Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2016shares | |
Document and Entity Information [Abstract] | |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2016 |
Amendment Flag | false |
Entity Registrant Name | Bank of N.T. Butterfield & Son Ltd |
Entity Central Index Key | 1,653,242 |
Entity Current Reporting Status | Yes |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Well Known Seasoned Issuer | No |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | FY |
Entity Common Stock, Shares Outstanding | 53,284,872 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and demand deposits with banks - Non-interest bearing | $ 110,741 | $ 110,895 |
Demand deposits with banks - Interest bearing | 326,437 | 378,629 |
Cash equivalents - Interest bearing | 1,664,473 | 1,799,366 |
Cash due from banks | 2,101,651 | 2,288,890 |
Securities purchased under agreement to resell | 148,813 | 0 |
Short-term investments | 519,755 | 409,482 |
Investment in securities | ||
Trading | 6,313 | 321,299 |
Available-for-sale | 3,332,738 | 2,201,349 |
Held-to-maturity (fair value: $1,046,828 (2015: $701,495)) | 1,061,103 | 701,282 |
Total investment in securities | 4,400,154 | 3,223,930 |
Loans | ||
Loans | 3,614,725 | 4,049,457 |
Allowance for credit losses | (44,247) | (49,302) |
Loans, net of allowance for credit losses | 3,570,478 | 4,000,155 |
Premises, equipment and computer software | 167,773 | 183,378 |
Accrued interest | 22,780 | 17,460 |
Goodwill | 19,622 | 23,462 |
Intangible assets | 42,289 | 27,669 |
Equity method investments | 13,482 | 12,786 |
Other real estate owned | 14,199 | 11,206 |
Other assets | 82,549 | 77,145 |
Total assets | 11,103,545 | 10,275,563 |
Bank deposits | ||
Total deposits | 10,033,649 | 9,182,146 |
Employee benefit plans | 139,967 | 122,135 |
Accrued interest | 2,143 | 2,744 |
Preference share dividends payable | 0 | 654 |
Other liabilities | 100,044 | 100,530 |
Total other liabilities | 242,154 | 226,063 |
Long-term debt | 117,000 | 117,000 |
Total liabilities | 10,392,803 | 9,525,209 |
Commitments, contingencies and guarantees (Note 12) | ||
Shareholders' equity | ||
Preference share capital (USD 0.01 par; USD 1,000 liquidation preference) issued and outstanding: nil (2015: 182,863) | 0 | 2 |
Common share capital (BMD 0.01 par; authorised voting ordinary shares 2,000,000,000 and non-voting ordinary shares 6,000,000,000) issued and outstanding: 53,284,872 (2015: 47,293,253) | 533 | 473 |
Additional paid-in capital | 1,142,608 | 1,225,344 |
Accumulated deficit | (287,677) | (368,618) |
Less: treasury common shares, at cost: 2,066 (2015: 924,031) | (42) | (16,350) |
Accumulated other comprehensive loss | (144,680) | (90,497) |
Total shareholders’ equity | 710,742 | 750,354 |
Total liabilities and shareholders’ equity | 11,103,545 | 10,275,563 |
Customers | ||
Bermuda | ||
Non-interest bearing | 1,733,684 | 1,348,878 |
Interest bearing | 4,213,417 | 2,922,830 |
Non-Bermuda | ||
Non-interest bearing | 651,329 | 532,867 |
Interest bearing | 3,411,423 | 4,363,093 |
Bank deposits | ||
Total deposits | 10,009,853 | 9,167,668 |
Banks | ||
Bank deposits | ||
Bermuda | 344 | 403 |
Non-Bermuda | 23,452 | 14,075 |
Total deposits | $ 23,796 | $ 14,478 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) $ in Thousands | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares |
Held-to-maturity, fair value | $ | $ 1,046,828 | $ 701,495 |
Preference shares, par value (in dollars per share) | $ / shares | $ 0 | $ 0.01 |
Preference shares, liquidation preference (in dollars per share) | $ / shares | $ 0 | $ 1,000 |
Preference shares, issued (in shares) | 0 | 182,683 |
Preference shares, outstanding (in shares) | 0 | 182,863 |
Common shares, issued (in shares) | 52,284,872 | 47,293,253 |
Common shares, outstanding (in shares) | 53,284,872 | 47,293,253 |
Treasury common shares, at cost (in shares) | 2,066 | 924,031 |
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, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Non-interest income | |||
Asset management | $ 21,106 | $ 18,910 | $ 17,728 |
Banking | 39,342 | 35,221 | 34,280 |
Foreign exchange revenue | 30,606 | 31,896 | 29,379 |
Trust | 44,060 | 40,264 | 38,268 |
Custody and other administration services | 8,883 | 9,522 | 10,166 |
Other non-interest income | 3,476 | 4,359 | 5,009 |
Total non-interest income | 147,473 | 140,172 | 134,830 |
Interest income | |||
Interest and fees on loans | 188,000 | 186,486 | 191,986 |
Investments (none of the investment securities are intrinsically tax-exempt) | |||
Trading | 1,725 | 5,894 | 9,078 |
Available-for-sale | 53,184 | 51,077 | 48,044 |
Held-to-maturity | 22,261 | 12,607 | 10,635 |
Deposits with banks | 9,759 | 6,517 | 5,358 |
Total interest income | 274,929 | 262,581 | 265,101 |
Interest expense | |||
Deposits | 11,831 | 18,446 | 20,903 |
Long-term debt | 4,500 | 4,861 | 5,628 |
Securities sold under repurchase agreements | 118 | 8 | 83 |
Total interest expense | 16,449 | 23,315 | 26,614 |
Net interest income before provision for credit losses | 258,480 | 239,266 | 238,487 |
Provision for credit losses | (4,399) | (5,741) | (8,048) |
Net interest income after provision for credit losses | 254,081 | 233,525 | 230,439 |
Net trading gains (losses) | 715 | (562) | 10,070 |
Net realised gains (losses) on available-for-sale investments | 1,546 | (4,407) | 8,680 |
Net gains (losses) on other real estate owned | (440) | 277 | (1,804) |
Impairment of fixed assets | 0 | (5,083) | (1,986) |
Net gain on sale of equity method investments | 0 | 0 | 277 |
Net other gains (losses) | (807) | 338 | 451 |
Total other gains (losses) | 1,014 | (9,437) | 15,688 |
Total net revenue | 402,568 | 364,260 | 380,957 |
Non-interest expense | |||
Salaries and other employee benefits | 139,967 | 134,917 | 129,761 |
Technology and communications | 57,441 | 57,069 | 57,119 |
Property | 21,043 | 21,539 | 24,312 |
Professional and outside services | 18,851 | 27,638 | 24,022 |
Indirect taxes | 16,352 | 13,882 | 14,175 |
Amortisation of intangible assets | 4,514 | 4,424 | 4,281 |
Marketing | 4,513 | 3,919 | 3,802 |
Restructuring costs | 6,266 | 2,183 | 0 |
Other expenses | 16,952 | 19,674 | 15,495 |
Total non-interest expense | 285,899 | 285,245 | 272,967 |
Net income before income taxes | 116,669 | 79,015 | 107,990 |
Income tax expense | (727) | (1,276) | 169 |
Net income | 115,942 | 77,739 | 108,159 |
Cash dividends declared on preference shares | (13,979) | (14,631) | (14,712) |
Preference shares guarantee fee | (1,676) | (1,824) | (1,834) |
Premium paid on repurchase of preference shares | (41,913) | (28) | (96) |
Net income attributable to common shareholders | $ 58,374 | $ 61,256 | $ 91,517 |
Earnings per common share | |||
Basic earnings per share (in dollars per share) | $ 1.20 | $ 1.25 | $ 1.67 |
Diluted earnings per share (in dollars per share) | $ 1.18 | $ 1.23 | $ 1.65 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 115,942 | $ 77,739 | $ 108,159 |
Other comprehensive income (loss), net of taxes | |||
Net change in unrealised gains and losses on translation of net investment in foreign operations | (6,507) | (3,139) | (2,874) |
Accretion of net unrealised (gains) losses on held-to-maturity investments transferred from available-for-sale investments | (71) | 365 | 0 |
Net change in unrealised gains and losses on available-for-sale investments | (21,181) | (11,793) | 40,085 |
Employee benefit plans adjustments | (26,424) | 1,590 | (47,143) |
Other comprehensive income (loss), net of taxes | (54,183) | (12,977) | (9,932) |
Total comprehensive income | $ 61,759 | $ 64,762 | $ 98,227 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common share capital | Preference sharesClass A | Preference sharesContingent value convertible preference shares | Additional paid-in capital | Accumulated deficit | Treasury common shares | Accumulated other comprehensive loss |
Beginning balance (in shares) at Dec. 31, 2013 | 54,980,346 | 183,606 | 712,907 | 831,042 | ||||
Balance at beginning of year at Dec. 31, 2013 | $ 550 | $ 2 | $ 7 | $ 1,349,767 | $ (469,229) | $ (10,948) | $ (67,588) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Conversion of contingent value preference shares (in shares) | 21,968 | (21,968) | ||||||
Conversion of contingent value preference shares | $ 0 | $ 0 | ||||||
Retirement of shares (in shares) | 0 | (560) | ||||||
Retirement of shares | $ 0 | $ 0 | 0 | |||||
Issuance of common shares (in shares) | 0 | |||||||
Issuance of common shares | $ 0 | 0 | ||||||
Redemption of preference shares (in shares) | 0 | |||||||
Redemption of preference shares | $ 0 | 0 | ||||||
Share-based compensation | 8,869 | |||||||
Share-based settlements | (4,503) | |||||||
Reduction of carrying value on repurchase of preference shares | (560) | |||||||
Retirement of common shares | $ (96) | (96) | ||||||
Repurchase of warrant | 0 | |||||||
Cost of issuance of common shares | 0 | |||||||
Net income for year | 108,159 | 108,159 | ||||||
Common share cash dividends declared and paid, $0.40 per share (2015: $0.50 per share; 2014: $0.50 per share) | (27,440) | |||||||
Cash dividends declared on preference shares, $80.00 per share (2015: $80.00 per share; 2014: $80.00 per share) | (14,712) | |||||||
Preference shares guarantee fee | (1,834) | |||||||
Purchase of treasury common shares (in shares) | 856,734 | |||||||
Purchase of treasury common shares | $ (17,018) | |||||||
Share-based settlements (in shares) | (410,716) | |||||||
Share-based settlements | $ 5,880 | |||||||
Fractional share payout (in shares) | 0 | |||||||
Other comprehensive income (loss), net of taxes | (9,932) | (9,932) | ||||||
Ending balance (in shares) at Dec. 31, 2014 | 55,002,314 | 183,046 | 690,939 | 1,277,060 | ||||
Balance at end of year at Dec. 31, 2014 | 849,374 | $ 550 | $ 2 | $ 7 | 1,353,477 | (405,056) | $ (22,086) | (77,520) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Conversion of contingent value preference shares (in shares) | 690,939 | (690,939) | ||||||
Conversion of contingent value preference shares | $ 7 | $ (7) | ||||||
Retirement of shares (in shares) | (8,400,000) | (183) | ||||||
Retirement of shares | $ (84) | $ 0 | (125,876) | |||||
Issuance of common shares (in shares) | 0 | |||||||
Issuance of common shares | $ 0 | 0 | ||||||
Redemption of preference shares (in shares) | 0 | |||||||
Redemption of preference shares | $ 0 | 0 | ||||||
Share-based compensation | 7,703 | |||||||
Share-based settlements | (9,749) | |||||||
Reduction of carrying value on repurchase of preference shares | (183) | |||||||
Retirement of common shares | (28) | (28) | ||||||
Repurchase of warrant | 0 | |||||||
Cost of issuance of common shares | 0 | |||||||
Net income for year | 77,739 | 77,739 | ||||||
Common share cash dividends declared and paid, $0.40 per share (2015: $0.50 per share; 2014: $0.50 per share) | (24,846) | |||||||
Cash dividends declared on preference shares, $80.00 per share (2015: $80.00 per share; 2014: $80.00 per share) | (14,631) | |||||||
Preference shares guarantee fee | (1,824) | |||||||
Purchase of treasury common shares (in shares) | 250,370 | |||||||
Purchase of treasury common shares | $ (4,862) | |||||||
Share-based settlements (in shares) | (603,399) | |||||||
Share-based settlements | $ 10,598 | |||||||
Fractional share payout (in shares) | 0 | |||||||
Other comprehensive income (loss), net of taxes | (12,977) | (12,977) | ||||||
Ending balance (in shares) at Dec. 31, 2015 | 47,293,253 | 182,863 | 0 | 924,031 | ||||
Balance at end of year at Dec. 31, 2015 | 750,354 | $ 473 | $ 2 | $ 0 | 1,225,344 | (368,618) | $ (16,350) | (90,497) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Conversion of contingent value preference shares (in shares) | 0 | 0 | ||||||
Conversion of contingent value preference shares | $ 0 | $ 0 | ||||||
Retirement of shares (in shares) | (2,393) | 0 | ||||||
Retirement of shares | $ 0 | $ 0 | (45) | |||||
Issuance of common shares (in shares) | 5,994,012 | |||||||
Issuance of common shares | $ 60 | 131,540 | ||||||
Redemption of preference shares (in shares) | (182,863) | |||||||
Redemption of preference shares | $ (2) | (170,206) | ||||||
Share-based compensation | 14,072 | |||||||
Share-based settlements | (10,626) | |||||||
Reduction of carrying value on repurchase of preference shares | 0 | |||||||
Retirement of common shares | (41,913) | (41,913) | ||||||
Repurchase of warrant | (100) | |||||||
Cost of issuance of common shares | (5,458) | |||||||
Net income for year | 115,942 | 115,942 | ||||||
Common share cash dividends declared and paid, $0.40 per share (2015: $0.50 per share; 2014: $0.50 per share) | (19,346) | |||||||
Cash dividends declared on preference shares, $80.00 per share (2015: $80.00 per share; 2014: $80.00 per share) | (13,979) | |||||||
Preference shares guarantee fee | (1,676) | |||||||
Purchase of treasury common shares (in shares) | 97,053 | |||||||
Purchase of treasury common shares | $ (1,588) | |||||||
Share-based settlements (in shares) | (1,019,016) | |||||||
Share-based settlements | $ 17,896 | |||||||
Fractional share payout (in shares) | (2) | |||||||
Other comprehensive income (loss), net of taxes | (54,183) | (54,183) | ||||||
Ending balance (in shares) at Dec. 31, 2016 | 53,284,872 | 0 | 0 | 2,066 | ||||
Balance at end of year at Dec. 31, 2016 | $ 710,742 | $ 533 | $ 0 | $ 0 | $ 1,142,608 | $ (287,677) | $ (42) | $ (144,680) |
Consolidated Statements of Cha7
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Common share cash dividends paid (in dollars per share) | $ 0.40 | $ 0.50 | $ 0.50 |
Accumulated deficit | |||
Common share cash dividends declared (in dollars per share) | 0.40 | 0.50 | 500 |
Common share cash dividends paid (in dollars per share) | 0.40 | 0.50 | 500 |
Cash dividends declared on preference shares (in dollars per share) | $ 80 | $ 80 | $ 80 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net income | $ 115,942 | $ 77,739 | $ 108,159 |
Adjustments to reconcile net income to operating cash flows | |||
Depreciation and amortisation | 52,261 | 50,069 | 45,116 |
Provision for credit losses | 4,399 | 5,741 | 8,048 |
Share-based payments and settlements | 14,423 | 7,913 | 9,049 |
Impairment of fixed assets | 0 | 5,083 | 1,986 |
Net realised (gains) losses on available-for-sale investments | (1,546) | 4,407 | (8,680) |
Equity pick up on private equity partnership investment | (42) | (224) | (458) |
(Gain) loss on sale of premises and equipment | (37) | 28 | 0 |
Net (gains) losses on other real estate owned | 440 | (277) | 1,804 |
Net (gain) on sales of equity method investments | 0 | 0 | (277) |
(Increase) in carrying value of equity method investments | (1,137) | (980) | (834) |
Fair value adjustments of a contingent payment | 895 | (143) | 1,070 |
Changes in operating assets and liabilities | |||
(Increase) decrease in accrued interest receivable | (6,054) | 1,417 | 594 |
(Increase) in other assets | (6,652) | (10,259) | (3,955) |
Increase (decrease) in accrued interest payable | (284) | (1,907) | 1,040 |
Increase (decrease) in employee benefit plans and other liabilities | 5,587 | 16,932 | (18,885) |
Cash provided by operating activities | 178,195 | 155,539 | 143,777 |
Cash flows from investing activities | |||
(Increase) in securities purchased under agreement to resell | (148,813) | 0 | 0 |
Net (increase) in short-term investments | (127,708) | (28,358) | (343,773) |
Net change in trading investments | 314,986 | 96,086 | 134,905 |
Available-for-sale investments: proceeds from sale | 60,548 | 238,756 | 130,453 |
Available-for-sale investments: proceeds from maturities and pay downs | 576,892 | 435,827 | 198,311 |
Available-for-sale investments: purchases | (1,884,554) | (1,018,759) | (800,865) |
Held-to-maturity investments: proceeds from maturities and pay downs | 73,725 | 26,965 | 12,426 |
Held-to-maturity investments: purchases | (360,959) | (50,283) | (18,073) |
Net (increase) decrease in loans | 321,722 | (36,876) | 145,023 |
Additions to premises, equipment and computer software | (9,804) | (1,477) | (6,128) |
Proceeds from sale of other real estate owned | 5,528 | 11,238 | 12,389 |
Dividends received on equity method investments | 441 | 1,032 | 806 |
Net amounts received for assuming deposits acquired from another bank | 0 | 0 | 310,578 |
Cash disbursed for business acquisitions | (21,778) | 0 | (34,757) |
Cash used in investing activities | (1,199,774) | (325,849) | (258,705) |
Cash flows from financing activities | |||
Net increase in demand and term deposit liabilities | 1,056,029 | 598,578 | 637,705 |
Net (decrease) in securities sold under agreement to repurchase | 0 | 0 | (25,535) |
Proceeds from issuance of common shares, net of underwriting discounts and commissions | 131,600 | 0 | 0 |
Cost of issuance of common shares | (5,458) | 0 | 0 |
Proceeds from loans sold under agreement to repurchase | 5,152 | 0 | 0 |
Cost of repurchase of loans under agreement to repurchase | (5,152) | 0 | 0 |
Repayment of long-term debt | 0 | 0 | (90,000) |
Common shares repurchased | (1,633) | (130,822) | (17,018) |
Preference shares repurchased | (212,121) | (211) | (656) |
Warrant repurchased | (100) | 0 | 0 |
Proceeds from stock option exercises | 6,919 | 640 | 1,198 |
Cash dividends paid on common and contingent value convertible preference shares | (19,346) | (24,846) | (27,440) |
Cash dividends paid on preference shares | (14,629) | (14,631) | (14,673) |
Preference shares guarantee fee paid | (1,676) | (1,824) | (1,834) |
Cash provided by financing activities | 939,585 | 426,884 | 461,747 |
Net effect of exchange rates on cash due from banks | (105,245) | (30,995) | (13,980) |
Net increase (decrease) in cash due from banks | (187,239) | 225,579 | 332,839 |
Cash due from banks at beginning of year | 2,288,890 | 2,063,311 | 1,730,472 |
Cash due from banks at end of year | 2,101,651 | 2,288,890 | 2,063,311 |
Supplemental disclosure of cash flow information | |||
Cash interest paid | 16,165 | 21,408 | 27,654 |
Cash income tax paid | 391 | 596 | 985 |
Non-cash items | |||
Transfer to other real estate owned | 8,961 | 3,400 | 6,086 |
Transfer of available-for-sale investments to held-to-maturity investments | $ 74,731 | $ 340,969 | $ 0 |
Nature of business
Nature of business | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of business | 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 licence under the Bank 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 community bank in Bermuda and Cayman and a provider of specialised wealth management services in all its jurisdictions. Services offered include retail, private and corporate banking, treasury, custody, asset management and personal and institutional trust services. The Bank provides such services from six jurisdictions: Bermuda, Cayman, Guernsey, Switzerland, The Bahamas and the United Kingdom. The Bank holds all applicable licences required in the jurisdictions in which it operates. On 16 September 2016, the Bank's common shares began to trade on the New York Stock Exchange under the symbol "NTB". On 21 September 2016, the Bank completed its offering of 5,957,447 common shares, at $23.50 per share. The proceeds, net of the underwriting discounts and commissions, were $131.6 million . |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant accounting policies | Significant accounting policies 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 payments Beginning on 1 January 2016, the Bank's financial statements for periods presented are reported in United States ("US") dollars (previously in Bermuda dollars) to increase comparability of the Bank's financial position and results with market peers. Assets, liabilities, revenues and expenses denominated in Bermuda dollars are translated to US dollars at par and consequently, no amounts presented in the financial statements have changed as a result of this change in reporting currency. B. Basis of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (collectively the “Bank”), and those variable interest entities (“VIEs”) where the Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated. The Bank consolidates subsidiaries where it holds, directly or indirectly, more than 50% of the voting rights or where it exercises control. The Bank is deemed to have a controlling financial interest and is the primary beneficiary of a VIE if it has both the power to direct the activities of the VIE that most significantly impact the VIE economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The determination of whether the Bank meets the criteria to be considered the primary beneficiary of a VIE requires a periodic evaluation of all transactions (such as investments, loans and fee arrangements) with the entity. During the periods under review, the Bank had no interests in VIEs where the Bank was considered the primary beneficiary. Entities where the Bank holds 20% to 50% of the voting rights and/or has the ability to exercise significant influence, other than investments in designated VIEs, 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 United States ("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. Unrealised translation gains or losses on investments in foreign currency- based subsidiaries are recorded as a separate component of Shareholders' equity within accumulated other comprehensive loss (“AOCL”). 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 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. Such investments are those with less than three months’ maturity 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 collateralised lending transactions. The obligation to resell is recorded at the value of the cash paid on purchase adjusted for the amortisation of the difference between the purchase price and the agreed resell price. The amortisation 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 Investments securities are classified as trading, available-for-sale (“AFS”) or held-to-maturity (“HTM”). Investments are classified as trading when management has the intent to sell these investments either for profit or to invest the cash received by taking customer deposits in foreign currencies. Debt and equity securities classified as trading investments are carried at fair value in the consolidated balance sheets, with unrealised gains and losses included in the consolidated statements of operations as net realised / unrealised 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 unrealised gains and losses reported as net increase or decrease to AOCL. Investments that the Bank has the positive intent and ability to hold to maturity are classified as HTM and are carried at amortised cost in the consolidated balance sheets. Unrecognised gains and losses on HTM securities are disclosed in the notes to the consolidated financial statements. The specific identification method is used to determine realised gains and losses on trading, AFS and HTM investments, which are included in net realised gains and losses on AFS and HTM investments, respectively, in the consolidated statements of operations. Dividend and interest income, including amortisation 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 amortised 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. 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 and reviewed for impairment if indicators of impairment exist. 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. Recognition of other-than-temporary impairments For debt securities, management considers a decline in fair value to be other-than-temporary when it does not expect to recover the entire amortised cost basis of the security. Investments in debt securities in unrealised loss positions are analysed 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 amortised cost, it recognises an impairment loss equal to the full difference between the amortised cost basis and the fair value of those securities. When management does not intend to sell or it is not more likely than not that the Bank will be required to sell such securities before recovering the amortised 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 recognised in net income. For AFS investments, the decrease in fair value relating to factors other than credit losses are recognised 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 securitisation, such as subordination, excess spread, over collateralisation 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 realised 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 recognised 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 are recorded at fair value at the date of acquisition. No allowance for credit losses is recorded on the acquisition date as the fair value of the acquired assets incorporates assumptions regarding credit risk. Acquired loans with evidence of credit quality deterioration for which it is probable that the Bank will not receive all contractually required payments receivable are accounted for as purchased credit-impaired loans. Generally, acquired loans that meet the Bank's definition for non-accrual status are considered to be credit-impaired. The excess of the cash flows expected to be collected on purchased credit-impaired loans, measured as of the acquisition date, over the estimated fair value is referred to as the accretable yield and is recognized in interest income over the remaining life of the loan using an effective yield methodology. The difference between contractually required payments as of the acquisition date and the cash flows expected to be collected is referred to as the non-accretable difference which is included as a reduction of the carrying amount of the purchased credit-impaired loans. The Bank evaluates at each balance sheet date the estimated cash flows and corresponding carrying value of purchased credit-impaired loans in the same manner as for the measurement of impaired loans, as is described below. The Bank evaluates at each balance sheet date whether the carrying value of its purchased credit-impaired loans has decreased and if so, recognises an allowance for credit losses in its consolidated statements of operations. For any increases in cash flows expected to be collected, the Bank adjusts any prior recorded allowance for purchased credit-impaired loans first, and then the amount of accretable yield recognized on a prospective basis over the purchased credit-impaired loan’s remaining life. Purchased credit-impaired loans are not considered non-performing and continue to have an accretable yield as long as there is a reasonable expectation about the timing and amount of cash flows expected to be collected. 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. When a loan is identified as impaired, the impairment is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole (remaining) source of repayment for the loan is the operation or liquidation of the collateral. In these cases the current fair value of the collateral, less selling costs, is used instead of discounted cash flows. If the Bank determines that the expected realisable 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 unamortised premium or discount), impairment is recognised 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 generally 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 recognised 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 recognised 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 recognised 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 recognised 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 troubled debt restructuring ("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 in the notes of the consolidated financial statements and individually evaluate the restructured loan for impairment. The Bank employs various types of concessions when modifying a loan that it would not otherwise consider which may include extension of repayment periods, interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimise economic loss and to avoid foreclosure or repossession of collateral. Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. Commercial mortgage and construction loans modified in a TDR often 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 works with its customers in these difficult economic times and 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 recognises 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 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. The allowance for credit losses consists of specific allowances and a general allowance as follows: Specific allowances Specific allowances are determined on an exposure-by-exposure basis and reflect the associated estimated credit loss. The specific allowance for credit loss is computed as the difference between the recorded investment in the loan and the present value of expected future cash flows from the loan. 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 recognises 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 is established through various analyses that estimate the incurred loss at the balance sheet date inherent in the lending and off-balance sheet credit-related arrangements portfolios. These analyses consider historical default rates, geographic, industry, and other environmental factors. Management also considers overall portfolio indicators including trends in internally risk rated exposures, 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 considers the current business strategy and credit process, including limit setting and compliance, credit approvals, loan underwriting criteria and loan workout procedures. Each portfolio of smaller balance, homogeneous loans, including consumer instalment, revolving credit, and most other consumer loans, is collectively evaluated for impairment. The allowance for credit losses attributed to these loans is established via a process that estimates the probable losses inherent and incurred in the portfolio, based upon various analyses. Management considers overall portfolio indicators including historical credit losses; delinquent (defined as loans that are more than 30 days past due), non-performing, and classified loans; trends in volumes and terms of loans; an evaluation of overall credit quality; the credit process, including lending policies and procedures; and economic, geographical, product, and other environmental factors. K. Business Combinations, Goodwill and Intangible Assets All business combinations are accounted for using the acquisition method. Identifiable intangible assets (mostly customer relationships) are recognised separately from goodwill and are initially valued at fair value using discounted cash flow calculations and other recognised 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 was 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 amortised 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. L. Premises, Equipment and Computer Software Land 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 three 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 capitalises 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 amortised on a straight-line basis over the software's expected useful life, which is between five 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 out of premises, equipment and computer software, a gain is recorded if the difference of the proceeds on disposition is in excess of the assets 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. M. Other Real Estate Owned Other real estate owned (“OREO”) is comprised of 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 recognised through charges to non-interest expense. N. Derivatives All derivatives are recognised 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 recognised 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 recognised asset or liability (a cash flow hedge); a hedge of an exposure to foreign currency risk of a net investment in a f |
Cash due from banks
Cash due from banks | 12 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Cash due from banks | Cash due from banks 31 December 2016 31 December 2015 Bermuda Non-Bermuda Total Bermuda Non-Bermuda Total Non-interest bearing Cash and demand deposits with banks 28,690 82,051 110,741 31,199 79,696 110,895 Interest bearing¹ Demand deposits with banks 138,123 188,314 326,437 130,589 248,040 378,629 Cash equivalents 976,557 687,916 1,664,473 691,439 1,107,927 1,799,366 Sub-total - Interest bearing 1,114,680 876,230 1,990,910 822,028 1,355,967 2,177,995 Total cash due from banks 1,143,370 958,281 2,101,651 853,227 1,435,663 2,288,890 ¹ Interest bearing cash due from banks includes certain demand deposits with banks as at 31 December 2016 in the amount of $305.3 million ( 31 December 2015 : $306.9 million ) that are earning interest at a negligible rate. |
Short-term investments
Short-term investments | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term investments | Short-term investments 31 December 2016 31 December 2015 Bermuda Non-Bermuda Total Bermuda Non-Bermuda Total Unrestricted Maturing within three months 36,953 80,360 117,313 — 104,249 104,249 Maturing between three to six months 343,723 40,825 384,548 99,810 192,118 291,928 Maturing between six to twelve months — — — — 796 796 Total unrestricted short-term investments 380,676 121,185 501,861 99,810 297,163 396,973 Affected by drawing restrictions related to minimum reserve and derivative margin requirements Interest earning demand deposits 17,894 — 17,894 12,509 — 12,509 Total short-term investments 398,570 121,185 519,755 112,319 297,163 409,482 |
Investment in securities
