The Bank of N.T. Butterfield & Son Limited (NTB) 14 Feb 232022 Q4 Earnings call transcript

Company Profile

Participants

Noah Fields	Head, IR
Michael Collins	Chairman and CEO
Craig Bridgewater	Group CFO
Michael Schrum	President and Group Chief Risk Officer
Alex Twerdahl	Piper Sandler
Timur Braziler	Wells Fargo Securities
David Feaster	Raymond James
Tim Switzer	KBW

Call transcript

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Operator

Good morning. My name is Dave, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter and Full Year 2022 Earnings Call for The Bank of N.T. Butterfield & Son Limited. After today’s presentation, there will be an opportunity to ask questions. this being note, Please Instructions] event recorded. is [Operator

turn over Investor to would now Fields, call to like of I Noah the Butterfield’s Relations. Head

Noah Fields

joining be Good thank financial and results. you. everyone, us. XXXX for Today, Thank full year we Butterfield’s reviewing morning, will fourth quarter you and

On I’m Risk Schrum, Michael President Michael Group Chief joined Collins, Chief Chairman and and the Officer; Financial Craig Officer; call, Officer. Executive Bridgewater, by Butterfield’s Group Chief and

session. question-and-answer Following call remarks, up their we the a prepared open will for

Yesterday press results. website quarter press slide afternoon, a on and are on full refer release the this fourth we announcing our remarks available will the issued release with during www.butterfieldgroup.com. we year The presentation our Investor at our call, of to Relations XXXX that along section

to important I non-GAAP call Company’s evaluating like will Before would remind today’s are the certain performance. refer everyone to I believe in turn Michael we Collins, that discussions the which over measures, to

measures U.S. please For a slide release to GAAP, the reconciliation refer earnings presentation. and press these of to

by associated may to subject factors statements. also are forward-looking which and statements, uncertainties those risks, to may call materials from contemplated materially cause actual that Today’s differ contain results certain and these other

found be our Additional these risks information regarding can SEC filings. in

turn I Michael call the will Collins. now to over

Michael Collins

Thank you, the joining Noah, and thanks call today. to everyone

the core and in and Islands private quarter excellent benefited in Islands. and our the fourth positioning the Cayman in banking Butterfield’s from trust results full year strong XXXX Bermuda, markets Channel

Bank’s strategically best-in-class and and high-end locations. Bahamas financial based lending United Switzerland London. as trust banking In The as Kingdom these addition services in provide to and offshore geographic Singapore, based The we and trust locations, is specialized mortgage across footprint Central well

by are market efficiently and generating our Canada. supported Halifax, revenue addition in Our centers in service Mauritius in operating and jurisdictions

results $XXX market at with year income resulted Operating full XX.X% for rates the $XXX.X of in a to net have of million. income on increased had rising average year X. turn Butterfield XXXX. on equity highlights and now common will core core return million an excellent page with I net and tangible

the net up value addition was inflationary were earnings common higher to tangible book cost share basis net to interest and margin to held In despite interest with recover expenses points in the XXXX. quarter. non-interest X.XX% X.XX% of some basis rising fourth in pressures. XX.X% see in from by I points per also to The cost XX steady, income, from increased deposits XX pleased XXXX X%

is The of Channel from differ the a deposit current competitive. presence than retail as based therefore and cycles, in Islands, somewhat more previous which costs cycle larger corporate banking result our more

of management dividends. continue paid pursue in We out have cash capital around to an XX% earnings and active strategy quarterly

TA authorization are The million repurchase common approved shares share beginning to which of has improve will towards to XXXX. our TCE of ratio to Board see We expect repurchases. and the XXXX at end for recommence the February our expiring range authorization share new a up targeted to replace X

asset deal making first progress Trust Credit that in in our acquisitions with vectors of September is last we accretive One good the in-market announced towards year. and Suisse we the closing are Private growth

Singapore quarters. the of Throughout structures still Bahamas in first end and at clients client over to the the of XXXX, with quarter, in the administration of and expect taking and smaller across second Guernsey and we’ll progressively first The tranche Bahamas. servicing selected the coming occur Private third the Guernsey Singapore, be jurisdiction by the and Trust We The timing onboarding of

so far. to conduct diligence team at of compliance we and level the continues with extensive the quality due client are pleased Our generally business

in to over turn Craig now the for detail will more quarter. I call the

Craig Bridgewater

and Michael, Thank good you, morning.

