This annual report contains forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations or assumptions regarding the future of our business, future plans and strategies, our operational results and other future conditions. Forward-looking statements can be identified by words such as "anticipate," "assume," "believe," "estimate," "expect," "indicate," "intend," "may," "plan," "point to," "predict," "project," "seek," "target," "potential," "will," "would," "could," "should," "continue," "contemplate" and other similar expressions, although not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this annual report and include statements regarding our intentions, beliefs or current expectation concerning, among other things, our results of operations, financial condition, capital and liquidity requirements, prospects, growth, strategies and the industry in which we operate.

There are important factors that could cause actual results to differ materially from those contemplated by such forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We believe that these risks and uncertainties include, but are not limited to, those described in the section captioned "Risk Factors" sectionthat appear in Item 3.D. "Risk Factors" of this annual report, which include, but are not limited to, the following:

Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this report. In addition, even if our results of operations, financial condition and

Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this report speaks only as of the date of such statement. Except to the extent required by applicable law, we undertake no obligation to update any forward-looking statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

Unfavorable market conditions (including as a result of the COVID-19 pandemic) can result in a deterioration in the credit quality of our borrowers and the demand for our products and services, comprisingan increase in the number of retailloan delinquencies, defaults and corporate banking, treasury services,charge-offs, additional provisions for loan losses, decreases in asset values, deterioration in investment performance and wealth management, which consistsan overall material adverse effect on the quality of investment management, advisory and brokerage services, trust, estate, and company managementour loan portfolio.

Unlike banks that are more geographically diversified, our business is concentrated primarily in both our Bermuda, andthe Cayman Islands, segments, as well as custody services in our Bermuda segment. Theand the Channel Islands and the UK, segment includeand we may be more affected by a downturn in these markets than more diversified competitors.

Furthermore, changes in legislation and regulation or an integrated modelattempt by any territory or dependency of the UK in which we operate to declare independence from the UK or to implement changes in its constitution, including its fiscal and monetary policies, could have a negative effect on the applicable jurisdiction's position as an international business center. This could have a significant negative effect on the local economy and in turn negatively affect our business.

Unlike many other jurisdictions, there is no central bank or similar governmental agency in Bermuda from which we may borrow US or Bermuda Dollars if we experience liquidity shortages, which may leave us without a lender of last resort in the event that combines traditionalBermuda suffers a severe economic downturn at the same time as a liquidity shortage. Similarly, there is no central bank in the Cayman Islands, Jersey or Guernsey to act as a lender of last resort. Accordingly, we may not have a lender of last resort in case of future liquidity shortages and we may be unable to sufficiently fund our liquidity needs. While there is no central bank or similar governmental agency in Bermuda, the Cayman Islands, Jersey or Guernsey that insures bank deposits, such as the Federal Deposit Insurance Corporation in the United States, the Governments of Bermuda and Jersey and the Government of the States of Guernsey have each implemented a Deposit Insurance Scheme or Deposit Compensation Scheme. See Item 4.B. "Business Overview - Supervision and Regulation" and "- Certain jurisdictions in which we operate, including Bermuda, Guernsey and Jersey, have a Deposit Insurance Scheme or Deposit Compensation Scheme and we incur ongoing costs as a result.” The regulators in these jurisdictions have also required us to hold capital add-ons to compensate for the systemic importance of our bank to the economy in the absence of a central bank. Without a central bank from which we could borrow funds, liquidity management will be critical to the management of our consolidated balance sheet, and an inability to obtain sufficient liquidity could adversely affect our financial condition.

controversial industries such as gaming and cryptocurrencies, among others. See "Our business may be negatively impacted by the economic substance legislation and regulations in the jurisdictions in which we operate, including Bermuda, the Cayman Islands, and the Channel Islands." Any circumstance that causes real or perceived damage to our brand or reputation, or banking or wealth management generally in these jurisdictions, may negatively affect our relationships with our customers and key introducers, which would have an adverse effect on our business, financial condition or results of operations.

We seek to grow both organically and through acquisitions. In the past several years, we have made various acquisitions and investments intended to complement and expand our businesses, including our July 2019 acquisition of ABN AMRO (Channel Islands) Limited, our February 2018 agreement with Deutsche Bank to refer Deutsche Bank's clients from their banking lending, cashand custody business in the Cayman and Channel Islands to us, and our March 2018 acquisition of Deutsche Bank’s GTS business, excluding its US operations. Our long-term growth strategy includes identifying and effecting selective acquisitions in our core geographies, but we cannot be sure that we will be able to continue to identify suitable acquisition candidates or investment opportunities. Even if we identify suitable targets, there can be no assurance that we will be able to obtain the necessary funding on acceptable terms, if at all, to finance any of those potential acquisitions or investments.

We also provide foreign exchange services custodyto our clients, including trading on behalf of clients in all major currencies and providing hedging solutions to manage foreign exchange risk. Foreign currency volatility influences the level of client activity. Changes in client activity may result in reduced foreign exchange trading income.

In addition, as a bank with subsidiaries located in various jurisdictions, the Bank’s access to assetinter-company funds can be restricted because our regulated banking subsidiaries are required to maintain certain liquidity ratios or minimum levels of capital in accordance with the laws of the jurisdictions in which they operate or otherwise. The necessity of maintaining these ratios or levels of capital or other liquidity considerations could restrict the ability of these subsidiaries to transfer funds to us, in the form of cash dividends, loans or advances.

