NYSE:NTB

Stock Analysis Report

Bank of N.T. Butterfield & Son

Executive Summary

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.


Snowflake Analysis

Excellent balance sheet established dividend payer.

Share Price & News

How has Bank of N.T. Butterfield & Son's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NTB has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.2%

NTB

-0.07%

US Banks

2.0%

US Market


1 Year Return

4.4%

NTB

15.5%

US Banks

23.5%

US Market

Return vs Industry: NTB underperformed the US Banks industry which returned 21.7% over the past year.

Return vs Market: NTB underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

NTBIndustryMarket
7 Day-1.2%-0.07%2.0%
30 Day-4.7%-1.8%4.3%
90 Day17.1%9.3%12.2%
1 Year9.7%4.4%18.9%15.5%26.1%23.5%
3 Year23.4%9.4%34.5%25.0%53.1%43.2%
5 Yearn/a86.0%65.1%75.5%56.1%

Price Volatility Vs. Market

How volatile is Bank of N.T. Butterfield & Son's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Bank of N.T. Butterfield & Son undervalued compared to its fair value and its price relative to the market?

44.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NTB ($36.19) is trading below our estimate of fair value ($65.27)

Significantly Below Fair Value: NTB is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NTB is good value based on its PE Ratio (10.5x) compared to the Banks industry average (12.8x).

PE vs Market: NTB is good value based on its PE Ratio (10.5x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: NTB is poor value based on its PEG Ratio (3.1x)


Price to Book Ratio

PB vs Industry: NTB is overvalued based on its PB Ratio (2x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is Bank of N.T. Butterfield & Son forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

3.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NTB's forecast earnings growth (3.4% per year) is above the savings rate (1.7%).

Earnings vs Market: NTB's earnings (3.4% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: NTB's earnings are forecast to grow, but not significantly.

Revenue vs Market: NTB's revenue (1.1% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: NTB's revenue (1.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NTB's Return on Equity is forecast to be low in 3 years time (19.5%).


Next Steps

Past Performance

How has Bank of N.T. Butterfield & Son performed over the past 5 years?

24.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NTB has high quality earnings.

Growing Profit Margin: NTB's current net profit margins (34.6%) are lower than last year (36.6%).


Past Earnings Growth Analysis

Earnings Trend: NTB's earnings have grown significantly by 24.4% per year over the past 5 years.

Accelerating Growth: NTB's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NTB had negative earnings growth (-0.2%) over the past year, making it difficult to compare to the Banks industry average (27.1%).


Return on Equity

High ROE: NTB's Return on Equity (19.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Bank of N.T. Butterfield & Son's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: NTB has a low level of unsold assets or inventory.

Debt Coverage by Assets: NTB's debt is covered by short term assets (assets are 25.5x debt).


Financial Institutions Analysis

Asset Level: NTB's level of assets compared to its equity is moderate.

Allowance for Bad Loans: NTB has a low allowance for bad loans.

Low Risk Liabilities: NTB's liabilities are made up of primarily low risk sources of funding.

Loan Level: NTB has an acceptable proportion of non-loan assets held.

Low Risk Deposits: NTB's loans are broadly funded by customer deposits.

Level of Bad Loans: NTB has an appropriate level of bad loans (1.38%)


Next Steps

Dividend

What is Bank of N.T. Butterfield & Son's current dividend yield, its reliability and sustainability?

4.90%

Current Dividend Yield


Dividend Yield vs Market

company4.9%marketbottom25%1.4%markettop25%3.7%industryaverage2.8%forecastin3Years4.9%

Current dividend yield vs market & industry

Notable Dividend: NTB's dividend (4.86%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: NTB's dividend (4.86%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

Stable Dividend: NTB's dividend payments have been volatile in the past 10 years.

Growing Dividend: NTB's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (51.3%), NTB's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NTB's dividends in 3 years are forecast to be well covered by earnings (47.9% payout ratio).


Next Steps

Management

What is the CEO of Bank of N.T. Butterfield & Son's salary, the management and board of directors tenure and is there insider trading?

