Cover Page
Cover Page | 12 Months Ended |
Dec. 31, 2020shares | |
Entity Listings [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2020 |
Current Fiscal Year End Date | --12-31 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-37877 |
Entity Incorporation, State or Country Code | D0 |
Entity Address, Address Line One | 65 Front Street |
Entity Address, City or Town | Hamilton |
Entity Address, Postal Zip Code | HM 12 |
Entity Address, Country | BM |
Title of 12(g) Security | None |
Entity Common Stock, Shares Outstanding (in shares) | 50,010,948 |
Entity Well Known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Amendment Flag | false |
Entity Registrant Name | Bank of N.T. Butterfield & Son Ltd |
Entity Central Index Key | 0001653242 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
New York Stock Exchange | |
Entity Listings [Line Items] | |
Title of 12(b) Security | Voting ordinary shares of par value BM$ 0.01 each |
Trading Symbol | NTB |
Security Exchange Name | NYSE |
Bermuda Stock Exchange | |
Entity Listings [Line Items] | |
Title of 12(b) Security | Voting ordinary shares of par value BM$ 0.01 each |
Trading Symbol | NTB.BH |
Business Contact | |
Entity Listings [Line Items] | |
Entity Address, Address Line One | 65 Front Street |
Entity Address, City or Town | Hamilton |
Entity Address, Postal Zip Code | HM 12 |
Entity Address, Country | BM |
Contact Personnel Name | Shaun Morris |
City Area Code | 441 |
Local Phone Number | 295-1111 |
Contact Personnel Fax Number | (441) 292-4365 |
Contact Personnel Email Address | Shaun.Morris@Butterfieldgroup.com |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and demand deposits with banks - Non-interest bearing | $ 133,363 | $ 88,031 |
Demand deposits with banks - Interest bearing | 433,511 | 839,320 |
Cash equivalents - Interest bearing | 2,722,718 | 1,622,719 |
Cash due from banks | 3,289,592 | 2,550,070 |
Securities purchased under agreements to resell | 197,039 | 142,283 |
Short-term investments | 823,039 | 1,218,380 |
Investment in securities | ||
Equity securities at fair value | 7,317 | 7,419 |
Available-for-sale at fair value (amortized cost: $2,588,335 (2019: $2,208,531)) | 2,661,116 | 2,220,341 |
Held-to-maturity (fair value: $2,304,756 (2019: $2,255,987)) | 2,194,371 | 2,208,663 |
Total investment in securities | 4,862,804 | 4,436,423 |
Loans | ||
Total amortized cost | 5,194,908 | 5,166,210 |
Allowance for expected credit losses | (34,098) | (23,588) |
Loans, net of allowance for credit losses | 5,160,810 | 5,142,622 |
Premises, equipment and computer software, net of accumulated depreciation | 150,752 | 158,233 |
Goodwill | 25,627 | 24,838 |
Other Intangible assets, net | 67,192 | 71,665 |
Equity method investments | 12,933 | 14,480 |
Other real estate owned, net | 4,052 | 3,842 |
Accrued interest and other assets | 144,794 | 158,739 |
Total assets | 14,738,634 | 13,921,575 |
Deposits | ||
Non-interest bearing | 3,012,360 | 2,238,256 |
Interest bearing | 10,237,724 | 10,203,369 |
Total deposits | 13,250,084 | 12,441,625 |
Employee benefit plans | 131,279 | 110,347 |
Accrued interest and other liabilities | 203,861 | 262,360 |
Total other liabilities | 335,140 | 372,707 |
Long-term debt | 171,462 | 143,500 |
Total liabilities | 13,756,686 | 12,957,832 |
Commitments, contingencies and guarantees (Note 12) | ||
Shareholders' equity | ||
Common share capital ( BMD 0.01 par; authorized voting ordinary shares 2,000,000,000 and non-voting ordinary shares 6,000,000,000) issued and outstanding: 50,010,948 (2019: 53,005,177) | 500 | 530 |
Additional paid-in capital | 1,013,326 | 1,081,569 |
Retained earnings (Accumulated deficit) | 33,918 | (9,237) |
Less: treasury common shares, at cost: 619,212 (2019: 619,212) | (16,116) | (22,022) |
Accumulated other comprehensive loss | (49,680) | (87,097) |
Total shareholders’ equity | 981,948 | 963,743 |
Total liabilities and shareholders’ equity | $ 14,738,634 | $ 13,921,575 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) $ in Thousands | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares |
Available-for-sale at fair value, amortized cost | $ | $ 2,588,335 | $ 2,208,531 |
Held-to-maturity, fair value | $ | $ 2,304,756 | $ 2,255,987 |
Common shares, par value (in BMD per share) | $ / shares | $ 0.01 | $ 0.01 |
Common shares, issued (in shares) | 50,010,948 | 53,005,177 |
Common shares, outstanding (in shares) | 50,010,948 | 53,005,177 |
Treasury common shares, at cost (in shares) | 619,212 | 619,212 |
Voting Common Stock | ||
Common shares, authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Non-voting Common Stock | ||
Common shares, authorized (in shares) | 6,000,000,000 | 6,000,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Non-interest income | |||
Asset management | $ 29,225 | $ 28,721 | $ 25,603 |
Banking | 47,346 | 49,347 | 45,010 |
Foreign exchange revenue | 37,180 | 37,001 | 32,895 |
Trust | 50,653 | 51,220 | 51,004 |
Custody and other administration services | 13,845 | 12,868 | 9,262 |
Other non-interest income | 5,610 | 4,818 | 4,912 |
Total non-interest income | 183,859 | 183,975 | 168,686 |
Interest income | |||
Interest and fees on loans | 230,656 | 234,032 | 218,495 |
Investments (none of the investment securities are intrinsically tax-exempt) | |||
Available-for-sale | 50,621 | 60,686 | 68,936 |
Held-to-maturity | 58,607 | 68,735 | 55,327 |
Deposits with banks and other | 12,125 | 41,625 | 24,830 |
Total interest income | 352,009 | 405,078 | 367,588 |
Interest expense | |||
Deposits | 25,116 | 51,486 | 17,617 |
Long-term debt | 9,294 | 7,876 | 6,949 |
Securities sold under agreement to repurchase | 0 | 14 | 33 |
Total interest expense | 34,410 | 59,376 | 24,599 |
Net interest income before provision for credit losses | 317,599 | 345,702 | 342,989 |
Provision for credit recoveries (losses) | (8,491) | 184 | 6,991 |
Net interest income after provision for credit losses | 309,108 | 345,886 | 349,980 |
Net gains (losses) on equity securities | 658 | 925 | (329) |
Net realized gains (losses) on available-for-sale investments | 1,220 | 1,624 | 1,100 |
Net gains (losses) on other real estate owned | (104) | (5) | (322) |
Net other gains (losses) | (552) | 223 | (1,304) |
Total other gains (losses) | 1,222 | 2,767 | (855) |
Total net revenue | 494,189 | 532,628 | 517,811 |
Non-interest expense | |||
Salaries and other employee benefits | 173,662 | 183,659 | 159,778 |
Technology and communications | 65,156 | 62,633 | 60,280 |
Professional and outside services | 21,263 | 27,952 | 26,034 |
Property | 29,392 | 24,181 | 21,825 |
Indirect taxes | 21,323 | 21,109 | 19,485 |
Non-service employee benefits expense | 2,640 | 5,649 | 5,570 |
Marketing | 4,443 | 8,050 | 6,116 |
Amortization of intangible assets | 5,819 | 5,451 | 5,091 |
Other expenses | 20,896 | 18,240 | 17,164 |
Total non-interest expense | 344,594 | 356,924 | 321,343 |
Net income before income taxes | 149,595 | 175,704 | 196,468 |
Income tax benefit (expense) | (2,378) | 1,371 | (1,284) |
Net income | $ 147,217 | $ 177,075 | $ 195,184 |
Earnings per common share | |||
Basic earnings per share (in dollars per share) | $ 2.91 | $ 3.33 | $ 3.55 |
Diluted earnings per share (in dollars per share) | $ 2.90 | $ 3.30 | $ 3.50 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 147,217 | $ 177,075 | $ 195,184 |
Other comprehensive income (loss), net of taxes | |||
Net change in unrealized gains and losses on translation of net investment in foreign operations | (247) | (952) | (2,317) |
Accretion of net unrealized gains and losses on held-to-maturity investments transferred from available-for-sale investments | 665 | 71 | 43 |
Net change in unrealized gains and losses on available-for-sale investments | 60,971 | 55,438 | (27,893) |
Employee benefit plans adjustments | (23,972) | 6,873 | 10,692 |
Other comprehensive income (loss), net of taxes | 37,417 | 61,430 | (19,475) |
Total comprehensive income | $ 184,634 | $ 238,505 | $ 175,709 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common share capital | Additional paid-in capital | Retained earnings (Accumulated deficit) | Retained earnings (Accumulated deficit)Cumulative Effect, Period of Adoption, Adjustment | Treasury common shares | Accumulated other comprehensive income (loss) |
Balance at beginning of year (in shares) at Dec. 31, 2017 | 54,692,630 | 0 | |||||
Balance at beginning of year at Dec. 31, 2017 | $ 547 | $ 1,155,542 | $ (204,156) | $ 0 | $ (129,052) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common shares (in shares) | 666,588 | ||||||
Issuance of common shares | $ 7 | 3,311 | |||||
Share-based compensation | 11,664 | ||||||
Share-based settlements | 918 | ||||||
Net Income for the year | $ 195,184 | 195,184 | |||||
Common share cash dividends declared and paid, 1.76 per share (2019: $1.76 per share) | (83,704) | ||||||
Purchase of treasury common shares (in shares) | 1,254,212 | ||||||
Purchase of treasury common shares | $ (48,443) | ||||||
Other comprehensive income (loss), net of taxes | (19,475) | (19,475) | |||||
Balance at end of year (in shares) at Dec. 31, 2018 | 55,359,218 | 1,254,212 | |||||
Balance at end of year at Dec. 31, 2018 | $ 882,343 | $ 554 | 1,171,435 | (92,676) | $ (48,443) | (148,527) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||||
Retirement of shares (in shares) | (2,928,788) | (2,928,788) | |||||
Retirement of shares | $ (29) | (107,926) | $ 107,955 | ||||
Issuance of common shares (in shares) | 574,747 | ||||||
Issuance of common shares | $ 5 | 344 | |||||
Share-based compensation | 17,459 | ||||||
Share-based settlements | 257 | ||||||
Net Income for the year | $ 177,075 | 177,075 | |||||
Common share cash dividends declared and paid, 1.76 per share (2019: $1.76 per share) | (93,636) | ||||||
Purchase of treasury common shares (in shares) | 2,293,788 | ||||||
Purchase of treasury common shares | $ (81,534) | ||||||
Other comprehensive income (loss), net of taxes | 61,430 | 61,430 | |||||
Balance at end of year (in shares) at Dec. 31, 2019 | 53,005,177 | 619,212 | |||||
Balance at end of year at Dec. 31, 2019 | 963,743 | $ 530 | 1,081,569 | (9,237) | $ (7,841) | $ (22,022) | (87,097) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Retirement of shares (in shares) | (3,452,000) | (3,452,000) | |||||
Retirement of shares | $ (35) | (85,222) | (7,289) | $ 92,546 | |||
Issuance of common shares (in shares) | 457,771 | ||||||
Issuance of common shares | $ 5 | 1,734 | |||||
Share-based compensation | 14,608 | ||||||
Share-based settlements | 637 | ||||||
Net Income for the year | 147,217 | 147,217 | |||||
Common share cash dividends declared and paid, 1.76 per share (2019: $1.76 per share) | (88,932) | ||||||
Purchase of treasury common shares (in shares) | 3,452,000 | ||||||
Purchase of treasury common shares | $ (86,640) | ||||||
Other comprehensive income (loss), net of taxes | 37,417 | 37,417 | |||||
Balance at end of year (in shares) at Dec. 31, 2020 | 50,010,948 | 619,212 | |||||
Balance at end of year at Dec. 31, 2020 | $ 981,948 | $ 500 | $ 1,013,326 | $ 33,918 | $ (16,116) | $ (49,680) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Common share cash dividends declared (in dollars per share) | $ 1.76 | $ 1.76 |
Common share cash dividends paid (in dollars per share) | 1.76 | 1.76 |
Retained earnings (Accumulated deficit) | ||
Common share cash dividends declared (in dollars per share) | 1.76 | 1.76 |
Common share cash dividends paid (in dollars per share) | $ 1.76 | $ 1.76 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||
Net income | $ 147,217 | $ 177,075 | $ 195,184 |
Adjustments to reconcile net income to operating cash flows | |||
Depreciation and amortization | 62,435 | 48,390 | 46,476 |
Provision for credit (recoveries) losses | 8,491 | (184) | (6,991) |
Share-based payments and settlements | 15,245 | 17,716 | 12,582 |
Net change in equity securities at fair value | 102 | 329 | |
Net change in equity securities at fair value | (925) | ||
Net realized (gains) losses on available-for-sale investments | (1,220) | (1,624) | (1,100) |
Net (gains) losses on other real estate owned | 104 | 5 | 322 |
(Increase) decrease in carrying value of equity method investments | (1,298) | (340) | (1,118) |
Dividends received from equity method investments | 2,845 | 520 | 556 |
Changes in operating assets and liabilities | |||
(Increase) decrease in accrued interest receivable and other assets | (8,143) | (18,583) | (3,975) |
Increase (decrease) in employee benefit plans, accrued interest payable and other liabilities | (37,628) | 26,672 | 54,409 |
Cash provided by (used in) operating activities | 188,150 | 248,722 | 296,674 |
Cash flows from investing activities | |||
(Increase) decrease in securities purchased under agreements to resell | (54,756) | (114,942) | 151,428 |
Short-term investments other than restricted cash: proceeds from maturities and sales | 2,214,870 | 568,944 | 252,028 |
Short-term investments other than restricted cash: purchases | (1,815,887) | (1,657,456) | (63,913) |
Available-for-sale investments: proceeds from sale | 352,965 | 225,305 | 854,160 |
Available-for-sale investments: proceeds from maturities and pay downs | 565,028 | 348,665 | 480,765 |
Available-for-sale investments: purchases | (1,313,884) | (563,007) | (242,087) |
Held-to-maturity investments: proceeds from maturities and pay downs | 538,345 | 274,490 | 166,406 |
Held-to-maturity investments: purchases | (533,379) | (420,018) | (903,958) |
Net (increase) decrease in loans | 25,555 | (362,624) | (321,944) |
Additions to premises, equipment and computer software | (20,566) | (22,777) | (18,529) |
Proceeds from sale of other real estate owned | 0 | 1,102 | 5,896 |
Purchase of intangible assets | 0 | 0 | (1,308) |
Gross cash received (disbursed for) from business acquisition | 0 | 2,815,752 | |
Gross cash received (disbursed for) from business acquisition | (20,722) | ||
Cash provided by (used in) investing activities | (41,709) | 1,093,434 | 338,222 |
Cash flows from financing activities | |||
Net increase (decrease) in deposits | 692,635 | (744,610) | (22,543) |
Issuance of subordinated capital, net of underwriting fees | 97,647 | 0 | 73,218 |
Repayment of long-term debt | (70,000) | 0 | (47,000) |
Common shares repurchased | (86,640) | (81,534) | (48,443) |
Proceeds from stock option exercises | 1,739 | 349 | 3,318 |
Cash dividends paid on common shares | (88,932) | (93,636) | (83,704) |
Cash provided by (used in) financing activities | 546,449 | (919,431) | (125,154) |
Net effect of exchange rates on cash, cash equivalents and restricted cash | 42,707 | 86,056 | 2,646 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 735,597 | 508,781 | 512,388 |
Cash, cash equivalents and restricted cash: beginning of year | 2,578,901 | 2,070,120 | 1,557,732 |
Cash, cash equivalents and restricted cash: end of year | 3,314,498 | 2,578,901 | 2,070,120 |
Components of cash, cash equivalents and restricted cash at end of year | |||
Total cash, cash equivalents and restricted cash at end of year | 3,314,498 | 2,070,120 | 1,557,732 |
Supplemental disclosure of cash flow information | |||
Cash interest paid | 39,125 | 56,265 | 27,374 |
Cash income taxes paid | 5,052 | 2,628 | 544 |
Supplemental disclosure of non-cash items | |||
Transfer to (out of) other real estate owned | 314 | 2,437 | |
Transfer to (out of) other real estate owned | (397) | ||
Initial recognition of right-of-use assets and operating lease liabilities | 323 | 22,370 | 0 |
Reduction in net loans due to initial adoption of a current expected credit loss model | 7,841 | 0 | 0 |
Extinguishment of loan in exchange for available-for-sale investments | $ 0 | $ 3,347 | $ 0 |
Nature of business
Nature of business | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of business | Note 1: Nature of business The Bank of N.T. Butterfield & Son Limited (“Butterfield”, the “Bank” or the “Company”) is incorporated under the laws of Bermuda and has a banking license under the Banks and Deposit Companies Act, 1999 (“the Act”). Butterfield is regulated by the Bermuda Monetary Authority (“BMA”), which operates in accordance with Basel principles. Butterfield is a full service bank and wealth manager headquartered in Hamilton, Bermuda. The Bank operates its business through three geographic segments: Bermuda, the Cayman Islands, and the Channel Islands and the United Kingdom ("UK"), where its principal banking operations are located and where it offers specialized financial services. Butterfield offers banking services, comprised of retail and corporate banking, and wealth management, which consists of trust, private banking, and asset management. In the Bermuda and Cayman Islands segments, Butterfield offers both banking and wealth management. In the Channel Islands and the UK segment, the Bank offers wealth management and residential property lending. Butterfield also has operations in the jurisdictions of The Bahamas, Canada, Mauritius, Singapore and Switzerland, which are included in our Other segment. |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant accounting policies | Note 2: Significant accounting policies The Bank's reporting currency is United States ("US") dollars. Assets, liabilities, revenues and expenses denominated in Bermuda dollars are translated to US dollars at par. A. Basis of Presentation and Use of Estimates and Assumptions The accounting and financial reporting policies of the Bank and its subsidiaries conform to generally accepted accounting principles in the United States of America (“GAAP”). The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the year, and actual results could differ from those estimates. Critical accounting estimates are those that require management to make subjective or complex judgments about the effect of matters that are inherently uncertain and may change in subsequent periods. Changes that may be required in the underlying assumptions or estimates in these areas could have a material impact on the future financial condition and results of operations. Management believes that the most critical accounting policies upon which the financial condition depends, and which involve the most complex or subjective decisions or assessments, are as follows: • Allowance for credit losses • Fair value and impairment of financial instruments • Impairment of long-lived assets • Impairment of goodwill • Employee benefit plans • Share-based compensation • Business combinations B. Basis of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (collectively the “Bank”). Intercompany accounts and transactions have been eliminated. The Bank consolidates entities where it holds, directly or indirectly, more than 50% of the voting rights or where it exercises control. Entities where the Bank holds 20% to 50% of the voting rights and/or has the ability to exercise significant influence are accounted for under the equity method, and the pro rata share of their income (loss) is included in other non-interest income. C. Foreign Currency Translation Assets, liabilities, revenues and expenses denominated in Bermuda dollars are translated to US dollars at par. Assets and liabilities of the parent company arising from other foreign currency transactions are translated into US dollars at the rates of exchange prevailing at the balance sheet date. The resulting gains or losses are included in foreign exchange revenue in the consolidated statements of operations. The assets and liabilities of foreign currency-based subsidiaries are translated at the rate of exchange prevailing on the balance sheet date, while associated revenues and expenses are translated to US dollars at the average rates of exchange prevailing throughout the year. Unrealized translation gains or losses on investments in foreign currency- based subsidiaries are recorded as a separate component of Shareholders' equity within accumulated other comprehensive income (“AOCI”). Gains and losses on foreign currency-based subsidiaries are recorded in the consolidated statements of operations when the Bank ceases to have a controlling financial interest in a foreign currency-based subsidiary. D. Assets Held in Trust or Custody Securities and properties (other than cash and deposits held with the Bank and its subsidiaries) held in trust, custody, agency or fiduciary capacity for customers are not included in the consolidated balance sheets because the Bank is not the beneficiary of these assets. E. Cash Due from Banks Cash due from banks includes cash on hand, cash items in the process of collection, amounts due from correspondent banks and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in fair value. Such investments are those with a maturity of three months or less from the date of acquisition and include unrestricted term deposits, certificates of deposit and treasury bills. F. Securities Purchased Under Agreement to Resell Securities purchased under agreement to resell are treated as collateralized lending transactions. The obligation to resell is recorded at the value of the cash paid on purchase adjusted for the amortization of the difference between the purchase price and the agreed resell price. The amortization of this amount is recorded as interest income. G. Short-Term Investments Short-term investments have maturities of less than one year from the date of acquisition, are only subject to an insignificant risk of change in fair value and comprise (1) restricted term and demand deposits, and (2) unrestricted term deposits, certificate of deposits and treasury bills with a maturity greater than three months from the date of acquisition. H. Investments Equity securities with readily determinable fair values are carried at fair value in the consolidated balance sheets, with unrealized gains and losses included in the consolidated statements of operations as net gains (losses) on equity securities. Contained within other assets are investments in private equity for which the Bank does not have sufficient rights or ownership interests to follow the equity method of accounting. Unquoted equity investments which are held directly by the Bank and which do not have readily determinable fair values are recorded at cost, less impairment, plus or minus observable price changes from transactions of identical or similar securities. Equity method investments which include investments whereby the Bank has the ability to influence, but not control, the financial or operating policies of such entities, are accounted for using the equity method of accounting. Debt securities are classified as available-for-sale (“AFS”) or held-to-maturity (“HTM”). Investments are classified as trading when management has the intent to sell these investments for profit. Debt securities classified as trading investments are carried at fair value in the consolidated balance sheets, with unrealized gains and losses included in the consolidated statements of operations as net gains (losses) on trading investments. Investments are classified primarily as AFS when used to manage the Bank’s exposure to interest rate and liquidity movements, as well as to make strategic longer-term investments. AFS investments are carried at fair value in the consolidated balance sheets with unrealized gains and losses reported in AOCL, net of the allowance for credit losses. Investments that the Bank has the positive intent and ability to hold to maturity are classified as HTM and are carried at amortized cost in the consolidated balance sheets, net of the allowance for credit losses. Unrecognized gains and losses on HTM securities are disclosed in the notes to the consolidated financial statements. The specific identification method is used to determine realized gains and losses on investments, which are included in net gains (losses) on equity securities and net realized gains (losses) on AFS investments respectively, in the consolidated statements of operations. Dividend and interest income, including amortization of premiums and discounts, on securities for which cash flows are not considered uncertain are included in interest income in the consolidated statements of operations. For securities with uncertain cash flows, the investments are accounted for under the cost recovery method, whereby all principal and coupon payments received are applied as a reduction of the amortized cost and carrying amount. Accrual of income is suspended in respect of debt securities that are in default, or from which it is unlikely that future interest payments will be received as scheduled. Impairment and credit losses (From January 1, 2020) For debt securities, where management does not expect to recover the entire amortized cost basis of the security and intends to sell such securities or it is more likely than not that the Bank will be required to sell the securities before recovering the amortized cost, it recognizes an impairment loss equal to the full difference between the amortized cost basis and the fair value of those securities through the statement of operations. Following the recognition of impairment, the security's new amortized cost basis is the previous basis less impairment. When management does not intend to sell or it is more likely than not that the Bank will hold such securities until recovering the amortized cost, management determines whether any credit losses exist. See "Note 2.J: Allowance for Credit Losses". Recognition of other-than-temporary impairments (Prior to January 1, 2020) For debt securities, management considers a decline in fair value to be other-than-temporary when it does not expect to recover the entire amortized cost basis of the security. Investments in debt securities in unrealized loss positions are analyzed as part of management’s ongoing assessment of other-than-temporary impairment (“OTTI”). When management intends to sell such securities or it is more likely than not that the Bank will be required to sell the securities before recovering the amortized cost, it recognizes an impairment loss equal to the full difference between the amortized cost basis and the fair value of those securities. When management does not intend to sell or it is more likely than not that the Bank will hold such securities until recovering the amortized cost, management determines whether any credit losses exist to identify any OTTI. Under certain circumstances, management will perform a qualitative determination and consider a variety of factors, including the length of time and extent to which the fair value has been less than cost; adverse conditions specifically related to the industry, geographic area or financial condition of the issuer or underlying collateral of a security; payment structure of the security; changes to the rating of the security by a rating agency; the volatility of the fair value changes; and changes in fair value of the security after the balance sheet date. Alternatively, management estimates cash flows over the remaining lives of the underlying security to assess whether credit losses exist. In situations where there is a credit loss, only the amount of impairment relating to credit losses on AFS and HTM investments is recognized in net income. For AFS investments, the decrease in fair value relating to factors other than credit losses is recognized in AOCL. Cash flow estimates take into account expectations of relevant market and economic data as of the end of the reporting period, including, for example, underlying loan-level data, and structural features of securitization, such as subordination, excess spread, over collateralization or other forms of credit enhancement. The degree of judgment involved in determining the recoverable value of an investment security is dependent upon the availability of observable market prices or observable market parameters. When observable market prices and parameters do not exist, judgment is necessary to estimate recoverable value which gives rise to added uncertainty in the assessment. The assessment takes into consideration factors such as interest rate changes, movements in credit spreads, default rate assumptions, prepayment assumptions, type and quality of collateral, and market sentiment. Management's fair valuations may include inputs and assumptions that are less observable or require greater estimation, thereby resulting in values which may be greater or lower than the actual value at which the investments may be ultimately sold or the ultimate cash flows that may be recovered. If the assumptions on which management based its fair valuations change, the Bank may experience additional OTTI or realized losses or gains, and the period-to-period changes in value could vary significantly. I. Loans Loans are reported as the principal amount outstanding, net of allowance for credit losses, unearned income, fair value adjustments arising from hedge accounting and net deferred loan fees. Interest income is recognized over the term of the loan using the effective interest method, or on a basis approximating a level rate of return over the term of the loan, except for loans classified as non-accrual. Prepayments are treated as a reduction of principal outstanding which is recognized upon receipt of payment. Prepayment penalties, if applicable under the terms of the specific loan agreement, are recognized also upon receipt of payment. Acquired loans Acquired loans that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit quality since origination, are accounted for as purchased credit-deteriorated ("PCD") loans. PCD loans are recorded at their purchase price with an adjustment to the amortized cost basis for the initial expected credit losses at the time of acquisition i.e. via a balance sheet gross-up. Changes in estimates of expected credit losses after acquisition are recognized as a movement in provision for credit recoveries (losses) in the statement of operations. Generally, acquired loans that meet the Bank's definition for non-accrual status are considered to be PCD loans. The Bank's purchased credit-impaired (“PCI”) loans outstanding as at January 1, 2020 are now classified as PCD loans and both the amortized cost and an allowance for expected credit losses are disclosed and included with other non-PCD loans' figures. The Bank will continue to recognize the amortization of the noncredit discount, if any, as interest income based on the yield of such assets as at the date of purchase. Participated or Assigned Loans The Bank may act as lead lender on large loans from time to time and may for strategic or commercial reasons, assign portions of such loans to other market participants. Such assignments are without full right of recourse to the Bank as the lead lender and participants/assignees accept all risks and obligations of the ultimate borrower associated with their proportional participation and assignment in such loans. The Bank records the unassigned portion of the principal outstanding in such loans on the consolidated balance sheets and records only its proportional share of interest income on the unassigned portion of the loan in the consolidated statement of operations. Impaired loans A loan is considered to be impaired when, based on current information and events, the Bank determines that it will not be able to collect all amounts due according to the original loan contract, including scheduled interest payments. Impaired loans include all non-accruing loans and all loans modified in a troubled debt restructuring (‘‘TDR’’) even if full collectability is expected following the restructuring. If the Bank determines that the expected realizable value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate. If the Bank determines that part of the allowance is uncollectible, that amount is charged off. Non-accrual Commercial, commercial real estate and consumer loans (excluding credit card consumer loans) are placed on non-accrual status if: • in the opinion of management, full payment of principal or interest is in doubt; or • principal or interest is 90 days past due. Residential mortgages are placed on non-accrual status immediately if: • in the opinion of management, full payment of principal or interest is in doubt; or • when principal or interest is 90 days past due, unless the loan is well secured and any ongoing collection efforts are reasonably expected to result in repayment of all amounts due under the contractual terms of the loan. Interest income on non-accrual loans is recognized only to the extent it is received in cash. Cash received on non-accrual loans where there is no doubt regarding full repayment (no impairment recognized in the form of a specific allowance) is first applied as repayment of the past due principal amount of the loan and secondly to past due interest and fees. Where there is doubt regarding the ultimate full repayment of the non-accrual loan (impairment recognized in the form of a specific allowance), all cash received is applied to reduce the principal amount of the loan. Interest income on these loans is recognized only after the entire balance receivable is recovered and interest is actually received. Loans are returned to accrual status when: • none of the principal or accrued interest is past due (with certain exceptions as noted below) and the Bank expects repayment of the remaining contractual obligation; or • when the loan becomes well secured and in the process of collection. Loans modified in a TDR A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession from originally agreed terms. If a restructuring is considered a TDR, the Bank is required to make certain disclosures to the notes of the consolidated financial statements and evaluate the restructured loan for impairment. The Bank employs various types of concessions when modifying a loan which may include extension of repayment periods, interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. Commercial and industrial loans modified in a TDR may involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor may be requested. Commercial mortgage and construction loans modified in a TDR may involve extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period. Residential mortgage modifications generally involve a short-term forbearance period after which the missed payments are added to the end of the loan term, thereby extending the maturity date. Interest continues to accrue on the missed payments and as a result, the effective yield on the mortgage remains unchanged. As the forbearance period usually involves an insignificant payment delay they typically do not meet the reporting criteria for a TDR. Automobile loans modified in a TDR are primarily composed of loans where the Bank has lowered monthly payments by extending the term. When a loan undergoes a TDR, the determination of the loan's accrual versus non-accrual status following the modification depends on several factors. As with the risk rating process, the accrual status decision for such a loan is a separate and distinct process from the loan's TDR analysis and determination. Management considers the following in determining the accrual status of restructured loans: • If the loan was appropriately on accrual status prior to the restructuring, the borrower has demonstrated performance under the previous terms, and the Bank's credit evaluation shows the borrower's capacity to continue to perform under the restructured terms (both principal and interest payments), it is likely that the appropriate conclusion is for the loan to remain on accrual at the time of the restructuring. This evaluation must include consideration of the borrower's sustained historical repayment performance for a reasonable period prior to the date on which the loan was restructured. A sustained period of repayment performance generally would be a minimum of six months and would involve payments of cash or cash equivalents; or • If the loan was on non-accrual status before the restructuring, but the Bank's credit evaluation shows the borrower's capacity to meet the restructured terms, the loan would likely remain as non-accrual until the borrower has demonstrated a reasonable period of sustained repayment performance. As noted above, this period generally would be at least six months (thereby providing reasonable assurance as to the ultimate collection of principal and interest in full under the modified terms). Sustained performance before the restructuring may be taken into account. Loans that have been modified in a TDR are restored to accrual status only when interest and principal payments are brought current for a continuous period of six months under the modified terms. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on non-accrual status. A loan that is modified in a TDR prior to becoming impaired will be left on accrual status if full collectability in accordance with the restructured terms is expected. The Bank may enter into a TDR for loans that are in default, or at risk of defaulting, even if the loan is not impaired. A loan that had previously been modified in a TDR and is subsequently refinanced under current underwriting standards at a market rate with no concessionary terms is accounted for as a new loan and is no longer reported as a TDR. Delinquencies The entire balance of an account is contractually delinquent if the minimum payment of principal or interest is not received by the specified due date. Delinquency is reported on loans that are more than 30 days past due. Charge-offs The Bank recognizes charge-offs when it determines that loans are uncollectible, and this generally occurs when all commercially reasonable means of recovering the loan balance have been exhausted. Commercial and consumer loans are either fully or partially charged-off down to the fair value of collateral securing the loans when: • management judges the loan to be uncollectible; • repayment is expected to be protracted beyond reasonable time frames; • the asset has been classified as a loss by either the Bank’s internal loan review process or third party appraisers; or • the customer has filed bankruptcy and the loss becomes evident owing to a lack of assets or cash flow. The outstanding balance of commercial and consumer real estate secured loans and residential mortgages that are in excess of the estimated property value, less costs to sell, is charged-off once there is reasonable assurance that such excess outstanding balance is not recoverable. Credit card consumer loans that are contractually 180 days past due and other consumer loans with an outstanding balance under $100,000 that are contractually 180 days past due are generally written off and reported as charge-offs. J. Allowance for Credit Losses Accounting for Financial instruments - Credit losses Starting on January 1, 2020 the Bank adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (Topic 326). Accordingly, from the date of adoption, the Bank uses a current expected credit loss model ("CECL") which is based on expected losses. The model used by the Bank up to December 31, 2019 to estimate credit losses was based on incurred losses. The CECL model is applied by the Bank to the measurement of credit losses on financial instruments at amortized cost, including loan receivables and held-to-maturity ("HTM") debt securities. The Bank also applies the CECL model to certain off-balance sheet credit exposures such as undrawn loan commitments, standby letters of credit, financial guarantees, and other similar instruments. In line with Topic 326, the Bank will present credit losses on available-for-sale ("AFS") securities as a valuation allowance rather than as a direct write-down. Changes in expected credit losses are recorded through the respective credit loss allowances on the consolidated balance sheets as well as in the provision for credit losses (recoveries) in the consolidated statements of operations. The Bank's PCI loans outstanding as at January 1, 2020 are now classified as PCD loans and both the amortized cost and an allowance for expected credit losses are disclosed and included with other non-PCD loans' figures. The Bank will continue to recognize the amortization of the noncredit discount, if any, as interest income based on the yield of such assets. The Bank has not restated comparative information previously accounted for under the incurred loss and the PCI models. The total adjustment resulting from the adoption of this methodology on the opening balance of the Bank’s accumulated deficit as at January 1, 2020 was a negative adjustment of $7.8 million relating to the Bank's loan portfolio. Under the CECL model, the Bank collects and maintains attributes as they relate to its financial instruments that are within scope of CECL including fair value of collateral, expected performance over the lifetime of the instruments and reasonable and supportable assumptions about future economic conditions. The Bank's measurement of expected losses takes into account historical loss information and is primarily based on the product of: the respective instrument’s probability of default (“PD”), loss given default (“LGD”) and exposure at default (“EAD”). For AFS securities, any allowance for credit losses is based on an impairment assessment. The Bank made the accounting policy election to write off accrued interest receivable on loans that are placed on non-accrual status by reversing the then accrued interest balance against interest income revenue. The Bank maintains an allowance for credit losses, which in management’s opinion is adequate to absorb all estimated credit-related losses that are incurred in its lending and off-balance sheet credit-related arrangements at the balance sheet date. Management measures expected credit losses on held-to-maturity and available-for-sale debt securities on a collective basis by major security type when similar risk characteristics exist, or failing that, on an individual basis. For available-for-sale debt securities in an unrealized loss position, the Bank first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Bank evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. The allowance for credit losses on loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries typically do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts as well as the Bank's internal risk rating framework. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in the current-loan specific risk characteristics such as differences in underwriting practices, vintage, portfolio mix, delinquency level, term as well as changes in environmental conditions, such as changes in macroeconomic factors and collateral values. The allowance for credit losses is measured on a collective pool basis when similar risk characteristics exist. In each of its jurisdictions, the Bank has identified the following portfolio segments: Residential mortgages, Consumer loans (including overdrafts), Commercial loans, Commercial overdrafts, Commercial real estate loans and Credit cards. For Loans and overdrafts, Management uses a probability of default and loss-given-default model to estimate the allowance for credit losses. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. For Credit cards, Management uses a loss rate to estimate expected credit losses. Expected credit losses are estimated over the contractual term of the loans. The contractual term excludes potential extensions, renewals and modifications unless management has a reasonable expectation at the reporting date that the extension or renewal options included in the original contract will occur or that a troubled debt restructuring will be executed. Credit card receivables do not have stated maturities, therefore establishing a contractual term is performed by using an analytical approximation of behavior. Prior to January 1, 2020, under the incurred loss model, the allowance for credit losses consisted of specific allowances and a general allowance as follows: Specific allowances Specific allowances are determined on an exposure-by-exposure basis identified through the Bank's internal risk rating framework and reflect the associated estimated credit loss. The specific allowance for an individual loan is computed as the difference between the recorded investment in the loan and the present value of expected future cash flows and is dependent upon the assumptions on the timing and amounts of the receipts or the fair value of collateral-dependent loans. The effective rate of return on the loan is used for discounting the cash flows. However, when foreclosure of a collateral-dependent loan is probable, the Bank measures impairment based on the fair value of the collateral. The Bank considers estimated costs to sell, on a discounted basis, in the measurement of impairment if those costs are expected to reduce the cash flows available to repay or otherwise satisfy the loan. If the measurement of an impaired loan is less than the recorded investment in the loan, then the Bank recognizes impairment by creating an allowance with a corresponding charge to provision for credit losses. For all commercial and commercial real estate TDRs, the Bank conducts further analysis to determine the probable amount of loss and establishes a specific allowance for the loan, if appropriate. The Bank estimates the impairment amount by comparing the loan’s carrying amount to the estimated present value of its future cash flows or the fair value of its underlying collateral. For collateral-dependent impaired commercial and commercial real estate loans, the excess of the Company’s recorded investment in the loan over the fair value of the collateral, less cost to sell, is charged off to the specific allowance. For consumer and residential mortgage TDRs that are not collateral-dependent, allowances are developed using the present value of expected future cash flows, compared to the recorded investment in the loans. Expected re-default factors are considered in this analysis. The fair value of collateral is periodically monitored subsequent to the modifi |
Cash due from banks
Cash due from banks | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Cash due from banks | Note 3: Cash due from banks December 31, 2020 December 31, 2019 Non-interest bearing Cash and demand deposits with banks 133,363 88,031 Interest bearing¹ Demand deposits with banks 433,511 839,320 Cash equivalents 2,722,718 1,622,719 Sub-total - Interest bearing 3,156,229 2,462,039 Total cash due from banks 3,289,592 2,550,070 ¹ Interest bearing cash due from banks includes certain demand deposits with banks as at December 31, 2020 in the amount of $156.2 million (December 31, 2019: $439.5 million) that are earning interest at a negligible rate. |
Short-term investments
Short-term investments | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term investments | Note 4: Short-term investments December 31, 2020 December 31, 2019 Unrestricted Maturing within three months 469,580 594,749 Maturing between three to six months 326,836 591,212 Maturing between six to twelve months 1,717 2,584 Total unrestricted short-term investments 798,133 1,188,545 Affected by drawing restrictions related to minimum reserve and derivative margin requirements Non-interest earning demand deposits 260 2,270 Interest earning demand and term deposits 24,646 27,565 Total restricted short-term investments 24,906 29,835 Total short-term investments 823,039 1,218,380 |
Investment in securities
Investment in securities | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment in securities | Note 5: Investment in securities Amortized Cost, Carrying Amount and Fair Value On the consolidated balance sheets, equity securities and AFS investments are carried at fair value and HTM investments are carried at amortized cost. December 31, 2020 December 31, 2019 Amortized Gross Gross Fair value Amortized Gross Gross Fair value Equity securities Mutual funds 5,274 2,531 (488) 7,317 5,724 2,142 (447) 7,419 Total equity securities 5,274 2,531 (488) 7,317 5,724 2,142 (447) 7,419 Available-for-sale US government and federal agencies 2,493,659 72,713 (306) 2,566,066 2,040,171 18,617 (6,342) 2,052,446 Non-US governments debt securities 22,797 — (389) 22,408 26,118 82 (524) 25,676 Asset-backed securities - Student loans 13,290 — (345) 12,945 13,290 — (399) 12,891 Residential mortgage-backed securities 58,589 1,108 — 59,697 128,952 654 (278) 129,328 Total available-for-sale 2,588,335 73,821 (1,040) 2,661,116 2,208,531 19,353 (7,543) 2,220,341 Held-to-maturity¹ US government and federal agencies 2,194,371 110,526 (141) 2,304,756 2,208,663 47,814 (490) 2,255,987 Total held-to-maturity 2,194,371 110,526 (141) 2,304,756 2,208,663 47,814 (490) 2,255,987 ¹ For the years ended December 31, 2020, 2019 and 2018, impairments recognized in other comprehensive income for HTM investments were nil. Investments with Unrealized Loss Positions The Bank does not believe that the unrealized losses on AFS debt securities as of December 31, 2020, comprising 13 securities representing 5.9% of the AFS portfolios' carrying value (December 31, 2019: 62 and 40.7%), represent credit losses. Total gross unrealized AFS losses were 0.7% of the fair value of the affected AFS securities (December 31, 2019: 0.8%). The Bank’s HTM debt securities are comprised of US government and federal agencies securities and have a zero credit loss assumption under the CECL model. HTM debt securities that were in an unrealized loss position as of December 31, 2020, were comprised of 3 securities representing 1.7% of the HTM portfolios’ carrying value (December 31, 2019: 6 and 4.3%). Total gross unrealized HTM losses were 0.4% of the fair value of affected HTM securities (December 31, 2019: 0.5%). Management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery of the cost of these securities. Unrealized losses were attributable primarily to changes in market interest rates, relative to when the investment securities were purchased, and not due to a decrease in the credit quality of the investment securities. The issuers continue to make timely principal and interest payments on the securities. The following describes the processes for identifying credit impairment in security types with the most significant unrealized losses as shown in the preceding tables. Management believes that all the US government and federal agencies securities do not have any credit losses, given the explicit and implicit guarantees provided by the US federal government. Management believes that all the Non-US governments debt securities do not have any credit losses, given the explicit guarantee provided by the issuing government. Investments in Asset-backed securities - Student loans are composed primarily of securities collateralized by Federal Family Education Loan Program loans (“FFELP loans”). FFELP loans benefit from a US federal government guarantee of at least 97% of defaulted principal and accrued interest, with additional credit support provided in the form of over-collateralization, subordination and excess spread, which collectively total in excess of 100%. Accordingly, the vast majority of FFELP loan-backed securities are not exposed to traditional consumer credit risk. None of the investments in Residential mortgage-backed securities were in an unrealized loss position at December 31, 2020 (December 31, 2019: 7). No credit losses were recognized on these securities. In the following tables, debt securities with unrealized losses that are not deemed to be credit impaired and for which an allowance for credit losses has not been recorded are categorized as being in a loss position for "less than 12 months" or "12 months or more" based on the point in time that the fair value most recently declined below the amortized cost basis. Less than 12 months 12 months or more December 31, 2020 Fair Gross Fair Gross Total Total gross Available-for-sale securities with unrealized losses US government and federal agencies 120,599 (279) 236 (27) 120,835 (306) Non-US governments debt securities 15 — 22,393 (389) 22,408 (389) Asset-backed securities - Student loans — — 12,945 (345) 12,945 (345) Total available-for-sale securities with unrealized losses 120,614 (279) 35,574 (761) 156,188 (1,040) Held-to-maturity securities with unrealized losses US government and federal agencies 36,079 (141) — — 36,079 (141) Less than 12 months 12 months or more December 31, 2019 Fair Gross Fair Gross Total Total gross Available-for-sale securities with unrealized losses US government and federal agencies 376,262 (1,786) 435,999 (4,556) 812,261 (6,342) Non-US governments debt securities 202 (1) 22,246 (523) 22,448 (524) Asset-backed securities - Student loans — — 12,891 (399) 12,891 (399) Residential mortgage-backed securities 6,038 (30) 50,254 (248) 56,292 (278) Total available-for-sale securities with unrealized losses 382,502 (1,817) 521,390 (5,726) 903,892 (7,543) Held-to-maturity securities with unrealized losses US government and federal agencies 47,038 (214) 46,411 (276) 93,449 (490) Investment Maturities The following table presents the remaining term to contractual maturity of the Bank’s securities. The actual maturities may differ as certain securities offer prepayment options to the borrowers. Remaining term to maturity December 31, 2020 Within 3 to 12 1 to 5 5 to 10 Over No specific or single Carrying Available-for-sale US government and federal agencies — — — — — 2,566,066 2,566,066 Non-US governments debt securities 15 — 22,393 — — — 22,408 Asset-backed securities - Student loans — — — — — 12,945 12,945 Residential mortgage-backed securities — — — — — 59,697 59,697 Total available-for-sale 15 — 22,393 — — 2,638,708 2,661,116 Held-to-maturity US government and federal agencies — — — — — 2,194,371 2,194,371 Pledged Investments The Bank pledges certain US government and federal agencies investment securities to further secure the Bank's issued customer deposit products. The secured party does not have the right to sell or repledge the collateral. December 31, 2020 December 31, 2019 Pledged Investments Amortized Fair Amortized Fair Available-for-sale 1,387 1,456 3,848 3,912 Held-to-maturity 2,460 2,623 5,449 5,552 Sale Proceeds and Realized Gains and Losses of AFS Securities Year ended December 31, 2020 December 31, 2019 December 31, 2018 Sale proceeds Gross realized gains Gross realized Sale Gross realized Gross realized Sale Gross realized Gross realized US government and federal agencies 349,699 1,171 (55) 35,001 115 — 812,720 1,599 (1,263) Non-US governments debt securities 3,266 104 — — — — — — — Corporate debt securities — — — 64,787 49 (141) 24,975 — (87) Commercial mortgage-backed securities — — — 124,545 901 (272) 15,260 — (354) Pass-through note — — — 972 972 — 1,205 1,205 — Total 352,965 1,275 (55) 225,305 2,037 (413) 854,160 2,804 (1,704) Taxability of Interest Income None of the investments' interest income has received a specific preferential income tax treatment in any of the jurisdictions in which the Bank owns investments. |
Loans