Investment in securities | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment in securities | Investment in securities Amortised Cost, Carrying Amount and Fair Value On the consolidated balance sheets, trading and available-for-sale ("AFS") investments are carried at fair value and held-to-maturity ("HTM") investments are carried at amortised cost. 31 December 2016 31 December 2015 Amortised cost Gross unrealised gains Gross unrealised losses Fair value Amortised cost Gross unrealised gains Gross unrealised losses Fair value Trading US government and federal agencies — — — — 278,500 2,347 (1,504 ) 279,343 Non-US governments debt securities — — — — 7,483 6 — 7,489 Asset-backed securities - Student loans — — — — 28,845 — (560 ) 28,285 Mutual funds 5,724 1,091 (502 ) 6,313 5,739 903 (460 ) 6,182 Total trading 5,724 1,091 (502 ) 6,313 320,567 3,256 (2,524 ) 321,299 Available-for-sale US government and federal agencies 2,448,207 6,773 (24,578 ) 2,430,402 1,399,456 8,812 (3,769 ) 1,404,499 Non-US governments debt securities 27,895 178 (1,053 ) 27,020 29,275 300 — 29,575 Corporate debt securities 513,881 2,139 (1,545 ) 514,475 505,139 3,779 (2,774 ) 506,144 Asset-backed securities - Student loans 13,290 — (797 ) 12,493 13,291 — (1,130 ) 12,161 Commercial mortgage-backed securities 151,855 43 (1,352 ) 150,546 153,046 9 (4,329 ) 148,726 Residential mortgage-backed securities 200,288 56 (2,542 ) 197,802 101,382 — (1,138 ) 100,244 Total available-for-sale 3,355,416 9,189 (31,867 ) 3,332,738 2,201,589 12,900 (13,140 ) 2,201,349 Held-to-maturity¹ US government and federal agencies 1,061,103 2,528 (16,803 ) 1,046,828 701,282 5,365 (5,152 ) 701,495 Total held-to-maturity 1,061,103 2,528 (16,803 ) 1,046,828 701,282 5,365 (5,152 ) 701,495 ¹ For the years ended 31 December 2016 , 2015 and 2014, non-credit impairments recognised in accumulated other comprehensive loss ("AOCL") for HTM investments were nil . Investments with Unrealised Loss Positions The Bank does not believe that the AFS and HTM investment securities that were in an unrealised loss position as of 31 December 2016 (and 31 December 2015 ), which were comprised of 170 securities representing 76% of the AFS and HTM portfolios' fair value, ( 31 December 2015 : 99 and 54% , respectively), represent an OTTI. Total gross unrealised losses were 1.5% of the fair value of affected securities ( 31 December 2015 : 1.1% ) and were attributable primarily to changes in market interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. Due to a strategic change in the investment portfolio composition during the year ended 31 December 2015 , several AFS securities were sold while being in an unrealised loss position. The Bank considers this to be a one-time event, and has determined that it is more likely than not that the Bank will not be required to sell, nor does the Bank have the intent to sell any of the remaining investment securities before recovery of the amortised cost basis. The following describes the processes for identifying credit impairment in security types with the most significant unrealised 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 securities do not have any credit losses, given the explicit guarantee provided by the issuing government. The unrealised losses in Corporate debt securities relate primarily to 12 debt securities that are all of investment grade with ratings ranging from BBB+ to A. Management believes that the value of these securities will recover and the current unrealised loss positions are a result of interest rate movements. Investments in Asset-backed securities - Student loans are composed primarily of securities collateralised 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-collateralisation, 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. Investments in Commercial mortgage-backed securities relate to 10 senior securities rated AAA and 1 senior security rated A that possess significant subordination, a form of credit enhancement expressed hereafter as the percentage of pool losses that can occur before the senior securities held by the Bank will incur its first dollar of principal loss. No credit losses were recognised on these securities as the credit support and the weighted average loan-to-value ratios ("LTV") range from 5% - 36% and 25% - 60% , respectively. Current credit support is significantly greater than any delinquencies experienced on the underlying mortgages. Investments in Residential mortgage-backed securities relate to 13 securities which are rated AAA or AA+ and possess significant credit enhancement as described above. No credit losses were recognised on these securities as there are no delinquencies over 60 days on the underlying mortgages and the weighted average credit support and LTV ratios range from 5% - 18% and 56% - 68% , respectively. In the following tables, debt securities with unrealised losses that are not deemed to be OTTI are categorised 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 amortised cost basis. During 2016, Management revised the methodology for considering the time period during which an investment has been in an unrealized loss by looking at monthly positions rather than annually. The 2015 comparative have been restated using the new methodology. Less than 12 months 12 months or more 31 December 2016 Fair value Gross unrealised losses Fair value Gross unrealised losses Total fair value Total gross unrealised losses Available-for-sale securities with unrealised losses US government and federal agencies 1,558,636 (21,932 ) 266,094 (2,646 ) 1,824,730 (24,578 ) Non-US governments debt securities 21,681 (1,053 ) — — 21,681 (1,053 ) Corporate debt securities 214,506 (1,545 ) — — 214,506 (1,545 ) Asset-backed securities - Student loans — — 12,493 (797 ) 12,493 (797 ) Commercial mortgage-backed securities 134,195 (1,352 ) — — 134,195 (1,352 ) Residential mortgage-backed securities 181,556 (2,542 ) — — 181,556 (2,542 ) Total available-for-sale securities with unrealised losses 2,110,574 (28,424 ) 278,587 (3,443 ) 2,389,161 (31,867 ) Held-to-maturity securities with unrealised losses US government and federal agencies 937,080 (16,803 ) — — 937,080 (16,803 ) Less than 12 months 12 months or more 31 December 2015 Fair value Gross unrealised losses Fair value Gross unrealised losses Total fair value Total gross unrealised losses Available-for-sale securities with unrealised losses US government and federal agencies 449,609 (2,258 ) 92,554 (1,511 ) 542,163 (3,769 ) Corporate debt securities 253,991 (1,480 ) 38,706 (1,294 ) 292,697 (2,774 ) Asset-backed securities - Student loans — — 12,160 (1,130 ) 12,160 (1,130 ) Commercial mortgage-backed securities 138,217 (4,007 ) 9,605 (322 ) 147,822 (4,329 ) Residential mortgage-backed securities 90,220 (660 ) 10,024 (478 ) 100,244 (1,138 ) Total available-for-sale securities with unrealised losses 932,037 (8,405 ) 163,049 (4,735 ) 1,095,086 (13,140 ) Held-to-maturity securities with unrealised losses US government and federal agencies 459,623 (5,152 ) — — 459,623 (5,152 ) Investment Maturities The following table presents the remaining maturities of the Bank’s securities. The maturities are contractual for securities other than mortgage-backed securities. For mortgage-backed securities (primarily US government agencies), management presents the maturity date as the mid-point between the reporting and expected contractual maturity date which is determined assuming no future prepayments. By using the aforementioned mid-point, this date represents management’s best estimate of the date by which the remaining principal balance will be repaid given future principal repayments of such securities. The actual maturities may differ due to the uncertainty of the timing when borrowers make prepayments on the underlying mortgages. Remaining term to maturity 31 December 2016 Within 3 months 3 to 12 months 1 to 5 years 5 to 10 years Over 10 years No specific maturity Carrying amount Trading Mutual funds — — — — — 6,313 6,313 Total trading — — — — — 6,313 6,313 Available-for-sale US government and federal agencies — 6,364 87,257 653,603 1,683,178 — 2,430,402 Non-US governments debt securities — 1,371 3,967 21,682 — — 27,020 Corporate debt securities 22,009 88,169 404,297 — — — 514,475 Asset-backed securities - Student loans — — — — 12,493 — 12,493 Commercial mortgage-backed securities — — 38,418 112,128 — — 150,546 Residential mortgage-backed securities — — — — 197,802 — 197,802 Total available-for-sale 22,009 95,904 533,939 787,413 1,893,473 — 3,332,738 Held-to-maturity US government and federal agencies — — 10,688 31,154 1,019,261 — 1,061,103 Total investments 22,009 95,904 544,627 818,567 2,912,734 6,313 4,400,154 Total by currency US dollars 22,009 95,904 544,627 818,567 2,912,734 6,091 4,399,932 Other — — — — — 222 222 Total investments 22,009 95,904 544,627 818,567 2,912,734 6,313 4,400,154 Remaining term to maturity 31 December 2015 Within 3 months 3 to 12 months 1 to 5 years 5 to 10 years Over 10 years No specific maturity Carrying amount Trading US government and federal agencies — 24,874 8,497 53,248 192,724 — 279,343 Non-US governments debt securities 7,489 — — — — — 7,489 Asset-backed securities - Student loans — — 28,285 — — — 28,285 Mutual funds — — — — — 6,182 6,182 Total trading 7,489 24,874 36,782 53,248 192,724 6,182 321,299 Available-for-sale US government and federal agencies — — 126,163 202,385 1,075,951 — 1,404,499 Non-US governments debt securities — 1,360 5,399 22,816 — — 29,575 Corporate debt securities 60,493 55,649 351,296 38,706 — — 506,144 Asset-backed securities - Student loans — — — — 12,161 — 12,161 Commercial mortgage-backed securities — — — 42,532 106,194 — 148,726 Residential mortgage-backed securities — — — — 100,244 — 100,244 Total available-for-sale 60,493 57,009 482,858 306,439 1,294,550 — 2,201,349 Held-to-maturity US government and federal agencies — — — 45,664 655,618 — 701,282 Total investments 67,982 81,883 519,640 405,351 2,142,892 6,182 3,223,930 Total by currency US dollars 67,982 81,883 519,640 405,351 2,142,892 5,903 3,223,651 Other — — — — — 279 279 Total investments 67,982 81,883 519,640 405,351 2,142,892 6,182 3,223,930 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. 31 December 2016 31 December 2015 Pledged Investments Amortised cost Fair value Amortised cost Fair value Available-for-sale 211,342 212,995 304,493 307,513 Held-to-maturity 320,942 315,635 372,546 372,868 Sale Proceeds and Realised Gains and Losses of AFS Securities Year ended 31 December 2016 Sale proceeds Gross realised Gross realised US government and federal agencies 59,939 1,013 (76 ) Residential mortgage-backed securities — — — Pass-through note 609 609 — Net realised gains (losses) recognised in net income 60,548 1,622 (76 ) Year ended 31 December 2015 Sale Gross realised Gross realised US government and federal agencies 232,372 — (4,465 ) Residential mortgage-backed securities 6,056 — (270 ) Pass-through note 328 328 — Net realised gains (losses) recognised in net income 238,756 328 (4,735 ) Year ended 31 December 2014 Sale Gross realised Gross realised US government and federal agencies 96,031 — (52 ) Pass-through note 34,422 8,732 — Net realised gains (losses) recognised in net income 130,453 8,732 (52 ) Taxability of Interest Income None of the investments' interest income have 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, 2016 | |
Receivables [Abstract] | |
Loans | Loans The "Bermuda" and "Non-Bermuda" classifications purpose is to reflect management segment reporting as described in Note 15: Segmented information. 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 thirty years and personal, business and government loans are generally repayable over terms not exceeding five years. 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 31 December 2016 is 4.78% ( 31 December 2015 : 4.57% ). 31 December 2016 31 December 2015 Bermuda Non-Bermuda Total Bermuda Non-Bermuda Total Commercial loans Government 94,504 17,908 112,412 202,776 22,402 225,178 Commercial and industrial 130,171 201,652 331,823 121,466 221,243 342,709 Commercial overdrafts 22,594 2,767 25,361 34,997 5,736 40,733 Total gross commercial loans 247,269 222,327 469,596 359,239 249,381 608,620 Less specific allowance for credit losses (577 ) — (577 ) (590 ) — (590 ) Net commercial loans 246,692 222,327 469,019 358,649 249,381 608,030 Commercial real estate loans Commercial mortgage 363,982 217,640 581,622 415,747 249,622 665,369 Construction 24,500 4,385 28,885 5,396 8,211 13,607 Total gross commercial real estate loans 388,482 222,025 610,507 421,143 257,833 678,976 Less specific allowance for credit losses (750 ) — (750 ) (727 ) (2,224 ) (2,951 ) Net commercial real estate loans 387,732 222,025 609,757 420,416 255,609 676,025 Consumer loans Automobile financing 13,077 6,905 19,982 12,308 7,556 19,864 Credit card 57,730 20,811 78,541 59,119 19,839 78,958 Overdrafts 2,380 3,202 5,582 4,750 8,165 12,915 Other consumer 30,798 63,186 93,984 32,022 84,062 116,084 Total gross consumer loans 103,985 94,104 198,089 108,199 119,622 227,821 Less specific allowance for credit losses (275 ) (3 ) (278 ) (274 ) — (274 ) Net consumer loans 103,710 94,101 197,811 107,925 119,622 227,547 Residential mortgage loans 1,205,468 1,131,065 2,336,533 1,243,221 1,290,819 2,534,040 Less specific allowance for credit losses (9,559 ) (574 ) (10,133 ) (13,411 ) (1,879 ) (15,290 ) Net residential mortgage loans 1,195,909 1,130,491 2,326,400 1,229,810 1,288,940 2,518,750 Total gross loans 1,945,204 1,669,521 3,614,725 2,131,802 1,917,655 4,049,457 Less specific allowance for credit losses (11,161 ) (577 ) (11,738 ) (15,002 ) (4,103 ) (19,105 ) Less general allowance for credit losses (24,950 ) (7,559 ) (32,509 ) (20,176 ) (10,021 ) (30,197 ) Net loans 1,909,093 1,661,385 3,570,478 2,096,624 1,903,531 4,000,155 Age Analysis of Past Due Loans (Including Non-Accrual Loans) The following tables summarise the past due status of the loans as at 31 December 2016 and 31 December 2015 . 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. 31 December 2016 30 - 59 days 60 - 89 days More than 90 days Total past due loans Total current Total loans Commercial loans Government — — — — 112,412 112,412 Commercial and industrial 2,712 — 584 3,296 328,527 331,823 Commercial overdrafts — — 2 2 25,359 25,361 Total commercial loans 2,712 — 586 3,298 466,298 469,596 Commercial real estate loans Commercial mortgage 377 — 5,964 6,341 575,281 581,622 Construction 175 — — 175 28,710 28,885 Total commercial real estate loans 552 — 5,964 6,516 603,991 610,507 Consumer loans Automobile financing 86 23 225 334 19,648 19,982 Credit card 366 177 392 935 77,606 78,541 Overdrafts — — 17 17 5,565 5,582 Other consumer 720 564 999 2,283 91,701 93,984 Total consumer loans 1,172 764 1,633 3,569 194,520 198,089 Residential mortgage loans 26,122 4,345 50,262 80,729 2,255,804 2,336,533 Total gross loans 30,558 5,109 58,445 94,112 3,520,613 3,614,725 31 December 2015 30 - 59 days 60 - 89 days More than 90 days Total past due loans Total current Total loans Commercial loans Government — — — — 225,178 225,178 Commercial and industrial 11 14 608 633 342,076 342,709 Commercial overdrafts — — 25 25 40,708 40,733 Total commercial loans 11 14 633 658 607,962 608,620 Commercial real estate loans Commercial mortgage 1,133 — 6,658 7,791 657,578 665,369 Construction — — — — 13,607 13,607 Total commercial real estate loans 1,133 — 6,658 7,791 671,185 678,976 Consumer loans Automobile financing 194 81 78 353 19,511 19,864 Credit card 1,459 337 132 1,928 77,030 78,958 Overdrafts — — 538 538 12,377 12,915 Other consumer 832 979 1,231 3,042 113,042 116,084 Total consumer loans 2,485 1,397 1,979 5,861 221,960 227,821 Residential mortgage loans 40,793 8,911 65,343 115,047 2,418,993 2,534,040 Total gross loans 44,422 10,322 74,613 129,357 3,920,100 4,049,457 Loans' Credit Quality The four credit quality classifications set out in the following tables (which excludes purchased credit-impaired loans) 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 assigned. 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. A special mention loan shall mean a loan under close monitoring by the Bank’s management. Loans in this category are currently protected and still performing (current with respect to interest and principal payments), 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. 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 and for residential mortgage loans which are not well secured and in the process of collection. 31 December 2016 Pass Special mention Substandard Non-accrual Total gross recorded investments Commercial loans Government 104,611 301 7,500 — 112,412 Commercial and industrial 325,924 4,122 1,194 583 331,823 Commercial overdrafts 22,976 2,145 238 2 25,361 Total commercial loans 453,511 6,568 8,932 585 469,596 Commercial real estate loans Commercial mortgage 502,918 71,038 1,702 5,964 581,622 Construction 28,885 — — — 28,885 Total commercial real estate loans 531,803 71,038 1,702 5,964 610,507 Consumer loans Automobile financing 19,309 360 28 285 19,982 Credit card 78,149 — 392 — 78,541 Overdrafts 5,533 32 — 17 5,582 Other consumer 91,348 1,564 360 712 93,984 Total consumer loans 194,339 1,956 780 1,014 198,089 Residential mortgage loans 2,200,807 36,739 58,087 40,900 2,336,533 Total gross recorded loans 3,380,460 116,301 69,501 48,463 3,614,725 31 December 2015 Pass Special mention Substandard Non-accrual Total gross recorded investments Commercial loans Government 213,928 11,250 — — 225,178 Commercial and industrial 333,853 4,133 4,106 617 342,709 Commercial overdrafts 36,017 4,493 197 26 40,733 Total commercial loans 583,798 19,876 4,303 643 608,620 Commercial real estate loans Commercial mortgage 542,195 86,285 26,629 10,260 665,369 Construction 13,607 — — — 13,607 Total commercial real estate loans 555,802 86,285 26,629 10,260 678,976 Consumer loans Automobile financing 19,378 388 — 98 19,864 Credit card 78,826 — 132 — 78,958 Overdrafts 11,618 54 1,232 11 12,915 Other consumer 112,426 1,308 1,056 1,294 116,084 Total consumer loans 222,248 1,750 2,420 1,403 227,821 Residential mortgage loans 2,391,723 42,578 46,793 52,946 2,534,040 Total gross recorded loans 3,753,571 150,489 80,145 65,252 4,049,457 Evaluation of Loans For Impairment 31 December 2016 31 December 2015 Individually evaluated Collectively evaluated Individually evaluated Collectively evaluated Commercial 9,686 459,910 13,607 595,013 Commercial real estate 21,893 588,614 38,019 640,957 Consumer 1,746 196,343 1,882 225,939 Residential mortgage 113,065 2,223,468 116,176 2,417,864 Total gross loans 146,390 3,468,335 169,684 3,879,773 Changes in General and Specific Allowances For Credit Losses Year ended 31 December 2016 Commercial Commercial real estate Consumer Residential mortgage Total Allowances at beginning of year 8,723 6,512 2,763 31,304 49,302 Provision taken (released) (5,265 ) 14,459 (1,076 ) (3,719 ) 4,399 Recoveries 97 12 1,264 70 1,443 Charge-offs (138 ) (4,520 ) (1,916 ) (3,837 ) (10,411 ) Other (40 ) (239 ) (70 ) (137 ) (486 ) Allowances at end of year 3,377 16,224 965 23,681 44,247 Allowances at end of year: individually evaluated for impairment 577 750 278 10,133 11,738 Allowances at end of year: collectively evaluated for impairment 2,800 15,474 687 13,548 32,509 Year ended 31 December 2015 Commercial Commercial real estate Consumer Residential mortgage Total Allowances at beginning of year 7,831 5,920 2,797 30,934 47,482 Provision taken 440 1,027 586 3,688 5,741 Recoveries 788 182 1,455 427 2,852 Charge-offs (318 ) (513 ) (2,031 ) (3,701 ) (6,563 ) Other (18 ) (104 ) (44 ) (44 ) (210 ) Allowances at end of year 8,723 6,512 2,763 31,304 49,302 Allowances at end of year: individually evaluated for impairment 590 2,951 274 15,290 19,105 Allowances at end of year: collectively evaluated for impairment 8,133 3,561 2,489 16,014 30,197 Year ended 31 December 2014 Commercial Commercial real estate Consumer Residential mortgage Total Allowances at beginning of year 8,340 9,816 3,442 31,157 52,755 Provision taken 282 2,789 (686 ) 5,663 8,048 Recoveries 67 — 1,983 274 2,324 Charge-offs (838 ) (6,621 ) (1,895 ) (6,113 ) (15,467 ) Other (20 ) (64 ) (47 ) (47 ) (178 ) Allowances at end of year 7,831 5,920 2,797 30,934 47,482 Allowances at end of year: individually evaluated for impairment 417 1,822 355 16,217 18,811 Allowances at end of year: collectively evaluated for impairment 7,414 4,098 2,442 14,717 28,671 Non-Performing Loans (excluding purchased credit-impaired loans) 31 December 2016 31 December 2015 Non-accrual Past due more than 90 days and accruing Total non- performing loans Non-accrual Past due more than 90 days and accruing Total non- performing loans Commercial loans Commercial and industrial 583 — 583 617 — 617 Commercial overdrafts 2 — 2 26 10 36 Total commercial loans 585 — 585 643 10 653 Commercial real estate loans Commercial mortgage 5,964 — 5,964 10,260 737 10,997 Consumer loans Automobile financing 285 2 287 98 — 98 Credit card — 392 392 — 132 132 Overdrafts 17 — 17 11 527 538 Other consumer 712 300 1,012 1,294 85 1,379 Total consumer loans 1,014 694 1,708 1,403 744 2,147 Residential mortgage loans 40,900 8,476 49,376 52,946 12,760 65,706 Total non-performing loans 48,463 9,170 57,633 65,252 14,251 79,503 Impaired Loans (excluding purchased credit-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-accrual loans and all loans modified in a troubled debt restructuring (‘‘TDR’’) even if full collectability is expected following the restructuring. During the year ended 31 December 2016 , the amount of gross interest income that would have been recorded had impaired loans been current was $2.7 million ( 31 December 2015 : $3.1 million ; 31 December 2014 : $5.2 million ). Impaired loans with an allowance Gross recorded investment of impaired loans without an allowance Total impaired loans 31 December 2016 Gross recorded investment Specific allowance Net loans Gross recorded investment Specific allowance Net loans Commercial loans Commercial and industrial 579 (577 ) 2 1,048 1,627 (577 ) 1,050 Commercial overdrafts — — — 2 2 — 2 Total commercial loans 579 (577 ) 2 1,050 1,629 (577 ) 1,052 Commercial real estate loans Commercial mortgage 1,722 (750 ) 972 5,944 7,666 (750 ) 6,916 Consumer loans Automobile financing 155 (75 ) 80 130 285 (75 ) 210 Overdrafts — — — 17 17 — 17 Other consumer 253 (203 ) 50 459 712 (203 ) 509 Total consumer loans 408 (278 ) 130 606 1,014 (278 ) 736 Residential mortgage loans 30,330 (9,961 ) 20,369 52,043 82,373 (9,961 ) 72,412 Total impaired loans 33,039 (11,566 ) 21,473 59,643 92,682 (11,566 ) 81,116 Specific allowance excludes $0.2 million recognized relating to purchased credit-impaired loans. Impaired loans with an allowance Gross recorded investment of impaired loans without an allowance Total impaired loans 31 December 2015 Gross recorded investment Specific allowance Net loans Gross recorded investment Specific allowance Net loans Commercial loans Commercial and industrial 599 (590 ) 9 1,096 1,695 (590 ) 1,105 Commercial overdrafts — — — 26 26 — 26 Total commercial loans 599 (590 ) 9 1,122 1,721 (590 ) 1,131 Commercial real estate loans Commercial mortgage 6,127 (2,951 ) 3,176 17,198 23,325 (2,951 ) 20,374 Consumer loans Automobile financing — — — 98 98 — 98 Overdrafts — — — 11 11 — 11 Other consumer 366 (274 ) 92 1,008 1,374 (274 ) 1,100 Total consumer loans 366 (274 ) 92 1,117 1,483 (274 ) 1,209 Residential mortgage loans 42,145 (15,290 ) 26,855 39,283 81,428 (15,290 ) 66,138 Total impaired loans 49,237 (19,105 ) 30,132 58,720 107,957 (19,105 ) 88,852 Average Impaired Loan Balances and Related Recognised Interest Income 31 December 2016 31 December 2015 31 December 2014 Average gross recorded investment Interest income recognised¹ Average gross recorded investment Interest income recognised¹ Average gross recorded investment Interest income recognised¹ Commercial loans Commercial and industrial 1,661 64 1,214 — 1,452 — Commercial overdrafts 14 — 66 — 289 — Total commercial loans 1,675 64 1,280 — 1,741 — Commercial real estate loans Commercial mortgage 15,496 237 28,612 311 48,581 675 Consumer loans Automobile financing 192 — 137 — 307 — Credit card — — — — 35 — Overdrafts 14 — 27 — 132 — Other consumer 1,043 — 1,617 2 1,963 5 Total consumer loans 1,249 — 1,781 2 2,437 5 Residential mortgage loans 81,901 2,201 78,433 1,442 70,923 1,021 Total impaired loans 100,321 2,502 110,106 1,755 123,682 1,701 ¹ All interest income recognised on impaired loans relate to loans previously modified in a TDR. Loans Modified in a TDR As at 31 December 2016 , the Bank had one loan which was formerly a residential mortgage that was modified in a TDR during the preceding 12 months that subsequently defaulted (i.e. 90 days or more past due following a modification) with a recorded investment of $0.9 million . As at 31 December 2015 , one loan which was formerly a residential mortgage was modified in a TDR during the preceding 12 months that subsequently defaulted with a recorded investment of $0.8 million . As at 31 December 2014 , four loans which were all formerly residential mortgages were modified in a TDR during the preceding 12 months that subsequently defaulted with a recorded investment of $2.4 million . TDRs entered into during the year Year ended 31 December 2016 Number of contracts Pre- modification recorded investment Modification: interest capitalisation Post- modification recorded investment Residential mortgage loans 21 12,543 81 12,624 Total loans modified in a TDR 21 12,543 81 12,624 Year ended 31 December 2015 Number of Pre- Modification: Post- Commercial loans 1 1,000 87 1,087 Residential mortgage loans 20 13,283 1,081 14,364 Total loans modified in a TDR 21 14,283 1,168 15,451 Year ended 31 December 2014 Number of contracts Pre- modification recorded investment Modification: interest capitalisation Post- modification recorded investment Residential mortgage loans 20 13,857 259 14,116 Total loans modified in a TDR 20 13,857 259 14,116 31 December 2016 31 December 2015 TDRs outstanding Accrual Non-accrual Accrual Non-accrual Commercial loans 1,044 — 1,078 — Commercial real estate loans 1,702 1,539 13,065 1,608 Consumer loans — — 80 — Residential mortgage loans 41,473 5,006 28,482 7,175 Total TDRs outstanding 44,219 6,545 42,705 8,783 Purchased Credit-Impaired Loans The Bank acquired certain credit-impaired loans as part of the 7 November 2014 acquisition of substantially all retail loans of HSBC Bank (Cayman) Limited. The accretable difference (or "accretable yield") represents the excess of a loan's cash flows expected to be collected over the loan's carrying amount. Year ended 31 December 2016 Contractual principal Non-accretable difference Accretable difference Carrying amount Balance at beginning of year 8,709 (2,248 ) (631 ) 5,830 Advances and increases in cash flows expected to be collected 166 408 (396 ) 178 Reductions resulting from repayments (464 ) — 216 (248 ) Reductions resulting from changes in allowances for credit losses — (172 ) — (172 ) Reductions resulting from charge-offs (395 ) 395 — — Balance at end of year 8,016 (1,617 ) (811 ) 5,588 Year ended 31 December 2015 Contractual principal Non-accretable difference Accretable difference Carrying amount Balance at beginning of year 11,020 (3,804 ) — 7,216 Advances and increases in cash flows expected to be collected 150 631 (631 ) 150 Reductions resulting from repayments (1,554 ) — 107 (1,447 ) Reductions resulting from charge-offs (907 ) 818 — (89 ) Accretion — 107 (107 ) — Balance at end of year 8,709 (2,248 ) (631 ) 5,830 Year ended 31 December 2014 Contractual principal Non-accretable difference Accretable difference Carrying amount Balance at beginning of year — — — — Purchases 11,001 (3,804 ) — 7,197 Advances and increases in cash flows expected to be collected 19 — — 19 Balance at end of year 11,020 (3,804 ) — 7,216 |
Credit risk concentrations
Credit risk concentrations | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Credit risk concentrations | 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 affected similarly 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 tables summarise the credit exposure of the Bank by business sector and by geographic region. The on-balance sheet exposure amounts disclosed are net of specific allowances and the off-balance sheet exposure amounts disclosed are gross of collateral held. During 2016, Management revised the method for determining the geographic location of cash and cash equivalents from the location of the branch to the location of the head office holding custody. 31 December 2016 31 December 2015 Business sector Loans Off-balance sheet Total credit exposure Loans Off-balance sheet Total credit exposure Banks and financial services 321,680 393,148 714,828 243,776 320,934 564,710 Commercial and merchandising 266,976 139,264 406,240 230,376 107,545 337,921 Governments 112,857 709 113,566 223,699 102,782 326,481 Individuals 2,299,852 108,810 2,408,662 2,532,209 95,956 2,628,165 Primary industry and manufacturing 34,304 2,095 36,399 36,299 978 37,277 Real estate 418,946 12,467 431,413 632,548 15,891 648,439 Hospitality industry 142,707 4,353 147,060 125,471 14,854 140,325 Transport and communication 5,665 — 5,665 5,974 — 5,974 Sub-total 3,602,987 660,846 4,263,833 4,030,352 658,940 4,689,292 General allowance (32,509 ) — (32,509 ) (30,197 ) — (30,197 ) Total 3,570,478 660,846 4,231,324 4,000,155 658,940 4,659,095 31 December 2016 31 December 2015 Geographic region Cash due from Loans Off-balance sheet Total credit exposure Cash due from Loans Off-balance sheet Total credit exposure Australia 14,242 — — 14,242 14,187 — — 14,187 Barbados — 7,500 — 7,500 — 11,250 — 11,250 Belgium 1,722 — — 1,722 3,352 — — 3,352 Bermuda 23,505 2,105,195 322,554 2,451,254 22,009 2,269,635 371,687 2,663,331 Canada 514,861 — — 514,861 365,037 — — 365,037 Cayman 40,356 706,994 231,211 978,561 19,086 713,468 207,139 939,693 Guernsey 1 337,037 107,081 444,119 1 434,531 53,750 488,282 Japan 20,963 — — 20,963 23,424 — — 23,424 New Zealand 785 — — 785 999 — — 999 Norway 42,477 — — 42,477 289 — — 289 Saint Lucia — 65,117 — 65,117 — 65,285 — 65,285 Sweden 1,550 — — 1,550 3,659 — — 3,659 Switzerland 5,833 — — 5,833 3,905 — — 3,905 The Bahamas 2,822 23,860 — 26,682 3,196 28,736 — 31,932 United Kingdom 1,224,263 357,284 — 1,581,547 1,078,088 507,447 26,364 1,611,899 United States 876,642 — — 876,642 1,161,106 — — 1,161,106 Other 197 — — 197 34 — — 34 Sub-total 2,770,219 3,602,987 660,846 7,034,052 2,698,372 4,030,352 658,940 7,387,664 General allowance — (32,509 ) — (32,509 ) — (30,197 ) — (30,197 ) Total 2,770,219 3,570,478 660,846 7,001,543 2,698,372 4,000,155 658,940 7,357,467 |
Premises, equipment and compute
Premises, equipment and computer software | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Premises, equipment and computer software | Premises, equipment and computer software 31 December 2016 31 December 2015 Category Cost Accumulated Net carrying Cost Accumulated Net carrying Land 9,008 — 9,008 9,008 — 9,008 Buildings 137,110 (58,606 ) 78,504 135,684 (55,030 ) 80,654 Equipment 28,837 (25,637 ) 3,200 31,108 (27,620 ) 3,488 Computer hardware and software in use 170,138 (98,452 ) 71,686 174,162 (88,582 ) 85,580 Computer software in development 5,375 — 5,375 4,648 — 4,648 Total 350,468 (182,695 ) 167,773 354,610 (171,232 ) 183,378 Year ended Depreciation charged to operating expenses 31 December 2016 31 December 2015 31 December 2014 Buildings (included in Property expense) 4,058 4,183 4,434 Equipment (included in Property expense) 1,462 1,605 1,728 Computer hardware and software (included in Technology and communication expense) 18,757 19,076 18,588 Total depreciation charged to operating expenses 24,277 24,864 24,750 Impairment of buildings' carrying value (included in Impairment of fixed assets) — — 1,986 During the year ended 31 December 2014, the Bank’s intended use of three Bermuda properties changed and therefore the properties were assessed for impairment. The carrying amounts of the Bermuda segment’s buildings were impaired by $1.2 million during 2014 because their respective fair values were lower than the carrying amounts. At the end of 2014, the Bank changed its commitment with respect to a Bermuda property which was being used in its operations but is now contemplated for disposal and therefore the property has been reclassified as held for sale and included in OREO assets in the consolidated balance sheet. The reclassification resulted in an $0.8 million write-down during 2014 of the carrying amount to its fair value less cost to sell. The fair value was based on the discounted cash flow of a projected sale. During the year ended 31 December 2015 , the Bank sold four Bermuda properties and one Cayman property which were classified as premises, equipment and computer software as at 31 December 2014. The properties were reclassified to other real estate owned during 2015 upon classification as held for sale. The properties were sold for total proceeds of $11.2 million and a gain of $0.5 million , which is recognized on the consolidated statements of operations under net realised / unrealised gains (losses) on other real estate owned. For the Cayman property, the Bank has entered into a leaseback agreement for two floors with lease payments of $0.4 million per year for three years. During the year ended 31 December 2015 , the Bank recognized an impairment of $5.1 million regarding the core banking system in the UK as described in Note 13: Exit cost obligations. |
Goodwill and other intangible a
Goodwill and other intangible assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill Year ended Guernsey segment 31 December 2016 31 December 2015 31 December 2014 Balance at beginning of year 23,462 24,821 7,086 Acquisitions during the year — — 19,291 Foreign exchange translation adjustment (3,840 ) (1,359 ) (1,556 ) Balance at end of year 19,622 23,462 24,821 Customer Relationship Intangible Assets 31 December 2016 31 December 2015 Business segment Cost Accumulated Net carrying Cost Accumulated Net carrying Bermuda 29,785 (7,762 ) 22,023 8,342 (6,258 ) 2,084 Cayman 12,324 (2,782 ) 9,542 12,324 (1,960 ) 10,364 Guernsey 58,420 (47,696 ) 10,724 58,420 (43,199 ) 15,221 Total 100,529 (58,240 ) 42,289 79,086 (51,417 ) 27,669 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 31 December 2016 , the Bank acquired new customer intangible assets with a value of $21.4 million ( 31 December 2015 : nil , 31 December 2014 : $26.6 million ), the amortisation expense amounted to $4.5 million ( 31 December 2015 : $4.4 million , 31 December 2014 : $4.3 million ) and the foreign exchange translation adjustment decreased the net carrying amount by $2.3 million ( 31 December 2015 : decreased by $0.9 million , 31 December 2014 : decreased by $1.3 million ). The estimated aggregate amortisation expense for each of the succeeding five years is $4.2 million . |
Customer deposits and deposits
Customer deposits and deposits from banks | 12 Months Ended |
Dec. 31, 2016 | |
Deposits [Abstract] | |