$X.XX the fourth $X.XX per be per Butterfield diluted income reported million begin share or core or net common where quarter fourth of the X will for provide share. and million I with income of highlights. $XX.X net slide $XX.X quarter

in XX.X% to core common increased equity quarter the tangible from average in return the on Our XX.X% prior quarter.

our the conduct stabilization X% of Our we XX points The margin deposits resume range of although not to deposit XX buybacks basis X.X% OCI rising share we cost during net share We repurchases of per and X.XX% improved as a share. to Directors improvement cash fourth Michael in points. basis as to did mentioned, quarter, interest expect of due to TCE/TA with points to the marks. Board approach XX quarterly again basis declared $X.XX sustained targeted dividend

income interest prior $XX.X provides increase higher improvement income the assets, to versus we of quarter. of interest continued an and I which for a before net was summary earning turn In will of increase mainly X, fourth margin. due somewhat credit provision to all interest net the X.X% quarter, now of interest slide by The net reported deposit yields was which on costs. offset million, losses

increases were balances million portfolio $XXX the up the Overall, at $XXX deposit the XXXX during quarter, $XX to million side. loan customer $XXX in announced by X.XX% impact of were Bermuda driven fourth an yield to million, in originations floating quarter previously loans. of of new $XXX.X quarter, maturities million Cayman. loan $XXX.X previous versus driven on of primarily funding down of expected due basis by Average at X.XX% net decreased XX million third of the loan investment average Average We on The the had rate and yields compared rate during in average $XX.X points was XXXX. short-dated and balances instruments We quarter outflows cash fourth down short-term the deployed balance million in investment maturities by the quarter. and million. the

quarter. a income third activity trust the ratio Non-interest X. with seasonal banking from fees. source of higher credit capital activities quarter-over-quarter, from based which slide XX.X% fee and business a debit Turning and due XX% fees, continues income to up benefited revenues be and efficient increased transaction Non-interest up of increased to stable during income revenue was primarily XX.X% new to card from and higher

of of and targeted our non-interest non-interest provides X.X% the run Total than core $XX.X rate. expenses. $XX.X The and expenses above summary prior in expenses higher slightly higher core million million Slide a X were quarter are The primarily ratio true and performance efficiency costs. to our target core accruals XX%. increased to the incentive remains based continued below from of related staff cycle XX.X% mostly costs, improve and results severance

I will the Michael now review turn call over Schrum to to the balance sheet.

Michael Schrum

Craig. you, Thank

levels. requirements. Slide XX capital minimum leverage summarizes regulatory above and regulatory to be continue capital significantly Butterfield’s levels

in Our the improved improved quarter portfolio. OCI tangible in due leverage from of our X.X% X.X% ratio marks prior to available-for-sale has

on range towards share X.X%, that important As sustained see to the conditions. target we of our we It subject is note to TCE to market TA to ratio recommence to X% improvements repurchases the in TA regulatory plan ratio ex also the TA ratio not the at TCE to TCE and is the securities cash ratio X.X% book, to a X.X% and for to remained excluding improved OCI Butterfield

we Period-end remains translation $XXX in Butterfield’s as assets. of balance $XX a represents total reflect customer of weighted which managed of sheet stabilization some quarter high low risk with continues and end. third dollar XX% came higher of liquidity. of the Butterfield’s of from sheet by Turning now of the of the to deposits, approximately XX. low the a to the with reversing mortgage now density balances million deposits to residential loan risk increase impact The foreign exchange XX.X% decline the conservatively slide degree well XXXX. the saw deposit increased balance capital loan volumes in non-U.S. regulatory billion quarter efficiency versus portfolio, prior as

of chart here The well XX, by the due $XXX shows slide as dollar. segment. fourth increase million deposit $XXX volume deposit to million million and exchange movement, weaker Turning underlying translation loan currency changes a we in quarter inflows, to by which currency as of provide consists from changes and deposits, foreign U.S. and $XXX

as more by than expected, movement. was decline but decreased that offset foreign originations loan exchange New

loan XX, risk which asset with slide have that remain rated continues Butterfield quarter which basis is charge-off comprised On quality securities. AAA to to the at XX% basis portfolio, to a and of U.S. loan loans, XX show X points holding Credit in the government from of points. non-accrual also agency credit book the loans gross we robust low guaranteed X.X% prior net the with quality up in strong is ratio, investment continues

and On held analysis. during sheet X.X average the book steady years. The balance of duration slide investment cash rate interest a at summary quarter XX, we sensitivity the present securities with the

rates. We expect rates to continue interest rate to rate improving market Channel loans has higher NII the in Butterfield’s sensitivity to sensitivity a moderated market asset somewhat due higher and relatively with dollar Islands. sensitivity to of deposits result in fixed of U.S. continued proportion higher