Loans | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Loans | Note 6: Loans The principal means of securing residential mortgages, personal, credit card and business loans are entitlements over assets and guarantees. Mortgage loans are generally repayable over periods of up to 30 years and personal and business loans are generally repayable over terms not exceeding five years. Government loans are repayable over a variety of terms which are individually negotiated. Amounts owing on credit cards are revolving and typically a minimum amount is due within 30 days from billing. The effective yield on total loans as at December 31, 2020 is 4.13% (December 31, 2019: 4.73%). The interest receivable on total loans as at December 31, 2020 is $8.7 million (December 31, 2019: $9.2 million). The interest receivable is included in Accrued interest and other assets on the consolidated balance sheets and is excluded from all loan amounts disclosed in this note. Loans' Credit Quality The four credit quality classifications set out in the following tables are defined below and describe the credit quality of the Bank's lending portfolio. These classifications each encompass a range of more granular internal credit rating grades. Loans' internal credit ratings are assigned by the Bank's customer relationship managers as well as members of the Bank's jurisdictional and group Credit Committees. The borrowers' financial condition is documented at loan origination and maintained periodically thereafter at a frequency which can be up to monthly for certain loans. The loans' performing status, as well as current economic trends, are continuously monitored. The Bank's jurisdictional and group Credit Committees meet on a monthly basis. The Bank also has a group Provisions and Impairments Committee which is responsible for approving significant provisions and other impairment charges. A pass loan shall mean a loan that is expected to be repaid as agreed. A loan is classified as pass where the Bank is not expected to face repayment difficulties because the present and projected cash flows are sufficient to repay the debt and the repayment schedule as established by the agreement is being followed. Loans in this category are reviewed by the Bank’s management on at least an annual basis. A special mention loan shall mean a loan under close monitoring by the Bank’s management on at least a quarterly basis. Loans in this category are currently protected and still performing, but are potentially weak and present an undue credit risk exposure, but not to the point of justifying a classification of substandard. A substandard loan shall mean a loan whose evident unreliability makes repayment doubtful and there is a threat of loss to the Bank unless the unreliability is averted. Loans in this category are under close monitoring by the Bank’s management on at least a quarterly basis. A non-accrual loan shall mean either management is of the opinion full payment of principal or interest is in doubt or when principal or interest is 90 days past due unless it is a residential mortgage loan which is well secured and collection efforts are reasonably expected to result in amounts due. Loans in this category are under close monitoring by the Bank’s management on at least a quarterly basis. The amortized cost of loans by credit quality classifications and allowance for expected credit losses by class of loans is as follows: December 31, 2020 Pass Special Substandard Non-accrual Total amortized cost Allowance for expected credit losses Total net loans Commercial loans Government 279,417 — — — 279,417 (1,453) 277,964 Commercial and industrial 422,616 5,841 1,082 18,226 447,765 (9,926) 437,839 Commercial overdrafts 70,324 1,686 451 1 72,462 (230) 72,232 Total commercial loans 772,357 7,527 1,533 18,227 799,644 (11,609) 788,035 Commercial real estate loans Commercial mortgage 627,512 79,168 2,362 6,300 715,342 (847) 714,495 Construction 4,950 39,870 — — 44,820 (1,257) 43,563 Total commercial real estate loans 632,462 119,038 2,362 6,300 760,162 (2,104) 758,058 Consumer loans Automobile financing 22,491 52 — 127 22,670 (103) 22,567 Credit card 68,025 — 234 — 68,259 (2,795) 65,464 Overdrafts 23,934 1,127 — 2 25,063 (162) 24,901 Other consumer 1 112,466 1,031 215 1,048 114,760 (1,416) 113,344 Total consumer loans 226,916 2,210 449 1,177 230,752 (4,476) 226,276 Residential mortgage loans 3,212,218 61,499 83,846 46,787 3,404,350 (15,909) 3,388,441 Total 4,843,953 190,274 88,190 72,491 5,194,908 (34,098) 5,160,810 1 Other consumer loans’ amortized cost comprises $54 million of cash and portfolio secured lending and $45 million of lending secured by buildings in construction or other collateral. Evaluation of gross loans for impairment December 31, 2019 Pass Special Substandard Non-accrual Total amortized General and specific allowances Total net loans Individually Collectively Commercial loans Government 370,753 — — — 370,753 — 370,753 — 370,753 Commercial and industrial 469,591 57,438 1,119 7,567 535,715 (7,195) 528,520 48,386 487,329 Commercial overdrafts 23,529 4,565 451 2 28,547 (86) 28,461 2 28,545 Total commercial loans 863,873 62,003 1,570 7,569 935,015 (7,281) 927,734 48,388 886,627 Commercial real estate loans Commercial mortgage 581,450 71,638 2,955 3,250 659,293 (1,496) 657,797 9,871 649,422 Construction 91,812 — 3,128 — 94,940 — 94,940 3,128 91,812 Total commercial real estate loans 673,262 71,638 6,083 3,250 754,233 (1,496) 752,737 12,999 741,234 Consumer loans Automobile financing 21,229 78 — 155 21,462 (102) 21,360 155 21,307 Credit card 87,250 — 424 — 87,674 (445) 87,229 — 87,674 Overdrafts 5,270 2,504 50 34 7,858 (28) 7,830 34 7,824 Other consumer 1 135,534 3,550 — 1,063 140,147 (927) 139,220 1,070 139,077 Total consumer loans 249,283 6,132 474 1,252 257,141 (1,502) 255,639 1,259 255,882 Residential mortgage loans 3,019,105 80,135 82,251 38,330 3,219,821 (13,309) 3,206,512 115,535 3,104,285 Total 4,805,523 219,908 90,378 50,401 5,166,210 (23,588) 5,142,622 178,181 4,988,028 1 Other consumer loans’ amortized cost comprises $74 million of cash and portfolio secured lending and $48 million of lending secured by buildings in construction or other collateral. Based on the most recent analysis performed, the amortized cost of loans by year of origination and credit quality indicator is as follows: December 31, 2020 Pass Special Substandard Non-accrual Total amortized cost Loans by origination year 2020 683,821 18,789 — 70 702,680 2019 1,026,634 27,575 181 4 1,054,394 2018 684,716 65,570 559 1,407 752,252 2017 624,332 2,381 3,245 11,910 641,868 2016 447,293 2,073 7,993 4,939 462,298 Prior 1,183,869 69,934 75,466 52,174 1,381,443 Overdrafts and credit cards 193,288 3,952 746 1,987 199,973 Total amortized cost 4,843,953 190,274 88,190 72,491 5,194,908 Age Analysis of Past Due Loans (Including Non-Accrual Loans) The following tables summarize the past due status of the loans. The aging of past due amounts are determined based on the contractual delinquency status of payments under the loan and this aging may be affected by the timing of the last business day at period end. Loans less than 30 days past due are included in current loans. December 31, 2020 30 - 59 60 - 89 More than 90 days Total past Total Total Commercial loans Government — — — — 279,417 279,417 Commercial and industrial 109 50 18,176 18,335 429,430 447,765 Commercial overdrafts — — 90 90 72,372 72,462 Total commercial loans 109 50 18,266 18,425 781,219 799,644 Commercial real estate loans Commercial mortgage 710 1,552 4,748 7,010 708,332 715,342 Construction — — — — 44,820 44,820 Total commercial real estate loans 710 1,552 4,748 7,010 753,152 760,162 Consumer loans Automobile financing 55 35 127 217 22,453 22,670 Credit card 480 224 234 938 67,321 68,259 Overdrafts — — 2 2 25,061 25,063 Other consumer 56 3 1,043 1,102 113,658 114,760 Total consumer loans 591 262 1,406 2,259 228,493 230,752 Residential mortgage loans 6,304 4,023 59,957 70,284 3,334,066 3,404,350 Total amortized cost 7,714 5,887 84,377 97,978 5,096,930 5,194,908 December 31, 2019 30 - 59 60 - 89 More than 90 days Total past Total Total Commercial loans Government — — — — 370,753 370,753 Commercial and industrial 276 — 7,487 7,763 527,952 535,715 Commercial overdrafts — — 2 2 28,545 28,547 Total commercial loans 276 — 7,489 7,765 927,250 935,015 Commercial real estate loans Commercial mortgage 445 — 3,250 3,695 655,598 659,293 Construction — — 3,128 3,128 91,812 94,940 Total commercial real estate loans 445 — 6,378 6,823 747,410 754,233 Consumer loans Automobile financing 53 58 135 246 21,216 21,462 Credit card 630 221 424 1,275 86,399 87,674 Overdrafts — — 34 34 7,824 7,858 Other consumer 994 139 1,028 2,161 137,986 140,147 Total consumer loans 1,677 418 1,621 3,716 253,425 257,141 Residential mortgage loans 31,931 9,487 47,132 88,550 3,131,271 3,219,821 Total amortized cost 34,329 9,905 62,620 106,854 5,059,356 5,166,210 Changes in Allowances for Credit Losses The increase in the allowance for credit losses during the year ended December 31, 2020 was primarily attributable to changes in macroeconomic factors, such as GDP forecasts, and changes in the credit ratings of some residential and commercial customers. As per the Bank’s accounting policy, as disclosed in Note 2, the Bank continuously collects and maintains attributes related to financial instruments within the scope of CECL, including current conditions, and reasonable and supportable assumptions about future economic conditions. Year ended December 31, 2020 Commercial Commercial Consumer Residential Total Balance at the beginning of period, before change in accounting policy 7,281 1,496 1,502 13,309 23,588 Cumulative effect from change in accounting policy (Note 2) 4,109 1,026 2,506 200 7,841 Provision increase (decrease) 3,832 (418) 1,095 3,803 8,312 Recoveries of previous charge-offs 12 — 1,247 379 1,638 Charge-offs (3,635) — (1,876) (2,043) (7,554) Other 10 — 2 261 273 Allowances for expected credit losses at end of year 11,609 2,104 4,476 15,909 34,098 Year ended December 31, 2019 Commercial Commercial Consumer Residential Total Balance at beginning of period 6,913 4,092 802 13,295 25,102 Provision increase (decrease) 733 (2,596) 1,701 (22) (184) Recoveries of previous charge-offs 9 — 1,186 445 1,640 Charge-offs (374) — (2,193) (449) (3,016) Other — — 6 40 46 General and specific allowances at end of period 7,281 1,496 1,502 13,309 23,588 Allowances at end of period: individually evaluated for impairment 4,904 470 676 11,628 17,678 Allowances at end of period: collectively evaluated for impairment 2,377 1,026 826 1,681 5,910 Collateral-dependent loans Management identified that the repayment of certain commercial and consumer mortgage loans is expected to be provided substantially through the operation or the sale of the collateral pledged to the Bank ("collateral-dependent loans"). The Bank believes that for the vast majority of loans identified as collateral-dependent, the sale of the collateral will be sufficient to fully reimburse the loan's carrying amount. Loan Deferral Program In response to the COVID-19 pandemic, effective April 1, 2020 the Bank implemented a residential mortgage and consumer loan deferral program for qualified borrowers in the Bermuda and Cayman segments under which principal and interest payments on performing loans were automatically deferre d for three months from April 1, 2020 to June 30, 2020 an d the loan term extended. Borrowers had the option to notify the Bank if they preferred to continue with regular, scheduled payments (i.e. to opt-out). Commercial customers had the option to pay interest only on their monthly loan payments with no penalties. The Bank subsequently extended the residential mortgage and personal loan deferral program for a further three months from July 1, 2020 to September 30, 2020, however, borrowers had to notify the Bank of their intention to defer principal and interest payments (i.e. to opt-in). Loans that meet the requirements for deferral under the programs are not considered TDRs or past due as the borrowers were current on their payments and were not experiencing financial difficulty at the time of these modifications. In addition, the Bank also introduced deferrals on credit card payments for April and May in the Bermuda segment and May and June in the Cayman segment. Non-Performing Loans During the year ended December 31, 2020, no interest was recognized on non-accrual loans. Non-performing loans at December 31, 2020 include PCD loans, which have all been on non-accrual status since their acquisition. The balances at December 31, 2019 have not been restated to include the $1.8 million amortized cost of PCD loans as at that date. No credit deteriorated loans were purchased during the year. December 31, 2020 December 31, 2019 Non-accrual loans with an allowance Non-accrual loans without an allowance Past due more than 90 days and accruing Total non- Non-accrual loans with an allowance Non-accrual loans without an allowance Past due more than 90 days and accruing Total non- Commercial loans Commercial and industrial 18,207 19 — 18,226 7,487 80 — 7,567 Commercial overdrafts — 1 89 90 — 2 — 2 Total commercial loans 18,207 20 89 18,316 7,487 82 — 7,569 Commercial real estate loans Commercial mortgage 952 5,348 — 6,300 1,019 2,231 — 3,250 Construction — — — — — — 3,128 3,128 Total commercial real estate loans 952 5,348 — 6,300 1,019 2,231 3,128 6,378 Consumer loans Automobile financing 126 1 — 127 — 155 — 155 Credit card — — 234 234 — — 424 424 Overdrafts — 2 — 2 — 34 — 34 Other consumer 869 179 — 1,048 676 387 — 1,063 Total consumer loans 995 182 234 1,411 676 576 424 1,676 Residential mortgage loans 36,897 9,890 18,788 65,575 29,016 9,314 12,008 50,338 Total non-performing loans 57,051 15,440 19,111 91,602 38,198 12,203 15,560 65,961 Loans modified in a TDR As at December 31, 2020, the Bank had nil loans that were modified in a TDR during the preceding 12 months that subsequently defaulted (December 31, 2019: nil; December 31, 2018: 2). TDRs entered into during the period Year ended December 31, 2020 Number of contracts Pre-modification recorded loans Modification: interest capitalization Post- Residential mortgage loans 9 5,590 98 5,688 Year ended December 31, 2019 Number of Pre- Modification: interest capitalization Post- Residential mortgage loans 3 1,381 101 1,482 TDRs Outstanding December 31, 2020 December 31, 2019 Accrual Non-accrual Accrual Non-accrual Commercial loans 901 — 939 — Commercial real estate loans 2,362 1,811 2,954 1,315 Residential mortgage loans 61,937 17,129 65,275 9,576 Total TDRs outstanding 65,200 18,940 69,168 10,891 |
Credit risk concentrations
Credit risk concentrations | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Credit risk concentrations | Note 7: Credit risk concentrations Concentrations of credit risk in the lending and off-balance sheet credit-related arrangements portfolios arise when a number of customers are engaged in similar business activities, are in the same geographic region, or when they have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. The Bank regularly monitors various segments of its credit risk portfolio to assess potential concentrations of risks and to obtain collateral when deemed necessary. In the Bank's commercial portfolio, risk concentrations are evaluated primarily by industry and by geographic region of loan origination. In the consumer portfolio, concentrations are evaluated primarily by products. Credit exposures include loans, guarantees and acceptances, letters of credit and commitments for undrawn lines of credit. Unconditionally cancellable credit cards and overdraft lines of credit are excluded from the tables below. The following table summarizes the credit exposure of the Bank by geographic region. The exposures amounts disclosed below do not include accrued interest and are gross of allowance s for credit losses and gross of collateral hel d. The comparatives have been revised to conform to current year presentation. December 31, 2020 December 31, 2019 Geographic region Cash due from Loans Off-balance Total credit Cash due from Loans Off-balance Total credit Australia 220,871 — — 220,871 170,956 — — 170,956 Belgium 4,271 — — 4,271 3,554 — — 3,554 Bermuda 51,329 2,225,401 323,097 2,599,827 38,059 2,253,969 347,802 2,639,830 Canada 996,213 — — 996,213 553,941 — — 553,941 Cayman 29,480 948,290 396,654 1,374,424 55,360 931,434 208,404 1,195,198 Germany 107,412 — — 107,412 — — — — Guernsey 1 779,915 213,461 993,377 4 856,453 123,376 979,833 Ireland 83,842 — — 83,842 — — — — Japan 6,029 — — 6,029 16,183 — — 16,183 Jersey — 26,773 35,224 61,997 — 7,219 — 7,219 Netherlands — — — — 410,461 — — 410,461 New Zealand 23,463 — — 23,463 6,174 — — 6,174 Norway 57,900 — — 57,900 1,204 — — 1,204 Saint Lucia — — — — — 29,400 — 29,400 Switzerland 4,510 — — 4,510 8,015 — — 8,015 The Bahamas 1,516 12,024 — 13,540 1,607 12,859 — 14,466 United Kingdom 1,291,655 1,202,505 140,663 2,634,823 1,742,676 1,074,876 108,599 2,926,151 United States 1,428,090 — — 1,428,090 898,262 — — 898,262 Other 3,088 — — 3,088 4,277 — — 4,277 Total gross exposure 4,309,670 5,194,908 1,109,099 10,613,677 3,910,733 5,166,210 788,181 9,865,124 |
Premises, equipment and compute
Premises, equipment and computer software | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Premises, equipment and computer software | Note 8: Premises, equipment and computer software December 31, 2020 December 31, 2019 Category Cost Accumulated Net carrying Cost Accumulated Net carrying Land 8,730 — 8,730 8,730 — 8,730 Buildings 164,171 (71,721) 92,450 156,756 (66,370) 90,386 Equipment 25,150 (15,930) 9,220 22,928 (17,062) 5,866 Computer hardware and software in use 197,165 (161,801) 35,364 189,380 (144,236) 45,144 Computer software in development 4,988 — 4,988 8,107 — 8,107 Total 400,204 (249,452) 150,752 385,901 (227,668) 158,233 Year ended Depreciation charged to operating expenses December 31, 2020 December 31, 2019 December 31, 2018 Buildings (included in Property expense) 5,511 4,492 4,283 Equipment (included in Property expense) 1,929 1,524 1,413 Computer hardware and software (included in Technology and communication expense) 21,773 20,620 20,441 Total depreciation charged to operating expenses 29,213 26,636 26,137 |
Goodwill and other intangible a
Goodwill and other intangible assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets | Note 9: Goodwill and other intangible assets Goodwill Segment Cayman Channel Islands and the UK Other Total Balance at December 31, 2017 — 21,529 — 21,529 Acquisitions during the year 551 1,231 2,086 3,868 Foreign exchange translation adjustment — (1,333) (73) (1,406) Balance at December 31, 2018 551 21,427 2,013 23,991 Foreign exchange translation adjustment — 818 29 847 Balance at December 31, 2019 551 22,245 2,042 24,838 Foreign exchange translation adjustment — 719 70 789 Balance at December 31, 2020 551 22,964 2,112 25,627 Customer Relationship Intangible Assets December 31, 2020 December 31, 2019 Segment Cost Accumulated Net carrying Cost Accumulated Net carrying Bermuda 29,785 (15,009) 14,776 29,785 (13,579) 16,206 Cayman 17,728 (6,773) 10,955 17,728 (5,672) 12,056 Channel Islands and the UK 90,069 (53,279) 36,790 90,069 (51,435) 38,634 Other 5,563 (892) 4,671 5,563 (794) 4,769 Total 143,145 (75,953) 67,192 143,145 (71,480) 71,665 Customer relationships are initially valued based on the present value of net cash flows expected to be derived solely from the recurring customer base existing as at the date of acquisition. Customer relationship intangible assets may or may not arise from contracts. During the year ended December 31, 2020, no new customer intangible assets were acquired. During the year ended December 31, 2019, the Bank acquired $24.4 million new customer intangible assets with an estimated useful life of 15 years (see "Note 26: Business combinations"). During the year ended December 31, 2018, the Bank acquired $18.2 million new customer intangible assets with an estimated useful life of 15 years, of which $16.9 million was acquired through a business acquisition (see Note 26: Business combinations) and $1.3 million via asset acquisitions. The amortization expense amounted to $5.8 million (December 31, 2019: $5.5 million, December 31, 2018: $5.1 million) and the foreign exchange translation adjustment increased the net carrying amount by $1.3 million (December 31, 2019: decreased by $2.0 million, December 31, 2018: decreased by $1.5 million). The estimated aggregate amortization expense for each of the succeeding five years is $6.1 million. |
Customer deposits and deposits
Customer deposits and deposits from banks | 12 Months Ended |
Dec. 31, 2020 | |
Deposits [Abstract] | |
Customer deposits and deposits from banks | Note 10: Customer deposits and deposits from banks By Maturity Demand Total Term Total December 31, 2020 Non-interest Interest Within 3 3 to 6 6 to 12 After 12 months Total Demand or less than $100k¹ 3,012,360 7,577,642 10,590,002 30,551 8,402 13,138 14,875 66,966 10,656,968 Term - $100k or more N/A N/A — 1,553,178 625,533 330,773 83,632 2,593,116 2,593,116 Total deposits 3,012,360 7,577,642 10,590,002 1,583,729 633,935 343,911 98,507 2,660,082 13,250,084 Demand Total Term Total December 31, 2019 Non-interest Interest Within 3 3 to 6 6 to 12 After 12 months Total Demand or less than $100k¹ 2,238,256 7,152,063 9,390,319 31,666 9,355 13,497 16,478 70,996 9,461,315 Term - $100k or more N/A N/A — 2,402,619 224,945 291,020 61,726 2,980,310 2,980,310 Total deposits 2,238,256 7,152,063 9,390,319 2,434,285 234,300 304,517 78,204 3,051,306 12,441,625 ¹ The weighted-average interest rate on interest-bearing demand deposits as at December 31, 2020 is -0.04% (December 31, 2019: 0.20%). By Type and Segment December 31, 2020 December 31, 2019 Payable Payable on a Total Payable Payable on a Total Bermuda 4,107,156 705,490 4,812,646 3,145,859 1,265,679 4,411,538 Cayman 3,577,120 531,602 4,108,722 2,995,119 479,848 3,474,967 Channel Islands and the UK 2,905,726 1,422,990 4,328,716 3,249,341 1,305,779 4,555,120 Total deposits 10,590,002 2,660,082 13,250,084 9,390,319 3,051,306 12,441,625 |
Employee benefit plans
Employee benefit plans | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Employee benefit plans | Note 11: Employee benefit plans The Bank maintains trusteed pension plans including non-contributory defined benefit plans and a number of defined contribution plans, and provides post-retirement medical benefits to its qualifying retirees. The defined benefit provisions under the pension plans are generally based upon years of service and average salary during the relevant years of employment. The defined benefit and post-retirement medical plans are not open to new participants and are non-contributory and the funding required is provided by the Bank, based upon the advice of independent actuaries. The defined benefit pension plans are in the Bermuda, Guernsey and UK jurisdictions, and the defined benefit post-retirement medical plan is in Bermuda. The Bank has a residual obligation on top of its defined contribution plan in Mauritius. Bermuda Defined Benefit and Post-Retirement Medical Benefit Plan The Bank amortizes prior service credit resulting from plan amendments that occurred when plan members were active employees, on a linear basis over the expected average remaining service period (to full eligibility) of active members expected to receive benefits under the plan. Such remaining service periods are as follows: 3.1 years for the 2010 plan amendments and 4.6 years for the 2011 plan amendments. Plan amendments occurring in 2014 and 2019 resulted in the recognition of new prior service cost on December 31, 2014 and December 31, 2019 on a plan for which substantially all members are now inactive the Bank has elected to amortize these new prior service costs on a linear basis over 21 years and 16 years, respectively, which was the average remaining life expectancy of members eligible for benefits under the plan at the time of the amendments. Guernsey Defined Benefit Pension Plan Effective October 2014, all the participants of the Guernsey defined benefit pension plan became inactive and in accordance with GAAP, the net actuarial loss of the Guernsey defined benefit pension plan is amortized over the then estimated average remaining life expectancy of the inactive participants of 39 years. Prior to all of the Guernsey participants being inactive, the net actuarial loss of the Guernsey defined benefit pension plan was amortized to net income over the estimated average remaining service period for active members of 15 years. UK Defined Benefit Pension Plan The UK defined benefit pension plan closed to new members effective April 1, 2002 and subsequently closed to further accrual of new benefits effective October 1, 2012. During the years ended December 31, 2018 and 2017, the pension plan settled in cash the liability of several plan members and an insurance policy was purchased in the name of the trustees of the plan to match the liabilities of remaining members who were pensioners as at March 31, 2016. Mauritius Portable Retirement Gratuity Fund Under the Mauritius Workers’ Right Act of 2019, the Portable Retirement Gratuity Fund was established for the purpose of providing for the payment of a gratuity on the death or retirement of an employee and came into effect on January 1, 2020. The Fund operates as a centralized defined contribution scheme with employers required to make upfront contributions at prescribed rates based on employees monthly remuneration. Any shortfall in this lump sum gratuity in the employees accumulated fund upon death or retirement, is to be funded by the Bank. Accordingly, the Bank recognizes the related service and net interest costs as well as the related net actuarial liability. The following table presents the financial position of the Bank’s defined benefit pension plans and the Bank’s post-retirement medical benefit plan, which is unfunded. The Bank measures the benefit obligations and plan assets annually on each December 31 and therefore, the most recent measurement date is December 31, 2020. December 31, 2020 December 31, 2019 December 31, 2018 Pension Post- Pension Post- Pension Post- Accumulated benefit obligation at end of year 179,018 128,167 168,791 110,347 148,966 117,203 Change in projected benefit obligation Projected benefit obligation at beginning of year 168,791 110,347 148,966 117,203 179,613 127,687 Service cost 43 66 — 58 — 63 Interest cost 3,957 3,270 5,034 4,741 4,971 4,305 Benefits paid (7,412) (4,069) (7,546) (4,010) (17,274) (3,263) Prior service cost 48 — — — 212 — Plan amendment — — — 2,369 — — Settlement and curtailment of liability (7,505) — (2,549) — (1,825) — Actuarial (gain) loss 18,326 18,553 21,950 (10,014) (12,423) (11,589) Foreign exchange translation adjustment 2,770 — 2,936 — (4,308) — Projected benefit obligation at end of year 179,018 128,167 168,791 110,347 148,966 117,203 Change in plan assets Fair value of plan assets at beginning of year 175,400 — 154,151 — 185,495 — Actual return on plan assets 14,945 — 25,225 — (11,618) — Employer contribution 2,917 4,069 2,605 4,010 3,653 3,263 Plan settlement (5,903) (2,043) — (1,608) — Benefits paid (7,412) (4,069) (7,546) (4,010) (17,274) (3,263) Foreign exchange translation adjustment 2,569 — 3,008 — (4,497) — Fair value of plan assets at end of year 182,516 — 175,400 — 154,151 — Amounts recognized in the consolidated balance sheets consist of: Prepaid benefit cost included in other assets 6,610 — 6,609 — 5,185 — Accrued pension benefit cost included in employee benefit plans liability (3,112) (128,167) — (110,347) — (117,203) Surplus (deficit) of plan assets over projected benefit obligation at measurement date 3,498 (128,167) 6,609 (110,347) 5,185 (117,203) Year ended December 31, 2020 December 31, 2019 December 31, 2018 Pension Post- Pension Post- Pension Post- Amounts recognized in accumulated other comprehensive loss consist of: Net actuarial gain (loss), excluding deferred taxes (73,506) (21,213) (67,118) (2,660) (65,506) (12,946) Net prior service credit (cost) (226) (7,866) (190) (8,390) (202) (6,397) Deferred income taxes assets (liabilities) 1,477 — 996 — 816 — Net amount recognized in accumulated other comprehensive loss (72,255) (29,079) (66,312) (11,050) (64,892) (19,343) Annual Benefit Expense Expense component Line item in the consolidated statements of operations Service cost Salaries and other employee benefits 97 66 — 58 — 63 Interest cost Non-service employee benefits expense 3,960 3,270 5,034 4,741 4,971 4,305 Expected return on plan assets Non-service employee benefits expense (7,547) N/A (7,563) — (8,720) — Amortization of net actuarial (gains) losses Non-service employee benefits expense 2,412 — 2,197 272 2,106 2,615 Amortization of prior service (credit) loss Non-service employee benefits expense 21 524 20 376 — 39 (Gain) loss on settlement Net other gains (losses)/Non-service employee benefits expense 1,326 — 572 — 1,757 — Defined benefit (income) expense 269 3,860 260 5,447 114 7,022 Defined contribution expense 8,933 — 8,340 — 7,442 — Total benefit (income) expense 9,202 3,860 8,600 5,447 7,556 7,022 The components of benefit expense (income) other than the service cost component are included in the line item non-service employee benefits expense in the consolidated statements of operations. Other Changes Recognized in Other Comprehensive Income (Loss) Net gain (loss) arising during the year (8,363) (18,553) (3,472) 10,014 (5,987) 11,589 Prior service credit (cost) arising during the year (47) — — (2,369) (212) — Amortization of net actuarial (gains) losses 2,412 — 2,407 272 2,106 2,615 Amortization of prior service (credit) cost 20 524 19 376 — 39 Change in deferred taxes 456 — 149 — (298) — Foreign exchange adjustment (421) — (523) — 840 — Total changes recognized in other comprehensive income (loss) (5,943) (18,029) (1,420) 8,293 (3,551) 14,243 To develop the expected long-term rate of return on the plan assets assumption for each plan, the Bank considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocations of the assets. The weighted average discount rate used to determine benefit obligations at the end of the year is derived from interest rates on high quality corporate bonds with maturities that match the expected benefit payments. Actuarial Assumptions Year ended December 31, 2020 December 31, 2019 December 31, 2018 Pension Post- Pension Post- Pension Post- Actuarial assumptions used to determine annual benefit expense Weighted average discount rate 2.65 % 3.38 % 3.65 % 4.40 % 3.05 % 3.73 % Weighted average rate of compensation increases 1 2.30 % N/A 2.50 % N/A 2.50 % N/A Weighted average expected long-term rate of return on plan assets 4.60 % N/A 5.00 % N/A 4.70 % N/A Weighted average annual medical cost increase rate N/A 7.3% to 4.5% in 2040 N/A 7.5% to 4.5% in 2035 N/A 7.7% to 4.5% in 2035 Actuarial assumptions used to determine benefit obligations at end of year Weighted average discount rate 1.90 % 2.53 % 2.65 % 3.38 % 3.65 % 4.40 % Weighted average rate of compensation increases 1 2.20 % N/A 2.30 % N/A 2.50 % N/A Weighted average annual medical cost increase rate N/A 7.2% to 4.5% in 2040 N/A 7.3% to 4.5% in 2040 N/A 7.5% to 4.5% in 2035 1 Only the UK subsidiary plan is impacted by potential future compensation increases. Investments Policies and Strategies The pension plans’ assets are managed according to each plan's investment policy statement, which outlines the purpose of the plan, statement of objectives and guidelines and investment policy. The asset allocation is diversified and any use of derivatives is limited to hedging purposes only. December 31, 2020 December 31, 2019 Weighted average actual and target asset allocations of the pension plans by asset category Actual Target Actual Target Debt securities (including debt mutual funds) 37 % 30 % 32 % 36 % Equity securities (including equity mutual funds) 50 % 52 % 51 % 47 % Other 13 % 18 % 17 % 17 % Total 100 % 100 % 100 % 100 % Fair Value Measurements of Pension Plans' Assets The following table presents the fair value of the plans' assets by category and level of inputs used in their respective fair value determination as described in "Note 2: Significant accounting policies", except the level 3 security, for which the valuation determination is described following the below table: December 31, 2020 December 31, 2019 Fair value determination Fair value determination Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total US government and federal agencies — 21,566 — 21,566 — 19,445 — 19,445 Non-US governments debt securities — 1,132 — 1,132 — 1,089 — 1,089 Corporate debt securities — 45,871 — 45,871 — 35,688 — 35,688 Equity securities and mutual funds 925 90,574 — 91,499 1,112 88,631 — 89,743 Other 727 226 21,495 22,448 10,049 406 18,980 29,435 Total fair value of plans' assets 1,652 159,369 21,495 182,516 11,161 145,259 18,980 175,400 The Level 3 assets consist of insured annuity policies covering the full pension benefits of certain plan members. The fair value of these policies is deemed equal to the actuarial value of the projected benefit obligation for the insured benefits. At December 31, 2020, 28.4% (December 31, 2019: 26.8%) of the assets of the pension plans were mutual funds and equity securities managed or administered by wholly-owned subsidiaries of the Bank. At December 31, 2020, 0.5% (December 31, 2019: 0.6%) of the plans' assets were invested in common shares of the Bank. The investments of the pension funds are diversified across a range of asset classes and are diversified within each asset class. The assets are generally actively managed with the goal of adding some incremental value through security selection and asset allocation. Estimated 2021 Bank contribution to and estimated benefit payments for the next ten years under the pension and post-retirement medical benefit plans are as follows: Pension Post- Estimated Bank contributions for the full year ending December 31, 2021 3,000 — Estimated benefit payments by year: 2021 7,400 4,538 2022 7,400 4,763 2023 7,300 4,992 2024 7,200 5,216 2025 7,200 5,447 2026-2030 34,500 30,034 |
Credit-related arrangements, re
Credit-related arrangements, repurchase agreements and commitments | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Credit-related arrangements, repurchase agreements and commitments | Note 12: Credit related arrangements, repurchase agreements and commitments Commitments As at December 31, 2020, the Bank was committed to expenditures under contract for information technology services sourcing of $13.0 million (December 31, 2019: $27.6 million). The Bank funded its expenditures with its own resources and plans to fund those currently in progress with its own resources, which may be obtained through cash on hand, cash flows from operations and issuances of debt and equity securities. The following table summarizes the Bank's commitments for sourcing, long-term leases and other agreements: Year ending December 31 Sourcing Other Total 2021 13,029 18,638 31,667 2022 — 11,682 11,682 2023 — 5,552 5,552 2024 — 2,490 2,490 2025 — 1,779 1,779 Total commitments 13,029 40,141 53,170 The Bank enters into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Substantially all of the Bank's commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of loan funding. Management assesses the credit risk associated with certain commitments to extend credit in determining the level of the allowance for expected credit losses. The Bank has a facility with one of its custodians, whereby the Bank may offer up to US $200 million of standby letters of credit to its customers on a fully secured basis. Under the standard terms of the facility, the custodian has the right to set-off against securities held of 110% of the utilized facility. At December 31, 2020, $153.2 million (December 31, 2019: $143.6 million) of standby letters of credit were issued under this facility. Outstanding unfunded commitments to extend credit December 31, 2020 December 31, 2019 Commitments to extend credit 836,710 549,049 Documentary and commercial letters of credit 981 355 Total unfunded commitments to extend credit 837,691 549,404 Allowance for credit losses (179) — Credit-Related Arrangements Standby letters of credit and letters of guarantee are issued at the request of a Bank customer in order to secure the customer’s payment or performance obligations to a third party. These guarantees represent an irrevocable obligation of the Bank to pay the third party beneficiary upon presentation of the guarantee and satisfaction of the documentary requirements stipulated therein, without investigation as to the validity of the beneficiary’s claim against the customer. Generally, the term of the standby letters of credit does not exceed one year, while the term of the letters of guarantee does not exceed four years. The types and amounts of collateral security held by the Bank for these standby letters of credit and letters of guarantee are generally represented by deposits with the Bank or a charge over assets held in mutual funds. The Bank considers the fees collected in connection with the issuance of standby letters of credit and letters of guarantee to be representative of the fair value of its obligation undertaken in issuing the guarantee. In accordance with applicable accounting standards related to guarantees, the Bank defers fees collected in connection with the issuance of standby letters of credit and letters of guarantee. The fees are then recognized in income proportionately over the life of the credit agreements. The following table presents the outstanding financial guarantees. Collateral is shown at estimated market value less selling cost. Where the collateral is cash, it is shown gross including accrued income. December 31, 2020 December 31, 2019 Outstanding financial guarantees Gross Collateral Net Gross Collateral Net Standby letters of credit 265,959 258,699 7,260 230,971 223,711 7,260 Letters of guarantee 5,449 5,413 36 7,806 7,672 134 Total 271,408 264,112 7,296 238,777 231,383 7,394 Repurchase agreements The Bank utilizes repurchase agreements and resell agreements (reverse repurchase agreements) to manage liquidity. The risks of these transactions include changes in the fair value in the securities posted or received as collateral and other credit-related events. The Bank manages these risks by ensuring that the collaterals involved are appropriate and by monitoring the value of the securities posted or received as collateral on a daily basis. As at December 31, 2020, the Bank had 5 open positions (December 31, 2019: 13) in resell agreements with a remaining maturity of less than 30 days involving pools of mortgages issued by US federal agencies. The amortized cost of these resell agreements is $197.0 million (December 31, 2019: $142.3 million) and is included in securities purchased under agreement to resell on the consolidated balance sheets. As at December 31, 2020, there were no positions (December 31, 2019: no positions) which were offset on the consolidated balance sheets to arrive at the carrying value, and there was no collateral amount which was available to offset against the future settlement amount. Legal Proceedings There are actions and legal proceedings pending against the Bank and its subsidiaries which arose in the normal course of its business. Management, after reviewing all actions and proceedings pending against or involving the Bank and its subsidiaries, considers that the resolution of these matters would in the aggregate not be material to the consolidated financial position of the Bank, except as noted in the following paragraphs. As publicly announced, in November 2013, the US Attorney's Office for the Southern District of New York applied for and secured the issuance of so-called John Doe Summonses to six US financial institutions with which the Bank had correspondent bank relationships. The Bank has been fully cooperating with the US authorities in their ongoing investigation. Specifically, the Bank has conducted an extensive review and account remediation exercise to determine the US tax compliance status of US person account holders. The review process and results have been shared with the US authorities. Management believes that as at December 31, 2020, a provision of $5.5 million (December 31, 2019: $5.5 million), which has been recorded, is appropriate. As the investigation remains ongoing at this time, the timing and terms of the final resolution, including any fines or penalties, remain uncertain and the financial impact to the Bank could exceed the amount of the provision. In this regard, we note that the US authorities have not approved or commented on the adequacy or reasonableness of the estimate. The provision is included on the consolidated balance sheets under other liabilities. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Note 13 : Leases The Bank enters into operating lease agreements either as the lessee or the lessor, mostly for office and parking spaces as well as for small office equipment. The terms of the existing leases, including renewal options that are reasonably certain to be exercised, extend up to the year 2035. Certain lease payments will be adjusted during the related lease's term based on movements in the relevant consumer price index. Rental expense for premises leased on a long-term basis for the year ended December 31, 2018 amounted to $5.6 million. Year ended December 31, 2020 December 31, 2019 Lease costs Operating lease costs 7,932 6,606 Short-term lease costs 1,500 858 Sublease income (1,205) (534) Total net lease cost 8,227 6,930 Operating lease income 940 677 Other information for the period Right-of-use assets related to new operating lease liabilities 323 28,703 Operating cash flows from operating leases 8,330 7,071 Year ended Other information at end of period December 31, 2020 December 31, 2019 Operating leases right-of-use assets (included in other assets on the balance sheets) 46,244 47,947 Operating lease liabilities (included in other liabilities on the balance sheets) 44,940 48,334 Weighted average remaining lease term for operating leases (in years) 10.14 10.37 Weighted average discount rate for operating leases 5.25 % 5.25 % The following table summarizes the maturity analysis of the Bank's commitments for long-term leases as at December 31, 2020: Year ending December 31 Operating Leases 2021 8,319 2022 8,111 2023 6,980 2024 6,247 2025 3,870 2026 & thereafter 24,793 Total commitments 58,320 Less: effect of discounting cash flows to their present value (13,380) Operating lease liabilities 44,940 |
Leases | Note 13 : Leases The Bank enters into operating lease agreements either as the lessee or the lessor, mostly for office and parking spaces as well as for small office equipment. The terms of the existing leases, including renewal options that are reasonably certain to be exercised, extend up to the year 2035. Certain lease payments will be adjusted during the related lease's term based on movements in the relevant consumer price index. Rental expense for premises leased on a long-term basis for the year ended December 31, 2018 amounted to $5.6 million. Year ended December 31, 2020 December 31, 2019 Lease costs Operating lease costs 7,932 6,606 Short-term lease costs 1,500 858 Sublease income (1,205) (534) Total net lease cost 8,227 6,930 Operating lease income 940 677 Other information for the period Right-of-use assets related to new operating lease liabilities 323 28,703 Operating cash flows from operating leases 8,330 7,071 Year ended Other information at end of period December 31, 2020 December 31, 2019 Operating leases right-of-use assets (included in other assets on the balance sheets) 46,244 47,947 Operating lease liabilities (included in other liabilities on the balance sheets) 44,940 48,334 Weighted average remaining lease term for operating leases (in years) 10.14 10.37 Weighted average discount rate for operating leases 5.25 % 5.25 % The following table summarizes the maturity analysis of the Bank's commitments for long-term leases as at December 31, 2020: Year ending December 31 Operating Leases 2021 8,319 2022 8,111 2023 6,980 2024 6,247 2025 3,870 2026 & thereafter 24,793 Total commitments 58,320 Less: effect of discounting cash flows to their present value (13,380) Operating lease liabilities 44,940 |
Loan interest income
Loan interest income | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Loan interest income | Note 14: Loan interest income Year ended December 31, 2020 December 31, 2019 December 31, 2018 Contractual interest earned 224,474 228,892 213,908 Amortization Amortization of fair value hedge (300) (316) (501) Amortization of loan origination fees (net of amortized costs) 5,436 5,456 5,088 Amortization of fair value adjustment on purchased loans 1,046 — — Total loan interest income 230,656 234,032 218,495 Balance of unamortized fair value hedge included in loans as at year end 1,376 1,676 1,992 Balance of unamortized loan fees included in loans as at year end 12,204 11,628 10,010 |
Segmented information
Segmented information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segmented information | Note 15: Segmented information The Bank is managed by the Chairman and Chief Executive Officer (“CEO”) on a geographic basis. The Bank presents four reportable segments, three geographical and one other: Bermuda, Cayman, Channel Islands and the UK, and Other. The Other segment is composed of several non-reportable operating segments that have been aggregated in accordance with GAAP. Each reportable segment has a managing director who reports to the Chairman and CEO. The Chairman and CEO and the segment managing director have final authority over resource allocation decisions and performance assessment. The geographic segments reflect this management structure and the manner in which financial information is currently evaluated by the Chairman and CEO. Segment results are determined based on the Bank's management reporting system, which assigns balance sheet and statement of operations items to each of the geographic segments. The process is designed around the Bank's organizational and management structure and, accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions. A description of each reportable segment and table of financial results is presented below. Accounting policies of the reportable segments are the same as those described in Note 2: Significant accounting policies. Transactions between segments are accounted for on an accrual basis and are all eliminated upon consolidation. The Bank generally does not allocate assets, revenues and expenses among its business segments, with the exception of certain corporate overhead expenses and loan participation revenue and expenses. Loan participation revenue and expenses are allocated pro-rata based upon the percentage of the total loan funded by each jurisdiction participating in the loan. The Bermuda segment provides a full range of retail, commercial and private banking services. Retail services are offered to individuals and small to medium-sized businesses through three branch locations and through internet banking, mobile banking, automated teller machines (“ATMs”) and debit cards. Retail services include deposit services, consumer and mortgage lending, credit cards and personal insurance products. Commercial banking includes commercial lending and mortgages, cash management, payroll services, remote banking and letters of credit. Treasury services include money market and foreign exchange activities. Bermuda’s wealth management offering consists of Butterfield Asset Management Limited, which provides investment management, advisory and brokerage services and Butterfield Trust (Bermuda) Limited, which provides trust, estate, company management and custody services. Bermuda is also the location of the Bank's head offices and accordingly, retains the unallocated corporate overhead expenses. The Cayman segment provides a comprehensive range of retail, commercial and private banking services. Retail services are offered to individuals and small to medium-sized businesses through three branch locations and through internet banking, mobile banking, ATMs and debit cards. Retail services include deposit services, consumer and mortgage lending, credit cards and property/auto insurance. Commercial banking includes commercial lending and mortgages, cash management, payroll services, remote banking and letters of credit. Treasury services include money market and foreign exchange activities. Cayman’s wealth management offering comprises investment management, advisory and brokerage services and Butterfield Trust (Cayman) Limited, which provides trust, estate and company management. The Channel Islands and the UK segment includes 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. The UK jurisdiction provides mortgage services for high-value residential properties. The Other segment includes the jurisdictions of The Bahamas, Canada, Mauritius, Singapore and Switzerland. These operating segments individually and collectively do not meet the quantitative threshold for segmented reporting and are therefore aggregated as non-reportable operating segments. Total Assets by Segment December 31, 2020 December 31, 2019 Bermuda 5,924,779 5,220,016 Cayman 4,479,937 3,839,074 Channel Islands and the UK 4,826,671 5,108,357 Other 32,928 35,148 Total assets before inter-segment eliminations 15,264,315 14,202,595 Less: inter-segment eliminations (525,681) (281,020) Total 14,738,634 13,921,575 2020 Net interest income Provision for credit recoveries (losses) Non-interest Net revenue Gains and Total net revenue Total Net income Year ended December 31 Customer Inter- segment Bermuda 158,790 778 (8,750) 85,216 236,034 1,970 238,004 192,781 45,223 Cayman 94,211 1,149 483 49,294 145,137 491 145,628 62,605 83,023 Channel Islands and the UK 64,591 (1,927) (224) 40,698 103,138 (1,238) 101,900 82,057 19,843 Other 7 — — 14,384 14,391 (1) 14,390 15,262 (872) Total before eliminations 317,599 — (8,491) 189,592 498,700 1,222 499,922 352,705 147,217 Inter-segment eliminations — — — (5,733) (5,733) — (5,733) (5,733) — Total 317,599 — (8,491) 183,859 492,967 1,222 494,189 346,972 147,217 2019 Net interest income Provision for credit recoveries (losses) Non-interest Net revenue Gains and Total net revenue Total Net income Year ended December 31 Customer Inter- segment Bermuda 182,674 1,236 (3,088) 89,114 269,936 2,172 272,108 209,417 62,691 Cayman 113,493 1,071 1,893 51,853 168,310 570 168,880 61,057 107,823 Channel Islands and the UK 49,486 (2,307) 1,379 34,319 82,877 43 82,920 74,217 8,703 Other 49 — — 22,119 22,168 (18) 22,150 24,292 (2,142) Total before eliminations 345,702 — 184 197,405 543,291 2,767 546,058 368,983 177,075 Inter-segment eliminations — — — (13,430) (13,430) — (13,430) (13,430) — Total 345,702 — 184 183,975 529,861 2,767 532,628 355,553 177,075 2018 Net interest income Provision for credit recoveries (losses) Non-interest Net revenue Gains and Total net revenue Total Net income Year ended December 31 Customer Inter- segment Bermuda 202,901 2,383 6,823 87,352 299,459 (20) 299,439 202,318 97,121 Cayman 102,793 416 1,297 47,781 152,287 349 152,636 60,666 91,970 Channel Islands and the UK 37,276 (2,799) (1,129) 26,824 60,172 (1,185) 58,987 50,353 8,634 Other 19 — — 15,157 15,176 1 15,177 17,718 (2,541) Total before eliminations 342,989 — 6,991 177,114 527,094 (855) 526,239 331,055 195,184 Inter-segment eliminations — — — (8,428) (8,428) — (8,428) (8,428) — Total 342,989 — 6,991 168,686 518,666 (855) 517,811 322,627 195,184 |
Derivative instruments and risk
Derivative instruments and risk management | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative instruments and risk management | Note 16: Derivative instruments and risk management The Bank uses derivatives for risk management purposes and to meet the needs of its customers. The Bank’s derivative contracts principally involve over-the-counter ("OTC") transactions that are negotiated privately between the Bank and the counterparty to the contract and include interest rate contracts and foreign exchange contracts. The Bank may pursue opportunities to reduce its exposure to credit losses on derivatives by entering into International Swaps and Derivatives Association master agreements (“ISDAs”). Depending on the nature of the derivative transaction, bilateral collateral arrangements may be used, as well. When the Bank is engaged in more than one outstanding derivative transaction with the same counterparty, and also has a legally enforceable master netting agreement with that counterparty, the net marked-to-market exposure represents the netting of the positive and negative exposures with that counterparty. When there is a net negative exposure, the Bank regards its credit exposure to the counterparty as being zero. The net marked-to-market position with a particular counterparty represents a reasonable measure of credit risk when there is a legally enforceable master netting agreement between the Bank and that counterparty. Certain of these agreements contain credit risk-related contingent features in which the counterparty has the option to accelerate cash settlement of the Bank's net derivative liabilities with the counterparty in the event the Bank's credit rating falls below specified levels or the liabilities reach certain levels. All derivative financial instruments, whether designated as hedges or not, are recorded on the consolidated balance sheets at fair value within other assets or other liabilities. These amounts include the effect of netting. The accounting for changes in the fair value of a derivative in the consolidated statements of operations depends on whether the contract has been designated as a hedge and qualifies for hedge accounting. Notional Amounts The notional amounts are not recorded as assets or liabilities on the consolidated balance sheets as they represent the face amount of the contract to which a rate or price is applied to determine the amount of cash flows to be exchanged. Notional amounts represent the volume of outstanding transactions and do not represent the potential gain or loss associated with market risk or credit risk of such instruments. Credit risk is limited to the positive fair value of the derivative instrument, which is significantly less than the notional amount. Fair Value Derivative instruments, in the absence of any compensating up-front cash payments, generally have no market value at inception. They obtain value, positive or negative, as relevant interest rates, exchange rates, equity or commodity prices or indices change. The potential for derivatives to increase or decrease in value as a result of the foregoing factors is generally referred to as market risk. Market risk is managed within clearly defined parameters as prescribed by senior management of the Bank. The fair value is defined as the profit or loss associated with replacing the derivative contracts at prevailing market prices. Risk Management Derivatives The Bank enters into interest derivative contracts as part of its overall interest rate risk management strategy to minimize significant unplanned fluctuations in earnings that are caused by interest rate volatility. The Bank’s goal is to manage interest rate sensitivity by modifying the repricing or maturity characteristics of certain consolidated balance sheet assets and liabilities so that movements in interest rates do not adversely affect the net interest margin. Derivative instruments that are used as part of the Bank’s risk management strategy include interest rate swap contracts that have indices related to the pricing of specific consolidated balance sheet assets and liabilities. Interest rate swaps generally involve the exchange of fixed and variable-rate interest payments between two parties, based on a common notional principal amount and maturity date. The Bank uses foreign currency derivative instruments to hedge its exposure to foreign currency risk. Certain hedging relationships are formally designated and qualify for hedge accounting as fair value or net investment hedges. Risk management derivatives comprise fair value hedges, net investment hedges and derivatives not formally designated as hedges as described below. Fair value hedges include designated currency swaps that are used to minimize the Bank's exposure to variability in the fair value of available-for-sale investments due to movements in foreign exchange rates. The effective portion of changes in the fair value of the hedging instrument is recognized in current year earnings consistent with the related change in fair value of the hedged items attributable to foreign exchange rates. For fair value hedges, hedging effectiveness of the hedged item and the hedging instrument are assessed and managed at inception and on an ongoing basis using a partial-term method. Net investment hedges include designated currency swaps and qualifying non-derivative instruments and are used to minimize the Bank’s exposure to variability in the foreign currency translation of net investments in foreign operations. The effective portion of changes in the fair value of the hedging instrument is recognized in AOCI consistent with the related translation gains and losses of the hedged net investment. For net investment hedges, all critical terms of the hedged item and the hedging instrument are matched at inception and on an ongoing basis to minimize the risk of hedge ineffectiveness. For derivatives designated as net investment hedges, the Bank follows the method based on changes in spot exchange rates. Accordingly: - The change in the fair value of the derivative instrument that is reported in AOCI (i.e., the effective portion) is determined by the changes in spot exchange rates. - The change in the fair value of the derivative instrument attributable to changes in the difference between the forward rate and spot rate are excluded from the measure of the hedge ineffectiveness and that difference is reported directly in the consolidated statements of operations under foreign exchange revenue. Amounts recorded in AOCI are reclassified to earnings only upon the sale or substantial liquidation of an investment in a foreign subsidiary. For foreign-currency-denominated debt instruments that are designated as hedges of net investments in foreign operations, the translation gain or loss that is recorded in AOCI is based on the spot exchange rate between the reporting currency of the Bank and the functional currency of the respective subsidiary. See Note 23: Accumulated other comprehensive loss" for details on the amount recognized into AOCI during the current period from translation gain or loss. Derivatives not formally designated as hedges are entered into to manage the interest rate risk of fixed rate deposits and the Bank's exposure to foreign exchange risk. Changes in the fair value of derivative instruments not formally designated as hedges are recognized in foreign exchange income. Client service derivatives The Bank enters into foreign exchange contracts and interest rate caps primarily to meet the foreign exchange needs of its customers. Foreign exchange contracts are agreements to exchange specific amounts of currencies at a future date at a specified rate of exchange. Changes in the fair value of client services derivative instruments are recognized in foreign exchange income. The following table shows the aggregate notional amounts of derivative contracts outstanding listed by type and respective gross positive or negative fair values and classified by those used for risk management (sub-classified as hedging and those that do not qualify for hedge accounting), client services and credit derivatives. Fair value of derivatives is recorded in the consolidated balance sheets in other assets and other liabilities. Gross positive fair values are recorded in other assets and gross negative fair values are recorded in other liabilities, subject to netting when master netting agreements are in place. December 31, 2020 Derivative instrument Number of contracts Notional Gross Gross Net Risk management derivatives Net investment hedges Currency swaps 4 68,231 — (4,586) (4,586) Fair value hedges Currency swaps 5 197,987 4,039 — 4,039 Derivatives not formally designated as hedging instruments Currency swaps 42 1,471,632 2,678 (21,239) (18,561) Subtotal risk management derivatives 1,737,850 6,717 (25,825) (19,108) Client services derivatives Spot and forward foreign exchange 241 770,113 7,128 (6,862) 266 Total derivative instruments 2,507,963 13,845 (32,687) (18,842) December 31, 2019 Derivative instrument Number of contracts Notional Gross Gross Net Risk management derivatives Net investment hedges Currency swaps 1 9,502 — (118) (118) Derivatives not formally designated as hedging instruments Currency swaps 9 207,032 1,632 (1,339) 293 Subtotal risk management derivatives 216,534 1,632 (1,457) 175 Client services derivatives Spot and forward foreign exchange 352 3,280,636 31,060 (30,602) 458 Total derivative instruments 3,497,170 32,692 (32,059) 633 In addition to the above, as at December 31, 2020 foreign denominated deposits of £192.8 million (December 31, 2019: £251.4 million) and CHF 0.4 million (December 31, 2019: CHF 0.4 million) were designated as a hedge of foreign exchange risk associated with the net investment in foreign operations. We manage derivative exposure by monitoring the credit risk associated with each counterparty using counterparty specific credit risk limits, using master netting arrangements where appropriate and obtaining collateral. The Bank elected to offset in the consolidated balance sheets certain gross derivative assets and liabilities subject to netting agreements. The Bank also elected not to offset certain derivative assets or liabilities and all collateral received or paid that the Bank or the counterparties could legally offset in the event of default. In the tables below, these positions are deducted from the net fair value presented in the consolidated balance sheets in order to present the net exposures. The collateral values presented in the following table are limited to the related net derivative asset or liability balance and, accordingly, do not include excess collateral received or paid. Gross fair Less: offset Net fair value Less: positions not offset in the consolidated balance sheets December 31, 2020 Gross fair value of derivatives Cash collateral received / paid Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 13,845 (7,153) 6,692 — (3) 6,689 Derivative liabilities Spot and forward foreign exchange and currency swaps 32,687 (7,153) 25,534 — (3,042) 22,492 Net negative fair value (18,842) Gross fair Less: offset Net fair value Less: positions not offset in the consolidated balance sheets December 31, 2019 Gross fair value of derivatives Cash collateral Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 32,692 (2,233) 30,459 — (3,224) 27,235 Derivative liabilities Spot and forward foreign exchange and currency swaps 32,059 (2,233) 29,826 — (997) 28,829 Net positive fair value 633 The following tables show the location and amount of gains (losses) recorded in either the consolidated statements of operations or consolidated statements of comprehensive income on derivative instruments outstanding. Year ended Derivative instrument Consolidated statements of operations line item December 31, 2020 December 31, 2019 December 31, 2018 Spot and forward foreign exchange Foreign exchange revenue (191) (202) (25) Currency swaps, not designated as hedge Foreign exchange revenue (18,854) 592 1,697 Currency swaps - fair value hedges Foreign exchange revenue 4,039 — — Total net gains (losses) recognized in net income (15,006) 390 1,672 Derivative instrument Consolidated statements of comprehensive income line item December 31, 2020 December 31, 2019 December 31, 2018 Currency swaps - net investment hedge Net change in unrealized gains and (losses) on translation of net investment in foreign operations (4,469) (85) — Total net gains (losses) recognized in comprehensive income (4,469) (85) — |