We face competition in all aspects of our business, and may not be able to attract and retain wealth management, trust and trust professionals within Butterfield. banking clients at current levels.

We also provide our clientscompete with immediate access to their account information through the use of internet and mobile banking.

In our banking business, we face competition mainly from other local banks, such as pensionBermuda Commercial Bank and Clarien Bank in Bermuda and from Cayman National Corporation in the Cayman Islands, as well as from subsidiaries of international banks, being Royal Bank of Canada in the Cayman Islands and HSBC in Bermuda, whom we view as our most significant competitors. In our wealth management business line, we face competition from local competitors, as well as much larger financial institutions, including financial institutions that are not based in the markets in which we operate. Revenues from the trust and wealth management business depend in large part on the level of AUA.

The Bank's credit ratings have a direct effect on its competitive position, and declines in the Bank's ratings would increase the cost of borrowing funds and captive insurance companies with investable assets over $10 millionmake our ability to raise new funds, attract and private clients suchretain deposits or renew maturing debt more difficult, which may negatively affect long-term and short-term funding.

The Bank's credit strength ratings are an important component of its liquidity profile and competitive position. Ratings show each agency's view of our financial strength, operating performance and ability to meet debt obligations as high net worththey become due. Nationally recognized statistical rating organizations ("NRSROs") periodically review the financial performance and ultra-high net worth individuals, families,condition of banks and trusts with investable assets over $1 million. Our principal services include discretionary investment management, managed portfolio services, money market, and mutual fund offerings. We also offer advisory and self-directed brokerage options. Over 90%may downgrade or change the outlook on a bank's ratings due to, for example: a change in a bank's regulatory capital ratios; a change in an NRSRO's determination of the business's discretionaryamount of capital cushion required to maintain a particular rating; an increase in the perceived risk of a bank's investment mandates call for balanced growth to conservative allocations. We focus on delivery of reasonable appreciation with an emphasis on capital preservation.portfolio; reduced confidence in management; or other considerations that may or may not be under our control. The Bank relieshas credit ratings from Standard & Poor's ("S&P"), Moody's Investor Service ("Moody's") and Kroll Bond Rating Agency ("KBRA"). Each of the rating agencies reviews its ratings and rating methodologies on a recurring basis and may decide on a downgrade at any time. The Bank's ratings as at December 31, 2021 are shown in the table below:

We rely on third parties to provide researchservices that are integral to our ordinary operations, and their failure to perform in a satisfactory manner could negatively affect us.

In addition, BNYM and managing client relationships.Wells Fargo act as clearing houses for all our US Dollar transactions and, if our relationships with BNYM and Wells Fargo are terminated, we could lose our ability to engage in US Dollar transactions. For more information see " - We could be negatively affected if the soundness of other financial institutions and counterparties deteriorates or if such counterparties, including clearing houses, are unwilling to do business with us, in particular in respect of US Dollar transactions."

In deciding whether to extend credit or enter into other transactions with clients and counterparties, we rely on information furnished by or on behalf of clients and counterparties, including financial statements and other financial information. We also provide customized reportingmay rely on representations of clients and counterparties as to meet specific needsthe accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. Such information could turn out to be inaccurate, including as a result of fraud or misrepresentation on behalf of our major clients.

We cannot be certain that our underwriting and operational controls will prevent or detect such fraud or that we will not experience fraud losses or incur costs or other losses related to returnsuch fraud. Our clients and counterparties may also experience fraud in their businesses which could adversely affect their ability to shareholders and invest strategically, both organically and through acquisitions, to further enhance the growth prospectsrepay their loans or make use of our Company. We aimservices.

During the periods reported in this annual report, we have not experienced any material losses, or had to continuewrite down collateral, as a result of fraud or misrepresentation, but we cannot be certain that the Bank will not experience any such losses or have to build excess capitalwrite down any such collateral in the future, which could have a material adverse impact on our results of operation and financial condition.

The appraisals and other valuation techniques we use in evaluating and monitoring loans secured by real property may not accurately describe the net value of the collateral that we can redeploy into growingrealize.

The originWe are a company incorporated under the laws of Bermuda, incorporated on October 22, 1904, pursuant to the The Bank of N.T. Butterfield & Son Limited traces back to 1784, toBank Act, 1904 (the "Butterfield Act"). We are registered with the foundingRegistrar of the trading firm of Nathaniel Butterfield. In 1858, our company was established as a bankCompanies in Bermuda under registration number 2106. Our registered office and has been instrumental to the local economy ever since. The Bank was later incorporated under a special actprincipal executive offices are located at 65 Front Street, Hamilton, HM 12, Bermuda. Our agent for service of the local Parliament in 1904. In the 1960s, as international businesses began contributing substantially to Bermuda's economy, we developed services to work to meet their needs. In 1967, we opened officesprocess in the Cayman Islands and byUnited States is C T Corporation System, 28 Liberty Street, New York, New York 10005. Our telephone number is (441) 295 1111. We maintain a website at www.butterfieldgroup.com. Neither this website nor the 1980s had expanded our operations to include retail banking, investment management, and fund administration. In 1973, we opened our Guernsey officeinformation on or accessible through this website is included or incorporated in, order to provide customers with access to the Pound Sterling currency after Bermuda's departure from the British Sterling zone. In addition to being Bermuda's first bank, we opened the first ATMs in Bermuda in the 1980s and launched Bermuda's first internet banking service in 2001. In 1971, we listed our common shares on the BSX ("Bermuda Stock Exchange") under the ticker symbol "NTB.BH". In 2016, we listed our common shares on the NYSE under the ticker symbol "NTB".