Customer deposits and deposits from banks | Customer deposits and deposits from banks By Maturity Demand Term 31 December 2016 Non-interest bearing Interest bearing Total demand deposits Within 3 months 3 to 6 months 6 to 12 months After 12 months Total term deposits Total deposits Customers Bermuda Demand or less than $100k¹ 1,733,684 3,013,401 4,747,085 14,091 4,309 9,068 16,380 43,848 4,790,933 Term - $100k or more N/A N/A — 1,013,159 37,550 60,952 44,507 1,156,168 1,156,168 Total Bermuda 1,733,684 3,013,401 4,747,085 1,027,250 41,859 70,020 60,887 1,200,016 5,947,101 Non-Bermuda Demand or less than $100k 651,329 2,794,799 3,446,128 20,295 4,108 4,145 783 29,331 3,475,459 Term and $100k or more N/A N/A — 440,674 119,519 17,590 9,510 587,293 587,293 Total non-Bermuda 651,329 2,794,799 3,446,128 460,969 123,627 21,735 10,293 616,624 4,062,752 Total customer deposits 2,385,013 5,808,200 8,193,213 1,488,219 165,486 91,755 71,180 1,816,640 10,009,853 Banks Bermuda Demand or less than $100k 340 — 340 4 — — — 4 344 Non-Bermuda Demand or less than $100k — 19,751 19,751 — — — — — 19,751 Term and $100k or more N/A N/A — 3,601 100 — — 3,701 3,701 Total non-Bermuda — 19,751 19,751 3,601 100 — — 3,701 23,452 Total bank deposits 340 19,751 20,091 3,605 100 — — 3,705 23,796 Total deposits 2,385,353 5,827,951 8,213,304 1,491,824 165,586 91,755 71,180 1,820,345 10,033,649 Demand Term 31 December 2015 Non-interest bearing Interest bearing Total demand deposits Within 3 months 3 to 6 months 6 to 12 months After 12 months Total term deposits Total deposits Customers Bermuda Demand or less than $100k¹ 1,348,878 2,390,952 3,739,830 15,902 4,757 10,035 15,881 46,575 3,786,405 Term - $100k or more N/A N/A — 329,433 37,925 64,943 53,002 485,303 485,303 Total Bermuda 1,348,878 2,390,952 3,739,830 345,335 42,682 74,978 68,883 531,878 4,271,708 Non-Bermuda Demand or less than $100k 532,867 3,381,946 3,914,813 22,878 6,714 4,238 376 34,206 3,949,019 Term and $100k or more N/A N/A — 616,442 246,989 74,030 9,480 946,941 946,941 Total non-Bermuda 532,867 3,381,946 3,914,813 639,320 253,703 78,268 9,856 981,147 4,895,960 Total customer deposits 1,881,745 5,772,898 7,654,643 984,655 296,385 153,246 78,739 1,513,025 9,167,668 Banks Bermuda Demand or less than $100k 403 — 403 — — — — — 403 Non-Bermuda Demand or less than $100k — 10,176 10,176 — — — — — 10,176 Term and $100k or more N/A N/A — 3,899 — — — 3,899 3,899 Total non-Bermuda — 10,176 10,176 3,899 — — — 3,899 14,075 Total bank deposits 403 10,176 10,579 3,899 — — — 3,899 14,478 Total deposits 1,882,148 5,783,074 7,665,222 988,554 296,385 153,246 78,739 1,516,924 9,182,146 ¹ As at 31 December 2016 , $150 million ( 31 December 2015 : $175 million ) of the Demand deposits - Interest bearing bear a special negligible interest rate. The weighted-average interest rate on interest-bearing demand deposits as at 31 December 2016 is 0.06% ( 31 December 2015 : 0.10% ). By Type and Segment 31 December 2016 31 December 2015 Payable on demand Payable on a fixed date Total Payable on demand Payable on a fixed date Total Bermuda Customers 4,747,086 1,200,016 5,947,102 3,739,829 531,877 4,271,706 Banks 341 4 345 403 — 403 Cayman Customers 2,606,305 417,750 3,024,055 2,596,642 416,489 3,013,131 Banks 19,615 3,701 23,316 9,365 3,899 13,264 Guernsey Customers 781,119 185,457 966,576 996,343 248,866 1,245,209 Banks — — — 669 — 669 The Bahamas Customers 58,703 13,417 72,120 36,078 3,602 39,680 United Kingdom Customers — — — 285,751 312,191 597,942 Banks 135 — 135 142 — 142 Total Customers 8,193,213 1,816,640 10,009,853 7,654,643 1,513,025 9,167,668 Total Banks 20,091 3,705 23,796 10,579 3,899 14,478 Total deposits 8,213,304 1,820,345 10,033,649 7,665,222 1,516,924 9,182,146 |
Employee benefit plans
Employee benefit plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee benefit plans | 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 expense related to these plans is included in the consolidated statements of operations under Salaries and other employee benefits. 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 United Kingdom jurisdictions and the defined benefit post-retirement medical plan is in Bermuda. Bermuda Defined Benefit Post Retirement Healthcare Plan For the year ended 31 December 2014, numerous changes in the plan provisions were made to align the plan provisions with the administrative practices of the Bank resulting in a further increase in the Bermuda defined benefit post-retirement healthcare plan liability of $7.9 million . The Bank amortises 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 follow: 3.1 years for the 2010 plan amendments and 4.6 years for the 2011 plan amendments. Plan amendments occurring in 2014 resulted in the recognition of new prior service cost on 31 December 2014 on a plan for which substantially all members are now inactive and, in accordance with US GAAP, the Bank has elected to amortise this new prior service cost on a linear basis over 21 years, which is 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 are inactive and in accordance with US GAAP, the net actuarial loss of the Guernsey defined benefit pension plan will be amortised 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 amortised to net income over the estimated average remaining service period for active members of 15 years. The following table presents the financial position of the Bank’s defined benefit pension plans and the Bank’s post-retirement medical benefits, which is unfunded. The Bank measures the benefit obligations and plan assets annually on each 31 December and therefore, the most recent measurement date is 31 December 2016 . 31 December 2016 31 December 2015 31 December 2014 Pension Post- Pension Post- Pension Post- Accumulated benefit obligation at end of year 178,067 — 166,815 — 188,890 — Change in projected benefit obligation Projected benefit obligation at beginning of year 166,815 119,107 188,890 114,640 167,469 89,109 Service cost — 118 — 341 1,203 825 Employee contributions — — — — 99 — Interest cost 5,781 4,792 6,958 4,745 7,760 4,503 Benefits paid (10,477 ) (3,594 ) (7,573 ) (2,871 ) (8,771 ) (3,590 ) Plan amendment — — — — — 7,901 Settlement and curtailment of liability — — (2,509 ) — (4,662 ) — Actuarial (gain) loss 30,953 5,911 (14,157 ) 2,252 31,604 15,892 Foreign exchange translation adjustment (15,004 ) — (4,794 ) — (5,812 ) — Projected benefit obligation at end of year 178,068 126,334 166,815 119,107 188,890 114,640 Change in plan assets Fair value of plan assets at beginning of year 179,961 — 194,007 — 186,412 — Actual return on plan assets 18,615 — 687 — 18,451 — Employer contribution 678 3,594 808 2,871 4,172 3,590 Employee contributions — — — — 99 — Plan settlement — — (2,424 ) — — — Benefits paid (10,477 ) (3,594 ) (7,573 ) (2,871 ) (8,771 ) (3,590 ) Foreign exchange translation adjustment (16,571 ) — (5,544 ) — (6,356 ) — Fair value of plan assets at end of year 172,206 — 179,961 — 194,007 — Amounts recognised in the consolidated balance sheets consist of: Prepaid benefit cost included in other assets 7,771 — 16,174 — 8,374 — Accrued pension benefit cost included in employee benefit plans liability (13,633 ) (126,334 ) (3,028 ) (119,107 ) (3,257 ) (114,640 ) Surplus (deficit) of plan assets over projected benefit obligation at measurement date (5,862 ) (126,334 ) 13,146 (119,107 ) 5,117 (114,640 ) As at 31 December 2016 , the pension plan of the United Kingdom subsidiary was in a surplus position (i.e., net surplus presented in other assets in the consolidated balance sheets) while the pension plans of the Bermuda and Guernsey operations were in a deficit position with projected benefit obligations of $150.0 million and plan assets of $136.3 million . Year ended 31 December 2016 31 December 2015 31 December 2014 Pension Post- Pension Post- Pension Post- Amounts recognised in accumulated other comprehensive loss consist of: Net actuarial loss, excluding deferred taxes (64,852 ) (31,959 ) (46,696 ) (28,779 ) (53,970 ) (29,874 ) Prior service credit, net of prior service cost — (5,678 ) — 665 — 7,008 Deferred income taxes assets 1,620 — 365 — 801 — Net amount recognised in accumulated other comprehensive loss (63,232 ) (37,637 ) (46,331 ) (28,114 ) (53,169 ) (22,866 ) Annual Benefit Expense Expense component Service cost — 118 — 341 1,203 825 Interest cost 5,781 4,792 6,958 4,745 7,760 4,503 Expected return on plan assets (8,943 ) — (9,585 ) — (10,653 ) — Amortisation of net actuarial losses 1,702 2,731 1,607 3,347 1,058 922 Amortisation of prior service credit — (6,343 ) — (6,343 ) — (6,719 ) Loss on settlement — — 101 — — — Defined benefit expense (income) (1,460 ) 1,298 (919 ) 2,090 (632 ) (469 ) Defined contribution expense 6,606 — 6,907 — 6,892 — Total benefit expense (income) 5,146 1,298 5,988 2,090 6,260 (469 ) Other Changes Recognised in Other Comprehensive Income (Loss) Net gain (loss) arising during the year (19,956 ) (5,911 ) 5,096 (2,252 ) (18,947 ) (15,892 ) Prior service cost arising during the year — — — — — (7,901 ) Amortisation of net actuarial losses 1,702 2,731 1,703 3,347 1,058 922 Amortisation of prior service credit — (6,343 ) — (6,343 ) — (6,719 ) Change in deferred taxes 1,315 — (391 ) — 83 — Foreign exchange adjustment 38 — 430 — 253 — Total changes recognised in other comprehensive income (loss) (16,901 ) (9,523 ) 6,838 (5,248 ) (17,553 ) (29,590 ) The estimated portion of the net actuarial loss for the pension plans that will be amortised from AOCL into benefit expense over the 2017 full fiscal year is $2.2 million . The estimated portion of the net actuarial loss and the prior service credit for the post-retirement medical benefit plan that will be amortised from AOCL into benefit expense over the 2017 full fiscal year is $3.5 million for the net actuarial loss and a credit of $0.8 million for the prior service credit. 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 31 December 2016 31 December 2015 31 December 2014 Pension plans Post- retirement medical benefit plan Pension plans Post- retirement medical benefit plan Pension Post- Actuarial assumptions used to determine annual benefit expense Weighted average discount rate 3.90 % 4.70 % 3.80 % 4.20 % 4.75 % 5.10 % Weighted average rate of compensation increases 1 2.30 % N/A 2.20 % N/A 4.30 % N/A Weighted average expected long-term rate of return on plan assets 5.30 % N/A 5.10 % N/A 5.80 % N/A Weighted average annual medical cost increase rate (sensitivity shown below) N/A 8.0% to 4.5% in 2035 N/A 7.1% to 4.5% in 2027 N/A 7.3% to 4.5% in 2027 1 Only the United Kingdom subsidiary plan is impacted by potential future compensation increases. Actuarial assumptions used to determine benefit obligations at end of year Weighted average discount rate 3.40 % 4.37 % 4.20 % 4.70 % 3.80 % 4.20 % Weighted average rate of compensation increases 2.50 % N/A 2.30 % N/A 2.80 % N/A Weighted average annual medical cost increase rate (sensitivity shown below) N/A 7.8% to 4.5% in 2035 N/A 8.0% to 4.5% in 2035 N/A 7.1% to 4.5% in 2027 Post-retirement medical benefit plan sensitivity to trend rate assumptions The effect of a one percentage point increase or decrease in the assumed medical cost increase rate on the aggregate of service and interest costs is as follows: a. One percent increase in trend rate i. Effect on total service cost and interest cost components for the year N/A 772 N/A 909 N/A 952 ii. Effect on benefit obligation at year end N/A 19,513 N/A 18,792 N/A 20,339 b. One percent decrease in trend rate i. Effect on total service cost and interest cost components for the year N/A (694 ) N/A (781 ) N/A (771 ) ii. Effect on benefit obligation at year end N/A (16,255 ) N/A (15,496 ) N/A (16,514 ) 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. 31 December 2016 31 December 2015 Weighted average actual and target asset allocations of the pension plans by asset category Actual allocation Target allocation Actual allocation Target allocation Debt securities (including debt mutual funds) 40 % 46 % 42 % 53 % Equity securities (including equity mutual funds) 60 % 49 % 58 % 47 % Other 0 % 5 % 0 % 0 % Total 100 % 100 % 100 % 100 % Fair Value Measurements of Pension Plans' Assets The following table presents the fair value of plans' assets by category and level of inputs used in their respective fair value determination as described in Note 2: 31 December 2016 31 December 2015 Fair value determination Fair value determination Level 1 Level 2 Level 3 Total fair value Level 1 Level 2 Level 3 Total fair value US government and federal agencies — 9,777 — 9,777 — 7,532 — 7,532 Non-US governments debt securities — 23,255 — 23,255 — — — — Corporate debt securities — 36,184 — 36,184 — 68,166 — 68,166 Equity securities and mutual funds — 102,627 — 102,627 11,845 91,702 — 103,547 Other — 363 — 363 — 716 — 716 Total fair value of plans' assets — 172,206 — 172,206 11,845 168,116 — 179,961 At 31 December 2016 , 31.2% ( 31 December 2015 : 34.8% ) of the assets of the pension plans were mutual funds and equity securities managed or administered by wholly-owned subsidiaries of the Bank. At 31 December 2016 , 0.5% and nil % ( 31 December 2015 : 0.3% and 1.2% ) of the plans' assets were invested in common and preference shares of the Bank respectively. 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 2017 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 plans Post- retirement medical benefit plan Estimated Bank contributions for the full year ending 31 December 2017 330 4,571 Estimated benefit payments by year: 2017 7,300 4,571 2018 7,300 4,896 2019 7,300 5,237 2020 7,300 5,581 2021 7,300 5,942 2022-2026 36,000 34,940 |
Credit-related arrangements, re
Credit-related arrangements, repurchase agreements and commitments | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Credit-related arrangements, repurchase agreements and commitments | Credit-related arrangements, repurchase agreements and commitments Commitments As at 31 December 2016 , the Bank was committed to expenditures under contract for information technology services sourcing and leases of $69.8 million and $19.3 million respectively ( 31 December 2015 : $16.3 million and $20.0 million respectively). Rental expense for premises leased on a long-term basis for the year ended 31 December 2016 amounted to $5.1 million ( 31 December 2015 : $4.8 million , 31 December 2014 : $ 5.3 million ). The leases under contract as of both 31 December 2016 and 31 December 2015 are all non-cancellable operating type leases primarily for the lease of office space. The following table summarises the Bank's commitments for sourcing, long-term leases and other agreements: Year ending 31 December Sourcing Leases Other Total 2017 17,157 4,761 2,503 24,421 2018 13,876 3,705 2,440 20,021 2019 13,746 2,900 2,440 19,086 2020 13,666 2,759 600 17,025 2021 11,373 2,665 600 14,638 2022 & thereafter — 2,508 600 3,108 Total commitments 69,818 19,298 9,183 98,299 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 is represented generally 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 recognised 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. 31 December 2016 31 December 2015 Outstanding financial guarantees Gross Collateral Net Gross Collateral Net Standby letters of credit 242,437 242,437 — 258,851 257,200 1,651 Letters of guarantee 4,772 4,772 — 9,137 8,418 719 Total 247,209 247,209 — 267,988 265,618 2,370 Commitments 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 possible loan losses. The Bank has a facility by 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 utilised facility. At 31 December 2016 , $110.3 million ( 31 December 2015 : $123.7 million ) of standby letters of credit were issued under this facility. Outstanding unfunded commitments to extend credit 31 December 2016 31 December 2015 Commitments to extend credit 412,568 390,497 Documentary and commercial letters of credit 1,069 455 Total unfunded commitments to extend credit 413,637 390,952 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 31 December 2016 , the Bank had eight open positions ( 31 December 2015 : nil ) in resell agreements with a remaining maturity of less than 30 days involving pools of mortgages issued by US federal agencies. The amortised cost of these resell agreements is $148.8 million and are included in securities purchased under agreement to resell on the consolidated balance sheets. As at 31 December 2016 , there were no positions which were offset on the balance sheet 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 USAO 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 of 31 December 2016 , a provision of $5.5 million ( 31 December 2015 : $4.8 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 and on the consolidated statements of operations under other expenses. |
Exit cost obligations
Exit cost obligations | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Exit cost obligations | Exit cost obligations During December 2015, the Bank agreed to commence an orderly wind-down of the deposit taking and investment management businesses in the United Kingdom segment as reflected in management segment reporting described in Note 15: Segmented Information. In making this determination, the Bank considered the increasing regulatory pressure along with periods of negative profitability and made the determination that an orderly wind-down of the deposit taking and investment management businesses in the United Kingdom was prudent for Butterfield as a group. The orderly wind-down was largely completed by the end of 2016 with the change in business operations to mortgage lending services and the change in name from Butterfield Bank (UK) Limited to Butterfield Mortgages Limited. The amounts expensed shown in the following table are all included in the consolidated statements of operations as restructuring costs under non-interest expenses. Related to this orderly wind-down, it was determined that the core banking system utilized in the operations of the United Kingdom segment was impaired (included in premises, equipment and computer software on the consolidated balance sheets). This determination was based upon the realisable value of this software upon completion of the orderly wind-down. A total of $5.1 million was expensed in the fourth quarter of the year ended 31 December 2015 and was included in impairment of fixed assets on the consolidated statements of operations of the relevant period. Expense recognised by year Amounts paid by year Exit cost liability Year ended 31 December 2016 Year ended 31 December 2015 Costs to be recognised in the future Total exit costs expected to be incurred Year ended 31 December 2016 Year ended 31 December 2015 As at 31 December 2016 As at 31 December 2015 Staff redundancy expenses 2,810 634 116 3,560 3,329 — 115 634 Professional services 2,284 1,549 219 4,052 3,763 — 70 1,549 Lease termination expenses — — 1,513 1,513 — — — — Other expenses 1,172 — 924 2,096 1,172 — — — Total 6,266 2,183 2,772 11,221 8,264 — 185 2,183 |
Loan interest income
Loan interest income | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Loan interest income | Loan interest income Year ended Contractual interest 31 December 2016 31 December 2015 31 December 2014 Contractual interest earned on mortgages 103,820 104,194 106,321 Contractual interest earned on other loans 81,509 79,506 82,395 Subtotal contractual interest earned 185,329 183,700 188,716 Amortisation Amortisation of fair value hedge (1,120 ) (1,471 ) (1,548 ) Amortisation of loan origination fees (net of amortised costs) 3,791 4,257 4,818 Total loan interest income 188,000 186,486 191,986 Balance of unamortised fair value hedge included in loans as at year end 3,215 4,335 5,806 Balance of unamortised loan fees included in loans as at year end 6,313 7,319 7,072 |
Segmented information
Segmented information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segmented information | Segmented information The Bank is managed by its CEO on a geographic basis. The Bank's six geographic segments are Bermuda, Cayman, Guernsey, Switzerland, The Bahamas and the United Kingdom. The geographic segments are determined based on the country's balance sheet size and by regulatory reporting requirements in the respective jurisdiction. Each region has a managing director who reports directly to the CEO. The Group CEO and the region 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 CEO. Segment results are determined based upon the Bank's management reporting system, which assigns balance sheet and income statement 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 expense. 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. Bermuda provides a full range of retail, commercial and private banking services. Retail services are offered to individuals and small to medium-sized businesses through five 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 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 Guernsey segment provides a broad range of services to private clients and financial institutions including private banking and treasury services, internet banking, administered bank services, wealth management and fiduciary services. The Switzerland segment provides fiduciary services. The Bahamas segment provides fiduciary and ancillary services. The United Kingdom segment previously provided a broad range of services including private banking and treasury services, internet banking and wealth management and fiduciary services to high net worth individuals and privately owned businesses. As described in Note 13: Exit cost obligations, during the year-ended 31 December 2015, the Bank commenced an orderly wind-down of the deposit- taking and investment management businesses in the United Kingdom segment. The United Kingdom segment now provides mortgage services for high-value residential properties. Total Assets by Segment 31 December 2016 31 December 2015 Bermuda 6,765,125 5,113,718 Cayman 3,393,256 3,282,319 Guernsey 1,132,663 1,391,126 Switzerland 2,173 2,713 The Bahamas 81,604 49,434 United Kingdom 151,866 788,433 Total assets before inter-segment eliminations 11,526,687 10,627,743 Less: inter-segment eliminations (423,142 ) (352,180 ) Total 11,103,545 10,275,563 Net interest income Provision for credit losses Non-interest income Revenue before gains and losses Gains and losses Total net revenue Total expenses Net income Year ended 31 December 2016 Customer Inter- segment Bermuda 160,466 1,642 (7,263 ) 71,765 226,610 1,412 228,022 164,503 63,519 Cayman 79,644 388 2,135 41,364 123,531 (532 ) 122,999 60,613 62,386 Guernsey 14,469 (323 ) (395 ) 24,623 38,374 (1,027 ) 37,347 35,547 1,800 Switzerland 41 — — 3,798 3,839 — 3,839 3,366 473 The Bahamas 46 30 — 4,666 4,742 — 4,742 5,032 (290 ) United Kingdom 3,814 (1,737 ) 1,124 3,947 7,148 1,161 8,309 20,255 (11,946 ) Total before eliminations 258,480 — (4,399 ) 150,163 404,244 1,014 405,258 289,316 115,942 Inter-segment eliminations — — — (2,690 ) (2,690 ) — (2,690 ) (2,690 ) — Total 258,480 — (4,399 ) 147,473 401,554 1,014 402,568 286,626 115,942 Net interest income Provision for credit losses Non-interest income Revenue before gains and losses Gains and losses Total net revenue Total expenses Net income Year ended 31 December 2015 Customer Inter- segment Bermuda 142,488 2,600 (3,625 ) 61,050 202,513 (2,503 ) 200,010 159,474 40,536 Cayman 66,317 608 (466 ) 39,508 105,967 (793 ) 105,174 58,115 47,059 Guernsey 17,025 (427 ) (103 ) 26,171 42,666 (1,066 ) 41,600 39,872 1,728 Switzerland — — — 3,420 3,420 — 3,420 3,320 100 The Bahamas 8 116 — 5,295 5,419 1 5,420 5,068 352 United Kingdom 13,428 (2,897 ) (1,547 ) 6,307 15,291 (5,076 ) 10,215 22,251 (12,036 ) Total before eliminations 239,266 — (5,741 ) 141,751 375,276 (9,437 ) 365,839 288,100 77,739 Inter-segment eliminations — — — (1,579 ) (1,579 ) — (1,579 ) (1,579 ) — Total 239,266 — (5,741 ) 140,172 373,697 (9,437 ) 364,260 286,521 77,739 Net interest income Provision for credit losses Non-interest income Revenue before gains and losses Gains and losses Total net revenue Total expenses Net income Year ended 31 December 2014 Customer Inter- segment Bermuda 141,528 3,164 (6,425 ) 60,692 198,959 6,908 205,867 145,696 60,171 Cayman 58,442 928 (557 ) 33,515 92,328 36 92,364 58,829 33,535 Guernsey 19,303 (1,242 ) (154 ) 26,814 44,721 4,432 49,153 39,580 9,573 Switzerland — — — 2,486 2,486 — 2,486 2,867 (381 ) The Bahamas (15 ) 166 — 5,492 5,643 — 5,643 5,548 95 United Kingdom 19,229 (3,016 ) (912 ) 7,717 23,018 4,312 27,330 22,164 5,166 Total before eliminations 238,487 — (8,048 ) 136,716 367,155 15,688 382,843 274,684 108,159 Inter-segment eliminations — — — (1,886 ) (1,886 ) — (1,886 ) (1,886 ) — Total 238,487 — (8,048 ) 134,830 365,269 15,688 380,957 272,798 108,159 |
Derivative instruments and risk
Derivative instruments and risk management | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative instruments and risk management | 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 minimise 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 investments hedges and derivatives not formally designated as hedges as described below. Fair value hedges consist of designated interest rate swaps and are used to minimise the Bank's exposure to changes in the fair value of assets and liabilities due to movements in interest rates. The Bank previously entered into interest rate swaps to convert its fixed-rate long-term loans to floating-rate loans, and convert fixed-rate deposits to floating-rate deposits. During the year ended 31 December 2011, the Bank cancelled its interest rate swaps designated as fair value hedges of loans receivable and therefore discontinued hedge accounting for these financial instruments. The fair value attributable to the hedged loans are accounted for prospectively and are being amortised to net income over the remaining life of each individual loan, which could extend to year 2029, using the effective interest method. Net investment hedges includes designated currency swaps and qualifying non-derivative instruments and are used to minimise 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 recognised in AOCL 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 minimise 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 AOCL (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 AOCL 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 AOCL 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 recognised into AOCL 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 foreign exchange risk of the Bank's exposure. Changes in the fair value of derivative instruments not formally designated as hedges are recognised 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 recognised 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. 31 December 2016 Derivative instrument Number of contracts Notional amounts Gross positive fair value Gross negative fair value Net fair value Risk management derivatives Net investment hedges Currency swaps 1 77,670 15,744 — 15,744 Derivatives not formally designated as hedging instruments Currency swaps 11 676,856 5,901 (3,013 ) 2,888 Subtotal risk management derivatives 754,526 21,645 (3,013 ) 18,632 Client services derivatives Spot and forward foreign exchange 106 2,039,141 15,410 (15,267 ) 143 Total derivative instruments 2,793,667 37,055 (18,280 ) 18,775 31 December 2015 Derivative instrument Number of contracts Notional amounts Gross positive fair value Gross negative fair value Net fair value Risk management derivatives Net investment hedges Currency swaps 1 77,670 4,122 — 4,122 Derivatives not formally designated as hedging instruments Currency swaps 4 77,881 273 (95 ) 178 Subtotal risk management derivatives 155,551 4,395 (95 ) 4,300 Client services derivatives Spot and forward foreign exchange 128 2,572,525 16,426 (15,961 ) 465 Total derivative instruments 2,728,076 20,821 (16,056 ) 4,765 In addition to the above, as at 31 December 2016 foreign denominated deposits of £34.5 million ( 31 December 2015 : £29.5 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 collaterals 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 value recognised Less: offset applied under master netting agreements Net fair value presented in the consolidated balance sheets Less: positions not offset in the consolidated balance sheets 31 December 2016 Gross fair value of derivatives Cash collateral received / paid Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 37,055 (6,959 ) 30,096 (6,811 ) (8,292 ) 14,993 Derivative liabilities Spot and forward foreign exchange and currency swaps 18,280 (6,959 ) 11,321 (6,811 ) — 4,510 Net positive fair value 18,775 Gross fair value recognised Less: offset applied under master netting agreements Net fair value presented in the consolidated balance sheets Less: positions not offset in the consolidated balance sheets 31 December 2015 Gross fair value of derivatives Cash collateral received / paid Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 20,821 (7,127 ) 13,694 (78 ) (269 ) 13,347 Derivative liabilities Spot and forward foreign exchange and currency swaps 16,056 (7,127 ) 8,929 (78 ) (185 ) 8,666 Net positive fair value 4,765 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. During 2016, management revised the following disclosures to segregate the gains and losses attributable to the specific types of derivatives. Year ended Derivative instrument Consolidated statements of operations line item 31 December 2016 31 December 2015 31 December 2014 Spot and forward foreign exchange Foreign exchange revenue (322 ) 110 (724 ) Currency swaps, not designated as hedge Foreign exchange revenue 2,710 1,643 7,916 Currency swaps (net investment hedge) Foreign exchange revenue (1,091 ) 2,331 742 Total net gains (losses) recognised in net income 1,297 4,084 7,934 Derivative instrument Consolidated statements of comprehensive income line item 31 December 2016 31 December 2015 31 December 2014 Currency swaps (net investment hedge) Net change in unrealised gains and losses on translation of net investment in foreign operations 12,713 4,254 6,799 Total net gains recognised in comprehensive income 12,713 4,254 6,799 |
Fair value measurements
Fair value measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | 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 the Group Asset and Liability Committee. Financial instruments in Level 1 include actively traded redeemable mutual funds. Financial instruments in Level 2 include corporate bonds, 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 31 December 2016 and the year ended 31 December 2015 . 31 December 2016 31 December 2015 Fair value Total carrying amount / fair value Fair value Total carrying amount / fair value Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Items that are recognised at fair value on a recurring basis: Financial assets Trading investments US government and federal agencies — — — — — 279,343 — 279,343 Non-US governments debt securities — — — — — 7,489 — 7,489 Asset-backed securities - Student loans — — — — — 28,285 — 28,285 Mutual funds 6,091 222 — 6,313 5,903 279 — 6,182 Total trading 6,091 222 — 6,313 5,903 315,396 — 321,299 Available-for-sale investments US government and federal agencies — 2,430,402 — 2,430,402 — 1,404,499 — 1,404,499 Non-US governments debt securities — 27,020 — 27,020 — 29,575 — 29,575 Corporate debt securities — 514,475 — 514,475 — 506,144 — 506,144 Asset-backed securities - Student loans — — 12,493 12,493 — — 12,161 12,161 Commercial mortgage-backed securities — 150,546 — 150,546 — 148,726 — 148,726 Residential mortgage-backed securities — 197,802 — 197,802 — 100,244 — 100,244 Total available-for-sale — 3,320,245 12,493 3,332,738 — 2,189,188 12,161 2,201,349 Other assets - Derivatives — 30,096 — 30,096 — 13,694 — 13,694 Financial liabilities Other liabilities - Derivatives — 11,321 — 11,321 — 8,929 — 8,929 Level 3 Reconciliation The Level 3 Asset-backed securities - Student loans is a federal family education loan programme guaranteed student loan security and is valued using a non-binding broker quote. The fair value provided by the broker is based on the last trading price of similar securities but as the market for the security is illiquid, a Level 2 classification is not supported. Significant increases (decreases) in any of the preceding inputs in isolation could result in a significantly different fair value measurement. Generally a change in assumption used for the probability of defaults is accompanied by a directionally similar change in the assumption used for the loss severity. 31 December 2016 31 December 2015 31 December 2014 Available- for-sale investments Available- for-sale investments Available- Carrying amount at beginning of year 12,161 12,226 45,304 Proceeds from sales, paydowns and maturities — — (36,439 ) Accretion recognised in net income — — 915 Realised and unrealised gains (losses) recognised in other comprehensive income 332 (65 ) (6,286 ) Realised and unrealised gains recognised in net income — — 8,732 Carrying amount at end of year 12,493 12,161 12,226 Items Other Than Those Recognised at Fair Value on a Recurring Basis: 31 December 2016 31 December 2015 Level Carrying amount Fair value Appreciation / (depreciation) Carrying amount Fair value Appreciation / (depreciation) Financial assets Cash due from banks Level 1 2,101,651 2,101,651 — 2,288,890 2,288,890 — Securities purchased under agreement to resell Level 2 148,813 148,813 — — — — Short-term investments Level 1 519,755 519,755 — 409,482 409,482 — Investments held-to-maturity Level 2 1,061,103 1,046,828 (14,275 ) 701,282 701,495 213 Loans, net of allowance for credit losses Level 2 3,570,478 3,566,812 (3,666 ) 4,000,155 3,996,443 (3,712 ) Other real estate owned¹ Level 2 14,199 14,199 — 11,206 11,206 — Financial liabilities Customer deposits Demand deposits Level 2 8,193,213 8,193,213 — 7,654,643 7,654,643 — Term deposits Level 2 1,816,640 1,817,564 (924 ) 1,513,025 1,514,126 (1,101 ) Deposits from banks Level 2 23,796 23,796 — 14,478 14,478 — Long-term debt Level 2 117,000 117,683 (683 ) 117,000 116,606 394 ¹ The current carrying value of OREO is adjusted to fair value only when there is devaluation below carrying value. Interest rate risk The following tables set out the assets, liabilities and shareholders' equity and off-balance sheet instruments 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. 31 December 2016 Earlier of contractual maturity or repricing date (in $ millions) Within 3 months 3 to 6 months 6 to 12 months 1 to 5 years After 5 years Non-interest bearing funds Total Assets Cash due from banks 1,991 — — — — 111 2,102 Securities purchased under agreement to resell 149 — — — — — 149 Short-term investments 135 385 — — — — 520 Investments 1,343 15 81 704 2,251 6 4,400 Loans 3,339 53 57 81 38 2 3,570 Other assets — — — — — 363 363 Total assets 6,957 453 138 785 2,289 482 11,104 Liabilities and shareholders' equity Shareholders’ equity — — — — — 711 711 Demand deposits 5,828 — — — — 2,385 8,213 Term deposits 1,492 166 92 71 — — 1,821 Other liabilities — — — — — 242 242 Long-term debt 92 — — 25 — — 117 Total liabilities and shareholders' equity 7,412 166 92 96 — 3,338 11,104 Interest rate sensitivity gap (455 ) 287 46 689 2,289 (2,856 ) — Cumulative interest rate sensitivity gap (455 ) (168 ) (122 ) 567 2,856 — — 31 December 2015 Earlier of contractual maturity or repricing date (in $ millions) Within 3 months 3 to 6 months 6 to 12 months 1 to 5 years After 5 years Non-interest bearing funds Total Assets Cash due from banks 2,178 — — — — 111 2,289 Short-term investments 117 291 1 — — — 409 Investments 871 79 19 620 1,629 6 3,224 Loans 3,735 84 53 67 47 14 4,000 Other assets — — — — — 354 354 Total assets 6,901 454 73 687 1,676 485 10,276 Liabilities and shareholders' equity Shareholders’ equity — — — — — 750 750 Demand deposits 5,783 — — — — 1,882 7,665 Term deposits 989 296 153 79 — — 1,517 Other liabilities — — — — — 227 227 Long-term debt 92 — — 25 — — 117 Total liabilities and shareholders' equity 6,864 296 153 104 — 2,859 10,276 Interest rate sensitivity gap 37 158 (80 ) 583 1,676 (2,374 ) — Cumulative interest rate sensitivity gap 37 195 115 698 2,374 — — |