Fair value measurements
Fair value measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Note 17: Fair value measurements The following table presents the financial assets and liabilities that are measured at fair value on a recurring basis. Management classifies these items based on the type of inputs used in their respective fair value determination as described in "Note 2: Significant accounting policies". Management reviews the price of each security monthly, comparing market values to expectations and to the prior month’s price. Management's expectations are based upon knowledge of prevailing market conditions and developments relating to specific issuers and/or asset classes held in the investment portfolio. Where there are unusual or significant price movements, or where a certain asset class has performed out-of-line with expectations, the matter is reviewed by management. Financial instruments in Level 1 include actively traded redeemable mutual funds. Financial instruments in Level 2 include government debt securities, corporate debt securities, mortgage-backed securities and other asset-backed securities, forward foreign exchange contracts and mutual funds not actively traded. Financial instruments in Level 3 include asset-backed securities for which the market is relatively illiquid and for which information about actual trading prices is not readily available. There were no transfers between Level 1 and Level 2 or Level 2 and Level 3 during the year ended December 31, 2020 and the year ended December 31, 2019. December 31, 2020 December 31, 2019 Fair value Total carrying Fair value Total carrying Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Items that are recognized at fair value on a recurring basis: Financial assets Equity securities Mutual funds 7,081 236 — 7,317 7,141 278 — 7,419 Total equity securities 7,081 236 — 7,317 7,141 278 — 7,419 Available-for-sale investments US government and federal agencies — 2,566,066 — 2,566,066 — 2,052,446 — 2,052,446 Non-US governments debt securities — 22,408 — 22,408 — 25,676 — 25,676 Asset-backed securities - Student loans — — 12,945 12,945 — — 12,891 12,891 Residential mortgage-backed securities — 59,697 — 59,697 — 129,328 — 129,328 Total available-for-sale — 2,648,171 12,945 2,661,116 — 2,207,450 12,891 2,220,341 Other assets - Derivatives — 6,692 — 6,692 — 30,459 — 30,459 Financial liabilities Other liabilities - Derivatives — 25,534 — 25,534 — 29,826 — 29,826 Level 3 Reconciliation The Level 3 financial instrument, shown as Asset-backed securities - Student loans in the above table, is a federal family education loan program guaranteed student loan security and is valued using a non-binding quote from an external security pricing service. The table below summarizes realized and unrealized gains and losses for Level 3 assets still held at the reporting date. December 31, 2020 December 31, 2019 December 31, 2018 Available- Available- Available- Carrying amount at beginning of year 12,891 12,626 12,493 Realized and unrealized gains (losses) recognized in other comprehensive income 54 265 133 Carrying amount at end of year 12,945 12,891 12,626 Cumulative gain (loss) recognized in other comprehensive income (345) (399) (664) Items Other Than Those Recognized at Fair Value on a Recurring Basis: December 31, 2020 December 31, 2019 Level Carrying Fair Appreciation / Carrying Fair Appreciation / Financial assets Cash due from banks Level 1 3,289,592 3,289,592 — 2,550,070 2,550,070 — Securities purchased under agreements to resell Level 2 197,039 197,039 — 142,283 142,283 — Short-term investments Level 1 823,039 823,039 — 1,218,380 1,218,380 — Investments held-to-maturity Level 2 2,194,371 2,304,756 110,385 2,208,663 2,255,987 47,324 Loans, net of allowance for credit losses Level 2 5,160,810 5,193,240 32,430 5,142,622 5,161,257 18,635 Other real estate owned¹ Level 2 4,052 4,052 — 3,842 3,842 — Financial liabilities Term deposits Level 2 2,660,082 2,665,463 (5,381) 3,051,306 3,054,813 (3,507) Long-term debt Level 2 171,462 170,086 1,376 143,500 147,574 (4,074) ¹ The current carrying value of OREO is adjusted to fair value only when there is devaluation below carrying value. Note 18: Interest rate risk The following tables set out the assets, liabilities and shareholders' equity on the date of the earlier of contractual maturity, expected maturity or repricing date. Use of these tables to derive information about the Bank’s interest rate risk position is limited by the fact that customers may choose to terminate their financial instruments at a date earlier than the contractual maturity or repricing date. Examples of this include fixed-rate mortgages, which are shown at contractual maturity but which may pre-pay earlier, and certain term deposits, which are shown at contractual maturity but which may be withdrawn before their contractual maturity subject to prepayment penalties. Investments are shown based on remaining contractual maturities. The remaining contractual principal maturities for mortgage-backed securities (primarily US government agencies) do not consider prepayments. Remaining expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations before the underlying mortgages mature. December 31, 2020 Earlier of contractual maturity or repricing date (in $ millions) Within 3 3 to 6 6 to 12 1 to 5 After Non-interest Total Assets Cash due from banks 3,156 — — — — 134 3,290 Securities purchased under agreement to resell 197 — — — — — 197 Short-term investments 494 327 2 — — — 823 Investments 13 13 27 92 4,711 7 4,863 Loans 4,170 39 71 652 187 42 5,161 Other assets — — — — — 405 405 Total assets 8,030 379 100 744 4,898 588 14,739 Liabilities and shareholders' equity Shareholders’ equity — — — — — 982 982 Demand deposits 7,578 — — — — 3,012 10,590 Term deposits 1,584 634 344 99 — — 2,661 Other liabilities — — — — — 335 335 Long-term debt — — — 171 — — 171 Total liabilities and shareholders' equity 9,162 634 344 270 — 4,329 14,739 Interest rate sensitivity gap (1,132) (255) (244) 474 4,898 (3,741) — Cumulative interest rate sensitivity gap (1,132) (1,387) (1,631) (1,157) 3,741 — — December 31, 2019 Earlier of contractual maturity or repricing date (in $ millions) Within 3 3 to 6 6 to 12 1 to 5 After Non-interest Total Assets Cash due from banks 2,462 — — — — 88 2,550 Securities purchased under agreement to resell 142 — — — — — 142 Short-term investments 622 591 3 — — 2 1,218 Investments 415 23 11 102 3,878 7 4,436 Loans 4,025 16 148 292 648 14 5,143 Other assets — — — — — 433 433 Total assets 7,666 630 162 394 4,526 544 13,922 Liabilities and shareholders' equity Shareholders’ equity — — — — — 964 964 Demand deposits 7,151 — — — — 2,239 9,390 Term deposits 2,435 234 305 78 — — 3,052 Other liabilities — — — — — 373 373 Long-term debt 70 — — 73 — — 143 Total liabilities and shareholders' equity 9,656 234 305 151 — 3,576 13,922 Interest rate sensitivity gap (1,990) 396 (143) 243 4,526 (3,032) — Cumulative interest rate sensitivity gap (1,990) (1,594) (1,737) (1,494) 3,032 — — |
Interest rate risk
Interest rate risk | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Interest rate risk | Note 17: Fair value measurements The following table presents the financial assets and liabilities that are measured at fair value on a recurring basis. Management classifies these items based on the type of inputs used in their respective fair value determination as described in "Note 2: Significant accounting policies". Management reviews the price of each security monthly, comparing market values to expectations and to the prior month’s price. Management's expectations are based upon knowledge of prevailing market conditions and developments relating to specific issuers and/or asset classes held in the investment portfolio. Where there are unusual or significant price movements, or where a certain asset class has performed out-of-line with expectations, the matter is reviewed by management. Financial instruments in Level 1 include actively traded redeemable mutual funds. Financial instruments in Level 2 include government debt securities, corporate debt securities, mortgage-backed securities and other asset-backed securities, forward foreign exchange contracts and mutual funds not actively traded. Financial instruments in Level 3 include asset-backed securities for which the market is relatively illiquid and for which information about actual trading prices is not readily available. There were no transfers between Level 1 and Level 2 or Level 2 and Level 3 during the year ended December 31, 2020 and the year ended December 31, 2019. December 31, 2020 December 31, 2019 Fair value Total carrying Fair value Total carrying Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Items that are recognized at fair value on a recurring basis: Financial assets Equity securities Mutual funds 7,081 236 — 7,317 7,141 278 — 7,419 Total equity securities 7,081 236 — 7,317 7,141 278 — 7,419 Available-for-sale investments US government and federal agencies — 2,566,066 — 2,566,066 — 2,052,446 — 2,052,446 Non-US governments debt securities — 22,408 — 22,408 — 25,676 — 25,676 Asset-backed securities - Student loans — — 12,945 12,945 — — 12,891 12,891 Residential mortgage-backed securities — 59,697 — 59,697 — 129,328 — 129,328 Total available-for-sale — 2,648,171 12,945 2,661,116 — 2,207,450 12,891 2,220,341 Other assets - Derivatives — 6,692 — 6,692 — 30,459 — 30,459 Financial liabilities Other liabilities - Derivatives — 25,534 — 25,534 — 29,826 — 29,826 Level 3 Reconciliation The Level 3 financial instrument, shown as Asset-backed securities - Student loans in the above table, is a federal family education loan program guaranteed student loan security and is valued using a non-binding quote from an external security pricing service. The table below summarizes realized and unrealized gains and losses for Level 3 assets still held at the reporting date. December 31, 2020 December 31, 2019 December 31, 2018 Available- Available- Available- Carrying amount at beginning of year 12,891 12,626 12,493 Realized and unrealized gains (losses) recognized in other comprehensive income 54 265 133 Carrying amount at end of year 12,945 12,891 12,626 Cumulative gain (loss) recognized in other comprehensive income (345) (399) (664) Items Other Than Those Recognized at Fair Value on a Recurring Basis: December 31, 2020 December 31, 2019 Level Carrying Fair Appreciation / Carrying Fair Appreciation / Financial assets Cash due from banks Level 1 3,289,592 3,289,592 — 2,550,070 2,550,070 — Securities purchased under agreements to resell Level 2 197,039 197,039 — 142,283 142,283 — Short-term investments Level 1 823,039 823,039 — 1,218,380 1,218,380 — Investments held-to-maturity Level 2 2,194,371 2,304,756 110,385 2,208,663 2,255,987 47,324 Loans, net of allowance for credit losses Level 2 5,160,810 5,193,240 32,430 5,142,622 5,161,257 18,635 Other real estate owned¹ Level 2 4,052 4,052 — 3,842 3,842 — Financial liabilities Term deposits Level 2 2,660,082 2,665,463 (5,381) 3,051,306 3,054,813 (3,507) Long-term debt Level 2 171,462 170,086 1,376 143,500 147,574 (4,074) ¹ The current carrying value of OREO is adjusted to fair value only when there is devaluation below carrying value. Note 18: Interest rate risk The following tables set out the assets, liabilities and shareholders' equity on the date of the earlier of contractual maturity, expected maturity or repricing date. Use of these tables to derive information about the Bank’s interest rate risk position is limited by the fact that customers may choose to terminate their financial instruments at a date earlier than the contractual maturity or repricing date. Examples of this include fixed-rate mortgages, which are shown at contractual maturity but which may pre-pay earlier, and certain term deposits, which are shown at contractual maturity but which may be withdrawn before their contractual maturity subject to prepayment penalties. Investments are shown based on remaining contractual maturities. The remaining contractual principal maturities for mortgage-backed securities (primarily US government agencies) do not consider prepayments. Remaining expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations before the underlying mortgages mature. December 31, 2020 Earlier of contractual maturity or repricing date (in $ millions) Within 3 3 to 6 6 to 12 1 to 5 After Non-interest Total Assets Cash due from banks 3,156 — — — — 134 3,290 Securities purchased under agreement to resell 197 — — — — — 197 Short-term investments 494 327 2 — — — 823 Investments 13 13 27 92 4,711 7 4,863 Loans 4,170 39 71 652 187 42 5,161 Other assets — — — — — 405 405 Total assets 8,030 379 100 744 4,898 588 14,739 Liabilities and shareholders' equity Shareholders’ equity — — — — — 982 982 Demand deposits 7,578 — — — — 3,012 10,590 Term deposits 1,584 634 344 99 — — 2,661 Other liabilities — — — — — 335 335 Long-term debt — — — 171 — — 171 Total liabilities and shareholders' equity 9,162 634 344 270 — 4,329 14,739 Interest rate sensitivity gap (1,132) (255) (244) 474 4,898 (3,741) — Cumulative interest rate sensitivity gap (1,132) (1,387) (1,631) (1,157) 3,741 — — December 31, 2019 Earlier of contractual maturity or repricing date (in $ millions) Within 3 3 to 6 6 to 12 1 to 5 After Non-interest Total Assets Cash due from banks 2,462 — — — — 88 2,550 Securities purchased under agreement to resell 142 — — — — — 142 Short-term investments 622 591 3 — — 2 1,218 Investments 415 23 11 102 3,878 7 4,436 Loans 4,025 16 148 292 648 14 5,143 Other assets — — — — — 433 433 Total assets 7,666 630 162 394 4,526 544 13,922 Liabilities and shareholders' equity Shareholders’ equity — — — — — 964 964 Demand deposits 7,151 — — — — 2,239 9,390 Term deposits 2,435 234 305 78 — — 3,052 Other liabilities — — — — — 373 373 Long-term debt 70 — — 73 — — 143 Total liabilities and shareholders' equity 9,656 234 305 151 — 3,576 13,922 Interest rate sensitivity gap (1,990) 396 (143) 243 4,526 (3,032) — Cumulative interest rate sensitivity gap (1,990) (1,594) (1,737) (1,494) 3,032 — — |
Long-term debt
Long-term debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-term debt | Note 19: Long-term debt On June 27, 2005, the Bank issued US $150 million of Subordinated Lower Tier II capital notes. The notes were issued at par in two tranches, namely US $90 million in Series A notes due 2015, which were redeemed at face value in January 2014, and US $60 million in Series B notes due 2020. The issuance was by way of private placement with US institutional investors. The notes are listed on the BSX in the specialist debt securities category. The Series B notes paid a fixed coupon of 5.11% until July 2, 2015 when they became redeemable in whole at the Bank’s option. The Series B notes were priced at a spread of 1.10% over the 10-year US Treasury yield. During September 2011, the Bank repurchased $15 million of the outstanding 5.11% 2005 Series B Subordinated notes with the balance of $45 million maturing in July 2, 2020. On May 27, 2008, the Bank issued US $78 million of Subordinated Lower Tier II capital notes. The notes were issued at par and in two tranches, namely US $53 million in Series A notes due 2018, which were redeemed at face value in May 2013 and US $25 million in Series B notes due 2023. The issuance was by way of private placement with US institutional investors. The notes are listed on the BSX in the specialist debt securities category. The proceeds of the issue were used to repay the entire amount of the US $78 million outstanding subordinated notes redeemed in May 2008. The Series B notes paid a fixed coupon of 8.44% until May 27, 2018 when they became redeemable in whole at the Bank’s option. The Series B notes were priced at a spread of 4.51% over the 10-year US Treasury yield and were redeemed at face value in November 2020. On May 24, 2018, the Bank issued US $75 million of Subordinated Lower Tier II capital notes. The notes were issued at par and due on June 1, 2028. The issuance was by way of a registered offering with US institutional investors. The notes are listed on the BSX in the specialist debt securities category. The proceeds of the issue were used, among other, to repay the entire amount of the US $47 million outstanding subordinated notes series 2003-B. The notes issued pay a fixed coupon of 5.25% until June 1, 2023 when they become redeemable in whole at the option of the Bank. The notes were priced at a spread of 2.27% over the 10-year US Treasury yield. The Bank incurred $1.8 million of costs directly related to the issuance of these capital notes. These costs have been capitalized directly against the carrying value of these notes on the balance sheet, and will be amortized over the life of the notes. On June 11, 2020, the Bank issued US $100 million of Subordinated Lower Tier II capital notes. The notes were issued at par and due on June 15, 2030. The issuance was by way of a registered offering with US institutional investors. The notes are listed on the BSX in the specialist debt securities category. The proceeds of the issue were used, among other, to repay the entire amount of the US $45 million outstanding subordinated notes series 2005-B which matured on July 2, 2020. The notes issued pay a fixed coupon of 5.25% until June 15, 2025 when they become redeemable in whole at the option of the Bank. The notes were priced at a spread of 4.43% over the 10-year US Treasury yield. The Bank incurred $2.3 million o f costs directly related to the issuance of these capital notes. These costs have been capitalized directly against the carrying value of these notes on the balance sheet, and will be amortized over the life of the notes. No interest was capitalized during the years ended December 31, 2020, 2019 and 2018. In the event the Bank would be in a position to redeem long-term debt, priority would go to the redemption of the higher interest-bearing Series, subject to availability relative to the earliest date the Series is redeemable at the Bank's option. The following table presents the contractual maturity and interest payments for long-term debt issued by the Bank as at December 31, 2020. The interest payments are calculated until contractual maturity using the current LIBOR and Secured Overnight Financing Rate ("SOFR"). Interest payments until contractual maturity Long-term debt Earliest date redeemable at the Bank's option Contractual maturity date Interest rate until date redeemable Interest rate from earliest date redeemable to contractual maturity Principal Outstanding Within 1 to 5 After Bermuda 2018 issuance June 1, 2023 June 1, 2028 5.25 % 3 months US$ LIBOR + 2.255% 75,000 3,938 10,654 4,743 2020 issuance June 15, 2025 June 15, 2030 5.25 % 3 months US$ SOFR + 5.060% 100,000 5,250 20,983 23,413 Total 175,000 9,188 31,637 28,156 Unamortized debt issuance costs (3,538) Long-term debt less unamortized debt issuance costs 171,462 |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per share | Note 20: Earnings per share Earnings per share have been calculated using the weighted average number of common shares outstanding during the year after deduction of the shares held as treasury stock. The dilutive effect of share-based compensation plans was calculated using the treasury stock method, whereby the proceeds received from the exercise of share-based awards are assumed to be used to repurchase outstanding shares, using the average market price of the Bank’s shares for the year. Numbers of shares are expressed in thousands. During the year ended December 31, 2020, options to purchase an average of 0.1 million (December 31, 2019: 0.2 million, December 31, 2018: 0.3 million) common shares were outstanding. During the year ended December 31, 2020, the average number of outstanding awards of unvested common shares was 0.9 million (December 31, 2019: 0.9 million, December 31, 2018: 0.9 million). Only awards for which the sum of 1) the expense that will be recognized in the future (i.e., the unrecognized expense) and 2) its exercise price, if any, was lower than the average market price of the Bank‘s common shares were considered dilutive and, therefore, included in the computation of diluted earnings per share. An award's unrecognized expense is also considered to be the proceeds the employees would need to pay to purchase accelerated vesting of the awards. For purposes of calculating dilution, such proceeds are assumed to be used by the Bank to buy back common shares at the average market price. The weighted-average number of outstanding awards, net of the assumed weighted-average number of common shares bought back, is included in the number of diluted participating shares. Year ended December 31, 2020 December 31, 2019 December 31, 2018 Net income 147,217 177,075 195,184 Basic Earnings Per Share Weighted average number of common shares issued 51,128 54,338 55,159 Weighted average number of common shares held as treasury stock (619) (1,166) (213) Weighted average number of common shares (in thousands) 50,509 53,172 54,946 Basic Earnings Per Share 2.91 3.33 3.55 Diluted Earnings Per Share Weighted average number of common shares 50,509 53,172 54,946 Net dilution impact related to options to purchase common shares 55 118 223 Net dilution impact related to awards of unvested common shares 286 369 576 Weighted average number of diluted common shares (in thousands) 50,850 53,659 55,745 Diluted Earnings Per Share 2.90 3.30 3.50 |
Share-based payments
Share-based payments | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based payments | Note 21: Share-based payments The common shares transferred to employees under all share-based payments are either taken from the Bank's common treasury shares or from newly issued shares. All share-based payments are settled by the ultimate parent company which, pursuant to Bermuda law, is not taxed on income. There are no income tax benefits in relation to the issue of such shares as a form of compensation. In conjunction with the 2010 capital raise, the Board of Directors approved the 2010 Omnibus Plan (the "2010 Plan"). Under the 2010 Plan, 5% of the Bank’s fully diluted common shares, equal to approximately 2.95 million shares, were initially available for grant to certain officers in the form of stock options or unvested shares awards. Both types of awards are detailed below. In 2012 and 2016, the Board of Directors approved an increase to the equivalent number of shares allowed to be granted under the 2010 Plan to 5.0 million and 7.5 million shares, respectively. In May 2020, the Board of Directors approved the 2020 Omnibus Plan (the "2020 Plan") which replaces the 2010 Plan. Under the 2020 Plan, 3.0 million shares are initially available for grant to employees in the form of stock options or unvested shares awards. Both types of awards are detailed below. Stock Option Awards 1997 Stock Option Plan Prior to the capital raise on March 2, 2010, the Bank granted stock options to employees and Directors of the Bank that entitle the holder to purchase one common share at a subscription price equal to the market price on the effective date of the grant. Generally, the options granted vest 25 percent at the end of each year for four years, however, as a result of the 2010 capital raise, the options granted under the Bank's 1997 Stock Option Plan to employees became fully vested and options awarded to certain executives were surrendered. 2010 and 2020 Plan Under the 2010 and 2020 Plans, options are awarded to Bank employees and executive management, based on predetermined vesting conditions that entitle the holder to purchase one common share at a subscription price usually equal to the price of the most recently traded common share when granted and have a term of 10 years. The subscription price is reduced for all special dividends declared by the Bank. Stock option awards granted under the 2010 and 2020 Plans vest based on two specific types of vesting conditions i.e., time and performance conditions, as detailed below: Time vesting condition 50% of each option award was granted in the form of time vested options and vested 25% on each of the second, third, fourth and fifth anniversaries of the effective grant date. In addition to the time vesting conditions noted above, the options will generally vest immediately: • by reason of the employee’s death or disability, • upon termination, by the Bank, of the holder’s employment, unless if in relation with the holder’s misconduct, or • in limited circumstances and specifically approved by the Board, as stipulated in the holder’s employment contract. In the event of the employee’s resignation, any unvested portion of the awards shall generally be forfeited and any vested portion of the options shall generally remain exercisable during the 90-day period following the termination date or, if earlier, until the expiration date, and any vested portion of the options not exercised as of the expiration of such period shall be forfeited without any consideration therefore. Performance vesting condition 50% of each option award was granted in the form of performance options and would vest (partially or fully) on a “valuation event” date (the date that any of the March 2, 2010 new investors transfers at least 5% of the total number of common shares or the date that there is a change in control and any of the new investors realize a predetermined multiple of invested capital (“MOIC”)). On September 21, 2016, it was determined that a valuation event occurred during which a new investor realized a MOIC of more than 200% of the original invested capital of $12.09 per share and accordingly, all outstanding unvested performance options vested. Changes in Outstanding Stock Option Plans Number of shares transferable upon exercise (thousands) Weighted average Weighted average Aggregate Year ended December 31, 2020 1997 Stock 2010 Stock Total 1997 Stock 2010 Stock 1997 Stock 2010 Stock Outstanding at beginning of year — 159 159 — 12.07 Exercised — (143) (143) — 12.13 2,192 Forfeitures and cancellations — (16) (16) — 11.50 Outstanding at end of year — — — — — 0.00 0.00 — Vested and exercisable at end of year — — — — — 0.00 0.00 Number of shares transferable upon exercise (thousands) Weighted average Weighted average Aggregate Year ended December 31, 2019 1997 Stock 2010 Stock Total 1997 Stock 2010 Stock 1997 Stock 2010 Stock Outstanding at beginning of year 25 189 214 64.51 11.98 Exercised — (30) (30) — 11.50 659 Expiration at end of plan life (25) — (25) 64.51 — Outstanding at end of year — 159 159 — 12.07 0.00 0.73 3,958 Vested and exercisable at end of year — 159 159 — 12.07 0.00 0.73 Number of shares transferable upon exercise (thousands) Weighted average Weighted average Aggregate Year ended December 31, 2018 1997 Stock 2010 Stock Total 1997 Stock 2010 Stock 1997 Stock 2010 Stock Outstanding at beginning of year 58 476 534 113.46 11.73 Exercised — (287) (287) — 11.56 10,172 Forfeitures and cancellations (33) — (33) 150.46 — Outstanding at end of year 25 189 214 64.51 11.98 0.20 1.67 3,665 Vested and exercisable at end of year 25 189 214 64.51 11.98 0.20 1.67 Share-Based Plans Recipients of unvested share awards are entitled to the related common shares at no cost, at the time the award vests. Recipients of unvested shares may be entitled to receive additional unvested shares having a value equal to the cash dividends that would have been paid had the unvested shares been issued and vested. Such additional unvested shares granted as dividend equivalents are subject to the same vesting schedule and conditions as the underlying unvested shares. Unvested shares subject only to the time vesting condition generally vest upon retirement, death, disability or upon termination, by the Bank, of the holder’s employment unless if in connection with the holder’s misconduct. Unvested shares subject to both time vesting and performance vesting conditions remain outstanding and unvested upon retirement and will vest only if the performance conditions are met. Unvested shares can also vest in limited circumstances and if specifically approved by the Board, as stipulated in the holder’s employment contract. In all other circumstances, unvested shares are generally forfeited when employment ends. The grant date weighted average fair value of unvested share awards granted in the years ended December 31, 2020, 2019 and 2018 was $33.35, $35.77 and $39.25, respectively. The Bank expects to settle these awards by issuing new shares. Employee Deferred Incentive Plan (“EDIP”) Under the Bank’s EDIP Plan, shares are awarded to Bank employees and executive management based on the time vesting condition, which states that the shares will vest equally over a three-year period from the effective grant date. Executive Long-Term Incentive Share Plan (“ELTIP”) - Years 2013 - 2020 The 2020 ELTIP was approved on February 12, 2020. Under the Bank’s ELTIP plans for the years 2013 through 2020, performance shares as well as time-vested shares were awarded to executive management. The performance shares will generally vest upon the achievement of certain performance targets in the three-year period from the effective grant date. The time-vested shares will generally vest over the three-year period from the effective grant date. Changes in Outstanding ELTIP and EDIP awards (in thousands of shares transferable upon vesting) Year ended December 31, 2020 December 31, 2019 December 31, 2018 EDIP ELTIP EDIP ELTIP EDIP ELTIP Outstanding at beginning of year 251 618 234 697 244 679 Granted 245 209 169 317 130 241 Vested (fair value in 2020: $9.6 million, 2019: $18.9 million; 2018: $16.0 million) (129) (162) (149) (389) (138) (220) Forfeitures (resignations, retirements, redundancies) (3) (7) (3) (7) (2) (3) Outstanding at end of year 364 658 251 618 234 697 Share-based Compensation Cost Recognized in Net Income Year ended December 31, 2020 December 31, 2019 December 31, 2018 EDIP and EDIP and EDIP and Cost recognized in net income 14,608 17,459 11,664 Unrecognized Share-based Compensation Cost December 31, 2020 December 31, 2019 Unrecognized cost Weighted average years over which it is expected to be recognized Unrecognized cost Weighted average years over which it is expected to be recognized EDIP 6,588 1.91 4,744 1.71 ELTIP Time vesting shares 156 1.09 121 0.48 Performance vesting shares 8,187 1.60 9,765 1.80 Total unrecognized expense 14,931 14,630 |
Share buy-back plans
Share buy-back plans | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Share buy-back plans | Note 22: Share buy-back plans From time to time, the Bank may seek to repurchase and retire equity securities of the Bank, through cash purchase, privately negotiated transactions, or otherwise. Such transactions, if any, depend on prevailing market conditions, liquidity and capital requirements, contractual restrictions, and other factors. Common Share Buy-Back Program On February 15, 2018, the Board approved, with effect on April 1, 2018, the 2018 common share buy-back program, authorizing the purchase for treasury of up to 1.0 million common shares. On December 6, 2018, the Board approved, with effect from December 10, 2018 to February 29, 2020, a common share buy-back program, authorizing the purchase for treasury of up to 2.5 million common shares. On December 2, 2019, the Board approved a new $125 million common share repurchase program, authorizing the purchase for treasury of up to 3.5 million common shares through to February 28, 2021. The new program came into effect on December 20, 2019 following the completion of the previous program. On February 10, 2021, the Board approved a new common share repurchase program, authorizing the purchase for treasury of up to 2 million common shares through to February 28, 2022. In the year ended December 31, 2020, the Bank repurchased and retired 3,452,000 shares. Year ended December 31 Common share buy-backs 2020 2019 2018 Total Acquired number of shares (to the nearest 1) 3,452,000 2,293,788 1,254,212 7,000,000 Average cost per common share 25.10 35.55 38.62 30.95 Total cost (in US dollars) 86,639,889 81,534,076 48,442,768 216,616,733 |
Accumulated other comprehensive
Accumulated other comprehensive loss | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Accumulated other comprehensive loss | Note 23: Accumulated other comprehensive loss Unrealized (losses) HTM Unrealized Employee benefit plans Year ended December 31, 2020 Pension Post-retirement Subtotal - Total AOCL Balance at beginning of year (20,818) (725) 11,808 (66,312) (11,050) (77,362) (87,097) Other comprehensive income (loss), net of taxes (247) 665 60,971 (5,943) (18,029) (23,972) 37,417 Balance at end of year (21,065) (60) 72,779 (72,255) (29,079) (101,334) (49,680) Unrealized (losses) HTM Unrealized Employee benefit plans Year ended December 31, 2019 Pension Post- retirement Subtotal - Total AOCL Balance at beginning of year (19,866) (796) (43,630) (64,892) (19,343) (84,235) (148,527) Other comprehensive income (loss), net of taxes (952) 71 55,438 (1,420) 8,293 6,873 61,430 Balance at end of year (20,818) (725) 11,808 (66,312) (11,050) (77,362) (87,097) Unrealized (losses) HTM Unrealized Employee benefit plans Year ended December 31, 2018 Pension Post- retirement Subtotal - Total AOCL Balance at beginning of year (17,549) (839) (15,737) (61,341) (33,586) (94,927) (129,052) Other comprehensive income (loss), net of taxes (2,317) 43 (27,893) (3,551) 14,243 10,692 (19,475) Balance at end of year (19,866) (796) (43,630) (64,892) (19,343) (84,235) (148,527) Net Change of AOCI Components Year ended Line item in the consolidated statements of operations, if any December 31, 2020 December 31, 2019 December 31, 2018 Net unrealized gains (losses) on translation of net investment in foreign operations adjustments Foreign currency translation adjustments N/A 9,991 16,200 (13,764) Gains (loss) on net investment hedge N/A (10,238) (17,152) 11,447 Net change (247) (952) (2,317) Held-to-maturity investment adjustments Amortization of net gains (losses) to net income Interest income on investments 665 71 43 Net change 665 71 43 Available-for-sale investment adjustments Gross unrealized gains (losses) N/A 62,191 57,062 (26,793) Transfer of realized (gains) losses to net income Net realized gains (losses) on AFS investments (1,220) (1,624) (1,100) Net change 60,971 55,438 (27,893) Employee benefit plans adjustments Defined benefit pension plan Net actuarial gain (loss) N/A (8,363) (3,472) (7,541) Net loss (gain) on settlement reclassified to net income Net other gains (losses) — — 1,554 Prior service credit (cost) arising during the year N/A (47) — (212) Amortization of net actuarial (gains) losses Non-service employee benefits expense 2,412 2,407 2,106 Change in deferred taxes N/A 456 149 (298) Amortization of prior service (credit) cost Non-service employee benefits expense 20 19 — Foreign currency translation adjustments of related balances N/A (421) (523) 840 Net change (5,943) (1,420) (3,551) Post-retirement healthcare plan Net actuarial gain (loss) N/A (18,553) 10,014 11,589 Prior service cost N/A — (2,369) — Amortization of net actuarial (gains) losses Non-service employee benefits expense — 272 2,615 Amortization of prior service (credit) cost Non-service employee benefits expense 524 376 39 Net change (18,029) 8,293 14,243 Other comprehensive income (loss), net of taxes 37,417 61,430 (19,475) |
Capital structure
Capital structure | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Capital structure | Note 24: Capital structure Authorized Capital On September 16, 2016, the Bank began trading on the New York Stock Exchange under the ticker symbol "NTB". The offering of 12,234,042 common shares consisted of 5,957,447 newly issued common shares sold by Butterfield and 6,276,595 common shares sold by certain selling shareholders, including 1,595,744 common shares sold by certain of the selling shareholders pursuant to the underwriters’ option to purchase additional shares, which was exercised in full prior to the closing. The par value of each issued common share and each authorized but unissued common share was BM$0.01 and the authorized share capital of the Bank comprises 2,000,000,000 common shares of par value BM$0.01 each, 6,000,000,000 non‑voting ordinary shares of par value BM$0.01 each, 110,200,001 preference shares of par value US$0.01 each and 50,000,000 preference shares of par value £0.01 each. Dividends Declared During the year ended December 31, 2020, the Bank declared and paid cash dividends of $1.76 (December 31, 2019: $1.76, December 31, 2018: $1.52) for each common share as of the related record dates. On February 10, 2021, the Board of Directors declared an interim dividend of $0.44 per common share to be paid on March 10, 2021 to shareholders of record on February 24, 2021. The Bank is required to comply with Section 54 of the Companies Act 1981 issued by the Government of Bermuda (the “Companies Act”) each time a dividend is declared or paid by the Bank and also obtain a letter of no objection from the BMA pursuant to the Banks and Deposit Companies Act 1999 for any dividends declared. The Bank has complied with Section 54 and has obtained the BMA's letter of no objection for all dividends declared during the periods presented. Regulatory Capital The Bank’s regulatory capital is determined in accordance with current Basel III guidelines as issued by the BMA. The Bank is fully compliant with all regulatory capital requirements to which it is subject, and it maintains capital ratios in excess of regulatory minimums as at December 31, 2020 and 2019. The following table sets forth the Bank's capital adequacy in accordance with the Basel III framework: December 31, 2020 December 31, 2019 Actual Regulatory minimum (1) Actual Regulatory minimum (1) Capital CET 1 capital 816,009 N/A 848,821 N/A Tier 1 capital 816,009 N/A 848,821 N/A Tier 2 capital 187,090 N/A 103,243 N/A Total capital 1,003,099 N/A 952,064 N/A Risk Weighted Assets 5,068,590 N/A 4,897,851 N/A Leverage Ratio Exposure Measure 15,349,363 N/A 14,377,474 N/A Capital Ratios (%) CET 1 capital 16.1 % 10.0 % 17.3 % 10.0 % Tier 1 capital 16.1 % 11.5 % 17.3 % 11.5 % Total capital 19.8 % 13.5 % 19.4 % 13.5 % Leverage ratio 5.3 % 5.0 % 5.9 % 5.0 % (1) The minimum capital ratio requirements do not reflect additional Pillar II add-on requirements that the BMA may impose upon the Bank as a prudential measure from time to time. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 25: Income taxes The Bank is incorporated in Bermuda, and pursuant to Bermuda law is not taxed on either income or capital gains. The Bank’s subsidiaries in the Cayman Islands and The Bahamas are not subject to any taxes in their respective jurisdictions on either income or capital gains under current law applicable in the respective jurisdictions. The Bank’s subsidiaries in Canada, the United Kingdom, Guernsey, Jersey, Switzerland, Singapore and Mauritius are subject to the tax laws of those jurisdictions. For the years ended December 31, 2020, 2019, and 2018, the Bank did not record any unrecognized tax benefits or expenses and has no uncertain tax positions as at December 31, 2020, 2019, and 2018. The Bank records income taxes based on the enacted tax laws and rates applicable in the relevant jurisdictions for the years ended December 31, 2020, 2019, and 2018. For the years ended December 31, 2020, 2019, and 2018, the Bank did not incur any interest or pay any penalties. Year ended Income taxes in consolidated statements of operations December 31, 2020 December 31, 2019 December 31, 2018 Current tax expense 2,382 1,860 721 Deferred tax (recovery) expense (4) (3,231) 563 Total tax (benefit) expense 2,378 (1,371) 1,284 Reconciliation between the Effective Income Tax Rate and the Statutory Income Tax Rate Year ended December 31, 2020 December 31, 2019 December 31, 2018 $ % $ % $ % Income tax expense in international offices taxed at different rates 2,695 1.8 695 0.4 876 0.4 Expenses not deductible for tax purposes 299 0.2 104 0.1 225 0.1 Prior year tax adjustments 41 — 160 0.1 (79) — Change in valuation allowance (582) (0.4) (2,429) (1.4) 315 0.2 Other - net (75) (0.1) 99 0.1 (53) — Income tax (benefit) expense at effective tax rate 2,378 1.6 (1,371) (0.8) 1,284 0.7 Deferred income taxes December 31, 2020 December 31, 2019 Deferred income tax asset Tax loss carried forward 8,134 8,427 Pension liability 1,448 968 Fixed assets (905) (691) Allowance for compensated absence 44 15 Deferred income tax asset before valuation allowance 8,721 8,719 Less: valuation allowance (4,257) (4,839) Deferred income tax asset after valuation allowance 4,464 3,880 Deferred income tax liability Other (19) (14) Net deferred income tax assets 4,445 3,866 Management assesses the available positive and negative evidence to evaluate if sufficient future taxable income will be generated to use the existing deferred tax assets. On the basis of this evaluation, as at December 31, 2020, a valuation allowance of $4.3 million (December 31, 2019: $4.8 million) has been recognized to record only the portion of the deferred tax asset that more likely than not will be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carry-forward period change, or if there are changes in the available positive and negative evidence. The Bank has net taxable loss carry forwards related to the Bank’s international operations of approximately $47.4 million (December 31, 2019: $48.1 million). Of these losses available to carry forward, $45.2 million (December 31, 2019: $45.6 million) have an indefinite life. |
Business combinations
Business combinations | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Business combinations | Note 26: Business combinations Deutsche Bank’s Global Trust Solutions Acquisition On March 29, 2018, the Bank concluded the acquisition of Deutsche Bank’s Global Trust Solutions (“GTS”) business, excluding its US operations, for net cash payments of $24.7 million (composed of an initial cash payment of $30.2 million followed by a refund of $5.5 million on May 29, 2018). The refund was received based upon the movement in the number of clients in the GTS portfolio between the time the acquisition was agreed upon and the conclusion of the acquisition, together with an adjustment based upon the net asset values of the companies transferred. Butterfield has taken over the ongoing management and administration of the GTS portfolio, comprising approximately 1,000 trust structures for some 900 private clients. Butterfield has also offered positions to all employees who are fully dedicated to GTS in the Cayman Islands, Guernsey, Switzerland, Singapore and Mauritius. The acquisition was undertaken to enhance the Bank's market presence in the global trust service market. The Bank incurred transaction expenses related to this acquisition in the amount of $3.8 million, of which $1.9 million were expensed during the year ended December 31, 2018 (including $1.0 million of legal and professional fees) and $1.9 million were expensed during the year ended December 31, 2017 (including $1.6 million of legal and professional fees). For the year ended December 31, 2018, the amount of revenues and net deficit relating to the acquired GTS operations that were not inextricably merged into the Bank’s operations were $6.5 million and $2.9 million, respectively. The assets acquired consist mainly of: customer relationships intangible assets, goodwill and accounts receivable. The liabilities assumed consist mainly of deferred revenues and accounts payable. Goodwill is made up of expected cash flows to be derived from new business and expected synergies resulting from leveraging existing support services and infrastructure within the Bank. The goodwill arising from the acquisition was allocated to reportable segments as per Note 9: Goodwill and other intangible assets. As at March 29, 2018 Total consideration transferred 24,680 Assets acquired Cash due from banks 3,958 Intangible assets (estimated useful life of 15 years) 16,932 Other assets 4,548 Total assets acquired 25,438 Liabilities acquired (included in Other liabilities on the balance sheet) (4,626) Excess purchase price (Goodwill) 3,868 Disclosure of the unaudited pro forma financial information to present a summary of the combined results of the Bank and GTS acquisition is impracticable for the year ended December 31, 2018. The disclosure is impracticable as the Bank does not have access to the complete historical revenue and expense data as it relates to GTS for the period preceding the acquisition. Asset Acquisition On February 15, 2018, the Bank announced that it had entered into an agreement to acquire Deutsche Bank's banking and custody business in the Cayman Islands, Guernsey and Jersey. During the year ended December 31, 2018, the Bank began to onboard certain customer deposits relating to the acquisition, and this activity was completed in the first half of 2019. ABN AMRO (Channel Islands) Limited Acquisition On April 25, 2019, the Bank announced that it entered into an agreement to acquire all the outstanding shares of ABN AMRO (Channel Islands) Limited (“ABN AMRO Channel Islands”), the Channel Islands-based banking subsidiary of ABN AMRO Bank N.V. via one of the Bank's subsidiaries, Butterfield Bank (Guernsey) Limited. ABN AMRO Channel Islands offers banking, investment management and custody products to three distinct client groups, including trusts, private clients, and funds. This agreement is part of the Bank's strategy to grow through acquisitions in offshore markets where the Bank already has scale and expertise in order to create an organization with a widened and diversified offering. On July 15, 2019, the transaction completed as planned and the aggregate purchase price of £160.7 million ($201.1 million) was paid in cash. During 2020, ABN AMRO Channel Islands' business and employees were integrated with the existing Butterfield Guernsey operations and operate under the Butterfield name. In addition to the figures noted below, on July 15, 2019, ABN AMRO Channel Islands had estimated clients' assets under management and custody of $4.7 billion. The fair value of the net assets acquired and allocation of purchase price is summarized as follows: As at July 15, 2019 Total consideration transferred 201,107 Assets acquired Cash due from banks 3,016,859 Loans 654,503 Intangible assets - Customer relationships 24,371 Other assets 31,674 Total assets acquired 3,727,407 Liabilities assumed Deposits (3,493,239) Other liabilities (33,061) Total liabilities assumed (3,526,300) Excess purchase price (Goodwill) — The acquired customer relationships intangible assets have an estimated finite useful life of 15 years. The Bank incurred legal and professional transaction expenses related to this acquisition in the amount of $5.4 million all of which were incurred and expensed during the year ended December 31, 2019. For the period beginning on July 15, 2019 (i.e. acquisition date) to December 31, 2019, the amount of revenues and earnings relating to the acquired ABN AMRO Channel Islands operations that were not inextricably merged into the Bank’s operations were $13.7 million and a net income of $1.5 million, respectively. The following selected unaudited pro forma financial information has been provided to present a summary of the combined results of the Bank and the acquired ABN AMRO Channel Islands operations, assuming the transaction had been effected on January 1, 2018. The unaudited pro forma data is for informational purposes only and does not necessarily represent results that would have occurred if the transaction had taken place on the basis assumed above. The pro forma financial information has been prepared based on the actual results realized by ABN AMRO Channel Islands from January 1, 2017 to July 15, 2019, and results estimated at the time of acquisition. Year ended Unaudited pro forma financial information December 31, 2019 December 31, 2018 Total net revenue 555,341 563,786 Total non-interest operating (expense) (372,796) (351,320) Pro forma net income post business combination 182,545 212,466 |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related-party transactions | Note 27: Related party transactions Financing Transactions Certain directors and executives of the Bank, companies in which they are principal owners and/or members of the board, and trusts in which they are involved, have loans and deposits with the Bank. Loans to directors were made in the ordinary course of business at normal credit terms, including interest rate and collateral requirements. Loans to executives may be eligible for preferential rates. All of these loans were considered performing loans as at December 31, 2020 and December 31, 2019. Loan balances with directors and executives of the Bank, companies in which they are principal owners and/or members of the board, and trusts in which they are involved were as follows: Balance at December 31, 2018 97,195 Loans issued during the year 45,602 Loan repayments and the effect of changes in the composition of related parties (104,156) Balance at December 31, 2019 38,641 Loans issued during the period 37,073 Loan repayments and the effect of changes in the composition of related parties (33,323) Balance at December 31, 2020 42,391 Consolidated balance sheets December 31, 2020 December 31, 2019 Deposits 19,591 12,838 Year ended December 31 Consolidated statement of operations 2020 2019 2018 Interest and fees on loans 1,444 1,887 4,533 Certain affiliates of the Bank have loans and deposits with the Bank which were made and are maintained in the ordinary course of business on normal commercial terms. Balances with these parties were as follows: Consolidated balance sheets December 31, 2020 December 31, 2019 Loans 12,939 9,888 Deposits 423 342 Year ended December 31 Consolidated statement of operations 2020 2019 2018 Interest and fees on loans 654 677 635 Other gains/losses 742 — — Total non-interest expense 1,431 1,717 1,769 Investments The Bank holds seed investments in several Butterfield mutual funds, which are managed by a wholly-owned subsidiary of the Bank. These investments are included in equity securities at their fair value and are as follows: Consolidated balance sheets December 31, 2020 December 31, 2019 Equity securities Fair value 7,081 7,142 Unrealized gain 2,531 2,142 As at December 31, 2020, several Butterfield mutual funds which are managed by a wholly owned subsidiary of the Bank, had loan balances and deposit balances held with the Bank. The Bank also earned asset management revenue and custody and other administration services revenue from funds managed by a wholly-owned subsidiary of the Bank and from directors and executives, companies in which they are principal owners and/or members of the board and trusts in which they are involved, as well as other income from other related parties. Consolidated balance sheets December 31, 2020 December 31, 2019 Loans 2,518 16 Deposits 26,541 3,492 Year ended December 31 Consolidated statement of operations 2020 2019 2018 Asset management 7,131 10,273 9,412 Custody and other administration services 1,108 1,452 1,376 Other non-interest income 729 1,458 972 |
Condensed financial statements
Condensed financial statements of the parent company only | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed financial statements of the parent company only | Note 28: Condensed financial statements of the parent company only Condensed financial statements of the Bank of N.T. Butterfield & Son Limited (the ultimate parent company) without consolidation of its subsidiaries were as follows: The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Balance Sheets (In thousands of US dollars) As at December 31, 2020 December 31, 2019 Assets Cash and demand deposits with banks - Non-interest-bearing 44,086 38,615 Demand deposits with banks - Interest-bearing 99,035 118,583 Cash equivalents - Interest-bearing 1,244,878 329,494 Cash due from banks 1,387,999 486,692 Securities purchased under agreements to resell 197,039 142,283 Short-term investments 16,277 44,512 Investment in securities Equity securities at fair value 7,316 7,420 Available-for-sale (amortized cost: $1,058,195 (2019: 1,248,726)) 1,092,325 1,252,749 Held-to-maturity (fair value: $1,023,424 (2019: $1,030,183)) 967,926 1,003,248 Total investment in securities 2,067,567 2,263,417 Net assets of subsidiaries - Banks 618,461 610,217 Net assets of subsidiaries - Non-banks 11,971 10,303 Loans to third parties, net of allowance for credit losses 2,025,358 2,046,406 Loans to subsidiaries - Banks 13,669 13,241 Loans to subsidiaries - Non-banks 58,515 56,951 Other assets, including accrued interest, premises, equipment and computer software, equity method investments, receivables from subsidiaries and other real estate owned 199,273 207,896 Total assets 6,596,129 5,881,918 Liabilities Deposits Non-interest bearing 1,945,042 1,441,194 Interest bearing 3,298,165 3,161,634 Total deposits 5,243,207 4,602,828 Employee benefit plans 128,167 110,347 Other liabilities, including accrued interest and payables to subsidiaries 71,345 61,500 Total other liabilities 199,512 171,847 Long-term debt 171,462 143,500 Total liabilities 5,614,181 4,918,175 Total shareholders’ equity 981,948 963,743 Total liabilities and shareholders’ equity 6,596,129 5,881,918 The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Operations (In thousands of US dollars) Year ended December 31, 2020 December 31, 2019 December 31, 2018 Non-interest income Banking 24,429 24,870 23,506 Foreign exchange revenue 9,166 10,613 11,727 Custody and other administration services 6,927 7,625 — Other non-interest income 5,924 5,650 6,330 Dividends from subsidiaries - Banks 121,522 122,776 60,000 Dividends from subsidiaries - Non-banks 19,864 23,371 19,095 Total non-interest income 187,832 194,905 120,658 Interest income Interest and fees on loans 123,774 132,104 133,124 Investments 52,135 68,721 73,698 Deposits with banks and other 3,109 9,156 12,932 Total interest income 179,018 209,981 219,754 Interest expense Deposits 9,386 17,410 6,709 Long-term debt 9,294 7,876 6,949 Securities sold under agreement to resell — 13 33 Total interest expense 18,680 25,299 13,691 Net interest income before provision for credit losses 160,338 184,682 206,063 Provision for credit recoveries (losses) (8,750) (3,088) 6,823 Net interest income after provision for credit losses 151,588 181,594 212,886 Net gains (losses) on equity securities 658 925 (329) Net realized gains (losses) on available-for-sale investments 702 1,053 758 Net gains (losses) on other real estate owned (104) (5) (323) Net other gains (losses) 714 2 — Total other gains (losses) 1,970 1,975 106 Total net revenue 341,390 378,474 333,650 Non-interest expense Salaries and other employee benefits 69,521 77,923 75,949 Technology and communications 35,434 36,008 36,466 Professional and outside services 27,791 27,954 22,696 Property 9,092 6,927 6,693 Indirect taxes 15,633 15,355 14,669 Non-service employee benefits expense 3,462 5,879 6,427 Marketing 2,418 4,372 3,034 Amortization of intangible assets 169 169 169 Other expenses 9,896 9,260 4,230 Total non-interest expense 173,416 183,847 170,333 Net income before equity in undistributed earnings of subsidiaries 167,974 194,627 163,317 Equity in undistributed earnings of subsidiaries (20,757) (17,552) 31,867 Net income 147,217 177,075 195,184 Other comprehensive income, net of tax 37,417 61,430 (19,475) Total comprehensive income 184,634 238,505 175,709 The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Cash Flows (In thousands of US dollars) Year ended December 31, 2020 December 31, 2019 December 31, 2018 Cash flows from operating activities Net income 147,217 177,075 195,184 Adjustments to reconcile net income to operating cash flows Depreciation and amortization 26,562 21,734 21,425 Provision for credit (recovery) losses 8,750 3,088 (6,823) Share-based payments and settlements 15,245 17,716 12,582 Net change in equity securities at fair value 102 (925) 329 Net realized (gains) losses on available-for-sale investments (702) (1,053) (758) Net (gains) losses on other real estate owned 104 5 323 (Increase) decrease in carrying value of equity method investments (1,376) (290) (1,033) Dividends received from equity method investments 2,710 385 376 Equity in undistributed earnings of subsidiaries 20,757 17,552 (31,867) Changes in operating assets and liabilities (Increase) decrease in accrued interest receivable and other assets 754 6,808 (11,915) Increase (decrease) in employee benefit plans, accrued interest payable and other liabilities 9,456 (3,753) (786) Cash provided by (used in) operating activities 229,579 238,342 177,037 Cash flows from investing activities (Increase) decrease in securities purchased under agreements to resell (54,756) (114,942) 151,428 Short-term investments other than restricted cash: proceeds from maturities and sales 68,272 — 106,221 Short-term investments other than restricted cash: purchases (35,319) (32,953) (18,953) Available-for-sale investments: proceeds from sale 205,770 114,058 681,656 Available-for-sale investments: proceeds from maturities and pay downs 295,547 204,105 340,114 Available-for-sale investments: purchases (317,451) (196,652) (156,271) Held-to-maturity investments: proceeds from maturities and pay downs 229,576 137,622 82,853 Held-to-maturity investments: purchases (195,898) (53,228) (525,637) Net (increase) decrease in loans to third parties 8,263 (99,793) 15,184 Net (increase) decrease in loans to bank subsidiaries (428) (487) 764 Net (increase) decrease in loans to non-bank subsidiaries (1,564) (930) 1,812 Additions to premises, equipment and computer software (11,313) (14,009) (9,830) Proceeds from sale of other real estate owned — 1,102 5,896 Injection of capital in subsidiary (1,522) (175,107) (64,029) Return of capital from a subsidiary 3,314 12,972 8,244 Cash provided by (used in) investing activities 192,491 (218,242) 619,452 The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Cash Flows (In thousands of US dollars) Year ended December 31, 2020 December 31, 2019 December 31, 2018 Cash flows from financing activities Net increase (decrease) in demand and term deposit liabilities 630,141 (64,027) (603,925) Issuance of subordinated capital, net of underwriting fees 97,647 — 73,218 Repayment of long-term debt (70,000) — (47,000) Common shares repurchased (86,640) (81,534) (48,443) Proceeds from stock option exercises 1,739 349 3,318 Cash dividends paid on common shares (88,932) (93,636) (83,704) Cash provided by (used in) financing activities 483,955 (238,848) (706,536) Net increase (decrease) in cash, cash equivalent and restricted cash 906,025 (218,748) 89,953 Cash, cash equivalents and restricted cash: beginning of year 498,251 716,999 627,046 Cash, cash equivalents and restricted cash: end of year 1,404,276 498,251 716,999 Components of cash, cash equivalents and restricted cash at end of year Cash due from banks 1,387,999 486,692 703,263 Restricted cash included in short-term investments on the consolidated balance sheets 16,277 11,559 13,736 Total cash, cash equivalents and restricted cash at end of year 1,404,276 498,251 716,999 Supplemental disclosure of cash flow information Cash interest paid 19,532 24,190 15,428 Supplemental disclosure of non-cash items Transfer to (out of) other real estate owned 314 — 2,041 Initial recognition of right-of-use assets and operating lease liabilities — 133 — Reduction in net loans due to initial adoption of a current expected credit loss model 3,899 — — |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 29: Subsequent events On February 10, 2021, the Board of Directors declared an interim dividend of $0.44 per common share to be paid on March 10, 2021 to shareholders of record on February 24, 2021. |
Significant accounting polici_2
Significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accounting and financial reporting policies of the Bank and its subsidiaries conform to generally accepted accounting principles in the United States of America (“GAAP”). The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the year, and actual results could differ from those estimates. |
Use of Estimates | Critical accounting estimates are those that require management to make subjective or complex judgments about the effect of matters that are inherently uncertain and may change in subsequent periods. Changes that may be required in the underlying assumptions or estimates in these areas could have a material impact on the future financial condition and results of operations. Management believes that the most critical accounting policies upon which the financial condition depends, and which involve the most complex or subjective decisions or assessments, are as follows: • Allowance for credit losses • Fair value and impairment of financial instruments • Impairment of long-lived assets • Impairment of goodwill • Employee benefit plans • Share-based compensation • Business combinations |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (collectively the “Bank”). Intercompany accounts and transactions have been eliminated. The Bank consolidates entities where it holds, directly or indirectly, more than 50% of the voting rights or where it exercises control. Entities where the Bank holds 20% to 50% of the voting rights and/or has the ability to exercise significant influence are accounted for under the equity method, and the pro rata share of their income (loss) is included in other non-interest income. |
Foreign Currency Translation | Foreign Currency Translation Assets, liabilities, revenues and expenses denominated in Bermuda dollars are translated to US dollars at par. Assets and liabilities of the parent company arising from other foreign currency transactions are translated into US dollars at the rates of exchange prevailing at the balance sheet date. The resulting gains or losses are included in foreign exchange revenue in the consolidated statements of operations. The assets and liabilities of foreign currency-based subsidiaries are translated at the rate of exchange prevailing on the balance sheet date, while associated revenues and expenses are translated to US dollars at the average rates of exchange prevailing throughout the year. Unrealized translation gains or losses on investments in foreign currency- based subsidiaries are recorded as a separate component of Shareholders' equity within accumulated other comprehensive income (“AOCI”). Gains and losses on foreign currency-based subsidiaries are recorded in the consolidated statements of operations when the Bank ceases to have a controlling financial interest in a foreign currency-based subsidiary. |
Assets Held in Trust or Custody | Assets Held in Trust or CustodySecurities and properties (other than cash and deposits held with the Bank and its subsidiaries) held in trust, custody, agency or fiduciary capacity for customers are not included in the consolidated balance sheets because the Bank is not the beneficiary of these assets. |
Cash Due from Banks and Consolidated Statements of Cash Flows | Cash Due from BanksCash due from banks includes cash on hand, cash items in the process of collection, amounts due from correspondent banks and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in fair value. Such investments are those with a maturity of three months or less from the date of acquisition and include unrestricted term deposits, certificates of deposit and treasury bills.Consolidated Statements of Cash FlowsFor the purposes of the consolidated statements of cash flows, cash due from banks include cash on hand, cash items in the process of collection, amounts due from correspondent banks and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in fair value, and restricted cash included in short-term investments on the consolidated balance sheets. |
Securities Purchased under Agreement to Resell and Collateral | Securities Purchased Under Agreement to ResellSecurities purchased under agreement to resell are treated as collateralized lending transactions. The obligation to resell is recorded at the value of the cash paid on purchase adjusted for the amortization of the difference between the purchase price and the agreed resell price. The amortization of this amount is recorded as interest income.CollateralThe Bank pledges assets as collateral as required for various transactions involving security repurchase agreements, deposit products and derivative financial instruments. Assets that have been pledged as collateral, including those that can be sold or repledged by the secured party, continue to be reported on the Bank’s consolidated balance sheets under the same line items as non-pledged assets of the same type. |
Investments | Short-Term Investments Short-term investments have maturities of less than one year from the date of acquisition, are only subject to an insignificant risk of change in fair value and comprise (1) restricted term and demand deposits, and (2) unrestricted term deposits, certificate of deposits and treasury bills with a maturity greater than three months from the date of acquisition. H. Investments Equity securities with readily determinable fair values are carried at fair value in the consolidated balance sheets, with unrealized gains and losses included in the consolidated statements of operations as net gains (losses) on equity securities. Contained within other assets are investments in private equity for which the Bank does not have sufficient rights or ownership interests to follow the equity method of accounting. Unquoted equity investments which are held directly by the Bank and which do not have readily determinable fair values are recorded at cost, less impairment, plus or minus observable price changes from transactions of identical or similar securities. Equity method investments which include investments whereby the Bank has the ability to influence, but not control, the financial or operating policies of such entities, are accounted for using the equity method of accounting. Debt securities are classified as available-for-sale (“AFS”) or held-to-maturity (“HTM”). Investments are classified as trading when management has the intent to sell these investments for profit. Debt securities classified as trading investments are carried at fair value in the consolidated balance sheets, with unrealized gains and losses included in the consolidated statements of operations as net gains (losses) on trading investments. Investments are classified primarily as AFS when used to manage the Bank’s exposure to interest rate and liquidity movements, as well as to make strategic longer-term investments. AFS investments are carried at fair value in the consolidated balance sheets with unrealized gains and losses reported in AOCL, net of the allowance for credit losses. Investments that the Bank has the positive intent and ability to hold to maturity are classified as HTM and are carried at amortized cost in the consolidated balance sheets, net of the allowance for credit losses. Unrecognized gains and losses on HTM securities are disclosed in the notes to the consolidated financial statements. The specific identification method is used to determine realized gains and losses on investments, which are included in net gains (losses) on equity securities and net realized gains (losses) on AFS investments respectively, in the consolidated statements of operations. Dividend and interest income, including amortization of premiums and discounts, on securities for which cash flows are not considered uncertain are included in interest income in the consolidated statements of operations. For securities with uncertain cash flows, the investments are accounted for under the cost recovery method, whereby all principal and coupon payments received are applied as a reduction of the amortized cost and carrying amount. Accrual of income is suspended in respect of debt securities that are in default, or from which it is unlikely that future interest payments will be received as scheduled. Impairment and credit losses (From January 1, 2020) For debt securities, where management does not expect to recover the entire amortized cost basis of the security and intends to sell such securities or it is more likely than not that the Bank will be required to sell the securities before recovering the amortized cost, it recognizes an impairment loss equal to the full difference between the amortized cost basis and the fair value of those securities through the statement of operations. Following the recognition of impairment, the security's new amortized cost basis is the previous basis less impairment. When management does not intend to sell or it is more likely than not that the Bank will hold such securities until recovering the amortized cost, management determines whether any credit losses exist. See "Note 2.J: Allowance for Credit Losses". Recognition of other-than-temporary impairments (Prior to January 1, 2020) For debt securities, management considers a decline in fair value to be other-than-temporary when it does not expect to recover the entire amortized cost basis of the security. Investments in debt securities in unrealized loss positions are analyzed as part of management’s ongoing assessment of other-than-temporary impairment (“OTTI”). When management intends to sell such securities or it is more likely than not that the Bank will be required to sell the securities before recovering the amortized cost, it recognizes an impairment loss equal to the full difference between the amortized cost basis and the fair value of those securities. When management does not intend to sell or it is more likely than not that the Bank will hold such securities until recovering the amortized cost, management determines whether any credit losses exist to identify any OTTI. Under certain circumstances, management will perform a qualitative determination and consider a variety of factors, including the length of time and extent to which the fair value has been less than cost; adverse conditions specifically related to the industry, geographic area or financial condition of the issuer or underlying collateral of a security; payment structure of the security; changes to the rating of the security by a rating agency; the volatility of the fair value changes; and changes in fair value of the security after the balance sheet date. Alternatively, management estimates cash flows over the remaining lives of the underlying security to assess whether credit losses exist. In situations where there is a credit loss, only the amount of impairment relating to credit losses on AFS and HTM investments is recognized in net income. For AFS investments, the decrease in fair value relating to factors other than credit losses is recognized in AOCL. Cash flow estimates take into account expectations of relevant market and economic data as of the end of the reporting period, including, for example, underlying loan-level data, and structural features of securitization, such as subordination, excess spread, over collateralization or other forms of credit enhancement. The degree of judgment involved in determining the recoverable value of an investment security is dependent upon the availability of observable market prices or observable market parameters. When observable market prices and parameters do not exist, judgment is necessary to estimate recoverable value which gives rise to added uncertainty in the assessment. The assessment takes into consideration factors such as interest rate changes, movements in credit spreads, default rate assumptions, prepayment assumptions, type and quality of collateral, and market sentiment. Management's fair valuations may include inputs and assumptions that are less observable or require greater estimation, thereby resulting in values which may be greater or lower than the actual value at which the investments may be ultimately sold or the ultimate cash flows that may be recovered. If the assumptions on which management based its fair valuations change, the Bank may experience additional OTTI or realized losses or gains, and the period-to-period changes in value could vary significantly. |
Loans | LoansLoans are reported as the principal amount outstanding, net of allowance for credit losses, unearned income, fair value adjustments arising from hedge accounting and net deferred loan fees. Interest income is recognized over the term of the loan using the effective interest method, or on a basis approximating a level rate of return over the term of the loan, except for loans classified as non-accrual. Prepayments are treated as a reduction of principal outstanding which is recognized upon receipt of payment. Prepayment penalties, if applicable under the terms of the specific loan agreement, are recognized also upon receipt of payment. Acquired loans Acquired loans that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit quality since origination, are accounted for as purchased credit-deteriorated ("PCD") loans. PCD loans are recorded at their purchase price with an adjustment to the amortized cost basis for the initial expected credit losses at the time of acquisition i.e. via a balance sheet gross-up. Changes in estimates of expected credit losses after acquisition are recognized as a movement in provision for credit recoveries (losses) in the statement of operations. Generally, acquired loans that meet the Bank's definition for non-accrual status are considered to be PCD loans. The Bank's purchased credit-impaired (“PCI”) loans outstanding as at January 1, 2020 are now classified as PCD loans and both the amortized cost and an allowance for expected credit losses are disclosed and included with other non-PCD loans' figures. The Bank will continue to recognize the amortization of the noncredit discount, if any, as interest income based on the yield of such assets as at the date of purchase. Participated or Assigned Loans The Bank may act as lead lender on large loans from time to time and may for strategic or commercial reasons, assign portions of such loans to other market participants. Such assignments are without full right of recourse to the Bank as the lead lender and participants/assignees accept all risks and obligations of the ultimate borrower associated with their proportional participation and assignment in such loans. The Bank records the unassigned portion of the principal outstanding in such loans on the consolidated balance sheets and records only its proportional share of interest income on the unassigned portion of the loan in the consolidated statement of operations. Impaired loans A loan is considered to be impaired when, based on current information and events, the Bank determines that it will not be able to collect all amounts due according to the original loan contract, including scheduled interest payments. Impaired loans include all non-accruing loans and all loans modified in a troubled debt restructuring (‘‘TDR’’) even if full collectability is expected following the restructuring. If the Bank determines that the expected realizable value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate. If the Bank determines that part of the allowance is uncollectible, that amount is charged off. Non-accrual Commercial, commercial real estate and consumer loans (excluding credit card consumer loans) are placed on non-accrual status if: • in the opinion of management, full payment of principal or interest is in doubt; or • principal or interest is 90 days past due. Residential mortgages are placed on non-accrual status immediately if: • in the opinion of management, full payment of principal or interest is in doubt; or • when principal or interest is 90 days past due, unless the loan is well secured and any ongoing collection efforts are reasonably expected to result in repayment of all amounts due under the contractual terms of the loan. Interest income on non-accrual loans is recognized only to the extent it is received in cash. Cash received on non-accrual loans where there is no doubt regarding full repayment (no impairment recognized in the form of a specific allowance) is first applied as repayment of the past due principal amount of the loan and secondly to past due interest and fees. Where there is doubt regarding the ultimate full repayment of the non-accrual loan (impairment recognized in the form of a specific allowance), all cash received is applied to reduce the principal amount of the loan. Interest income on these loans is recognized only after the entire balance receivable is recovered and interest is actually received. Loans are returned to accrual status when: • none of the principal or accrued interest is past due (with certain exceptions as noted below) and the Bank expects repayment of the remaining contractual obligation; or • when the loan becomes well secured and in the process of collection. Loans modified in a TDR A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession from originally agreed terms. If a restructuring is considered a TDR, the Bank is required to make certain disclosures to the notes of the consolidated financial statements and evaluate the restructured loan for impairment. The Bank employs various types of concessions when modifying a loan which may include extension of repayment periods, interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. Commercial and industrial loans modified in a TDR may involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor may be requested. Commercial mortgage and construction loans modified in a TDR may involve extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period. Residential mortgage modifications generally involve a short-term forbearance period after which the missed payments are added to the end of the loan term, thereby extending the maturity date. Interest continues to accrue on the missed payments and as a result, the effective yield on the mortgage remains unchanged. As the forbearance period usually involves an insignificant payment delay they typically do not meet the reporting criteria for a TDR. Automobile loans modified in a TDR are primarily composed of loans where the Bank has lowered monthly payments by extending the term. When a loan undergoes a TDR, the determination of the loan's accrual versus non-accrual status following the modification depends on several factors. As with the risk rating process, the accrual status decision for such a loan is a separate and distinct process from the loan's TDR analysis and determination. Management considers the following in determining the accrual status of restructured loans: • If the loan was appropriately on accrual status prior to the restructuring, the borrower has demonstrated performance under the previous terms, and the Bank's credit evaluation shows the borrower's capacity to continue to perform under the restructured terms (both principal and interest payments), it is likely that the appropriate conclusion is for the loan to remain on accrual at the time of the restructuring. This evaluation must include consideration of the borrower's sustained historical repayment performance for a reasonable period prior to the date on which the loan was restructured. A sustained period of repayment performance generally would be a minimum of six months and would involve payments of cash or cash equivalents; or • If the loan was on non-accrual status before the restructuring, but the Bank's credit evaluation shows the borrower's capacity to meet the restructured terms, the loan would likely remain as non-accrual until the borrower has demonstrated a reasonable period of sustained repayment performance. As noted above, this period generally would be at least six months (thereby providing reasonable assurance as to the ultimate collection of principal and interest in full under the modified terms). Sustained performance before the restructuring may be taken into account. Loans that have been modified in a TDR are restored to accrual status only when interest and principal payments are brought current for a continuous period of six months under the modified terms. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on non-accrual status. A loan that is modified in a TDR prior to becoming impaired will be left on accrual status if full collectability in accordance with the restructured terms is expected. The Bank may enter into a TDR for loans that are in default, or at risk of defaulting, even if the loan is not impaired. A loan that had previously been modified in a TDR and is subsequently refinanced under current underwriting standards at a market rate with no concessionary terms is accounted for as a new loan and is no longer reported as a TDR. Delinquencies The entire balance of an account is contractually delinquent if the minimum payment of principal or interest is not received by the specified due date. Delinquency is reported on loans that are more than 30 days past due. Charge-offs The Bank recognizes charge-offs when it determines that loans are uncollectible, and this generally occurs when all commercially reasonable means of recovering the loan balance have been exhausted. Commercial and consumer loans are either fully or partially charged-off down to the fair value of collateral securing the loans when: • management judges the loan to be uncollectible; • repayment is expected to be protracted beyond reasonable time frames; • the asset has been classified as a loss by either the Bank’s internal loan review process or third party appraisers; or • the customer has filed bankruptcy and the loss becomes evident owing to a lack of assets or cash flow. The outstanding balance of commercial and consumer real estate secured loans and residential mortgages that are in excess of the estimated property value, less costs to sell, is charged-off once there is reasonable assurance that such excess outstanding balance is not recoverable. Credit card consumer loans that are contractually 180 days past due and other consumer loans with an outstanding balance under $100,000 that are contractually 180 days past due are generally written off and reported as charge-offs. |
Allowance for Credit Losses | Allowance for Credit Losses Accounting for Financial instruments - Credit losses Starting on January 1, 2020 the Bank adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (Topic 326). Accordingly, from the date of adoption, the Bank uses a current expected credit loss model ("CECL") which is based on expected losses. The model used by the Bank up to December 31, 2019 to estimate credit losses was based on incurred losses. The CECL model is applied by the Bank to the measurement of credit losses on financial instruments at amortized cost, including loan receivables and held-to-maturity ("HTM") debt securities. The Bank also applies the CECL model to certain off-balance sheet credit exposures such as undrawn loan commitments, standby letters of credit, financial guarantees, and other similar instruments. In line with Topic 326, the Bank will present credit losses on available-for-sale ("AFS") securities as a valuation allowance rather than as a direct write-down. Changes in expected credit losses are recorded through the respective credit loss allowances on the consolidated balance sheets as well as in the provision for credit losses (recoveries) in the consolidated statements of operations. The Bank's PCI loans outstanding as at January 1, 2020 are now classified as PCD loans and both the amortized cost and an allowance for expected credit losses are disclosed and included with other non-PCD loans' figures. The Bank will continue to recognize the amortization of the noncredit discount, if any, as interest income based on the yield of such assets. The Bank has not restated comparative information previously accounted for under the incurred loss and the PCI models. The total adjustment resulting from the adoption of this methodology on the opening balance of the Bank’s accumulated deficit as at January 1, 2020 was a negative adjustment of $7.8 million relating to the Bank's loan portfolio. Under the CECL model, the Bank collects and maintains attributes as they relate to its financial instruments that are within scope of CECL including fair value of collateral, expected performance over the lifetime of the instruments and reasonable and supportable assumptions about future economic conditions. The Bank's measurement of expected losses takes into account historical loss information and is primarily based on the product of: the respective instrument’s probability of default (“PD”), loss given default (“LGD”) and exposure at default (“EAD”). For AFS securities, any allowance for credit losses is based on an impairment assessment. The Bank made the accounting policy election to write off accrued interest receivable on loans that are placed on non-accrual status by reversing the then accrued interest balance against interest income revenue. The Bank maintains an allowance for credit losses, which in management’s opinion is adequate to absorb all estimated credit-related losses that are incurred in its lending and off-balance sheet credit-related arrangements at the balance sheet date. Management measures expected credit losses on held-to-maturity and available-for-sale debt securities on a collective basis by major security type when similar risk characteristics exist, or failing that, on an individual basis. For available-for-sale debt securities in an unrealized loss position, the Bank first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Bank evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. The allowance for credit losses on loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries typically do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts as well as the Bank's internal risk rating framework. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in the current-loan specific risk characteristics such as differences in underwriting practices, vintage, portfolio mix, delinquency level, term as well as changes in environmental conditions, such as changes in macroeconomic factors and collateral values. The allowance for credit losses is measured on a collective pool basis when similar risk characteristics exist. In each of its jurisdictions, the Bank has identified the following portfolio segments: Residential mortgages, Consumer loans (including overdrafts), Commercial loans, Commercial overdrafts, Commercial real estate loans and Credit cards. For Loans and overdrafts, Management uses a probability of default and loss-given-default model to estimate the allowance for credit losses. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. For Credit cards, Management uses a loss rate to estimate expected credit losses. Expected credit losses are estimated over the contractual term of the loans. The contractual term excludes potential extensions, renewals and modifications unless management has a reasonable expectation at the reporting date that the extension or renewal options included in the original contract will occur or that a troubled debt restructuring will be executed. Credit card receivables do not have stated maturities, therefore establishing a contractual term is performed by using an analytical approximation of behavior. Prior to January 1, 2020, under the incurred loss model, the allowance for credit losses consisted of specific allowances and a general allowance as follows: Specific allowances Specific allowances are determined on an exposure-by-exposure basis identified through the Bank's internal risk rating framework and reflect the associated estimated credit loss. The specific allowance for an individual loan is computed as the difference between the recorded investment in the loan and the present value of expected future cash flows and is dependent upon the assumptions on the timing and amounts of the receipts or the fair value of collateral-dependent loans. The effective rate of return on the loan is used for discounting the cash flows. However, when foreclosure of a collateral-dependent loan is probable, the Bank measures impairment based on the fair value of the collateral. The Bank considers estimated costs to sell, on a discounted basis, in the measurement of impairment if those costs are expected to reduce the cash flows available to repay or otherwise satisfy the loan. If the measurement of an impaired loan is less than the recorded investment in the loan, then the Bank recognizes impairment by creating an allowance with a corresponding charge to provision for credit losses. For all commercial and commercial real estate TDRs, the Bank conducts further analysis to determine the probable amount of loss and establishes a specific allowance for the loan, if appropriate. The Bank estimates the impairment amount by comparing the loan’s carrying amount to the estimated present value of its future cash flows or the fair value of its underlying collateral. For collateral-dependent impaired commercial and commercial real estate loans, the excess of the Company’s recorded investment in the loan over the fair value of the collateral, less cost to sell, is charged off to the specific allowance. For consumer and residential mortgage TDRs that are not collateral-dependent, allowances are developed using the present value of expected future cash flows, compared to the recorded investment in the loans. Expected re-default factors are considered in this analysis. The fair value of collateral is periodically monitored subsequent to the modification. General allowances The allowance for credit losses attributed to the remaining portfolio of smaller balance homogeneous loans is established through various analyzes that estimate the incurred loss at the balance sheet date inherent in the lending and off-balance sheet credit-related arrangements portfolios. These analyzes may consider historical default and loss rates, geographic, industry, economic, and other environmental factors. Management may also consider overall portfolio indicators including trends in internally risk rated exposures, delinquent (defined as loans that are more than 30 days past due), non-performing, trends in volumes and terms of loans, cash-basis loans, historical and forecasted write-offs, and a review of industry, geographic and portfolio concentrations, including current developments within those segments. In addition, management may consider the current business strategy and credit process, including lending policies and procedures such as limit setting and compliance, credit approvals, loan underwriting criteria and loan workout procedures. |
Business Combinations | All business combinations are accounted for using the acquisition method. |
Goodwill and Intangible Assets | Identifiable intangible assets (mostly customer relationships) are recognized separately from goodwill and are initially valued at fair value using discounted cash flow calculations and other recognized valuation techniques. Goodwill represents the excess of the fair value of the consideration paid for the acquisition of a business over the fair value of the net assets acquired. Contingent purchase consideration is measured at its fair value and recorded on the purchase date. Any subsequent changes in the fair value of a contingent consideration liability will be recorded through the consolidated statements of operations.Goodwill is tested annually for impairment at the reporting unit level, or more frequently if events or circumstances indicate there may be impairment. If the carrying amount of a reporting unit, including the allocated goodwill, exceeds its fair value, goodwill impairment is measured as the excess of the carrying amount of the reporting unit's allocated goodwill over the implied fair value of the goodwill. Other acquired intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives, not exceeding 15 years. Intangible assets' estimated lives are re-evaluated annually and an impairment test is carried out if certain indicators of impairment exist. |
Premises, Equipment and Computer Software | Premises, Equipment and Computer SoftwareLand is carried at cost. Buildings, equipment and computer software, including leasehold improvements, are carried at cost less accumulated depreciation. The Bank generally computes depreciation using the straight-line method over the estimated useful life of an asset, which is 50 years for buildings, and 3 to 10 years for other equipment. For leasehold improvements the Bank uses the straight-line method over the lesser of the remaining term of the leased facility or the estimated economic life of the improvement. The Bank capitalizes certain costs, including interest cost incurred during the development phase, associated with the acquisition or development of internal use software. Once the software is ready for its intended use, these costs are amortized on a straight-line basis over the software's expected useful life, which is between 5 and 10 years.Management reviews the recoverability of the carrying amount of premises, equipment and computer software when indicators of impairment exist and an impairment charge is recorded when the carrying amount of the reviewed asset is deemed not recoverable by future expected cash flows to be derived from the use and disposition of the asset. If there is a disposition of premises, equipment and computer software, a gain is recorded if the difference of the proceeds on disposition is in excess of the asset's carrying value. Otherwise, a loss is recorded. If there is an abandonment out of premises, equipment and computer software, the full carrying value of the asset is recognized as a loss. |
Other Real Estate Owned | Other Real Estate OwnedOther real estate owned (“OREO”) comprises real estate property held for sale and commercial and residential real estate properties acquired in partial or total satisfaction of loans acquired through foreclosure proceedings, acceptance of a deed-in-lieu of foreclosure or by taking possession of assets that were used as loan collateral. These properties are initially recorded at fair value less estimated costs to sell the property. If the recorded investment in the loan exceeds the property’s fair value at the time of acquisition, a charge-off is recorded against the specific allowance. If the carrying value of the real estate exceeds the property’s fair value at the time of reclassification, an impairment charge is recorded in the consolidated statements of operations. Subsequent decreases in the property’s fair value below the new cost basis are recorded through the use of a valuation allowance. Subsequent increases in the fair value of a property may be used to reduce the allowance but not below zero. Any operating expenses of the property are recognized through charges to non-interest expense. |
Leases | Leases In the normal course of operation, the Bank enters into leasing agreements either as the lessee or the lessor. Starting on January 1, 2019 (the adoption date of the new lease accounting guidance Accounting Standards Update (“ASU”) 2016-02 Leases (Topic 842)), the Bank recognized (prospectively, with no adjustments to prior periods) right-of-use assets and lease liabilities for operating leases. Lease liabilities are measured as the present value of future lease payments, including term renewals that are reasonably certain to occur, discounted using the Bank’s incremental borrowing interest rate. Right-of-use assets are measured as the carrying amount of the related lease liabilities adjusted for: prepaid or accrued lease payments, unamortized lease incentive received, unamortized initial direct costs and any impairment of the right-of-use asset. On January 1, 2019 the Bank elected the practical expedient: (1) not to reassess whether any expired or existing contracts are or contain leases; (2) not to reassess the lease classification for any expired or existing leases and (3) not to reassess initial direct costs for any existing leases. The Bank also elected: (1) the practical expedient not to separate lease components from non-lease components for all classes of underlying assets; and (2) the practical expedient not to recognize a right-of-use asset and a lease liability for leases with a term at inception of 12 months or less, including renewal options that are reasonably certain to be exercised (referred to as “short term leases”). |
Derivatives | Derivatives All derivatives are recognized on the consolidated balance sheets at their fair value. On the date that the Bank enters into a derivative contract, it designates the derivative as either: a hedge of the fair value of a recognized asset or liability (a fair value hedge); a hedge of a forecasted transaction or the variability of cash flows that are to be received or paid in connection with a recognized asset or liability (a cash flow hedge); a hedge of an exposure to foreign currency risk of a net investment in a foreign operation (a net investment hedge); or, an instrument that is held for trading or non-hedging purposes (a trading or non-hedging derivative instrument). All instruments utilized as a hedging instrument in a fair value hedge or cash flow hedge must have one or more underlying notional amounts, no or a minimal net initial investment and a provision for net settlement in the contract to meet the definition of a derivative instrument. Instruments utilized as a hedging instrument in a hedge of a net investment in foreign operations may be derivative instruments or non-derivatives. The changes in the fair value of a derivative that is designated and qualifies as a fair value hedge, along with changes in the fair value of the hedged asset or liability that are attributable to the hedged risk, are recorded in the statement of operations. The changes in the fair value of a derivative that is designated and qualifies as a cash flow hedge, to the extent that the hedge is effective, are recorded in other comprehensive income ("OCI") and the ineffective portion is recorded in statement of operations. That is, ineffectiveness from a derivative that overcompensates for changes in the hedged cash flows is recorded in statement of operations. However, the ineffectiveness from a derivative that under compensates is not recorded in statement of operations. The changes in the fair value of a derivative that is designated and qualifies as a foreign currency hedge is recorded in either current year earnings or OCI, depending on whether the hedging relationship satisfies the criteria for a fair value or cash flow hedge. If, however, a derivative is used as a hedge of a net investment in a foreign operation, the changes in the derivative’s fair value, to the extent that the derivative is effective as a hedge, are recorded in the cumulative translation adjustment (“CTA”) account within OCI. Changes in the fair value of trading and non-hedging derivative instruments are reported in the statement of operations. The Bank formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair value, cash flow, or foreign currency hedges to specific assets and liabilities on the consolidated balance sheets or specific firm commitments or forecasted transactions. The Bank also formally assesses whether the derivatives that are used in hedging transactions have been highly effective in offsetting changes in the fair value or cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods. For those hedge relationships that are terminated, hedge designations that are elected to be removed, forecasted transactions that are no longer expected to occur, or the hedge relationship ceases to be highly effective, the hedge accounting treatment described in the paragraphs above is no longer applied and the end-user derivative is terminated or transferred to the trading designation. For fair value hedges, any changes to the carrying value of the hedged item prior to the discontinuance remain as part of the basis of the asset or liability. When a cash flow hedge is discontinued, the net derivative gain (loss) remains in AOCI unless it is probable that the forecasted transaction will not occur in the originally specified time period. |
Employee Benefit Plans | Employee Benefit Plans The Bank maintains trusteed pension plans for substantially all employees as either non-contributory defined benefit plans or defined contribution plans. Benefits under the defined benefit plans are based primarily on the employee's years of credited service and average annual salary during the final years of employment as defined in the plans. The Bank also provides post-retirement medical benefits for certain qualifying active and retired Bermuda-based employees. Expense for the defined benefit pension plans and the post-retirement medical benefits plan is composed of (a) the actuarially determined benefits for the current year's service, (b) imputed interest on the actuarially determined liability of the plan, (c) in the case of the defined benefit pension plans, the expected investment return on the fair value of plan assets and (d) amortization of certain items over the expected average remaining service life of employees in the case of the active defined benefit pension plans, estimated average remaining life expectancy of the inactive participants in the case of the inactive defined benefit pension plans and the expected average remaining service life to full eligibility age of employees covered by the plan in the case of the post-retirement medical benefits plan. The items amortized are amounts arising as a result of experience gains and losses, changes in assumptions, plan amendments and the change in the net pension asset or post-retirement medical benefits liability arising on adoption of revised accounting standards. For each of the defined benefit pension plans and for the post-retirement medical benefits plan, the assets and liabilities recognized for accounting purposes are reported in other assets and employee benefit plans respectively. The actuarial gains and losses, transition obligation and prior service costs of the defined pension plans and post-retirement medical benefits plan are recognized in OCI net of tax and amortized to net income over the average service period for the active defined benefit pension plans and post-retirement medical benefits plan and average remaining life expectancy for the inactive defined benefit pension plans. For the defined contribution pension plans, the Bank and participating employees provide an annual contribution based on each participating employee's pensionable earnings. Amounts paid are expensed in the period. |
Share-based Compensation | Share-Based Compensation The Bank engages in equity settled share-based payment transactions in respect of services received from eligible employees. The fair value of the services received is measured by reference to the fair value of the shares or share options granted on the date of the grant. The cost of the employee services received in respect of the shares or share options granted is recognized in the consolidated statements of operations over the shorter of the vesting or service period. The fair value of the options granted is determined using option pricing models, which take into account the exercise price of the option, the current share price, the risk-free interest rate, expected dividend rate, the expected volatility of the share price over the life of the option and other relevant factors. The fair value of unvested share awards is deemed to be the closing price of the publicly traded Bank shares on grant date. The fair value of time vesting conditions is taken into account by adjusting the number of shares or share options included in the measurement of the cost of employee services so that ultimately, the amount recognized in the consolidated statements of operations reflects the number of vested shares or share options. The Bank recognizes compensation cost for awards with performance conditions if and when the Bank concludes that it is probable that the performance condition will be achieved, net of an estimate of pre-vesting forfeitures (e.g., due to termination of employment prior to vesting). |
Revenue Recognition | Revenue Recognition Trust, custody and other administration services fees include fees for private and institutional trust, executorship, and custody services. Asset management fees include fees for investment management, investment advice and brokerage services. Fees are recognized as revenue over the period of the relationship or when the Bank has rendered all services to the clients and is entitled to collect the fee from the client, as long as there are no contingencies associated with the fees. Banking services fees primarily include fees for letters of credit and other financial guarantees, compensating balances, overdraft facilities and other financial services-related products as well as credit card fees. Letters of credit and other financial guarantees fees are recognized as revenue over the period in which the related guarantee is outstanding. Credit card fees are comprised of merchant discounts, late fees and membership fees, net of interchange and rewards costs. Credit card fees and other fees are recognized in the period in which the service is provided. Foreign exchange revenue includes fees earned on currency exchange transactions which are recognized when such transactions occur, as well as gains and losses recognized when translating financial instruments held or due in currencies other than the local functional currency at the rates of exchange prevailing at the balance sheet date. Loan interest income includes the amortization of deferred non-refundable loan origination and commitment fees. These fees are recognized as an adjustment of yield over the life of the related loan. Loan origination and commitment fees are offset by their related direct costs and only the net amounts are deferred and amortized into interest income. Dividend and interest income, including amortization of premiums and discounts, on securities for which cash flows are not considered uncertain are included in interest income in the consolidated statements of operations. Loans placed on non-accrual status and investments with uncertain cash flows are accounted for under the cost recovery method, whereby all principal, dividends, interest and coupon payments received are applied as a reduction of the amortized cost and carrying amount. |
Fair Values | Fair Values Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Bank determines the fair values of assets and liabilities based on the fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The relevant accounting standard describes three levels of inputs that may be used to measure fair value. Equity securities and debt investments classified as AFS, and derivative assets and liabilities are recognized in the consolidated balance sheets at fair value. Level 1, 2 and 3 valuation inputs Management classifies items that are recognized at fair value on a recurring basis based on the level of inputs used in their respective fair value determination as described below. Fair value inputs are considered Level 1 when based on unadjusted quoted prices in active markets for identical assets. Fair value inputs are considered Level 2 when based on inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active. Fair value inputs are considered Level 3 when based on internally developed models using significant unobservable assumptions involving management's estimations or non-binding bid quotes from brokers. The following methods and assumptions were used in the determination of the fair value of financial instruments: Cash due from banks The carrying amount of cash and demand deposits with banks, being short-term in nature, is deemed to approximate fair value. Cash equivalents include unrestricted term deposits, certificates of deposits and Treasury bills with a maturity of less than three months from the date of acquisition and the carrying value at cost is considered to approximate fair value because they are short term in nature, bear interest rates that approximate market rates, and generally have negligible credit risk. Short-term investments Short-term investments comprise restricted term and demand deposits and unrestricted term deposits, certificates of deposit and treasury bills with less than one year but greater than three months' maturity from the date of acquisition. The carrying value at cost is considered to approximate fair value because they are short term in nature, bear interest rates that approximate market rates, and generally have negligible credit risk. Equity securities, defined benefit pension plan equity securities, and mutual funds The fair value of listed equity securities is based upon quoted market values. Investments in actively traded mutual funds are based on their published net asset values. AFS and HTM investments and defined benefit pension plan fixed income securities The fair values for AFS investments are generally sourced from third parties. The fair value of fixed income securities is based upon quoted market values where available, “evaluated bid” prices provided by third party pricing services (“pricing services”) where quoted market values are not available, or by reference to broker or underwriter bid indications where pricing services do not provide coverage for a particular security. To the extent the Bank believes current trading conditions represent distressed transactions, the Bank may elect to utilize internally generated models. The pricing services typically use market approaches for valuations using primarily Level 2 inputs (in the vast majority of valuations), or some form of discounted cash flow analysis. Pricing services indicate that they will only produce an estimate of fair value if there is objectively verifiable information available to produce a valuation. Standard inputs to the valuations provided by the pricing services listed in approximate order of priority for use when available include: reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data. The pricing services may prioritize inputs differently on any given day for any security, and not all inputs listed are available for use in the evaluation process on any given day for each security evaluation. However, the pricing services also monitor market indicators and industry and economic events. When these inputs are not available, pricing services identify “buckets” of similar securities (allocated by asset class types, sectors, sub-sectors, contractual cash flows/structure, and credit rating characteristics) and apply some form of matrix or other modeled pricing to determine an appropriate security value which represents their best estimate as to what a buyer in the marketplace would pay for a security in a current sale. It is common industry practice to utilize pricing services as a source for determining the fair values of investments where the pricing services are able to obtain sufficient market corroborating information to allow them to produce a valuation at a reporting date. In addition, in the majority of cases, although a value may be obtained from a particular pricing service for a security or class of similar securities, these values are corroborated against values provided by other pricing services. While the Bank receives values for the majority of the investment securities it holds from pricing services, it is ultimately management’s responsibility to determine whether the values received and recorded in the financial statements are representative of appropriate fair value measurements. Broker/dealer quotations are used to value investments with fixed maturities where prices are unavailable from pricing services due to factors specific to the security such as limited liquidity, lack of current transactions, or trades only taking place in privately negotiated transactions. These are considered Level 3 valuations, as significant inputs utilized by brokers may be difficult to corroborate with observable market data, or sufficient information regarding the specific inputs utilized by the broker was not available to support a Level 2 classification. For disclosure purposes, HTM investments are fair valued using the same methods described above. Loans The majority of loans are variable rate and re-price in response to changes in market rates and hence management estimates that the fair value of loans is not significantly different than their carrying amount. For significant fixed-rate loan exposures, fair value is estimated by discounting the future cash flows, using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities, of such loans. Management includes the effects of any credit losses recorded against individual loans, which factors in a loan's credit quality, as well as accrued interest in determining the fair value of loans. Accrued interest The carrying amounts of accrued interest receivable and payable are assumed to approximate their fair values given their short-term nature. OREO OREO assets are carried at the lower of cost or fair value less estimated costs to sell. The determination of fair value, which aims at estimating the realizable value of the properties, is based either on third-party appraisals, when available, or on internal valuation models. Appraisals of OREO properties are updated on an annual basis. Where the fair value of the related property is based on an unadjusted appraised value, the OREO is generally classified as Level 2. Where significant adjustments are made to the appraised value, or based on an internally generated valuation model, the OREO is generally classified as Level 3. Deposits The fair value of fixed-rate deposits has been estimated by discounting the contractual cash flows, using market interest rates offered at the balance sheet date for deposits of similar terms. The carrying amount of deposits with no stated maturity date is deemed to equate to the fair value. Long-term debt The fair value of the long-term debt has been estimated by discounting the contractual cash flows, using current market interest rates. Derivatives Derivative contracts can be exchange traded or over-the-counter (“OTC”) derivative contracts and may include forward, swap and option contracts relating to interest rates or foreign currencies. Exchange-traded derivatives typically fall within Level 1 of the fair value hierarchy depending on whether they are deemed to be actively traded or not. OTC derivatives are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, model calibration to market clearing transactions, broker or dealer quotations or alternative pricing sources where an understanding of the inputs utilized in arriving at the valuations is obtained. Where models are used, the selection of a particular model to value an OTC derivative depends upon the contractual terms and specific risks inherent in the instrument as well as the availability of pricing information in the market. The Bank generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit curves, measures of volatility, prepayment rates and correlations of such inputs. For OTC derivatives that trade in liquid markets, such as generic forwards, interest rate swaps and options, model inputs can generally be verified and model selection does not involve significant management judgment. Goodwill The fair value of reporting units for which goodwill is recognized is determined when an impairment assessment is performed by discounting estimated future cash flows using discount rates reflecting valuation-date market conditions and risks specific to the reporting unit. |
