company background image
NTB

Bank of N.T. Butterfield & Son NYSE:NTB Stock Report

Last Price

US$33.03

Market Cap

US$1.6b

7D

-1.1%

1Y

-8.5%

Updated

03 Oct, 2022

Data

Company Financials +
NTB fundamental analysis
Snowflake Score
Valuation5/6
Future Growth2/6
Past Performance6/6
Financial Health5/6
Dividends4/6

NTB Stock Overview

The 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.

The Bank of N.T. Butterfield & Son Limited Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Bank of N.T. Butterfield & Son
Historical stock prices
Current Share PriceUS$33.03
52 Week HighUS$41.69
52 Week LowUS$28.67
Beta1.52
1 Month Change2.42%
3 Month Change5.80%
1 Year Change-8.53%
3 Year Change17.34%
5 Year Change-10.56%
Change since IPO-91.74%

Recent News & Updates

Aug 11

Butterfield Bank: Q2 Earnings Overview For This 5.2%-Yielding Offshore Bank

Back in March, I predicted that NTB would enjoy a rally driven by rising interest rates' positive effect on the bank's earnings. That rally never happened. NTB enjoys a conservative asset portfolio that appears likely to remain resilient even through a recession. As interest rates have surged this year, NTB's return on equity has likewise soared by nearly 50%. The 5.2%-yielding dividend is durable and well-covered, but the stock may continue to trade rangebound. Thesis: Durable Income Machine The Bank of N.T. Butterfield & Son (NTB) is the holding company for an offshore banking enterprise spread across 10 locations around the globe but with leading market positions particularly in Bermuda and the Cayman Islands. Back in March 2022, I pitched NTB as a good dividend-paying play on rising interest rates, because NTB's loan book is heavily concentrated in floating rate debt. I expected NTB not only to perform well from an earnings standpoint but also to see some valuation upside. Well, the second part of that call didn't exactly work out as I predicted. NTB's stock price has performed slightly worse than the market since the article was published. NTB data by YCharts And yet, the bullish thesis about NTB's fundamental performance has proven accurate. Core net income per share in Q2 2022 reached $1.01, which represented 12.2% growth over Q1 2022's number and 26.3% growth year-over-year! In the first half of 2022, NTB has earned $1.91 in core net income. Comparing that to the quarterly dividend of $0.44, we arrive at a year-to-date payout ratio of 46.1%. This is a very comfortable payout ratio. Combining the fact that NTB's payout ratio never climbed higher than 60% in 2020 with the increasing conservatism of the bank's asset portfolio, I believe it uncontroversial to state that NTB makes a solid and durable, 5.2%-yielding dividend income machine. Will NTB have its breakout rally that I predicted back in March? Maybe, maybe not. But for conservative dividend investors holding primarily for the relatively high and safe yield, NTB has proven its ability to continue paying its dividend through thick and thin - strong economies and weak ones, rising rate environments and low-rate ones. In what follows, we perform a midyear vitals checkup on NTB and finish with a discussion of whether it is a good buy today. N.T. Butterfield Midyear Update NTB's loan and securities investment portfolios are extraordinarily conservative. Over 2/3rds of the loan book is in residential mortgages (mostly in the UK, Channel Islands, and the Caribbean), and underwriting standards for these mortgages were quite strong. NTB Q2 2022 Presentation Another ~7% of loans are made to government entities, which makes them highly secure. And nearly 13% of loans are backed by commercial real estate. A mere 12.4% of loans are made either to commercial and industrial customers or for consumers, which are generally considered the riskiest categories of loans. Notably, over 95% of the securities portfolio is rated AAA, signifying the highest level of credit safety. The quality and conservatism of NTB's assets explains why the bank has below-average interest rate sensitivity despite a majority of its loans having a floating rate component. NTB Q2 2022 Presentation During the last rising interest rate environment from 2017 to 2019, NTB's core earnings doubled, driven by loan portfolio growth in addition to rising asset yields: Quarter Q2 2017 Q4 2017 Q2 2018 Q4 2018 Q2 2019 Loan Yield 5.11% 5.23% 5.44% 5.56% 5.67% Securities Yield 2.2% 2.27% 2.67% 2.87% 2.92% In the current rate-hiking cycle, NTB's average loan yield bottomed at 4.18% in Q4 2021, then ticked up to 4.26% in Q1 2022 and 4.48% in Q2 2022. The bank's average securities yield followed the same pattern. Here's NTB's net interest margin over time: 2016: 2.45% 2017: 2.73% 2018: 3.25% 2019: 2.86% 2020: 2.42% 2021: 2.02% Q1 2022: 2.03% Q2 2022: 2.26% Meanwhile, NTB's cost of deposits ticked up only very slightly from Q1 2022's 0.12% to Q2 2022's 0.16%. Between a reduction in the total share count due to buybacks and rising effective yields on loans and investments, NTB's core return on equity has risen by nearly 50% since the end of 2021. NTB Q2 2022 Presentation What's more, core net income has likewise increased nicely as interest income has come in higher. Meanwhile, non-performing loans as a percentage of total loans stayed steady at 1.2% in Q2, flat against Q1 as well as Q3 and Q4 of 2021. But even in Q3 and Q4 of 2020, at the peak of COVID-19 lockdowns, non-performing loans only reached 1.5% of total loans. This demonstrates the quality and defensiveness of NTB's loan book. Total deposits did drop from $13.9 billion in Q1 to $13.1 billion in Q2, driven by "client deposit activation" and the strong US dollar's impact on foreign currency deposits. Over the long term, NTB aims for deposit growth in the low single-digits. Total assets likewise fell from Q1's $15.3 billion to Q2's $14.3 billion, but that change was driven almost entirely by a drop in cash & equivalents. Again, the drop in cash levels is largely driven by the strong US dollar against the cash held as foreign currency in banks around the world.