The rights offering, which closed on May 12, 2010, was fully subscribed to,SEC maintains an internet site at https://www.sec.gov that contains reports, information statements, and the proceeds were used to repurchase shares from the recapitalization investors. As a result, the recapitalization investors' total investment was reduced to $420 million.

Corporate Information

We are a company incorporated under the laws of Bermuda, incorporated on October 22, 1904, pursuant to the The N.T. Butterfield & Son Bank Act, 1904 (the "Butterfield Act"). We are registered with the Registrar of Companies in Bermuda under registration number 2106. Our registered office and principal executive offices are located at 65 Front Street, Hamilton, HM 12, Bermuda. Our agent for service of process in the United States is C T Corporation System, 28 Liberty Street, New York, New York 10005. Our telephone number is (441) 295 1111. We maintain a website at www.butterfieldgroup.com. Neither this website nor the information on or accessible through this website is included or incorporated in, or is a part of, this report.

The SEC maintains an internet site at https://www.sec.gov that contains reports, information statements, and other information regarding issuers that file electronically with the SEC.

The following chart presents our corporate structure, indicating our principal regulated subsidiaries as at December 31, 2019.2021. All of the subsidiaries listed below are wholly owned by the Bank.

The Bank itself is licensed in Bermuda to provide banking services and wealth managementcustody services. Through Butterfield Asset Management Limited and Butterfield Securities (Bermuda) Limited, it is licensed and provides asset managementinvestment services and, through Butterfield Trust (Bermuda) Limited and Bermuda Trust Company Limited, it is licensed and provides corporate trustee, fiduciary and corporate administration services. Butterfield Securities (Bermuda) Limited also provides investment advisory and listing sponsor services.

Butterfield Trust (Bahamas) Limited provides trust and fiduciary services.

Butterfield Bank (Cayman) Limited provides banking services and Butterfield Trust (Cayman) Limited provides trustee, fiduciary and corporate administration services.

Butterfield Bank (Guernsey) Limited provides private banking, corporate banking, custody services and administered banking services.mortgage lending. Butterfield Trust (Guernsey) Limited provides trustee and fiduciary services.

Butterfield Trust (Bahamas)Mortgages Limited provides trust and fiduciaryresidential property lending services.

Butterfield Holdings (Switzerland) Limited provides investment services and Butterfield Trust (Switzerland) Limited provides trust and fiduciary services.

Butterfield Bank (Jersey) Limited provides deposit-taking, mortgage services, investment business and custody services.

Butterfield Trust (Asia) Limited provides trust and fiduciary services.

The financial services industry and each of the markets in which we operate are competitive. We face strong competition in gathering deposits, making loans and obtaining client assets for management. We compete, both domestically and internationally, with globally oriented asset managers, retail and commercial banks, investment banking firms, brokerage firms and other investment service firms. Due to the trend toward consolidation in the global financial services industry, our larger competitors tend to have broader ranges of product and service offerings, increasedgreater access to capital, and greater efficiency. Larger financial institutions may also have greater ability to leverage increasing regulatory requirements and investment in expensive technology platforms. We also face competition from non-banking financial institutions. These institutions have the ability to offer services previously limited to commercial banks. In addition, non-banking financial institutions are not subject to the same regulatory restrictions as banks, and can often operate with greater flexibility and lower cost structures.

The Bermuda banking industry currently consists of four licensed banks and one licensed deposit-taking institution. These include one large subsidiary of an international bank, HSBC, and three domestic institutions, includinginstitutions: Butterfield, Bermuda Commercial Bank and Clarien Bank. In the Cayman Islands, the Bank is one of six Class 'A' full service retail banks licensed to conduct business with domestic and international clients. There are also threefour non-retail Class 'A' banks and 11698 limited service Class 'B' banks according to CIMA ("Cayman Islands Monetary Authority").CIMA. In the Channel Islands, Guernsey has 2220 licensed banks and Jersey has 29,20, the majority of which are topsubsidiaries of global banking groups and brands such as Barclays, RBS, Lloyds, Credit Suisse, Investec, RBCRoyal Bank of Canada and Northern Trust. In certain interest rate environments, additional significant competition for deposits may be expected to arise from corporate and government debt securities and money market mutual funds. We view HSBC in Bermuda and Scotia and CIBC FirstCaribbean in the Cayman Islands as our most significant competitors in those markets.

In our wealth management business line, we face competition from local competitors, as well as much larger financial institutions, including financial institutions that are not based in the markets in which we operate. Revenues from the trust and wealth management business depend in large part on the level of assets under management, and larger international banks may have higher levels of assets under management.

In our trust business line, we face competition primarily from other specialized trust service providers. There are many trust companies in the main international financial centers, and many of our competitors in this sector offer fund administration and corporate services alongside private client fiduciary services.