I will now a to Michael call back Collins. turn

Michael Collins

rights, labor, XXXX, responsible of in pleased became Compact that environment note you, anti-corruption. our practices and to is Global the I Thank to of of which a UN the areas human member Michael. business in public confirmation a am commitment the Butterfield

education change Our infrastructure, specific workforce wellbeing, and focus and ESG and on program equity. a includes climate sustainable

jurisdictions, and best-in-class continue Butterfield’s to XX%. results operating efficiency that management sustainable our validate non-interest strengths the disciplined below income, drive ratio helped the expense of

we we believe continue As growth on equity common support and investor return returns. Butterfield’s that objectives to XXXX, will overall enter

remains portfolio, thoughtful growth acquisitions, on in investment Our and through longstanding focused conservative strategy exposure credit limiting targeted capital our management.

goals the across recent high help look in great remain Our of low Butterfield’s and to people business and to shareholder risk core return I proven forward our beyond, model conditions markets economic continuing relatively achieve alongside success, enhancing interest working and financial their market of constructive and given and profile for clients our cycles. teams rate value. XXXX,

with you. Thank questions. happy to your be we’d that And take Operator?

Operator

with Alex question Our go comes from Instructions] Please Twerdahl Sandler. [Operator Piper first ahead.

Alex Twerdahl

to of about outflows. I during deposit quarter. had nice of reversal Obviously, the wanted couple to ask a the after flows quarters you the fourth see

is over deposit do they see that next are or you you that that do still back kind where were that As there the or months? there couple some maybe could ‘XX, of some closer now look think should of stability we into -- see pre-pandemic inflows some deposit forward think actually deposits at-risk you to

Michael Schrum

It’s Good Schrum. morning, Michael Alex.

values movement, off. the you say. Obviously, can you post-pandemic elevated, maybe outflow, outflow, terms we’ve the underlying deck, the would put on slide I’ll FX balance just we sheet. net of in sort The which underlying of So kick deposit a quite seen is I a the still significant bit in said, as that flows, see

steady, we more has and held So, Cayman, I corporate, particularly think at we business Bermuda of in a still the believe flows. terms when look very volatile in is retail bit

in of the land think still region will somewhere $XX.X I billion. So we

bit to So, we’re right the are But as the trying obviously, of flows carefully well. deposits now. elevated with rate, the balance cost little a we still

of think I job decent cycle. even But this the that’s of the of done part we’ve are though So, cost deposits a that, up. balance ticking

little I So, of little maybe XX.X%, are at a a bit higher, lower, looking bit think thereabout. sort maybe we still but

Alex Twerdahl

correlated -- then the from as guess, in same think investment you to I the portfolio. Okay. flows cash that, about And

expecting is expectations? the thinking of cash it I most little bit cash. strategy? Have you given flows Are to into the more, you kind just it some stability think reinvesting more changed last year was -- turn a are about

Michael Schrum

Yes.

So, is more our the to answer. helpful coming mean, latter of it’s extent, geography in some cash FX Obviously, short any not so having book the in impacting we securities. and terms short-term portfolio I TCE. have T-bill that’s yes into a OCI

So see again, to pleased little of march obviously marks we’re start we TCE bit. the were the just kind back, a sitting OCI there quarter, back some until of of kind a helped by the recovery of this and coming we

as well, -- pretty we I as conservative. are So,

of -- portfolio. going want are But in obviously, pretty are fixed still assets rate rates kind we productive. to we the time, investment over So, short-term

and and more back then and quarters of how see couple develop we should BAU. a out going be rates maybe to re-laddering So,

Alex Twerdahl

then That’s starting about to in bit Channel great. you pressures specifically bit, Islands. talked a little the the pick deposit And little a up Okay.

get overall for sense So, a if little I -- thinking bit are how deposit wondering us, betas the about how better various you thinking about or in just could was you’re we jurisdictions? help

Michael Schrum

Yes.

in. rates kick Obviously, can run a higher. are and off Craig I’ll bit then chime also exit So the

just at really to a you an share look term have the the it the due Islands, have market particularly to significant If largely again deposit obviously we there. impact mid-market trying enough pricing on Channel don’t share, there it has we’re been is grow March, on markets. a side, where our are those And And banks in more to banks. competitive environment. still And the commercial market primarily

markets. And so those again, in there’s more price sensitivity

we beta. the terms how about betas and Bermuda Cayman, deposit in that in really changed of much terms In the very of think hasn’t

fund And of as I a So, term and demand, something well. outperformed across XX%. they a money we the Again, we cycles. have we’ve opportunity think, sort customers if I to go want And that us. for the there’s the beta, think reasonable model to in with rate XX% obviously a on like to deposits, term model give we

So, aggressive those we’re through on a a market, the modeling a conservative And Channel to pretty Islands, bit more so little These bit and we’re for betas. assumptions obviously then deposit markets, basis are back newer testing the at two those little it cycle. are really.

we’re a XXX% terms betas deposit in think, I in to actually. pretty of right Channel peaking close but they’ve Islands, of sort now, been

Craig Bridgewater

I We’ve Islands, a think, mass retail Channel initiative launched in it’s part of today. of very it of affluent are recently. is very -- Alex we bank a sort corporate much our much

million We have sterling sort XXX over in deposits. over XXX mortgages about and in now, a of million

Cayman, that little a over So over it’ll very will get Channel change become to retail think expensive Islands It’ll will like but time there. we less time. Bermuda look more time, to and a much book. the funding book, today it’s as some the start think bit will -- I somewhat But I grow take become but corporate

Operator

with Our from Please go next comes Fargo question Timur ahead. Wells Securities. Braziler

Timur Braziler

I you the to make hearing correctly. I’m want buyback, sure, just On

You’re re-upping it.

million see the end little during for of I follow-up, you still about that if prior million trajectory not get the X shares, as there’s a X that tapping waiting serve to is of of share we to think actually shares You’re year the bit authorization February. remaining purchased I through catch-up Could reengage already? X X% reengage, you kind -- you before in than are addition starting the as optimistic million to to the ‘XX? still a a higher it’s a or of TCE. shares you are or then, And to level kind guess into guys

Craig Bridgewater

share guess XX.X%, into our and we’ll I structure it into whether back kind is, we tee market, consideration can are up we Timur. few just we probably that. range of that you the as a give points always our And that, said pathway to Thanks, go as to commence towards kind back marching of see repurchases. a

I we’re positive So, at like a seeing we’re that. the and think, X.X, conditions December, end of around of kind

we then like program authorized. And always secondly, have to that’s a

one the point, your the existing to end that So expires we have do of February. at

to we’ll we’re program So, -- through then, shares at to us announce to that. obviously subject conditions. And into very us. that next Board share what happy meetings X renewal of the look finished going back a really yesterday that we that’s supportive million of market And we available or is yesterday, And our the take just market we’re approve continue for did repurchases, replacement Board to February. and to

morning, seeing are looking internal as do we we is available yes, for as program. see. current the we to us And activity well of we nice have having and the kind So, recommencing us some buybacks. on the good new program discussions are this have March share which shares But come to at

Michael Schrum

Michael I to sorry, it’s And that. can Tim Yes. think -- Schrum, add

deposit what it conditions stabilize, I about slower think both we internally. and levels year I to that’s half of We is in think the would But will how the pace see think be expect. want just probably the kind of we first OCI.

Timur Braziler

that that appreciate the mentioned you then situation large there government. are line but to more, bit to other Got a a or pipeline had that does of up And and you any that? it. Can want a say Cayman that. taking size And that don’t more loan you book ‘XX, chunky is to kind the the of bit looking fluid you credit I activities little at through extended unexpected, of place, come little is quantify seeing as I visibility there?

Craig Bridgewater

Yes.

the that couple also kind one paying well. obviously, was the been of government. Cayman of months amortizing XXXX that’s Islands kind and last size So, the of as down the And extended was to over during of mid-teens

kind around hats kind of Nothing of to the XX those to come we those ring. relationships. XX but point. to relationships, this moment, on is the That willing focus it’s of -- obviously, at our are always somewhere So, significant we continue at opportunities the pipeline put kind significant as up, in in those

conditions appropriate, we’ll facilities. the pricing as the and appropriate, those terms long are types is As extend

Timur Braziler

side, Great. that on still mortgages. lagging at And fact be me, rates Bermuda put expectation to into your have deposit looking we then the the the just last for some

expectation kind as two and Just together, steady or as do dynamics and interest little goes, pressure down is at she getting net at base you of the out asset of a these slow the bit? looking quarter or margin here yields reversal that all the as first kind slowing see even funding least putting work you start on in maybe more

Michael Collins

Yes. Great first to rates NIM pace than slower is, were expansion question. the continued quarter seen a what have fourth QX say, Obviously, would exit QX. our I for it depends in -- at are. rates market where the run and we’ve that thing on

So in the we uptick increases two obviously, QX. are big QX, uptick worth mentioning, you more in just coming in saw NIM rate a Bermuda have slightly And moderate it’s through residential in which QX. then book, in and base still the announced

it will rate start up cash XX% but So, trend securities to TCE should reinvest in securities about continue trend re-ladder And coming put little higher see we you much obviously, short-term all loans at the to that. together, will then fixed back. and when bit, to as start we there is when up, a

for there’s little at the as path So, still us, but is a a to expansion bit where longer of which little expansion come. market the kind additional of a higher, are rates long moment, we see remains bit somewhere we as a constructive sitting lower,

Timur Braziler

two what’s it. Bermuda announced the magnitude the book? the And of on Got base increases

Michael Schrum

points. XX Both basis

Timur Braziler

XX? so each, XX

Michael Schrum

Yes.

Timur Braziler

Great. you. Thank

Michael Schrum

to correct I have Tim. Sorry, myself.

so when I of the it’ll the that was I of it’s in said it. sorry, was of Cayman kind thinking is actually tenure tenure facility thinking, actually region region mid-teens, of XXX. that’s XXX. But So, be in I

Timur Braziler

only that that’s of part or is fully million down, that Okay. commitment. is... And drawn a That’s XXX

Michael Schrum

Yes.

Timur Braziler

great. for Okay, I appreciate color. Thanks the it.

Operator

question next from with David comes James. Raymond Our Feaster

David Feaster

got inflation I perspective. just in for island restrictions as then in would Obviously, any economic get line your there, economies, pulse from seasonal And economies the your a curious, We’ve item are the How banking uptick just and now great benefits banking quick want update of fee all. that impacting maybe just the the from lifted expectations there’s there? but businesses rates to the see some well? you the to local local higher fees.

Michael Collins

our in quite the in Thanks sense. I doing the are mean, It think for Yes. a I is questions. actually economies all seasonal jurisdictions well.

quarter Thanksgiving through of That’s obviously, So December sort really season. low late fourth actually the a But on is high is in from hand, November, came the season busy. tourism perspective. their the Bermuda other

So, its own. the of sort holding over We’ve to well. it last doing new -- balances out, years, whole of industry reinsurers. have life a X type Reinsurance company Bermuda’s is reinsurance XX

So, reinvented itself waned is as bit, a property Bermuda’s again. catastrophe actually

So, reinsurance business and well. international is doing

doesn’t Cayman doing We do get problem and there, capacity, population sort in well. growth, as try of very airlines terms has tons flight doing so have working new Cayman Channel bit up of of which well, Cayman has flights. lots people the setting of more have. fewer and quite well. well flights, to But economy’s a Bermuda is reasonably of today the capacity. is expanding doing Islands we’re a to with

good have open. doing So everything’s Bermuda, all the economies summer I think, season. a are well, will

so so So, far good.

In expensive. of have Bermuda, cost-of-living been Cayman terms always very

seen rates on We’ve it as particular this But wealth haven’t in at but we and keeping Bermuda any in any in so up. far credit an any seen talked stress. go enough credit that eye we wealth here. think I inflation stress point, So, past, the haven’t real there’s isn’t surprise saved indigenous we’re

it, all quite an banking eye way looking the are but about the four So, economies side. we’ll we’re keep on on positive

David Feaster

maybe it in what drove seeing your great to Okay. That’s you up mortgages credit, whether there’s that borrowers and anything clients, those concerned about watching decline? on then rates on point working those decrease and on not talk and or the approach your the we’re And point. how was maybe struggling non-accruals. just to to Obviously, significant. Could they’re more, you’re maybe with credit helpful. this at And higher see just rate the that holding just curious mortgage about on that floating be may anything with front

might on be just to Sounds to not wanted like there but that. but touch much, just wanted

