The Bank of N.T. Butterfield & Son (US:NTB)2025-02-11 21:28Financial Data and Key Metrics Changes - The company reported a net income of $216.3 million and core net income of $218.9 million for the full year 2024, resulting in a core return on average tangible common equity of 24% [9] - The net interest margin decreased to 2.64% from 2.80% in 2023, with the cost of deposits rising to 183 basis points from 140 basis points in 2023 [10] - Tangible book value per common share grew by 12.5% to end the year at $21.70 [11] Business Line Data and Key Metrics Changes - In Q4 2024, net income and core net income were $59.6 million, with core earnings per share of $1.34 and a core return on average tangible common equity of 25.2%, an increase of 270 basis points over Q3 [14] - Non-interest income totaled $63.2 million for Q4, up 12.9% compared to the prior quarter, driven by seasonal increases in card services and transaction volumes [19][20] - Total core non-interest expenses were $89.6 million, a 2.2% increase compared to the prior quarter, primarily due to increased marketing expenditures [21] Market Data and Key Metrics Changes - Bermuda and Cayman experienced improved visitor numbers, contributing to economic development, with expectations for continued growth in 2025 and beyond [12] - The international financial services business, particularly in reinsurance and asset management, continued to grow in 2024 [12] Company Strategy and Development Direction - The company aims to pursue sustainable growth in a stable rate environment while focusing on organic growth opportunities in the Channel Islands and Singapore [30] - Active capital management remains a priority, with a focus on returning excess capital to shareholders and pursuing acquisitions of fee businesses [29] Management Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the company's performance in 2024, highlighting a secure and conservatively managed balance sheet [29] - The company expects to manage expenses carefully while investing in technology and operational efficiency [30] Other Important Information - The Board approved a quarterly cash dividend of $0.44 and repurchased approximately 1.3 million shares at an average price of $37.42 during the quarter [16] - The company continues to maintain strong asset quality with low credit risk in its investment portfolio [25] Q&A Session Summary Question: Deposit trends and expectations - Management noted that deposit levels have remained elevated, with expectations to settle around $11.5 billion to $12 billion [40][41] Question: Margin trajectory and net interest income - Management expects a slow expansion of net interest margin over the next couple of quarters, driven by active management of deposit costs and investment yields [46][48] Question: Capital priorities and buyback strategy - Management emphasized the importance of retaining the current dividend rate while remaining open to M&A opportunities and managing buybacks based on share price [50][56] Question: Expense trajectory and non-interest income guidance - Management anticipates quarterly expenses to remain in the range of $90 million to $92 million, with non-interest income expected to stabilize around mid-$50 million per quarter [82][84] Question: Drivers of lower non-performing loans - Management highlighted the full repayment of a facility that had gone over 90 days and ongoing positive developments in the legacy hospitality facility liquidation process [88][91]