Competition for deposits is also affected by the ease with which customers can transfer deposits from one institution to another. Our cost of funds fluctuates with market interest rates and may be affected by higher rates being offered by other financial institutions. Our management believesWe believe that our most direct competition for deposits comes from international and domestic financial services firms that target the same customers as the Bank.

Our deposits are generated principally by our banking business line, which offers retail and corporate checking, savings, and term deposits through our segments in Bermuda, the Cayman Islands and the Channel Islands. In addition, wealth management, through its private banking business line, also provides deposit services to high net worth and ultra-high net worth clients in those same geographic segments. As at December 31, 2019,2021, our Bermuda, Cayman Islands and Channel Islands and the UK segments contributed $4.4$4.5 billion, $3.5$4.6 billion and $4.6$4.7 billion, respectively, to our total customer deposit base.

Total deposits as at December 31, 20192021 were $12.4$13.9 billion, up 31.6%4.7% over total deposits as at December 31, 2018. Customer demand2020. Demand deposits, which include checking, savings and call accounts, totaled $9.4$10.9 billion, or 75.4%78.8% of customerour total deposits, as at December 31, 2019,2021, compared to $7.4$10.6 billion, or 79.1%79.9%, as at December 31, 2018. Customer term2020. Term deposits totaled $3.0$2.9 billion as at December 31, 2019.2021. The cost of funds on total deposits increaseddecreased from 1821 basis points in 20182020 to 4711 basis points in 2019. Deposit2021. The increase in deposit balances increased primarily as a result ofwas driven by retail and corporate deposit increases in Cayman and the ABN AMRO (Channel Islands) acquisitionChannel Islands, and partially offset by expected corporate deposit decreases in 2019 while costBermuda. Cost of funds increaseddecreased primarily due to higher interest rates as well as increased costthe active repricing of funding associated with the ABN AMRO (Channel Islands) acquisition.deposits.

We offer a broad set of lending products and services including residential mortgage lending, automobile lending, credit cards, consumer financing, and overdraft facilities to our retail customers, and commercial real estate lending, commercial and industrial loans, and overdraft facilities to our commercial and corporate customers. These offerings are provided to our retail, commercial, and private banking clients in our key jurisdictions of Bermuda and the Cayman Islands. We also offer residential mortgage lending through our private banking business in Guernsey and to our high net worth and ultra-high net worth clients in the UK. Our loan portfolio, net of allowance for credit losses, stood at $5.1$5.2 billion as at December 31, 2019.2021 compared to $5.2 billion as at December 31, 2020. The loan portfolio represented 36.9%34.2% of total assets as at December 31, 2019,2021, and loans, net of allowance for credit losses, as a percentage of customertotal deposits were 41.4%37.8%. The effective yield on total loans for the year ended December 31, 20192021 was 5.36%4.26%, compared to 5.47%4.54% for the year ended December 31, 2018.2020.

The residential mortgage portfolio comprises mortgages to clients with whom we are seeking to establish (or already have) a comprehensive financial services relationship. It includes mortgages to individuals and corporate loans secured by way of first ranking charges over the residential property to which each specific loan relates, generally on terms which allow for the repossession and sale of the property if the borrower fails to comply with the terms of the loan. As at December 31, 2019,2021, residential

We provide loans, as part of our normal banking business, in respect of automobile financing, consumer financing, credit cards and overdraft facilities to retail and private banking clients in the jurisdictions in which we operate. As at December 31, 2019,2021, non-residential loans to consumers (after specific allowance for credit losses) totaled $256.5$214.8 million, accounting for approximately 5.0%4.1% of the Group's total gross loan portfolio (after specific allowance for credit losses) and approximately 2.5%1.9% of total non-accrual loans in the Group's loan portfolio.

Commercial real estate loans are offered to real estate investors, developers and builders domiciled primarily in Bermuda, the Cayman Islands, Guernsey and the UK. To manage the Group's credit exposure on such loans, the principal collateral is real estate held for commercial purposes and is supported by a registered mortgage. Cash flows from the properties, primarily from rental income, are generally supported by long-term leases.

As at December 31, 2019,2021, our commercial real estate loan portfolio (after specific allowance for credit losses) totaled $753.8$693.2 million, accounting for approximately 14.6%13.2% of the Group's total gross loan portfolio and approximately 6.4%with $4.7 million of commercial real estate non-accrual loans representing 7.8% of total non-accrual loans in the Group's loan portfolio.

Our commercial real estate loan portfolio is broken down into two categories: commercial mortgage and construction. As at December 31, 2019,2021, commercial mortgages totaled $658.8$683.5 million, (after specific allowance for credit losses), and construction loans totaled $94.9$9.6 million, accounting for approximately 87.4%98.6% and 12.6%1.4% of our commercial real estate loan portfolio, (after specific allowance for credit losses), respectively.