Interest rate risk
Interest rate risk | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Interest rate risk | 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 the Group Asset and Liability Committee. Financial instruments in Level 1 include actively traded redeemable mutual funds. Financial instruments in Level 2 include corporate bonds, 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 31 December 2016 and the year ended 31 December 2015 . 31 December 2016 31 December 2015 Fair value Total carrying amount / fair value Fair value Total carrying amount / fair value Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Items that are recognised at fair value on a recurring basis: Financial assets Trading investments US government and federal agencies — — — — — 279,343 — 279,343 Non-US governments debt securities — — — — — 7,489 — 7,489 Asset-backed securities - Student loans — — — — — 28,285 — 28,285 Mutual funds 6,091 222 — 6,313 5,903 279 — 6,182 Total trading 6,091 222 — 6,313 5,903 315,396 — 321,299 Available-for-sale investments US government and federal agencies — 2,430,402 — 2,430,402 — 1,404,499 — 1,404,499 Non-US governments debt securities — 27,020 — 27,020 — 29,575 — 29,575 Corporate debt securities — 514,475 — 514,475 — 506,144 — 506,144 Asset-backed securities - Student loans — — 12,493 12,493 — — 12,161 12,161 Commercial mortgage-backed securities — 150,546 — 150,546 — 148,726 — 148,726 Residential mortgage-backed securities — 197,802 — 197,802 — 100,244 — 100,244 Total available-for-sale — 3,320,245 12,493 3,332,738 — 2,189,188 12,161 2,201,349 Other assets - Derivatives — 30,096 — 30,096 — 13,694 — 13,694 Financial liabilities Other liabilities - Derivatives — 11,321 — 11,321 — 8,929 — 8,929 Level 3 Reconciliation The Level 3 Asset-backed securities - Student loans is a federal family education loan programme guaranteed student loan security and is valued using a non-binding broker quote. The fair value provided by the broker is based on the last trading price of similar securities but as the market for the security is illiquid, a Level 2 classification is not supported. Significant increases (decreases) in any of the preceding inputs in isolation could result in a significantly different fair value measurement. Generally a change in assumption used for the probability of defaults is accompanied by a directionally similar change in the assumption used for the loss severity. 31 December 2016 31 December 2015 31 December 2014 Available- for-sale investments Available- for-sale investments Available- Carrying amount at beginning of year 12,161 12,226 45,304 Proceeds from sales, paydowns and maturities — — (36,439 ) Accretion recognised in net income — — 915 Realised and unrealised gains (losses) recognised in other comprehensive income 332 (65 ) (6,286 ) Realised and unrealised gains recognised in net income — — 8,732 Carrying amount at end of year 12,493 12,161 12,226 Items Other Than Those Recognised at Fair Value on a Recurring Basis: 31 December 2016 31 December 2015 Level Carrying amount Fair value Appreciation / (depreciation) Carrying amount Fair value Appreciation / (depreciation) Financial assets Cash due from banks Level 1 2,101,651 2,101,651 — 2,288,890 2,288,890 — Securities purchased under agreement to resell Level 2 148,813 148,813 — — — — Short-term investments Level 1 519,755 519,755 — 409,482 409,482 — Investments held-to-maturity Level 2 1,061,103 1,046,828 (14,275 ) 701,282 701,495 213 Loans, net of allowance for credit losses Level 2 3,570,478 3,566,812 (3,666 ) 4,000,155 3,996,443 (3,712 ) Other real estate owned¹ Level 2 14,199 14,199 — 11,206 11,206 — Financial liabilities Customer deposits Demand deposits Level 2 8,193,213 8,193,213 — 7,654,643 7,654,643 — Term deposits Level 2 1,816,640 1,817,564 (924 ) 1,513,025 1,514,126 (1,101 ) Deposits from banks Level 2 23,796 23,796 — 14,478 14,478 — Long-term debt Level 2 117,000 117,683 (683 ) 117,000 116,606 394 ¹ The current carrying value of OREO is adjusted to fair value only when there is devaluation below carrying value. Interest rate risk The following tables set out the assets, liabilities and shareholders' equity and off-balance sheet instruments 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. 31 December 2016 Earlier of contractual maturity or repricing date (in $ millions) Within 3 months 3 to 6 months 6 to 12 months 1 to 5 years After 5 years Non-interest bearing funds Total Assets Cash due from banks 1,991 — — — — 111 2,102 Securities purchased under agreement to resell 149 — — — — — 149 Short-term investments 135 385 — — — — 520 Investments 1,343 15 81 704 2,251 6 4,400 Loans 3,339 53 57 81 38 2 3,570 Other assets — — — — — 363 363 Total assets 6,957 453 138 785 2,289 482 11,104 Liabilities and shareholders' equity Shareholders’ equity — — — — — 711 711 Demand deposits 5,828 — — — — 2,385 8,213 Term deposits 1,492 166 92 71 — — 1,821 Other liabilities — — — — — 242 242 Long-term debt 92 — — 25 — — 117 Total liabilities and shareholders' equity 7,412 166 92 96 — 3,338 11,104 Interest rate sensitivity gap (455 ) 287 46 689 2,289 (2,856 ) — Cumulative interest rate sensitivity gap (455 ) (168 ) (122 ) 567 2,856 — — 31 December 2015 Earlier of contractual maturity or repricing date (in $ millions) Within 3 months 3 to 6 months 6 to 12 months 1 to 5 years After 5 years Non-interest bearing funds Total Assets Cash due from banks 2,178 — — — — 111 2,289 Short-term investments 117 291 1 — — — 409 Investments 871 79 19 620 1,629 6 3,224 Loans 3,735 84 53 67 47 14 4,000 Other assets — — — — — 354 354 Total assets 6,901 454 73 687 1,676 485 10,276 Liabilities and shareholders' equity Shareholders’ equity — — — — — 750 750 Demand deposits 5,783 — — — — 1,882 7,665 Term deposits 989 296 153 79 — — 1,517 Other liabilities — — — — — 227 227 Long-term debt 92 — — 25 — — 117 Total liabilities and shareholders' equity 6,864 296 153 104 — 2,859 10,276 Interest rate sensitivity gap 37 158 (80 ) 583 1,676 (2,374 ) — Cumulative interest rate sensitivity gap 37 195 115 698 2,374 — — |
Long-term debt
Long-term debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt On 28 May 2003, the Bank issued US $125 million of Subordinated Lower Tier II capital notes. The notes were issued at par and in two tranches, namely US $78 million in Series A notes due 2013 and US $47 million in Series B notes due 2018. The issuance was by way of private placement with US institutional investors. The notes are listed on the Bermuda Stock Exchange (“BSX”) in the specialist debt securities category. Part of the proceeds of the issue were used to repay the entire amount of the US $75 million outstanding subordinated notes redeemed in July 2003. The notes issued under Series A paid a fixed coupon of 3.94% until 27 May 2008 when it was redeemed in whole by the Bank. The Series B notes paid a fixed coupon of 5.15% until 27 May 2013 when they became redeemable in whole at the Bank’s option. The Series B notes were priced at a spread of 1.35% over the 10-year US Treasury yield. On 27 June 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 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 notes issued under Series A paid a fixed coupon of 4.81% until 2 July 2010 after which the coupon rate became floating and the principal became redeemable in whole at the Bank's option. The Series B notes pay a fixed coupon of 5.11% until 2 July 2015 when they also become redeemable in whole at the Bank’s option. The Series A notes were priced at a spread of 1.00% over the five-year US Treasury yield and 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 a portion of the outstanding 5.11% 2005 Series B Subordinated notes (“the Note”). The face value of the portion of the Note repurchased was $15 million and the purchase price paid for the repurchase was $13.875 million , which realised a gain of $1.125 million . During January 2014, the Bank fully redeemed the 2005 issuance Series A subordinated debt for its nominal value of $90 million . On 27 May 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 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 $78 million outstanding subordinated notes redeemed in May 2008. The notes issued under Series A paid a fixed coupon of 7.59% until 27 May 2013 when they became redeemable in whole at the option of the Bank. In May 2013, the Bank exercised its option to redeem the Series A note outstanding at face value. The Series B notes pay a fixed coupon of 8.44% until 27 May 2018 when they also become redeemable in whole at the Bank’s option. The Series B notes were priced at a spread of 4.51% over the 10-year US Treasury yield. No interest was capitalised during the years ended 31 December 2016 , 2015 and 2014. In the event the Bank would be in a position to redeem long-term debt, priority would go the redemption of the higher interest-bearing Series, subject to availability relative to the earliest date the Series is redeemable at the Bank's option. The following table presents the contractual maturity and interest payments for long-term debt issued by the Bank as at 31 December 2016 . The interest payments are calculated until contractual maturity using the current LIBOR rates. Interest payments until contractual maturity Long-term debt Earliest date redeemable at the Bank's option Contractual maturity date Interest rate until date redeemable Interest rate from earliest date redeemable to contractual maturity Principal Outstanding Within 1 year 1 to 5 years After 5 years Bermuda 2003 issuance - Series B 27 May 2013 27 May 2018 5.15 % 3 months US$ LIBOR + 2.000% 47,000 1,354 672 — 2005 issuance - Series B 2 July 2015 2 July 2020 5.11 % 3 months US$ LIBOR + 1.695% 45,000 1,158 3,184 — 2008 issuance - Series B 27 May 2018 27 May 2023 8.44 % 3 months US$ LIBOR + 4.929% 25,000 2,110 6,185 2,188 Total 117,000 4,622 10,041 2,188 |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per share | 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. Prior to their conversion into common shares on 31 March 2015, outstanding contingent value convertible preference ("CVCP") shares were classified as participating securities as they were entitled to dividends declared to common shareholders on a 1 :1 basis and were therefore included in the basic earnings per share calculation. During the year ended 31 December 2016 , options to purchase an average of 2.6 million (2015: 2.9 million , 2014 : 3.1 million ) common shares were outstanding. During the year ended 31 December 2016 , the average number of outstanding awards of unvested common shares was 0.8 million (2015: 0.9 million , 2014 : 1.0 million ). Only awards for which the sum of 1) the expense that will be recognised in the future (i.e. the unrecognised 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 unrecognised 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. A warrant, outstanding until the Bank repurchased it in December 2016, to purchase 0.43 million ( 31 December 2015 and 2014 : 0.43 million ) common shares issued to the Government of Bermuda in exchange for the Government's guarantee of the preference shares, with an exercise price per share of $34.72 ( 31 December 2015 : $34.72 , 31 December 2014: $34.89 ) was not included in the computation of earnings per share for the years ended 31 December 2016 , 2015 and 2014 because the exercise price was greater than the average market price of the Bank‘s common shares. Year Ended 31 December 2016 31 December 2015 31 December 2014 Net income 115,942 77,739 108,159 Less: Preference dividends declared and guarantee fee (15,655 ) (16,455 ) (16,546 ) Less: Premium on preference share buyback and redemption (41,913 ) (28 ) (96 ) Net income attributable to participating shares 58,374 61,256 91,517 Less: Dividend paid on common shares (19,346 ) (24,708 ) (27,088 ) Less: Dividend paid on contingent value convertible preference shares — (138 ) (352 ) Undistributed earnings attributable for participating shares 39,028 36,410 64,077 Basic Earnings Per Share Common shares Common shares CVCP Common shares CVCP Weighted average number of shares issued 49,128 49,842 159 54,994 699 Weighted average number of common shares held as treasury stock (506 ) (1,079 ) N/A (934 ) N/A Weighted average number of participating shares (in thousands) 48,622 48,763 159 54,060 699 Allocation of undistributed earnings - Basic 39,028 36,292 118 63,259 818 Distributed earnings per share 0.40 0.50 0.20 0.50 0.50 Undistributed earnings per share 0.80 0.75 0.19 1.17 1.17 Basic Earnings Per Share 1.20 1.25 0.39 1.67 1.67 Diluted Earnings Per Share Common shares Common shares CVCP Common shares CVCP Adjusted weighted average number of participating shares outstanding 48,622 48,763 159 54,060 699 Net dilution impact related to options to purchase common shares 607 472 N/A 393 N/A Net dilution impact related to awards of unvested common shares 382 609 N/A 496 N/A Weighted average number of diluted participating shares (in thousands) 49,611 49,844 159 54,949 699 Allocation of undistributed earnings - Diluted 39,028 36,294 116 63,272 805 Distributed earnings per share 0.40 0.50 0.20 0.50 0.50 Undistributed earnings per share 0.78 0.73 0.19 1.15 1.15 Diluted Earnings Per Share 1.18 1.23 0.39 1.65 1.65 |
Share-based payments
Share-based payments | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based payments | 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 respectively 5.0 million and 7.5 million shares. Stock Option Awards 1997 Stock Option Plan Prior to the capital raise on 2 March 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 Plan Under the 2010 Plan, 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 Plan 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 is granted in the form of time vested options and vests 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 is granted in the form of performance options and vests (partially or fully) on a “valuation event” date (date any of the 2 March 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 realises a predetermined multiple of invested capital (“MOIC”)). On 21 September 2016, it was determined that a valuation event occurred during which a new investor realised a MOIC of more than 200% of the original invested capital of $12.09 per share and accordingly, all outstanding unvested performance options vested. Accordingly, as at 31 December 2016 the grant date fair value not yet recognised in expenses of outstanding performance options is nil ( 31 December 2015 : $ 8.7 million ). Weighted average fair value of stock options granted Time vested options Performance Year ended 31 December 2012 (most recent year during which options were granted) $ 4.20 $ 4.40 Year ended 31 December 2011 $ 4.10 $ 4.30 The weighted average fair value of stock options granted in the years ended 31 December 2012 and 2011 was calculated using the Black-Scholes-Merton option-pricing model for the time vested options and a lattice-based binomial option-pricing model for the performance options. Changes in Outstanding Stock Options Number of shares transferable upon exercise (thousands) Weighted average exercise price ($) Weighted average remaining life (years) Aggregate intrinsic value ($ thousands) Year ended 31 December 2016 1997 Stock Option Plan 2010 Stock Option Plan Total 1997 Stock Option Plan 2010 Stock Option Plan 1997 Stock Option Plan 2010 Stock Option Plan Outstanding at beginning of year 218 2,608 2,826 135.19 11.60 Exercised — (625 ) (625 ) — 11.68 8,938 Forfeitures and cancellations (102 ) (5 ) (107 ) 138.79 11.50 Resignations, retirements, redundancies — (28 ) (28 ) — 11.50 Outstanding at end of year 116 1,950 2,066 132.13 11.57 1.18 3.42 38,489 Vested and exercisable at end of year 116 1,950 2,066 132.13 11.57 1.18 3.42 Number of shares transferable upon exercise (thousands) Weighted average exercise price ($) Weighted average remaining life (years) Aggregate intrinsic value ($ thousands) Year ended 31 December 2015 1997 Stock Option Plan 2010 Stock Option Plan Total 1997 Stock Option Plan 2010 Stock Option Plan 1997 Stock Option Plan 2010 Stock Option Plan Outstanding at beginning of year 352 2,678 3,030 130.70 11.70 Exercised — (55 ) (55 ) — 11.50 393 Forfeitures and cancellations (134 ) (2 ) (136 ) 123.30 11.50 Resignations, retirements, redundancies — (13 ) (13 ) — 11.50 Outstanding at end of year 218 2,608 2,826 135.19 11.60 1.78 4.67 20,594 Vested and exercisable at end of year 218 1,242 1,460 135.19 11.60 1.78 4.94 Number of shares transferable upon exercise (thousands) Weighted average exercise price ($) Weighted average remaining life (years) Aggregate intrinsic value ($ thousands) Year ended 31 December 2014 1997 Stock Option Plan 2010 Stock Option Plan Total 1997 Stock Option Plan 2010 Stock Option Plan 1997 Stock Option Plan 2010 Stock Option Plan Outstanding at beginning of year 399 2,781 3,180 128.30 11.70 Exercised — (103 ) (103 ) — 11.60 874 Forfeitures and cancellations (44 ) — (44 ) 108.60 11.60 Expiration at end of plan life (3 ) — (3 ) 137.60 — Outstanding at end of year 352 2,678 3,030 130.70 11.70 2.38 5.66 22,233 Vested and exercisable at end of year 352 868 1,220 130.70 11.70 2.38 5.65 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. Employee Deferred Incentive Plan (“EDIP”) Under the Bank’s EDIP Plan, shares were 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 2012 and 2011 Under the Bank’s 2012 and 2011 ELTIP, shares were awarded to Bank employees and executive management, based on predetermined vesting conditions. Two types of vesting conditions upon which the shares were awarded comprise the ELTIP: 1) 50% of each share award was granted in the form of time vested shares, generally vesting equally over a three -year period from the effective grant date; and 2) 50% of each share award was granted in the form of performance shares, generally vesting upon the achievement of certain performance targets in the three -year period from the effective grant date. Executive Long-Term Incentive Share Plan (“ELTIP”) - Years 2016, 2015, 2014 and 2013 The 2016 ELTIP was approved on 18 February 2016. Under the Bank’s 2016, 2015, 2014 and 2013 ELTIP, performance shares were awarded to executive management. These shares will generally vest upon the achievement of certain performance targets in 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 31 December 2016 31 December 2015 31 December 2014 EDIP ELTIP EDIP ELTIP EDIP ELTIP Outstanding at beginning of year 226 606 265 706 218 644 Granted 115 360 175 253 150 255 Vested (fair value in 2016: $7.0 million, 2015: $10.6 million, 2014: $5.5 million) (118 ) (302 ) (207 ) (322 ) (103 ) (185 ) Resignations, retirements, redundancies (8 ) (24 ) (7 ) (31 ) — (8 ) Outstanding at end of year 215 640 226 606 265 706 Share-based Compensation Cost Recognised in Net Income Year ended 31 December 2016 31 December 2015 31 December 2014 Stock option plans EDIP and ELTIP Total Stock option plans EDIP and ELTIP Total Stock option plans EDIP and ELTIP Total Cost recognised in net income 8,697 5,375 14,072 521 7,182 7,703 1,915 6,954 8,869 Unrecognised Share-based Compensation Cost 31 December 2016 31 December 2015 2010 Stock Option Plan Time vesting options — 8 Performance vesting options — 8,689 EDIP 2,040 2,098 ELTIP Time vesting shares 2,988 21 Performance vesting shares 3,802 3,432 Total unrecognised expense 8,830 14,248 |
Share buy-back plans
Share buy-back plans | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Share buy-back plans | Share buy-back plans The Bank initially introduced two share buy-back programmes on 1 May 2012 as a means to improve shareholder liquidity and facilitate growth in share value. Each programme was approved by the Board of Directors for a period of 12 months, in accordance with the regulations of the BSX. The BSX must be advised monthly of shares purchased pursuant to each programme. From time to time the Bank's associates, insiders and insiders' associates as defined by the BSX regulations may sell shares which may result in such shares being repurchased pursuant to each programme, provided no more than any such person's pro-rata share of the listed securities is repurchased. Pursuant to the BSX regulations, all repurchases made by any issuer pursuant to a securities repurchase programme must be made: (1) in the open market and not by private agreement; and (2) for a price not higher than the last independent trade for a round lot of the relevant class of securities. See Note 24: Capital structure, in which certain large one-time share buy-back transactions are described. Common Share Buy-Back Programme Effective 1 April 2014, the Board approved, the 2014 common share buy-back programme authorising the purchase for treasury of up to 1.5 million common shares. On 26 February 2015, the Board approved, with effect from 1 April 2015, the 2015 common share buy-back programme, authorising the purchase for treasury of up to 0.8 million common shares. On 19 February 2016, the Board approved, with effect from 1 April 2016, the 2016 common share buy-back programme, authorising the purchase for treasury of up to 0.8 million common shares. Year ended 31 December Common share buy-backs 2016 2015 2014 2013 2012 Total Acquired number of shares (to the nearest 1) 97,053 250,371 856,734 403,848 726,005 2,334,011 Average cost per common share 16.36 19.42 19.86 13.89 12.40 16.31 Total cost (in US dollars) 1,588,189 4,862,248 17,018,412 5,610,907 8,999,061 38,078,817 Preference Share Buy-Back Programme On 28 April 2014, the Board approved the 2014 preference share buy-back programme, authorising the purchase for cancellation of up to 26,000 preference shares. On 26 February 2015, the Board approved, with effect from 5 May 2015, the 2015 preference share buy-back programme, authorising the purchase for cancellation of up to 5,000 preference shares. Year ended 31 December Preference share buy-backs 2016 2015 2014 2013 2012 Total Acquired number of shares (to the nearest 1) — 183 560 11,972 4,422 17,137 Average cost per preference share — 1,151.55 1,172.26 1,230.26 1,218.40 1,224.46 Total cost (in US dollars) — 210,734 656,465 14,728,624 5,387,777 20,983,600 |
Accumulated other comprehensive
Accumulated other comprehensive loss | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Accumulated other comprehensive loss | Accumulated other comprehensive loss Unrealised (losses) on translation of net investment in foreign operations HTM investments Unrealised gains (losses) on AFS investments Employee benefit plans 31 December 2016 Pension Post-retirement healthcare Subtotal - employee benefits plans Total AOCL Balance at beginning of year (13,645 ) (2,350 ) (57 ) (46,331 ) (28,114 ) (74,445 ) (90,497 ) Transfer of AFS investments to HTM investments — 1,442 (1,442 ) — — — — Other comprehensive income (loss), net of taxes (6,507 ) (71 ) (21,181 ) (16,901 ) (9,523 ) (26,424 ) (54,183 ) Balance at end of year (20,152 ) (979 ) (22,680 ) (63,232 ) (37,637 ) (100,869 ) (144,680 ) Unrealised (losses) on translation of net investment in foreign operations HTM investments Unrealised gains (losses) on AFS investments Employee benefit plans 31 December 2015 Pension Post- retirement healthcare Subtotal - employee benefits plans Total AOCL Balance at beginning of year (10,506 ) — 9,021 (53,169 ) (22,866 ) (76,035 ) (77,520 ) Transfer of AFS investments to HTM investments — (2,715 ) 2,715 — — — — Other comprehensive income (loss), net of taxes (3,139 ) 365 (11,793 ) 6,838 (5,248 ) 1,590 (12,977 ) Balance at end of year (13,645 ) (2,350 ) (57 ) (46,331 ) (28,114 ) (74,445 ) (90,497 ) Unrealised (losses) on translation of net investment in foreign operations HTM investments Unrealised gains (losses) on AFS investments Employee benefit plans 31 December 2014 Pension Post- retirement healthcare Subtotal - employee benefits plans Total AOCL Balance at beginning of year (7,632 ) — (31,064 ) (35,616 ) 6,724 (28,892 ) (67,588 ) Other comprehensive income (loss), net of taxes (2,874 ) — 40,085 (17,553 ) (29,590 ) (47,143 ) (9,932 ) Balance at end of year (10,506 ) — 9,021 (53,169 ) (22,866 ) (76,035 ) (77,520 ) Net Change of AOCL Components Year ended Line item in the consolidated statements of operations, if any 31 December 2016 31 December 2015 31 December 2014 Net unrealised gains (losses) on translation of net investment in foreign operations adjustments Foreign currency translation adjustments N/A (25,691 ) (9,723 ) (10,574 ) Gains (loss) on net investment hedge N/A 19,184 6,584 7,700 Net change (6,507 ) (3,139 ) (2,874 ) Held-to-maturity investment adjustments Net unamortised gains (losses) transferred from AFS N/A 1,442 (2,715 ) — Amortisation of net gains (losses) to net income Interest income on investments (71 ) 378 — Foreign currency translation adjustments of related balances N/A — (13 ) — Net change 1,371 (2,350 ) — Available-for-sale investment adjustments Gross unrealised gains (losses) N/A (19,635 ) (16,337 ) 48,703 Net unrealised (gains) losses transferred to HTM N/A (1,442 ) 2,715 — Transfer of realised (gains) losses to net income Net realised gains (losses) on AFS investments (1,546 ) 4,407 (8,680 ) Foreign currency translation adjustments of related balances N/A — 137 62 Net change (22,623 ) (9,078 ) 40,085 Employee benefit plans adjustments Defined benefit pension plan Net actuarial gain (loss) N/A (19,956 ) 5,096 (18,947 ) Amortisation of actuarial losses Salaries and other employee benefits 1,702 1,703 1,058 Change in deferred taxes N/A 1,315 (391 ) 83 Foreign currency translation adjustments of related balances N/A 38 430 253 Net change (16,901 ) 6,838 (17,553 ) Post-retirement healthcare plan Net actuarial (loss) N/A (5,911 ) (2,252 ) (15,892 ) Prior service cost N/A — — (7,901 ) Amortisation of net actuarial losses Salaries and other employee benefits 2,731 3,347 922 Amortisation of prior service credit Salaries and other employee benefits (6,343 ) (6,343 ) (6,719 ) Net change (9,523 ) (5,248 ) (29,590 ) Other comprehensive income (loss), net of taxes (54,183 ) (12,977 ) (9,932 ) |
Capital structure
Capital structure | 12 Months Ended |
Dec. 31, 2016 | |
Banking and Thrift [Abstract] | |
Capital structure | Capital structure Authorised Capital On 16 September 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. On 25 July 2016, the Bank’s board of directors approved a consolidation of the existing common shares on the basis of a 10 to 1 ratio, subject to shareholder approval. As a result of this consolidation, effective 6 September 2016 upon shareholder approval, every 10 common shares of par value BM $0.01 were consolidated into 1 common share of par value BM $0.10 (the “Share Consolidation”). In addition, as of 6 September 2016, the par value of each issued common share and each authorised but unissued common share was reduced from BM $0.10 to BM $0.01 and the authorised share capital of the Bank was correspondingly reduced from 2,000,000,000 common shares of par value BM $0.10 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 to 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, without any payment by the Bank to the holders of the voting ordinary shares in respect thereof (the “Reduction in Par Value” and together with the Share Consolidation, the “Reverse Share Split”). Immediately following the Reduction in Par Value, the Bank repurchased any and all fractions of common shares issued and outstanding following the Reduction in Par Value, from the holders thereof. All share, share‑based payments and dividend information presented in these consolidated financial statements and accompanying footnotes has been retroactively adjusted to reflect the decreased number of shares resulting from this action. Prior to the Reverse Share Split, the Bank’s total authorised share capital consisted of (i) 20 billion common shares of par value BM $0.01 , (ii) 6 billion non‑voting ordinary shares of par value BM $0.01 ; (iii) 110,200,001 preference shares of par value US $0.01 and (iv) 50 million preference shares of par value £0.01 . On 30 April 2015, Butterfield repurchased and cancelled 8,000,000 shares held by CIBC for $15.00 per share, for a total of $120 million . The remaining CIBC shareholding in Butterfield (representing 2,343,423 shares) was taken up by Carlyle Global Financial Services, L.P. at $15.00 per share and subsequently sold to other investors. On 13 August 2015, Butterfield repurchased and cancelled 400,000 shares held by two shareholders for $14.90 per share, for a total of $5.96 million . Preference Shares On 22 June 2009, the Bank issued 200,000 Government guaranteed, 8.00% non-cumulative perpetual limited voting preference shares (the “preference shares”). The issuance price was US $1,000 per share. The preference share buy-backs are disclosed in Note 22: Share Buy-Back Plans. The preference share principal and dividend payments are guaranteed by the Government of Bermuda. At any time after the expiry of the guarantee offered by the Government of Bermuda, and subject to the approval of the BMA, the Bank would have been able to redeem, in whole or in part, any preference shares at the time issued and outstanding, at a redemption price equal to the liquidation preference plus any unpaid dividends at the time. Holders of preference shares were entitled to receive, on each preference share only when, as and if declared by the Board of Directors, non-cumulative cash dividends at a rate per annum equal to 8.00% on the liquidation preference of US $1,000 per preference share payable quarterly in arrears. In exchange for the Government's commitment, the Bank issued to the Government a warrant that, upon issuance, allowed the purchase of 427,960 common shares of the Bank at an exercise price of $70.10 per share. The warrant which, after adjustments in accordance with anti-dilution terms allowed for the purchase of 432,028 shares with an exercise price of $34.72 per share was repurchased and cancelled by the Bank in December 2016. On 15 December 2016, the Bank effected a mandatory redemption of its preference shares by paying a make-whole redemption payment (the "make-whole redemption price") of USD $1,180.00 per preference share to preference shareholders of record as at 1 December 2016. The make-whole redemption price comprises the sum of the dividend per preference share for the current quarter, the $1,000 liquidation preference per preference share, discounted for present value, and the present value of future dividend payments through 22 June 2019. Following the payment of the make-whole redemption price, all issued and outstanding preference shares were redeemed, cancelled and reverted to authorised but unissued preference shares of the Bank. The preference shares were also delisted from both the BSX and the Luxembourg Stock Exchange. On 11 May 2010, the Bank’s Rights offering was over subscribed with the maximum allowable number of rights of 10,743,801 exercised and subsequently converted on the ratio of 0.07692 CVCP shares for each right unit exercised amounting to 826,415 CVCP shares issued. The CVCP shares have specific rights and conditions attached, which are explained in detail in the prospectus of the rights offering. On 31 March 2015, all remaining CVCP shares were converted to common shares at a ratio of 1 :1. Dividends Declared During the year ended 31 December 2016 , the Bank paid cash dividends of $0.40 ( 31 December 2015 : $0.50 , 31 December 2014: $0.50 ) for each common share and CVCP share on record (CVCP shares were all converted to common shares on 31 March 2015) as of the related record dates. Subsequent to year-end, the Bank declared a fourth interim dividend of $0.32 per common share to be paid to shareholders of record on 13 March 2017. During the years ended 31 December 2016 , 2015 , and 2014, the Bank declared the full 8.00% cash dividends on preference shares in each quarter. 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 prior written approval 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 BMA approval for all dividends declared during the periods under review. Regulatory Capital Effective 1 January 2016, the Bank’s regulatory capital is determined in accordance with current Basel III guidelines as issued by the BMA. Basel III adopts CET1 as the predominant form of regulatory capital with the CET1 ratio as a new metric. Basel III also adopts the new Leverage Ratio regime, which is calculated by dividing Tier 1 capital by an exposure measure. The exposure measure consists of total assets (excluding items deducted from Tier 1 capital) and certain off-balance sheet items converted into credit exposure equivalents as well as adjustments for derivatives to reflect credit risk and other risks. Prior to 1 January 2016, the Bank’s regulatory capital was determined in accordance with Basel II guidelines as issued by the BMA. The Bank is fully compliant with all regulatory capital requirements and maintains capital ratios in excess of regulatory minimums as at 31 December 2016 and 31 December 2015 . The following table sets forth the Bank's capital adequacy in accordance with the Basel III framework as at 31 December 2016 and the Basel II framework as at 31 December 2015 : 31 December 2016 (Basel III) 31 December 2015 (Basel II) Actual Regulatory minimum Actual Regulatory minimum Capital Tier 1 capital 666,847 N/A 699,278 N/A Common Equity Tier 1 666,847 N/A N/A N/A Tier 2 capital 102,709 N/A 119,164 N/A Total capital 769,556 N/A 818,442 N/A Risk Weighted Assets 4,365,440 N/A 4,304,074 N/A Capital Ratios (%) Common Equity Tier 1 15.3 % 8.1 % N/A N/A Total Tier 1 15.3 % 9.6 % 16.2 % 4.0 % Total Capital 17.6 % 15.3 % 19.0 % 14.5 % Leverage ratio 5.8 % 5.0 % N/A N/A |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income taxes | 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 the United Kingdom, Guernsey, and Switzerland are subject to the tax laws of those jurisdictions. For the years ended 31 December 2016 , 2015 , and 2014, the Bank did not record any unrecognised tax benefits or expenses and has no uncertain tax positions as at 31 December 2016 , 2015 , and 2014. The Bank records income taxes based on the enacted tax laws and rates applicable in the relevant jurisdictions for the years ended 31 December 2016 , 2015 , and 2014. For the years ended 31 December 2016 , 2015 , and 2014, the Bank did not incur any interest or pay any penalties. Year ended Income taxes in consolidated statements of operations 31 December 2016 31 December 2015 31 December 2014 Current tax expense (benefit) 727 819 (169 ) Deferred tax expense — 457 — Total tax expense (benefit) 727 1,276 (169 ) Reconciliation between the Effective Income Tax Rate and the Statutory Income Tax Rate Year ended 31 December 2016 31 December 2015 31 December 2014 $ % $ % $ % Income tax expense at Bermuda corporation tax rate of 0% — — % — — % — — % Income tax expense in international offices taxed at different rates (2,104 ) (2 )% (904 ) (1 )% 1,501 2 % Change in valuation allowance 87 — % 466 1 % (1,429 ) (2 )% Prior year tax adjustments (71 ) — % 80 — % (956 ) (1 )% Tax loss carried forward — — % — — % — — % Other - net 2,815 3 % 1,634 2 % 715 1 % Income tax expense (benefit) at effective tax rate 727 1 % 1,276 2 % (169 ) — % Deferred income taxes 31 December 2016 31 December 2015 Deferred income tax asset Tax loss carried forward 5,770 2,540 Pension liability 1,594 365 Fixed assets 11 741 Allowance for compensated absence 8 9 Onerous leases 9 11 Deferred income tax asset before valuation allowance 7,392 3,666 Less: valuation allowance (5,638 ) (3,105 ) Net deferred income tax assets 1,754 561 Deferred income tax liability Other — — Net deferred income tax asset 1,754 561 Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred in the UK segment over the years ended 31 December 2016 and 2015 . Such objective evidence limits the ability to consider other subjective evidence such as projections for future growth. On the basis of this evaluation, as of 31 December 2016 , a valuation allowance of $5.6 million ( 31 December 2015 : $3.1 million ) has been recognised to record only the portion of the deferred tax asset that more likely than not will be realised. The amount of the deferred tax asset considered realisable, however, could be adjusted if estimates of future taxable income during the carry-forward period are reduced or increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth. This valuation allowance relates specifically to our UK segment. The Bank has net taxable loss carry forwards related to the Bank’s international operations of approximately $28.2 million ( 31 December 2015 : $13.6 million ), which have an indefinite life. |
