Second Quarter Earnings Presentation The Bank of N.T. Butterfield - PowerPoint PPT Presentation

Second Quarter Earnings Presentation The Bank of N.T. Butterfield & Son Limited July 23, 2020

Forward-Looking Statements Forward-Looking Statements : Certain of the statements made in this release are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. 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 other similar words and expressions of the future. Forward-looking statements include statements with respect to our 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 the impact of the COVID-19 pandemic, the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, worldwide economic conditions and fluctuations of interest rates, the successful completion and integration of acquisitions or the realization of the anticipated benefits of such acquisitions in the expected time-frames or at all, 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. All 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 from the SEC, including through the SEC’s website at https://www.sec.gov. Except otherwise required by law, Butterfield assumes no obligation and does not undertake to review, update, revise or correct any of the forward-looking statements included herein, whether as a result of new information, future events or other developments. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. About Non-GAAP Financial Measures : This presentation contains non-GAAP financial measures including “core” net income and other financial measures presented on a “core” basis. 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

Agenda and Overview Presenters Agenda Butterfield Overview • Overview Michael Collins • Leading Bank in Attractive Markets • Second Quarter 2020 Highlights Chairman and Chief Executive Officer • Strong Capital Generation and Return • COVID-19 Update Michael Schrum • Efficient, Conservative Balance Sheet • Financials Group Chief Financial Officer • Visible Earnings • Q&A Ten International Locations Awards 3

Second Quarter 2020 Highlights (In US$ millions) vs. Q1 2020 vs. Q2 2019 • Net income of $34.3 million, or $0.67 per share Q2 2020 $ % $ % • Core Net Income** of $34.4 million, or $0.67 per share • Return on average common equity of 14.0%; core return on average Net Interest Income $ 79.1 $ (8.5) $ (6.1) 14.2 % tangible common equity** of 15.5% Non-Interest Income 41.7 (5.9) (2.5) 5.4 % • Net Interest Margin of 2.48%, cost of deposits of 0.14% Prov. for Credit Losses (4.4) 0.8 (5.3) (315.3) % • Credit reserve build of $4.4 million in Q2 2020 Non-Interest Expenses* (82.8) 6.3 9.1 (4.8) % • Cash dividend of $0.44 per common share and active share Other Gains (Losses) 0.7 1.3 0.5 181.3 % repurchases Net Income $ 34.3 $ (6.0) (14.9) % $ (4.3) (11.1) % • Issued $100 million 5.25% 10-year fixed to floating rate subordinated Non-Core Items** 0.1 0.4 (12.4) (104.5) % debt Core Net Income** $ 34.4 $ (6.4) (15.6) % $ (16.7) (32.7) % Core Return on Average Tangible Common Equity** Core Net Income** (In US$ millions) $51.1 24.6% $48.8 22.5% $46.2 21.1% $40.8 18.6% 15.5% $34.4 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 2020 2019 2019 2020 4 * Includes income taxes ** See the Appendix for a reconciliation of the non-GAAP measure

COVID-19 Update* Principal Markets Update** Butterfield Actions • Near term Guernsey & ◦ Support local economic activity through mortgage Bermuda Cayman Jersey deferral program for qualifying residential mortgage holders in Bermuda and Cayman Active COVID-19 Cases 7 2 5 ◦ Working with customers to meet financing needs Total COVID-19 Cases 153 203 583 ◦ Effect deposit repricing and tactical cost initiatives • Medium/Longer term Deaths 9 1 44 ◦ Evolve business model for lower interest rate Status Open Restricted Open environment • All offices are open to some degree with social distancing and adhering to local protocol Direct Hotel and Restaurant Lending Exposure Limited • Domestic economies are open despite limited tourist visitors $ millions % Hotel Operators $ 183.2 11.1 % Market commentary Hotel Construction 30.9 1.9 % • Bermuda’s airport is open with limited but increasing flights Restaurants 7.1 0.4 % and robust health guidelines/checks and testing for arrivals Other Commercial and CRE Loans 1,429.4 86.6 % • Cayman remains closed to flights with local economy open Total Commercial and CRE Loans $ 1,650.6 100.0 % • Channel Islands are open with quarantine/testing rules for visitors 5 * Please see the Appendix for commentary on factors influencing COVID-19 implications ** Data as of July 21, 2020

Financials

Income Statement Net Interest Income Net Interest Income before Provision for Credit Losses - Net Interest Margin & Yields Trend (In US$ millions) $87.6 (In US$ millions) Q2 2020 vs. Q1 2020 $85.2 Avg. Balance Yield Avg. Balance Yield $79.1 Cash, S/T Inv. & Repos $ 3,358.4 0.13 % $ (322.8) (0.90) % Investments 4,426.6 2.52 % (76.5) (0.26) % Loans (net) 4,997.3 4.53 % (162.5) (0.27) % Interest Earning Assets 12,782.3 2.68 % (561.8) (0.40) % Interest Bearing Liabilities 9,827.6 (0.25) % (488.1) 0.33 % Q2 Q3 Q4 Q1 Q2 2019 2020 Net Interest Margin 2.48 % (0.15) % • Net interest margin (“NIM”) decreased by 15 bps from the previous quarter due to a drop in global interest rates • Loan yields of 4.53% down 27 bps in the second quarter of 2020 as interest rates declined on floating rate loans • Lower rates on roll-over maturities have decreased term deposit costs and are nearing zero 7

Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) Q2 2020 vs. Q1 2020 $47.6 $44.2 Asset management $ 7.4 $ (0.4) $41.7 Banking 9.1 (2.1) FX Revenue 8.1 (2.7) Trust 12.3 0.2 Custody and Other 3.3 (0.3) Q2 Q3 Q4 Q1 Q2 Other 1.5 (0.5) 2019 2020 Total Non-Interest Income $ 41.7 $ (6.0) • Non-interest income down $6.0 million or 12.4% sequentially • The impact of COVID-19 related economic slowdown resulted in lower non-interest income due to lower transactional volumes, particularly in card and merchant services fees and foreign exchange commissions • Fee income ratio of 35.8% in the second quarter of 2020 remains higher than the peer average* * Includes US banks identified by management as a peer group. Please see the Appendix for a list of these banks. 8