The Bank of N.T. Butterfield & Son Limited (NTB) | Investment Case

1. Company Snapshot

1.a. Company Description

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 company's lending portfolio includes residential mortgage lending, automobile lending, 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, and fiduciary services.Further, it offers debit cards; automated teller machines; and personal and business deposit, merchant acquiring, and mobile and internet banking services.

The company operates through offices in the Cayman Islands, Guernsey, Jersey, the United Kingdom, The Bahamas, Switzerland, Singapore, Mauritius, and Canada.It also operates through 3 branches in Bermuda and 4 branches in the Cayman Islands.The Bank of N.T. Butterfield & Son Limited was founded in 1858 and is headquartered in Hamilton, Bermuda.

Show Full description

1.b. Last Insights on NTB

The Bank of N.T. Butterfield & Son Limited's recent performance was positively driven by its Q3 2025 earnings beat, with quarterly earnings of $1.51 per share, surpassing the Zacks Consensus Estimate of $1.3 per share. Additionally, Acadian Asset Management LLC and Y Intercept Hong Kong Ltd increased their holdings in the company by 441% and 152.2%, respectively. The company's strong earnings report and growing investor confidence have contributed to its positive momentum, with revenue of $147.9240 million for the quarter aligning with analyst expectations.

1.c. Company Highlights

Last Price	49.07
Change Percentage	1.18%
Open	48.52
Previous Close	48.5
Market Cap ( Millions)	2068
Volume	122259
Year High	49.22
Year Low	34.77
M A 50	44.36
M A 200	42.73

FCF Yield	13.72%
Dividend Yield	3.83%
ROE	21.63%
Debt / Equity	3.58%
Net Debt / EBIDTA	-1008.63%
Price To Book	1.91
Price Earnings Ratio	8.97
Price To FCF	7.29
Price To sales	3.77
EV / EBITDA	1.21

2. Butterfield's Q3 2025 Earnings: A Strong Performance

Butterfield reported a net income of $61.1 million and core net income of $63.3 million for the third quarter of 2025, with core earnings per share (EPS) of $1.51, surpassing estimates of $1.3. The net interest income before provision for credit losses was $92.7 million, an improvement of 3.7% from the prior quarter, driven by a lower cost of deposits and the redemption of subordinated debt. The net interest margin (NIM) increased 9 basis points to 2.73%. Noninterest income totaled $61.2 million, a 7.4% increase from the last quarter, due to higher banking fees and foreign exchange revenues. The company's core return on average tangible common equity was 25.5%.

Publication Date: Nov -24

                                    📋 Highlights
                                    Profitability Growth:
                                                Butterfield reported net income of $61.1M and core net income of $63.3M, with a core return on average tangible common equity of 25.5% in Q3 2025.
Revenue Expansion:
                                                Noninterest income increased by $4.2M to $61.2M, driven by higher banking fees and foreign exchange revenues, while net interest income before credit losses rose to $92.7M.
Margin Improvement:
                                                Net interest margin (NIM) increased 9 bps to 2.73%, attributed to lower deposit costs and subordinated debt redemption, with a projected 150 bps uplift from deposit repricing over 12 months.
Capital Efficiency:
                                                Management prioritizes capital management via dividends, share repurchases, and strategic acquisitions, with expenses projected to stabilize at a $90M annualized run rate.
Crypto Caution:
                                                Management described themselves as "slow followers" in crypto, with no client demand pressure and no current initiatives, emphasizing safety by piggybacking on correspondent banks.

                                

Business Environment and Outlook

The business environment in Bermuda remained stable, with the local economy showing signs of growth and the government forecasting its first budget surplus in over two decades. The company's international private trust business continued to expand, and it remains focused on enhancing operational efficiency and maintaining prudent expense discipline. As Michael Collins noted, "Our capital-efficient fee-based businesses continue to deliver differentiated products and services to meet the needs of our clients."

Margin Trajectory and Interest Rate Environment

The company's net interest margin is expected to remain relatively stable, with a potential expansion due to the repricing of assets. With about $10 billion of interest-earning deposits and $400 million of loans resetting, the company expects a 150 basis point uplift on reinvestment over the next 12 months. The yield curve, if it steepens, will be beneficial to the company's margin.

Valuation and Dividend Yield

With a Price-to-Tangible Book Value (P/TBV) not directly available, we can look at the Price-to-Book Ratio (P/B Ratio) of 1.8, which suggests that the stock is trading at a reasonable valuation relative to its book value. The Dividend Yield is 4.07%, which is attractive for income-seeking investors. Given the company's strong performance and outlook, the current valuation multiples appear reasonable.

Growth Prospects and Expense Management

The company is constructive on its outlook, with growth expected to come from a combination of its markets. Expenses are expected to remain under control, with a run rate of around $90 million. The company has invested in its infrastructure, including a cloud migration of its core banking system, which is expected to drive efficiency improvements.

