Reinsurance Market Cayman Islands’ Financial Services Market #2 #1 #1 #1 #2 Global Captive Insurance Insurance Linked Captive Insurance International Reinsurance Fund Domicile Domicile Securities Domicile Domicile Financial Center Market 70% of issuance 34% of hedge 15 of the top 40 750 captive 360 captive 40 of the world’s 50 and outstanding funds and 75% of global reinsurers insurers insurers largest banks securities offshore funds Global capital: Foreign currency deposits (primarily USD) held by local banks exceed 3x GDP in Bermuda and Cayman Islands Width: 29.7cm (11.69”) Real GDP Growth Height: 21.0cm (8.27”) Key Market Attributes Bermuda Cayman Islands British Overseas Territories, English Common Law, UK Privy Council final court of appeal 2.8 % 2.1 % Affluent resident population, no corporate or personal income tax 1.3 % 1.4 % FATCA / CRS tax transparency requires reporting on foreign nationals to 67 tax authorities, including US tax persons to the IRS (0.4)% The Bermuda Monetary Authority (BMA) and the Cayman Islands Monetary Authority (CIMA) are primary financial services regulators (2.5)% 2013 2014 2015 2013 2014 2015 Sources: SNL Financial, Association of Bermuda Insurers and Reinsurers, Bermuda Government, UN Department of Economic and Social Affairs Population Division, Butterfield Research, CIA World Fact Book, The Economist, Appleby ¹ Sovereign Ratings as of 1-Nov-2016. 6
Leading Share in Our Markets with Attractive Client Base Leading Bank in Attractive Markets Bermuda Cayman Islands 35% 39% 36% 25% Market Share BMD Deposits BMD Loans Local Deposits Local Mortgages Width: 29.7cm (11.69”) Height: 21.0cm (8.27”) Competitive Landscape “Bermuda Bank of the Year “Cayman Bank Selected 2013, 2014, 2015 of the Year Awards and 2016 ” 2013, 2014 and 2015” “Best Developed Market Bank: Bermuda 2015 and 2016” 7 7 Source: BMA for Bermudian market shares; CIMA for Cayman Islands market shares
Award-Winning Trust Business Leading Bank in Attractive Markets Private Trust Overview Private Trust Economics Butterfield Value Proposition Bank-owned trust company with Trustee fees Client’s Asset sets over 70 years of experience Multi-jurisdictional offering in FX fees English Common Law domiciles Trust st Custody fees Fiduciary expertise and service Relat ation ionship ip respected by key introducers Asset management fees Recognized as one of the leading Truste stee Ben enefic eficia iarie ies trust companies in the world Width: 29.7cm (11.69”) Admin minist sters s & NII deposits Manages es Height: 21.0cm (8.27”) Asset sets / Pays Incom ome and / or “Trust Company of Deposit posits Capit ital the Year, 2015” Private Trust Landscape Very Large Large Boutique Franchise Private Client Trust focus Diversified Fee Players / 8 8
Q1 2017 Financials
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