Business combinations
Business combinations | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business combinations | Business combinations Bermuda Trust Company Limited and the Private Banking Investment Management of Operations of HSBC Bank Bermuda Limited Acquisition On 29 April 2016, the Bank and two of its subsidiaries, Butterfield Trust (Bermuda) Limited ("BTBL") and Butterfield Asset Management Limited ("BAM"), acquired for a total purchase price of $22.0 million : 1) all outstanding shares of Bermuda Trust Company Limited ("BTCL", a wholly–owned subsidiary of HSBC Bank Bermuda Limited ("HSBCBB")), 2) certain assets of the asset management services operations of HSBCBB and 3) certain assets of the private banking services operations of HSBCBB. The acquisition is in line with the Bank's growth strategy of developing core businesses in existing markets and was undertaken to add scale to the Bank capacity in these market segments where the Bank had already a significant presence and a long history. The acquisition date fair value of consideration transferred amounted to $22.0 million comprising cash settlement of $7.0 million paid on 29 April 2016, a second payment of $2.1 million made on 6 May 2016, and contingent considerations payable in the second half of 2016 and evaluated at $12.4 million . The contingent considerations were dependent on the trust and asset management clients retention by Butterfield before the end of the contingency period in September 2016 and the amount paid was $12.4 million . The fair value of the net assets acquired and allocation of purchase is summarised as follows: As at 29 April 2016 Total consideration transferred 21,778 Assets acquired Intangible assets 21,443 Other assets 3,345 Total assets acquired 24,788 Liabilities acquired 3,010 Excess purchase price (goodwill) — The purchase price paid by the Bank was for BTCL's net tangible value as well as intangible assets of $21.4 million in the form of customer relationships in all three segments with an estimated finite useful life of 15 years . The Bank incurred transaction expenses related to this acquisition in the amount of $4.3 million , of which $3.3 million were expensed during the year ended 31 December 2016 (including $0.7 million of legal and professional fees) and $1.0 million were expensed during the year ended 31 December 2015 (including $1.0 million of legal and professional fees). For the year ended 31 December 2016 , the amount of revenues and earnings relating to the acquired HSBC Bermuda operations that are not inextricably merged into the Bank’s operations are $9.8 million and $5.0 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 operations from HSBC Bermuda, assuming the transaction had been effected on 1 January 2014. 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 have been prepared based on the actual results realised by the Bank from operating the acquired activities, when such activities where not yet inextricably merged into the Bank's operations. Year ended Unaudited pro forma financial information 31 December 2016 31 December 2015 31 December 2014 Total net revenue 407,453 378,915 395,612 Total non-interest operating expense 289,019 293,700 279,977 Pro forma net income post business combination 118,434 85,215 115,635 |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions Financing Transactions As of 17 May 2005, the Bank established a programme to offer loans with preferential rates to eligible Bank employees, subject to certain conditions set by the Bank and provided that such employees meet certain credit criteria. Loan payments are serviced by automatically debiting the employee’s chequing or savings account with the Bank. Applications for loans are handled according to the same policies as those for the Bank's retail banking clients. The Bank's ability to offer preferential rates on loans depends upon a number of factors, including market conditions, regulations and the Bank's overall profitability. The Bank has the right to change its employee loan policy at any time after notifying participants. The non-executive employee loans outstanding at 31 December 2016 amount to $123.2 million ( 31 December 2015 : $204.3 million ) resulting in an interest rate benefit to non-executive employees of $3.7 million (31 December 2015: $5.3 million , 31 December 2014: $6.2 million). Certain directors and executives of the Bank, companies in which they are principal owners, and trusts in which they are involved, have loans 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 to preferential rates as described in the preceding paragraph. As at 31 December 2016 , related party director and executive loan balances were $12.1 million ( 31 December 2015 : $63.9 million ). During the year ended 31 December 2016 , new issuance of loans and change in directorships to directors and executives were $27.6 million and repayments and change in directorships were $25.1 million (year ended 31 December 2015 : $17.5 and $17.4 million respectively, year ended 31 December 2014: $18.4 and $25.2 million respectively). Also, during the year ended 31 December 2016 , a director resigned from the Board resulting in $54.3 million in loans being reclassified out of related party loans. All of these loans were considered performing loans as at 31 December 2016 and 31 December 2015 . On 27 June 2013, the Bank executed a $95 million loan agreement with an investment fund managed by a significant shareholder which provides for maturity on 30 June 2017. This loan was made in the ordinary course of business on normal commercial terms. At 31 December 2016 and 31 December 2015 , nil was outstanding under this agreement. For the year ended 31 December 2016 , nil ( 31 December 2015 : $1.0 million , 31 December 2014: $2.7 million ) of interest income has been recognised in the consolidated statements of operations in relation with this agreement. Capital Transaction Investments partnerships associated with The Carlyle Group hold approximately 14% of the Bank's equity voting power along with the right to designate two persons for nomination for election by the shareholders as members of the Bank’s Board of Directors. Prior to 30 April 2015, Canadian Imperial Bank of Commerce ("CIBC”) held approximately 19% of the Bank's equity voting power. On 30 April 2015, the Bank completed the transaction with CIBC to repurchase for cancellation approximately 77% of CIBC's shares for $15.00 per share, or a total of $120 million , representing 8,000,000 common shares. The remaining 23% of CIBC's shareholding in Butterfield (representing 2.3 million shares) were acquired by Carlyle Global Financial Services, L.P. and subsequently sold to other investors. Financial Transactions With Related Parties The Bank holds seed investments in several Butterfield mutual funds, which are managed by a wholly-owned subsidiary of the Bank. As at 31 December 2016 , these investments have a fair value of $5.0 million with an unrealized gain of $1.1 million ( 31 December 2015 : $5.0 million and $0.9 million respectively) and were included in trading investments at their fair value. During the year ended 31 December 2016 , the Bank earned $5.7 million ( 31 December 2015 : $6.4 million , 31 December 2014: $4.3 million ) in asset management revenue from funds managed by a wholly-owned subsidiary of the Bank. |
Condensed financial statements
Condensed financial statements of the parent company only | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed financial statements of the parent company only | 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 31 December 2016 31 December 2015 Assets Cash and demand deposits with banks - Non-interest-bearing 28,032 28,146 Demand deposits with banks - Interest-bearing 136,373 125,826 Cash equivalents - Interest-bearing 1,042,365 691,438 Cash due from banks 1,206,770 845,410 Securities purchased under agreement to resell 148,813 — Short-term investments 447,748 112,219 Investment in securities Trading 6,313 6,167 Available-for-sale 2,170,155 1,227,953 Held-to-maturity (fair value: $498,367 (2015: $421,588)) 507,239 422,000 Total investment in securities 2,683,707 1,656,120 Net assets of subsidiaries - Banks 327,149 355,062 Net assets of subsidiaries - Non-banks 11,610 7,173 Loans to third parties, net of allowance for credit losses 1,909,093 2,096,625 Loans to subsidiaries - Banks 54,207 71,331 Loans to subsidiaries - Non-banks 55,120 60,292 Accrued interest 15,035 13,872 Other assets, including premises, equipment and computer software, equity method investments and other real estate owned 217,795 196,636 Total assets 7,077,047 5,414,740 Liabilities Customer deposits Non-interest bearing 1,733,684 1,348,877 Interest bearing 4,213,417 2,922,830 Total customer deposits 5,947,101 4,271,707 Bank deposits 119,331 102,574 Total deposits 6,066,432 4,374,281 Securities sold under agreement to repurchase — — Employee benefit plans 133,834 122,135 Accrued interest 1,690 1,530 Preference share dividends payable — 654 Other liabilities 47,348 48,786 Total other liabilities 182,872 173,105 Long-term debt 117,000 117,000 Total liabilities 6,366,304 4,664,386 Total shareholders’ equity 710,743 750,354 Total liabilities and shareholders’ equity 7,077,047 5,414,740 The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Operations (In thousands of US dollars) Year ended 31 December 2016 31 December 2015 31 December 2014 Non-interest income Banking 21,984 19,193 18,208 Foreign exchange revenue 11,174 11,789 12,581 Other non-interest income 3,516 4,671 4,592 Dividends from subsidiaries - Banks 40,000 36,226 43,343 Dividends from subsidiaries - Non-banks 6,600 — 28,656 Total non-interest income 83,274 71,879 107,380 Interest income Loans 123,370 117,124 119,846 Investments 44,745 39,987 38,510 Deposits with banks 6,293 1,600 1,398 Total interest income 174,408 158,711 159,754 Interest expense Deposits 6,882 7,947 8,541 Long-term debt 4,500 4,861 5,628 Securities sold under repurchase agreements 118 8 82 Total interest expense 11,500 12,816 14,251 Net interest income before provision for credit losses 162,908 145,895 145,503 Provision for credit losses (7,263 ) (3,624 ) (6,425 ) Net interest income after provision for credit losses 155,645 142,271 139,078 Net trading gains 330 80 257 Net realised gains (losses) on available-for-sale investments 1,222 (2,841 ) 8,714 Net losses on other real estate owned (287 ) (543 ) (775 ) Impairment of fixed assets — — (1,050 ) Net other gains (losses) (325 ) 19 (10 ) Total other gains (losses) 940 (3,285 ) 7,136 Total net revenue 239,859 210,865 253,594 Non-interest expense Salaries and other employee benefits 69,770 60,132 55,276 Technology and communications 34,033 34,879 33,248 Property 5,983 5,929 6,297 Professional and outside services 9,379 19,043 14,140 Indirect taxes 10,562 8,577 7,814 Amortisation of intangible assets 113 — — Marketing 2,138 1,730 1,309 Restructuring costs 117 — — Other expenses 5,373 8,017 4,846 Total non-interest expense 137,468 138,307 122,930 Net income before equity in undistributed earnings of subsidiaries 102,391 72,558 130,664 Equity in undistributed earnings of subsidiaries 13,551 5,181 (22,505 ) Net income 115,942 77,739 108,159 Other comprehensive income, net of tax (54,183 ) (12,977 ) (9,932 ) Total comprehensive income 61,759 64,762 98,227 The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Cash Flows (In thousands of US dollars) Year ended 31 December 2016 31 December 2015 31 December 2014 Cash flows from operating activities Net income 115,942 77,739 108,159 Adjustments to reconcile net income to operating cash flows Depreciation and amortisation 23,687 22,267 19,836 (Increase) in carrying value of equity method investments (949 ) (1,056 ) (1,103 ) Share-based payments and settlements 14,423 7,913 9,049 Equity in undistributed earnings of subsidiaries (13,551 ) (5,181 ) 22,505 Net realised / unrealised losses on other real estate owned 287 543 775 Net realised (gains) losses on available-for-sale investments (1,222 ) 2,841 (8,714 ) Provision for credit losses 7,263 3,624 6,425 Changes in operating assets and liabilities (Increase) decrease in accrued interest receivable (1,163 ) 6,904 (982 ) (Increase) decrease in other assets (20,312 ) 2,650 (1,284 ) Increase (decrease) in accrued interest payable 160 (1,909 ) 240 Increase (decrease) in other liabilities and employee benefit plans 10,388 480 (5,763 ) Cash provided by operating activities 134,953 116,815 149,143 Cash flows from investing activities (Increase) in securities purchased under agreement to resell (148,813 ) — — Net (increase) in short-term investments (335,529 ) (103,178 ) (299 ) Net change in trading investments (146 ) 704 42,910 Available-for-sale investments: proceeds from sale 25,489 404,575 84,360 Available-for-sale investments: proceeds from maturities and pay downs 341,835 256,566 163,725 Available-for-sale investments: purchases (1,332,836 ) (473,834 ) (392,719 ) Held-to-maturity investments: proceeds from maturities and pay downs 38,430 10,077 4,533 Held-to-maturity investments: purchases (124,325 ) (276,723 ) — Net (increase) decrease in loans to third parties 177,823 (70,821 ) 18,645 Net (increase) decrease in loans to bank subsidiaries 10,608 (2,761 ) 4,318 Net (increase) decrease in loans to non-bank subsidiaries 5,172 2,057 (9,518 ) Additions to premises, equipment and computer software (5,700 ) (4,239 ) (222 ) Proceeds from sale of other real estate owned 3,061 4,644 4,196 Dividends received from equity method investment 319 884 359 Return (injection) of capital from (in) subsidiary (6,945 ) (94 ) 607 Cash disbursed for business acquisition (2,540 ) — — Cash used in investing activities (1,354,097 ) (252,143 ) (79,105 ) The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Cash Flows (In thousands of US dollars) Year ended 31 December 2016 31 December 2015 31 December 2014 Cash flows from financing activities Net decrease in demand and term deposit liabilities 1,696,948 457,836 242,152 Net (increase) in securities sold under agreement to repurchase — — (25,535 ) Repayment of long-term debt — — (90,000 ) Proceeds from issuance of common shares, net of underwriting discounts and commissions 131,600 — — Cost of issuance of common shares (5,458 ) — — Proceeds from loans sold under agreement to repurchase 5,152 — — Cost of repurchase of loans under agreement to repurchase (5,152 ) — — Common shares repurchased (1,633 ) (130,822 ) (17,018 ) Preference shares repurchased (212,121 ) (211 ) (656 ) Warrant repurchase (100 ) — — Proceeds from stock option exercises 6,919 640 1,198 Cash dividends paid on common and contingent value convertible preference shares (19,346 ) (24,846 ) (27,440 ) Cash dividends paid on preference shares (14,629 ) (14,631 ) (14,673 ) Preference shares guarantee fee paid (1,676 ) (1,824 ) (1,834 ) Cash provided by financing activities 1,580,504 286,142 66,194 Net increase (decrease) in cash due from banks 361,360 150,814 136,232 Cash due from banks at beginning of year 845,410 694,596 558,364 Cash due from banks at end of year 1,206,770 845,410 694,596 Supplemental disclosure of cash flow information Cash interest paid 11,660 10,907 14,491 Non-cash item Transfer to other real estate owned 8,961 3,326 2,733 |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events On 12 February 2017 , the Board of Directors declared a fourth interim dividend of $0.32 per common share to be paid on 27 March 2017 to shareholders of record on 13 March 2017 . Note 30: Subsequent events (unaudited) Prior to February 28, 2017, The Carlyle Group was our principal shareholder and owned approximately 14% of our common shares as of January 31, 2017. On February 28, 2017, The Carlyle Group completed the sale of all of its shares of our common shares in a registered secondary offering. |
Significant accounting polici38
Significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
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 payments |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (collectively the “Bank”), and those variable interest entities (“VIEs”) where the Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated. The Bank consolidates subsidiaries where it holds, directly or indirectly, more than 50% of the voting rights or where it exercises control. The Bank is deemed to have a controlling financial interest and is the primary beneficiary of a VIE if it has both the power to direct the activities of the VIE that most significantly impact the VIE economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The determination of whether the Bank meets the criteria to be considered the primary beneficiary of a VIE requires a periodic evaluation of all transactions (such as investments, loans and fee arrangements) with the entity. During the periods under review, the Bank had no interests in VIEs where the Bank was considered the primary beneficiary. Entities where the Bank holds 20% to 50% of the voting rights and/or has the ability to exercise significant influence, other than investments in designated VIEs, 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 United States ("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. Unrealised translation gains or losses on investments in foreign currency- based subsidiaries are recorded as a separate component of Shareholders' equity within accumulated other comprehensive loss (“AOCL”). 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 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. |
Cash Due from Banks | Cash Due from Banks 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. Such investments are those with less than three months’ maturity from the date of acquisition and include unrestricted term deposits, certificates of deposit and treasury bills. Consolidated Statements of Cash Flows For 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. |
Securities Purchased and Sold Under Agreement to Resell | Securities Purchased Under Agreement to Resell Securities purchased under agreement to resell are treated as collateralised lending transactions. The obligation to resell is recorded at the value of the cash paid on purchase adjusted for the amortisation of the difference between the purchase price and the agreed resell price. The amortisation of this amount is recorded as interest income. Collateral The 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. Securities Sold Under Agreements to Repurchase Securities sold under agreements to repurchase (securities financing agreements) are treated as collateralised financing transactions. The obligation to repurchase is recorded at the value of the cash received on sale adjusted for the amortisation of the difference between the sale price and the agreed repurchase price. The amortisation of this amount is recorded as an interest expense. |
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 Investments securities are classified as trading, available-for-sale (“AFS”) or held-to-maturity (“HTM”). Investments are classified as trading when management has the intent to sell these investments either for profit or to invest the cash received by taking customer deposits in foreign currencies. Debt and equity securities classified as trading investments are carried at fair value in the consolidated balance sheets, with unrealised gains and losses included in the consolidated statements of operations as net realised / unrealised 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 unrealised gains and losses reported as net increase or decrease to AOCL. Investments that the Bank has the positive intent and ability to hold to maturity are classified as HTM and are carried at amortised cost in the consolidated balance sheets. Unrecognised gains and losses on HTM securities are disclosed in the notes to the consolidated financial statements. The specific identification method is used to determine realised gains and losses on trading, AFS and HTM investments, which are included in net realised gains and losses on AFS and HTM investments, respectively, in the consolidated statements of operations. Dividend and interest income, including amortisation 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 amortised 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. 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 and reviewed for impairment if indicators of impairment exist. 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. Recognition of other-than-temporary impairments For debt securities, management considers a decline in fair value to be other-than-temporary when it does not expect to recover the entire amortised cost basis of the security. Investments in debt securities in unrealised loss positions are analysed 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 amortised cost, it recognises an impairment loss equal to the full difference between the amortised cost basis and the fair value of those securities. When management does not intend to sell or it is not more likely than not that the Bank will be required to sell such securities before recovering the amortised 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 recognised in net income. For AFS investments, the decrease in fair value relating to factors other than credit losses are recognised 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 securitisation, such as subordination, excess spread, over collateralisation 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 realised losses or gains, and the period-to-period changes in value could vary significantly. |
Loans | 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 recognised 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 are recorded at fair value at the date of acquisition. No allowance for credit losses is recorded on the acquisition date as the fair value of the acquired assets incorporates assumptions regarding credit risk. Acquired loans with evidence of credit quality deterioration for which it is probable that the Bank will not receive all contractually required payments receivable are accounted for as purchased credit-impaired loans. Generally, acquired loans that meet the Bank's definition for non-accrual status are considered to be credit-impaired. The excess of the cash flows expected to be collected on purchased credit-impaired loans, measured as of the acquisition date, over the estimated fair value is referred to as the accretable yield and is recognized in interest income over the remaining life of the loan using an effective yield methodology. The difference between contractually required payments as of the acquisition date and the cash flows expected to be collected is referred to as the non-accretable difference which is included as a reduction of the carrying amount of the purchased credit-impaired loans. The Bank evaluates at each balance sheet date the estimated cash flows and corresponding carrying value of purchased credit-impaired loans in the same manner as for the measurement of impaired loans, as is described below. The Bank evaluates at each balance sheet date whether the carrying value of its purchased credit-impaired loans has decreased and if so, recognises an allowance for credit losses in its consolidated statements of operations. For any increases in cash flows expected to be collected, the Bank adjusts any prior recorded allowance for purchased credit-impaired loans first, and then the amount of accretable yield recognized on a prospective basis over the purchased credit-impaired loan’s remaining life. Purchased credit-impaired loans are not considered non-performing and continue to have an accretable yield as long as there is a reasonable expectation about the timing and amount of cash flows expected to be collected. 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. When a loan is identified as impaired, the impairment is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole (remaining) source of repayment for the loan is the operation or liquidation of the collateral. In these cases the current fair value of the collateral, less selling costs, is used instead of discounted cash flows. If the Bank determines that the expected realisable 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 unamortised premium or discount), impairment is recognised 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 generally 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 recognised 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 recognised 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 recognised 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 recognised 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 troubled debt restructuring ("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 in the notes of the consolidated financial statements and individually evaluate the restructured loan for impairment. The Bank employs various types of concessions when modifying a loan that it would not otherwise consider which may include extension of repayment periods, interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimise economic loss and to avoid foreclosure or repossession of collateral. Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. Commercial mortgage and construction loans modified in a TDR often 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 works with its customers in these difficult economic times and 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 recognises 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 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. The allowance for credit losses consists of specific allowances and a general allowance as follows: Specific allowances Specific allowances are determined on an exposure-by-exposure basis and reflect the associated estimated credit loss. The specific allowance for credit loss is computed as the difference between the recorded investment in the loan and the present value of expected future cash flows from the loan. 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 recognises 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 is established through various analyses that estimate the incurred loss at the balance sheet date inherent in the lending and off-balance sheet credit-related arrangements portfolios. These analyses consider historical default rates, geographic, industry, and other environmental factors. Management also considers overall portfolio indicators including trends in internally risk rated exposures, 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 considers the current business strategy and credit process, including limit setting and compliance, credit approvals, loan underwriting criteria and loan workout procedures. Each portfolio of smaller balance, homogeneous loans, including consumer instalment, revolving credit, and most other consumer loans, is collectively evaluated for impairment. The allowance for credit losses attributed to these loans is established via a process that estimates the probable losses inherent and incurred in the portfolio, based upon various analyses. Management considers overall portfolio indicators including historical credit losses; delinquent (defined as loans that are more than 30 days past due), non-performing, and classified loans; trends in volumes and terms of loans; an evaluation of overall credit quality; the credit process, including lending policies and procedures; and economic, geographical, product, and other environmental factors. |
Business Combinations | All business combinations are accounted for using the acquisition method. |
Goodwill and Intangible Assets | Identifiable intangible assets (mostly customer relationships) are recognised separately from goodwill and are initially valued at fair value using discounted cash flow calculations and other recognised 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 was 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 amortised 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 Software Land 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 three 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 capitalises 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 amortised on a straight-line basis over the software's expected useful life, which is between five 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 out of premises, equipment and computer software, a gain is recorded if the difference of the proceeds on disposition is in excess of the assets 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 Owned Other real estate owned (“OREO”) is comprised of 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 recognised through charges to non-interest expense. |