3. NewsRoom

Acadian Asset Management LLC Boosts Holdings in Bank of N.T. Butterfield & Son Limited (The) $NTB

Nov -14

Source: defenseworld.net

Bank of N.T. Butterfield & Son Limited (The) $NTB Stake Raised by Y Intercept Hong Kong Ltd

Nov -06

Source: defenseworld.net

The Bank of N.T. Butterfield & Son Limited (NTB) Q3 2025 Earnings Call Transcript

Oct -29

Source: seekingalpha.com

Bank of NT Butterfield & Son (NTB) Surpasses Q3 Earnings and Revenue Estimates

Oct -28

Source: zacks.com

Bank of N.T. Butterfield & Son (NTB) Expected to Announce Quarterly Earnings on Tuesday

Oct -26

Source: defenseworld.net

Butterfield to Announce Third Quarter 2025 Financial Results on October 28, 2025 and Host Earnings Conference Call on October 29, 2025

Oct -13

Source: businesswire.com

Butterfield Announces Senior Leadership Appointments

Sep -02

Source: businesswire.com

The Bank of N.T. Butterfield & Son Limited (NTB) Q2 2025 Earnings Call Transcript

Jul -29

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.90%)

6. Segments

Banking Services and Wealth Management

Expected Growth: 6.9%

The 6.9% growth in Banking Services and Wealth Management at The Bank of N.T. Butterfield & Son Limited is driven by increasing demand for private banking and wealth management services, strategic acquisitions, and expansion into new markets. Additionally, the bank's focus on digital transformation, improved customer experience, and diversified revenue streams have contributed to this growth.

7. Detailed Products

Personal Banking

A range of personal banking services including current and savings accounts, credit cards, personal loans, and mortgages.

Private Banking

Tailored financial solutions for high net worth individuals, including investment management, wealth planning, and bespoke banking services.

Corporate Banking

A range of financial solutions for businesses, including cash management, trade finance, and lending services.

Wealth Management

Comprehensive wealth management services, including investment management, trust services, and estate planning.

Treasury Services

A range of treasury services, including foreign exchange, interest rate management, and commodity hedging.

Fiduciary Services

Trust, company formation, and administration services for individuals, companies, and institutions.

Custody and Administration

Custody and administration services for investment funds, pension schemes, and other institutional clients.

8. The Bank of N.T. Butterfield & Son Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for The Bank of N.T. Butterfield & Son Limited is medium, as there are alternative financial institutions and digital payment platforms that customers can use.

Bargaining Power Of Customers

The bargaining power of customers is low, as The Bank of N.T. Butterfield & Son Limited has a strong brand presence and a wide range of financial products and services.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium, as The Bank of N.T. Butterfield & Son Limited relies on a network of suppliers for its operations, but has some flexibility in choosing its suppliers.

Threat Of New Entrants

The threat of new entrants is low, as The Bank of N.T. Butterfield & Son Limited has a strong brand presence and a large customer base, making it difficult for new entrants to gain traction.

Intensity Of Rivalry

The intensity of rivalry is high, as The Bank of N.T. Butterfield & Son Limited operates in a highly competitive banking industry with many established players.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	9.52%
Debt Cost	6.17%
Equity Weight	90.48%
Equity Cost	10.06%
WACC	9.69%
Leverage	10.53%

11. Quality Control: The Bank of N.T. Butterfield & Son Limited passed 6 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Butterfield

A-Score: 7.5/10

Value: 6.7

Growth: 6.2

Quality: 8.0

Yield: 8.0

Momentum: 7.5

Volatility: 8.7

1-Year Total Return ->

Barings

A-Score: 7.3/10

Value: 2.6

Growth: 4.6

Quality: 8.8

Yield: 10.0

Momentum: 8.0

Volatility: 9.7

1-Year Total Return ->

General American Investors Company

A-Score: 7.2/10

Value: 5.3

Growth: 2.8

Quality: 8.9

Yield: 9.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

Sixth Street Specialty Lending

A-Score: 6.9/10

Value: 5.2

Growth: 4.3

Quality: 6.5

Yield: 10.0

Momentum: 6.0

Volatility: 9.7

1-Year Total Return ->

Crescent Capital BDC

A-Score: 6.8/10

Value: 6.3

Growth: 7.4

Quality: 6.3

Yield: 10.0

Momentum: 1.5

Volatility: 9.3

1-Year Total Return ->

Conduit Holdings

A-Score: 6.5/10

Value: 6.8

Growth: 10.0

Quality: 6.6

Yield: 9.0

Momentum: 0.5

Volatility: 6.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-7.89%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.69%

The Bank of N.T. Butterfield & Son Limited - BMG0772R2087

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on NTB

1.c. Company Highlights

Better Quality

Higher Yield

Average Growth

Earnings Beats

Revenues Beats

Average Yield

Stable Momentum

Average Quality

Fairly Valued

Medium Volatility

Strong Momentum

2. Butterfield's Q3 2025 Earnings: A Strong Performance

Business Environment and Outlook

Margin Trajectory and Interest Rate Environment

Valuation and Dividend Yield

Growth Prospects and Expense Management

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.90%)

6. Segments

Banking Services and Wealth Management

Expected Growth: 6.9%

7. Detailed Products

Personal Banking

Private Banking

Corporate Banking

Wealth Management

Treasury Services

Fiduciary Services

Custody and Administration

8. The Bank of N.T. Butterfield & Son Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: The Bank of N.T. Butterfield & Son Limited passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

49.07$

Current Price

49.07$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA