HAMILTON, Bermuda - The Bank of N.T. Butterfield & Son Limited (BSX: NTB.BH; NYSE: NTB) disclosed its financial outcomes for the fourth quarter and the full year of 2023, signaling a strong fiscal performance. The bank reported a net income of $225.5 million, or $4.58 per diluted common share, for the year ended December 31, 2023, marking an increase from the previous year's $214.0 million, or $4.29 per diluted common share.
For the fourth quarter ended December 31, 2023, Butterfield's net income stood at $53.5 million, or $1.11 per diluted common share, compared to $48.7 million, or $0.99 per diluted common share, for the preceding quarter. The core net income for the same period was $55.3 million, or $1.15 per diluted common share.
The bank's return on average common equity for 2023 was 24.2%, with a core return on average tangible common equity of 27.0%. The net interest margin for the year was reported at 2.80%, with the cost of deposits at 1.40%.
Butterfield's board declared a dividend of $0.44 per share for the quarter ended December 31, 2023, and authorized a new share repurchase program for up to 3.5 million common shares.
The bank's Chairman and Chief Executive Officer, Michael Collins, attributed the favorable results to active balance sheet management and a focus on long-term client relationships. He also noted the successful integration of the final tranche of Credit Suisse trust clients and the approval of a new share repurchase program for 2024.
The report highlighted a decrease in net interest income for the fourth quarter of 2023, attributed to higher deposit costs and a reduction in the bank's balance sheet size. Despite this, non-interest income increased, driven by higher banking fees, trust fees from the Credit Suisse acquisition, and foreign exchange revenue.
The bank completed the year with a solid capital position, maintaining a total regulatory capital ratio of 25.4% under Basel III guidelines, comfortably above the minimum requirements.
Butterfield's balance sheet showed a slight decrease in total assets from $14.3 billion at the end of 2022 to $13.4 billion at the end of 2023. The bank maintained a liquid position, with a significant portion of its assets in cash, bank deposits, and liquid investments.
The information provided is based on a press release statement.
InvestingPro Insights
As The Bank of N.T. Butterfield & Son Limited (NYSE: NTB) reflects on a year of solid financial performance and strategic acquisitions, insights from InvestingPro shed light on the bank's current market standing. With a market capitalization of $1.45 billion, Butterfield is positioned as a significant player in the financial sector. The bank's aggressive share buyback program, highlighted by management, aligns with its strong performance metrics, suggesting a confident outlook on its value.
Butterfield's P/E ratio stands attractively at 6.38, with an adjusted figure for the last twelve months as of Q3 2023 even lower at 6.13, pointing to a potentially undervalued stock relative to its earnings. This is further supported by a PEG ratio of 0.27 for the same period, indicating that the stock may be trading at a discount relative to its near-term earnings growth potential. With a consistent dividend payment history over the past eight years and a current dividend yield of 5.85%, the bank demonstrates its commitment to returning value to shareholders.
An InvestingPro Tip of particular relevance is the bank's strong return over the last three months, with a price total return of 15.07%. This performance is indicative of the market's positive reception to Butterfield's operational strategies and financial results. For investors seeking a deeper analysis, InvestingPro offers an array of additional tips, including insights on profitability and earnings multiples, which can be accessed with a subscription. Use coupon code PRONEWS24 for an extra 10% off a yearly or biyearly Pro and Pro+ subscription, and discover the 9 additional InvestingPro Tips that could further inform your investment decisions in Butterfield.
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