4.3yrs

Average management tenure


CEO

Michael Collins (56yo)

4.3yrs

Tenure

0

Mr. Michael W. Collins has been the Chairman of the Board of The Bank of NT Butterfield & Son Limited (Known as Bank Butterfield & Son Ltd) since July 27, 2017 and as its Chief Executive Officer since Sept ...


Management Age and Tenure

4.3yrs

Average Tenure

56yo

Average Age

Experienced Management: NTB's management team is considered experienced (4.3 years average tenure).


Board Age and Tenure

2.3yrs

Average Tenure

58yo

Average Age

Experienced Board: NTB's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Michael Collins (56yo)

    Chairman & CEO

    • Tenure: 4.3yrs
  • Shaun Morris (59yo)

    Group Chief Legal Officer & General Counsel

    • Tenure: 7.5yrs
  • Bob Moore

    Group Head of Trust and Executive Vice President

    • Mike McWatt (54yo)

      Managing Director of Cayman Islands

      • Siän Dalrymple (56yo)

        Group Head of Compliance

        • Tenure: 3.1yrs
      • Beth Bauman (59yo)

        Group Head of Human Resources

        • Tenure: 4.3yrs
      • Mark Johnson

        VP & Group Head of Communications

        • Michael Schrum (51yo)

          Group Chief Financial Officer

          • Tenure: 4.3yrs
        • Jeff Bennett

          Chief Accountant

          • Noah Fields

            Vice President of Investor Relations


            Board Members

            • Pamela Thomas-Graham (56yo)

              Non-Executive Director

              • Tenure: 2.1yrs
            • Michael Collins (56yo)

              Chairman & CEO

              • Tenure: 4.3yrs
            • Jim Burr (53yo)

              Lead Independent Director

              • Tenure: 1.3yrs
            • John Wright (78yo)

              Independent Non-Executive Director

              • Mark Lynch

                Independent Director

                • Tenure: 0.3yrs
              • Conor O’Dea (60yo)

                Non-Executive Director

                • Tenure: 3.7yrs
              • Alastair William Barbour (66yo)

                Independent Non-Executive Director

                • Tenure: 8yrs
              • Caroline Foulger (58yo)

                Non-Executive Director

                • Tenure: 6.5yrs
              • Meroe Park (53yo)

                Non-Executive Director

                • Tenure: 2.3yrs
              • Michael Covell (65yo)

                Non-Executive Director

                • Tenure: 1.8yrs

              Company Information

              The Bank of N.T. Butterfield & Son Limited's company bio, employee growth, exchange listings and data sources


              Key Information


              Number of Employees


              Location

              • The Bank of N.T. Butterfield & Son Limited
              • 65 Front Street
              • Hamilton
              • HM 12
              • Bermuda

              Listings

              TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
              NTB.BHBER (The Bermuda Stock Exchange)COM NPV(POST REVSPLIT)BMBMDNo data
              NTBNYSE (New York Stock Exchange)YesCommon StockUSUSDNov 2003
              NTB.BHBER (The Bermuda Stock Exchange)YesCommon StockBMBMDNov 2003

              Biography

              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 non-interest bearing deposits, as well as certificates of deposit. The company’s lending portfolio includes residential mortgage lending, automobile financing, 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, private banking, administered banking services, and fiduciary services. Further, it offers debit cards; automated teller machines; personal and business deposit, merchant acquiring, and mobile/online banking services. The company operates through offices in the Cayman Islands, Guernsey, Jersey, the United Kingdom, The Bahamas, Switzerland, Singapore, Mauritius, and Canada, as well as through four branch locations in Bermuda and three branch locations in the Cayman Islands. The Bank of N.T. Butterfield & Son Limited was founded in 1858 and is headquartered in Hamilton, Bermuda. 


              Company Analysis and Financial Data Status

              All financial data provided by Standard & Poor's Capital IQ.
              DataLast Updated (UTC time)
              Company Analysis2020/01/17 23:51
              End of Day Share Price2020/01/17 00:00
              Earnings2019/09/30
              Annual Earnings2018/12/31


              Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.