Impairment or Disposal of Long-Lived Assets | Impairment or Disposal of Long-Lived AssetsImpairment losses are recognized when the carrying amount of a long-lived asset exceeds the sum of the undiscounted cash flows expected from its use and disposal. The impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Long-lived assets that are to be disposed of other than by sale are classified and accounted for as held for use until the date of disposal or abandonment. Assets that meet certain criteria are classified as held for sale and are measured at the lower of their carrying amounts or fair value less estimated costs to sell. |
Credit-Related Arrangements | Credit-Related Arrangements In the normal course of business, the Bank enters into various commitments to meet the credit requirements of its customers. Such commitments, which are not included in the consolidated balance sheet, include: • commitments to extend credit, which represent undertakings to make credit available in the form of loans or other financing for specific amounts and maturities, subject to certain conditions; • standby letters of credit, which represent irrevocable obligations to make payments to third parties in the event that the customer is unable to meet its financial obligations; and, • documentary and commercial letters of credit, related primarily to the import of goods by customers, which represent agreements to honor drafts presented by third parties upon completion of specific activities. These credit arrangements are subject to the Bank's normal credit standards and collateral is obtained where appropriate. The contractual amounts for these commitments set out in the table in Note 12 represent the maximum payments the Bank would have to make should the contracts be fully drawn, the counterparty default, and any collateral held prove to be of no value. As many of these arrangements will expire or terminate without being drawn upon or are fully collateralized, the contractual amounts do not necessarily represent future cash requirements. The Bank does not carry any liability for these obligations. |
Income Taxes | Income Taxes The Bank uses the asset and liability method of accounting for income taxes. Under this method, deferred income taxes reflect the net tax effect of temporary differences between the consolidated financial statements' carrying amounts of assets and liabilities and their respective tax bases. Accordingly, a deferred income tax asset or liability is determined for each temporary difference based on the enacted tax rates to be in effect on the expected reversal date of the temporary difference. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Bank records net deferred tax assets to the extent the Bank believes these assets will more likely than not be realized. Net deferred income tax assets or liabilities accumulated as a result of temporary differences are included in other assets or other liabilities, respectively. A valuation allowance is established to reduce deferred income tax assets to the amount more likely than not to be realized. In making such a determination, the Bank considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the event the Bank were to determine that it would be able to realize the deferred income tax assets in the future in excess of their net recorded amount, the Bank would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Bank records uncertain tax positions on the basis of a two-step process whereby (1) the Bank determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) where those tax positions that meet the more-likely-than-not recognition threshold, the Bank recognizes the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Income taxes on the consolidated statements of operations include the current and deferred portions of the income taxes. The Bank recognizes accrued interest and penalties related to income taxes in operating expenses. Income taxes applicable to items charged or credited directly to shareholders’ equity are included in such items. |
Earnings Per Share | Earnings Per ShareEarnings per share have been calculated using the weighted average number of common shares outstanding during the year (see also Note 20: Earnings per share). In periods when basic earnings per share is positive, the dilutive effect of share-based compensation plans is calculated using the treasury stock method, whereby the proceeds received from the exercise of share-based awards are assumed to be used to repurchase outstanding common shares, using the quarterly average market price of the Bank’s shares for the period. |
New Accounting Pronouncements | New Accounting Pronouncements The following accounting developments were issued during the year ended December 31, 2020 or are accounting standards pending adoption: In January 2020, the Financial Accounting Standards Board (“FASB”) published ASU 2020-01 Clarifying the Interactions between Topic 321 (Investments-Equity Securities), Topic 323 (Investments-Equity Method and Joint Ventures), and Topic 815 (Derivatives and Hedging). The amendments in this update are effective for the Bank for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Bank does not anticipate this ASU to have a material impact on its consolidated financial statements. In March 2020 and January 2021, respectively, the FASB published ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and ASU 2021-01 Reference Rate Reform (Topic 848): Scope. The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met and are effective for the Bank upon issuance (March 12, 2020) through December 31, 2022. The amendments to ASU 2021-01 clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition, specifically derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. The Bank may elect to apply the amendments in ASU 2021-01 on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final Update, up to the date that financial statements are available to be issued. The Bank has elected to early adopt ASU 2021-01. These ASUs have not had a material impact on the Bank's consolidated financial statements. In October 2020, the FASB published ASU 2020-08-Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs. The amendments in this update clarify that an entity should re-evaluate whether a callable debt security is within the scope of paragraph 310-20-35-33 for each reporting period. The amendments in this update are effective for the Bank for fiscal years, beginning after December 15, 2020, and interim periods within those fiscal years. The Bank does not anticipate this ASU to have a material impact on its consolidated financial statements. In October 2020, the FASB published ASU 2020-10-Codification Improvements which is intended to conform, clarify, simplify, and/or provide technical corrections to a wide variety of codification topics, including moving certain presentation and disclosure guidance to the appropriate codification section. The amendments in Sections B and C of this update are effective for the Bank for annual periods beginning after December 15, 2020. The Bank does not anticipate this ASU to have a material impact on its consolidated financial statements. |
Fair Value of Financial Instruments | Management reviews the price of each security monthly, comparing market values to expectations and to the prior month’s price. Management's expectations are based upon knowledge of prevailing market conditions and developments relating to specific issuers and/or asset classes held in the investment portfolio. Where there are unusual or significant price movements, or where a certain asset class has performed out-of-line with expectations, the matter is reviewed by management. Financial instruments in Level 1 include actively traded redeemable mutual funds. Financial instruments in Level 2 include government debt securities, corporate debt securities, mortgage-backed securities and other asset-backed securities, forward foreign exchange contracts and mutual funds not actively traded. Financial instruments in Level 3 include asset-backed securities for which the market is relatively illiquid and for which information about actual trading prices is not readily available. |
Cash due from banks (Tables)
Cash due from banks (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash due from banks | December 31, 2020 December 31, 2019 Non-interest bearing Cash and demand deposits with banks 133,363 88,031 Interest bearing¹ Demand deposits with banks 433,511 839,320 Cash equivalents 2,722,718 1,622,719 Sub-total - Interest bearing 3,156,229 2,462,039 Total cash due from banks 3,289,592 2,550,070 ¹ Interest bearing cash due from banks includes certain demand deposits with banks as at December 31, 2020 in the amount of $156.2 million (December 31, 2019: $439.5 million) that are earning interest at a negligible rate. |
Short-term investments (Tables)
Short-term investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of short-term investments | December 31, 2020 December 31, 2019 Unrestricted Maturing within three months 469,580 594,749 Maturing between three to six months 326,836 591,212 Maturing between six to twelve months 1,717 2,584 Total unrestricted short-term investments 798,133 1,188,545 Affected by drawing restrictions related to minimum reserve and derivative margin requirements Non-interest earning demand deposits 260 2,270 Interest earning demand and term deposits 24,646 27,565 Total restricted short-term investments 24,906 29,835 Total short-term investments 823,039 1,218,380 |
Investment in securities (Table
Investment in securities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of marketable securities | December 31, 2020 December 31, 2019 Amortized Gross Gross Fair value Amortized Gross Gross Fair value Equity securities Mutual funds 5,274 2,531 (488) 7,317 5,724 2,142 (447) 7,419 Total equity securities 5,274 2,531 (488) 7,317 5,724 2,142 (447) 7,419 Available-for-sale US government and federal agencies 2,493,659 72,713 (306) 2,566,066 2,040,171 18,617 (6,342) 2,052,446 Non-US governments debt securities 22,797 — (389) 22,408 26,118 82 (524) 25,676 Asset-backed securities - Student loans 13,290 — (345) 12,945 13,290 — (399) 12,891 Residential mortgage-backed securities 58,589 1,108 — 59,697 128,952 654 (278) 129,328 Total available-for-sale 2,588,335 73,821 (1,040) 2,661,116 2,208,531 19,353 (7,543) 2,220,341 Held-to-maturity¹ US government and federal agencies 2,194,371 110,526 (141) 2,304,756 2,208,663 47,814 (490) 2,255,987 Total held-to-maturity 2,194,371 110,526 (141) 2,304,756 2,208,663 47,814 (490) 2,255,987 In the following tables, debt securities with unrealized losses that are not deemed to be credit impaired and for which an allowance for credit losses has not been recorded are categorized as being in a loss position for "less than 12 months" or "12 months or more" based on the point in time that the fair value most recently declined below the amortized cost basis. Less than 12 months 12 months or more December 31, 2020 Fair Gross Fair Gross Total Total gross Available-for-sale securities with unrealized losses US government and federal agencies 120,599 (279) 236 (27) 120,835 (306) Non-US governments debt securities 15 — 22,393 (389) 22,408 (389) Asset-backed securities - Student loans — — 12,945 (345) 12,945 (345) Total available-for-sale securities with unrealized losses 120,614 (279) 35,574 (761) 156,188 (1,040) Held-to-maturity securities with unrealized losses US government and federal agencies 36,079 (141) — — 36,079 (141) Less than 12 months 12 months or more December 31, 2019 Fair Gross Fair Gross Total Total gross Available-for-sale securities with unrealized losses US government and federal agencies 376,262 (1,786) 435,999 (4,556) 812,261 (6,342) Non-US governments debt securities 202 (1) 22,246 (523) 22,448 (524) Asset-backed securities - Student loans — — 12,891 (399) 12,891 (399) Residential mortgage-backed securities 6,038 (30) 50,254 (248) 56,292 (278) Total available-for-sale securities with unrealized losses 382,502 (1,817) 521,390 (5,726) 903,892 (7,543) Held-to-maturity securities with unrealized losses US government and federal agencies 47,038 (214) 46,411 (276) 93,449 (490) December 31, 2020 December 31, 2019 Pledged Investments Amortized Fair Amortized Fair Available-for-sale 1,387 1,456 3,848 3,912 Held-to-maturity 2,460 2,623 5,449 5,552 |
Summary of investments maturities | The following table presents the remaining term to contractual maturity of the Bank’s securities. The actual maturities may differ as certain securities offer prepayment options to the borrowers. Remaining term to maturity December 31, 2020 Within 3 to 12 1 to 5 5 to 10 Over No specific or single Carrying Available-for-sale US government and federal agencies — — — — — 2,566,066 2,566,066 Non-US governments debt securities 15 — 22,393 — — — 22,408 Asset-backed securities - Student loans — — — — — 12,945 12,945 Residential mortgage-backed securities — — — — — 59,697 59,697 Total available-for-sale 15 — 22,393 — — 2,638,708 2,661,116 Held-to-maturity US government and federal agencies — — — — — 2,194,371 2,194,371 |
Schedule of sale proceeds and realized gains and losses of AFS securities | Sale Proceeds and Realized Gains and Losses of AFS Securities Year ended December 31, 2020 December 31, 2019 December 31, 2018 Sale proceeds Gross realized gains Gross realized Sale Gross realized Gross realized Sale Gross realized Gross realized US government and federal agencies 349,699 1,171 (55) 35,001 115 — 812,720 1,599 (1,263) Non-US governments debt securities 3,266 104 — — — — — — — Corporate debt securities — — — 64,787 49 (141) 24,975 — (87) Commercial mortgage-backed securities — — — 124,545 901 (272) 15,260 — (354) Pass-through note — — — 972 972 — 1,205 1,205 — Total 352,965 1,275 (55) 225,305 2,037 (413) 854,160 2,804 (1,704) |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of financing receivable credit quality indicators | The amortized cost of loans by credit quality classifications and allowance for expected credit losses by class of loans is as follows: December 31, 2020 Pass Special Substandard Non-accrual Total amortized cost Allowance for expected credit losses Total net loans Commercial loans Government 279,417 — — — 279,417 (1,453) 277,964 Commercial and industrial 422,616 5,841 1,082 18,226 447,765 (9,926) 437,839 Commercial overdrafts 70,324 1,686 451 1 72,462 (230) 72,232 Total commercial loans 772,357 7,527 1,533 18,227 799,644 (11,609) 788,035 Commercial real estate loans Commercial mortgage 627,512 79,168 2,362 6,300 715,342 (847) 714,495 Construction 4,950 39,870 — — 44,820 (1,257) 43,563 Total commercial real estate loans 632,462 119,038 2,362 6,300 760,162 (2,104) 758,058 Consumer loans Automobile financing 22,491 52 — 127 22,670 (103) 22,567 Credit card 68,025 — 234 — 68,259 (2,795) 65,464 Overdrafts 23,934 1,127 — 2 25,063 (162) 24,901 Other consumer 1 112,466 1,031 215 1,048 114,760 (1,416) 113,344 Total consumer loans 226,916 2,210 449 1,177 230,752 (4,476) 226,276 Residential mortgage loans 3,212,218 61,499 83,846 46,787 3,404,350 (15,909) 3,388,441 Total 4,843,953 190,274 88,190 72,491 5,194,908 (34,098) 5,160,810 1 Other consumer loans’ amortized cost comprises $54 million of cash and portfolio secured lending and $45 million of lending secured by buildings in construction or other collateral. Evaluation of gross loans for impairment December 31, 2019 Pass Special Substandard Non-accrual Total amortized General and specific allowances Total net loans Individually Collectively Commercial loans Government 370,753 — — — 370,753 — 370,753 — 370,753 Commercial and industrial 469,591 57,438 1,119 7,567 535,715 (7,195) 528,520 48,386 487,329 Commercial overdrafts 23,529 4,565 451 2 28,547 (86) 28,461 2 28,545 Total commercial loans 863,873 62,003 1,570 7,569 935,015 (7,281) 927,734 48,388 886,627 Commercial real estate loans Commercial mortgage 581,450 71,638 2,955 3,250 659,293 (1,496) 657,797 9,871 649,422 Construction 91,812 — 3,128 — 94,940 — 94,940 3,128 91,812 Total commercial real estate loans 673,262 71,638 6,083 3,250 754,233 (1,496) 752,737 12,999 741,234 Consumer loans Automobile financing 21,229 78 — 155 21,462 (102) 21,360 155 21,307 Credit card 87,250 — 424 — 87,674 (445) 87,229 — 87,674 Overdrafts 5,270 2,504 50 34 7,858 (28) 7,830 34 7,824 Other consumer 1 135,534 3,550 — 1,063 140,147 (927) 139,220 1,070 139,077 Total consumer loans 249,283 6,132 474 1,252 257,141 (1,502) 255,639 1,259 255,882 Residential mortgage loans 3,019,105 80,135 82,251 38,330 3,219,821 (13,309) 3,206,512 115,535 3,104,285 Total 4,805,523 219,908 90,378 50,401 5,166,210 (23,588) 5,142,622 178,181 4,988,028 1 Other consumer loans’ amortized cost comprises $74 million of cash and portfolio secured lending and $48 million of lending secured by buildings in construction or other collateral. Based on the most recent analysis performed, the amortized cost of loans by year of origination and credit quality indicator is as follows: December 31, 2020 Pass Special Substandard Non-accrual Total amortized cost Loans by origination year 2020 683,821 18,789 — 70 702,680 2019 1,026,634 27,575 181 4 1,054,394 2018 684,716 65,570 559 1,407 752,252 2017 624,332 2,381 3,245 11,910 641,868 2016 447,293 2,073 7,993 4,939 462,298 Prior 1,183,869 69,934 75,466 52,174 1,381,443 Overdrafts and credit cards 193,288 3,952 746 1,987 199,973 Total amortized cost 4,843,953 190,274 88,190 72,491 5,194,908 |
Schedule of age analysis and past due loans | The following tables summarize the past due status of the loans. The aging of past due amounts are determined based on the contractual delinquency status of payments under the loan and this aging may be affected by the timing of the last business day at period end. Loans less than 30 days past due are included in current loans. December 31, 2020 30 - 59 60 - 89 More than 90 days Total past Total Total Commercial loans Government — — — — 279,417 279,417 Commercial and industrial 109 50 18,176 18,335 429,430 447,765 Commercial overdrafts — — 90 90 72,372 72,462 Total commercial loans 109 50 18,266 18,425 781,219 799,644 Commercial real estate loans Commercial mortgage 710 1,552 4,748 7,010 708,332 715,342 Construction — — — — 44,820 44,820 Total commercial real estate loans 710 1,552 4,748 7,010 753,152 760,162 Consumer loans Automobile financing 55 35 127 217 22,453 22,670 Credit card 480 224 234 938 67,321 68,259 Overdrafts — — 2 2 25,061 25,063 Other consumer 56 3 1,043 1,102 113,658 114,760 Total consumer loans 591 262 1,406 2,259 228,493 230,752 Residential mortgage loans 6,304 4,023 59,957 70,284 3,334,066 3,404,350 Total amortized cost 7,714 5,887 84,377 97,978 5,096,930 5,194,908 December 31, 2019 30 - 59 60 - 89 More than 90 days Total past Total Total Commercial loans Government — — — — 370,753 370,753 Commercial and industrial 276 — 7,487 7,763 527,952 535,715 Commercial overdrafts — — 2 2 28,545 28,547 Total commercial loans 276 — 7,489 7,765 927,250 935,015 Commercial real estate loans Commercial mortgage 445 — 3,250 3,695 655,598 659,293 Construction — — 3,128 3,128 91,812 94,940 Total commercial real estate loans 445 — 6,378 6,823 747,410 754,233 Consumer loans Automobile financing 53 58 135 246 21,216 21,462 Credit card 630 221 424 1,275 86,399 87,674 Overdrafts — — 34 34 7,824 7,858 Other consumer 994 139 1,028 2,161 137,986 140,147 Total consumer loans 1,677 418 1,621 3,716 253,425 257,141 Residential mortgage loans 31,931 9,487 47,132 88,550 3,131,271 3,219,821 Total amortized cost 34,329 9,905 62,620 106,854 5,059,356 5,166,210 |
Schedule of allowance for credit loss | Year ended December 31, 2020 Commercial Commercial Consumer Residential Total Balance at the beginning of period, before change in accounting policy 7,281 1,496 1,502 13,309 23,588 Cumulative effect from change in accounting policy (Note 2) 4,109 1,026 2,506 200 7,841 Provision increase (decrease) 3,832 (418) 1,095 3,803 8,312 Recoveries of previous charge-offs 12 — 1,247 379 1,638 Charge-offs (3,635) — (1,876) (2,043) (7,554) Other 10 — 2 261 273 Allowances for expected credit losses at end of year 11,609 2,104 4,476 15,909 34,098 Year ended December 31, 2019 Commercial Commercial Consumer Residential Total Balance at beginning of period 6,913 4,092 802 13,295 25,102 Provision increase (decrease) 733 (2,596) 1,701 (22) (184) Recoveries of previous charge-offs 9 — 1,186 445 1,640 Charge-offs (374) — (2,193) (449) (3,016) Other — — 6 40 46 General and specific allowances at end of period 7,281 1,496 1,502 13,309 23,588 Allowances at end of period: individually evaluated for impairment 4,904 470 676 11,628 17,678 Allowances at end of period: collectively evaluated for impairment 2,377 1,026 826 1,681 5,910 |
Schedule of non-accrual status for non-performing loans | December 31, 2020 December 31, 2019 Non-accrual loans with an allowance Non-accrual loans without an allowance Past due more than 90 days and accruing Total non- Non-accrual loans with an allowance Non-accrual loans without an allowance Past due more than 90 days and accruing Total non- Commercial loans Commercial and industrial 18,207 19 — 18,226 7,487 80 — 7,567 Commercial overdrafts — 1 89 90 — 2 — 2 Total commercial loans 18,207 20 89 18,316 7,487 82 — 7,569 Commercial real estate loans Commercial mortgage 952 5,348 — 6,300 1,019 2,231 — 3,250 Construction — — — — — — 3,128 3,128 Total commercial real estate loans 952 5,348 — 6,300 1,019 2,231 3,128 6,378 Consumer loans Automobile financing 126 1 — 127 — 155 — 155 Credit card — — 234 234 — — 424 424 Overdrafts — 2 — 2 — 34 — 34 Other consumer 869 179 — 1,048 676 387 — 1,063 Total consumer loans 995 182 234 1,411 676 576 424 1,676 Residential mortgage loans 36,897 9,890 18,788 65,575 29,016 9,314 12,008 50,338 Total non-performing loans 57,051 15,440 19,111 91,602 38,198 12,203 15,560 65,961 |
Schedule of troubled debt restructuring | TDRs entered into during the period Year ended December 31, 2020 Number of contracts Pre-modification recorded loans Modification: interest capitalization Post- Residential mortgage loans 9 5,590 98 5,688 Year ended December 31, 2019 Number of Pre- Modification: interest capitalization Post- Residential mortgage loans 3 1,381 101 1,482 TDRs Outstanding December 31, 2020 December 31, 2019 Accrual Non-accrual Accrual Non-accrual Commercial loans 901 — 939 — Commercial real estate loans 2,362 1,811 2,954 1,315 Residential mortgage loans 61,937 17,129 65,275 9,576 Total TDRs outstanding 65,200 18,940 69,168 10,891 |
Credit risk concentrations (Tab
Credit risk concentrations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Summary of credit exposure | The following table summarizes the credit exposure of the Bank by geographic region. The exposures amounts disclosed below do not include accrued interest and are gross of allowance s for credit losses and gross of collateral hel d. The comparatives have been revised to conform to current year presentation. December 31, 2020 December 31, 2019 Geographic region Cash due from Loans Off-balance Total credit Cash due from Loans Off-balance Total credit Australia 220,871 — — 220,871 170,956 — — 170,956 Belgium 4,271 — — 4,271 3,554 — — 3,554 Bermuda 51,329 2,225,401 323,097 2,599,827 38,059 2,253,969 347,802 2,639,830 Canada 996,213 — — 996,213 553,941 — — 553,941 Cayman 29,480 948,290 396,654 1,374,424 55,360 931,434 208,404 1,195,198 Germany 107,412 — — 107,412 — — — — Guernsey 1 779,915 213,461 993,377 4 856,453 123,376 979,833 Ireland 83,842 — — 83,842 — — — — Japan 6,029 — — 6,029 16,183 — — 16,183 Jersey — 26,773 35,224 61,997 — 7,219 — 7,219 Netherlands — — — — 410,461 — — 410,461 New Zealand 23,463 — — 23,463 6,174 — — 6,174 Norway 57,900 — — 57,900 1,204 — — 1,204 Saint Lucia — — — — — 29,400 — 29,400 Switzerland 4,510 — — 4,510 8,015 — — 8,015 The Bahamas 1,516 12,024 — 13,540 1,607 12,859 — 14,466 United Kingdom 1,291,655 1,202,505 140,663 2,634,823 1,742,676 1,074,876 108,599 2,926,151 United States 1,428,090 — — 1,428,090 898,262 — — 898,262 Other 3,088 — — 3,088 4,277 — — 4,277 Total gross exposure 4,309,670 5,194,908 1,109,099 10,613,677 3,910,733 5,166,210 788,181 9,865,124 |
Premises, equipment and compu_2
Premises, equipment and computer software (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of premise, equipment, and computer software | December 31, 2020 December 31, 2019 Category Cost Accumulated Net carrying Cost Accumulated Net carrying Land 8,730 — 8,730 8,730 — 8,730 Buildings 164,171 (71,721) 92,450 156,756 (66,370) 90,386 Equipment 25,150 (15,930) 9,220 22,928 (17,062) 5,866 Computer hardware and software in use 197,165 (161,801) 35,364 189,380 (144,236) 45,144 Computer software in development 4,988 — 4,988 8,107 — 8,107 Total 400,204 (249,452) 150,752 385,901 (227,668) 158,233 Year ended Depreciation charged to operating expenses December 31, 2020 December 31, 2019 December 31, 2018 Buildings (included in Property expense) 5,511 4,492 4,283 Equipment (included in Property expense) 1,929 1,524 1,413 Computer hardware and software (included in Technology and communication expense) 21,773 20,620 20,441 Total depreciation charged to operating expenses 29,213 26,636 26,137 |
Goodwill and other intangible_2
Goodwill and other intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Segment Cayman Channel Islands and the UK Other Total Balance at December 31, 2017 — 21,529 — 21,529 Acquisitions during the year 551 1,231 2,086 3,868 Foreign exchange translation adjustment — (1,333) (73) (1,406) Balance at December 31, 2018 551 21,427 2,013 23,991 Foreign exchange translation adjustment — 818 29 847 Balance at December 31, 2019 551 22,245 2,042 24,838 Foreign exchange translation adjustment — 719 70 789 Balance at December 31, 2020 551 22,964 2,112 25,627 |
Schedule of customer relationship intangible assets | December 31, 2020 December 31, 2019 Segment Cost Accumulated Net carrying Cost Accumulated Net carrying Bermuda 29,785 (15,009) 14,776 29,785 (13,579) 16,206 Cayman 17,728 (6,773) 10,955 17,728 (5,672) 12,056 Channel Islands and the UK 90,069 (53,279) 36,790 90,069 (51,435) 38,634 Other 5,563 (892) 4,671 5,563 (794) 4,769 Total 143,145 (75,953) 67,192 143,145 (71,480) 71,665 |
Customer deposits and deposit_2
Customer deposits and deposits from banks (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deposits [Abstract] | |
Schedule of maturities of deposits | By Maturity Demand Total Term Total December 31, 2020 Non-interest Interest Within 3 3 to 6 6 to 12 After 12 months Total Demand or less than $100k¹ 3,012,360 7,577,642 10,590,002 30,551 8,402 13,138 14,875 66,966 10,656,968 Term - $100k or more N/A N/A — 1,553,178 625,533 330,773 83,632 2,593,116 2,593,116 Total deposits 3,012,360 7,577,642 10,590,002 1,583,729 633,935 343,911 98,507 2,660,082 13,250,084 Demand Total Term Total December 31, 2019 Non-interest Interest Within 3 3 to 6 6 to 12 After 12 months Total Demand or less than $100k¹ 2,238,256 7,152,063 9,390,319 31,666 9,355 13,497 16,478 70,996 9,461,315 Term - $100k or more N/A N/A — 2,402,619 224,945 291,020 61,726 2,980,310 2,980,310 Total deposits 2,238,256 7,152,063 9,390,319 2,434,285 234,300 304,517 78,204 3,051,306 12,441,625 ¹ The weighted-average interest rate on interest-bearing demand deposits as at December 31, 2020 is -0.04% (December 31, 2019: 0.20%). |
Schedule of deposits by type and segment | By Type and Segment December 31, 2020 December 31, 2019 Payable Payable on a Total Payable Payable on a Total Bermuda 4,107,156 705,490 4,812,646 3,145,859 1,265,679 4,411,538 Cayman 3,577,120 531,602 4,108,722 2,995,119 479,848 3,474,967 Channel Islands and the UK 2,905,726 1,422,990 4,328,716 3,249,341 1,305,779 4,555,120 Total deposits 10,590,002 2,660,082 13,250,084 9,390,319 3,051,306 12,441,625 |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Summary of financial position of the Bank’s defined benefit pension plans and the Bank’s post-retirement medical benefits | The following table presents the financial position of the Bank’s defined benefit pension plans and the Bank’s post-retirement medical benefit plan, which is unfunded. The Bank measures the benefit obligations and plan assets annually on each December 31 and therefore, the most recent measurement date is December 31, 2020. December 31, 2020 December 31, 2019 December 31, 2018 Pension Post- Pension Post- Pension Post- Accumulated benefit obligation at end of year 179,018 128,167 168,791 110,347 148,966 117,203 Change in projected benefit obligation Projected benefit obligation at beginning of year 168,791 110,347 148,966 117,203 179,613 127,687 Service cost 43 66 — 58 — 63 Interest cost 3,957 3,270 5,034 4,741 4,971 4,305 Benefits paid (7,412) (4,069) (7,546) (4,010) (17,274) (3,263) Prior service cost 48 — — — 212 — Plan amendment — — — 2,369 — — Settlement and curtailment of liability (7,505) — (2,549) — (1,825) — Actuarial (gain) loss 18,326 18,553 21,950 (10,014) (12,423) (11,589) Foreign exchange translation adjustment 2,770 — 2,936 — (4,308) — Projected benefit obligation at end of year 179,018 128,167 168,791 110,347 148,966 117,203 Change in plan assets Fair value of plan assets at beginning of year 175,400 — 154,151 — 185,495 — Actual return on plan assets 14,945 — 25,225 — (11,618) — Employer contribution 2,917 4,069 2,605 4,010 3,653 3,263 Plan settlement (5,903) (2,043) — (1,608) — Benefits paid (7,412) (4,069) (7,546) (4,010) (17,274) (3,263) Foreign exchange translation adjustment 2,569 — 3,008 — (4,497) — Fair value of plan assets at end of year 182,516 — 175,400 — 154,151 — Amounts recognized in the consolidated balance sheets consist of: Prepaid benefit cost included in other assets 6,610 — 6,609 — 5,185 — Accrued pension benefit cost included in employee benefit plans liability (3,112) (128,167) — (110,347) — (117,203) Surplus (deficit) of plan assets over projected benefit obligation at measurement date 3,498 (128,167) 6,609 (110,347) 5,185 (117,203) |
Schedule of amounts recognized in accumulated other comprehensive loss | Year ended December 31, 2020 December 31, 2019 December 31, 2018 Pension Post- Pension Post- Pension Post- Amounts recognized in accumulated other comprehensive loss consist of: Net actuarial gain (loss), excluding deferred taxes (73,506) (21,213) (67,118) (2,660) (65,506) (12,946) Net prior service credit (cost) (226) (7,866) (190) (8,390) (202) (6,397) Deferred income taxes assets (liabilities) 1,477 — 996 — 816 — Net amount recognized in accumulated other comprehensive loss (72,255) (29,079) (66,312) (11,050) (64,892) (19,343) Annual Benefit Expense Expense component Line item in the consolidated statements of operations Service cost Salaries and other employee benefits 97 66 — 58 — 63 Interest cost Non-service employee benefits expense 3,960 3,270 5,034 4,741 4,971 4,305 Expected return on plan assets Non-service employee benefits expense (7,547) N/A (7,563) — (8,720) — Amortization of net actuarial (gains) losses Non-service employee benefits expense 2,412 — 2,197 272 2,106 2,615 Amortization of prior service (credit) loss Non-service employee benefits expense 21 524 20 376 — 39 (Gain) loss on settlement Net other gains (losses)/Non-service employee benefits expense 1,326 — 572 — 1,757 — Defined benefit (income) expense 269 3,860 260 5,447 114 7,022 Defined contribution expense 8,933 — 8,340 — 7,442 — Total benefit (income) expense 9,202 3,860 8,600 5,447 7,556 7,022 The components of benefit expense (income) other than the service cost component are included in the line item non-service employee benefits expense in the consolidated statements of operations. Other Changes Recognized in Other Comprehensive Income (Loss) Net gain (loss) arising during the year (8,363) (18,553) (3,472) 10,014 (5,987) 11,589 Prior service credit (cost) arising during the year (47) — — (2,369) (212) — Amortization of net actuarial (gains) losses 2,412 — 2,407 272 2,106 2,615 Amortization of prior service (credit) cost 20 524 19 376 — 39 Change in deferred taxes 456 — 149 — (298) — Foreign exchange adjustment (421) — (523) — 840 — Total changes recognized in other comprehensive income (loss) (5,943) (18,029) (1,420) 8,293 (3,551) 14,243 |
Schedule of actuarial assumptions | Actuarial Assumptions Year ended December 31, 2020 December 31, 2019 December 31, 2018 Pension Post- Pension Post- Pension Post- Actuarial assumptions used to determine annual benefit expense Weighted average discount rate 2.65 % 3.38 % 3.65 % 4.40 % 3.05 % 3.73 % Weighted average rate of compensation increases 1 2.30 % N/A 2.50 % N/A 2.50 % N/A Weighted average expected long-term rate of return on plan assets 4.60 % N/A 5.00 % N/A 4.70 % N/A Weighted average annual medical cost increase rate N/A 7.3% to 4.5% in 2040 N/A 7.5% to 4.5% in 2035 N/A 7.7% to 4.5% in 2035 Actuarial assumptions used to determine benefit obligations at end of year Weighted average discount rate 1.90 % 2.53 % 2.65 % 3.38 % 3.65 % 4.40 % Weighted average rate of compensation increases 1 2.20 % N/A 2.30 % N/A 2.50 % N/A Weighted average annual medical cost increase rate N/A 7.2% to 4.5% in 2040 N/A 7.3% to 4.5% in 2040 N/A 7.5% to 4.5% in 2035 1 Only the UK subsidiary plan is impacted by potential future compensation increases. |
Schedule of allocation of plan assets | December 31, 2020 December 31, 2019 Weighted average actual and target asset allocations of the pension plans by asset category Actual Target Actual Target Debt securities (including debt mutual funds) 37 % 30 % 32 % 36 % Equity securities (including equity mutual funds) 50 % 52 % 51 % 47 % Other 13 % 18 % 17 % 17 % Total 100 % 100 % 100 % 100 % The following table presents the fair value of the plans' assets by category and level of inputs used in their respective fair value determination as described in "Note 2: Significant accounting policies", except the level 3 security, for which the valuation determination is described following the below table: December 31, 2020 December 31, 2019 Fair value determination Fair value determination Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total US government and federal agencies — 21,566 — 21,566 — 19,445 — 19,445 Non-US governments debt securities — 1,132 — 1,132 — 1,089 — 1,089 Corporate debt securities — 45,871 — 45,871 — 35,688 — 35,688 Equity securities and mutual funds 925 90,574 — 91,499 1,112 88,631 — 89,743 Other 727 226 21,495 22,448 10,049 406 18,980 29,435 Total fair value of plans' assets 1,652 159,369 21,495 182,516 11,161 145,259 18,980 175,400 |
Schedule of expected benefit payments | Estimated 2021 Bank contribution to and estimated benefit payments for the next ten years under the pension and post-retirement medical benefit plans are as follows: Pension Post- Estimated Bank contributions for the full year ending December 31, 2021 3,000 — Estimated benefit payments by year: 2021 7,400 4,538 2022 7,400 4,763 2023 7,300 4,992 2024 7,200 5,216 2025 7,200 5,447 2026-2030 34,500 30,034 |
Credit-related arrangements, _2
Credit-related arrangements, repurchase agreements and commitments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual obligation, fiscal year maturity schedule | The following table summarizes the Bank's commitments for sourcing, long-term leases and other agreements: Year ending December 31 Sourcing Other Total 2021 13,029 18,638 31,667 2022 — 11,682 11,682 2023 — 5,552 5,552 2024 — 2,490 2,490 2025 — 1,779 1,779 Total commitments 13,029 40,141 53,170 |
Schedule of fair value, off-balance sheet risks | Outstanding unfunded commitments to extend credit December 31, 2020 December 31, 2019 Commitments to extend credit 836,710 549,049 Documentary and commercial letters of credit 981 355 Total unfunded commitments to extend credit 837,691 549,404 Allowance for credit losses (179) — |
Summary of credit-related arrangements | The following table presents the outstanding financial guarantees. Collateral is shown at estimated market value less selling cost. Where the collateral is cash, it is shown gross including accrued income. December 31, 2020 December 31, 2019 Outstanding financial guarantees Gross Collateral Net Gross Collateral Net Standby letters of credit 265,959 258,699 7,260 230,971 223,711 7,260 Letters of guarantee 5,449 5,413 36 7,806 7,672 134 Total 271,408 264,112 7,296 238,777 231,383 7,394 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Summary of lease costs | Year ended December 31, 2020 December 31, 2019 Lease costs Operating lease costs 7,932 6,606 Short-term lease costs 1,500 858 Sublease income (1,205) (534) Total net lease cost 8,227 6,930 Operating lease income 940 677 Other information for the period Right-of-use assets related to new operating lease liabilities 323 28,703 Operating cash flows from operating leases 8,330 7,071 Year ended Other information at end of period December 31, 2020 December 31, 2019 Operating leases right-of-use assets (included in other assets on the balance sheets) 46,244 47,947 Operating lease liabilities (included in other liabilities on the balance sheets) 44,940 48,334 Weighted average remaining lease term for operating leases (in years) 10.14 10.37 Weighted average discount rate for operating leases 5.25 % 5.25 % |
Summary of lessee operating lease liability maturity | The following table summarizes the maturity analysis of the Bank's commitments for long-term leases as at December 31, 2020: Year ending December 31 Operating Leases 2021 8,319 2022 8,111 2023 6,980 2024 6,247 2025 3,870 2026 & thereafter 24,793 Total commitments 58,320 Less: effect of discounting cash flows to their present value (13,380) Operating lease liabilities 44,940 |
Loan interest income (Tables)
Loan interest income (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Summary of interest and other income | Year ended December 31, 2020 December 31, 2019 December 31, 2018 Contractual interest earned 224,474 228,892 213,908 Amortization Amortization of fair value hedge (300) (316) (501) Amortization of loan origination fees (net of amortized costs) 5,436 5,456 5,088 Amortization of fair value adjustment on purchased loans 1,046 — — Total loan interest income 230,656 234,032 218,495 Balance of unamortized fair value hedge included in loans as at year end 1,376 1,676 1,992 Balance of unamortized loan fees included in loans as at year end 12,204 11,628 10,010 |
Segmented information (Tables)
Segmented information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Total Assets by Segment December 31, 2020 December 31, 2019 Bermuda 5,924,779 5,220,016 Cayman 4,479,937 3,839,074 Channel Islands and the UK 4,826,671 5,108,357 Other 32,928 35,148 Total assets before inter-segment eliminations 15,264,315 14,202,595 Less: inter-segment eliminations (525,681) (281,020) Total 14,738,634 13,921,575 2020 Net interest income Provision for credit recoveries (losses) Non-interest Net revenue Gains and Total net revenue Total Net income Year ended December 31 Customer Inter- segment Bermuda 158,790 778 (8,750) 85,216 236,034 1,970 238,004 192,781 45,223 Cayman 94,211 1,149 483 49,294 145,137 491 145,628 62,605 83,023 Channel Islands and the UK 64,591 (1,927) (224) 40,698 103,138 (1,238) 101,900 82,057 19,843 Other 7 — — 14,384 14,391 (1) 14,390 15,262 (872) Total before eliminations 317,599 — (8,491) 189,592 498,700 1,222 499,922 352,705 147,217 Inter-segment eliminations — — — (5,733) (5,733) — (5,733) (5,733) — Total 317,599 — (8,491) 183,859 492,967 1,222 494,189 346,972 147,217 2019 Net interest income Provision for credit recoveries (losses) Non-interest Net revenue Gains and Total net revenue Total Net income Year ended December 31 Customer Inter- segment Bermuda 182,674 1,236 (3,088) 89,114 269,936 2,172 272,108 209,417 62,691 Cayman 113,493 1,071 1,893 51,853 168,310 570 168,880 61,057 107,823 Channel Islands and the UK 49,486 (2,307) 1,379 34,319 82,877 43 82,920 74,217 8,703 Other 49 — — 22,119 22,168 (18) 22,150 24,292 (2,142) Total before eliminations 345,702 — 184 197,405 543,291 2,767 546,058 368,983 177,075 Inter-segment eliminations — — — (13,430) (13,430) — (13,430) (13,430) — Total 345,702 — 184 183,975 529,861 2,767 532,628 355,553 177,075 2018 Net interest income Provision for credit recoveries (losses) Non-interest Net revenue Gains and Total net revenue Total Net income Year ended December 31 Customer Inter- segment Bermuda 202,901 2,383 6,823 87,352 299,459 (20) 299,439 202,318 97,121 Cayman 102,793 416 1,297 47,781 152,287 349 152,636 60,666 91,970 Channel Islands and the UK 37,276 (2,799) (1,129) 26,824 60,172 (1,185) 58,987 50,353 8,634 Other 19 — — 15,157 15,176 1 15,177 17,718 (2,541) Total before eliminations 342,989 — 6,991 177,114 527,094 (855) 526,239 331,055 195,184 Inter-segment eliminations — — — (8,428) (8,428) — (8,428) (8,428) — Total 342,989 — 6,991 168,686 518,666 (855) 517,811 322,627 195,184 |
Derivative instruments and ri_2
Derivative instruments and risk management (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts and related fair value measurements of derivative instruments | The following table shows the aggregate notional amounts of derivative contracts outstanding listed by type and respective gross positive or negative fair values and classified by those used for risk management (sub-classified as hedging and those that do not qualify for hedge accounting), client services and credit derivatives. Fair value of derivatives is recorded in the consolidated balance sheets in other assets and other liabilities. Gross positive fair values are recorded in other assets and gross negative fair values are recorded in other liabilities, subject to netting when master netting agreements are in place. December 31, 2020 Derivative instrument Number of contracts Notional Gross Gross Net Risk management derivatives Net investment hedges Currency swaps 4 68,231 — (4,586) (4,586) Fair value hedges Currency swaps 5 197,987 4,039 — 4,039 Derivatives not formally designated as hedging instruments Currency swaps 42 1,471,632 2,678 (21,239) (18,561) Subtotal risk management derivatives 1,737,850 6,717 (25,825) (19,108) Client services derivatives Spot and forward foreign exchange 241 770,113 7,128 (6,862) 266 Total derivative instruments 2,507,963 13,845 (32,687) (18,842) December 31, 2019 Derivative instrument Number of contracts Notional Gross Gross Net Risk management derivatives Net investment hedges Currency swaps 1 9,502 — (118) (118) Derivatives not formally designated as hedging instruments Currency swaps 9 207,032 1,632 (1,339) 293 Subtotal risk management derivatives 216,534 1,632 (1,457) 175 Client services derivatives Spot and forward foreign exchange 352 3,280,636 31,060 (30,602) 458 Total derivative instruments 3,497,170 32,692 (32,059) 633 |
Schedule of offsetting assets | The Bank also elected not to offset certain derivative assets or liabilities and all collateral received or paid that the Bank or the counterparties could legally offset in the event of default. In the tables below, these positions are deducted from the net fair value presented in the consolidated balance sheets in order to present the net exposures. The collateral values presented in the following table are limited to the related net derivative asset or liability balance and, accordingly, do not include excess collateral received or paid. Gross fair Less: offset Net fair value Less: positions not offset in the consolidated balance sheets December 31, 2020 Gross fair value of derivatives Cash collateral received / paid Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 13,845 (7,153) 6,692 — (3) 6,689 Derivative liabilities Spot and forward foreign exchange and currency swaps 32,687 (7,153) 25,534 — (3,042) 22,492 Net negative fair value (18,842) Gross fair Less: offset Net fair value Less: positions not offset in the consolidated balance sheets December 31, 2019 Gross fair value of derivatives Cash collateral Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 32,692 (2,233) 30,459 — (3,224) 27,235 Derivative liabilities Spot and forward foreign exchange and currency swaps 32,059 (2,233) 29,826 — (997) 28,829 Net positive fair value 633 |
Schedule of offsetting liabilities | The Bank also elected not to offset certain derivative assets or liabilities and all collateral received or paid that the Bank or the counterparties could legally offset in the event of default. In the tables below, these positions are deducted from the net fair value presented in the consolidated balance sheets in order to present the net exposures. The collateral values presented in the following table are limited to the related net derivative asset or liability balance and, accordingly, do not include excess collateral received or paid. Gross fair Less: offset Net fair value Less: positions not offset in the consolidated balance sheets December 31, 2020 Gross fair value of derivatives Cash collateral received / paid Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 13,845 (7,153) 6,692 — (3) 6,689 Derivative liabilities Spot and forward foreign exchange and currency swaps 32,687 (7,153) 25,534 — (3,042) 22,492 Net negative fair value (18,842) Gross fair Less: offset Net fair value Less: positions not offset in the consolidated balance sheets December 31, 2019 Gross fair value of derivatives Cash collateral Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 32,692 (2,233) 30,459 — (3,224) 27,235 Derivative liabilities Spot and forward foreign exchange and currency swaps 32,059 (2,233) 29,826 — (997) 28,829 Net positive fair value 633 |
Schedule of location and amount of gains (losses) recorded in either the consolidated statements of operations or consolidated statements of comprehensive income on derivative instruments outstanding | The following tables show the location and amount of gains (losses) recorded in either the consolidated statements of operations or consolidated statements of comprehensive income on derivative instruments outstanding. Year ended Derivative instrument Consolidated statements of operations line item December 31, 2020 December 31, 2019 December 31, 2018 Spot and forward foreign exchange Foreign exchange revenue (191) (202) (25) Currency swaps, not designated as hedge Foreign exchange revenue (18,854) 592 1,697 Currency swaps - fair value hedges Foreign exchange revenue 4,039 — — Total net gains (losses) recognized in net income (15,006) 390 1,672 Derivative instrument Consolidated statements of comprehensive income line item December 31, 2020 December 31, 2019 December 31, 2018 Currency swaps - net investment hedge Net change in unrealized gains and (losses) on translation of net investment in foreign operations (4,469) (85) — Total net gains (losses) recognized in comprehensive income (4,469) (85) — |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities measured at fair value | December 31, 2020 December 31, 2019 Fair value Total carrying Fair value Total carrying Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Items that are recognized at fair value on a recurring basis: Financial assets Equity securities Mutual funds 7,081 236 — 7,317 7,141 278 — 7,419 Total equity securities 7,081 236 — 7,317 7,141 278 — 7,419 Available-for-sale investments US government and federal agencies — 2,566,066 — 2,566,066 — 2,052,446 — 2,052,446 Non-US governments debt securities — 22,408 — 22,408 — 25,676 — 25,676 Asset-backed securities - Student loans — — 12,945 12,945 — — 12,891 12,891 Residential mortgage-backed securities — 59,697 — 59,697 — 129,328 — 129,328 Total available-for-sale — 2,648,171 12,945 2,661,116 — 2,207,450 12,891 2,220,341 Other assets - Derivatives — 6,692 — 6,692 — 30,459 — 30,459 Financial liabilities Other liabilities - Derivatives — 25,534 — 25,534 — 29,826 — 29,826 |
Schedule of level 3 reconciliation | The table below summarizes realized and unrealized gains and losses for Level 3 assets still held at the reporting date. December 31, 2020 December 31, 2019 December 31, 2018 Available- Available- Available- Carrying amount at beginning of year 12,891 12,626 12,493 Realized and unrealized gains (losses) recognized in other comprehensive income 54 265 133 Carrying amount at end of year 12,945 12,891 12,626 Cumulative gain (loss) recognized in other comprehensive income (345) (399) (664) |
Items other than those recognized at fair value on a recurring basis | Items Other Than Those Recognized at Fair Value on a Recurring Basis: December 31, 2020 December 31, 2019 Level Carrying Fair Appreciation / Carrying Fair Appreciation / Financial assets Cash due from banks Level 1 3,289,592 3,289,592 — 2,550,070 2,550,070 — Securities purchased under agreements to resell Level 2 197,039 197,039 — 142,283 142,283 — Short-term investments Level 1 823,039 823,039 — 1,218,380 1,218,380 — Investments held-to-maturity Level 2 2,194,371 2,304,756 110,385 2,208,663 2,255,987 47,324 Loans, net of allowance for credit losses Level 2 5,160,810 5,193,240 32,430 5,142,622 5,161,257 18,635 Other real estate owned¹ Level 2 4,052 4,052 — 3,842 3,842 — Financial liabilities Term deposits Level 2 2,660,082 2,665,463 (5,381) 3,051,306 3,054,813 (3,507) Long-term debt Level 2 171,462 170,086 1,376 143,500 147,574 (4,074) ¹ The current carrying value of OREO is adjusted to fair value only when there is devaluation below carrying value. |
Interest rate risk (Tables)
Interest rate risk (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Assets, liabilities and shareholders' equity and off-balance sheet instruments on the date of the earlier of contractual maturity, expected maturity or repricing date | The following tables set out the assets, liabilities and shareholders' equity on the date of the earlier of contractual maturity, expected maturity or repricing date. Use of these tables to derive information about the Bank’s interest rate risk position is limited by the fact that customers may choose to terminate their financial instruments at a date earlier than the contractual maturity or repricing date. Examples of this include fixed-rate mortgages, which are shown at contractual maturity but which may pre-pay earlier, and certain term deposits, which are shown at contractual maturity but which may be withdrawn before their contractual maturity subject to prepayment penalties. Investments are shown based on remaining contractual maturities. The remaining contractual principal maturities for mortgage-backed securities (primarily US government agencies) do not consider prepayments. Remaining expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations before the underlying mortgages mature. December 31, 2020 Earlier of contractual maturity or repricing date (in $ millions) Within 3 3 to 6 6 to 12 1 to 5 After Non-interest Total Assets Cash due from banks 3,156 — — — — 134 3,290 Securities purchased under agreement to resell 197 — — — — — 197 Short-term investments 494 327 2 — — — 823 Investments 13 13 27 92 4,711 7 4,863 Loans 4,170 39 71 652 187 42 5,161 Other assets — — — — — 405 405 Total assets 8,030 379 100 744 4,898 588 14,739 Liabilities and shareholders' equity Shareholders’ equity — — — — — 982 982 Demand deposits 7,578 — — — — 3,012 10,590 Term deposits 1,584 634 344 99 — — 2,661 Other liabilities — — — — — 335 335 Long-term debt — — — 171 — — 171 Total liabilities and shareholders' equity 9,162 634 344 270 — 4,329 14,739 Interest rate sensitivity gap (1,132) (255) (244) 474 4,898 (3,741) — Cumulative interest rate sensitivity gap (1,132) (1,387) (1,631) (1,157) 3,741 — — December 31, 2019 Earlier of contractual maturity or repricing date (in $ millions) Within 3 3 to 6 6 to 12 1 to 5 After Non-interest Total Assets Cash due from banks 2,462 — — — — 88 2,550 Securities purchased under agreement to resell 142 — — — — — 142 Short-term investments 622 591 3 — — 2 1,218 Investments 415 23 11 102 3,878 7 4,436 Loans 4,025 16 148 292 648 14 5,143 Other assets — — — — — 433 433 Total assets 7,666 630 162 394 4,526 544 13,922 Liabilities and shareholders' equity Shareholders’ equity — — — — — 964 964 Demand deposits 7,151 — — — — 2,239 9,390 Term deposits 2,435 234 305 78 — — 3,052 Other liabilities — — — — — 373 373 Long-term debt 70 — — 73 — — 143 Total liabilities and shareholders' equity 9,656 234 305 151 — 3,576 13,922 Interest rate sensitivity gap (1,990) 396 (143) 243 4,526 (3,032) — Cumulative interest rate sensitivity gap (1,990) (1,594) (1,737) (1,494) 3,032 — — |
Long-term debt (Tables)