The commercial and industrial loan portfolio includes loans and overdraft facilities advanced primarily to corporations and small and medium-sized entities, which are generally not collateralized by real estate and where loan repayments are expected to flow from the operation of the underlying businesses. As at December 31, 2019,2021, the Group's other commercial loan portfolio, excluding loans to governments, totaled $559.4$478.4 million, (after specific allowance for credit losses), accounting for approximately 10.9%9.1% of the Group's total gross loan portfolio (after specific allowance for credit losses). As of the same date,and the Group's loans to governments totaled $370.8$259.6 million, accounting for approximately 7.2% of our loan portfolio (after specific allowance for credit losses). As at December 31, 2019, other commercial loans accounted for approximately 15.0%4.9% of our total gross loan portfolio. There was $18.6 million of other commercial non-accrual loans.loans representing approximately 30.4% of total non-accrual loans in the loan portfolio.

Given the large customer deposit base commanded in our Bermuda, Cayman Islands and Channel Islands operations, and the relatively low volume of lending demand from our customer base, our investment strategy is more important than may be the case for most financial institutions. In recognition of this, we maintain what we believe to be a conservative approach to investments, requiring the purchase of mainly fixed-rate investments in order to manage interest rate risk. Our investment portfolio comprises of mainly securities issued or guaranteed by the US Governmentgovernment or federal agencies. The securities in which we invest are limited generally to securities that are considered investment grade (i.e., "BBB" and higher by S&P's Financial Services LLC or an equivalent credit rating). Effective July 31, 2012,April 1, 2013, we entered into an agreement with Alumina Investment Management LLC ("Alumina") pursuant to which Alumina provides investment advisory services to us in respect of our US Treasury and agency portfolio.

As at December 31, 2019,2021, the Group held $4.4$6.2 billion in investments, representing approximately 31.9%40.7% of total assets.

We operate across multiple currency jurisdictions with multi-currency products. In our deposit taking jurisdictions—Bermuda, the Cayman Islands, Guernsey and Jersey—there are currently no dedicated central banks, and no pre-funded deposit insurance scheme infrastructures (such as the Federal Deposit Insurance Corporation in the United States), with the exception of Bermuda, where a pre-funded deposit insurance scheme has been implemented, and as described below in “Supervision“- Supervision and Regulation” and “Risk Factors - Risks Relating to the Markets in Which We Operate - Certain jurisdictions in which we operate, including Bermuda, Guernsey and Jersey, have a Deposit Insurance Scheme or Deposit Compensation Scheme and we incur ongoing costs as a result”. In addition, we do not have access to borrowing or deposit facilities with the US Federal Reserve or the European Central Bank; therefore, we conservatively manage client deposit balances and the liquidity risk profile of our balance sheets. This involves the retention of significant cash or cash equivalent balances, management of intra-bank counterparty exposure and management of a significant short-dated Canadian, UK and US Treasury Bill portfolio. As at December 31, 2019,2021, the cash due from banks of $2.6$2.2 billion was composed primarily of $1.6 billion in interest earning cash equivalents, which are investments with a less than ninety day90-day duration. The remaining amounts were comprised of non-interest earningbearing and interest earningbearing deposits of $0.1 billion and $0.8$0.4 billion, respectively.

We provide foreign exchange services in the normal course of business in all banking jurisdictions. The major contributors to foreign exchange revenues are Bermuda and the Cayman Islands, accounting for 84% and 92%78% of our foreign exchange revenue for the year ended December 31, 2019 and 2018, respectively.2021. We do not maintain a proprietary trading book. Foreign exchange commission income is generated from client-driven transactions and totaled $37.0$43.4 million during the year ended December 31, 2019, compared to $32.9 million for the comparative period in 2018. The $4.1 million period-over-period increase reflects increased client activity and related volumes in retail and institutional foreign exchange flows, as well as increased unrealized gains on client service derivatives held over period ends.2021.

Through our wholly-owned trust subsidiaries, we provide custody administration and settlement services to a wide range of internal and external investment clients dealing in global markets. Our custody service currently offers custody settlement and safekeeping services in 39 markets globally, including major markets and smaller, less-developed markets, with principal markets covered being the United States, Canada, Europe and the Far East.Asia.

Our custody service offers safekeeping services for physical and book-entry assets. Custody for listed securities is conducted through Bank of New York Mellon ("BNYM").BNYM. Hedge funds, mutual funds and Exchange Traded Fundsexchange traded funds are held by Brown Brothers Harriman ("BBH").Harriman. Trading in investment transactions is settled via our global sub-custodians, BNYM and BBH. Custody services are offered from our Bermuda, Cayman Islands and Channel Islands segments and complement core wealth management services offered by other parts of the Group, and we currently anticipate this business to grow generally proportionallyin line with our wealth management business. Clients of our custody service include a wide range of investment funds and other investment vehicles, corporations and trusts whose related banking requirements are provided by the Bank. As such, the custody client base, in addition to delivering a fee based income, also provides cash balances and foreign exchange transaction flows.

We devote significant resources to maintain stable, reliable, efficientAdverse economic and scalable information technology systems. We work with our third-party vendors to monitor and maximizemarket conditions in Bermuda, the efficiency of our use of their applications. We use integrated systems to originate and process loans and deposit accounts, which reduces processing time, improves customer experience and reduces costs. Most customer records are maintained digitally. We are also currently executing several initiatives to enhance our online and mobile banking services to further improveCayman Islands, the overall client experience.

Unfavorable market conditions (including as a result of the COVID-19 pandemic) can result in a single location, Guernsey.