Derivatives | Derivatives All derivatives are recognised 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 recognised 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 recognised 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 utilised 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 utilised 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 current year earnings. 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 loss ("OCL") and the ineffective portion is recorded in current year earnings. That is, ineffectiveness from a derivative that overcompensates for changes in the hedged cash flows is recorded in earnings. However, the ineffectiveness from a derivative that under compensates is not recorded in earnings. 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 OCL, depends 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 OCL. Changes in the fair value of trading and non-hedging derivative instruments are reported in current year earnings. 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 AOCL 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) amortisation 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 amortised 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 asset and liability recognised 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 recognised in OCL net of tax and amortised 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 recognised 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. Time vesting conditions are 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 recognised in the consolidated statements of operations reflects the number of vested shares or share options. The Bank recognises 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 recognised 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 recognised 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 are recognised in the period in which the service is provided. All other fees are recognised as revenue in the period in which the service is provided. Foreign exchange revenue includes fees earned on currency exchange transactions which are recognised when such transactions occur, as well as gains and losses recognised 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 amortisation of deferred non-refundable loan origination and commitment fees. These fees are recognised 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 amortised into interest income. Dividend and interest income, including amortisation 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 amortised 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 maximise the use of observable inputs and minimise 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. Investments classified as trading and AFS, and derivative assets and liabilities are recognised in the consolidated balance sheets at fair value. Level 1, 2 and 3 valuation inputs Management classifies items that are recognised 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. Trading investments and defined benefit pension plan equity securities and mutual funds Trading investments include equities, mutual funds and debt securities issued by both US and non-US governments. 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. See “AFS and HTM investments and defined benefit pension plan fixed income securities” below for valuation techniques and inputs of fixed income securities. 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 utilise 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 prioritise 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 modelled 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 utilise 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 utilised by brokers may be difficult to corroborate with observable market data, or sufficient information regarding the specific inputs utilised by the broker was not available to support a Level 2 classification. For disclosure purposes, investments held-to-maturity 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 specific provisions raised 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 realisable 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. 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 utilised 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 recognised 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 Assets Impairment losses are recognised 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 recognised 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 honour 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 collateralised, 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 recognised 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 realised. 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 realised. 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 realise 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 recognises the largest amount of tax benefit that is greater than 50 percent likely to be realised 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 recognises 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 Share Earnings per share have been calculated using the weighted average number of common shares outstanding during the year (see also Note 20). Dividends declared on preference shares and related guarantee fees are deducted from net income to obtain net income available to common shareholders. 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 31 December 2016: In January 2016, the FASB published Accounting Standards Update No. 2016-01 Financial Instruments – Overall (Subtopic 825-10) which: 1) requires that equity securities be measured at fair value with changes in the fair value recognised through net income; 2) allow certain equity investments to be re-measured at fair value either upon the occurrence of an observable price change or upon identification of an impairment (qualitative assessment being allowed); 3) requires public business entities that are required to disclose fair value of financial instruments on the balance sheet to measure that fair value using the exit price notion consistent with Topic 820, Fair Value Measurement; 4) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option; and, 5) requires enhanced disclosures about certain financial assets and financial liabilities. This update is effective for public business entities for fiscal years, and interim periods with in those fiscal years, beginning after 15 December 2017. Except for the early application guidance in the update, early adoption of the amendments is not permitted. The Bank is assessing the impact of the adoption of this guidance. In February 2016, FASB published Accounting Standards Update No. 2016-02 Leases (Topic 842) which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. This update is effective for public business entities for fiscal years, and interim periods with in those fiscal years, beginning after 15 December 2018. Early application is permitted. The Bank has determined that this standard will have an effect due to the recognition of lease assets and lease liabilities currently classified as operating leases, which will result in the recognition of assets and corresponding lease liabilities. In March 2016, FASB published Accounting Standards Update No. 2016-08 Revenue from Contracts with Customers (Topic 606). The amendments in this update are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. The amendments in this update affect the guidance in Accounting Standards Update No. 2014-09 Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") which is not yet effective. The effective date for this update is the same as for Accounting Standards Update No. 2015-14 Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date ("ASU 2015-14") which defers the effective date of ASU 2014-09 by one year resulting in the effective date being fiscal years, and interim periods with in those fiscal years, beginning after 15 December 2017. Earlier application is permitted only as of annual reporting periods beginning after 15 December 2016, including interim reporting periods within that reporting period. The Bank has determined that this standard will affect non-interest income items that are fee generating but does not expect the impact to have a significant effect. In March 2016, FASB published Accounting Standards Update No. 2016-09 Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in this update are intended to simplify various aspects of the accounting for share-based payments including accounting for the income tax effects of share-based payments, minimum statutory tax withholding requirements and forfeitures. This update is effective for public business entities for fiscal years, and interim periods with in those fiscal years after 15 December 2016, and early adoption is permitted. The Bank has assessed the impact of the adoption of this guidance, and does not expect this to have an impact. In June 2016, FASB published Accounting Standards Update No. 2016-13 Financial Instruments – Credit Losses. The amendments in this update provide a new impairment model, known as the current expected credit loss model that is based on expected losses rather than incurred losses. The amendments in this update are also intended to reduce the complexity and reduce the number of impairment models entities use to account for debt instruments. For public business entities that meet the GAAP definition of an SEC filer, the effective date for this update for fiscal years beginning after 15 December 2019, including interim periods within those fiscal years. The Bank is assessing the impact of the adoption of this guidance. In August 2016, FASB published Accounting Standards Update No. 2016-15 Statement of Cash Flows (Topic 230). The amendments in this update provide guidance on eight specific cash flow issues regarding their presentation and classification on the Statement of Cash Flows. The eight specific areas are: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments of other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies), distributions received from equity method investees, beneficial interest in securitization transactions, and separately identifiable cash flows and application of the predominance principle. This update is effective for public business entities for fiscal years, and interim periods within those fiscal years, after 15 December 2017, and early adoption is permitted. The Bank is assessing the impact of the adoption of this guidance. In October 2016, FASB published Accounting Standards Update No. 2016-17 Consolidation (Topic 810) ("ASU 2016-17"). This Update was issued to amend the consolidation guidance presented in Accounting Standards Update No. 2015-02 Consolidation (Topic 810) ("ASU 2015-02) on how a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The amendments in this Update do not change the characteristics of a primary beneficiary in GAAP, but under the amendments, a single decision maker is not required to consider indirect interests held through related parties that are under common control with the single decision maker to be the equivalent of direct interests in their entirety. Instead, a single decision maker is required to include those interests on a proportionate basis consistent with indirect interests held through other related parties. The Bank has early adopted ASU 2015-02 and has concluded that ASU 2016-17 does not have an impact on the Bank. In November 2016, FASB published Accounting Standards Update No. 2016-18 Statement of Cash Flows (Topic 230). This Update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This update is effective for public business entities for fiscal years, and interim periods with in those fiscal years, beginning after 15 December 2017. Early adoption is permitted. The Bank has determined that this standard will have an effect on the presentation of the statements of cash flows as the Bank often owns cash balances affected by drawing restrictions related to minimum reserve and derivative margin requirements. |
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 the Group Asset and Liability Committee. Financial instruments in Level 1 include actively traded redeemable mutual funds. Financial instruments in Level 2 include corporate bonds, 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, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash due from banks | 31 December 2016 31 December 2015 Bermuda Non-Bermuda Total Bermuda Non-Bermuda Total Non-interest bearing Cash and demand deposits with banks 28,690 82,051 110,741 31,199 79,696 110,895 Interest bearing¹ Demand deposits with banks 138,123 188,314 326,437 130,589 248,040 378,629 Cash equivalents 976,557 687,916 1,664,473 691,439 1,107,927 1,799,366 Sub-total - Interest bearing 1,114,680 876,230 1,990,910 822,028 1,355,967 2,177,995 Total cash due from banks 1,143,370 958,281 2,101,651 853,227 1,435,663 2,288,890 ¹ Interest bearing cash due from banks includes certain demand deposits with banks as at 31 December 2016 in the amount of $305.3 million ( 31 December 2015 : $306.9 million ) that are earning interest at a negligible rate. |
Short-term investments (Tables)
Short-term investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of short-term investments | 31 December 2016 31 December 2015 Bermuda Non-Bermuda Total Bermuda Non-Bermuda Total Unrestricted Maturing within three months 36,953 80,360 117,313 — 104,249 104,249 Maturing between three to six months 343,723 40,825 384,548 99,810 192,118 291,928 Maturing between six to twelve months — — — — 796 796 Total unrestricted short-term investments 380,676 121,185 501,861 99,810 297,163 396,973 Affected by drawing restrictions related to minimum reserve and derivative margin requirements Interest earning demand deposits 17,894 — 17,894 12,509 — 12,509 Total short-term investments 398,570 121,185 519,755 112,319 297,163 409,482 |
Investment in securities (Table
Investment in securities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of marketable securities | 31 December 2016 31 December 2015 Pledged Investments Amortised cost Fair value Amortised cost Fair value Available-for-sale 211,342 212,995 304,493 307,513 Held-to-maturity 320,942 315,635 372,546 372,868 In the following tables, debt securities with unrealised losses that are not deemed to be OTTI are categorised 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 amortised cost basis. During 2016, Management revised the methodology for considering the time period during which an investment has been in an unrealized loss by looking at monthly positions rather than annually. The 2015 comparative have been restated using the new methodology. Less than 12 months 12 months or more 31 December 2016 Fair value Gross unrealised losses Fair value Gross unrealised losses Total fair value Total gross unrealised losses Available-for-sale securities with unrealised losses US government and federal agencies 1,558,636 (21,932 ) 266,094 (2,646 ) 1,824,730 (24,578 ) Non-US governments debt securities 21,681 (1,053 ) — — 21,681 (1,053 ) Corporate debt securities 214,506 (1,545 ) — — 214,506 (1,545 ) Asset-backed securities - Student loans — — 12,493 (797 ) 12,493 (797 ) Commercial mortgage-backed securities 134,195 (1,352 ) — — 134,195 (1,352 ) Residential mortgage-backed securities 181,556 (2,542 ) — — 181,556 (2,542 ) Total available-for-sale securities with unrealised losses 2,110,574 (28,424 ) 278,587 (3,443 ) 2,389,161 (31,867 ) Held-to-maturity securities with unrealised losses US government and federal agencies 937,080 (16,803 ) — — 937,080 (16,803 ) Less than 12 months 12 months or more 31 December 2015 Fair value Gross unrealised losses Fair value Gross unrealised losses Total fair value Total gross unrealised losses Available-for-sale securities with unrealised losses US government and federal agencies 449,609 (2,258 ) 92,554 (1,511 ) 542,163 (3,769 ) Corporate debt securities 253,991 (1,480 ) 38,706 (1,294 ) 292,697 (2,774 ) Asset-backed securities - Student loans — — 12,160 (1,130 ) 12,160 (1,130 ) Commercial mortgage-backed securities 138,217 (4,007 ) 9,605 (322 ) 147,822 (4,329 ) Residential mortgage-backed securities 90,220 (660 ) 10,024 (478 ) 100,244 (1,138 ) Total available-for-sale securities with unrealised losses 932,037 (8,405 ) 163,049 (4,735 ) 1,095,086 (13,140 ) Held-to-maturity securities with unrealised losses US government and federal agencies 459,623 (5,152 ) — — 459,623 (5,152 ) 31 December 2016 31 December 2015 Amortised cost Gross unrealised gains Gross unrealised losses Fair value Amortised cost Gross unrealised gains Gross unrealised losses Fair value Trading US government and federal agencies — — — — 278,500 2,347 (1,504 ) 279,343 Non-US governments debt securities — — — — 7,483 6 — 7,489 Asset-backed securities - Student loans — — — — 28,845 — (560 ) 28,285 Mutual funds 5,724 1,091 (502 ) 6,313 5,739 903 (460 ) 6,182 Total trading 5,724 1,091 (502 ) 6,313 320,567 3,256 (2,524 ) 321,299 Available-for-sale US government and federal agencies 2,448,207 6,773 (24,578 ) 2,430,402 1,399,456 8,812 (3,769 ) 1,404,499 Non-US governments debt securities 27,895 178 (1,053 ) 27,020 29,275 300 — 29,575 Corporate debt securities 513,881 2,139 (1,545 ) 514,475 505,139 3,779 (2,774 ) 506,144 Asset-backed securities - Student loans 13,290 — (797 ) 12,493 13,291 — (1,130 ) 12,161 Commercial mortgage-backed securities 151,855 43 (1,352 ) 150,546 153,046 9 (4,329 ) 148,726 Residential mortgage-backed securities 200,288 56 (2,542 ) 197,802 101,382 — (1,138 ) 100,244 Total available-for-sale 3,355,416 9,189 (31,867 ) 3,332,738 2,201,589 12,900 (13,140 ) 2,201,349 Held-to-maturity¹ US government and federal agencies 1,061,103 2,528 (16,803 ) 1,046,828 701,282 5,365 (5,152 ) 701,495 Total held-to-maturity 1,061,103 2,528 (16,803 ) 1,046,828 701,282 5,365 (5,152 ) 701,495 ¹ For the years ended 31 December 2016 , 2015 and 2014, non-credit impairments recognised in accumulated other comprehensive loss ("AOCL") for HTM investments were nil . |
Summary of investments maturities | The following table presents the remaining maturities of the Bank’s securities. The maturities are contractual for securities other than mortgage-backed securities. For mortgage-backed securities (primarily US government agencies), management presents the maturity date as the mid-point between the reporting and expected contractual maturity date which is determined assuming no future prepayments. By using the aforementioned mid-point, this date represents management’s best estimate of the date by which the remaining principal balance will be repaid given future principal repayments of such securities. The actual maturities may differ due to the uncertainty of the timing when borrowers make prepayments on the underlying mortgages. Remaining term to maturity 31 December 2016 Within 3 months 3 to 12 months 1 to 5 years 5 to 10 years Over 10 years No specific maturity Carrying amount Trading Mutual funds — — — — — 6,313 6,313 Total trading — — — — — 6,313 6,313 Available-for-sale US government and federal agencies — 6,364 87,257 653,603 1,683,178 — 2,430,402 Non-US governments debt securities — 1,371 3,967 21,682 — — 27,020 Corporate debt securities 22,009 88,169 404,297 — — — 514,475 Asset-backed securities - Student loans — — — — 12,493 — 12,493 Commercial mortgage-backed securities — — 38,418 112,128 — — 150,546 Residential mortgage-backed securities — — — — 197,802 — 197,802 Total available-for-sale 22,009 95,904 533,939 787,413 1,893,473 — 3,332,738 Held-to-maturity US government and federal agencies — — 10,688 31,154 1,019,261 — 1,061,103 Total investments 22,009 95,904 544,627 818,567 2,912,734 6,313 4,400,154 Total by currency US dollars 22,009 95,904 544,627 818,567 2,912,734 6,091 4,399,932 Other — — — — — 222 222 Total investments 22,009 95,904 544,627 818,567 2,912,734 6,313 4,400,154 Remaining term to maturity 31 December 2015 Within 3 months 3 to 12 months 1 to 5 years 5 to 10 years Over 10 years No specific maturity Carrying amount Trading US government and federal agencies — 24,874 8,497 53,248 192,724 — 279,343 Non-US governments debt securities 7,489 — — — — — 7,489 Asset-backed securities - Student loans — — 28,285 — — — 28,285 Mutual funds — — — — — 6,182 6,182 Total trading 7,489 24,874 36,782 53,248 192,724 6,182 321,299 Available-for-sale US government and federal agencies — — 126,163 202,385 1,075,951 — 1,404,499 Non-US governments debt securities — 1,360 5,399 22,816 — — 29,575 Corporate debt securities 60,493 55,649 351,296 38,706 — — 506,144 Asset-backed securities - Student loans — — — — 12,161 — 12,161 Commercial mortgage-backed securities — — — 42,532 106,194 — 148,726 Residential mortgage-backed securities — — — — 100,244 — 100,244 Total available-for-sale 60,493 57,009 482,858 306,439 1,294,550 — 2,201,349 Held-to-maturity US government and federal agencies — — — 45,664 655,618 — 701,282 Total investments 67,982 81,883 519,640 405,351 2,142,892 6,182 3,223,930 Total by currency US dollars 67,982 81,883 519,640 405,351 2,142,892 5,903 3,223,651 Other — — — — — 279 279 Total investments 67,982 81,883 519,640 405,351 2,142,892 6,182 3,223,930 |
Schedule of sale proceeds and realised gains and losses of AFS securities | Sale Proceeds and Realised Gains and Losses of AFS Securities Year ended 31 December 2016 Sale proceeds Gross realised Gross realised US government and federal agencies 59,939 1,013 (76 ) Residential mortgage-backed securities — — — Pass-through note 609 609 — Net realised gains (losses) recognised in net income 60,548 1,622 (76 ) Year ended 31 December 2015 Sale Gross realised Gross realised US government and federal agencies 232,372 — (4,465 ) Residential mortgage-backed securities 6,056 — (270 ) Pass-through note 328 328 — Net realised gains (losses) recognised in net income 238,756 328 (4,735 ) Year ended 31 December 2014 Sale Gross realised Gross realised US government and federal agencies 96,031 — (52 ) Pass-through note 34,422 8,732 — Net realised gains (losses) recognised in net income 130,453 8,732 (52 ) |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Schedule of loans receivable | 31 December 2016 31 December 2015 Bermuda Non-Bermuda Total Bermuda Non-Bermuda Total Commercial loans Government 94,504 17,908 112,412 202,776 22,402 225,178 Commercial and industrial 130,171 201,652 331,823 121,466 221,243 342,709 Commercial overdrafts 22,594 2,767 25,361 34,997 5,736 40,733 Total gross commercial loans 247,269 222,327 469,596 359,239 249,381 608,620 Less specific allowance for credit losses (577 ) — (577 ) (590 ) — (590 ) Net commercial loans 246,692 222,327 469,019 358,649 249,381 608,030 Commercial real estate loans Commercial mortgage 363,982 217,640 581,622 415,747 249,622 665,369 Construction 24,500 4,385 28,885 5,396 8,211 13,607 Total gross commercial real estate loans 388,482 222,025 610,507 421,143 257,833 678,976 Less specific allowance for credit losses (750 ) — (750 ) (727 ) (2,224 ) (2,951 ) Net commercial real estate loans 387,732 222,025 609,757 420,416 255,609 676,025 Consumer loans Automobile financing 13,077 6,905 19,982 12,308 7,556 19,864 Credit card 57,730 20,811 78,541 59,119 19,839 78,958 Overdrafts 2,380 3,202 5,582 4,750 8,165 12,915 Other consumer 30,798 63,186 93,984 32,022 84,062 116,084 Total gross consumer loans 103,985 94,104 198,089 108,199 119,622 227,821 Less specific allowance for credit losses (275 ) (3 ) (278 ) (274 ) — (274 ) Net consumer loans 103,710 94,101 197,811 107,925 119,622 227,547 Residential mortgage loans 1,205,468 1,131,065 2,336,533 1,243,221 1,290,819 2,534,040 Less specific allowance for credit losses (9,559 ) (574 ) (10,133 ) (13,411 ) (1,879 ) (15,290 ) Net residential mortgage loans 1,195,909 1,130,491 2,326,400 1,229,810 1,288,940 2,518,750 Total gross loans 1,945,204 1,669,521 3,614,725 2,131,802 1,917,655 4,049,457 Less specific allowance for credit losses (11,161 ) (577 ) (11,738 ) (15,002 ) (4,103 ) (19,105 ) Less general allowance for credit losses (24,950 ) (7,559 ) (32,509 ) (20,176 ) (10,021 ) (30,197 ) Net loans 1,909,093 1,661,385 3,570,478 2,096,624 1,903,531 4,000,155 |
Schedule of age analysis and past due loans | The following tables summarise the past due status of the loans as at 31 December 2016 and 31 December 2015 . 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. 31 December 2016 30 - 59 days 60 - 89 days More than 90 days Total past due loans Total current Total loans Commercial loans Government — — — — 112,412 112,412 Commercial and industrial 2,712 — 584 3,296 328,527 331,823 Commercial overdrafts — — 2 2 25,359 25,361 Total commercial loans 2,712 — 586 3,298 466,298 469,596 Commercial real estate loans Commercial mortgage 377 — 5,964 6,341 575,281 581,622 Construction 175 — — 175 28,710 28,885 Total commercial real estate loans 552 — 5,964 6,516 603,991 610,507 Consumer loans Automobile financing 86 23 225 334 19,648 19,982 Credit card 366 177 392 935 77,606 78,541 Overdrafts — — 17 17 5,565 5,582 Other consumer 720 564 999 2,283 91,701 93,984 Total consumer loans 1,172 764 1,633 3,569 194,520 198,089 Residential mortgage loans 26,122 4,345 50,262 80,729 2,255,804 2,336,533 Total gross loans 30,558 5,109 58,445 94,112 3,520,613 3,614,725 31 December 2015 30 - 59 days 60 - 89 days More than 90 days Total past due loans Total current Total loans Commercial loans Government — — — — 225,178 225,178 Commercial and industrial 11 14 608 633 342,076 342,709 Commercial overdrafts — — 25 25 40,708 40,733 Total commercial loans 11 14 633 658 607,962 608,620 Commercial real estate loans Commercial mortgage 1,133 — 6,658 7,791 657,578 665,369 Construction — — — — 13,607 13,607 Total commercial real estate loans 1,133 — 6,658 7,791 671,185 678,976 Consumer loans Automobile financing 194 81 78 353 19,511 19,864 Credit card 1,459 337 132 1,928 77,030 78,958 Overdrafts — — 538 538 12,377 12,915 Other consumer 832 979 1,231 3,042 113,042 116,084 Total consumer loans 2,485 1,397 1,979 5,861 221,960 227,821 Residential mortgage loans 40,793 8,911 65,343 115,047 2,418,993 2,534,040 Total gross loans 44,422 10,322 74,613 129,357 3,920,100 4,049,457 |
Schedule of financing receivable credit quality indicators | 31 December 2016 Pass Special mention Substandard Non-accrual Total gross recorded investments Commercial loans Government 104,611 301 7,500 — 112,412 Commercial and industrial 325,924 4,122 1,194 583 331,823 Commercial overdrafts 22,976 2,145 238 2 25,361 Total commercial loans 453,511 6,568 8,932 585 469,596 Commercial real estate loans Commercial mortgage 502,918 71,038 1,702 5,964 581,622 Construction 28,885 — — — 28,885 Total commercial real estate loans 531,803 71,038 1,702 5,964 610,507 Consumer loans Automobile financing 19,309 360 28 285 19,982 Credit card 78,149 — 392 — 78,541 Overdrafts 5,533 32 — 17 5,582 Other consumer 91,348 1,564 360 712 93,984 Total consumer loans 194,339 1,956 780 1,014 198,089 Residential mortgage loans 2,200,807 36,739 58,087 40,900 2,336,533 Total gross recorded loans 3,380,460 116,301 69,501 48,463 3,614,725 31 December 2015 Pass Special mention Substandard Non-accrual Total gross recorded investments Commercial loans Government 213,928 11,250 — — 225,178 Commercial and industrial 333,853 4,133 4,106 617 342,709 Commercial overdrafts 36,017 4,493 197 26 40,733 Total commercial loans 583,798 19,876 4,303 643 608,620 Commercial real estate loans Commercial mortgage 542,195 86,285 26,629 10,260 665,369 Construction 13,607 — — — 13,607 Total commercial real estate loans 555,802 86,285 26,629 10,260 678,976 Consumer loans Automobile financing 19,378 388 — 98 19,864 Credit card 78,826 — 132 — 78,958 Overdrafts 11,618 54 1,232 11 12,915 Other consumer 112,426 1,308 1,056 1,294 116,084 Total consumer loans 222,248 1,750 2,420 1,403 227,821 Residential mortgage loans 2,391,723 42,578 46,793 52,946 2,534,040 Total gross recorded loans 3,753,571 150,489 80,145 65,252 4,049,457 |
Schedule of allowance for credit loss | Evaluation of Loans For Impairment 31 December 2016 31 December 2015 Individually evaluated Collectively evaluated Individually evaluated Collectively evaluated Commercial 9,686 459,910 13,607 595,013 Commercial real estate 21,893 588,614 38,019 640,957 Consumer 1,746 196,343 1,882 225,939 Residential mortgage 113,065 2,223,468 116,176 2,417,864 Total gross loans 146,390 3,468,335 169,684 3,879,773 Changes in General and Specific Allowances For Credit Losses Year ended 31 December 2016 Commercial Commercial real estate Consumer Residential mortgage Total Allowances at beginning of year 8,723 6,512 2,763 31,304 49,302 Provision taken (released) (5,265 ) 14,459 (1,076 ) (3,719 ) 4,399 Recoveries 97 12 1,264 70 1,443 Charge-offs (138 ) (4,520 ) (1,916 ) (3,837 ) (10,411 ) Other (40 ) (239 ) (70 ) (137 ) (486 ) Allowances at end of year 3,377 16,224 965 23,681 44,247 Allowances at end of year: individually evaluated for impairment 577 750 278 10,133 11,738 Allowances at end of year: collectively evaluated for impairment 2,800 15,474 687 13,548 32,509 Year ended 31 December 2015 Commercial Commercial real estate Consumer Residential mortgage Total Allowances at beginning of year 7,831 5,920 2,797 30,934 47,482 Provision taken 440 1,027 586 3,688 5,741 Recoveries 788 182 1,455 427 2,852 Charge-offs (318 ) (513 ) (2,031 ) (3,701 ) (6,563 ) Other (18 ) (104 ) (44 ) (44 ) (210 ) Allowances at end of year 8,723 6,512 2,763 31,304 49,302 Allowances at end of year: individually evaluated for impairment 590 2,951 274 15,290 19,105 Allowances at end of year: collectively evaluated for impairment 8,133 3,561 2,489 16,014 30,197 Year ended 31 December 2014 Commercial Commercial real estate Consumer Residential mortgage Total Allowances at beginning of year 8,340 9,816 3,442 31,157 52,755 Provision taken 282 2,789 (686 ) 5,663 8,048 Recoveries 67 — 1,983 274 2,324 Charge-offs (838 ) (6,621 ) (1,895 ) (6,113 ) (15,467 ) Other (20 ) (64 ) (47 ) (47 ) (178 ) Allowances at end of year 7,831 5,920 2,797 30,934 47,482 Allowances at end of year: individually evaluated for impairment 417 1,822 355 16,217 18,811 Allowances at end of year: collectively evaluated for impairment 7,414 4,098 2,442 14,717 28,671 |
Schedule of non-accrual status for non-performing loans | Non-Performing Loans (excluding purchased credit-impaired loans) 31 December 2016 31 December 2015 Non-accrual Past due more than 90 days and accruing Total non- performing loans Non-accrual Past due more than 90 days and accruing Total non- performing loans Commercial loans Commercial and industrial 583 — 583 617 — 617 Commercial overdrafts 2 — 2 26 10 36 Total commercial loans 585 — 585 643 10 653 Commercial real estate loans Commercial mortgage 5,964 — 5,964 10,260 737 10,997 Consumer loans Automobile financing 285 2 287 98 — 98 Credit card — 392 392 — 132 132 Overdrafts 17 — 17 11 527 538 Other consumer 712 300 1,012 1,294 85 1,379 Total consumer loans 1,014 694 1,708 1,403 744 2,147 Residential mortgage loans 40,900 8,476 49,376 52,946 12,760 65,706 Total non-performing loans 48,463 9,170 57,633 65,252 14,251 79,503 |
Schedule of impaired loans | Impaired loans with an allowance Gross recorded investment of impaired loans without an allowance Total impaired loans 31 December 2016 Gross recorded investment Specific allowance Net loans Gross recorded investment Specific allowance Net loans Commercial loans Commercial and industrial 579 (577 ) 2 1,048 1,627 (577 ) 1,050 Commercial overdrafts — — — 2 2 — 2 Total commercial loans 579 (577 ) 2 1,050 1,629 (577 ) 1,052 Commercial real estate loans Commercial mortgage 1,722 (750 ) 972 5,944 7,666 (750 ) 6,916 Consumer loans Automobile financing 155 (75 ) 80 130 285 (75 ) 210 Overdrafts — — — 17 17 — 17 Other consumer 253 (203 ) 50 459 712 (203 ) 509 Total consumer loans 408 (278 ) 130 606 1,014 (278 ) 736 Residential mortgage loans 30,330 (9,961 ) 20,369 52,043 82,373 (9,961 ) 72,412 Total impaired loans 33,039 (11,566 ) 21,473 59,643 92,682 (11,566 ) 81,116 Specific allowance excludes $0.2 million recognized relating to purchased credit-impaired loans. Impaired loans with an allowance Gross recorded investment of impaired loans without an allowance Total impaired loans 31 December 2015 Gross recorded investment Specific allowance Net loans Gross recorded investment Specific allowance Net loans Commercial loans Commercial and industrial 599 (590 ) 9 1,096 1,695 (590 ) 1,105 Commercial overdrafts — — — 26 26 — 26 Total commercial loans 599 (590 ) 9 1,122 1,721 (590 ) 1,131 Commercial real estate loans Commercial mortgage 6,127 (2,951 ) 3,176 17,198 23,325 (2,951 ) 20,374 Consumer loans Automobile financing — — — 98 98 — 98 Overdrafts — — — 11 11 — 11 Other consumer 366 (274 ) 92 1,008 1,374 (274 ) 1,100 Total consumer loans 366 (274 ) 92 1,117 1,483 (274 ) 1,209 Residential mortgage loans 42,145 (15,290 ) 26,855 39,283 81,428 (15,290 ) 66,138 Total impaired loans 49,237 (19,105 ) 30,132 58,720 107,957 (19,105 ) 88,852 Average Impaired Loan Balances and Related Recognised Interest Income 31 December 2016 31 December 2015 31 December 2014 Average gross recorded investment Interest income recognised¹ Average gross recorded investment Interest income recognised¹ Average gross recorded investment Interest income recognised¹ Commercial loans Commercial and industrial 1,661 64 1,214 — 1,452 — Commercial overdrafts 14 — 66 — 289 — Total commercial loans 1,675 64 1,280 — 1,741 — Commercial real estate loans Commercial mortgage 15,496 237 28,612 311 48,581 675 Consumer loans Automobile financing 192 — 137 — 307 — Credit card — — — — 35 — Overdrafts 14 — 27 — 132 — Other consumer 1,043 — 1,617 2 1,963 5 Total consumer loans 1,249 — 1,781 2 2,437 5 Residential mortgage loans 81,901 2,201 78,433 1,442 70,923 1,021 Total impaired loans 100,321 2,502 110,106 1,755 123,682 1,701 ¹ All interest income recognised on impaired loans relate to loans previously modified in a TDR. |
Schedule of troubled debt restructuring | TDRs entered into during the year Year ended 31 December 2016 Number of contracts Pre- modification recorded investment Modification: interest capitalisation Post- modification recorded investment Residential mortgage loans 21 12,543 81 12,624 Total loans modified in a TDR 21 12,543 81 12,624 Year ended 31 December 2015 Number of Pre- Modification: Post- Commercial loans 1 1,000 87 1,087 Residential mortgage loans 20 13,283 1,081 14,364 Total loans modified in a TDR 21 14,283 1,168 15,451 Year ended 31 December 2014 Number of contracts Pre- modification recorded investment Modification: interest capitalisation Post- modification recorded investment Residential mortgage loans 20 13,857 259 14,116 Total loans modified in a TDR 20 13,857 259 14,116 31 December 2016 31 December 2015 TDRs outstanding Accrual Non-accrual Accrual Non-accrual Commercial loans 1,044 — 1,078 — Commercial real estate loans 1,702 1,539 13,065 1,608 Consumer loans — — 80 — Residential mortgage loans 41,473 5,006 28,482 7,175 Total TDRs outstanding 44,219 6,545 42,705 8,783 |
Schedule of purchased credit-impaired loans | Year ended 31 December 2016 Contractual principal Non-accretable difference Accretable difference Carrying amount Balance at beginning of year 8,709 (2,248 ) (631 ) 5,830 Advances and increases in cash flows expected to be collected 166 408 (396 ) 178 Reductions resulting from repayments (464 ) — 216 (248 ) Reductions resulting from changes in allowances for credit losses — (172 ) — (172 ) Reductions resulting from charge-offs (395 ) 395 — — Balance at end of year 8,016 (1,617 ) (811 ) 5,588 Year ended 31 December 2015 Contractual principal Non-accretable difference Accretable difference Carrying amount Balance at beginning of year 11,020 (3,804 ) — 7,216 Advances and increases in cash flows expected to be collected 150 631 (631 ) 150 Reductions resulting from repayments (1,554 ) — 107 (1,447 ) Reductions resulting from charge-offs (907 ) 818 — (89 ) Accretion — 107 (107 ) — Balance at end of year 8,709 (2,248 ) (631 ) 5,830 Year ended 31 December 2014 Contractual principal Non-accretable difference Accretable difference Carrying amount Balance at beginning of year — — — — Purchases 11,001 (3,804 ) — 7,197 Advances and increases in cash flows expected to be collected 19 — — 19 Balance at end of year 11,020 (3,804 ) — 7,216 |
Credit risk concentrations (Tab