Long-term debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of maturities of long-term debt | The following table presents the contractual maturity and interest payments for long-term debt issued by the Bank as at December 31, 2020. The interest payments are calculated until contractual maturity using the current LIBOR and Secured Overnight Financing Rate ("SOFR"). Interest payments until contractual maturity Long-term debt Earliest date redeemable at the Bank's option Contractual maturity date Interest rate until date redeemable Interest rate from earliest date redeemable to contractual maturity Principal Outstanding Within 1 to 5 After Bermuda 2018 issuance June 1, 2023 June 1, 2028 5.25 % 3 months US$ LIBOR + 2.255% 75,000 3,938 10,654 4,743 2020 issuance June 15, 2025 June 15, 2030 5.25 % 3 months US$ SOFR + 5.060% 100,000 5,250 20,983 23,413 Total 175,000 9,188 31,637 28,156 Unamortized debt issuance costs (3,538) Long-term debt less unamortized debt issuance costs 171,462 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | Year ended December 31, 2020 December 31, 2019 December 31, 2018 Net income 147,217 177,075 195,184 Basic Earnings Per Share Weighted average number of common shares issued 51,128 54,338 55,159 Weighted average number of common shares held as treasury stock (619) (1,166) (213) Weighted average number of common shares (in thousands) 50,509 53,172 54,946 Basic Earnings Per Share 2.91 3.33 3.55 Diluted Earnings Per Share Weighted average number of common shares 50,509 53,172 54,946 Net dilution impact related to options to purchase common shares 55 118 223 Net dilution impact related to awards of unvested common shares 286 369 576 Weighted average number of diluted common shares (in thousands) 50,850 53,659 55,745 Diluted Earnings Per Share 2.90 3.30 3.50 |
Share-based payments (Tables)
Share-based payments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of changes in outstanding stock options | Changes in Outstanding Stock Option Plans Number of shares transferable upon exercise (thousands) Weighted average Weighted average Aggregate Year ended December 31, 2020 1997 Stock 2010 Stock Total 1997 Stock 2010 Stock 1997 Stock 2010 Stock Outstanding at beginning of year — 159 159 — 12.07 Exercised — (143) (143) — 12.13 2,192 Forfeitures and cancellations — (16) (16) — 11.50 Outstanding at end of year — — — — — 0.00 0.00 — Vested and exercisable at end of year — — — — — 0.00 0.00 Number of shares transferable upon exercise (thousands) Weighted average Weighted average Aggregate Year ended December 31, 2019 1997 Stock 2010 Stock Total 1997 Stock 2010 Stock 1997 Stock 2010 Stock Outstanding at beginning of year 25 189 214 64.51 11.98 Exercised — (30) (30) — 11.50 659 Expiration at end of plan life (25) — (25) 64.51 — Outstanding at end of year — 159 159 — 12.07 0.00 0.73 3,958 Vested and exercisable at end of year — 159 159 — 12.07 0.00 0.73 Number of shares transferable upon exercise (thousands) Weighted average Weighted average Aggregate Year ended December 31, 2018 1997 Stock 2010 Stock Total 1997 Stock 2010 Stock 1997 Stock 2010 Stock Outstanding at beginning of year 58 476 534 113.46 11.73 Exercised — (287) (287) — 11.56 10,172 Forfeitures and cancellations (33) — (33) 150.46 — Outstanding at end of year 25 189 214 64.51 11.98 0.20 1.67 3,665 Vested and exercisable at end of year 25 189 214 64.51 11.98 0.20 1.67 |
Schedule of changes in outstanding ELTIP and EDIP awards | Changes in Outstanding ELTIP and EDIP awards (in thousands of shares transferable upon vesting) Year ended December 31, 2020 December 31, 2019 December 31, 2018 EDIP ELTIP EDIP ELTIP EDIP ELTIP Outstanding at beginning of year 251 618 234 697 244 679 Granted 245 209 169 317 130 241 Vested (fair value in 2020: $9.6 million, 2019: $18.9 million; 2018: $16.0 million) (129) (162) (149) (389) (138) (220) Forfeitures (resignations, retirements, redundancies) (3) (7) (3) (7) (2) (3) Outstanding at end of year 364 658 251 618 234 697 |
Schedule of share-based compensation cost recognized in net income | Share-based Compensation Cost Recognized in Net Income Year ended December 31, 2020 December 31, 2019 December 31, 2018 EDIP and EDIP and EDIP and Cost recognized in net income 14,608 17,459 11,664 |
Schedule of unrecognized compensation cost | Unrecognized Share-based Compensation Cost December 31, 2020 December 31, 2019 Unrecognized cost Weighted average years over which it is expected to be recognized Unrecognized cost Weighted average years over which it is expected to be recognized EDIP 6,588 1.91 4,744 1.71 ELTIP Time vesting shares 156 1.09 121 0.48 Performance vesting shares 8,187 1.60 9,765 1.80 Total unrecognized expense 14,931 14,630 |
Share buy-back plans (Tables)
Share buy-back plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of share repurchase programs | Year ended December 31 Common share buy-backs 2020 2019 2018 Total Acquired number of shares (to the nearest 1) 3,452,000 2,293,788 1,254,212 7,000,000 Average cost per common share 25.10 35.55 38.62 30.95 Total cost (in US dollars) 86,639,889 81,534,076 48,442,768 216,616,733 |
Accumulated other comprehensi_2
Accumulated other comprehensive loss (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of AOCL components | Unrealized (losses) HTM Unrealized Employee benefit plans Year ended December 31, 2020 Pension Post-retirement Subtotal - Total AOCL Balance at beginning of year (20,818) (725) 11,808 (66,312) (11,050) (77,362) (87,097) Other comprehensive income (loss), net of taxes (247) 665 60,971 (5,943) (18,029) (23,972) 37,417 Balance at end of year (21,065) (60) 72,779 (72,255) (29,079) (101,334) (49,680) Unrealized (losses) HTM Unrealized Employee benefit plans Year ended December 31, 2019 Pension Post- retirement Subtotal - Total AOCL Balance at beginning of year (19,866) (796) (43,630) (64,892) (19,343) (84,235) (148,527) Other comprehensive income (loss), net of taxes (952) 71 55,438 (1,420) 8,293 6,873 61,430 Balance at end of year (20,818) (725) 11,808 (66,312) (11,050) (77,362) (87,097) Unrealized (losses) HTM Unrealized Employee benefit plans Year ended December 31, 2018 Pension Post- retirement Subtotal - Total AOCL Balance at beginning of year (17,549) (839) (15,737) (61,341) (33,586) (94,927) (129,052) Other comprehensive income (loss), net of taxes (2,317) 43 (27,893) (3,551) 14,243 10,692 (19,475) Balance at end of year (19,866) (796) (43,630) (64,892) (19,343) (84,235) (148,527) |
Schedule of net change in AOCL components | Net Change of AOCI Components Year ended Line item in the consolidated statements of operations, if any December 31, 2020 December 31, 2019 December 31, 2018 Net unrealized gains (losses) on translation of net investment in foreign operations adjustments Foreign currency translation adjustments N/A 9,991 16,200 (13,764) Gains (loss) on net investment hedge N/A (10,238) (17,152) 11,447 Net change (247) (952) (2,317) Held-to-maturity investment adjustments Amortization of net gains (losses) to net income Interest income on investments 665 71 43 Net change 665 71 43 Available-for-sale investment adjustments Gross unrealized gains (losses) N/A 62,191 57,062 (26,793) Transfer of realized (gains) losses to net income Net realized gains (losses) on AFS investments (1,220) (1,624) (1,100) Net change 60,971 55,438 (27,893) Employee benefit plans adjustments Defined benefit pension plan Net actuarial gain (loss) N/A (8,363) (3,472) (7,541) Net loss (gain) on settlement reclassified to net income Net other gains (losses) — — 1,554 Prior service credit (cost) arising during the year N/A (47) — (212) Amortization of net actuarial (gains) losses Non-service employee benefits expense 2,412 2,407 2,106 Change in deferred taxes N/A 456 149 (298) Amortization of prior service (credit) cost Non-service employee benefits expense 20 19 — Foreign currency translation adjustments of related balances N/A (421) (523) 840 Net change (5,943) (1,420) (3,551) Post-retirement healthcare plan Net actuarial gain (loss) N/A (18,553) 10,014 11,589 Prior service cost N/A — (2,369) — Amortization of net actuarial (gains) losses Non-service employee benefits expense — 272 2,615 Amortization of prior service (credit) cost Non-service employee benefits expense 524 376 39 Net change (18,029) 8,293 14,243 Other comprehensive income (loss), net of taxes 37,417 61,430 (19,475) |
Capital structure (Tables)
Capital structure (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of compliance with regulatory capital requirements | The following table sets forth the Bank's capital adequacy in accordance with the Basel III framework: December 31, 2020 December 31, 2019 Actual Regulatory minimum (1) Actual Regulatory minimum (1) Capital CET 1 capital 816,009 N/A 848,821 N/A Tier 1 capital 816,009 N/A 848,821 N/A Tier 2 capital 187,090 N/A 103,243 N/A Total capital 1,003,099 N/A 952,064 N/A Risk Weighted Assets 5,068,590 N/A 4,897,851 N/A Leverage Ratio Exposure Measure 15,349,363 N/A 14,377,474 N/A Capital Ratios (%) CET 1 capital 16.1 % 10.0 % 17.3 % 10.0 % Tier 1 capital 16.1 % 11.5 % 17.3 % 11.5 % Total capital 19.8 % 13.5 % 19.4 % 13.5 % Leverage ratio 5.3 % 5.0 % 5.9 % 5.0 % (1) The minimum capital ratio requirements do not reflect additional Pillar II add-on requirements that the BMA may impose upon the Bank as a prudential measure from time to time. |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income taxes in consolidated statements of operations | Year ended Income taxes in consolidated statements of operations December 31, 2020 December 31, 2019 December 31, 2018 Current tax expense 2,382 1,860 721 Deferred tax (recovery) expense (4) (3,231) 563 Total tax (benefit) expense 2,378 (1,371) 1,284 |
Schedule of reconciliation between the effective income tax rate and the statutory income tax rate | Reconciliation between the Effective Income Tax Rate and the Statutory Income Tax Rate Year ended December 31, 2020 December 31, 2019 December 31, 2018 $ % $ % $ % Income tax expense in international offices taxed at different rates 2,695 1.8 695 0.4 876 0.4 Expenses not deductible for tax purposes 299 0.2 104 0.1 225 0.1 Prior year tax adjustments 41 — 160 0.1 (79) — Change in valuation allowance (582) (0.4) (2,429) (1.4) 315 0.2 Other - net (75) (0.1) 99 0.1 (53) — Income tax (benefit) expense at effective tax rate 2,378 1.6 (1,371) (0.8) 1,284 0.7 |
Schedule of deferred income taxes | Deferred income taxes December 31, 2020 December 31, 2019 Deferred income tax asset Tax loss carried forward 8,134 8,427 Pension liability 1,448 968 Fixed assets (905) (691) Allowance for compensated absence 44 15 Deferred income tax asset before valuation allowance 8,721 8,719 Less: valuation allowance (4,257) (4,839) Deferred income tax asset after valuation allowance 4,464 3,880 Deferred income tax liability Other (19) (14) Net deferred income tax assets 4,445 3,866 |
Business combinations (Tables)
Business combinations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of total consideration transferred | As at March 29, 2018 Total consideration transferred 24,680 Assets acquired Cash due from banks 3,958 Intangible assets (estimated useful life of 15 years) 16,932 Other assets 4,548 Total assets acquired 25,438 Liabilities acquired (included in Other liabilities on the balance sheet) (4,626) Excess purchase price (Goodwill) 3,868 The fair value of the net assets acquired and allocation of purchase price is summarized as follows: As at July 15, 2019 Total consideration transferred 201,107 Assets acquired Cash due from banks 3,016,859 Loans 654,503 Intangible assets - Customer relationships 24,371 Other assets 31,674 Total assets acquired 3,727,407 Liabilities assumed Deposits (3,493,239) Other liabilities (33,061) Total liabilities assumed (3,526,300) Excess purchase price (Goodwill) — |
Summary of unaudited pro forma financial information | The following selected unaudited pro forma financial information has been provided to present a summary of the combined results of the Bank and the acquired ABN AMRO Channel Islands operations, assuming the transaction had been effected on January 1, 2018. The unaudited pro forma data is for informational purposes only and does not necessarily represent results that would have occurred if the transaction had taken place on the basis assumed above. The pro forma financial information has been prepared based on the actual results realized by ABN AMRO Channel Islands from January 1, 2017 to July 15, 2019, and results estimated at the time of acquisition. Year ended Unaudited pro forma financial information December 31, 2019 December 31, 2018 Total net revenue 555,341 563,786 Total non-interest operating (expense) (372,796) (351,320) Pro forma net income post business combination 182,545 212,466 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Loan balances with directors and executives of the Bank, companies in which they are principal owners and/or members of the board, and trusts in which they are involved were as follows: Balance at December 31, 2018 97,195 Loans issued during the year 45,602 Loan repayments and the effect of changes in the composition of related parties (104,156) Balance at December 31, 2019 38,641 Loans issued during the period 37,073 Loan repayments and the effect of changes in the composition of related parties (33,323) Balance at December 31, 2020 42,391 Consolidated balance sheets December 31, 2020 December 31, 2019 Deposits 19,591 12,838 Year ended December 31 Consolidated statement of operations 2020 2019 2018 Interest and fees on loans 1,444 1,887 4,533 Certain affiliates of the Bank have loans and deposits with the Bank which were made and are maintained in the ordinary course of business on normal commercial terms. Balances with these parties were as follows: Consolidated balance sheets December 31, 2020 December 31, 2019 Loans 12,939 9,888 Deposits 423 342 Year ended December 31 Consolidated statement of operations 2020 2019 2018 Interest and fees on loans 654 677 635 Other gains/losses 742 — — Total non-interest expense 1,431 1,717 1,769 Consolidated balance sheets December 31, 2020 December 31, 2019 Equity securities Fair value 7,081 7,142 Unrealized gain 2,531 2,142 Consolidated balance sheets December 31, 2020 December 31, 2019 Loans 2,518 16 Deposits 26,541 3,492 Year ended December 31 Consolidated statement of operations 2020 2019 2018 Asset management 7,131 10,273 9,412 Custody and other administration services 1,108 1,452 1,376 Other non-interest income 729 1,458 972 |
Condensed financial statement_2
Condensed financial statements of the parent company only (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Balance Sheet | The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Balance Sheets (In thousands of US dollars) As at December 31, 2020 December 31, 2019 Assets Cash and demand deposits with banks - Non-interest-bearing 44,086 38,615 Demand deposits with banks - Interest-bearing 99,035 118,583 Cash equivalents - Interest-bearing 1,244,878 329,494 Cash due from banks 1,387,999 486,692 Securities purchased under agreements to resell 197,039 142,283 Short-term investments 16,277 44,512 Investment in securities Equity securities at fair value 7,316 7,420 Available-for-sale (amortized cost: $1,058,195 (2019: 1,248,726)) 1,092,325 1,252,749 Held-to-maturity (fair value: $1,023,424 (2019: $1,030,183)) 967,926 1,003,248 Total investment in securities 2,067,567 2,263,417 Net assets of subsidiaries - Banks 618,461 610,217 Net assets of subsidiaries - Non-banks 11,971 10,303 Loans to third parties, net of allowance for credit losses 2,025,358 2,046,406 Loans to subsidiaries - Banks 13,669 13,241 Loans to subsidiaries - Non-banks 58,515 56,951 Other assets, including accrued interest, premises, equipment and computer software, equity method investments, receivables from subsidiaries and other real estate owned 199,273 207,896 Total assets 6,596,129 5,881,918 Liabilities Deposits Non-interest bearing 1,945,042 1,441,194 Interest bearing 3,298,165 3,161,634 Total deposits 5,243,207 4,602,828 Employee benefit plans 128,167 110,347 Other liabilities, including accrued interest and payables to subsidiaries 71,345 61,500 Total other liabilities 199,512 171,847 Long-term debt 171,462 143,500 Total liabilities 5,614,181 4,918,175 Total shareholders’ equity 981,948 963,743 Total liabilities and shareholders’ equity 6,596,129 5,881,918 |
Condensed Income Statement | The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Operations (In thousands of US dollars) Year ended December 31, 2020 December 31, 2019 December 31, 2018 Non-interest income Banking 24,429 24,870 23,506 Foreign exchange revenue 9,166 10,613 11,727 Custody and other administration services 6,927 7,625 — Other non-interest income 5,924 5,650 6,330 Dividends from subsidiaries - Banks 121,522 122,776 60,000 Dividends from subsidiaries - Non-banks 19,864 23,371 19,095 Total non-interest income 187,832 194,905 120,658 Interest income Interest and fees on loans 123,774 132,104 133,124 Investments 52,135 68,721 73,698 Deposits with banks and other 3,109 9,156 12,932 Total interest income 179,018 209,981 219,754 Interest expense Deposits 9,386 17,410 6,709 Long-term debt 9,294 7,876 6,949 Securities sold under agreement to resell — 13 33 Total interest expense 18,680 25,299 13,691 Net interest income before provision for credit losses 160,338 184,682 206,063 Provision for credit recoveries (losses) (8,750) (3,088) 6,823 Net interest income after provision for credit losses 151,588 181,594 212,886 Net gains (losses) on equity securities 658 925 (329) Net realized gains (losses) on available-for-sale investments 702 1,053 758 Net gains (losses) on other real estate owned (104) (5) (323) Net other gains (losses) 714 2 — Total other gains (losses) 1,970 1,975 106 Total net revenue 341,390 378,474 333,650 Non-interest expense Salaries and other employee benefits 69,521 77,923 75,949 Technology and communications 35,434 36,008 36,466 Professional and outside services 27,791 27,954 22,696 Property 9,092 6,927 6,693 Indirect taxes 15,633 15,355 14,669 Non-service employee benefits expense 3,462 5,879 6,427 Marketing 2,418 4,372 3,034 Amortization of intangible assets 169 169 169 Other expenses 9,896 9,260 4,230 Total non-interest expense 173,416 183,847 170,333 Net income before equity in undistributed earnings of subsidiaries 167,974 194,627 163,317 Equity in undistributed earnings of subsidiaries (20,757) (17,552) 31,867 Net income 147,217 177,075 195,184 Other comprehensive income, net of tax 37,417 61,430 (19,475) Total comprehensive income 184,634 238,505 175,709 |
Condensed Cash Flow Statement | The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Cash Flows (In thousands of US dollars) Year ended December 31, 2020 December 31, 2019 December 31, 2018 Cash flows from operating activities Net income 147,217 177,075 195,184 Adjustments to reconcile net income to operating cash flows Depreciation and amortization 26,562 21,734 21,425 Provision for credit (recovery) losses 8,750 3,088 (6,823) Share-based payments and settlements 15,245 17,716 12,582 Net change in equity securities at fair value 102 (925) 329 Net realized (gains) losses on available-for-sale investments (702) (1,053) (758) Net (gains) losses on other real estate owned 104 5 323 (Increase) decrease in carrying value of equity method investments (1,376) (290) (1,033) Dividends received from equity method investments 2,710 385 376 Equity in undistributed earnings of subsidiaries 20,757 17,552 (31,867) Changes in operating assets and liabilities (Increase) decrease in accrued interest receivable and other assets 754 6,808 (11,915) Increase (decrease) in employee benefit plans, accrued interest payable and other liabilities 9,456 (3,753) (786) Cash provided by (used in) operating activities 229,579 238,342 177,037 Cash flows from investing activities (Increase) decrease in securities purchased under agreements to resell (54,756) (114,942) 151,428 Short-term investments other than restricted cash: proceeds from maturities and sales 68,272 — 106,221 Short-term investments other than restricted cash: purchases (35,319) (32,953) (18,953) Available-for-sale investments: proceeds from sale 205,770 114,058 681,656 Available-for-sale investments: proceeds from maturities and pay downs 295,547 204,105 340,114 Available-for-sale investments: purchases (317,451) (196,652) (156,271) Held-to-maturity investments: proceeds from maturities and pay downs 229,576 137,622 82,853 Held-to-maturity investments: purchases (195,898) (53,228) (525,637) Net (increase) decrease in loans to third parties 8,263 (99,793) 15,184 Net (increase) decrease in loans to bank subsidiaries (428) (487) 764 Net (increase) decrease in loans to non-bank subsidiaries (1,564) (930) 1,812 Additions to premises, equipment and computer software (11,313) (14,009) (9,830) Proceeds from sale of other real estate owned — 1,102 5,896 Injection of capital in subsidiary (1,522) (175,107) (64,029) Return of capital from a subsidiary 3,314 12,972 8,244 Cash provided by (used in) investing activities 192,491 (218,242) 619,452 The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Cash Flows (In thousands of US dollars) Year ended December 31, 2020 December 31, 2019 December 31, 2018 Cash flows from financing activities Net increase (decrease) in demand and term deposit liabilities 630,141 (64,027) (603,925) Issuance of subordinated capital, net of underwriting fees 97,647 — 73,218 Repayment of long-term debt (70,000) — (47,000) Common shares repurchased (86,640) (81,534) (48,443) Proceeds from stock option exercises 1,739 349 3,318 Cash dividends paid on common shares (88,932) (93,636) (83,704) Cash provided by (used in) financing activities 483,955 (238,848) (706,536) Net increase (decrease) in cash, cash equivalent and restricted cash 906,025 (218,748) 89,953 Cash, cash equivalents and restricted cash: beginning of year 498,251 716,999 627,046 Cash, cash equivalents and restricted cash: end of year 1,404,276 498,251 716,999 Components of cash, cash equivalents and restricted cash at end of year Cash due from banks 1,387,999 486,692 703,263 Restricted cash included in short-term investments on the consolidated balance sheets 16,277 11,559 13,736 Total cash, cash equivalents and restricted cash at end of year 1,404,276 498,251 716,999 Supplemental disclosure of cash flow information Cash interest paid 19,532 24,190 15,428 Supplemental disclosure of non-cash items Transfer to (out of) other real estate owned 314 — 2,041 Initial recognition of right-of-use assets and operating lease liabilities — 133 — Reduction in net loans due to initial adoption of a current expected credit loss model 3,899 — — |
Nature of business (Details)
Nature of business (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 3 |
Significant accounting polici_3
Significant accounting policies (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||||
Number of contractual days past due after which credit card consumer loans are generally written off | 180 days | |||
Outstanding balance threshold under which consumer loans are generally written off | $ 100,000 | |||
Number of contractual days past due after which consumer loans under $100,000 are generally written off | 180 days | |||
Property, Plant and Equipment [Line Items] | ||||
Negative adjustment to loan portfolio | $ 981,948,000 | $ 963,743,000 | $ 882,343,000 | |
Retained earnings (Accumulated deficit) | ||||
Property, Plant and Equipment [Line Items] | ||||
Negative adjustment to loan portfolio | $ 33,918,000 | (9,237,000) | $ (92,676,000) | $ (204,156,000) |
Cumulative Effect, Period of Adoption, Adjustment | Retained earnings (Accumulated deficit) | ||||
Property, Plant and Equipment [Line Items] | ||||
Negative adjustment to loan portfolio | $ (7,841,000) | |||
Buildings | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 50 years | |||
Equipment | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 3 years | |||
Equipment | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 10 years | |||
Software and Software Development Costs | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 5 years | |||
Software and Software Development Costs | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 10 years | |||
Other Intangible Assets | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 15 years |
Cash due from banks (Details)
Cash due from banks (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Non-interest bearing | ||
Cash and demand deposits with banks | $ 133,363 | $ 88,031 |
Interest bearing | ||
Demand deposits with banks | 433,511 | 839,320 |
Cash equivalents | 2,722,718 | 1,622,719 |
Sub-total - Interest bearing | 3,156,229 | 2,462,039 |
Cash due from banks | 3,289,592 | 2,550,070 |
Interest-bearing deposits in banks bearing negligible interest | $ 156,200 | $ 439,500 |
Short-term investments (Details
Short-term investments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investment [Line Items] | ||
Short-term investments | $ 823,039 | $ 1,218,380 |
Unrestricted | ||
Investment [Line Items] | ||
Short-term investments | 798,133 | 1,188,545 |
Affected by drawing restrictions related to minimum reserve and derivative margin requirements | ||
Investment [Line Items] | ||
Short-term investments | 24,906 | 29,835 |
Affected by drawing restrictions related to minimum reserve and derivative margin requirements | Non-interest earning demand deposits | ||
Investment [Line Items] | ||
Short-term investments | 260 | 2,270 |
Affected by drawing restrictions related to minimum reserve and derivative margin requirements | Interest earning demand and term deposits | ||
Investment [Line Items] | ||
Short-term investments | 24,646 | 27,565 |
Maturing within three months | Unrestricted | ||
Investment [Line Items] | ||
Short-term investments | 469,580 | 594,749 |
Maturing between three to six months | Unrestricted | ||
Investment [Line Items] | ||
Short-term investments | 326,836 | 591,212 |
Maturing between six to twelve months | Unrestricted | ||
Investment [Line Items] | ||
Short-term investments | $ 1,717 | $ 2,584 |
Investment in securities - Amor
Investment in securities - Amortized Cost, Carrying Amount and Fair Value (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity securities | |||
Amortized cost | $ 5,274,000 | $ 5,724,000 | |
Gross unrealized gains | 2,531,000 | 2,142,000 | |
Gross unrealized losses | (488,000) | (447,000) | |
Fair value | 7,317,000 | 7,419,000 | |
Available-for-sale | |||
Amortized cost | 2,588,335,000 | 2,208,531,000 | |
Gross unrealized gains | 73,821,000 | 19,353,000 | |
Gross unrealized losses | (1,040,000) | (7,543,000) | |
Available-for-sale investments | 2,661,116,000 | 2,220,341,000 | |
Held-to-maturity | |||
Amortized cost | 2,194,371,000 | 2,208,663,000 | |
Gross unrealized gains | 110,526,000 | 47,814,000 | |
Gross unrealized losses | (141,000) | (490,000) | |
Held-to-maturity, fair value | 2,304,756,000 | 2,255,987,000 | |
Non-credit impairments recognized in accumulated other comprehensive loss, held-to-maturity investments | 0 | 0 | $ 0 |
Mutual funds | |||
Equity securities | |||
Amortized cost | 5,274,000 | 5,724,000 | |
Gross unrealized gains | 2,531,000 | 2,142,000 | |
Gross unrealized losses | (488,000) | (447,000) | |
Fair value | 7,317,000 | 7,419,000 | |
US government and federal agencies | |||
Available-for-sale | |||
Amortized cost | 2,493,659,000 | 2,040,171,000 | |
Gross unrealized gains | 72,713,000 | 18,617,000 | |
Gross unrealized losses | (306,000) | (6,342,000) | |
Available-for-sale investments | 2,566,066,000 | 2,052,446,000 | |
Held-to-maturity | |||
Amortized cost | 2,194,371,000 | 2,208,663,000 | |
Gross unrealized gains | 110,526,000 | 47,814,000 | |
Gross unrealized losses | (141,000) | (490,000) | |
Held-to-maturity, fair value | 2,304,756,000 | 2,255,987,000 | |
Non-US governments debt securities | |||
Available-for-sale | |||
Amortized cost | 22,797,000 | 26,118,000 | |
Gross unrealized gains | 0 | 82,000 | |
Gross unrealized losses | (389,000) | (524,000) | |
Available-for-sale investments | 22,408,000 | 25,676,000 | |
Asset-backed securities - Student loans | |||
Available-for-sale | |||
Amortized cost | 13,290,000 | 13,290,000 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | (345,000) | (399,000) | |
Available-for-sale investments | 12,945,000 | 12,891,000 | |
Residential mortgage-backed securities | |||
Available-for-sale | |||
Amortized cost | 58,589,000 | 128,952,000 | |
Gross unrealized gains | 1,108,000 | 654,000 | |
Gross unrealized losses | 0 | (278,000) | |
Available-for-sale investments | $ 59,697,000 | $ 129,328,000 |
Investment in securities - Narr
Investment in securities - Narrative (Details) | Dec. 31, 2020security | Dec. 31, 2019securityposition |
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, unrealized loss position, number of positions | 13 | 62 |
Debt securities, available-for-sale, securities in unrealized loss positions, percentage of portfolio fair value | 5.90% | 40.70% |
Debt securities, available-for-sale, securities in unrealized loss positions, percentage of fair value of affected securities | 0.70% | 0.80% |
US government and federal agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Held-to-maturity, securities in unrealized loss positions, number of positions | 3 | 6 |
Held-to-maturity, securities in unrealized loss positions, percentage of portfolio fair value | 1.70% | 4.30% |
Held-to-maturity, securities in unrealized loss positions, percentage of fair value of affected securities | 0.40% | 0.50% |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, unrealized loss position, number of positions | 0 | 7 |
Investment in securities - Cont
Investment in securities - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Available-for-sale securities with unrealized losses | ||
Available-for-sale securities with unrealized losses, Less than 12 months, Fair value | $ 120,614 | $ 382,502 |
Available-for-sale securities with unrealized losses, Less than 12 months, Gross unrealized losses | (279) | (1,817) |
Available-for-sale securities with unrealized losses,12 months or more, Fair value | 35,574 | 521,390 |
Available-for-sale securities with unrealized losses,12 months or more, Gross unrealized losses | (761) | (5,726) |
Available-for-sale securities with unrealized losses, Total fair value | 156,188 | 903,892 |
Available-for-sale securities with unrealized losses, Total gross unrealized losses | (1,040) | (7,543) |
Held-to-maturity securities with unrealized losses, Less than 12 months, Fair Value | 36,079 | 47,038 |
Held-to-maturity securities with unrealized losses, Less than 12 months, Gross unrealized losses | (141) | (214) |
Held-to-maturity securities with unrealized losses, 12 months or more, Fair value | 0 | 46,411 |
Held-to-maturity securities with unrealized losses, 12 months or more, Gross unrealized losses | 0 | (276) |
Held-to-maturity securities with unrealized losses, Total fair value | 36,079 | 93,449 |
Held-to-maturity securities with unrealized losses, Total gross unrealized losses | (141) | (490) |
US government and federal agencies | ||
Available-for-sale securities with unrealized losses | ||
Available-for-sale securities with unrealized losses, Less than 12 months, Fair value | 120,599 | 376,262 |
Available-for-sale securities with unrealized losses, Less than 12 months, Gross unrealized losses | (279) | (1,786) |
Available-for-sale securities with unrealized losses,12 months or more, Fair value | 236 | 435,999 |
Available-for-sale securities with unrealized losses,12 months or more, Gross unrealized losses | (27) | (4,556) |
Available-for-sale securities with unrealized losses, Total fair value | 120,835 | 812,261 |
Available-for-sale securities with unrealized losses, Total gross unrealized losses | (306) | (6,342) |
Non-US governments debt securities | ||
Available-for-sale securities with unrealized losses | ||
Available-for-sale securities with unrealized losses, Less than 12 months, Fair value | 15 | 202 |
Available-for-sale securities with unrealized losses, Less than 12 months, Gross unrealized losses | 0 | (1) |
Available-for-sale securities with unrealized losses,12 months or more, Fair value | 22,393 | 22,246 |
Available-for-sale securities with unrealized losses,12 months or more, Gross unrealized losses | (389) | (523) |
Available-for-sale securities with unrealized losses, Total fair value | 22,408 | 22,448 |
Available-for-sale securities with unrealized losses, Total gross unrealized losses | (389) | (524) |
Asset-backed securities - Student loans | ||
Available-for-sale securities with unrealized losses | ||
Available-for-sale securities with unrealized losses, Less than 12 months, Fair value | 0 | 0 |
Available-for-sale securities with unrealized losses, Less than 12 months, Gross unrealized losses | 0 | 0 |
Available-for-sale securities with unrealized losses,12 months or more, Fair value | 12,945 | 12,891 |
Available-for-sale securities with unrealized losses,12 months or more, Gross unrealized losses | (345) | (399) |
Available-for-sale securities with unrealized losses, Total fair value | 12,945 | 12,891 |
Available-for-sale securities with unrealized losses, Total gross unrealized losses | $ (345) | (399) |
Residential mortgage-backed securities | ||
Available-for-sale securities with unrealized losses | ||
Available-for-sale securities with unrealized losses, Less than 12 months, Fair value | 6,038 | |
Available-for-sale securities with unrealized losses, Less than 12 months, Gross unrealized losses | (30) | |
Available-for-sale securities with unrealized losses,12 months or more, Fair value | 50,254 | |
Available-for-sale securities with unrealized losses,12 months or more, Gross unrealized losses | (248) | |
Available-for-sale securities with unrealized losses, Total fair value | 56,292 | |
Available-for-sale securities with unrealized losses, Total gross unrealized losses | $ (278) |
Investment in securities - Inve
Investment in securities - Investment Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Available-for-sale | ||
Within 3 months | $ 15 | |
3 to 12 months | 0 | |
1 to 5 years | 22,393 | |
5 to 10 years | 0 | |
Over 10 years | 0 | |
No specific or single maturity | 2,638,708 | |
Carrying amount | 2,661,116 | $ 2,220,341 |
US government and federal agencies | ||
Available-for-sale | ||
Within 3 months | 0 | |
3 to 12 months | 0 | |
1 to 5 years | 0 | |
5 to 10 years | 0 | |
Over 10 years | 0 | |
No specific or single maturity | 2,566,066 | |
Carrying amount | 2,566,066 | 2,052,446 |
Held-to-maturity | ||
Within 3 months | 0 | |
3 to 12 months | 0 | |
1 to 5 years | 0 | |
5 to 10 years | 0 | |
Over 10 years | 0 | |
No specific or single maturity | 2,194,371 | |
Carrying amount | 2,194,371 | |
Non-US governments debt securities | ||
Available-for-sale | ||
Within 3 months | 15 | |
3 to 12 months | 0 | |
1 to 5 years | 22,393 | |
5 to 10 years | 0 | |
Over 10 years | 0 | |
No specific or single maturity | 0 | |
Carrying amount | 22,408 | 25,676 |
Asset-backed securities - Student loans | ||
Available-for-sale | ||
Within 3 months | 0 | |
3 to 12 months | 0 | |
1 to 5 years | 0 | |
5 to 10 years | 0 | |
Over 10 years | 0 | |
No specific or single maturity | 12,945 | |
Carrying amount | 12,945 | 12,891 |
Residential mortgage-backed securities | ||
Available-for-sale | ||
Within 3 months | 0 | |
3 to 12 months | 0 | |
1 to 5 years | 0 | |
5 to 10 years | 0 | |
Over 10 years | 0 | |
No specific or single maturity | 59,697 | |
Carrying amount | $ 59,697 | $ 129,328 |
Investment in securities - Pled
Investment in securities - Pledged Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments, Debt and Equity Securities [Abstract] | ||
Available-for-sale, Amortized cost | $ 1,387 | $ 3,848 |
Available-for-sale, Fair value | 1,456 | 3,912 |
Held-to-maturity, Amortized cost | 2,460 | 5,449 |
Held-to-maturity, Fair value | $ 2,623 | $ 5,552 |
Investment in securities - Sale
Investment in securities - Sale Proceeds and Realized Gains and Losses of AFS Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Securities, Available-for-sale [Line Items] | |||
Sale proceeds | $ 352,965 | $ 225,305 | $ 854,160 |
Gross realized gains | 1,275 | 2,037 | 2,804 |
Gross realized (losses) | (55) | (413) | (1,704) |
US government and federal agencies | |||
Debt Securities, Available-for-sale [Line Items] | |||
Sale proceeds | 349,699 | 35,001 | 812,720 |
Gross realized gains | 1,171 | 115 | 1,599 |
Gross realized (losses) | (55) | 0 | (1,263) |
Non-US governments debt securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Sale proceeds | 3,266 | 0 | 0 |
Gross realized gains | 104 | 0 | 0 |
Gross realized (losses) | 0 | 0 | 0 |
Corporate debt securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Sale proceeds | 0 | 64,787 | 24,975 |
Gross realized gains | 0 | 49 | 0 |
Gross realized (losses) | 0 | (141) | (87) |
Commercial mortgage-backed securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Sale proceeds | 0 | 124,545 | 15,260 |
Gross realized gains | 0 | 901 | 0 |
Gross realized (losses) | 0 | (272) | (354) |
Pass-through note | |||
Debt Securities, Available-for-sale [Line Items] | |||
Sale proceeds | 0 | 972 | 1,205 |
Gross realized gains | 0 | 972 | 1,205 |
Gross realized (losses) | $ 0 | $ 0 | $ 0 |
Loans - Additional Information
Loans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | ||
Effective yield | 4.13% | 4.73% |
Accrued interest | $ 8.7 | $ 9.2 |
Loans - Loans' Credit Quality (
Loans - Loans' Credit Quality (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | $ 5,194,908 | $ 5,166,210 | |
Allowance for expected credit losses | (34,098) | (23,588) | $ (25,102) |
Loans, net of allowance for credit losses | 5,160,810 | 5,142,622 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 178,181 | ||
Collectively evaluated | 4,988,028 | ||
Loans originated in 2020 | 702,680 | ||
Loans originated in 2019 | 1,054,394 | ||
Loans originated in 2018 | 752,252 | ||
Loans originated in 2017 | 641,868 | ||
Loans originated in 2016 | 462,298 | ||
Loans originated prior to 2016 | 1,381,443 | ||
Overdrafts and credit cards | 199,973 | ||
Commercial loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 799,644 | 935,015 | |
Allowance for expected credit losses | (11,609) | (7,281) | (6,913) |
Loans, net of allowance for credit losses | 788,035 | 927,734 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 48,388 | ||
Collectively evaluated | 886,627 | ||
Commercial loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 72,462 | 28,547 | |
Allowance for expected credit losses | (230) | (86) | |
Loans, net of allowance for credit losses | 72,232 | 28,461 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 2 | ||
Collectively evaluated | 28,545 | ||
Commercial loans | Government | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 279,417 | 370,753 | |
Allowance for expected credit losses | (1,453) | 0 | |
Loans, net of allowance for credit losses | 277,964 | 370,753 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 0 | ||
Collectively evaluated | 370,753 | ||
Commercial loans | Commercial and industrial | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 447,765 | 535,715 | |
Allowance for expected credit losses | (9,926) | (7,195) | |
Loans, net of allowance for credit losses | 437,839 | 528,520 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 48,386 | ||
Collectively evaluated | 487,329 | ||
Commercial real estate loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 760,162 | 754,233 | |
Allowance for expected credit losses | (2,104) | (1,496) | (4,092) |
Loans, net of allowance for credit losses | 758,058 | 752,737 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 12,999 | ||
Collectively evaluated | 741,234 | ||
Commercial real estate loans | Commercial mortgage | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 715,342 | 659,293 | |
Allowance for expected credit losses | (847) | (1,496) | |
Loans, net of allowance for credit losses | 714,495 | 657,797 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 9,871 | ||
Collectively evaluated | 649,422 | ||
Commercial real estate loans | Construction | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 44,820 | 94,940 | |
Allowance for expected credit losses | (1,257) | 0 | |
Loans, net of allowance for credit losses | 43,563 | 94,940 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 3,128 | ||
Collectively evaluated | 91,812 | ||
Consumer loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 230,752 | 257,141 | |
Allowance for expected credit losses | (4,476) | (1,502) | (802) |
Loans, net of allowance for credit losses | 226,276 | 255,639 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 1,259 | ||
Collectively evaluated | 255,882 | ||
Consumer loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 25,063 | 7,858 | |
Allowance for expected credit losses | (162) | (28) | |
Loans, net of allowance for credit losses | 24,901 | 7,830 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 34 | ||
Collectively evaluated | 7,824 | ||
Consumer loans | Automobile financing | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 22,670 | 21,462 | |
Allowance for expected credit losses | (103) | (102) | |
Loans, net of allowance for credit losses | 22,567 | 21,360 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 155 | ||
Collectively evaluated | 21,307 | ||
Consumer loans | Credit card | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 68,259 | 87,674 | |
Allowance for expected credit losses | (2,795) | (445) | |
Loans, net of allowance for credit losses | 65,464 | 87,229 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 0 | ||
Collectively evaluated | 87,674 | ||
Consumer loans | Other consumer | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 114,760 | 140,147 | |
Allowance for expected credit losses | (1,416) | (927) | |
Loans, net of allowance for credit losses | 113,344 | 139,220 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 1,070 | ||
Collectively evaluated | 139,077 | ||
Consumer loans | Other consumer | Cash and Portfolio Secured Lending Collateral | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 54,000 | 74,000 | |
Consumer loans | Other consumer | Buildings in Construction or Other Collateral | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 45,000 | 48,000 | |
Residential mortgage loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 3,404,350 | 3,219,821 | |
Allowance for expected credit losses | (15,909) | (13,309) | $ (13,295) |
Loans, net of allowance for credit losses | 3,388,441 | 3,206,512 | |
Evaluation of gross loans for impairment | |||
Individually evaluated | 115,535 | ||
Collectively evaluated | 3,104,285 | ||
Pass | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 4,843,953 | 4,805,523 | |
Evaluation of gross loans for impairment | |||
Loans originated in 2020 | 683,821 | ||
Loans originated in 2019 | 1,026,634 | ||
Loans originated in 2018 | 684,716 | ||
Loans originated in 2017 | 624,332 | ||
Loans originated in 2016 | 447,293 | ||
Loans originated prior to 2016 | 1,183,869 | ||
Overdrafts and credit cards | 193,288 | ||
Pass | Commercial loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 772,357 | 863,873 | |
Pass | Commercial loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 70,324 | 23,529 | |
Pass | Commercial loans | Government | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 279,417 | 370,753 | |
Pass | Commercial loans | Commercial and industrial | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 422,616 | 469,591 | |
Pass | Commercial real estate loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 632,462 | 673,262 | |
Pass | Commercial real estate loans | Commercial mortgage | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 627,512 | 581,450 | |
Pass | Commercial real estate loans | Construction | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 4,950 | 91,812 | |
Pass | Consumer loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 226,916 | 249,283 | |
Pass | Consumer loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 23,934 | 5,270 | |
Pass | Consumer loans | Automobile financing | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 22,491 | 21,229 | |
Pass | Consumer loans | Credit card | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 68,025 | 87,250 | |
Pass | Consumer loans | Other consumer | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 112,466 | 135,534 | |
Pass | Residential mortgage loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 3,212,218 | 3,019,105 | |
Special mention | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 190,274 | 219,908 | |
Evaluation of gross loans for impairment | |||
Loans originated in 2020 | 18,789 | ||
Loans originated in 2019 | 27,575 | ||
Loans originated in 2018 | 65,570 | ||
Loans originated in 2017 | 2,381 | ||
Loans originated in 2016 | 2,073 | ||
Loans originated prior to 2016 | 69,934 | ||
Overdrafts and credit cards | 3,952 | ||
Special mention | Commercial loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 7,527 | 62,003 | |
Special mention | Commercial loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 1,686 | 4,565 | |
Special mention | Commercial loans | Government | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Special mention | Commercial loans | Commercial and industrial | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 5,841 | 57,438 | |
Special mention | Commercial real estate loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 119,038 | 71,638 | |
Special mention | Commercial real estate loans | Commercial mortgage | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 79,168 | 71,638 | |
Special mention | Commercial real estate loans | Construction | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 39,870 | 0 | |
Special mention | Consumer loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 2,210 | 6,132 | |
Special mention | Consumer loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 1,127 | 2,504 | |
Special mention | Consumer loans | Automobile financing | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 52 | 78 | |
Special mention | Consumer loans | Credit card | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Special mention | Consumer loans | Other consumer | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 1,031 | 3,550 | |
Special mention | Residential mortgage loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 61,499 | 80,135 | |
Substandard | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 88,190 | 90,378 | |
Evaluation of gross loans for impairment | |||
Loans originated in 2020 | 0 | ||
Loans originated in 2019 | 181 | ||
Loans originated in 2018 | 559 | ||
Loans originated in 2017 | 3,245 | ||
Loans originated in 2016 | 7,993 | ||
Loans originated prior to 2016 | 75,466 | ||
Overdrafts and credit cards | 746 | ||
Substandard | Commercial loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 1,533 | 1,570 | |
Substandard | Commercial loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 451 | 451 | |
Substandard | Commercial loans | Government | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Substandard | Commercial loans | Commercial and industrial | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 1,082 | 1,119 | |
Substandard | Commercial real estate loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 2,362 | 6,083 | |
Substandard | Commercial real estate loans | Commercial mortgage | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 2,362 | 2,955 | |
Substandard | Commercial real estate loans | Construction | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 3,128 | |
Substandard | Consumer loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 449 | 474 | |
Substandard | Consumer loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 50 | |
Substandard | Consumer loans | Automobile financing | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Substandard | Consumer loans | Credit card | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 234 | 424 | |
Substandard | Consumer loans | Other consumer | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 215 | 0 | |
Substandard | Residential mortgage loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 83,846 | 82,251 | |
Non-accrual | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 72,491 | 50,401 | |
Evaluation of gross loans for impairment | |||
Loans originated in 2020 | 70 | ||
Loans originated in 2019 | 4 | ||
Loans originated in 2018 | 1,407 | ||
Loans originated in 2017 | 11,910 | ||
Loans originated in 2016 | 4,939 | ||
Loans originated prior to 2016 | 52,174 | ||
Overdrafts and credit cards | 1,987 | ||
Non-accrual | Commercial loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 18,227 | 7,569 | |
Non-accrual | Commercial loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 1 | 2 | |
Non-accrual | Commercial loans | Government | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Non-accrual | Commercial loans | Commercial and industrial | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 18,226 | 7,567 | |
Non-accrual | Commercial real estate loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 6,300 | 3,250 | |
Non-accrual | Commercial real estate loans | Commercial mortgage | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 6,300 | 3,250 | |
Non-accrual | Commercial real estate loans | Construction | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Non-accrual | Consumer loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 1,177 | 1,252 | |
Non-accrual | Consumer loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 2 | 34 | |
Non-accrual | Consumer loans | Automobile financing | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 127 | 155 | |
Non-accrual | Consumer loans | Credit card | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Non-accrual | Consumer loans | Other consumer | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 1,048 | 1,063 | |
Non-accrual | Residential mortgage loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | $ 46,787 | $ 38,330 |
Loans - Age Analysis of Past Du
Loans - Age Analysis of Past Due Loans (Including Non-Accrual Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | $ 97,978 | $ 106,854 |
Total current | 5,096,930 | 5,059,356 |
Total amortized cost | 5,194,908 | 5,166,210 |
30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 7,714 | 34,329 |
60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 5,887 | 9,905 |
More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 84,377 | 62,620 |
Commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 18,425 | 7,765 |
Total current | 781,219 | 927,250 |
Total amortized cost | 799,644 | 935,015 |
Commercial loans | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 109 | 276 |
Commercial loans | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 50 | 0 |
Commercial loans | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 18,266 | 7,489 |
Commercial loans | Overdrafts | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 90 | 2 |
Total current | 72,372 | 28,545 |
Total amortized cost | 72,462 | 28,547 |
Commercial loans | Overdrafts | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial loans | Overdrafts | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial loans | Overdrafts | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 90 | 2 |
Commercial loans | Government | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Total current | 279,417 | 370,753 |
Total amortized cost | 279,417 | 370,753 |
Commercial loans | Government | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial loans | Government | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial loans | Government | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 18,335 | 7,763 |
Total current | 429,430 | 527,952 |
Total amortized cost | 447,765 | 535,715 |
Commercial loans | Commercial and industrial | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 109 | 276 |
Commercial loans | Commercial and industrial | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 50 | 0 |
Commercial loans | Commercial and industrial | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 18,176 | 7,487 |
Commercial real estate loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 7,010 | 6,823 |
Total current | 753,152 | 747,410 |
Total amortized cost | 760,162 | 754,233 |
Commercial real estate loans | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 710 | 445 |
Commercial real estate loans | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 1,552 | 0 |
Commercial real estate loans | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 4,748 | 6,378 |
Commercial real estate loans | Commercial mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 7,010 | 3,695 |
Total current | 708,332 | 655,598 |
Total amortized cost | 715,342 | 659,293 |
Commercial real estate loans | Commercial mortgage | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 710 | 445 |
Commercial real estate loans | Commercial mortgage | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 1,552 | 0 |
Commercial real estate loans | Commercial mortgage | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 4,748 | 3,250 |
Commercial real estate loans | Construction | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 0 | 3,128 |
Total current | 44,820 | 91,812 |
Total amortized cost | 44,820 | 94,940 |
Commercial real estate loans | Construction | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial real estate loans | Construction | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial real estate loans | Construction | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 0 | 3,128 |
Consumer loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 2,259 | 3,716 |
Total current | 228,493 | 253,425 |
Total amortized cost | 230,752 | 257,141 |
Consumer loans | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 591 | 1,677 |
Consumer loans | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 262 | 418 |
Consumer loans | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 1,406 | 1,621 |
Consumer loans | Overdrafts | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 2 | 34 |
Total current | 25,061 | 7,824 |
Total amortized cost | 25,063 | 7,858 |
Consumer loans | Overdrafts | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Consumer loans | Overdrafts | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Consumer loans | Overdrafts | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 2 | 34 |
Consumer loans | Automobile financing | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 217 | 246 |
Total current | 22,453 | 21,216 |
Total amortized cost | 22,670 | 21,462 |
Consumer loans | Automobile financing | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 55 | 53 |
Consumer loans | Automobile financing | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 35 | 58 |
Consumer loans | Automobile financing | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 127 | 135 |
Consumer loans | Credit card | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 938 | 1,275 |
Total current | 67,321 | 86,399 |
Total amortized cost | 68,259 | 87,674 |
Consumer loans | Credit card | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 480 | 630 |
Consumer loans | Credit card | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 224 | 221 |
Consumer loans | Credit card | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 234 | 424 |
Consumer loans | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 1,102 | 2,161 |
Total current | 113,658 | 137,986 |
Total amortized cost | 114,760 | 140,147 |
Consumer loans | Other consumer | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 56 | 994 |
Consumer loans | Other consumer | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 3 | 139 |
Consumer loans | Other consumer | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 1,043 | 1,028 |
Residential mortgage loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 70,284 | 88,550 |
Total current | 3,334,066 | 3,131,271 |
Total amortized cost | 3,404,350 | 3,219,821 |
Residential mortgage loans | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 6,304 | 31,931 |
Residential mortgage loans | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | 4,023 | 9,487 |
Residential mortgage loans | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due loans | $ 59,957 | $ 47,132 |
Loans - Changes in Allowances f
Loans - Changes in Allowances for Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 23,588 | $ 25,102 |
Provision increase (decrease) | 8,312 | (184) |
Recoveries of previous charge-offs | 1,638 | 1,640 |
Charge-offs | (7,554) | (3,016) |
Other | 273 | 46 |
Ending balance | 34,098 | 23,588 |
Allowances at end of period: individually evaluated for impairment | 17,678 | |
Allowances at end of period: collectively evaluated for impairment | 5,910 | |
Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 7,841 | |
Ending balance | 7,841 | |
Commercial loans | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 7,281 | 6,913 |
Provision increase (decrease) | 3,832 | 733 |
Recoveries of previous charge-offs | 12 | 9 |
Charge-offs | (3,635) | (374) |
Other | 10 | 0 |
Ending balance | 11,609 | 7,281 |
Allowances at end of period: individually evaluated for impairment | 4,904 | |
Allowances at end of period: collectively evaluated for impairment | 2,377 | |
Commercial loans | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 4,109 | |
Ending balance | 4,109 | |
Commercial real estate loans | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 1,496 | 4,092 |
Provision increase (decrease) | (418) | (2,596) |
Recoveries of previous charge-offs | 0 | 0 |
Charge-offs | 0 | 0 |
Other | 0 | 0 |
Ending balance | 2,104 | 1,496 |
Allowances at end of period: individually evaluated for impairment | 470 | |
Allowances at end of period: collectively evaluated for impairment | 1,026 | |
Commercial real estate loans | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 1,026 | |
Ending balance | 1,026 | |
Consumer loans | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 1,502 | 802 |
Provision increase (decrease) | 1,095 | 1,701 |
Recoveries of previous charge-offs | 1,247 | 1,186 |
Charge-offs | (1,876) | (2,193) |
Other | 2 | 6 |
Ending balance | 4,476 | 1,502 |
Allowances at end of period: individually evaluated for impairment | 676 | |
Allowances at end of period: collectively evaluated for impairment | 826 | |
Consumer loans | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 2,506 | |
Ending balance | 2,506 | |
Residential mortgage loans | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 13,309 | 13,295 |
Provision increase (decrease) | 3,803 | (22) |
Recoveries of previous charge-offs | 379 | 445 |
Charge-offs | (2,043) | (449) |
Other | 261 | 40 |
Ending balance | 15,909 | 13,309 |
Allowances at end of period: individually evaluated for impairment | 11,628 | |
Allowances at end of period: collectively evaluated for impairment | 1,681 | |
Residential mortgage loans | Cumulative Effect, Period of Adoption, Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 200 | |
Ending balance | $ 200 |
Loans - Non-Performing Loans (D
Loans - Non-Performing Loans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Financing Receivable, Past Due [Line Items] | ||
Financing receivable, nonaccrual, interest income | $ 0 | |
Total amortized cost | 5,194,908,000 | $ 5,166,210,000 |
Commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 799,644,000 | 935,015,000 |
Commercial loans | Overdrafts | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 72,462,000 | 28,547,000 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 447,765,000 | 535,715,000 |
Commercial real estate loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 760,162,000 | 754,233,000 |
Commercial real estate loans | Commercial mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 715,342,000 | 659,293,000 |
Commercial real estate loans | Construction | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 44,820,000 | 94,940,000 |
Consumer loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 230,752,000 | 257,141,000 |
Consumer loans | Overdrafts | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 25,063,000 | 7,858,000 |
Consumer loans | Automobile financing | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 22,670,000 | 21,462,000 |
Consumer loans | Credit card | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 68,259,000 | 87,674,000 |
Consumer loans | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 114,760,000 | 140,147,000 |
Residential mortgage loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 3,404,350,000 | 3,219,821,000 |
Non-Performing Financial Instruments | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 57,051,000 | 38,198,000 |
Non-accrual loans without an allowance | 15,440,000 | 12,203,000 |
Past due more than 90 days and accruing | 19,111,000 | 15,560,000 |
Total amortized cost | 91,602,000 | 65,961,000 |
Non-Performing Financial Instruments | Financial Asset Acquired with Credit Deterioration [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 1,800,000 | |
Non-Performing Financial Instruments | Commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 18,207,000 | 7,487,000 |
Non-accrual loans without an allowance | 20,000 | 82,000 |
Past due more than 90 days and accruing | 89,000 | 0 |
Total amortized cost | 18,316,000 | 7,569,000 |
Non-Performing Financial Instruments | Commercial loans | Overdrafts | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 0 | 0 |
Non-accrual loans without an allowance | 1,000 | 2,000 |
Past due more than 90 days and accruing | 89,000 | 0 |
Total amortized cost | 90,000 | 2,000 |
Non-Performing Financial Instruments | Commercial loans | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 18,207,000 | 7,487,000 |
Non-accrual loans without an allowance | 19,000 | 80,000 |
Past due more than 90 days and accruing | 0 | 0 |
Total amortized cost | 18,226,000 | 7,567,000 |
Non-Performing Financial Instruments | Commercial real estate loans | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 952,000 | 1,019,000 |
Non-accrual loans without an allowance | 5,348,000 | 2,231,000 |
Past due more than 90 days and accruing | 0 | 3,128,000 |
Total amortized cost | 6,300,000 | 6,378,000 |
Non-Performing Financial Instruments | Commercial real estate loans | Commercial mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 952,000 | 1,019,000 |
Non-accrual loans without an allowance | 5,348,000 | 2,231,000 |
Past due more than 90 days and accruing | 0 | 0 |
Total amortized cost | 6,300,000 | 3,250,000 |
Non-Performing Financial Instruments | Commercial real estate loans | Construction | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 0 | 0 |
Non-accrual loans without an allowance | 0 | 0 |
Past due more than 90 days and accruing | 0 | 3,128,000 |
Total amortized cost | 0 | 3,128,000 |
Non-Performing Financial Instruments | Consumer loans | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 995,000 | 676,000 |
Non-accrual loans without an allowance | 182,000 | 576,000 |
Past due more than 90 days and accruing | 234,000 | 424,000 |
Total amortized cost | 1,411,000 | 1,676,000 |
Non-Performing Financial Instruments | Consumer loans | Overdrafts | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 0 | 0 |
Non-accrual loans without an allowance | 2,000 | 34,000 |
Past due more than 90 days and accruing | 0 | 0 |
Total amortized cost | 2,000 | 34,000 |
Non-Performing Financial Instruments | Consumer loans | Automobile financing | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 126,000 | 0 |
Non-accrual loans without an allowance | 1,000 | 155,000 |
Past due more than 90 days and accruing | 0 | 0 |
Total amortized cost | 127,000 | 155,000 |
Non-Performing Financial Instruments | Consumer loans | Credit card | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 0 | 0 |
Non-accrual loans without an allowance | 0 | 0 |
Past due more than 90 days and accruing | 234,000 | 424,000 |
Total amortized cost | 234,000 | 424,000 |
Non-Performing Financial Instruments | Consumer loans | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 869,000 | 676,000 |
Non-accrual loans without an allowance | 179,000 | 387,000 |
Past due more than 90 days and accruing | 0 | 0 |
Total amortized cost | 1,048,000 | 1,063,000 |
Non-Performing Financial Instruments | Residential mortgage loans | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 36,897,000 | 29,016,000 |
Non-accrual loans without an allowance | 9,890,000 | 9,314,000 |
Past due more than 90 days and accruing | 18,788,000 | 12,008,000 |
Total amortized cost | $ 65,575,000 | $ 50,338,000 |
Loans - Loans Modified in a TDR
Loans - Loans Modified in a TDR (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)contract | Dec. 31, 2019USD ($)contract | Dec. 31, 2018contract | |
Receivables [Abstract] | |||
Subsequent default, number of contracts | contract | 0 | 0 | 2 |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
TDRs outstanding, Accrual | $ 65,200 | $ 69,168 | |
TDRs outstanding, Non-accrual | 18,940 | 10,891 | |
Commercial loans | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
TDRs outstanding, Accrual | 901 | 939 | |
TDRs outstanding, Non-accrual | 0 | 0 | |
Commercial real estate loans | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
TDRs outstanding, Accrual | 2,362 | 2,954 | |
TDRs outstanding, Non-accrual | $ 1,811 | $ 1,315 | |
Residential mortgage loans | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Number of contracts | contract | 9 | 3 | |
Pre-modification recorded loans | $ 5,590 | $ 1,381 | |
Modification: interest capitalization | 98 | 101 | |
Post- modification recorded loans | 5,688 | 1,482 | |
TDRs outstanding, Accrual | 61,937 | 65,275 | |
TDRs outstanding, Non-accrual | $ 17,129 | $ 9,576 |
Credit risk concentrations (Det
Credit risk concentrations (Details) - Credit Availability Concentration Risk - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total Credit Exposure | ||
Concentration Risk [Line Items] | ||
Total gross exposure | $ 10,613,677 | $ 9,865,124 |
Total Credit Exposure | Australia | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 220,871 | 170,956 |
Total Credit Exposure | Belgium | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 4,271 | 3,554 |
Total Credit Exposure | Bermuda | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 2,599,827 | 2,639,830 |
Total Credit Exposure | Canada | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 996,213 | 553,941 |
Total Credit Exposure | Cayman | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,374,424 | 1,195,198 |
Total Credit Exposure | Germany | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 107,412 | 0 |
Total Credit Exposure | Guernsey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 993,377 | 979,833 |
Total Credit Exposure | Ireland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 83,842 | 0 |
Total Credit Exposure | Japan | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 6,029 | 16,183 |
Total Credit Exposure | Jersey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 61,997 | 7,219 |
Total Credit Exposure | Netherlands | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 410,461 |
Total Credit Exposure | New Zealand | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 23,463 | 6,174 |
Total Credit Exposure | Norway | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 57,900 | 1,204 |
Total Credit Exposure | Saint Lucia | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 29,400 |
Total Credit Exposure | Switzerland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 4,510 | 8,015 |
Total Credit Exposure | The Bahamas | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 13,540 | 14,466 |
Total Credit Exposure | United Kingdom | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 2,634,823 | 2,926,151 |
Total Credit Exposure | United States | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,428,090 | 898,262 |
Total Credit Exposure | Other | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 3,088 | 4,277 |
Cash due from banks, resell agreements and short-term investments | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 4,309,670 | 3,910,733 |
Cash due from banks, resell agreements and short-term investments | Australia | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 220,871 | 170,956 |
Cash due from banks, resell agreements and short-term investments | Belgium | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 4,271 | 3,554 |
Cash due from banks, resell agreements and short-term investments | Bermuda | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 51,329 | 38,059 |
Cash due from banks, resell agreements and short-term investments | Canada | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 996,213 | 553,941 |
Cash due from banks, resell agreements and short-term investments | Cayman | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 29,480 | 55,360 |
Cash due from banks, resell agreements and short-term investments | Germany | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 107,412 | 0 |
Cash due from banks, resell agreements and short-term investments | Guernsey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1 | 4 |
Cash due from banks, resell agreements and short-term investments | Ireland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 83,842 | 0 |
Cash due from banks, resell agreements and short-term investments | Japan | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 6,029 | 16,183 |
Cash due from banks, resell agreements and short-term investments | Jersey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Cash due from banks, resell agreements and short-term investments | Netherlands | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 410,461 |
Cash due from banks, resell agreements and short-term investments | New Zealand | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 23,463 | 6,174 |
Cash due from banks, resell agreements and short-term investments | Norway | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 57,900 | 1,204 |
Cash due from banks, resell agreements and short-term investments | Saint Lucia | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Cash due from banks, resell agreements and short-term investments | Switzerland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 4,510 | 8,015 |
Cash due from banks, resell agreements and short-term investments | The Bahamas | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,516 | 1,607 |
Cash due from banks, resell agreements and short-term investments | United Kingdom | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,291,655 | 1,742,676 |
Cash due from banks, resell agreements and short-term investments | United States | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,428,090 | 898,262 |
Cash due from banks, resell agreements and short-term investments | Other | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 3,088 | 4,277 |
Loans | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 5,194,908 | 5,166,210 |
Loans | Australia | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Belgium | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Bermuda | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 2,225,401 | 2,253,969 |
Loans | Canada | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Cayman | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 948,290 | 931,434 |
Loans | Germany | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Guernsey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 779,915 | 856,453 |
Loans | Ireland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Japan | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Jersey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 26,773 | 7,219 |
Loans | Netherlands | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | New Zealand | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Norway | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Saint Lucia | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 29,400 |
Loans | Switzerland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | The Bahamas | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 12,024 | 12,859 |
Loans | United Kingdom | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,202,505 | 1,074,876 |
Loans | United States | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Other | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,109,099 | 788,181 |
Off-balance sheet | Australia | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Belgium | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Bermuda | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 323,097 | 347,802 |
Off-balance sheet | Canada | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Cayman | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 396,654 | 208,404 |
Off-balance sheet | Germany | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Guernsey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 213,461 | 123,376 |
Off-balance sheet | Ireland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Japan | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Jersey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 35,224 | 0 |
Off-balance sheet | Netherlands | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | New Zealand | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Norway | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Saint Lucia | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Switzerland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | The Bahamas | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | United Kingdom | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 140,663 | 108,599 |
Off-balance sheet | United States | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Other | ||
Concentration Risk [Line Items] | ||
Total gross exposure | $ 0 | $ 0 |
Premises, equipment and compu_3
Premises, equipment and computer software - Schedule of Premise, Equipment, and Computer Software (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Cost | $ 400,204 | $ 385,901 | |
Accumulated depreciation | (249,452) | (227,668) | |
Net carrying value | 150,752 | 158,233 | |
Total depreciation charged to operating expenses | 29,213 | 26,636 | $ 26,137 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 8,730 | 8,730 | |
Accumulated depreciation | 0 | 0 | |
Net carrying value | 8,730 | 8,730 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 164,171 | 156,756 | |
Accumulated depreciation | (71,721) | (66,370) | |
Net carrying value | 92,450 | 90,386 | |
Total depreciation charged to operating expenses | 5,511 | 4,492 | 4,283 |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 25,150 | 22,928 | |
Accumulated depreciation | (15,930) | (17,062) | |
Net carrying value | 9,220 | 5,866 | |
Total depreciation charged to operating expenses | 1,929 | 1,524 | 1,413 |
Computer hardware and software in use | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 197,165 | 189,380 | |
Accumulated depreciation | (161,801) | (144,236) | |
Net carrying value | 35,364 | 45,144 | |
Total depreciation charged to operating expenses | 21,773 | 20,620 | $ 20,441 |
Computer software in development | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 4,988 | 8,107 | |
Accumulated depreciation | 0 | 0 | |
Net carrying value | $ 4,988 | $ 8,107 |
Goodwill and other intangible_3
Goodwill and other intangible assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | |||
Balance at beginning of year | $ 24,838 | $ 23,991 | $ 21,529 |
Acquisitions during the year | 3,868 | ||
Foreign exchange translation adjustment | 789 | 847 | (1,406) |
Balance at end of year | 25,627 | 24,838 | 23,991 |
Cayman | |||
Goodwill [Roll Forward] | |||
Balance at beginning of year | 551 | 551 | 0 |
Acquisitions during the year | 551 | ||
Foreign exchange translation adjustment | 0 | 0 | 0 |
Balance at end of year | 551 | 551 | 551 |
Channel Islands and the UK | |||
Goodwill [Roll Forward] | |||
Balance at beginning of year | 22,245 | 21,427 | 21,529 |
Acquisitions during the year | 1,231 | ||
Foreign exchange translation adjustment | 719 | 818 | (1,333) |
Balance at end of year | 22,964 | 22,245 | 21,427 |
Other | |||
Goodwill [Roll Forward] | |||
Balance at beginning of year | 2,042 | 2,013 | 0 |
Acquisitions during the year | 2,086 | ||
Foreign exchange translation adjustment | 70 | 29 | (73) |
Balance at end of year | $ 2,112 | $ 2,042 | $ 2,013 |
Goodwill and other intangible_4
Goodwill and other intangible assets - Customer Relationship Intangible Assets (Details) - Customer Relationships - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 143,145 | $ 143,145 |
Accumulated amortization | (75,953) | (71,480) |
Net carrying amount | 67,192 | 71,665 |
Bermuda | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 29,785 | 29,785 |
Accumulated amortization | (15,009) | (13,579) |
Net carrying amount | 14,776 | 16,206 |
Cayman | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 17,728 | 17,728 |
Accumulated amortization | (6,773) | (5,672) |
Net carrying amount | 10,955 | 12,056 |
Channel Islands and the UK | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 90,069 | 90,069 |
Accumulated amortization | (53,279) | (51,435) |
Net carrying amount | 36,790 | 38,634 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 5,563 | 5,563 |
Accumulated amortization | (892) | (794) |
Net carrying amount | $ 4,671 | $ 4,769 |
Goodwill and other intangible_5
Goodwill and other intangible assets - Narrative (Details) - USD ($) | Mar. 29, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 5,819,000 | $ 5,451,000 | $ 5,091,000 | |
Deutsche Bank’s Global Trust Solutions | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Acquired finite-lived intangible assets, useful life | 15 years | |||
Customer Relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Assets acquired | 0 | $ 24,400,000 | $ 18,200,000 | |
Acquired finite-lived intangible assets, useful life | 15 years | 15 years | ||
Amortization expense | 5,800,000 | $ 5,500,000 | $ 5,100,000 | |
Foreign currency translation increase (decrease) in net carrying amount | 1,300,000 | $ (2,000,000) | (1,500,000) | |
Estimated aggregate amortization expense, next twelve months | 6,100,000 | |||
Estimated aggregate amortization expense, year two | 6,100,000 | |||
Estimated aggregate amortization expense, year three | 6,100,000 | |||
Estimated aggregate amortization expense, year four | 6,100,000 | |||
Estimated aggregate amortization expense, year five | $ 6,100,000 | |||
Customer Relationships | Deutsche Bank’s Global Trust Solutions | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Assets acquired | 16,900,000 | |||
Customer Relationships | Asset Acquisitions | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Assets acquired | $ 1,300,000 |
Customer deposits and deposit_3
Customer deposits and deposits from banks (Details) $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Time Deposits [Line Items] | ||
Non-interest-bearing, Demand | $ 3,012,360 | $ 2,238,256 |
Interest-bearing, Demand | 7,577,642 | 7,152,063 |
Total demand deposits | 10,590,002 | 9,390,319 |
Term, Within 3 months | 1,583,729 | 2,434,285 |
Term, 3 to 6 months | 633,935 | 234,300 |
Term, 6 to 12 months | 343,911 | 304,517 |
Term, After 12 months | 98,507 | 78,204 |
Total term deposits | 2,660,082 | 3,051,306 |
Total deposits | $ 13,250,084 | $ 12,441,625 |
Weighted average interest rate, demand deposits | (0.0004) | 0.0020 |
Demand or less than $100k | ||
Time Deposits [Line Items] | ||
Non-interest-bearing, Demand | $ 3,012,360 | $ 2,238,256 |
Interest-bearing, Demand | 7,577,642 | 7,152,063 |
Total demand deposits | 10,590,002 | 9,390,319 |
Term, less than $100k, Within 3 months | 30,551 | 31,666 |
Term, less than $100k, 3 to 6 months | 8,402 | 9,355 |
Term, less than $100k, 6 to 12 months | 13,138 | 13,497 |
Term, less than $100k, After 12 months | 14,875 | 16,478 |
Total term deposits, less than $100k | 66,966 | 70,996 |
Total deposits, less than $100k | 10,656,968 | 9,461,315 |
Term - $100k or more | ||
Time Deposits [Line Items] | ||
Term, more than $100k, Within 3 months | 1,553,178 | 2,402,619 |
Term, more than $100k, 3 to 6 months | 625,533 | 224,945 |
Term, more than $100k, 6 to 12 months | 330,773 | 291,020 |
Term, more than $100k, After 12 months | 83,632 | 61,726 |
Total term deposits, more than $100k | 2,593,116 | 2,980,310 |
Total deposits, more than $100k | $ 2,593,116 | $ 2,980,310 |
Customer deposits and deposit_4
Customer deposits and deposits from banks - By Type and Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Time Deposits [Line Items] | ||
Demand Deposit Accounts | $ 10,590,002 | $ 9,390,319 |
Time Deposits | 2,660,082 | 3,051,306 |
Deposits | 13,250,084 | 12,441,625 |
Bermuda | ||
Time Deposits [Line Items] | ||
Demand Deposit Accounts | 4,107,156 | 3,145,859 |
Time Deposits | 705,490 | 1,265,679 |
Deposits | 4,812,646 | 4,411,538 |
Cayman | ||
Time Deposits [Line Items] | ||
Demand Deposit Accounts | 3,577,120 | 2,995,119 |
Time Deposits | 531,602 | 479,848 |
Deposits | 4,108,722 | 3,474,967 |
Channel Islands and the UK | ||
Time Deposits [Line Items] | ||
Demand Deposit Accounts | 2,905,726 | 3,249,341 |
Time Deposits | 1,422,990 | 1,305,779 |
Deposits | $ 4,328,716 | $ 4,555,120 |
Employee benefit plans - Narrat
Employee benefit plans - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2014 | |
Guernsey | Pension plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Remaining life expectancy, inactive participants | 39 years | ||
Remaining life expectancy, active members | 15 years | ||
Postretirement Health Coverage 2010 Amendment | Bermuda | Post- retirement medical benefit plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Remaining service period | 3 years 1 month 6 days | ||
Postretirement Health Coverage 2011 Amendment | Bermuda | Post- retirement medical benefit plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Remaining service period | 4 years 7 months 6 days | ||
Postretirement Health Coverage 2014 Amendment | Bermuda | Post- retirement medical benefit plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Remaining life expectancy | 16 years | 21 years |
Employee benefit plans - Financ
Employee benefit plans - Financial Position of Defined Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Amounts recognized in the consolidated balance sheets consist of: | |||
Accrued pension benefit cost included in employee benefit plans liability | $ (131,279) | $ (110,347) | |
Pension plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation at end of year | 179,018 | 168,791 | $ 148,966 |
Change in projected benefit obligation | |||
Projected benefit obligation at beginning of year | 168,791 | 148,966 | 179,613 |
Service cost | 43 | 0 | 0 |
Interest cost | 3,957 | 5,034 | 4,971 |
Benefits paid | (7,412) | (7,546) | (17,274) |
Prior service cost | 48 | 0 | 212 |
Plan amendment | 0 | 0 | 0 |
Settlement and curtailment of liability | (7,505) | (2,549) | (1,825) |
Actuarial (gain) loss | 18,326 | 21,950 | (12,423) |
Foreign exchange translation adjustment | 2,770 | 2,936 | (4,308) |
Projected benefit obligation at end of year | 179,018 | 168,791 | 148,966 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 175,400 | 154,151 | 185,495 |
Actual return on plan assets | 14,945 | 25,225 | (11,618) |
Employer contribution | 2,917 | 2,605 | 3,653 |
Plan settlement | (5,903) | (2,043) | (1,608) |
Benefits paid | (7,412) | (7,546) | (17,274) |
Foreign exchange translation adjustment | 2,569 | 3,008 | (4,497) |
Fair value of plan assets at end of year | 182,516 | 175,400 | 154,151 |
Amounts recognized in the consolidated balance sheets consist of: | |||
Prepaid benefit cost included in other assets | 6,610 | 6,609 | 5,185 |
Accrued pension benefit cost included in employee benefit plans liability | (3,112) | 0 | 0 |
Surplus (deficit) of plan assets over projected benefit obligation at measurement date | 3,498 | 6,609 | 5,185 |
Post- retirement medical benefit plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation at end of year | 128,167 | 110,347 | 117,203 |
Change in projected benefit obligation | |||
Projected benefit obligation at beginning of year | 110,347 | 117,203 | 127,687 |
Service cost | 66 | 58 | 63 |
Interest cost | 3,270 | 4,741 | 4,305 |
Benefits paid | (4,069) | (4,010) | (3,263) |
Prior service cost | 0 | 0 | 0 |
Plan amendment | 0 | 2,369 | 0 |
Settlement and curtailment of liability | 0 | 0 | 0 |
Actuarial (gain) loss | 18,553 | (10,014) | (11,589) |
Foreign exchange translation adjustment | 0 | 0 | 0 |
Projected benefit obligation at end of year | 128,167 | 110,347 | 117,203 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 0 | 0 | 0 |
Actual return on plan assets | 0 | 0 | 0 |
Employer contribution | 4,069 | 4,010 | 3,263 |
Plan settlement | 0 | 0 | |
Benefits paid | (4,069) | (4,010) | (3,263) |
Foreign exchange translation adjustment | 0 | 0 | 0 |
Fair value of plan assets at end of year | 0 | 0 | 0 |
Amounts recognized in the consolidated balance sheets consist of: | |||
Prepaid benefit cost included in other assets | 0 | 0 | 0 |
Accrued pension benefit cost included in employee benefit plans liability | (128,167) | (110,347) | (117,203) |
Surplus (deficit) of plan assets over projected benefit obligation at measurement date | $ (128,167) | $ (110,347) | $ (117,203) |
Employee benefit plans - Amount
Employee benefit plans - Amounts Recognized in AOCI, Benefit Expense (Income), and OCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Changes Recognized in Other Comprehensive Income (Loss) | |||
Amortization of prior service (credit) cost | $ 20 | $ 19 | $ 0 |
Pension plans | |||
Amounts recognized in accumulated other comprehensive loss consist of: | |||
Net actuarial gain (loss), excluding deferred taxes | (73,506) | (67,118) | (65,506) |
Net prior service credit (cost) | (226) | (190) | (202) |
Deferred income taxes assets (liabilities) | 1,477 | 996 | 816 |
Net amount recognized in accumulated other comprehensive loss | (72,255) | (66,312) | (64,892) |
Expense component | |||
Service cost | 43 | 0 | 0 |
Interest cost | 3,957 | 5,034 | 4,971 |
Defined benefit (income) expense | 269 | 260 | 114 |
Defined contribution expense | 8,933 | 8,340 | 7,442 |
Total benefit (income) expense | 9,202 | 8,600 | 7,556 |
Other Changes Recognized in Other Comprehensive Income (Loss) | |||
Net gain (loss) arising during the year | (8,363) | (3,472) | (5,987) |
Prior service credit (cost) arising during the year | (47) | 0 | (212) |
Amortization of net actuarial (gains) losses | 2,412 | 2,407 | 2,106 |
Amortization of prior service (credit) cost | 20 | 19 | 0 |
Change in deferred taxes | 456 | 149 | (298) |
Foreign exchange adjustment | (421) | (523) | 840 |
Total changes recognized in other comprehensive income (loss) | (5,943) | (1,420) | (3,551) |
Pension plans | Salaries and other employee benefits | |||
Expense component | |||
Service cost | 97 | 0 | 0 |
Pension plans | Non-service employee benefits expense | |||
Expense component | |||
Interest cost | 3,960 | 5,034 | 4,971 |
Expected return on plan assets | (7,547) | (7,563) | (8,720) |
Amortization of net actuarial (gains) losses | 2,412 | 2,197 | 2,106 |
Amortization of prior service (credit) loss | 21 | 20 | 0 |
Pension plans | Net other gains (losses)/Non-service employee benefits expense | |||
Expense component | |||
(Gain) loss on settlement | 1,326 | 572 | 1,757 |
Post- retirement medical benefit plan | |||
Amounts recognized in accumulated other comprehensive loss consist of: | |||
Net actuarial gain (loss), excluding deferred taxes | (21,213) | (2,660) | (12,946) |
Net prior service credit (cost) | (7,866) | (8,390) | (6,397) |
Deferred income taxes assets (liabilities) | 0 | 0 | 0 |
Net amount recognized in accumulated other comprehensive loss | (29,079) | (11,050) | (19,343) |
Expense component | |||
Service cost | 66 | 58 | 63 |
Interest cost | 3,270 | 4,741 | 4,305 |
Defined benefit (income) expense | 3,860 | 5,447 | 7,022 |
Defined contribution expense | 0 | 0 | 0 |
Total benefit (income) expense | 3,860 | 5,447 | 7,022 |
Other Changes Recognized in Other Comprehensive Income (Loss) | |||
Net gain (loss) arising during the year | (18,553) | 10,014 | 11,589 |
Prior service credit (cost) arising during the year | 0 | (2,369) | 0 |
Amortization of net actuarial (gains) losses | 0 | 272 | 2,615 |
Amortization of prior service (credit) cost | 524 | 376 | 39 |
Change in deferred taxes | 0 | 0 | 0 |
Foreign exchange adjustment | 0 | 0 | 0 |
Total changes recognized in other comprehensive income (loss) | (18,029) | 8,293 | 14,243 |
Post- retirement medical benefit plan | Salaries and other employee benefits | |||
Expense component | |||
Service cost | 66 | 58 | 63 |
Post- retirement medical benefit plan | Non-service employee benefits expense | |||
Expense component | |||
Interest cost | 3,270 | 4,741 | 4,305 |
Expected return on plan assets | 0 | 0 | |
Amortization of net actuarial (gains) losses | 0 | 272 | 2,615 |
Amortization of prior service (credit) loss | 524 | 376 | 39 |
Post- retirement medical benefit plan | Net other gains (losses)/Non-service employee benefits expense | |||
Expense component | |||
(Gain) loss on settlement | $ 0 | $ 0 | $ 0 |
Employee benefit plans - Actuar
Employee benefit plans - Actuarial Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Pension plans | |||
Actuarial assumptions used to determine annual benefit expense | |||
Weighted average discount rate | 2.65% | 3.65% | 3.05% |
Weighted average rate of compensation increases | 2.30% | 2.50% | 2.50% |
Weighted average expected long-term rate of return on plan assets | 4.60% | 5.00% | 4.70% |
Actuarial assumptions used to determine benefit obligations at end of year | |||
Weighted average discount rate | 1.90% | 2.65% | 3.65% |
Weighted average rate of compensation increases | 2.20% | 2.30% | 2.50% |
Post-retirement healthcare plan | |||
Actuarial assumptions used to determine annual benefit expense | |||
Weighted average discount rate | 3.38% | 4.40% | 3.73% |
Actuarial assumptions used to determine benefit obligations at end of year | |||
Weighted average discount rate | 2.53% | 3.38% | 4.40% |
Post-retirement healthcare plan | Maximum | |||
Actuarial assumptions used to determine annual benefit expense | |||
Weighted average annual medical cost increase rate | 7.30% | 7.50% | 7.70% |
Actuarial assumptions used to determine benefit obligations at end of year | |||
Weighted average annual medical cost increase rate | 7.20% | 7.30% | 7.50% |
Post-retirement healthcare plan | Minimum | |||
Actuarial assumptions used to determine annual benefit expense | |||
Weighted average annual medical cost increase rate | 4.50% | 4.50% | 4.50% |
Actuarial assumptions used to determine benefit obligations at end of year | |||
Weighted average annual medical cost increase rate | 4.50% | 4.50% | 4.50% |
Employee benefit plans - Invest
Employee benefit plans - Investments Policies and Strategies (Details) - Pension plans | Dec. 31, 2020 | Dec. 31, 2019 |
Weighted average actual and target asset allocations of the pension plans by asset category | ||
Actual allocation | 100.00% | 100.00% |
Target allocation | 100.00% | 100.00% |
Debt securities (including debt mutual funds) | ||
Weighted average actual and target asset allocations of the pension plans by asset category | ||
Actual allocation | 37.00% | 32.00% |
Target allocation | 30.00% | 36.00% |
Equity securities (including equity mutual funds) | ||
Weighted average actual and target asset allocations of the pension plans by asset category | ||
Actual allocation | 50.00% | 51.00% |
Target allocation | 52.00% | 47.00% |
Other | ||
Weighted average actual and target asset allocations of the pension plans by asset category | ||
Actual allocation | 13.00% | 17.00% |
Target allocation | 18.00% | 17.00% |
Employee benefit plans - Fair V
Employee benefit plans - Fair Value Measurements of Pension Plans' Assets (Details) - Pension plans - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 182,516 | $ 175,400 | $ 154,151 | $ 185,495 |
Actual allocation | 100.00% | 100.00% | ||
Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 1,652 | $ 11,161 | ||
Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 159,369 | 145,259 | ||
Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 21,495 | 18,980 | ||
US government and federal agencies | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 21,566 | 19,445 | ||
US government and federal agencies | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 0 | 0 | ||
US government and federal agencies | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 21,566 | 19,445 | ||
US government and federal agencies | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 0 | 0 | ||
Non-US governments debt securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 1,132 | 1,089 | ||
Non-US governments debt securities | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 0 | 0 | ||
Non-US governments debt securities | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 1,132 | 1,089 | ||
Non-US governments debt securities | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 0 | 0 | ||
Corporate debt securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 45,871 | 35,688 | ||
Corporate debt securities | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 0 | 0 | ||
Corporate debt securities | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 45,871 | 35,688 | ||
Corporate debt securities | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 0 | 0 | ||
Equity securities (including equity mutual funds) | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 91,499 | $ 89,743 | ||
Actual allocation | 50.00% | 51.00% | ||
Equity securities (including equity mutual funds) | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 925 | $ 1,112 | ||
Equity securities (including equity mutual funds) | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 90,574 | 88,631 | ||
Equity securities (including equity mutual funds) | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 0 | 0 | ||
Other | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 22,448 | $ 29,435 | ||
Actual allocation | 13.00% | 17.00% | ||
Other | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 727 | $ 10,049 | ||
Other | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 226 | 406 | ||
Other | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 21,495 | $ 18,980 | ||
Mutual Funds And Equity Securities Managed Or Administered By Wholly-Owned Subsidiaries | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Actual allocation | 28.40% | 26.80% | ||
Parent Company Common Stock | Voting Common Stock | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Actual allocation | 0.50% | 0.60% |
Employee benefit plans - Estima
Employee benefit plans - Estimated Future Contributions (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Pension plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated Bank contributions for the full year ending December 31, 2021 | $ 3,000 |
Estimated benefit payments by year: | |
2021 | 7,400 |
2022 | 7,400 |
2023 | 7,300 |
2024 | 7,200 |
2025 | 7,200 |
2026-2030 | 34,500 |
Post- retirement medical benefit plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated Bank contributions for the full year ending December 31, 2021 | 0 |
Estimated benefit payments by year: | |
2021 | 4,538 |
2022 | 4,763 |
2023 | 4,992 |
2024 | 5,216 |
2025 | 5,447 |
2026-2030 | $ 30,034 |
Credit-related arrangements, _3
Credit-related arrangements, repurchase agreements and commitments - Commitments (Details) | Dec. 31, 2020USD ($)custodian | Dec. 31, 2019USD ($) |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Purchase obligation | $ 13,029,000 | $ 27,600,000 |
Number of custodians | custodian | 1 | |
Commitments to extend credit | $ 836,710,000 | 549,049,000 |
Documentary and commercial letters of credit | 981,000 | 355,000 |
Total unfunded commitments to extend credit | 837,691,000 | 549,404,000 |
Allowance for credit losses | $ (179,000) | 0 |
Custodian | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Right to set-off against securities held, percent of utilized facility | 110.00% | |
Commitments to extend credit | $ 200,000,000 | |
Custodian | Standby Letters of Credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to extend credit | $ 153,200,000 | $ 143,600,000 |
Credit-related arrangements, _4
Credit-related arrangements, repurchase agreements and commitments - Contractual Obligation, Fiscal Year Maturity Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Sourcing | ||
2021 | $ 13,029 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
Total commitments | 13,029 | $ 27,600 |
Other | ||
2021 | 18,638 | |
2022 | 11,682 | |
2023 | 5,552 | |
2024 | 2,490 | |
2025 | 1,779 | |
Total commitments | 40,141 | |
Total | ||
2021 | 31,667 | |
2022 | 11,682 | |
2023 | 5,552 | |
2024 | 2,490 | |
2025 | 1,779 | |
Total commitments | $ 53,170 |
Credit-related arrangements, _5
Credit-related arrangements, repurchase agreements and commitments - Credit-Related Arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Offsetting Liabilities [Line Items] | ||
Outstanding financial guarantees, Gross | $ 271,408 | $ 238,777 |
Outstanding financial guarantees, Collateral | 264,112 | 231,383 |
Outstanding financial guarantees, Net | $ 7,296 | 7,394 |
Standby Letters of Credit | ||
Offsetting Liabilities [Line Items] | ||
Guarantor obligations, term period | 1 year | |
Letters of Guarantee | ||
Offsetting Liabilities [Line Items] | ||
Guarantor obligations, term period | 4 years | |
Standby letters of credit | ||
Offsetting Liabilities [Line Items] | ||
Outstanding financial guarantees, Gross | $ 265,959 | 230,971 |
Outstanding financial guarantees, Collateral | 258,699 | 223,711 |
Outstanding financial guarantees, Net | 7,260 | 7,260 |
Letters of guarantee | ||
Offsetting Liabilities [Line Items] | ||
Outstanding financial guarantees, Gross | 5,449 | 7,806 |
Outstanding financial guarantees, Collateral | 5,413 | 7,672 |
Outstanding financial guarantees, Net | $ 36 | $ 134 |
Credit-related arrangements, _6
Credit-related arrangements, repurchase agreements and commitments - Repurchase Agreements (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)position | Dec. 31, 2019USD ($)position | |
Loss Contingencies [Line Items] | ||
Securities purchased under agreements to resell | $ 197,039 | $ 142,283 |
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises | ||
Loss Contingencies [Line Items] | ||
Resell agreements, number of open positions | position | 5 | 13 |
Resell agreements, maturity period (less than) | 30 days | |
Securities purchased under agreements to resell | $ 197,000 | $ 142,300 |
Credit-related arrangements, _7
Credit-related arrangements, repurchase agreements and commitments - Legal Proceedings (Details) - John Doe Summonses - Pending Litigation $ in Millions | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2013institution | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Loss Contingencies [Line Items] | |||
Number of defendants | institution | 6 | ||
Loss contingency provision | $ | $ 5.5 | $ 5.5 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Leases [Abstract] | |
Operating leases, rent expense | $ 5.6 |
Leases - Summary of Lease Costs
Leases - Summary of Lease Costs and Lessee Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lease costs | ||
Operating lease costs | $ 7,932 | $ 6,606 |
Short-term lease costs | 1,500 | 858 |
Sublease income | (1,205) | (534) |
Total net lease cost | 8,227 | 6,930 |
Operating lease income | 940 | 677 |
Right-of-use assets related to new operating lease liabilities | 323 | 28,703 |
Operating cash flows from operating leases | $ 8,330 | $ 7,071 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssets | us-gaap:OtherAssets |
Operating leases right-of-use assets (included in other assets on the balance sheets) | $ 46,244 | $ 47,947 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilities | us-gaap:OtherLiabilities |
Operating lease liabilities (included in other liabilities on the balance sheets) | $ 44,940 | $ 48,334 |
Weighted average remaining lease term for operating leases (in years) | 10 years 1 month 20 days | 10 years 4 months 13 days |
Weighted average discount rate for operating leases | 5.25% | 5.25% |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2021 | $ 8,319 | |
2022 | 8,111 | |
2023 | 6,980 | |
2024 | 6,247 | |
2025 | 3,870 | |
2026 & thereafter | 24,793 | |
Total commitments | 58,320 | |
Less: effect of discounting cash flows to their present value | (13,380) | |
Operating lease liabilities | $ 44,940 | $ 48,334 |
Loan interest income (Details)
Loan interest income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |||
Contractual interest earned | $ 224,474 | $ 228,892 | $ 213,908 |
Amortization | |||
Amortization of fair value hedge | (300) | (316) | (501) |
Amortization of loan origination fees (net of amortized costs) | 5,436 | 5,456 | 5,088 |
Amortization of fair value adjustment on purchased loans | 1,046 | 0 | 0 |
Total loan interest income | 230,656 | 234,032 | 218,495 |
Balance of unamortized fair value hedge included in loans as at year end | 1,376 | 1,676 | 1,992 |
Balance of unamortized loan fees included in loans as at year end | $ 12,204 | $ 11,628 | $ 10,010 |
Segmented information (Details)
Segmented information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)branchsegment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 4 | ||
Segment Reporting Information [Line Items] | |||
Assets | $ 14,738,634 | $ 13,921,575 | |
Net interest income | 317,599 | 345,702 | $ 342,989 |
Provision for credit recoveries (losses) | (8,491) | 184 | 6,991 |
Non-interest income | 183,859 | 183,975 | 168,686 |
Net revenue before gains and losses | 492,967 | 529,861 | 518,666 |
Gains and losses | 1,222 | 2,767 | (855) |
Total net revenue | 494,189 | 532,628 | 517,811 |
Total expenses | 346,972 | 355,553 | 322,627 |
Net income | 147,217 | 177,075 | 195,184 |
Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 317,599 | 345,702 | 342,989 |
Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 0 | 0 | 0 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Assets | 15,264,315 | 14,202,595 | |
Provision for credit recoveries (losses) | (8,491) | 184 | 6,991 |
Non-interest income | 189,592 | 197,405 | 177,114 |
Net revenue before gains and losses | 498,700 | 543,291 | 527,094 |
Gains and losses | 1,222 | 2,767 | (855) |
Total net revenue | 499,922 | 546,058 | 526,239 |
Total expenses | 352,705 | 368,983 | 331,055 |
Net income | 147,217 | 177,075 | 195,184 |
Operating Segments | Customer | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 317,599 | 345,702 | 342,989 |
Operating Segments | Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | $ 0 | 0 | 0 |
Operating Segments | Bermuda | |||
Segment Reporting Information [Line Items] | |||
Number of branch locations | branch | 3 | ||
Assets | $ 5,924,779 | 5,220,016 | |
Provision for credit recoveries (losses) | (8,750) | (3,088) | 6,823 |
Non-interest income | 85,216 | 89,114 | 87,352 |
Net revenue before gains and losses | 236,034 | 269,936 | 299,459 |
Gains and losses | 1,970 | 2,172 | (20) |
Total net revenue | 238,004 | 272,108 | 299,439 |
Total expenses | 192,781 | 209,417 | 202,318 |
Net income | 45,223 | 62,691 | 97,121 |
Operating Segments | Bermuda | Customer | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 158,790 | 182,674 | 202,901 |
Operating Segments | Bermuda | Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | $ 778 | 1,236 | 2,383 |
Operating Segments | Cayman | |||
Segment Reporting Information [Line Items] | |||
Number of branch locations | branch | 3 | ||
Assets | $ 4,479,937 | 3,839,074 | |
Provision for credit recoveries (losses) | 483 | 1,893 | 1,297 |
Non-interest income | 49,294 | 51,853 | 47,781 |
Net revenue before gains and losses | 145,137 | 168,310 | 152,287 |
Gains and losses | 491 | 570 | 349 |
Total net revenue | 145,628 | 168,880 | 152,636 |
Total expenses | 62,605 | 61,057 | 60,666 |
Net income | 83,023 | 107,823 | 91,970 |
Operating Segments | Cayman | Customer | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 94,211 | 113,493 | 102,793 |
Operating Segments | Cayman | Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 1,149 | 1,071 | 416 |
Operating Segments | Channel Islands and the UK | |||
Segment Reporting Information [Line Items] | |||
Assets | 4,826,671 | 5,108,357 | |
Provision for credit recoveries (losses) | (224) | 1,379 | (1,129) |
Non-interest income | 40,698 | 34,319 | 26,824 |
Net revenue before gains and losses | 103,138 | 82,877 | 60,172 |
Gains and losses | (1,238) | 43 | (1,185) |
Total net revenue | 101,900 | 82,920 | 58,987 |
Total expenses | 82,057 | 74,217 | 50,353 |
Net income | 19,843 | 8,703 | 8,634 |
Operating Segments | Channel Islands and the UK | Customer | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 64,591 | 49,486 | 37,276 |
Operating Segments | Channel Islands and the UK | Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | (1,927) | (2,307) | (2,799) |
Operating Segments | Other | |||
Segment Reporting Information [Line Items] | |||
Assets | 32,928 | 35,148 | |
Provision for credit recoveries (losses) | 0 | 0 | 0 |
Non-interest income | 14,384 | 22,119 | 15,157 |
Net revenue before gains and losses | 14,391 | 22,168 | 15,176 |
Gains and losses | (1) | (18) | 1 |
Total net revenue | 14,390 | 22,150 | 15,177 |
Total expenses | 15,262 | 24,292 | 17,718 |
Net income | (872) | (2,142) | (2,541) |
Operating Segments | Other | Customer | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 7 | 49 | 19 |
Operating Segments | Other | Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 0 | 0 | 0 |
Inter-segment eliminations | |||
Segment Reporting Information [Line Items] | |||
Assets | (525,681) | (281,020) | |
Provision for credit recoveries (losses) | 0 | 0 | 0 |
Non-interest income | (5,733) | (13,430) | (8,428) |
Net revenue before gains and losses | (5,733) | (13,430) | (8,428) |
Gains and losses | 0 | 0 | 0 |
Total net revenue | (5,733) | (13,430) | (8,428) |
Total expenses | (5,733) | (13,430) | (8,428) |
Net income | 0 | 0 | 0 |
Inter-segment eliminations | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 0 | 0 | 0 |
Inter-segment eliminations | Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | $ 0 | $ 0 | $ 0 |
Derivative instruments and ri_3
Derivative instruments and risk management - Schedule of Notional Amounts and Related Fair Value Measurements of Derivative Instruments (Details) $ in Thousands, € in Millions, SFr in Millions | Dec. 31, 2020USD ($)contract | Dec. 31, 2020EUR (€)contract | Dec. 31, 2020CHF (SFr)contract | Dec. 31, 2019USD ($)contract | Dec. 31, 2019EUR (€)contract | Dec. 31, 2019CHF (SFr)contract |
Derivatives, Fair Value [Line Items] | ||||||
Notional amounts | $ 2,507,963 | $ 3,497,170 | ||||
Gross positive fair value | 13,845 | 32,692 | ||||
Gross negative fair value | (32,687) | (32,059) | ||||
Net fair value | $ (18,842) | $ 633 | ||||
Currency swaps | Designated as Hedging Instrument | Net investment hedges | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Number of contracts | contract | 4 | 4 | 4 | 1 | 1 | 1 |
Notional amounts | $ 68,231 | $ 9,502 | ||||
Gross positive fair value | 0 | 0 | ||||
Gross negative fair value | (4,586) | (118) | ||||
Net fair value | $ (4,586) | $ (118) | ||||
Currency swaps | Designated as Hedging Instrument | Fair value hedges | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Number of contracts | contract | 5 | 5 | 5 | |||
Notional amounts | $ 197,987 | |||||
Gross positive fair value | 4,039 | |||||
Gross negative fair value | 0 | |||||
Net fair value | $ 4,039 | |||||
Currency swaps | Not Designated as Hedging Instrument | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Number of contracts | contract | 42 | 42 | 42 | 9 | 9 | 9 |
Notional amounts | $ 1,471,632 | $ 207,032 | ||||
Gross positive fair value | 2,678 | 1,632 | ||||
Gross negative fair value | (21,239) | (1,339) | ||||
Net fair value | (18,561) | 293 | ||||
Subtotal risk management derivatives | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional amounts | 1,737,850 | 216,534 | ||||
Gross positive fair value | 6,717 | 1,632 | ||||
Gross negative fair value | (25,825) | (1,457) | ||||
Net fair value | $ (19,108) | $ 175 | ||||
Spot and forward foreign exchange | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Number of contracts | contract | 241 | 241 | 241 | 352 | 352 | 352 |
Notional amounts | $ 770,113 | $ 3,280,636 | ||||
Gross positive fair value | 7,128 | 31,060 | ||||
Gross negative fair value | (6,862) | (30,602) | ||||
Net fair value | $ 266 | $ 458 | ||||
Foreign Exchange Contract | Designated as Hedging Instrument | Net investment hedges | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Foreign deposits | € 192.8 | SFr 0.4 | € 251.4 | SFr 0.4 |
Derivative instruments and ri_4
Derivative instruments and risk management - Offsetting (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Derivative assets | ||
Gross fair value recognized | $ 13,845 | $ 32,692 |
Less: offset applied under master netting agreements | (7,153) | (2,233) |
Net fair value presented in the consolidated balance sheets | 6,692 | 30,459 |
Positions not offset in the consolidated balance sheets, Gross fair value of derivatives | 0 | 0 |
Positions not offset in the consolidated balance sheets, Cash collateral received/paid | (3) | (3,224) |
Net exposures | 6,689 | 27,235 |
Derivative liabilities | ||
Gross fair value recognized | 32,687 | 32,059 |
Less: offset applied under master netting agreements | (7,153) | (2,233) |
Net fair value presented in the consolidated balance sheets | 25,534 | 29,826 |
Positions not offset in the consolidated balance sheets, Gross fair value of derivatives | 0 | 0 |
Positions not offset in the consolidated balance sheets, Cash collateral received/paid | (3,042) | (997) |
Net exposures | 22,492 | 28,829 |
Net fair value | $ (18,842) | $ 633 |
Derivative instruments and ri_5
Derivative instruments and risk management - Location and Amount of Gains (Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognized in net income | $ (15,006) | $ 390 | $ 1,672 |
Total net gains (losses) recognized in comprehensive income | (4,469) | (85) | |
Total net gains (losses) recognized in comprehensive income | 0 | ||
Spot and forward foreign exchange | Foreign exchange revenue | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognized in net income | (191) | (202) | (25) |
Currency swaps | Designated as Hedging Instrument | Net change in unrealized gains and (losses) on translation of net investment in foreign operations | Net investment hedges | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognized in comprehensive income | (4,469) | (85) | |
Total net gains (losses) recognized in comprehensive income | 0 | ||
Currency swaps | Foreign exchange revenue | Not Designated as Hedging Instrument | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognized in net income | (18,854) | 592 | 1,697 |
Currency swaps | Foreign exchange revenue | Designated as Hedging Instrument | Fair value hedges | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognized in net income | $ 4,039 | $ 0 | $ 0 |
Fair value measurements - Finan
Fair value measurements - Financial Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financial assets | ||
Equity securities at fair value | $ 7,317 | $ 7,419 |
Available-for-sale investments | 2,661,116 | 2,220,341 |
Other assets - Derivatives | 6,692 | 30,459 |
Financial liabilities | ||
Other liabilities - Derivatives | 25,534 | 29,826 |
Fair Value, Measurements, Recurring | ||
Financial assets | ||
Equity securities at fair value | 7,317 | 7,419 |
Available-for-sale investments | 2,661,116 | 2,220,341 |
Other assets - Derivatives | 6,692 | 30,459 |
Financial liabilities | ||
Other liabilities - Derivatives | 25,534 | 29,826 |
Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Equity securities at fair value | 7,081 | 7,141 |
Available-for-sale investments | 0 | 0 |
Other assets - Derivatives | 0 | 0 |
Financial liabilities | ||
Other liabilities - Derivatives | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Equity securities at fair value | 236 | 278 |
Available-for-sale investments | 2,648,171 | 2,207,450 |
Other assets - Derivatives | 6,692 | 30,459 |
Financial liabilities | ||
Other liabilities - Derivatives | 25,534 | 29,826 |
Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Equity securities at fair value | 0 | 0 |
Available-for-sale investments | 12,945 | 12,891 |
Other assets - Derivatives | 0 | 0 |
Financial liabilities | ||
Other liabilities - Derivatives | 0 | 0 |
Mutual funds | ||
Financial assets | ||
Equity securities at fair value | 7,317 | 7,419 |
Mutual funds | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Equity securities at fair value | 7,317 | 7,419 |
Mutual funds | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Equity securities at fair value | 7,081 | 7,141 |
Mutual funds | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Equity securities at fair value | 236 | 278 |
Mutual funds | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Equity securities at fair value | 0 | 0 |
US government and federal agencies | ||
Financial assets | ||
Available-for-sale investments | 2,566,066 | 2,052,446 |
US government and federal agencies | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Available-for-sale investments | 2,566,066 | 2,052,446 |
US government and federal agencies | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Available-for-sale investments | 0 | 0 |
US government and federal agencies | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Available-for-sale investments | 2,566,066 | 2,052,446 |
US government and federal agencies | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Available-for-sale investments | 0 | 0 |
Non-US governments debt securities | ||
Financial assets | ||
Available-for-sale investments | 22,408 | 25,676 |
Non-US governments debt securities | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Available-for-sale investments | 22,408 | 25,676 |
Non-US governments debt securities | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Available-for-sale investments | 0 | 0 |
Non-US governments debt securities | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Available-for-sale investments | 22,408 | 25,676 |
Non-US governments debt securities | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Available-for-sale investments | 0 | 0 |
Asset-backed securities - Student loans | ||
Financial assets | ||
Available-for-sale investments | 12,945 | 12,891 |
Asset-backed securities - Student loans | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Available-for-sale investments | 12,945 | 12,891 |
Asset-backed securities - Student loans | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Available-for-sale investments | 0 | 0 |
Asset-backed securities - Student loans | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Available-for-sale investments | 0 | 0 |
Asset-backed securities - Student loans | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Available-for-sale investments | 12,945 | 12,891 |
Residential mortgage-backed securities | ||
Financial assets | ||
Available-for-sale investments | 59,697 | 129,328 |
Residential mortgage-backed securities | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Available-for-sale investments | 59,697 | 129,328 |
Residential mortgage-backed securities | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Available-for-sale investments | 0 | 0 |
Residential mortgage-backed securities | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Available-for-sale investments | 59,697 | 129,328 |
Residential mortgage-backed securities | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Available-for-sale investments | $ 0 | $ 0 |