Craig Bridgewater

answer It’s to to Craig. Hi, the non-accrual. I in the question David. guess regards decreases in first

non-accrual a was had actually down. loan we So, that paid

off of that’s come books. So, kind the

to it a So, was facility that It was development the unusual a come very if caused quarter. UK to credit during regards up. our book, and loan in very will, you positive the a circumstance, kind in of that

see will was necessarily something -- And reoccur, down. that that that but paid expect settle to and we wouldn’t

that’s news. good So,

just been loan experiences, has rates Bermuda the particular, good credit to of impacts understanding interest risk a really, then XXXX. And as in the management or have working clients’ potential payment on in of forward, really going the hard increased team over get affordability loans, affordability

we that. So, very on focused are

And any so anything no we in indications through, haven’t come decreases far, of quality. seen credit

of make kind and unusual see kind the we have and make anything unusual. to they of sure kind do they payments, are bringing the have around seasonal to of Christmas missed -- as not that’s good want that when no happiness at a payments month Christmas or seen for payments -- to the least they and So, sure being kind it don’t that’s going But of family. Usually Christmas due. missed that mortgage past as ignore days to time comes people

Michael Collins

-- sense market that it’s credit don’t in the we as you And do know, a different scoring. we

see much few in average so the mortgages size the have and U.S. mortgage than would We the higher you is of

So, in we we Bermuda, and property. Cayman actually -- each know both actually

restructure a someone we’ve into struggling to So we where what how know We sell know is around actually it got getting it, arms for. will when our it. bit, trouble and

So, it mortgage-by-mortgage. is underwriting really

very So, it’s a different market.

I this in intelligence Christmas, point, that are of islands. certain early is when we are we but borrowers struggling, places small irrespective not at very just such important very is there think -- small such it’s So, the which get seeing

David Feaster

you. acquisition. Thank That’s helpful. just That’s the right. then, And maybe on touching

first quarter. we getting like revenues here sounds be Just in curious, the might it some

going? diligence process. expected? more Just consuming financial any it’s initially seeing thresholds that meet than Whether time the to tell? I you’d kind you or if curious us has And still been a just, deal is know it could due your from too you just early then clients are provide of how impacts

Michael Schrum

Hi, David. Schrum. It’s Michael

what’s teams yes, going the do the any the very a both client order questions are lot in systems diligence, clients consents well, due on pushing So around, that’s hey, sort we needing of happening. a pretty little explain and of and all, actually bit But working process, the see obviously through consent diligently stop on this to from to slower, of have a Once good any so and we we DD for that what’s the conversation. it’s file. a checklist for fiduciary flags

also check documents. We missing for

high And of are And of seen, the Bahamas. book. Singapore than so really the here. It’s the with Guernsey we slightly going to be first clients also far has what quarter very end we’re closing pleased very the we and a files. started been at younger It first of we client that have quality book tranche

not clients moving not are it’s material, whole. and But around it’s be can a few for helpful coming parts a both income, it’s going acquisition fee I which -- obviously -- a to it and still is entity, moving for actually as pieces but across. there’s still Singapore some it’s large helpful a There’s the

and the think to which some coming there’s staff And clients. so I -- service in are movement

the is pipeline back, come when well. end at a the as about definitely So, what we’ll certainty talk around closing we of population, have the quarter bit and the

trust appetite. a and some there’s kind within The that very opportunity initial and fantastic get committee at There -- overall, through kind has the them whether of been put way. are are there’s deal’s clients, them conditional going of look the it and to the stated to system. clients some of we whether still think, But or an I really the few additional that’s out been I a we differences way sort us discuss, arbitration within reject just could for to some, would push risk to there’s the forward. parameters. say lot take are in of of figure on

that So productive. has discussion been

been calls process, think, the So, clients, the of in expect I they talking There what well. are Michael some talking can happen. and I some overall, early through to have families, to going it’s and Singapore great on and

So, cooperated but this pleased got very has Credit committed pleased with they and very during so process. well. lot as well They’ve been way done I helpful us, with with -- obviously as think to that’s the that Suisse a going getting quality, the this very very on,

Yes.

financials, a still some and about come So next the definitely but quarter. there’s it’s earlier still, pieces, like, little moving to talk we’re keen

Michael Collins

Yes.

we’re happy really think, I of quality about the the client.

you what generational Asia. think wealth we’re seeing what is I So, in --

down because companies source of the funds you pretty straightforward, can is industrial So see generations. going through

it’s takes so And move a process. time It trust, laborious. to it’s a long

You’ve But extremely consent. to Credit time. client get and we’re got It’ll some helpful. is being I very take the think Suisse supportive happy with quality of clients.