Because the primary markets in which we operate. Trustoperate do not have well-diversified economies, a downturn in their key industries could affect their economies as a whole and fiduciaryhave an adverse effect on our business, financial condition or results of operations.

Bermuda is among the largest reinsurance markets in the world. The Cayman Islands is a leader in fund domiciliation for global asset managers, with 12,719 regulated mutual funds as at December 31, 2021 according to CIMA. International financial services account for a significant portion of the economies of the Channel Islands. Many of our commercial customers are marketed primarilyreinsurance or regulated fund service providers. As a result, a downturn in these key sectors, a change in laws or regulations (including the favorable tax treatment of entities in these jurisdictions), or a shift of business away from Bermuda, the Cayman Islands, or the Channel Islands, including as a result of the inclusion of any of these jurisdictions on the EU list of non-cooperative jurisdictions for tax purposes or the implementation of the global minimum tax regime proposed by the Organization for Economic Cooperation and Development ("OECD") in any of these jurisdictions, could result in job losses and adversely impact the economies in these markets. Any downturn or further concentration in the reinsurance, investment and asset management and banking markets could also adversely affect our business, financial condition and results of operations.

Banks domiciled in Bermuda, including us, are not supported by a central bank from which to intermediaries through representative attendanceborrow funds, so if we are unable to maintain sufficient liquidity by continuously attracting deposits and other short-term funding, our financial condition, including our capital ratios, funding costs or results of operations could be adversely affected.

Unlike many other jurisdictions, there is no central bank or similar governmental agency in Bermuda from which we may borrow US or Bermuda Dollars if we experience liquidity shortages, which may leave us without a lender of last resort in the event that Bermuda suffers a severe economic downturn at the same time as a liquidity shortage. Similarly, there is no central bank in the Cayman Islands, Jersey or Guernsey to act as a lender of last resort. Accordingly, we may not have a lender of last resort in case of future liquidity shortages and sponsorshipwe may be unable to sufficiently fund our liquidity needs. While there is no central bank or similar governmental agency in Bermuda, the Cayman Islands, Jersey or Guernsey that insures bank deposits, such as the Federal Deposit Insurance Corporation in the United States, the Governments of industry conferencesBermuda and through print advertising in international trade journals.

As a bank licensed by the BMA, we are required to be a member of the Deposit Insurance Scheme ("DIS") and pay contributions to the Deposit Insurance Fund. Currently, our premium contribution is calculated by the Bermuda Deposit Insurance Corporation as 0.25% per annum of the average total amount of our Bermuda Dollar deposits that are covered by the DIS guarantee over a rolling three-month period, payable every three months in arrears. The amount of the contribution we are liable to pay may change from time to time as the total level of our insured Bermuda Dollar deposits changes; in addition, there is no guarantee that the current rate of premium contributions charged by the Bermuda Deposit Insurance Corporation will stay the same and not increase or that the Bermuda Deposit Insurance Corporation will not require additional contributions in the event that the Deposit Insurance Fund is insufficient to pay compensation due to insured depositors. We ownmay also not be able to recover our contributions to the Deposit Insurance Fund from any failed institution whose insured depositors receive payments from the Deposit Insurance Fund. Any contributions we are required to make as part of the DIS (and any associated costs) are a varietycost to our business, and such costs, including any future increases, may have an adverse effect on our business, financial condition or results of trademarks, service marks, trade names and logos and spendoperations.

As a bank licensed by the Guernsey Financial Services Commission, we are required to pay contributions to the Guernsey Deposit Compensation Scheme (the "Guernsey DCS"). Currently, we are required to pay an administration levy which is calculated by the Guernsey DCS Board. The amount of the contribution we are liable to pay may change from time to time and resources maintaining this intellectual property portfolio.there is no guarantee that the current rate charged by the Guernsey DCS Board will stay the same and not increase. In the event of the failure of a Guernsey licensed bank, the Guernsey DCS Board will estimate the total level of compensation levy required and the Bank will be liable in equal shares with every other participant (i.e., every other licensed bank in Guernsey) for the first £10,000,000. If the total compensation levy exceeds £10,000,000, then the Bank will be liable on a pro-rata basis (calculated by reference to the total "value at risk" of our Guernsey deposits compared to the Guernsey market) with every other participant for the amount of such excess. We control accessmay also not be able to recover our contributions to the Guernsey DCS from any failed licensed bank whose insured depositors receive payments from the Guernsey DCS. Any contributions we are required to make as part of the Guernsey DCS (and any associated costs) are a cost to our intellectual propertybusiness, and such costs, including any future increases, may have an adverse effect on our business, financial condition or results of operations.

The Jersey Bank Depositors Compensation Scheme ("Jersey DCS") is funded primarily through license agreements, confidentiality procedures, non-disclosure agreementsan upfront loan from the States of Jersey. In the event of a bank failing, levies would be raised on Jersey banks, subject to certain caps for banking groups over a five-year period, based on the proportion of protected deposits each bank holds to repay the loan. In the event that the full £100 million liability of the Jersey DCS was called upon, banks would contribute approximately two-thirds of funding, with third parties, employment agreementsthe States of Jersey contributing one-third.

Severe weather, natural disasters and potential impacts of climate change could disrupt our intellectual property.businesses and adversely affect our financial condition or results of operations.