Credit risk concentrations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Summary of credit exposure | The following tables summarise the credit exposure of the Bank by business sector and by geographic region. The on-balance sheet exposure amounts disclosed are net of specific allowances and the off-balance sheet exposure amounts disclosed are gross of collateral held. During 2016, Management revised the method for determining the geographic location of cash and cash equivalents from the location of the branch to the location of the head office holding custody. 31 December 2016 31 December 2015 Business sector Loans Off-balance sheet Total credit exposure Loans Off-balance sheet Total credit exposure Banks and financial services 321,680 393,148 714,828 243,776 320,934 564,710 Commercial and merchandising 266,976 139,264 406,240 230,376 107,545 337,921 Governments 112,857 709 113,566 223,699 102,782 326,481 Individuals 2,299,852 108,810 2,408,662 2,532,209 95,956 2,628,165 Primary industry and manufacturing 34,304 2,095 36,399 36,299 978 37,277 Real estate 418,946 12,467 431,413 632,548 15,891 648,439 Hospitality industry 142,707 4,353 147,060 125,471 14,854 140,325 Transport and communication 5,665 — 5,665 5,974 — 5,974 Sub-total 3,602,987 660,846 4,263,833 4,030,352 658,940 4,689,292 General allowance (32,509 ) — (32,509 ) (30,197 ) — (30,197 ) Total 3,570,478 660,846 4,231,324 4,000,155 658,940 4,659,095 31 December 2016 31 December 2015 Geographic region Cash due from Loans Off-balance sheet Total credit exposure Cash due from Loans Off-balance sheet Total credit exposure Australia 14,242 — — 14,242 14,187 — — 14,187 Barbados — 7,500 — 7,500 — 11,250 — 11,250 Belgium 1,722 — — 1,722 3,352 — — 3,352 Bermuda 23,505 2,105,195 322,554 2,451,254 22,009 2,269,635 371,687 2,663,331 Canada 514,861 — — 514,861 365,037 — — 365,037 Cayman 40,356 706,994 231,211 978,561 19,086 713,468 207,139 939,693 Guernsey 1 337,037 107,081 444,119 1 434,531 53,750 488,282 Japan 20,963 — — 20,963 23,424 — — 23,424 New Zealand 785 — — 785 999 — — 999 Norway 42,477 — — 42,477 289 — — 289 Saint Lucia — 65,117 — 65,117 — 65,285 — 65,285 Sweden 1,550 — — 1,550 3,659 — — 3,659 Switzerland 5,833 — — 5,833 3,905 — — 3,905 The Bahamas 2,822 23,860 — 26,682 3,196 28,736 — 31,932 United Kingdom 1,224,263 357,284 — 1,581,547 1,078,088 507,447 26,364 1,611,899 United States 876,642 — — 876,642 1,161,106 — — 1,161,106 Other 197 — — 197 34 — — 34 Sub-total 2,770,219 3,602,987 660,846 7,034,052 2,698,372 4,030,352 658,940 7,387,664 General allowance — (32,509 ) — (32,509 ) — (30,197 ) — (30,197 ) Total 2,770,219 3,570,478 660,846 7,001,543 2,698,372 4,000,155 658,940 7,357,467 |
Premises, equipment and compu44
Premises, equipment and computer software (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of premise, equipment, and computer software | 31 December 2016 31 December 2015 Category Cost Accumulated Net carrying Cost Accumulated Net carrying Land 9,008 — 9,008 9,008 — 9,008 Buildings 137,110 (58,606 ) 78,504 135,684 (55,030 ) 80,654 Equipment 28,837 (25,637 ) 3,200 31,108 (27,620 ) 3,488 Computer hardware and software in use 170,138 (98,452 ) 71,686 174,162 (88,582 ) 85,580 Computer software in development 5,375 — 5,375 4,648 — 4,648 Total 350,468 (182,695 ) 167,773 354,610 (171,232 ) 183,378 Year ended Depreciation charged to operating expenses 31 December 2016 31 December 2015 31 December 2014 Buildings (included in Property expense) 4,058 4,183 4,434 Equipment (included in Property expense) 1,462 1,605 1,728 Computer hardware and software (included in Technology and communication expense) 18,757 19,076 18,588 Total depreciation charged to operating expenses 24,277 24,864 24,750 Impairment of buildings' carrying value (included in Impairment of fixed assets) — — 1,986 |
Goodwill and other intangible45
Goodwill and other intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Year ended Guernsey segment 31 December 2016 31 December 2015 31 December 2014 Balance at beginning of year 23,462 24,821 7,086 Acquisitions during the year — — 19,291 Foreign exchange translation adjustment (3,840 ) (1,359 ) (1,556 ) Balance at end of year 19,622 23,462 24,821 |
Schedule of customer relationship intangible assets | 31 December 2016 31 December 2015 Business segment Cost Accumulated Net carrying Cost Accumulated Net carrying Bermuda 29,785 (7,762 ) 22,023 8,342 (6,258 ) 2,084 Cayman 12,324 (2,782 ) 9,542 12,324 (1,960 ) 10,364 Guernsey 58,420 (47,696 ) 10,724 58,420 (43,199 ) 15,221 Total 100,529 (58,240 ) 42,289 79,086 (51,417 ) 27,669 |
Customer deposits and deposit46
Customer deposits and deposits from banks (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deposits [Abstract] | |
Schedule of maturities of deposits | By Maturity Demand Term 31 December 2016 Non-interest bearing Interest bearing Total demand deposits Within 3 months 3 to 6 months 6 to 12 months After 12 months Total term deposits Total deposits Customers Bermuda Demand or less than $100k¹ 1,733,684 3,013,401 4,747,085 14,091 4,309 9,068 16,380 43,848 4,790,933 Term - $100k or more N/A N/A — 1,013,159 37,550 60,952 44,507 1,156,168 1,156,168 Total Bermuda 1,733,684 3,013,401 4,747,085 1,027,250 41,859 70,020 60,887 1,200,016 5,947,101 Non-Bermuda Demand or less than $100k 651,329 2,794,799 3,446,128 20,295 4,108 4,145 783 29,331 3,475,459 Term and $100k or more N/A N/A — 440,674 119,519 17,590 9,510 587,293 587,293 Total non-Bermuda 651,329 2,794,799 3,446,128 460,969 123,627 21,735 10,293 616,624 4,062,752 Total customer deposits 2,385,013 5,808,200 8,193,213 1,488,219 165,486 91,755 71,180 1,816,640 10,009,853 Banks Bermuda Demand or less than $100k 340 — 340 4 — — — 4 344 Non-Bermuda Demand or less than $100k — 19,751 19,751 — — — — — 19,751 Term and $100k or more N/A N/A — 3,601 100 — — 3,701 3,701 Total non-Bermuda — 19,751 19,751 3,601 100 — — 3,701 23,452 Total bank deposits 340 19,751 20,091 3,605 100 — — 3,705 23,796 Total deposits 2,385,353 5,827,951 8,213,304 1,491,824 165,586 91,755 71,180 1,820,345 10,033,649 Demand Term 31 December 2015 Non-interest bearing Interest bearing Total demand deposits Within 3 months 3 to 6 months 6 to 12 months After 12 months Total term deposits Total deposits Customers Bermuda Demand or less than $100k¹ 1,348,878 2,390,952 3,739,830 15,902 4,757 10,035 15,881 46,575 3,786,405 Term - $100k or more N/A N/A — 329,433 37,925 64,943 53,002 485,303 485,303 Total Bermuda 1,348,878 2,390,952 3,739,830 345,335 42,682 74,978 68,883 531,878 4,271,708 Non-Bermuda Demand or less than $100k 532,867 3,381,946 3,914,813 22,878 6,714 4,238 376 34,206 3,949,019 Term and $100k or more N/A N/A — 616,442 246,989 74,030 9,480 946,941 946,941 Total non-Bermuda 532,867 3,381,946 3,914,813 639,320 253,703 78,268 9,856 981,147 4,895,960 Total customer deposits 1,881,745 5,772,898 7,654,643 984,655 296,385 153,246 78,739 1,513,025 9,167,668 Banks Bermuda Demand or less than $100k 403 — 403 — — — — — 403 Non-Bermuda Demand or less than $100k — 10,176 10,176 — — — — — 10,176 Term and $100k or more N/A N/A — 3,899 — — — 3,899 3,899 Total non-Bermuda — 10,176 10,176 3,899 — — — 3,899 14,075 Total bank deposits 403 10,176 10,579 3,899 — — — 3,899 14,478 Total deposits 1,882,148 5,783,074 7,665,222 988,554 296,385 153,246 78,739 1,516,924 9,182,146 ¹ As at 31 December 2016 , $150 million ( 31 December 2015 : $175 million ) of the Demand deposits - Interest bearing bear a special negligible interest rate. The weighted-average interest rate on interest-bearing demand deposits as at 31 December 2016 is 0.06% ( 31 December 2015 : 0.10% ). |
Schedule of deposits by type and segment | By Type and Segment 31 December 2016 31 December 2015 Payable on demand Payable on a fixed date Total Payable on demand Payable on a fixed date Total Bermuda Customers 4,747,086 1,200,016 5,947,102 3,739,829 531,877 4,271,706 Banks 341 4 345 403 — 403 Cayman Customers 2,606,305 417,750 3,024,055 2,596,642 416,489 3,013,131 Banks 19,615 3,701 23,316 9,365 3,899 13,264 Guernsey Customers 781,119 185,457 966,576 996,343 248,866 1,245,209 Banks — — — 669 — 669 The Bahamas Customers 58,703 13,417 72,120 36,078 3,602 39,680 United Kingdom Customers — — — 285,751 312,191 597,942 Banks 135 — 135 142 — 142 Total Customers 8,193,213 1,816,640 10,009,853 7,654,643 1,513,025 9,167,668 Total Banks 20,091 3,705 23,796 10,579 3,899 14,478 Total deposits 8,213,304 1,820,345 10,033,649 7,665,222 1,516,924 9,182,146 |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [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 benefits, which is unfunded. The Bank measures the benefit obligations and plan assets annually on each 31 December and therefore, the most recent measurement date is 31 December 2016 . 31 December 2016 31 December 2015 31 December 2014 Pension Post- Pension Post- Pension Post- Accumulated benefit obligation at end of year 178,067 — 166,815 — 188,890 — Change in projected benefit obligation Projected benefit obligation at beginning of year 166,815 119,107 188,890 114,640 167,469 89,109 Service cost — 118 — 341 1,203 825 Employee contributions — — — — 99 — Interest cost 5,781 4,792 6,958 4,745 7,760 4,503 Benefits paid (10,477 ) (3,594 ) (7,573 ) (2,871 ) (8,771 ) (3,590 ) Plan amendment — — — — — 7,901 Settlement and curtailment of liability — — (2,509 ) — (4,662 ) — Actuarial (gain) loss 30,953 5,911 (14,157 ) 2,252 31,604 15,892 Foreign exchange translation adjustment (15,004 ) — (4,794 ) — (5,812 ) — Projected benefit obligation at end of year 178,068 126,334 166,815 119,107 188,890 114,640 Change in plan assets Fair value of plan assets at beginning of year 179,961 — 194,007 — 186,412 — Actual return on plan assets 18,615 — 687 — 18,451 — Employer contribution 678 3,594 808 2,871 4,172 3,590 Employee contributions — — — — 99 — Plan settlement — — (2,424 ) — — — Benefits paid (10,477 ) (3,594 ) (7,573 ) (2,871 ) (8,771 ) (3,590 ) Foreign exchange translation adjustment (16,571 ) — (5,544 ) — (6,356 ) — Fair value of plan assets at end of year 172,206 — 179,961 — 194,007 — Amounts recognised in the consolidated balance sheets consist of: Prepaid benefit cost included in other assets 7,771 — 16,174 — 8,374 — Accrued pension benefit cost included in employee benefit plans liability (13,633 ) (126,334 ) (3,028 ) (119,107 ) (3,257 ) (114,640 ) Surplus (deficit) of plan assets over projected benefit obligation at measurement date (5,862 ) (126,334 ) 13,146 (119,107 ) 5,117 (114,640 ) |
Schedule of amounts recognised in accumulated other comprehensive loss | Year ended 31 December 2016 31 December 2015 31 December 2014 Pension Post- Pension Post- Pension Post- Amounts recognised in accumulated other comprehensive loss consist of: Net actuarial loss, excluding deferred taxes (64,852 ) (31,959 ) (46,696 ) (28,779 ) (53,970 ) (29,874 ) Prior service credit, net of prior service cost — (5,678 ) — 665 — 7,008 Deferred income taxes assets 1,620 — 365 — 801 — Net amount recognised in accumulated other comprehensive loss (63,232 ) (37,637 ) (46,331 ) (28,114 ) (53,169 ) (22,866 ) Annual Benefit Expense Expense component Service cost — 118 — 341 1,203 825 Interest cost 5,781 4,792 6,958 4,745 7,760 4,503 Expected return on plan assets (8,943 ) — (9,585 ) — (10,653 ) — Amortisation of net actuarial losses 1,702 2,731 1,607 3,347 1,058 922 Amortisation of prior service credit — (6,343 ) — (6,343 ) — (6,719 ) Loss on settlement — — 101 — — — Defined benefit expense (income) (1,460 ) 1,298 (919 ) 2,090 (632 ) (469 ) Defined contribution expense 6,606 — 6,907 — 6,892 — Total benefit expense (income) 5,146 1,298 5,988 2,090 6,260 (469 ) Other Changes Recognised in Other Comprehensive Income (Loss) Net gain (loss) arising during the year (19,956 ) (5,911 ) 5,096 (2,252 ) (18,947 ) (15,892 ) Prior service cost arising during the year — — — — — (7,901 ) Amortisation of net actuarial losses 1,702 2,731 1,703 3,347 1,058 922 Amortisation of prior service credit — (6,343 ) — (6,343 ) — (6,719 ) Change in deferred taxes 1,315 — (391 ) — 83 — Foreign exchange adjustment 38 — 430 — 253 — Total changes recognised in other comprehensive income (loss) (16,901 ) (9,523 ) 6,838 (5,248 ) (17,553 ) (29,590 ) |
Schedule of actuarial assumptions | Actuarial Assumptions Year ended 31 December 2016 31 December 2015 31 December 2014 Pension plans Post- retirement medical benefit plan Pension plans Post- retirement medical benefit plan Pension Post- Actuarial assumptions used to determine annual benefit expense Weighted average discount rate 3.90 % 4.70 % 3.80 % 4.20 % 4.75 % 5.10 % Weighted average rate of compensation increases 1 2.30 % N/A 2.20 % N/A 4.30 % N/A Weighted average expected long-term rate of return on plan assets 5.30 % N/A 5.10 % N/A 5.80 % N/A Weighted average annual medical cost increase rate (sensitivity shown below) N/A 8.0% to 4.5% in 2035 N/A 7.1% to 4.5% in 2027 N/A 7.3% to 4.5% in 2027 1 Only the United Kingdom subsidiary plan is impacted by potential future compensation increases. Actuarial assumptions used to determine benefit obligations at end of year Weighted average discount rate 3.40 % 4.37 % 4.20 % 4.70 % 3.80 % 4.20 % Weighted average rate of compensation increases 2.50 % N/A 2.30 % N/A 2.80 % N/A Weighted average annual medical cost increase rate (sensitivity shown below) N/A 7.8% to 4.5% in 2035 N/A 8.0% to 4.5% in 2035 N/A 7.1% to 4.5% in 2027 Post-retirement medical benefit plan sensitivity to trend rate assumptions The effect of a one percentage point increase or decrease in the assumed medical cost increase rate on the aggregate of service and interest costs is as follows: a. One percent increase in trend rate i. Effect on total service cost and interest cost components for the year N/A 772 N/A 909 N/A 952 ii. Effect on benefit obligation at year end N/A 19,513 N/A 18,792 N/A 20,339 b. One percent decrease in trend rate i. Effect on total service cost and interest cost components for the year N/A (694 ) N/A (781 ) N/A (771 ) ii. Effect on benefit obligation at year end N/A (16,255 ) N/A (15,496 ) N/A (16,514 ) |
Schedule of allocation of plan assets | The following table presents the fair value of plans' assets by category and level of inputs used in their respective fair value determination as described in Note 2: 31 December 2016 31 December 2015 Fair value determination Fair value determination Level 1 Level 2 Level 3 Total fair value Level 1 Level 2 Level 3 Total fair value US government and federal agencies — 9,777 — 9,777 — 7,532 — 7,532 Non-US governments debt securities — 23,255 — 23,255 — — — — Corporate debt securities — 36,184 — 36,184 — 68,166 — 68,166 Equity securities and mutual funds — 102,627 — 102,627 11,845 91,702 — 103,547 Other — 363 — 363 — 716 — 716 Total fair value of plans' assets — 172,206 — 172,206 11,845 168,116 — 179,961 31 December 2016 31 December 2015 Weighted average actual and target asset allocations of the pension plans by asset category Actual allocation Target allocation Actual allocation Target allocation Debt securities (including debt mutual funds) 40 % 46 % 42 % 53 % Equity securities (including equity mutual funds) 60 % 49 % 58 % 47 % Other 0 % 5 % 0 % 0 % Total 100 % 100 % 100 % 100 % |
Schedule of expected benefit payments | Estimated 2017 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 plans Post- retirement medical benefit plan Estimated Bank contributions for the full year ending 31 December 2017 330 4,571 Estimated benefit payments by year: 2017 7,300 4,571 2018 7,300 4,896 2019 7,300 5,237 2020 7,300 5,581 2021 7,300 5,942 2022-2026 36,000 34,940 |
Credit-related arrangements, 48
Credit-related arrangements, repurchase agreements and commitments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual obligation, fiscal year maturity schedule | The following table summarises the Bank's commitments for sourcing, long-term leases and other agreements: Year ending 31 December Sourcing Leases Other Total 2017 17,157 4,761 2,503 24,421 2018 13,876 3,705 2,440 20,021 2019 13,746 2,900 2,440 19,086 2020 13,666 2,759 600 17,025 2021 11,373 2,665 600 14,638 2022 & thereafter — 2,508 600 3,108 Total commitments 69,818 19,298 9,183 98,299 |
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. 31 December 2016 31 December 2015 Outstanding financial guarantees Gross Collateral Net Gross Collateral Net Standby letters of credit 242,437 242,437 — 258,851 257,200 1,651 Letters of guarantee 4,772 4,772 — 9,137 8,418 719 Total 247,209 247,209 — 267,988 265,618 2,370 |
Schedule of fair value, off-balance sheet risks | Outstanding unfunded commitments to extend credit 31 December 2016 31 December 2015 Commitments to extend credit 412,568 390,497 Documentary and commercial letters of credit 1,069 455 Total unfunded commitments to extend credit 413,637 390,952 |
Exit cost obligations (Tables)
Exit cost obligations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and related costs | Expense recognised by year Amounts paid by year Exit cost liability Year ended 31 December 2016 Year ended 31 December 2015 Costs to be recognised in the future Total exit costs expected to be incurred Year ended 31 December 2016 Year ended 31 December 2015 As at 31 December 2016 As at 31 December 2015 Staff redundancy expenses 2,810 634 116 3,560 3,329 — 115 634 Professional services 2,284 1,549 219 4,052 3,763 — 70 1,549 Lease termination expenses — — 1,513 1,513 — — — — Other expenses 1,172 — 924 2,096 1,172 — — — Total 6,266 2,183 2,772 11,221 8,264 — 185 2,183 |
Loan interest income (Tables)
Loan interest income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Summary of interest and other income | Year ended Contractual interest 31 December 2016 31 December 2015 31 December 2014 Contractual interest earned on mortgages 103,820 104,194 106,321 Contractual interest earned on other loans 81,509 79,506 82,395 Subtotal contractual interest earned 185,329 183,700 188,716 Amortisation Amortisation of fair value hedge (1,120 ) (1,471 ) (1,548 ) Amortisation of loan origination fees (net of amortised costs) 3,791 4,257 4,818 Total loan interest income 188,000 186,486 191,986 Balance of unamortised fair value hedge included in loans as at year end 3,215 4,335 5,806 Balance of unamortised loan fees included in loans as at year end 6,313 7,319 7,072 |
Segmented information (Tables)
Segmented information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Total Assets by Segment 31 December 2016 31 December 2015 Bermuda 6,765,125 5,113,718 Cayman 3,393,256 3,282,319 Guernsey 1,132,663 1,391,126 Switzerland 2,173 2,713 The Bahamas 81,604 49,434 United Kingdom 151,866 788,433 Total assets before inter-segment eliminations 11,526,687 10,627,743 Less: inter-segment eliminations (423,142 ) (352,180 ) Total 11,103,545 10,275,563 Net interest income Provision for credit losses Non-interest income Revenue before gains and losses Gains and losses Total net revenue Total expenses Net income Year ended 31 December 2016 Customer Inter- segment Bermuda 160,466 1,642 (7,263 ) 71,765 226,610 1,412 228,022 164,503 63,519 Cayman 79,644 388 2,135 41,364 123,531 (532 ) 122,999 60,613 62,386 Guernsey 14,469 (323 ) (395 ) 24,623 38,374 (1,027 ) 37,347 35,547 1,800 Switzerland 41 — — 3,798 3,839 — 3,839 3,366 473 The Bahamas 46 30 — 4,666 4,742 — 4,742 5,032 (290 ) United Kingdom 3,814 (1,737 ) 1,124 3,947 7,148 1,161 8,309 20,255 (11,946 ) Total before eliminations 258,480 — (4,399 ) 150,163 404,244 1,014 405,258 289,316 115,942 Inter-segment eliminations — — — (2,690 ) (2,690 ) — (2,690 ) (2,690 ) — Total 258,480 — (4,399 ) 147,473 401,554 1,014 402,568 286,626 115,942 Net interest income Provision for credit losses Non-interest income Revenue before gains and losses Gains and losses Total net revenue Total expenses Net income Year ended 31 December 2015 Customer Inter- segment Bermuda 142,488 2,600 (3,625 ) 61,050 202,513 (2,503 ) 200,010 159,474 40,536 Cayman 66,317 608 (466 ) 39,508 105,967 (793 ) 105,174 58,115 47,059 Guernsey 17,025 (427 ) (103 ) 26,171 42,666 (1,066 ) 41,600 39,872 1,728 Switzerland — — — 3,420 3,420 — 3,420 3,320 100 The Bahamas 8 116 — 5,295 5,419 1 5,420 5,068 352 United Kingdom 13,428 (2,897 ) (1,547 ) 6,307 15,291 (5,076 ) 10,215 22,251 (12,036 ) Total before eliminations 239,266 — (5,741 ) 141,751 375,276 (9,437 ) 365,839 288,100 77,739 Inter-segment eliminations — — — (1,579 ) (1,579 ) — (1,579 ) (1,579 ) — Total 239,266 — (5,741 ) 140,172 373,697 (9,437 ) 364,260 286,521 77,739 Net interest income Provision for credit losses Non-interest income Revenue before gains and losses Gains and losses Total net revenue Total expenses Net income Year ended 31 December 2014 Customer Inter- segment Bermuda 141,528 3,164 (6,425 ) 60,692 198,959 6,908 205,867 145,696 60,171 Cayman 58,442 928 (557 ) 33,515 92,328 36 92,364 58,829 33,535 Guernsey 19,303 (1,242 ) (154 ) 26,814 44,721 4,432 49,153 39,580 9,573 Switzerland — — — 2,486 2,486 — 2,486 2,867 (381 ) The Bahamas (15 ) 166 — 5,492 5,643 — 5,643 5,548 95 United Kingdom 19,229 (3,016 ) (912 ) 7,717 23,018 4,312 27,330 22,164 5,166 Total before eliminations 238,487 — (8,048 ) 136,716 367,155 15,688 382,843 274,684 108,159 Inter-segment eliminations — — — (1,886 ) (1,886 ) — (1,886 ) (1,886 ) — Total 238,487 — (8,048 ) 134,830 365,269 15,688 380,957 272,798 108,159 |
Derivative instruments and ri52
Derivative instruments and risk management (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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. 31 December 2016 Derivative instrument Number of contracts Notional amounts Gross positive fair value Gross negative fair value Net fair value Risk management derivatives Net investment hedges Currency swaps 1 77,670 15,744 — 15,744 Derivatives not formally designated as hedging instruments Currency swaps 11 676,856 5,901 (3,013 ) 2,888 Subtotal risk management derivatives 754,526 21,645 (3,013 ) 18,632 Client services derivatives Spot and forward foreign exchange 106 2,039,141 15,410 (15,267 ) 143 Total derivative instruments 2,793,667 37,055 (18,280 ) 18,775 31 December 2015 Derivative instrument Number of contracts Notional amounts Gross positive fair value Gross negative fair value Net fair value Risk management derivatives Net investment hedges Currency swaps 1 77,670 4,122 — 4,122 Derivatives not formally designated as hedging instruments Currency swaps 4 77,881 273 (95 ) 178 Subtotal risk management derivatives 155,551 4,395 (95 ) 4,300 Client services derivatives Spot and forward foreign exchange 128 2,572,525 16,426 (15,961 ) 465 Total derivative instruments 2,728,076 20,821 (16,056 ) 4,765 |
Schedule of offsetting assets | 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 value recognised Less: offset applied under master netting agreements Net fair value presented in the consolidated balance sheets Less: positions not offset in the consolidated balance sheets 31 December 2016 Gross fair value of derivatives Cash collateral received / paid Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 37,055 (6,959 ) 30,096 (6,811 ) (8,292 ) 14,993 Derivative liabilities Spot and forward foreign exchange and currency swaps 18,280 (6,959 ) 11,321 (6,811 ) — 4,510 Net positive fair value 18,775 Gross fair value recognised Less: offset applied under master netting agreements Net fair value presented in the consolidated balance sheets Less: positions not offset in the consolidated balance sheets 31 December 2015 Gross fair value of derivatives Cash collateral received / paid Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 20,821 (7,127 ) 13,694 (78 ) (269 ) 13,347 Derivative liabilities Spot and forward foreign exchange and currency swaps 16,056 (7,127 ) 8,929 (78 ) (185 ) 8,666 Net positive fair value 4,765 |
Schedule of offsetting liabilities | 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 value recognised Less: offset applied under master netting agreements Net fair value presented in the consolidated balance sheets Less: positions not offset in the consolidated balance sheets 31 December 2016 Gross fair value of derivatives Cash collateral received / paid Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 37,055 (6,959 ) 30,096 (6,811 ) (8,292 ) 14,993 Derivative liabilities Spot and forward foreign exchange and currency swaps 18,280 (6,959 ) 11,321 (6,811 ) — 4,510 Net positive fair value 18,775 Gross fair value recognised Less: offset applied under master netting agreements Net fair value presented in the consolidated balance sheets Less: positions not offset in the consolidated balance sheets 31 December 2015 Gross fair value of derivatives Cash collateral received / paid Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 20,821 (7,127 ) 13,694 (78 ) (269 ) 13,347 Derivative liabilities Spot and forward foreign exchange and currency swaps 16,056 (7,127 ) 8,929 (78 ) (185 ) 8,666 Net positive fair value 4,765 |
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. During 2016, management revised the following disclosures to segregate the gains and losses attributable to the specific types of derivatives. Year ended Derivative instrument Consolidated statements of operations line item 31 December 2016 31 December 2015 31 December 2014 Spot and forward foreign exchange Foreign exchange revenue (322 ) 110 (724 ) Currency swaps, not designated as hedge Foreign exchange revenue 2,710 1,643 7,916 Currency swaps (net investment hedge) Foreign exchange revenue (1,091 ) 2,331 742 Total net gains (losses) recognised in net income 1,297 4,084 7,934 Derivative instrument Consolidated statements of comprehensive income line item 31 December 2016 31 December 2015 31 December 2014 Currency swaps (net investment hedge) Net change in unrealised gains and losses on translation of net investment in foreign operations 12,713 4,254 6,799 Total net gains recognised in comprehensive income 12,713 4,254 6,799 |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities that are measured at fair value on a recurring basis | 31 December 2016 31 December 2015 Fair value Total carrying amount / fair value Fair value Total carrying amount / fair value Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Items that are recognised at fair value on a recurring basis: Financial assets Trading investments US government and federal agencies — — — — — 279,343 — 279,343 Non-US governments debt securities — — — — — 7,489 — 7,489 Asset-backed securities - Student loans — — — — — 28,285 — 28,285 Mutual funds 6,091 222 — 6,313 5,903 279 — 6,182 Total trading 6,091 222 — 6,313 5,903 315,396 — 321,299 Available-for-sale investments US government and federal agencies — 2,430,402 — 2,430,402 — 1,404,499 — 1,404,499 Non-US governments debt securities — 27,020 — 27,020 — 29,575 — 29,575 Corporate debt securities — 514,475 — 514,475 — 506,144 — 506,144 Asset-backed securities - Student loans — — 12,493 12,493 — — 12,161 12,161 Commercial mortgage-backed securities — 150,546 — 150,546 — 148,726 — 148,726 Residential mortgage-backed securities — 197,802 — 197,802 — 100,244 — 100,244 Total available-for-sale — 3,320,245 12,493 3,332,738 — 2,189,188 12,161 2,201,349 Other assets - Derivatives — 30,096 — 30,096 — 13,694 — 13,694 Financial liabilities Other liabilities - Derivatives — 11,321 — 11,321 — 8,929 — 8,929 |
Schedule of level 3 reconciliation | 31 December 2016 31 December 2015 31 December 2014 Available- for-sale investments Available- for-sale investments Available- Carrying amount at beginning of year 12,161 12,226 45,304 Proceeds from sales, paydowns and maturities — — (36,439 ) Accretion recognised in net income — — 915 Realised and unrealised gains (losses) recognised in other comprehensive income 332 (65 ) (6,286 ) Realised and unrealised gains recognised in net income — — 8,732 Carrying amount at end of year 12,493 12,161 12,226 |
Items other than those recognised at fair value on a recurring basis | Items Other Than Those Recognised at Fair Value on a Recurring Basis: 31 December 2016 31 December 2015 Level Carrying amount Fair value Appreciation / (depreciation) Carrying amount Fair value Appreciation / (depreciation) Financial assets Cash due from banks Level 1 2,101,651 2,101,651 — 2,288,890 2,288,890 — Securities purchased under agreement to resell Level 2 148,813 148,813 — — — — Short-term investments Level 1 519,755 519,755 — 409,482 409,482 — Investments held-to-maturity Level 2 1,061,103 1,046,828 (14,275 ) 701,282 701,495 213 Loans, net of allowance for credit losses Level 2 3,570,478 3,566,812 (3,666 ) 4,000,155 3,996,443 (3,712 ) Other real estate owned¹ Level 2 14,199 14,199 — 11,206 11,206 — Financial liabilities Customer deposits Demand deposits Level 2 8,193,213 8,193,213 — 7,654,643 7,654,643 — Term deposits Level 2 1,816,640 1,817,564 (924 ) 1,513,025 1,514,126 (1,101 ) Deposits from banks Level 2 23,796 23,796 — 14,478 14,478 — Long-term debt Level 2 117,000 117,683 (683 ) 117,000 116,606 394 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, 2016 | |
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 | 31 December 2016 Earlier of contractual maturity or repricing date (in $ millions) Within 3 months 3 to 6 months 6 to 12 months 1 to 5 years After 5 years Non-interest bearing funds Total Assets Cash due from banks 1,991 — — — — 111 2,102 Securities purchased under agreement to resell 149 — — — — — 149 Short-term investments 135 385 — — — — 520 Investments 1,343 15 81 704 2,251 6 4,400 Loans 3,339 53 57 81 38 2 3,570 Other assets — — — — — 363 363 Total assets 6,957 453 138 785 2,289 482 11,104 Liabilities and shareholders' equity Shareholders’ equity — — — — — 711 711 Demand deposits 5,828 — — — — 2,385 8,213 Term deposits 1,492 166 92 71 — — 1,821 Other liabilities — — — — — 242 242 Long-term debt 92 — — 25 — — 117 Total liabilities and shareholders' equity 7,412 166 92 96 — 3,338 11,104 Interest rate sensitivity gap (455 ) 287 46 689 2,289 (2,856 ) — Cumulative interest rate sensitivity gap (455 ) (168 ) (122 ) 567 2,856 — — 31 December 2015 Earlier of contractual maturity or repricing date (in $ millions) Within 3 months 3 to 6 months 6 to 12 months 1 to 5 years After 5 years Non-interest bearing funds Total Assets Cash due from banks 2,178 — — — — 111 2,289 Short-term investments 117 291 1 — — — 409 Investments 871 79 19 620 1,629 6 3,224 Loans 3,735 84 53 67 47 14 4,000 Other assets — — — — — 354 354 Total assets 6,901 454 73 687 1,676 485 10,276 Liabilities and shareholders' equity Shareholders’ equity — — — — — 750 750 Demand deposits 5,783 — — — — 1,882 7,665 Term deposits 989 296 153 79 — — 1,517 Other liabilities — — — — — 227 227 Long-term debt 92 — — 25 — — 117 Total liabilities and shareholders' equity 6,864 296 153 104 — 2,859 10,276 Interest rate sensitivity gap 37 158 (80 ) 583 1,676 (2,374 ) — Cumulative interest rate sensitivity gap 37 195 115 698 2,374 — — |
Long-term debt (Tables)
Long-term debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 31 December 2016 . The interest payments are calculated until contractual maturity using the current LIBOR rates. 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 year 1 to 5 years After 5 years Bermuda 2003 issuance - Series B 27 May 2013 27 May 2018 5.15 % 3 months US$ LIBOR + 2.000% 47,000 1,354 672 — 2005 issuance - Series B 2 July 2015 2 July 2020 5.11 % 3 months US$ LIBOR + 1.695% 45,000 1,158 3,184 — 2008 issuance - Series B 27 May 2018 27 May 2023 8.44 % 3 months US$ LIBOR + 4.929% 25,000 2,110 6,185 2,188 Total 117,000 4,622 10,041 2,188 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | Year Ended 31 December 2016 31 December 2015 31 December 2014 Net income 115,942 77,739 108,159 Less: Preference dividends declared and guarantee fee (15,655 ) (16,455 ) (16,546 ) Less: Premium on preference share buyback and redemption (41,913 ) (28 ) (96 ) Net income attributable to participating shares 58,374 61,256 91,517 Less: Dividend paid on common shares (19,346 ) (24,708 ) (27,088 ) Less: Dividend paid on contingent value convertible preference shares — (138 ) (352 ) Undistributed earnings attributable for participating shares 39,028 36,410 64,077 Basic Earnings Per Share Common shares Common shares CVCP Common shares CVCP Weighted average number of shares issued 49,128 49,842 159 54,994 699 Weighted average number of common shares held as treasury stock (506 ) (1,079 ) N/A (934 ) N/A Weighted average number of participating shares (in thousands) 48,622 48,763 159 54,060 699 Allocation of undistributed earnings - Basic 39,028 36,292 118 63,259 818 Distributed earnings per share 0.40 0.50 0.20 0.50 0.50 Undistributed earnings per share 0.80 0.75 0.19 1.17 1.17 Basic Earnings Per Share 1.20 1.25 0.39 1.67 1.67 Diluted Earnings Per Share Common shares Common shares CVCP Common shares CVCP Adjusted weighted average number of participating shares outstanding 48,622 48,763 159 54,060 699 Net dilution impact related to options to purchase common shares 607 472 N/A 393 N/A Net dilution impact related to awards of unvested common shares 382 609 N/A 496 N/A Weighted average number of diluted participating shares (in thousands) 49,611 49,844 159 54,949 699 Allocation of undistributed earnings - Diluted 39,028 36,294 116 63,272 805 Distributed earnings per share 0.40 0.50 0.20 0.50 0.50 Undistributed earnings per share 0.78 0.73 0.19 1.15 1.15 Diluted Earnings Per Share 1.18 1.23 0.39 1.65 1.65 |
Share-based payments (Tables)
Share-based payments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of weighted average fair value of stock options granted | Weighted average fair value of stock options granted Time vested options Performance Year ended 31 December 2012 (most recent year during which options were granted) $ 4.20 $ 4.40 Year ended 31 December 2011 $ 4.10 $ 4.30 |
Schedule of changes in outstanding stock options | Changes in Outstanding Stock Options Number of shares transferable upon exercise (thousands) Weighted average exercise price ($) Weighted average remaining life (years) Aggregate intrinsic value ($ thousands) Year ended 31 December 2016 1997 Stock Option Plan 2010 Stock Option Plan Total 1997 Stock Option Plan 2010 Stock Option Plan 1997 Stock Option Plan 2010 Stock Option Plan Outstanding at beginning of year 218 2,608 2,826 135.19 11.60 Exercised — (625 ) (625 ) — 11.68 8,938 Forfeitures and cancellations (102 ) (5 ) (107 ) 138.79 11.50 Resignations, retirements, redundancies — (28 ) (28 ) — 11.50 Outstanding at end of year 116 1,950 2,066 132.13 11.57 1.18 3.42 38,489 Vested and exercisable at end of year 116 1,950 2,066 132.13 11.57 1.18 3.42 Number of shares transferable upon exercise (thousands) Weighted average exercise price ($) Weighted average remaining life (years) Aggregate intrinsic value ($ thousands) Year ended 31 December 2015 1997 Stock Option Plan 2010 Stock Option Plan Total 1997 Stock Option Plan 2010 Stock Option Plan 1997 Stock Option Plan 2010 Stock Option Plan Outstanding at beginning of year 352 2,678 3,030 130.70 11.70 Exercised — (55 ) (55 ) — 11.50 393 Forfeitures and cancellations (134 ) (2 ) (136 ) 123.30 11.50 Resignations, retirements, redundancies — (13 ) (13 ) — 11.50 Outstanding at end of year 218 2,608 2,826 135.19 11.60 1.78 4.67 20,594 Vested and exercisable at end of year 218 1,242 1,460 135.19 11.60 1.78 4.94 Number of shares transferable upon exercise (thousands) Weighted average exercise price ($) Weighted average remaining life (years) Aggregate intrinsic value ($ thousands) Year ended 31 December 2014 1997 Stock Option Plan 2010 Stock Option Plan Total 1997 Stock Option Plan 2010 Stock Option Plan 1997 Stock Option Plan 2010 Stock Option Plan Outstanding at beginning of year 399 2,781 3,180 128.30 11.70 Exercised — (103 ) (103 ) — 11.60 874 Forfeitures and cancellations (44 ) — (44 ) 108.60 11.60 Expiration at end of plan life (3 ) — (3 ) 137.60 — Outstanding at end of year 352 2,678 3,030 130.70 11.70 2.38 5.66 22,233 Vested and exercisable at end of year 352 868 1,220 130.70 11.70 2.38 5.65 |