Operator

Tim from Instructions] Please go Switzer next comes ahead. KBW. question Our [Operator with

Tim Switzer

trust guess -- spending maybe -- pursuits still just diligence. I bank burner for guys appetite -- and I to now? is business I know this on interest And know options, if doing but quick M&A lot a find right that it’s you the of that have been on had due I you to you you interest, opportunity, with back your have year question a have similar then is M&A, many too another of if as still kind this Do of you the follow-up well? time or don’t acquire

Michael Schrum

Michael for Yes. the Thanks question, Schrum. Tim. It’s

curve as tend you still go So, a they few and is a and be things tend through balls, gestation these -- the have to long period interested have negotiations. a to the we’re answer

still another there’s initial to from kind set for CS up it’s of dialogue. the and took to conversations some to kind And everybody. team deal then, get active of So, a that get The that of better part integrate. of year work year

in So, us of at making business for work, in small franchise looking a banks but also conversations jurisdictions, coming and and places. are business other out our that that Singapore, bigger complex, opportunities just in COVID, still the having some there I where low some pipeline in are as great of both of growing terms think there out

And the be so, natural eventually. definitely we bias in would

gestation the is parties sometimes and time. both -- longer for just work the doesn’t a at bit It’s same it period

definitely So still an the are same. Parameters still appetite.

paying EBITDA of market, pre-synergies million. outlay to in are we So, maximum X up $XX times

Now if would something look big did along, come it. a obviously we at take

a our the to around we to posting accretive acquisitions, hurdle at high but be are deals integrate smaller the accretive. certain and can So be IRRs for it’s we the got still are arms with can moment. the at XX%, the order ROEs at they rates that it, we get XX% for Obviously, it, in

-- strategic not things financial us. moves sellers these kind for of these are so, the for acquisitions, are And and that

still good talk of going again, to trust yet. But a and company. about knows. definitely bank yes, And end still coming in away back the up the maybe they appetite opportunities, is there So nothing and handful who

Tim Switzer

Okay, you the bit Fed. but able XXXX, the is moderation as loan you continue to like or maintain little great. in the in margin margin settle another about what’s deposit costs talked back we half expansion the NIM? a guys you be basis hikes yields the If expect there out trajectory from or something of in Fed you’d assuming for of outlook, over of QX, still. seems the maybe of points but And a rest It do year, XX think the pauses, the rise, the to get

Michael Collins

Yes.

more is And in, retail component in flawed, we up if that’s are starting of it maturities. terms then really market will for would way the we the on exit deposit for we both rates. rate it’s see the expect a still new into longer-dated of of of for in -- The see you going would a And will. correctly higher moderation the is stabilization. said, the the originations in but fixed drivers then the discontinue So are, rolling us. in costs, just that on low, moderate we a moderate as as NIM loans, to there you run you definitely cost to does. is exit loan, kick depends really at just terms deposit them a obviously What’s to but cash what getting re-laddering see expansion the terms it fixed roll bit as rate And the But us meaningful as fair T-bills is cash of run on pretty over. rate in now, there

have in fix done since We in have rate we -- ABN Islands. certainly the cycle sterling we the the that’s income in Channel to the Obviously, where this remain is acquisition first have bucket. competitive

experience. XXX And sensitivity we is moderation bit see a learning you basis if points, can a even flat conservative. sense. that makes with -- but so, another the we expecting as asset still are not of not XXX model basis asset sensitivity point, lining, are our this expecting in on very think But the And I are assumptions

Tim Switzer

Thank Yes. you. That for all sense. That’s all makes me.

Operator

closing This session. would conference concludes our question-and-answer I to to the turn any Butterfield remarks. for back over like

Noah Fields

for speaking with Dave. quarter. Have And to day. dialing to everyone you, next you today. thanks a forward great look Thank in We

Operator

The conference has now concluded. attending Thank you today’s for presentation.

may disconnect. You now

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