We cannot predict whether we will continue to be able to obtain insurance for hazard-related damages to our premises or, if obtainable and carried, whether this insurance will be adequate to cover our losses. Moreover, we expect any insurance of this nature to be subject to substantial deductibles and to provide for premium adjustments based on claims, and we do not carry insurance against all types of losses. For moreall these reasons, any future hazard-related costs and work interruptions could have an adverse effect on our business, financial condition or results of operations.

Unlike the US where the Fair Credit Reporting Act ("FCRA") is designed to help ensure that credit bureaus furnish correct and complete information see "Risk Factors - when evaluating loan applications, the majority of the markets in which we operate do not have systemic credit bureau reports. Therefore, we review each loan and we use a formal and documented tiered credit approval process that is administered through and governed by our risk management framework. Due to limitations in the availability of information, our assessment of credit risk associated with a particular customer may not be based on complete, accurate or reliable information. In addition, although we have made and continue to make improvements to our credit scoring systems to better assess borrowers' credit risk profiles, we cannot provide assurance that our credit scoring systems collect complete or accurate information reflecting the actual behavior of customers or that their credit risk can be assessed correctly. Without complete, accurate and reliable information, we have to rely on other publicly available resources and our internal resources, which may not be effective. As a result, our ability to effectively manage our credit risk and subsequently our impairment losses and allowance for credit losses may be materially adversely affected. In addition, because our credit approval process involves detailed analyses of the customer or credit risk, taking into account both quantitative and qualitative factors, it is subject to human or information technology systems errors. In exercising their judgment on current or future credit risk behavior of our customers, our employees may not always be able to assign an accurate credit rating, which may result in our exposure to higher credit risks than indicated by our risk rating system. In addition, we have been refining our credit policies and guidelines to address potential risks associated with particular industries or types of customers. However, we may not be able to timely detect all possible risks before they occur, or due to limited tools available to us, our employees may not be able to effectively implement them, which may increase our credit risk. Failure to effectively implement, consistently follow or continuously refine our credit risk management system may result in an increase in the level of nonperforming loans and a higher risk exposure for us, which could have a material adverse effect on us.

Our corporate headquarters is locatedstrategy includes expansion of our business through acquisitions of, or investments in, other companies or new products and services, but we may not be able to achieve regulatory approval for such transactions or be able to achieve the anticipated cost savings, growth opportunities and other benefits anticipated from such transactions.

We seek to grow both organically and through acquisitions. In the past several years, we have made various acquisitions and investments intended to complement and expand our businesses, including our July 2019 acquisition of ABN AMRO (Channel Islands) Limited, our February 2018 agreement with Deutsche Bank to refer Deutsche Bank's clients from their banking and custody business in the Cayman and Channel Islands to us, and our March 2018 acquisition of Deutsche Bank’s GTS business, excluding its US operations. Our long-term growth strategy includes identifying and effecting selective acquisitions in our core geographies, but we cannot be sure that we will be able to continue to identify suitable acquisition candidates or investment opportunities. Even if we identify suitable targets, there can be no assurance that we will be able to obtain the necessary funding on acceptable terms, if at 65 Front Street, Hamilton HM 12, Bermuda. all, to finance any of those potential acquisitions or investments.

In addition, integrating an acquired company, business or technology possesses significant risks, including, among other things:

Goodwill is tested for impairment on an annual basis. As at December 31, 2021, we had $25.4 million and $60.8 million of goodwill and intangible assets, respectively. In the future, if our acquisitions do not yield expected returns or there are changes in discount rates, we may be required to take additional charges to our corporate headquarters we also maintain officesearnings based on the impairment assessment process, which could harm our business, financial condition, results of operations and prospects.

In our banking business, we face competition mainly from other local banks, such as Bermuda Commercial Bank and Clarien Bank in Bermuda and four branch locationsfrom Cayman National Corporation in the Cayman Islands.Islands, as well as from subsidiaries of international banks, being Royal Bank of Canada in the Cayman Islands and HSBC in Bermuda, whom we view as our most significant competitors. In our wealth management business line, we face competition from local competitors, as well as much larger financial institutions, including financial institutions that are not based in the markets in which we operate. Revenues from the trust and wealth management business depend in large part on the level of AUA.

We are, from time to time, we are a partyinvolved in various legal and regulatory proceedings arising from our normal business activities. These claims and legal actions, including supervisory actions by our regulators or proceedings or investigations brought by other regulators, could involve large monetary claims and significant defense costs. The outcome of these cases is uncertain. Substantial legal liability or significant regulatory action against us could have material financial effects or cause significant reputational harm to various litigation matters incidentalus, which in turn could seriously harm our business, financial condition, results of operations and prospects. We may be exposed to the conductsubstantial uninsured liabilities, which could materially affect our results of operations and in the ordinary course of our business.financial condition.

declared and paid by the Board only as permitted under applicable law. In determining the amount of any future dividends, factors the Board may take into account include: (1) our financial consequences, fines and/or penalties resulting from thisresults; (2) our available cash, as well as anticipated cash requirements (including debt servicing); (3) our capital requirements, including the capital requirements of our subsidiaries; (4) our capital requirements to fund potential acquisitions; (5) contractual, legal, tax compliance review, we have recorded as at December 31, 2019, a provision of $5.5 million (December 31, 2018: $5.5 million). As the investigation remains ongoing at this time, the timing and termsregulatory restrictions on, and implications of, the final resolution, including any finesdeclaration and payment of dividends by us to our shareholders or penalties, remain uncertainshare buy-back activity; (6) general economic and the financial impactbusiness conditions; (7) restrictions applicable to the Bank could exceedand its subsidiaries under Bermuda and other applicable laws, regulations and policies, including the requirement to obtain a letter of no objection from the BMA for the payment of dividends on our common shares; and (8) any other factors that the Board may deem relevant. Therefore, there can be no assurance that we will declare or pay any dividends to holders of the common shares, or as to the amount of the provision. In this regard, we note that the US authorities have not approved or commentedany such dividends.