Fair value measurements - Level
Fair value measurements - Level 3 Reconciliation (Details) - Unrealized gains (losses) on AFS investments - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Carrying amount at beginning of year | $ 12,891 | $ 12,626 | $ 12,493 |
Realized and unrealized gains (losses) recognized in other comprehensive income | 54 | 265 | 133 |
Carrying amount at end of year | 12,945 | 12,891 | 12,626 |
Cumulative gain (loss) recognized in other comprehensive income | $ (345) | $ (399) | $ (664) |
Fair value measurements - Items
Fair value measurements - Items Other Than Those Recognized at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financial assets | ||
Short-term investments | $ 823,039 | $ 1,218,380 |
Investments held-to-maturity | 2,304,756 | 2,255,987 |
Other real estate owned, net | 4,052 | 3,842 |
Carrying amount | Nonrecurring | Level 1 | ||
Financial assets | ||
Cash due from banks | 3,289,592 | 2,550,070 |
Short-term investments | 823,039 | 1,218,380 |
Carrying amount | Nonrecurring | Level 2 | ||
Financial assets | ||
Securities purchased under agreements to resell | 197,039 | 142,283 |
Investments held-to-maturity | 2,194,371 | 2,208,663 |
Loans, net of allowance for credit losses | 5,160,810 | 5,142,622 |
Other real estate owned, net | 4,052 | 3,842 |
Financial liabilities | ||
Long-term debt | 171,462 | 143,500 |
Carrying amount | Nonrecurring | Level 2 | Term deposits | ||
Financial liabilities | ||
Payable on demand | 2,660,082 | 3,051,306 |
Fair value | Nonrecurring | Level 1 | ||
Financial assets | ||
Cash due from banks | 3,289,592 | 2,550,070 |
Short-term investments | 823,039 | 1,218,380 |
Fair value | Nonrecurring | Level 2 | ||
Financial assets | ||
Securities purchased under agreements to resell | 197,039 | 142,283 |
Investments held-to-maturity | 2,304,756 | 2,255,987 |
Loans, net of allowance for credit losses | 5,193,240 | 5,161,257 |
Other real estate owned, net | 4,052 | 3,842 |
Financial liabilities | ||
Long-term debt | 170,086 | 147,574 |
Fair value | Nonrecurring | Level 2 | Term deposits | ||
Financial liabilities | ||
Payable on demand | 2,665,463 | 3,054,813 |
Appreciation / (depreciation) | Nonrecurring | Level 1 | ||
Financial assets | ||
Cash due from banks | 0 | 0 |
Short-term investments | 0 | 0 |
Appreciation / (depreciation) | Nonrecurring | Level 2 | ||
Financial assets | ||
Securities purchased under agreements to resell | 0 | 0 |
Investments held-to-maturity | 110,385 | 47,324 |
Loans, net of allowance for credit losses | 32,430 | 18,635 |
Other real estate owned, net | 0 | 0 |
Financial liabilities | ||
Long-term debt | 1,376 | (4,074) |
Appreciation / (depreciation) | Nonrecurring | Level 2 | Term deposits | ||
Financial liabilities | ||
Payable on demand | $ (5,381) | $ (3,507) |
Interest rate risk (Details)
Interest rate risk (Details) - Fair Value, Concentration of Risk, Market Risk Management, Gap Analysis - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash due from banks | $ 3,290 | $ 2,550 |
Securities purchased under agreement to resell | 197 | 142 |
Short-term investments | 823 | 1,218 |
Investments | 4,863 | 4,436 |
Loans | 5,161 | 5,143 |
Other assets | 405 | 433 |
Total assets | 14,739 | 13,922 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 982 | 964 |
Demand deposits | 10,590 | 9,390 |
Term deposits | 2,661 | 3,052 |
Other liabilities | 335 | 373 |
Long-term debt | 171 | 143 |
Total liabilities and shareholders' equity | 14,739 | 13,922 |
Interest rate sensitivity gap | 0 | 0 |
Cumulative interest rate sensitivity gap | 0 | 0 |
Interest Bearing Funds | Within 3 months | ||
Assets | ||
Cash due from banks | 3,156 | 2,462 |
Securities purchased under agreement to resell | 197 | 142 |
Short-term investments | 494 | 622 |
Investments | 13 | 415 |
Loans | 4,170 | 4,025 |
Other assets | 0 | 0 |
Total assets | 8,030 | 7,666 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 7,578 | 7,151 |
Term deposits | 1,584 | 2,435 |
Other liabilities | 0 | 0 |
Long-term debt | 0 | 70 |
Total liabilities and shareholders' equity | 9,162 | 9,656 |
Interest rate sensitivity gap | (1,132) | (1,990) |
Cumulative interest rate sensitivity gap | (1,132) | (1,990) |
Interest Bearing Funds | 3 to 6 months | ||
Assets | ||
Cash due from banks | 0 | 0 |
Securities purchased under agreement to resell | 0 | 0 |
Short-term investments | 327 | 591 |
Investments | 13 | 23 |
Loans | 39 | 16 |
Other assets | 0 | 0 |
Total assets | 379 | 630 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 0 | 0 |
Term deposits | 634 | 234 |
Other liabilities | 0 | 0 |
Long-term debt | 0 | 0 |
Total liabilities and shareholders' equity | 634 | 234 |
Interest rate sensitivity gap | (255) | 396 |
Cumulative interest rate sensitivity gap | (1,387) | (1,594) |
Interest Bearing Funds | 6 to 12 months | ||
Assets | ||
Cash due from banks | 0 | 0 |
Securities purchased under agreement to resell | 0 | 0 |
Short-term investments | 2 | 3 |
Investments | 27 | 11 |
Loans | 71 | 148 |
Other assets | 0 | 0 |
Total assets | 100 | 162 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 0 | 0 |
Term deposits | 344 | 305 |
Other liabilities | 0 | 0 |
Long-term debt | 0 | 0 |
Total liabilities and shareholders' equity | 344 | 305 |
Interest rate sensitivity gap | (244) | (143) |
Cumulative interest rate sensitivity gap | (1,631) | (1,737) |
Interest Bearing Funds | 1 to 5 years | ||
Assets | ||
Cash due from banks | 0 | 0 |
Securities purchased under agreement to resell | 0 | 0 |
Short-term investments | 0 | 0 |
Investments | 92 | 102 |
Loans | 652 | 292 |
Other assets | 0 | 0 |
Total assets | 744 | 394 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 0 | 0 |
Term deposits | 99 | 78 |
Other liabilities | 0 | 0 |
Long-term debt | 171 | 73 |
Total liabilities and shareholders' equity | 270 | 151 |
Interest rate sensitivity gap | 474 | 243 |
Cumulative interest rate sensitivity gap | (1,157) | (1,494) |
Interest Bearing Funds | After 5 years | ||
Assets | ||
Cash due from banks | 0 | 0 |
Securities purchased under agreement to resell | 0 | 0 |
Short-term investments | 0 | 0 |
Investments | 4,711 | 3,878 |
Loans | 187 | 648 |
Other assets | 0 | 0 |
Total assets | 4,898 | 4,526 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 0 | 0 |
Term deposits | 0 | 0 |
Other liabilities | 0 | 0 |
Long-term debt | 0 | 0 |
Total liabilities and shareholders' equity | 0 | 0 |
Interest rate sensitivity gap | 4,898 | 4,526 |
Cumulative interest rate sensitivity gap | 3,741 | 3,032 |
Non-interest bearing funds | ||
Assets | ||
Cash due from banks | 134 | 88 |
Securities purchased under agreement to resell | 0 | 0 |
Short-term investments | 0 | 2 |
Investments | 7 | 7 |
Loans | 42 | 14 |
Other assets | 405 | 433 |
Total assets | 588 | 544 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 982 | 964 |
Demand deposits | 3,012 | 2,239 |
Term deposits | 0 | 0 |
Other liabilities | 335 | 373 |
Long-term debt | 0 | 0 |
Total liabilities and shareholders' equity | 4,329 | 3,576 |
Interest rate sensitivity gap | (3,741) | (3,032) |
Cumulative interest rate sensitivity gap | $ 0 | $ 0 |
Long-term debt - Additional Inf
Long-term debt - Additional Information (Details) | Jun. 11, 2020USD ($) | May 24, 2018USD ($) | May 27, 2008USD ($)tranche | Jun. 27, 2005USD ($)tranche | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2011USD ($) |
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 171,462,000 | $ 143,500,000 | ||||||
Interest costs capitalized | 0 | $ 0 | $ 0 | |||||
Subordinated Lower Tier II Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 78,000,000 | $ 150,000,000 | ||||||
Number of tranches | tranche | 2 | 2 | ||||||
Long-term debt | $ 171,462,000 | |||||||
Subordinated Lower Tier II Debt | Series A Notes Due 2015 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 90,000,000 | |||||||
Subordinated Lower Tier II Debt | Series B Notes Due 2020 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 60,000,000 | |||||||
Fixed interest rate | 5.11% | 5.11% | ||||||
Repurchased face amount | $ 15,000,000 | |||||||
Long-term debt | $ 45,000,000 | |||||||
Repayments of debt | $ 45,000,000 | |||||||
Subordinated Lower Tier II Debt | Series B Notes Due 2020 | 10-Year US Treasury Yield | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.10% | |||||||
Subordinated Lower Tier II Debt | Series A Notes Due 2018 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 53,000,000 | |||||||
Subordinated Lower Tier II Debt | Series B Notes Due 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 25,000,000 | |||||||
Fixed interest rate | 8.44% | |||||||
Subordinated Lower Tier II Debt | Series B Notes Due 2023 | 10-Year US Treasury Yield | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 4.51% | |||||||
Subordinated Lower Tier II Debt | Notes Redeemed in May 2008 | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayments of debt | $ 78,000,000 | |||||||
Subordinated Lower Tier II Debt | Notes Due 2028 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 75,000,000 | |||||||
Fixed interest rate | 5.25% | 5.25% | ||||||
Payments of debt issuance costs | $ 1,800,000 | |||||||
Subordinated Lower Tier II Debt | Notes Due 2028 | 10-Year US Treasury Yield | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 2.27% | |||||||
Subordinated Lower Tier II Debt | Series B Notes Due 2018 | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayments of debt | $ 47,000,000 | |||||||
Subordinated Lower Tier II Debt | Notes Due 2030 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 100,000,000 | |||||||
Fixed interest rate | 5.25% | 5.25% | ||||||
Payments of debt issuance costs | $ 2,300,000 | |||||||
Subordinated Lower Tier II Debt | Notes Due 2030 | 10-Year US Treasury Yield | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 4.43% |
Long-term debt - Contractual Ma
Long-term debt - Contractual Maturity (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Jun. 11, 2020 | Dec. 31, 2019 | May 24, 2018 | |
Debt Instrument [Line Items] | ||||
Long-term debt less unamortized debt issuance costs | $ 171,462 | $ 143,500 | ||
Subordinated Lower Tier II Debt | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 175,000 | |||
Interest payments until contractual maturity, Within 1 year | 9,188 | |||
Interest payments until contractual maturity, 1 to 5 years | 31,637 | |||
Interest payments until contractual maturity, After 5 years | 28,156 | |||
Unamortized debt issuance costs | (3,538) | |||
Long-term debt less unamortized debt issuance costs | $ 171,462 | |||
Subordinated Lower Tier II Debt | Notes Due 2028 | ||||
Debt Instrument [Line Items] | ||||
Interest rate until date redeemable | 5.25% | 5.25% | ||
Principal Outstanding | $ 75,000 | |||
Interest payments until contractual maturity, Within 1 year | 3,938 | |||
Interest payments until contractual maturity, 1 to 5 years | 10,654 | |||
Interest payments until contractual maturity, After 5 years | $ 4,743 | |||
Subordinated Lower Tier II Debt | Notes Due 2028 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Interest rate from earliest date redeemable to contractual maturity, basis spread on variable rate | 2.255% | |||
Subordinated Lower Tier II Debt | Notes Due 2030 | ||||
Debt Instrument [Line Items] | ||||
Interest rate until date redeemable | 5.25% | 5.25% | ||
Principal Outstanding | $ 100,000 | |||
Interest payments until contractual maturity, Within 1 year | 5,250 | |||
Interest payments until contractual maturity, 1 to 5 years | 20,983 | |||
Interest payments until contractual maturity, After 5 years | $ 23,413 | |||
Subordinated Lower Tier II Debt | Notes Due 2030 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Interest rate from earliest date redeemable to contractual maturity, basis spread on variable rate | 5.06% |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Class of Stock [Line Items] | |||
Options outstanding (in shares) | 100 | 200 | 300 |
Average number of outstanding awards of unvested shares (in shares) | 900 | 900 | 900 |
Net income | $ 147,217 | $ 177,075 | $ 195,184 |
Basic Earnings Per Share | |||
Basic Earnings Per Share (in dollars per share) | $ 2.91 | $ 3.33 | $ 3.55 |
Diluted Earnings Per Share | |||
Diluted Earnings Per Share (in dollars per share) | $ 2.90 | $ 3.30 | $ 3.50 |
Voting Common Stock | |||
Basic Earnings Per Share | |||
Weighted average number of common shares issued (in shares) | 51,128 | 54,338 | 55,159 |
Weighted average number of common shares held as treasury stock (in shares) | (619) | (1,166) | (213) |
Weighted average number of participating shares (in shares) | 50,509 | 53,172 | 54,946 |
Basic Earnings Per Share (in dollars per share) | $ 2.91 | $ 3.33 | $ 3.55 |
Diluted Earnings Per Share | |||
Weighted average number of common shares (in shares) | 50,509 | 53,172 | 54,946 |
Net dilution impact related to options to purchase common shares (in shares) | 55 | 118 | 223 |
Net dilution impact related to awards of unvested common shares (in shares) | 286 | 369 | 576 |
Weighted average number of diluted common shares (in shares) | 50,850 | 53,659 | 55,745 |
Diluted Earnings Per Share (in dollars per share) | $ 2.90 | $ 3.30 | $ 3.50 |
Share-based payments - Addition
Share-based payments - Additional Information (Details) | Mar. 01, 2010shares | Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2019$ / shares | Dec. 31, 2018$ / shares | Dec. 31, 2020 | May 31, 2020conditionshares | Dec. 31, 2016shares | Sep. 21, 2016$ / shares | Dec. 31, 2012shares | Dec. 31, 2010shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Tax benefit from compensation expense | $ | $ 0 | |||||||||
Stock Compensation Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average fair value of stock options granted (in dollars per share) | $ / shares | $ 33.35 | $ 35.77 | $ 39.25 | |||||||
2010 Stock Option Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares authorized (in shares) | 7,500,000 | 5,000,000 | 2,950,000 | |||||||
2010 Stock Option Plan | Employee Stock Option | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Percent of diluted common shares initially available for grant | 5.00% | |||||||||
2010 Stock Option Plan | Time Vesting Employee Stock Option | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Expiration period | 90 days | |||||||||
Percent of option award granted, time vested | 50.00% | |||||||||
2010 Stock Option Plan | Time Vesting Employee Stock Option | Share-based Compensation Award, Tranche One | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting rights, percentage | 25.00% | |||||||||
2010 Stock Option Plan | Time Vesting Employee Stock Option | Share-based Compensation Award, Tranche Two | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting rights, percentage | 25.00% | |||||||||
2010 Stock Option Plan | Time Vesting Employee Stock Option | Share-based Compensation Award, Tranche Three | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting rights, percentage | 25.00% | |||||||||
2010 Stock Option Plan | Time Vesting Employee Stock Option | Share-based Compensation Award, Tranche Four | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting rights, percentage | 25.00% | |||||||||
2010 Stock Option Plan | Performance Vesting Employee Stock Option | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Percent of option award granted, performance vesting | 50.00% | |||||||||
Valuation event, percent of total common shares transferred | 5.00% | |||||||||
Multiple of invested capital (more than) | 200.00% | |||||||||
Original capital invested (in dollars per share) | $ / shares | $ 12.09 | |||||||||
2020 Omnibus Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares authorized (in shares) | 3,000,000 | |||||||||
1997 Stock Option Plan | Employee Stock Option | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares issued upon exercise of each option (in shares) | 1 | |||||||||
Award vesting period | 4 years | |||||||||
1997 Stock Option Plan | Employee Stock Option | Share-based Compensation Award, Tranche One | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting rights, percentage | 25.00% | |||||||||
1997 Stock Option Plan | Employee Stock Option | Share-based Compensation Award, Tranche Two | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting rights, percentage | 25.00% | |||||||||
1997 Stock Option Plan | Employee Stock Option | Share-based Compensation Award, Tranche Three | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting rights, percentage | 25.00% | |||||||||
1997 Stock Option Plan | Employee Stock Option | Share-based Compensation Award, Tranche Four | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting rights, percentage | 25.00% | |||||||||
2010 And 2020 Omnibus Plan [Member] | Employee Stock Option | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares issued upon exercise of each option (in shares) | 1 | |||||||||
Expiration period | 10 years | |||||||||
Number of vesting conditions | condition | 2 | |||||||||
EDIP | Time vesting shares | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 3 years | |||||||||
Executive Long-Term Incentive Share Plan 2016, 2015, 2014, 2013 | Time vesting shares | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 3 years | |||||||||
Executive Long-Term Incentive Share Plan 2016, 2015, 2014, 2013 | Performance vesting shares | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 3 years |
Share-based payments - Changes
Share-based payments - Changes in Outstanding Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of shares transferable upon exercise | |||
Outstanding at beginning of year (in shares) | 159 | 214 | 534 |
Exercised (in shares) | (143) | (30) | (287) |
Forfeitures and cancellations (in shares) | (16) | (25) | (33) |
Outstanding at end of year (in shares) | 0 | 159 | 214 |
Vested and exercisable at end of year (in shares) | 0 | 159 | 214 |
Additional Disclosures | |||
Aggregate intrinsic value, Exercised | $ 2,192 | $ 659 | $ 10,172 |
Aggregate intrinsic value, Outstanding at end of year | $ 0 | $ 3,958 | $ 3,665 |
1997 Stock Option Plan | |||
Number of shares transferable upon exercise | |||
Outstanding at beginning of year (in shares) | 0 | 25 | 58 |
Exercised (in shares) | 0 | 0 | 0 |
Forfeitures and cancellations (in shares) | 0 | (25) | (33) |
Outstanding at end of year (in shares) | 0 | 0 | 25 |
Vested and exercisable at end of year (in shares) | 0 | 0 | 25 |
Weighted average exercise price | |||
Outstanding at beginning of year (in dollars per share) | $ 0 | $ 64.51 | $ 113.46 |
Exercised (in dollars per share) | 0 | 0 | 0 |
Forfeitures and cancellations (in dollars per share) | 0 | 64.51 | 150.46 |
Outstanding at end of year (in dollars per share) | 0 | 0 | 64.51 |
Vested and exercisable at end of year (in dollars per share) | $ 0 | $ 0 | $ 64.51 |
Additional Disclosures | |||
Weighted average remaining life, Outstanding at end of year | 0 years | 0 years | 2 months 12 days |
Weighted average remaining life, Vested and exercisable at end of year | 0 years | 0 years | 2 months 12 days |
2010 Stock Option Plan | |||
Number of shares transferable upon exercise | |||
Outstanding at beginning of year (in shares) | 159 | 189 | 476 |
Exercised (in shares) | (143) | (30) | (287) |
Forfeitures and cancellations (in shares) | (16) | 0 | 0 |
Outstanding at end of year (in shares) | 0 | 159 | 189 |
Vested and exercisable at end of year (in shares) | 0 | 159 | 189 |
Weighted average exercise price | |||
Outstanding at beginning of year (in dollars per share) | $ 12.07 | $ 11.98 | $ 11.73 |
Exercised (in dollars per share) | 12.13 | 11.50 | 11.56 |
Forfeitures and cancellations (in dollars per share) | 11.50 | 0 | 0 |
Outstanding at end of year (in dollars per share) | 0 | 12.07 | 11.98 |
Vested and exercisable at end of year (in dollars per share) | $ 0 | $ 12.07 | $ 11.98 |
Additional Disclosures | |||
Weighted average remaining life, Outstanding at end of year | 0 years | 8 months 23 days | 1 year 8 months 1 day |
Weighted average remaining life, Vested and exercisable at end of year | 0 years | 8 months 23 days | 1 year 8 months 1 day |
Share-based payments - Change_2
Share-based payments - Changes in Outstanding ELTIP and EDIP Awards (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
EDIP | Time vesting shares | |||
Changes in Outstanding ELTIP and EDIP Awards | |||
Outstanding at beginning of year (in shares) | 251 | 234 | 244 |
Granted (in shares) | 245 | 169 | 130 |
Vested (fair value in 2017: $10.2 million, 2016: $7.0 million, 2015: $10.6 million) (in shares) | (129) | (149) | (138) |
Forfeitures (resignations, retirements, redundancies) (in shares) | (3) | (3) | (2) |
Outstanding at end of year (in shares) | 364 | 251 | 234 |
Unrecognized cost | $ 6,588 | $ 4,744 | |
ELTIP | Time Vesting Shares and Performance Shares | |||
Changes in Outstanding ELTIP and EDIP Awards | |||
Outstanding at beginning of year (in shares) | 618 | 697 | 679 |
Granted (in shares) | 209 | 317 | 241 |
Vested (fair value in 2017: $10.2 million, 2016: $7.0 million, 2015: $10.6 million) (in shares) | (162) | (389) | (220) |
Forfeitures (resignations, retirements, redundancies) (in shares) | (7) | (7) | (3) |
Outstanding at end of year (in shares) | 658 | 618 | 697 |
ELTIP | Time vesting shares | |||
Changes in Outstanding ELTIP and EDIP Awards | |||
Unrecognized cost | $ 156 | $ 121 | |
ELTIP | Performance vesting shares | |||
Changes in Outstanding ELTIP and EDIP Awards | |||
Unrecognized cost | 8,187 | 9,765 | |
EDIP and ELTIP | |||
Changes in Outstanding ELTIP and EDIP Awards | |||
Fair value of awards vested | $ 9,600 | $ 18,900 | $ 16,000 |
Share-based payments - Share-ba
Share-based payments - Share-based Compensation Cost Recognized in Net Income (Details) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
EDIP and ELTIP | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Cost recognized in net income | $ 14,608 | $ 17,459 | $ 11,664 |
Share-based payments - Unrecogn
Share-based payments - Unrecognized Share-based Compensation Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Unrecognized Share-based Compensation Cost | ||
Total unrecognized expense | $ 14,931 | $ 14,630 |
EDIP | Time vesting shares | ||
Unrecognized Share-based Compensation Cost | ||
Unrecognized cost | $ 6,588 | $ 4,744 |
Weighted average years over which it is expected to be recognized | 1 year 10 months 28 days | 1 year 8 months 15 days |
ELTIP | Time vesting shares | ||
Unrecognized Share-based Compensation Cost | ||
Unrecognized cost | $ 156 | $ 121 |
Weighted average years over which it is expected to be recognized | 1 year 1 month 2 days | 5 months 23 days |
ELTIP | Performance vesting shares | ||
Unrecognized Share-based Compensation Cost | ||
Unrecognized cost | $ 8,187 | $ 9,765 |
Weighted average years over which it is expected to be recognized | 1 year 7 months 6 days | 1 year 9 months 18 days |
Share buy-back plans (Details)
Share buy-back plans (Details) - USD ($) | 12 Months Ended | 72 Months Ended | ||||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | Feb. 10, 2021 | Dec. 02, 2019 | Dec. 06, 2018 | Feb. 15, 2018 | |
Class of Stock [Line Items] | ||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 3,452,000 | 3,452,000 | ||||||
Subsequent Event | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 2,000,000 | |||||||
2018 Common Share Buy-Back Program | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 2,500,000 | 1,000,000 | ||||||
2019 Common Share Buy-Back Program | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 3,500,000 | |||||||
Common share repurchase program, remaining authorized repurchase amount | $ 125,000,000 | |||||||
2021 Common Share Buy-Back Program | Subsequent Event | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 2,000,000 | |||||||
Common Share Buy-Back Program | ||||||||
Class of Stock [Line Items] | ||||||||
Acquired number of shares (in shares) | 3,452,000 | 2,293,788 | 1,254,212 | 7,000,000 | ||||
Average cost per share (in dollars per share) | $ 25.10 | $ 35.55 | $ 38.62 | $ 30.95 | ||||
Total cost | $ 86,639,889 | $ 81,534,076 | $ 48,442,768 | $ 216,616,733 |
Accumulated other comprehensi_3
Accumulated other comprehensive loss - Schedule of AOCL Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | $ 963,743 | $ 882,343 | |
Other comprehensive income (loss), net of taxes | 37,417 | 61,430 | $ (19,475) |
Balance at end of year | 981,948 | 963,743 | 882,343 |
Unrealized (losses) on translation of net investment in foreign operations | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (20,818) | (19,866) | (17,549) |
Other comprehensive income (loss), net of taxes | (247) | (952) | (2,317) |
Balance at end of year | (21,065) | (20,818) | (19,866) |
Accumulated net investment gain (loss) | HTM investments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (725) | (796) | (839) |
Other comprehensive income (loss), net of taxes | 665 | 71 | 43 |
Balance at end of year | (60) | (725) | (796) |
Accumulated net investment gain (loss) | Unrealized gains (losses) on AFS investments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | 11,808 | (43,630) | (15,737) |
Other comprehensive income (loss), net of taxes | 60,971 | 55,438 | (27,893) |
Balance at end of year | 72,779 | 11,808 | (43,630) |
Employee benefit plans | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (77,362) | (84,235) | (94,927) |
Other comprehensive income (loss), net of taxes | (23,972) | 6,873 | 10,692 |
Balance at end of year | (101,334) | (77,362) | (84,235) |
Employee benefit plans | Defined benefit pension plan | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (66,312) | (64,892) | (61,341) |
Other comprehensive income (loss), net of taxes | (5,943) | (1,420) | (3,551) |
Balance at end of year | (72,255) | (66,312) | (64,892) |
Employee benefit plans | Post-retirement healthcare plan | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (11,050) | (19,343) | (33,586) |
Other comprehensive income (loss), net of taxes | (18,029) | 8,293 | 14,243 |
Balance at end of year | (29,079) | (11,050) | (19,343) |
Total AOCL | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (87,097) | (148,527) | (129,052) |
Other comprehensive income (loss), net of taxes | 37,417 | 61,430 | (19,475) |
Balance at end of year | $ (49,680) | $ (87,097) | $ (148,527) |
Accumulated other comprehensi_4
Accumulated other comprehensive loss - Net Change of AOCL Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net unrealized gains (losses) on translation of net investment in foreign operations adjustments | |||
Foreign currency translation adjustments | $ 9,991 | $ 16,200 | $ (13,764) |
Gains (loss) on net investment hedge | (10,238) | (17,152) | |
Gains (loss) on net investment hedge | 11,447 | ||
Net change | (247) | (952) | |
Net change | (2,317) | ||
Available-for-sale investment adjustments | |||
Gross unrealized gains (losses) | 60,971 | 55,438 | (27,893) |
Employee benefit plans adjustments | |||
Amortization of prior service (credit) cost | 20 | 19 | 0 |
Other comprehensive income (loss), net of taxes | 37,417 | 61,430 | (19,475) |
Defined benefit pension plan | |||
Employee benefit plans adjustments | |||
Net actuarial gain (loss) | (8,363) | (3,472) | (7,541) |
Net loss (gain) on settlement reclassified to net income | 0 | 0 | 1,554 |
Net actuarial gain (loss) | (8,363) | (3,472) | (5,987) |
Prior service credit (cost) arising during the year | (47) | 0 | (212) |
Amortization of net actuarial (gains) losses | 2,412 | 2,407 | 2,106 |
Change in deferred taxes | 456 | 149 | (298) |
Amortization of prior service (credit) cost | 20 | 19 | 0 |
Foreign currency translation adjustments of related balances | (421) | (523) | 840 |
Total changes recognized in other comprehensive income (loss) | (5,943) | (1,420) | (3,551) |
Post-retirement healthcare plan | |||
Employee benefit plans adjustments | |||
Net actuarial gain (loss) | (18,553) | 10,014 | 11,589 |
Prior service credit (cost) arising during the year | 0 | (2,369) | 0 |
Amortization of net actuarial (gains) losses | 0 | 272 | 2,615 |
Change in deferred taxes | 0 | 0 | 0 |
Amortization of prior service (credit) cost | 524 | 376 | 39 |
Total changes recognized in other comprehensive income (loss) | (18,029) | 8,293 | 14,243 |
Held-to-maturity Securities | |||
Available-for-sale investment adjustments | |||
Transfer of realized (gains) losses to net income | 665 | 71 | 43 |
Net change | 665 | 71 | 43 |
Available-for-sale Securities | |||
Available-for-sale investment adjustments | |||
Gross unrealized gains (losses) | 62,191 | 57,062 | (26,793) |
Transfer of realized (gains) losses to net income | (1,220) | (1,624) | (1,100) |
Net change | $ 60,971 | $ 55,438 | $ (27,893) |
Capital structure - Authorized
Capital structure - Authorized Capital (Details) | Sep. 16, 2016$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares | Sep. 16, 2016$ / sharesshares | Sep. 16, 2016£ / sharesshares |
Class of Stock [Line Items] | |||||
Common shares, par value (in BMD per share) | $ / shares | $ 0.01 | $ 0.01 | |||
US dollars | |||||
Class of Stock [Line Items] | |||||
Preferred shares, authorized (in shares) | 110,200,001 | 110,200,001 | 110,200,001 | ||
Preference shares, par value (in dollars per share or pounds per share) | $ / shares | $ 0.01 | ||||
United Kingdom, Pounds | |||||
Class of Stock [Line Items] | |||||
Preferred shares, authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | ||
Preference shares, par value (in dollars per share or pounds per share) | £ / shares | £ 0.01 | ||||
Common Stock Issued And Common Stock Authorized But Unissued | |||||
Class of Stock [Line Items] | |||||
Common shares, par value (in BMD per share) | $ / shares | $ 0.01 | ||||
Voting Common Stock | |||||
Class of Stock [Line Items] | |||||
Common shares, par value (in BMD per share) | $ / shares | $ 0.01 | ||||
Common shares, authorized (in shares) | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 |
Non-voting Common Stock | |||||
Class of Stock [Line Items] | |||||
Common shares, par value (in BMD per share) | $ / shares | $ 0.01 | ||||
Common shares, authorized (in shares) | 6,000,000,000 | 6,000,000,000 | 6,000,000,000 | 6,000,000,000 | 6,000,000,000 |
IPO | |||||
Class of Stock [Line Items] | |||||
Issuance of common shares (in shares) | 12,234,042 | ||||
Newly Issued | |||||
Class of Stock [Line Items] | |||||
Issuance of common shares (in shares) | 5,957,447 | ||||
Selling Shareholders | |||||
Class of Stock [Line Items] | |||||
Issuance of common shares (in shares) | 6,276,595 | ||||
Over-Allotment Option | |||||
Class of Stock [Line Items] | |||||
Issuance of common shares (in shares) | 1,595,744 |
Capital structure - Dividends (
Capital structure - Dividends (Details) - $ / shares | Mar. 10, 2021 | Feb. 10, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | |||||
Common share cash dividends declared (in dollars per share) | $ 1.76 | $ 1.76 | $ 1.52 | ||
Common share cash dividends paid (in dollars per share) | $ 1.76 | $ 1.76 | $ 1.52 | ||
Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Common share cash dividends declared (in dollars per share) | $ 0.44 | ||||
Scenario, Forecast | Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Common share cash dividends paid (in dollars per share) | $ 0.44 |
Capital structure - Regulatory
Capital structure - Regulatory Capital (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Capital | ||
CET 1 capital | $ 816,009 | $ 848,821 |
Tier 1 capital | 816,009 | 848,821 |
Tier 2 capital | 187,090 | 103,243 |
Total capital | 1,003,099 | 952,064 |
Risk Weighted Assets | 5,068,590 | 4,897,851 |
Leverage Ratio Exposure Measure | $ 15,349,363 | $ 14,377,474 |
Capital Ratios (%) | ||
Common Equity Tier 1, Actual | 16.10% | 17.30% |
Common Equity Tier 1, Regulatory minimum | 10.00% | 10.00% |
Total Tier 1, Actual | 0.161 | 0.173 |
Total Tier 1, Regulatory minimum | 0.115 | 0.115 |
Total Capital, Actual | 0.198 | 0.194 |
Total Capital, Regulatory minimum | 0.135 | 0.135 |
Leverage ratio, Actual | 0.053 | 0.059 |
Leverage ratio, Regulatory minimum | 0.050 | 0.050 |
Income taxes - Income Taxes in
Income taxes - Income Taxes in Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Current tax expense | $ 2,382 | $ 1,860 | $ 721 |
Deferred tax (recovery) expense | (4) | (3,231) | 563 |
Total tax (benefit) expense | $ 2,378 | $ (1,371) | $ 1,284 |
Income taxes - Reconciliation b
Income taxes - Reconciliation between the Effective Income Tax Rate and the Statutory Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
$ | |||
Income tax expense in international offices taxed at different rates | $ 2,695 | $ 695 | $ 876 |
Expenses not deductible for tax purposes | 299 | 104 | 225 |
Prior year tax adjustments | 41 | 160 | (79) |
Change in valuation allowance | (582) | (2,429) | 315 |
Other - net | (75) | 99 | (53) |
Total tax (benefit) expense | $ 2,378 | $ (1,371) | $ 1,284 |
% | |||
Income tax expense in international offices taxed at different rates | 1.80% | 0.40% | 0.40% |
Expenses not deductible for tax purposes | 0.20% | 0.10% | 0.10% |
Prior year tax adjustments | 0.00% | 0.10% | 0.00% |
Change in valuation allowance | (0.40%) | (1.40%) | 0.20% |
Other - net | (0.10%) | 0.10% | 0.00% |
Income tax (benefit) expense at effective tax rate | 1.60% | (0.80%) | 0.70% |
Income taxes - Deferred Income
Income taxes - Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred income tax asset | ||
Tax loss carried forward | $ 8,134 | $ 8,427 |
Pension liability | 1,448 | 968 |
Fixed assets | (905) | (691) |
Allowance for compensated absence | 44 | 15 |
Deferred income tax asset before valuation allowance | 8,721 | 8,719 |
Less: valuation allowance | (4,257) | (4,839) |
Deferred income tax asset after valuation allowance | 4,464 | 3,880 |
Deferred income tax liability | ||
Other | (19) | (14) |
Net deferred income tax assets | $ 4,445 | $ 3,866 |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets, valuation allowance | $ 4,257 | $ 4,839 |
Foreign Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Tax loss carried forward | 47,400 | 48,100 |
Tax loss carried forward, no expiration date | 45,200 | 45,600 |
United Kingdom | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets, valuation allowance | $ 4,300 | $ 4,800 |
Business combinations - Deutsch
Business combinations - Deutsche Bank’s Global Trust Solutions (Details) $ in Thousands | May 29, 2018USD ($) | Mar. 29, 2018USD ($)clientstructure | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | ||||
Payments to acquire businesses | $ 20,722 | |||
Deutsche Bank’s Global Trust Solutions | ||||
Business Acquisition [Line Items] | ||||
Net cash payments | $ 24,680 | |||
Payments to acquire businesses | $ 30,200 | |||
Refund based upon movement in number of clients | $ 5,500 | |||
Number of trust structures managed and administrated | structure | 1,000 | |||
Number of private clients | client | 900 | |||
Acquisition related costs | $ 3,800 | 1,900 | $ 1,900 | |
Legal and professional transaction costs | 1,000 | $ 1,600 | ||
Revenue | 6,500 | |||
Net deficit | $ 2,900 |
Business combinations - Total C
Business combinations - Total Consideration Transferred (Details) - USD ($) $ in Thousands | Jul. 15, 2019 | Mar. 29, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Liabilities assumed | ||||||
Excess purchase price (goodwill) | $ 25,627 | $ 24,838 | $ 23,991 | $ 21,529 | ||
Deutsche Bank’s Global Trust Solutions | ||||||
Business Acquisition [Line Items] | ||||||
Total consideration transferred | $ 24,680 | |||||
Assets acquired | ||||||
Cash due from banks | 3,958 | |||||
Intangible assets | 16,932 | |||||
Other assets | 4,548 | |||||
Total assets acquired | 25,438 | |||||
Liabilities assumed | ||||||
Liabilities acquired | (4,626) | |||||
Excess purchase price (goodwill) | $ 3,868 | |||||
Acquired finite-lived intangible assets, useful life | 15 years | |||||
ABN AMRO (Channel Islands) Limited Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Total consideration transferred | $ 201,107 | |||||
Assets acquired | ||||||
Cash due from banks | 3,016,859 | |||||
Loans | 654,503 | |||||
Intangible assets | 24,371 | |||||
Other assets | 31,674 | |||||
Total assets acquired | 3,727,407 | |||||
Liabilities assumed | ||||||
Deposits | (3,493,239) | |||||
Other liabilities | (33,061) | |||||
Liabilities acquired | (3,526,300) | |||||
Excess purchase price (goodwill) | $ 0 |
Business combinations - ABN AMR
Business combinations - ABN AMRO (Channel Islands) Limited Acquisition (Details) $ in Thousands, £ in Millions | Jul. 15, 2019USD ($) | Jul. 15, 2019GBP (£) | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019 | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | ||||||
Payments to acquire businesses | $ 20,722 | |||||
Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Acquired finite-lived intangible assets, useful life | 15 years | 15 years | ||||
ABN AMRO (Channel Islands) Limited Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire businesses | $ 201,100 | £ 160.7 | ||||
Clients assets custody fees | $ 4,700,000 | |||||
Legal and professional transaction costs | $ 5,400 | |||||
Total net revenue | $ 13,700 | |||||
Net income | $ 1,500 | |||||
ABN AMRO (Channel Islands) Limited Acquisition | Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Acquired finite-lived intangible assets, useful life | 15 years |
Business combinations - Pro For
Business combinations - Pro Forma Information (Details) - ABN AMRO (Channel Islands) Limited Acquisition - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Unaudited pro forma financial information | ||
Total net revenue | $ 555,341 | $ 563,786 |
Total non-interest operating (expense) | (372,796) | (351,320) |
Pro forma net income post business combination | $ 182,545 | $ 212,466 |
Related party transactions - Fi
Related party transactions - Financing Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Loans and Leases Receivable, Related Parties [Roll Forward] | |||
Loans | $ 5,194,908 | $ 5,166,210 | |
Deposits | 13,250,084 | 12,441,625 | |
Interest and fees on loans | 230,656 | 234,032 | $ 218,495 |
Net other gains (losses) | (552) | 223 | (1,304) |
Non-interest expense | 344,594 | 356,924 | 321,343 |
Directors and Executives | |||
Loans and Leases Receivable, Related Parties [Roll Forward] | |||
Beginning balance | 38,641 | 97,195 | |
Loans issued during the year | 37,073 | 45,602 | |
Loan repayments and the effect of changes in the composition of related parties | (33,323) | (104,156) | |
Ending balance | 42,391 | 38,641 | 97,195 |
Deposits | 19,591 | 12,838 | |
Interest and fees on loans | 1,444 | 1,887 | 4,533 |
Affiliates | |||
Loans and Leases Receivable, Related Parties [Roll Forward] | |||
Loans | 12,939 | 9,888 | |
Deposits | 423 | 342 | |
Interest and fees on loans | 654 | 677 | 635 |
Net other gains (losses) | 742 | 0 | 0 |
Non-interest expense | $ 1,431 | $ 1,717 | $ 1,769 |
Related party transactions - _2
Related party transactions - Financial Transactions With Related Parties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity securities | |||
Fair value | $ 7,317 | $ 7,419 | |
Loans | 5,194,908 | 5,166,210 | |
Deposits | 13,250,084 | 12,441,625 | |
Asset management | 29,225 | 28,721 | $ 25,603 |
Custody and other administration services | 13,845 | 12,868 | 9,262 |
Wholly-owned subsidiary | |||
Equity securities | |||
Fair value | 7,081 | 7,142 | |
Unrealized gain | 2,531 | 2,142 | |
Loans | 12,939 | 9,888 | |
Deposits | 423 | 342 | |
Asset Management Arrangement | Wholly-owned subsidiary | |||
Equity securities | |||
Loans | 2,518 | 16 | |
Deposits | 26,541 | 3,492 | |
Asset management | 7,131 | 10,273 | 9,412 |
Custody and other administration services | 1,108 | 1,452 | 1,376 |
Other non-interest income | $ 729 | $ 1,458 | $ 972 |
Condensed financial statement_3
Condensed financial statements of the parent company only - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | |||
Cash and demand deposits with banks - Non-interest bearing | $ 133,363 | $ 88,031 | |
Demand deposits with banks - Interest bearing | 433,511 | 839,320 | |
Cash equivalents - Interest bearing | 2,722,718 | 1,622,719 | |
Cash due from banks | 3,289,592 | 2,550,070 | |
Securities purchased under agreements to resell | 197,039 | 142,283 | |
Short-term investments | 823,039 | 1,218,380 | |
Investment in securities | |||
Equity securities at fair value | 7,317 | 7,419 | |
Available-for-sale (amortized cost: $1,058,195 (2019: 1,248,726)) | 2,661,116 | 2,220,341 | |
Held-to-maturity (fair value: $1,023,424 (2019: $1,030,183)) | 2,194,371 | 2,208,663 | |
Total investment in securities | 4,862,804 | 4,436,423 | |
Loans to third parties, net of allowance for credit losses | 5,160,810 | 5,142,622 | |
Other assets, including accrued interest, premises, equipment and computer software, equity method investments, receivables from subsidiaries and other real estate owned | 144,794 | 158,739 | |
Total assets | 14,738,634 | 13,921,575 | |
Deposits | |||
Non-interest bearing | 3,012,360 | 2,238,256 | |
Interest bearing | 10,237,724 | 10,203,369 | |
Total deposits | 13,250,084 | 12,441,625 | |
Employee benefit plans | 131,279 | 110,347 | |
Other liabilities, including accrued interest and payables to subsidiaries | 203,861 | 262,360 | |
Total other liabilities | 335,140 | 372,707 | |
Long-term debt | 171,462 | 143,500 | |
Total liabilities | 13,756,686 | 12,957,832 | |
Shareholders' equity | |||
Total shareholders’ equity | 981,948 | 963,743 | $ 882,343 |
Total liabilities and shareholders’ equity | 14,738,634 | 13,921,575 | |
Available-for-sale at fair value, amortized cost | 2,588,335 | 2,208,531 | |
Held-to-maturity, fair value | 2,304,756 | 2,255,987 | |
Bank of N.T. Butterfield & Son Ltd | |||
Assets | |||
Cash and demand deposits with banks - Non-interest bearing | 44,086 | 38,615 | |
Demand deposits with banks - Interest bearing | 99,035 | 118,583 | |
Cash equivalents - Interest bearing | 1,244,878 | 329,494 | |
Cash due from banks | 1,387,999 | 486,692 | |
Securities purchased under agreements to resell | 197,039 | 142,283 | |
Short-term investments | 16,277 | 44,512 | |
Investment in securities | |||
Equity securities at fair value | 7,316 | 7,420 | |
Available-for-sale (amortized cost: $1,058,195 (2019: 1,248,726)) | 1,092,325 | 1,252,749 | |
Held-to-maturity (fair value: $1,023,424 (2019: $1,030,183)) | 967,926 | 1,003,248 | |
Total investment in securities | 2,067,567 | 2,263,417 | |
Loans to third parties, net of allowance for credit losses | 2,025,358 | 2,046,406 | |
Other assets, including accrued interest, premises, equipment and computer software, equity method investments, receivables from subsidiaries and other real estate owned | 199,273 | 207,896 | |
Total assets | 6,596,129 | 5,881,918 | |
Deposits | |||
Non-interest bearing | 1,945,042 | 1,441,194 | |
Interest bearing | 3,298,165 | 3,161,634 | |
Total deposits | 5,243,207 | 4,602,828 | |
Employee benefit plans | 128,167 | 110,347 | |
Other liabilities, including accrued interest and payables to subsidiaries | 71,345 | 61,500 | |
Total other liabilities | 199,512 | 171,847 | |
Long-term debt | 171,462 | 143,500 | |
Total liabilities | 5,614,181 | 4,918,175 | |
Shareholders' equity | |||
Total shareholders’ equity | 981,948 | 963,743 | |
Total liabilities and shareholders’ equity | 6,596,129 | 5,881,918 | |
Available-for-sale at fair value, amortized cost | 1,058,195 | 1,248,726 | |
Held-to-maturity, fair value | 1,023,424 | 1,030,183 | |
Bank of N.T. Butterfield & Son Ltd | Banks | |||
Investment in securities | |||
Net assets of subsidiaries | 618,461 | 610,217 | |
Loans to subsidiaries | 13,669 | 13,241 | |
Bank of N.T. Butterfield & Son Ltd | Customers | |||
Investment in securities | |||
Net assets of subsidiaries | 11,971 | 10,303 | |
Loans to subsidiaries | $ 58,515 | $ 56,951 |
Condensed financial statement_4
Condensed financial statements of the parent company only - Condensed Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Non-interest income | |||
Banking | $ 47,346 | $ 49,347 | $ 45,010 |
Foreign exchange revenue | 37,180 | 37,001 | 32,895 |
Custody and other administration services | 13,845 | 12,868 | 9,262 |
Other non-interest income | 5,610 | 4,818 | 4,912 |
Total non-interest income | 183,859 | 183,975 | 168,686 |
Interest income | |||
Interest and fees on loans | 230,656 | 234,032 | 218,495 |
Deposits with banks and other | 12,125 | 41,625 | 24,830 |
Total interest income | 352,009 | 405,078 | 367,588 |
Interest expense | |||
Deposits | 25,116 | 51,486 | 17,617 |
Long-term debt | 9,294 | 7,876 | 6,949 |
Securities sold under agreement to repurchase | 0 | 14 | 33 |
Total interest expense | 34,410 | 59,376 | 24,599 |
Net interest income before provision for credit losses | 317,599 | 345,702 | 342,989 |
Provision for credit recoveries (losses) | (8,491) | 184 | 6,991 |
Net interest income after provision for credit losses | 309,108 | 345,886 | 349,980 |
Net gains (losses) on equity securities | 658 | 925 | (329) |
Net realized gains (losses) on available-for-sale investments | 1,220 | 1,624 | 1,100 |
Net gains (losses) on other real estate owned | (104) | (5) | (322) |
Net other gains (losses) | (552) | 223 | (1,304) |
Total other gains (losses) | 1,222 | 2,767 | (855) |
Total net revenue | 494,189 | 532,628 | 517,811 |
Non-interest expense | |||
Salaries and other employee benefits | 173,662 | 183,659 | 159,778 |
Technology and communications | 65,156 | 62,633 | 60,280 |
Professional and outside services | 21,263 | 27,952 | 26,034 |
Property | 29,392 | 24,181 | 21,825 |
Indirect taxes | 21,323 | 21,109 | 19,485 |
Non-service employee benefits expense | 2,640 | 5,649 | 5,570 |
Marketing | 4,443 | 8,050 | 6,116 |
Amortization of intangible assets | 5,819 | 5,451 | 5,091 |
Other expenses | 20,896 | 18,240 | 17,164 |
Total non-interest expense | 344,594 | 356,924 | 321,343 |
Net income | 147,217 | 177,075 | 195,184 |
Other comprehensive income (loss), net of taxes | 37,417 | 61,430 | (19,475) |
Total comprehensive income | 184,634 | 238,505 | 175,709 |
Bank of N.T. Butterfield & Son Ltd | |||
Non-interest income | |||
Banking | 24,429 | 24,870 | 23,506 |
Foreign exchange revenue | 9,166 | 10,613 | 11,727 |
Custody and other administration services | 6,927 | 7,625 | 0 |
Other non-interest income | 5,924 | 5,650 | 6,330 |
Total non-interest income | 187,832 | 194,905 | 120,658 |
Interest income | |||
Interest and fees on loans | 123,774 | 132,104 | 133,124 |
Investments | 52,135 | 68,721 | 73,698 |
Deposits with banks and other | 3,109 | 9,156 | 12,932 |
Total interest income | 179,018 | 209,981 | 219,754 |
Interest expense | |||
Deposits | 9,386 | 17,410 | 6,709 |
Long-term debt | 9,294 | 7,876 | 6,949 |
Securities sold under agreement to repurchase | 0 | 13 | 33 |
Total interest expense | 18,680 | 25,299 | 13,691 |
Net interest income before provision for credit losses | 160,338 | 184,682 | 206,063 |
Provision for credit recoveries (losses) | (8,750) | (3,088) | 6,823 |
Net interest income after provision for credit losses | 151,588 | 181,594 | 212,886 |
Net gains (losses) on equity securities | 658 | 925 | (329) |
Net realized gains (losses) on available-for-sale investments | 702 | 1,053 | 758 |
Net gains (losses) on other real estate owned | (104) | (5) | (323) |
Net other gains (losses) | 714 | 2 | 0 |
Total other gains (losses) | 1,970 | 1,975 | 106 |
Total net revenue | 341,390 | 378,474 | 333,650 |
Non-interest expense | |||
Salaries and other employee benefits | 69,521 | 77,923 | 75,949 |
Technology and communications | 35,434 | 36,008 | 36,466 |
Professional and outside services | 27,791 | 27,954 | 22,696 |
Property | 9,092 | 6,927 | 6,693 |
Indirect taxes | 15,633 | 15,355 | 14,669 |
Non-service employee benefits expense | 3,462 | 5,879 | 6,427 |
Marketing | 2,418 | 4,372 | 3,034 |
Amortization of intangible assets | 169 | 169 | 169 |
Other expenses | 9,896 | 9,260 | 4,230 |
Total non-interest expense | 173,416 | 183,847 | 170,333 |
Net income before equity in undistributed earnings of subsidiaries | 167,974 | 194,627 | 163,317 |
Equity in undistributed earnings of subsidiaries | (20,757) | (17,552) | 31,867 |
Net income | 147,217 | 177,075 | 195,184 |
Other comprehensive income (loss), net of taxes | 37,417 | 61,430 | (19,475) |
Total comprehensive income | 184,634 | 238,505 | 175,709 |
Bank of N.T. Butterfield & Son Ltd | Banks | |||
Non-interest income | |||
Dividends from subsidiaries | 121,522 | 122,776 | 60,000 |
Bank of N.T. Butterfield & Son Ltd | Customers | |||
Non-interest income | |||
Dividends from subsidiaries | $ 19,864 | $ 23,371 | $ 19,095 |
Condensed financial statement_5
Condensed financial statements of the parent company only - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | ||||||
Net income | $ 147,217 | $ 177,075 | $ 195,184 | |||
Adjustments to reconcile net income to operating cash flows | ||||||
Depreciation and amortization | 62,435 | 48,390 | 46,476 | |||
Provision for credit (recoveries) losses | 8,491 | (184) | (6,991) | |||
Share-based payments and settlements | 15,245 | 17,716 | 12,582 | |||
Net change in equity securities at fair value | (925) | |||||
Net change in equity securities at fair value | 102 | 329 | ||||
Net realized (gains) losses on available-for-sale investments | (1,220) | (1,624) | (1,100) | |||
Net (gains) losses on other real estate owned | 104 | 5 | 322 | |||
(Increase) decrease in carrying value of equity method investments | (1,298) | (340) | (1,118) | |||
Dividends received from equity method investments | 2,845 | 520 | 556 | |||
Changes in operating assets and liabilities | ||||||
Cash provided by (used in) operating activities | 188,150 | 248,722 | 296,674 | |||
Cash flows from investing activities | ||||||
Short-term investments other than restricted cash: proceeds from maturities and sales | 2,214,870 | 568,944 | 252,028 | |||
Short-term investments other than restricted cash: purchases | (1,815,887) | (1,657,456) | (63,913) | |||
Available-for-sale investments: proceeds from sale | 352,965 | 225,305 | 854,160 | |||
Available-for-sale investments: proceeds from maturities and pay downs | 565,028 | 348,665 | 480,765 | |||
Available-for-sale investments: purchases | (1,313,884) | (563,007) | (242,087) | |||
Held-to-maturity investments: proceeds from maturities and pay downs | 538,345 | 274,490 | 166,406 | |||
Held-to-maturity investments: purchases | (533,379) | (420,018) | (903,958) | |||
Net (increase) decrease in loans to third parties | 25,555 | (362,624) | (321,944) | |||
Additions to premises, equipment and computer software | (20,566) | (22,777) | (18,529) | |||
Proceeds from sale of other real estate owned | 0 | 1,102 | 5,896 | |||
Cash provided by (used in) investing activities | (41,709) | 1,093,434 | 338,222 | |||
Cash flows from financing activities | ||||||
Net increase (decrease) in demand and term deposit liabilities | 692,635 | (744,610) | (22,543) | |||
Issuance of subordinated capital, net of underwriting fees | 97,647 | 0 | 73,218 | |||
Repayment of long-term debt | (70,000) | 0 | (47,000) | |||
Common shares repurchased | (86,640) | (81,534) | (48,443) | |||
Proceeds from stock option exercises | 1,739 | 349 | 3,318 | |||
Cash dividends paid on common shares | (88,932) | (93,636) | (83,704) | |||
Cash provided by (used in) financing activities | 546,449 | (919,431) | (125,154) | |||
Cash, cash equivalents and restricted cash: beginning of year | 2,578,901 | 2,070,120 | 1,557,732 | |||
Cash, cash equivalents and restricted cash: end of year | 3,314,498 | 2,578,901 | 2,070,120 | |||
Components of cash, cash equivalents and restricted cash at end of year | ||||||
Cash due from banks | $ 3,289,592 | $ 2,550,070 | $ 2,053,883 | |||
Restricted cash included in short-term investments on the consolidated balance sheets | 24,906 | 28,831 | 16,237 | |||
Total cash, cash equivalents and restricted cash at end of year | 3,314,498 | 2,070,120 | 1,557,732 | 3,314,498 | 2,578,901 | 2,070,120 |
Supplemental disclosure of non-cash items | ||||||
Transfer to (out of) other real estate owned | 314 | 2,437 | ||||
Initial recognition of right-of-use assets and operating lease liabilities | 323 | 22,370 | 0 | |||
Reduction in net loans due to initial adoption of a current expected credit loss model | 7,841 | 0 | 0 | |||
Bank of N.T. Butterfield & Son Ltd | ||||||
Cash flows from operating activities | ||||||
Net income | 147,217 | 177,075 | 195,184 | |||
Adjustments to reconcile net income to operating cash flows | ||||||
Depreciation and amortization | 26,562 | 21,734 | 21,425 | |||
Provision for credit (recoveries) losses | 8,750 | 3,088 | (6,823) | |||
Share-based payments and settlements | 15,245 | 17,716 | 12,582 | |||
Net change in equity securities at fair value | (925) | |||||
Net change in equity securities at fair value | 102 | 329 | ||||
Net realized (gains) losses on available-for-sale investments | (702) | (1,053) | (758) | |||
Net (gains) losses on other real estate owned | 104 | 5 | 323 | |||
(Increase) decrease in carrying value of equity method investments | (1,376) | (290) | (1,033) | |||
Dividends received from equity method investments | 2,710 | 385 | 376 | |||
Equity in undistributed earnings of subsidiaries | 20,757 | 17,552 | (31,867) | |||
Changes in operating assets and liabilities | ||||||
(Increase) decrease in accrued interest receivable and other assets | 754 | 6,808 | (11,915) | |||
Increase (decrease) in employee benefit plans, accrued interest payable and other liabilities | 9,456 | (3,753) | (786) | |||
Cash provided by (used in) operating activities | 229,579 | 238,342 | 177,037 | |||
Cash flows from investing activities | ||||||
(Increase) decrease in securities purchased under agreements to resell | (54,756) | (114,942) | 151,428 | |||
Short-term investments other than restricted cash: proceeds from maturities and sales | 68,272 | 0 | 106,221 | |||
Short-term investments other than restricted cash: purchases | (35,319) | (32,953) | (18,953) | |||
Available-for-sale investments: proceeds from sale | 205,770 | 114,058 | 681,656 | |||
Available-for-sale investments: proceeds from maturities and pay downs | 295,547 | 204,105 | 340,114 | |||
Available-for-sale investments: purchases | (317,451) | (196,652) | (156,271) | |||
Held-to-maturity investments: proceeds from maturities and pay downs | 229,576 | 137,622 | 82,853 | |||
Held-to-maturity investments: purchases | (195,898) | (53,228) | (525,637) | |||
Net (increase) decrease in loans to third parties | 8,263 | (99,793) | 15,184 | |||
Additions to premises, equipment and computer software | (11,313) | (14,009) | (9,830) | |||
Proceeds from sale of other real estate owned | 0 | 1,102 | 5,896 | |||
Injection of capital in subsidiary | (1,522) | (175,107) | (64,029) | |||
Return of capital from a subsidiary | 3,314 | 12,972 | 8,244 | |||
Cash provided by (used in) investing activities | 192,491 | (218,242) | 619,452 | |||
Cash flows from financing activities | ||||||
Net increase (decrease) in demand and term deposit liabilities | 630,141 | (64,027) | (603,925) | |||
Issuance of subordinated capital, net of underwriting fees | 97,647 | 0 | 73,218 | |||
Repayment of long-term debt | (70,000) | 0 | (47,000) | |||
Common shares repurchased | (86,640) | (81,534) | (48,443) | |||
Proceeds from stock option exercises | 1,739 | 349 | 3,318 | |||
Cash dividends paid on common shares | (88,932) | (93,636) | (83,704) | |||
Cash provided by (used in) financing activities | 483,955 | (238,848) | (706,536) | |||
Net increase (decrease) in cash, cash equivalent and restricted cash | 906,025 | (218,748) | 89,953 | |||
Cash, cash equivalents and restricted cash: beginning of year | 498,251 | 716,999 | 627,046 | |||
Cash, cash equivalents and restricted cash: end of year | 1,404,276 | 498,251 | 716,999 | |||
Components of cash, cash equivalents and restricted cash at end of year | ||||||
Cash due from banks | 1,387,999 | 486,692 | 703,263 | |||
Restricted cash included in short-term investments on the consolidated balance sheets | 16,277 | 11,559 | 13,736 | |||
Total cash, cash equivalents and restricted cash at end of year | 498,251 | 716,999 | 716,999 | $ 1,404,276 | $ 498,251 | $ 716,999 |
Supplemental disclosure of cash flow information | ||||||
Cash interest paid | 19,532 | 24,190 | 15,428 | |||
Supplemental disclosure of non-cash items | ||||||
Transfer to (out of) other real estate owned | 314 | 0 | 2,041 | |||
Initial recognition of right-of-use assets and operating lease liabilities | 0 | 133 | 0 | |||
Reduction in net loans due to initial adoption of a current expected credit loss model | 3,899 | 0 | 0 | |||
Bank of N.T. Butterfield & Son Ltd | Banks | ||||||
Cash flows from investing activities | ||||||
Net decrease in loans to subsidiaries | (428) | (487) | 764 | |||
Bank of N.T. Butterfield & Son Ltd | Customers | ||||||
Cash flows from investing activities | ||||||
Net decrease in loans to subsidiaries | $ (1,564) | $ (930) | $ 1,812 |
Subsequent events (Details)
Subsequent events (Details) - $ / shares | Mar. 10, 2021 | Feb. 10, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||||
Common share cash dividends declared (in dollars per share) | $ 1.76 | $ 1.76 | $ 1.52 | ||
Common share cash dividends paid (in dollars per share) | $ 1.76 | $ 1.76 | $ 1.52 | ||
Number of shares authorized to be repurchased (up to) (in shares) | 3,452,000 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Common share cash dividends declared (in dollars per share) | $ 0.44 | ||||
Number of shares authorized to be repurchased (up to) (in shares) | 2,000,000 | ||||
Scenario, Forecast | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Common share cash dividends paid (in dollars per share) | $ 0.44 |