Aug 04

The Bank of N.T. Butterfield & Son goes ex-dividend tomorrow

The Bank of N.T. Butterfield & Son (NYSE:NTB) had declared $0.44/share quarterly dividend, in line with previous. Payable Aug. 22; for shareholders of record Aug. 8; ex-div Aug. 5. See NTB Dividend Scorecard, Yield Chart, & Dividend Growth.

Jul 30
Bank of N.T. Butterfield & Son (NYSE:NTB) Is Due To Pay A Dividend Of $0.44

Bank of N.T. Butterfield & Son (NYSE:NTB) Is Due To Pay A Dividend Of $0.44

The board of The Bank of N.T. Butterfield & Son Limited ( NYSE:NTB ) has announced that it will pay a dividend on the...

Shareholder Returns

NTBUS BanksUS Market
7D-1.1%-3.2%-2.5%
1Y-8.5%-26.1%-23.2%

Return vs Industry: NTB exceeded the US Banks industry which returned -26.1% over the past year.

Return vs Market: NTB exceeded the US Market which returned -23.2% over the past year.

Price Volatility

Is NTB's price volatile compared to industry and market?
NTB volatility
NTB Average Weekly Movement3.7%
Banks Industry Average Movement3.4%
Market Average Movement6.8%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

Stable Share Price: NTB is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: NTB's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
17841,217Michael Collinshttps://www.butterfieldgroup.com

The 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 Bank of N.T. Butterfield & Son Limited Fundamentals Summary

How do Bank of N.T. Butterfield & Son's earnings and revenue compare to its market cap?
NTB fundamental statistics
Market CapUS$1.62b
Earnings (TTM)US$174.92m
Revenue (TTM)US$511.66m

9.2x

P/E Ratio

2.0x

P/B Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
NTB income statement (TTM)
RevenueUS$511.66m
Cost of RevenueUS$0
Gross ProfitUS$511.66m
Other ExpensesUS$336.74m
EarningsUS$174.92m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)3.58
Gross Margin100.00%
Net Profit Margin34.19%
Debt/Equity Ratio22.6%

How did NTB perform over the long term?

See historical performance and comparison

Dividends

5.3%

Current Dividend Yield

50%

Payout Ratio