We are a company incorporated under the laws of Bermuda, incorporated on October 22, 1904, pursuant to the The provisionN.T. Butterfield & Son Bank Act, 1904 (the "Butterfield Act"). We are registered with the Registrar of Companies in Bermuda under registration number 2106. Our registered office and principal executive offices are located at 65 Front Street, Hamilton, HM 12, Bermuda. Our agent for service of process in the United States is C T Corporation System, 28 Liberty Street, New York, New York 10005. Our telephone number is (441) 295 1111. We maintain a website at www.butterfieldgroup.com. Neither this website nor the information on or accessible through this website is included onor incorporated in, or is a part of, this report.

The SEC maintains an internet site at https://www.sec.gov that contains reports, information statements, and other information regarding issuers that file electronically with the consolidated balance sheets under other liabilities.

The following data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations".

Since our restructuring, we have pursued a strategy to focus on our core business in banking and wealth management. We have executed upon our strategy by streamlining the Company's operations through exiting non-core markets, repositioning our balance sheet, investing in efficiency initiatives, and continuing to invest in our core business lines to grow both organically and through acquisitions. By following this report.strategy, we have improved our financial results and have been able to initiate a progressive capital return policy for investors. The selected consolidatedfollowing are the most recent key steps in executing our strategy:

We are a full service bank and wealth manager headquartered in Hamilton, Bermuda. We operate our business through three geographic segments: Bermuda, the Cayman Islands, and the Channel Islands and the UK. We offer banking services, comprising of retail, private and corporate banking, treasury services, and wealth management, which consists of investment management, advisory and brokerage services, trust, estate, and company management in both our Bermuda and Cayman Islands segments, as atwell as custody services in our Bermuda segment. The Channel Islands and the UK segment include the jurisdictions of Guernsey and Jersey (Channel Islands), and the UK. In the Channel Islands, a broad range of services are provided to private clients and financial intermediaries including private banking and treasury services, internet banking, wealth management and fiduciary services. In 2021, the Channel Islands entered the local mortgage market offering various products to local residents. The UK jurisdiction provides mortgage services for high-value residential properties. We also have operations in the jurisdictions of The Bahamas, Canada, Mauritius, Singapore and Switzerland, which we include in our Other segment.

For the year ended December 31, 2017, 20162021, we generated $499.7 million in net revenue after provision for credit losses and 2015other gains/losses ("net revenue"). Our total net revenue, before inter-segment eliminations, by each of our three geographic segments and our non-reportable "Other" segment for the years ended December 31, 20162021, 2020 and 2015 have been derived from2019 are as follows:

In our Channel Islands and UK segment, our bank provides a broad range of services to private clients and financial institutions including private banking, corporate banking and treasury services, internet banking, wealth management, mortgage lending and fiduciary services. In 2021, the audited consolidatedsegment entered the local mortgage market offering various products to local residents. The UK jurisdiction provides mortgages for high-value residential properties.

The trust business line, which utilizes specialists in each of our geographic areas, responds to client needs in estate and succession planning, administration of complex asset holdings, and efficient coordination of family affairs. In addition, the business provides pension and employee benefits services for multinational corporations, as well as services that involve administration of and fiduciary responsibility for customized trust structures holding a wide range of asset types including financial statementsassets, property, business assets and art.

Our private banking business line offers access to a suite of services, targeted toward high net worth and ultra-high net worth individuals, trusts, and family offices, that can be customized to each client's needs and preferences and delivered as part of a coordinated strategy by a dedicated private banker. We provide clients in our Bermuda, Cayman Islands, and Channel Islands and the UK segments with an integrated model that combines traditional wealth management with banking, lending, cash management, foreign exchange services, custody and access to asset management and trust professionals within Butterfield. We also provide our clients with access to their account information through the use of internet and mobile banking.

Our asset management business line provides a broad range of portfolio management services to institutional and private clients. Our target client base includes institutions such as pension funds and captive insurance companies with investable assets over $10 million and private clients such as high net worth and ultra-high net worth individuals, families, and trusts with investable assets over $1 million. Our principal services include discretionary investment management, managed portfolio services, money market, and mutual fund offerings. We also offer advisory and self-directed brokerage options. Over 90% of the business's discretionary investment mandates call for balanced growth to conservative allocations. We focus on delivery of reasonable appreciation with an emphasis on capital preservation. The Bank relies on third parties to provide research and investment management expertise, while our own services are concentrated on portfolio construction and managing client relationships. We also provide customized reporting to meet specific needs of N.T. Butterfield & Son Limited,our major clients.