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 31 December 2016 31 December 2015 31 December 2014 EDIP ELTIP EDIP ELTIP EDIP ELTIP Outstanding at beginning of year 226 606 265 706 218 644 Granted 115 360 175 253 150 255 Vested (fair value in 2016: $7.0 million, 2015: $10.6 million, 2014: $5.5 million) (118 ) (302 ) (207 ) (322 ) (103 ) (185 ) Resignations, retirements, redundancies (8 ) (24 ) (7 ) (31 ) — (8 ) Outstanding at end of year 215 640 226 606 265 706 |
Schedule of share-based compensation cost recognised in net income | Share-based Compensation Cost Recognised in Net Income Year ended 31 December 2016 31 December 2015 31 December 2014 Stock option plans EDIP and ELTIP Total Stock option plans EDIP and ELTIP Total Stock option plans EDIP and ELTIP Total Cost recognised in net income 8,697 5,375 14,072 521 7,182 7,703 1,915 6,954 8,869 |
Schedule of unrecognized compensation cost | Unrecognised Share-based Compensation Cost 31 December 2016 31 December 2015 2010 Stock Option Plan Time vesting options — 8 Performance vesting options — 8,689 EDIP 2,040 2,098 ELTIP Time vesting shares 2,988 21 Performance vesting shares 3,802 3,432 Total unrecognised expense 8,830 14,248 |
Share buy-back plans (Tables)
Share buy-back plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of share repurchase programmes | Year ended 31 December Preference share buy-backs 2016 2015 2014 2013 2012 Total Acquired number of shares (to the nearest 1) — 183 560 11,972 4,422 17,137 Average cost per preference share — 1,151.55 1,172.26 1,230.26 1,218.40 1,224.46 Total cost (in US dollars) — 210,734 656,465 14,728,624 5,387,777 20,983,600 Year ended 31 December Common share buy-backs 2016 2015 2014 2013 2012 Total Acquired number of shares (to the nearest 1) 97,053 250,371 856,734 403,848 726,005 2,334,011 Average cost per common share 16.36 19.42 19.86 13.89 12.40 16.31 Total cost (in US dollars) 1,588,189 4,862,248 17,018,412 5,610,907 8,999,061 38,078,817 |
Accumulated other comprehensi59
Accumulated other comprehensive loss (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of AOCL components | Unrealised (losses) on translation of net investment in foreign operations HTM investments Unrealised gains (losses) on AFS investments Employee benefit plans 31 December 2016 Pension Post-retirement healthcare Subtotal - employee benefits plans Total AOCL Balance at beginning of year (13,645 ) (2,350 ) (57 ) (46,331 ) (28,114 ) (74,445 ) (90,497 ) Transfer of AFS investments to HTM investments — 1,442 (1,442 ) — — — — Other comprehensive income (loss), net of taxes (6,507 ) (71 ) (21,181 ) (16,901 ) (9,523 ) (26,424 ) (54,183 ) Balance at end of year (20,152 ) (979 ) (22,680 ) (63,232 ) (37,637 ) (100,869 ) (144,680 ) Unrealised (losses) on translation of net investment in foreign operations HTM investments Unrealised gains (losses) on AFS investments Employee benefit plans 31 December 2015 Pension Post- retirement healthcare Subtotal - employee benefits plans Total AOCL Balance at beginning of year (10,506 ) — 9,021 (53,169 ) (22,866 ) (76,035 ) (77,520 ) Transfer of AFS investments to HTM investments — (2,715 ) 2,715 — — — — Other comprehensive income (loss), net of taxes (3,139 ) 365 (11,793 ) 6,838 (5,248 ) 1,590 (12,977 ) Balance at end of year (13,645 ) (2,350 ) (57 ) (46,331 ) (28,114 ) (74,445 ) (90,497 ) Unrealised (losses) on translation of net investment in foreign operations HTM investments Unrealised gains (losses) on AFS investments Employee benefit plans 31 December 2014 Pension Post- retirement healthcare Subtotal - employee benefits plans Total AOCL Balance at beginning of year (7,632 ) — (31,064 ) (35,616 ) 6,724 (28,892 ) (67,588 ) Other comprehensive income (loss), net of taxes (2,874 ) — 40,085 (17,553 ) (29,590 ) (47,143 ) (9,932 ) Balance at end of year (10,506 ) — 9,021 (53,169 ) (22,866 ) (76,035 ) (77,520 ) |
Schedule of net change in AOCL components | Net Change of AOCL Components Year ended Line item in the consolidated statements of operations, if any 31 December 2016 31 December 2015 31 December 2014 Net unrealised gains (losses) on translation of net investment in foreign operations adjustments Foreign currency translation adjustments N/A (25,691 ) (9,723 ) (10,574 ) Gains (loss) on net investment hedge N/A 19,184 6,584 7,700 Net change (6,507 ) (3,139 ) (2,874 ) Held-to-maturity investment adjustments Net unamortised gains (losses) transferred from AFS N/A 1,442 (2,715 ) — Amortisation of net gains (losses) to net income Interest income on investments (71 ) 378 — Foreign currency translation adjustments of related balances N/A — (13 ) — Net change 1,371 (2,350 ) — Available-for-sale investment adjustments Gross unrealised gains (losses) N/A (19,635 ) (16,337 ) 48,703 Net unrealised (gains) losses transferred to HTM N/A (1,442 ) 2,715 — Transfer of realised (gains) losses to net income Net realised gains (losses) on AFS investments (1,546 ) 4,407 (8,680 ) Foreign currency translation adjustments of related balances N/A — 137 62 Net change (22,623 ) (9,078 ) 40,085 Employee benefit plans adjustments Defined benefit pension plan Net actuarial gain (loss) N/A (19,956 ) 5,096 (18,947 ) Amortisation of actuarial losses Salaries and other employee benefits 1,702 1,703 1,058 Change in deferred taxes N/A 1,315 (391 ) 83 Foreign currency translation adjustments of related balances N/A 38 430 253 Net change (16,901 ) 6,838 (17,553 ) Post-retirement healthcare plan Net actuarial (loss) N/A (5,911 ) (2,252 ) (15,892 ) Prior service cost N/A — — (7,901 ) Amortisation of net actuarial losses Salaries and other employee benefits 2,731 3,347 922 Amortisation of prior service credit Salaries and other employee benefits (6,343 ) (6,343 ) (6,719 ) Net change (9,523 ) (5,248 ) (29,590 ) Other comprehensive income (loss), net of taxes (54,183 ) (12,977 ) (9,932 ) |
Capital structure (Tables)
Capital structure (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Banking and Thrift [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 as at 31 December 2016 and the Basel II framework as at 31 December 2015 : 31 December 2016 (Basel III) 31 December 2015 (Basel II) Actual Regulatory minimum Actual Regulatory minimum Capital Tier 1 capital 666,847 N/A 699,278 N/A Common Equity Tier 1 666,847 N/A N/A N/A Tier 2 capital 102,709 N/A 119,164 N/A Total capital 769,556 N/A 818,442 N/A Risk Weighted Assets 4,365,440 N/A 4,304,074 N/A Capital Ratios (%) Common Equity Tier 1 15.3 % 8.1 % N/A N/A Total Tier 1 15.3 % 9.6 % 16.2 % 4.0 % Total Capital 17.6 % 15.3 % 19.0 % 14.5 % Leverage ratio 5.8 % 5.0 % N/A N/A |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of income taxes in consolidated statements of operations | Year ended Income taxes in consolidated statements of operations 31 December 2016 31 December 2015 31 December 2014 Current tax expense (benefit) 727 819 (169 ) Deferred tax expense — 457 — Total tax expense (benefit) 727 1,276 (169 ) |
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 31 December 2016 31 December 2015 31 December 2014 $ % $ % $ % Income tax expense at Bermuda corporation tax rate of 0% — — % — — % — — % Income tax expense in international offices taxed at different rates (2,104 ) (2 )% (904 ) (1 )% 1,501 2 % Change in valuation allowance 87 — % 466 1 % (1,429 ) (2 )% Prior year tax adjustments (71 ) — % 80 — % (956 ) (1 )% Tax loss carried forward — — % — — % — — % Other - net 2,815 3 % 1,634 2 % 715 1 % Income tax expense (benefit) at effective tax rate 727 1 % 1,276 2 % (169 ) — % |
Schedule of deferred income taxes | Deferred income taxes 31 December 2016 31 December 2015 Deferred income tax asset Tax loss carried forward 5,770 2,540 Pension liability 1,594 365 Fixed assets 11 741 Allowance for compensated absence 8 9 Onerous leases 9 11 Deferred income tax asset before valuation allowance 7,392 3,666 Less: valuation allowance (5,638 ) (3,105 ) Net deferred income tax assets 1,754 561 Deferred income tax liability Other — — Net deferred income tax asset 1,754 561 |
Business combinations (Tables)
Business combinations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of total consideration transferred | The fair value of the net assets acquired and allocation of purchase is summarised as follows: As at 29 April 2016 Total consideration transferred 21,778 Assets acquired Intangible assets 21,443 Other assets 3,345 Total assets acquired 24,788 Liabilities acquired 3,010 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 operations from HSBC Bermuda, assuming the transaction had been effected on 1 January 2014. 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 have been prepared based on the actual results realised by the Bank from operating the acquired activities, when such activities where not yet inextricably merged into the Bank's operations. Year ended Unaudited pro forma financial information 31 December 2016 31 December 2015 31 December 2014 Total net revenue 407,453 378,915 395,612 Total non-interest operating expense 289,019 293,700 279,977 Pro forma net income post business combination 118,434 85,215 115,635 |
Condensed financial statement63
Condensed financial statements of the parent company only (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only 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 31 December 2016 31 December 2015 Assets Cash and demand deposits with banks - Non-interest-bearing 28,032 28,146 Demand deposits with banks - Interest-bearing 136,373 125,826 Cash equivalents - Interest-bearing 1,042,365 691,438 Cash due from banks 1,206,770 845,410 Securities purchased under agreement to resell 148,813 — Short-term investments 447,748 112,219 Investment in securities Trading 6,313 6,167 Available-for-sale 2,170,155 1,227,953 Held-to-maturity (fair value: $498,367 (2015: $421,588)) 507,239 422,000 Total investment in securities 2,683,707 1,656,120 Net assets of subsidiaries - Banks 327,149 355,062 Net assets of subsidiaries - Non-banks 11,610 7,173 Loans to third parties, net of allowance for credit losses 1,909,093 2,096,625 Loans to subsidiaries - Banks 54,207 71,331 Loans to subsidiaries - Non-banks 55,120 60,292 Accrued interest 15,035 13,872 Other assets, including premises, equipment and computer software, equity method investments and other real estate owned 217,795 196,636 Total assets 7,077,047 5,414,740 Liabilities Customer deposits Non-interest bearing 1,733,684 1,348,877 Interest bearing 4,213,417 2,922,830 Total customer deposits 5,947,101 4,271,707 Bank deposits 119,331 102,574 Total deposits 6,066,432 4,374,281 Securities sold under agreement to repurchase — — Employee benefit plans 133,834 122,135 Accrued interest 1,690 1,530 Preference share dividends payable — 654 Other liabilities 47,348 48,786 Total other liabilities 182,872 173,105 Long-term debt 117,000 117,000 Total liabilities 6,366,304 4,664,386 Total shareholders’ equity 710,743 750,354 Total liabilities and shareholders’ equity 7,077,047 5,414,740 |
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 31 December 2016 31 December 2015 31 December 2014 Non-interest income Banking 21,984 19,193 18,208 Foreign exchange revenue 11,174 11,789 12,581 Other non-interest income 3,516 4,671 4,592 Dividends from subsidiaries - Banks 40,000 36,226 43,343 Dividends from subsidiaries - Non-banks 6,600 — 28,656 Total non-interest income 83,274 71,879 107,380 Interest income Loans 123,370 117,124 119,846 Investments 44,745 39,987 38,510 Deposits with banks 6,293 1,600 1,398 Total interest income 174,408 158,711 159,754 Interest expense Deposits 6,882 7,947 8,541 Long-term debt 4,500 4,861 5,628 Securities sold under repurchase agreements 118 8 82 Total interest expense 11,500 12,816 14,251 Net interest income before provision for credit losses 162,908 145,895 145,503 Provision for credit losses (7,263 ) (3,624 ) (6,425 ) Net interest income after provision for credit losses 155,645 142,271 139,078 Net trading gains 330 80 257 Net realised gains (losses) on available-for-sale investments 1,222 (2,841 ) 8,714 Net losses on other real estate owned (287 ) (543 ) (775 ) Impairment of fixed assets — — (1,050 ) Net other gains (losses) (325 ) 19 (10 ) Total other gains (losses) 940 (3,285 ) 7,136 Total net revenue 239,859 210,865 253,594 Non-interest expense Salaries and other employee benefits 69,770 60,132 55,276 Technology and communications 34,033 34,879 33,248 Property 5,983 5,929 6,297 Professional and outside services 9,379 19,043 14,140 Indirect taxes 10,562 8,577 7,814 Amortisation of intangible assets 113 — — Marketing 2,138 1,730 1,309 Restructuring costs 117 — — Other expenses 5,373 8,017 4,846 Total non-interest expense 137,468 138,307 122,930 Net income before equity in undistributed earnings of subsidiaries 102,391 72,558 130,664 Equity in undistributed earnings of subsidiaries 13,551 5,181 (22,505 ) Net income 115,942 77,739 108,159 Other comprehensive income, net of tax (54,183 ) (12,977 ) (9,932 ) Total comprehensive income 61,759 64,762 98,227 |
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 31 December 2016 31 December 2015 31 December 2014 Cash flows from operating activities Net income 115,942 77,739 108,159 Adjustments to reconcile net income to operating cash flows Depreciation and amortisation 23,687 22,267 19,836 (Increase) in carrying value of equity method investments (949 ) (1,056 ) (1,103 ) Share-based payments and settlements 14,423 7,913 9,049 Equity in undistributed earnings of subsidiaries (13,551 ) (5,181 ) 22,505 Net realised / unrealised losses on other real estate owned 287 543 775 Net realised (gains) losses on available-for-sale investments (1,222 ) 2,841 (8,714 ) Provision for credit losses 7,263 3,624 6,425 Changes in operating assets and liabilities (Increase) decrease in accrued interest receivable (1,163 ) 6,904 (982 ) (Increase) decrease in other assets (20,312 ) 2,650 (1,284 ) Increase (decrease) in accrued interest payable 160 (1,909 ) 240 Increase (decrease) in other liabilities and employee benefit plans 10,388 480 (5,763 ) Cash provided by operating activities 134,953 116,815 149,143 Cash flows from investing activities (Increase) in securities purchased under agreement to resell (148,813 ) — — Net (increase) in short-term investments (335,529 ) (103,178 ) (299 ) Net change in trading investments (146 ) 704 42,910 Available-for-sale investments: proceeds from sale 25,489 404,575 84,360 Available-for-sale investments: proceeds from maturities and pay downs 341,835 256,566 163,725 Available-for-sale investments: purchases (1,332,836 ) (473,834 ) (392,719 ) Held-to-maturity investments: proceeds from maturities and pay downs 38,430 10,077 4,533 Held-to-maturity investments: purchases (124,325 ) (276,723 ) — Net (increase) decrease in loans to third parties 177,823 (70,821 ) 18,645 Net (increase) decrease in loans to bank subsidiaries 10,608 (2,761 ) 4,318 Net (increase) decrease in loans to non-bank subsidiaries 5,172 2,057 (9,518 ) Additions to premises, equipment and computer software (5,700 ) (4,239 ) (222 ) Proceeds from sale of other real estate owned 3,061 4,644 4,196 Dividends received from equity method investment 319 884 359 Return (injection) of capital from (in) subsidiary (6,945 ) (94 ) 607 Cash disbursed for business acquisition (2,540 ) — — Cash used in investing activities (1,354,097 ) (252,143 ) (79,105 ) The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Cash Flows (In thousands of US dollars) Year ended 31 December 2016 31 December 2015 31 December 2014 Cash flows from financing activities Net decrease in demand and term deposit liabilities 1,696,948 457,836 242,152 Net (increase) in securities sold under agreement to repurchase — — (25,535 ) Repayment of long-term debt — — (90,000 ) Proceeds from issuance of common shares, net of underwriting discounts and commissions 131,600 — — Cost of issuance of common shares (5,458 ) — — Proceeds from loans sold under agreement to repurchase 5,152 — — Cost of repurchase of loans under agreement to repurchase (5,152 ) — — Common shares repurchased (1,633 ) (130,822 ) (17,018 ) Preference shares repurchased (212,121 ) (211 ) (656 ) Warrant repurchase (100 ) — — Proceeds from stock option exercises 6,919 640 1,198 Cash dividends paid on common and contingent value convertible preference shares (19,346 ) (24,846 ) (27,440 ) Cash dividends paid on preference shares (14,629 ) (14,631 ) (14,673 ) Preference shares guarantee fee paid (1,676 ) (1,824 ) (1,834 ) Cash provided by financing activities 1,580,504 286,142 66,194 Net increase (decrease) in cash due from banks 361,360 150,814 136,232 Cash due from banks at beginning of year 845,410 694,596 558,364 Cash due from banks at end of year 1,206,770 845,410 694,596 Supplemental disclosure of cash flow information Cash interest paid 11,660 10,907 14,491 Non-cash item Transfer to other real estate owned 8,961 3,326 2,733 |
Nature of business (Details)
Nature of business (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 21, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Class of Stock [Line Items] | ||||
Proceeds from issuance initial public offering | $ 131.6 | |||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Issuance of common shares in initial public offering (in shares) | 5,957,447 | 5,994,012 | 0 | 0 |
Share price (in dollars per share) | $ 23.50 |
Significant accounting polici65
Significant accounting policies (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Property, Plant and Equipment [Line Items] | |
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 $100,000 are generally written off | 180 days |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Useful life | 50 years |
Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Software and Software Development Costs | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Software and Software Development Costs | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Cash due from banks (Details)
Cash due from banks (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Non-interest bearing | ||||
Cash and demand deposits with banks | $ 110,741 | $ 110,895 | ||
Interest bearing | ||||
Demand deposits with banks | 326,437 | 378,629 | ||
Cash equivalents | 1,664,473 | 1,799,366 | ||
Sub-total - Interest bearing | 1,990,910 | 2,177,995 | ||
Cash due from banks | 2,101,651 | 2,288,890 | $ 2,063,311 | $ 1,730,472 |
Interest-bearing deposits in banks bearing negligible interest | 305,300 | 306,900 | ||
Bermuda | ||||
Non-interest bearing | ||||
Cash and demand deposits with banks | 28,690 | 31,199 | ||
Interest bearing | ||||
Demand deposits with banks | 138,123 | 130,589 | ||
Cash equivalents | 976,557 | 691,439 | ||
Sub-total - Interest bearing | 1,114,680 | 822,028 | ||
Cash due from banks | 1,143,370 | 853,227 | ||
Non-Bermuda | ||||
Non-interest bearing | ||||
Cash and demand deposits with banks | 82,051 | 79,696 | ||
Interest bearing | ||||
Demand deposits with banks | 188,314 | 248,040 | ||
Cash equivalents | 687,916 | 1,107,927 | ||
Sub-total - Interest bearing | 876,230 | 1,355,967 | ||
Cash due from banks | $ 958,281 | $ 1,435,663 |
Short-term investments (Details
Short-term investments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Investment [Line Items] | ||
Short-term investments | $ 519,755 | $ 409,482 |
Bermuda | ||
Investment [Line Items] | ||
Short-term investments | 398,570 | 112,319 |
Non-Bermuda | ||
Investment [Line Items] | ||
Short-term investments | 121,185 | 297,163 |
Unrestricted | ||
Investment [Line Items] | ||
Short-term investments | 501,861 | 396,973 |
Unrestricted | Bermuda | ||
Investment [Line Items] | ||
Short-term investments | 380,676 | 99,810 |
Unrestricted | Non-Bermuda | ||
Investment [Line Items] | ||
Short-term investments | 121,185 | 297,163 |
Affected by drawing restrictions related to minimum reserve and derivative margin requirements | ||
Investment [Line Items] | ||
Short-term investments | 17,894 | 12,509 |
Affected by drawing restrictions related to minimum reserve and derivative margin requirements | Bermuda | ||
Investment [Line Items] | ||
Short-term investments | 17,894 | 12,509 |
Affected by drawing restrictions related to minimum reserve and derivative margin requirements | Non-Bermuda | ||
Investment [Line Items] | ||
Short-term investments | 0 | 0 |
Maturing within three months | Unrestricted | ||
Investment [Line Items] | ||
Short-term investments | 117,313 | 104,249 |
Maturing within three months | Unrestricted | Bermuda | ||
Investment [Line Items] | ||
Short-term investments | 36,953 | 0 |
Maturing within three months | Unrestricted | Non-Bermuda | ||
Investment [Line Items] | ||
Short-term investments | 80,360 | 104,249 |
Maturing between three to six months | Unrestricted | ||
Investment [Line Items] | ||
Short-term investments | 384,548 | 291,928 |
Maturing between three to six months | Unrestricted | Bermuda | ||
Investment [Line Items] | ||
Short-term investments | 343,723 | 99,810 |
Maturing between three to six months | Unrestricted | Non-Bermuda | ||
Investment [Line Items] | ||
Short-term investments | 40,825 | 192,118 |
Maturing between six to twelve months | Unrestricted | ||
Investment [Line Items] | ||
Short-term investments | 0 | 796 |
Maturing between six to twelve months | Unrestricted | Bermuda | ||
Investment [Line Items] | ||
Short-term investments | 0 | 0 |
Maturing between six to twelve months | Unrestricted | Non-Bermuda | ||
Investment [Line Items] | ||
Short-term investments | $ 0 | $ 796 |
Investment in securities - Amor
Investment in securities - Amortised Cost, Carrying Amount and Fair Value (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Trading | ||
Trading, Amortised cost | $ 5,724,000 | $ 320,567,000 |
Trading, Gross unrealised gains | 1,091,000 | 3,256,000 |
Trading, Gross unrealised losses | (502,000) | (2,524,000) |
Trading, Fair value | 6,313,000 | 321,299,000 |
Available-for-sale | ||
Available-for-sale, Amortised cost | 3,355,416,000 | 2,201,589,000 |
Available-for-sale, Gross unrealised gains | 9,189,000 | 12,900,000 |
Available-for-sale, Gross unrealised losses | (31,867,000) | (13,140,000) |
Available-for-sale, Fair value | 3,332,738,000 | 2,201,349,000 |
Held-to-maturity | ||
Held-to-maturity, Amortised cost | 1,061,103,000 | 701,282,000 |
Held-to-maturity, Gross unrealised gains | 2,528,000 | 5,365,000 |
Held-to-maturity, Gross unrealised losses | (16,803,000) | (5,152,000) |
Held-to-maturity, fair value | 1,046,828,000 | 701,495,000 |
Non-credit impairments recognised in accumulated other comprehensive loss, held-to-maturity investments | 0 | 0 |
US government and federal agencies | ||
Trading | ||
Trading, Amortised cost | 0 | 278,500,000 |
Trading, Gross unrealised gains | 0 | 2,347,000 |
Trading, Gross unrealised losses | 0 | (1,504,000) |
Trading, Fair value | 0 | 279,343,000 |
Available-for-sale | ||
Available-for-sale, Amortised cost | 2,448,207,000 | 1,399,456,000 |
Available-for-sale, Gross unrealised gains | 6,773,000 | 8,812,000 |
Available-for-sale, Gross unrealised losses | (24,578,000) | (3,769,000) |
Available-for-sale, Fair value | 2,430,402,000 | 1,404,499,000 |
Held-to-maturity | ||
Held-to-maturity, Amortised cost | 1,061,103,000 | 701,282,000 |
Held-to-maturity, Gross unrealised gains | 2,528,000 | 5,365,000 |
Held-to-maturity, Gross unrealised losses | (16,803,000) | (5,152,000) |
Held-to-maturity, fair value | 1,046,828,000 | 701,495,000 |
Non-US governments debt securities | ||
Trading | ||
Trading, Amortised cost | 0 | 7,483,000 |
Trading, Gross unrealised gains | 0 | 6,000 |
Trading, Gross unrealised losses | 0 | 0 |
Trading, Fair value | 0 | 7,489,000 |
Available-for-sale | ||
Available-for-sale, Amortised cost | 27,895,000 | 29,275,000 |
Available-for-sale, Gross unrealised gains | 178,000 | 300,000 |
Available-for-sale, Gross unrealised losses | (1,053,000) | 0 |
Available-for-sale, Fair value | 27,020,000 | 29,575,000 |
Corporate debt securities | ||
Available-for-sale | ||
Available-for-sale, Amortised cost | 513,881,000 | 505,139,000 |
Available-for-sale, Gross unrealised gains | 2,139,000 | 3,779,000 |
Available-for-sale, Gross unrealised losses | (1,545,000) | (2,774,000) |
Available-for-sale, Fair value | 514,475,000 | 506,144,000 |
Commercial mortgage-backed securities | ||
Available-for-sale | ||
Available-for-sale, Amortised cost | 151,855,000 | 153,046,000 |
Available-for-sale, Gross unrealised gains | 43,000 | 9,000 |
Available-for-sale, Gross unrealised losses | (1,352,000) | (4,329,000) |
Available-for-sale, Fair value | 150,546,000 | 148,726,000 |
Residential mortgage-backed securities | ||
Available-for-sale | ||
Available-for-sale, Amortised cost | 200,288,000 | 101,382,000 |
Available-for-sale, Gross unrealised gains | 56,000 | 0 |
Available-for-sale, Gross unrealised losses | (2,542,000) | (1,138,000) |
Available-for-sale, Fair value | 197,802,000 | 100,244,000 |
Asset-backed securities - Student loans | ||
Trading | ||
Trading, Amortised cost | 0 | 28,845,000 |
Trading, Gross unrealised gains | 0 | 0 |
Trading, Gross unrealised losses | 0 | (560,000) |
Trading, Fair value | 0 | 28,285,000 |
Available-for-sale | ||
Available-for-sale, Amortised cost | 13,290,000 | 13,291,000 |
Available-for-sale, Gross unrealised gains | 0 | 0 |
Available-for-sale, Gross unrealised losses | (797,000) | (1,130,000) |
Available-for-sale, Fair value | 12,493,000 | 12,161,000 |
Mutual funds | ||
Trading | ||
Trading, Amortised cost | 5,724,000 | 5,739,000 |
Trading, Gross unrealised gains | 1,091,000 | 903,000 |
Trading, Gross unrealised losses | (502,000) | (460,000) |
Trading, Fair value | $ 6,313,000 | $ 6,182,000 |
Investment in securities - Narr
Investment in securities - Narrative (Details) | Dec. 31, 2016security | Dec. 31, 2015security |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions | 170 | 99 |
Available-for-sale and held-to-maturity, securities in unrealized loss positions, percentage of portfolio fair value | 76.00% | 54.00% |
Available-for-sale and held-to-maturity, securities in unrealized loss positions, qualitative disclosure, percentage of fair value of affected securities | 1.50% | 1.10% |
Standard & Poor's, BBB Plus To A Rating | Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions | 12 | |
Standard & Poor's, AAA Rating | Commercial mortgage-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions | 10 | |
Standard & Poor's, A Rating | Commercial mortgage-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions | 1 | |
Standard & Poor's, A To AAA Rating | Commercial mortgage-backed securities | Minimum | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, securities in unrealized loss positions, weighted average credit support | 0.05 | |
Available-for-sale, securities in unrealized loss positions, loan-to-value ratio | 0.36 | |
Standard & Poor's, A To AAA Rating | Commercial mortgage-backed securities | Maximum | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, securities in unrealized loss positions, weighted average credit support | 0.25 | |
Available-for-sale, securities in unrealized loss positions, loan-to-value ratio | 0.60 | |
Standard & Poor's, AA To AAA Rating | Residential mortgage-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions | 13 | |
Standard & Poor's, AA To AAA Rating | Residential mortgage-backed securities | Minimum | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, securities in unrealized loss positions, weighted average credit support | 0.05 | |
Available-for-sale, securities in unrealized loss positions, loan-to-value ratio | 0.18 | |
Standard & Poor's, AA To AAA Rating | Residential mortgage-backed securities | Maximum | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, securities in unrealized loss positions, weighted average credit support | 0.56 | |
Available-for-sale, securities in unrealized loss positions, loan-to-value ratio | 0.68 |
Investment in securities - Cont
Investment in securities - Continuous Unrealised Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule Of Marketable Securities [Line Items] | ||
Available-for-sale securities with unrealised losses, Less than 12 months, Fair value | $ 2,110,574 | $ 932,037 |
Available-for-sale securities with unrealised losses, Less than 12 months, Gross unrealised losses | (28,424) | (8,405) |
Available-for-sale securities with unrealised losses,12 months or more, Fair value | 278,587 | 163,049 |
Available-for-sale securities with unrealised losses,12 months or more, Gross unrealised losses | (3,443) | (4,735) |
Available-for-sale securities with unrealised losses, Total fair value | 2,389,161 | 1,095,086 |
Available-for-sale securities with unrealised losses, Total gross unrealised losses | (31,867) | (13,140) |
Held-to-maturity securities with unrealised losses, Less than 12 months, Fair Value | 937,080 | 459,623 |
Held-to-maturity securities with unrealised losses, Less than 12 months, Gross unrealised losses | (16,803) | (5,152) |
Held-to-maturity securities with unrealised losses, 12 months or more, Fair value | 0 | 0 |
Held-to-maturity securities with unrealised losses, 12 months or more, Gross unrealised losses | 0 | 0 |
Held-to-maturity securities with unrealised losses, Total fair value | 937,080 | 459,623 |
Held-to-maturity securities with unrealised losses, Total gross unrealized losses | (16,803) | (5,152) |
US government and federal agencies | ||
Schedule Of Marketable Securities [Line Items] | ||
Available-for-sale securities with unrealised losses, Less than 12 months, Fair value | 1,558,636 | 449,609 |
Available-for-sale securities with unrealised losses, Less than 12 months, Gross unrealised losses | (21,932) | (2,258) |
Available-for-sale securities with unrealised losses,12 months or more, Fair value | 266,094 | 92,554 |
Available-for-sale securities with unrealised losses,12 months or more, Gross unrealised losses | (2,646) | (1,511) |
Available-for-sale securities with unrealised losses, Total fair value | 1,824,730 | 542,163 |
Available-for-sale securities with unrealised losses, Total gross unrealised losses | (24,578) | (3,769) |
Non-US governments debt securities | ||
Schedule Of Marketable Securities [Line Items] | ||
Available-for-sale securities with unrealised losses, Less than 12 months, Fair value | 21,681 | |
Available-for-sale securities with unrealised losses, Less than 12 months, Gross unrealised losses | (1,053) | |
Available-for-sale securities with unrealised losses,12 months or more, Fair value | 0 | |
Available-for-sale securities with unrealised losses,12 months or more, Gross unrealised losses | 0 | |
Available-for-sale securities with unrealised losses, Total fair value | 21,681 | |
Available-for-sale securities with unrealised losses, Total gross unrealised losses | (1,053) | |
Corporate debt securities | ||
Schedule Of Marketable Securities [Line Items] | ||
Available-for-sale securities with unrealised losses, Less than 12 months, Fair value | 214,506 | 253,991 |
Available-for-sale securities with unrealised losses, Less than 12 months, Gross unrealised losses | (1,545) | (1,480) |
Available-for-sale securities with unrealised losses,12 months or more, Fair value | 0 | 38,706 |
Available-for-sale securities with unrealised losses,12 months or more, Gross unrealised losses | 0 | (1,294) |
Available-for-sale securities with unrealised losses, Total fair value | 214,506 | 292,697 |
Available-for-sale securities with unrealised losses, Total gross unrealised losses | (1,545) | (2,774) |
Asset-backed securities - Student loans | ||
Schedule Of Marketable Securities [Line Items] | ||
Available-for-sale securities with unrealised losses, Less than 12 months, Fair value | 0 | 0 |
Available-for-sale securities with unrealised losses, Less than 12 months, Gross unrealised losses | 0 | 0 |
Available-for-sale securities with unrealised losses,12 months or more, Fair value | 12,493 | 12,160 |
Available-for-sale securities with unrealised losses,12 months or more, Gross unrealised losses | (797) | (1,130) |
Available-for-sale securities with unrealised losses, Total fair value | 12,493 | 12,160 |
Available-for-sale securities with unrealised losses, Total gross unrealised losses | (797) | (1,130) |
Commercial mortgage-backed securities | ||
Schedule Of Marketable Securities [Line Items] | ||
Available-for-sale securities with unrealised losses, Less than 12 months, Fair value | 134,195 | 138,217 |
Available-for-sale securities with unrealised losses, Less than 12 months, Gross unrealised losses | (1,352) | (4,007) |
Available-for-sale securities with unrealised losses,12 months or more, Fair value | 0 | 9,605 |
Available-for-sale securities with unrealised losses,12 months or more, Gross unrealised losses | 0 | (322) |
Available-for-sale securities with unrealised losses, Total fair value | 134,195 | 147,822 |
Available-for-sale securities with unrealised losses, Total gross unrealised losses | (1,352) | (4,329) |
Residential mortgage-backed securities | ||
Schedule Of Marketable Securities [Line Items] | ||
Available-for-sale securities with unrealised losses, Less than 12 months, Fair value | 181,556 | 90,220 |
Available-for-sale securities with unrealised losses, Less than 12 months, Gross unrealised losses | (2,542) | (660) |
Available-for-sale securities with unrealised losses,12 months or more, Fair value | 0 | 10,024 |
Available-for-sale securities with unrealised losses,12 months or more, Gross unrealised losses | 0 | (478) |
Available-for-sale securities with unrealised losses, Total fair value | 181,556 | 100,244 |
Available-for-sale securities with unrealised losses, Total gross unrealised losses | $ (2,542) | $ (1,138) |
Investment in securities - Inve
Investment in securities - Investment Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Trading | ||
Within 3 months | $ 0 | $ 7,489 |
3 to 12 months | 0 | 24,874 |
1 to 5 years | 0 | 36,782 |
5 to 10 years | 0 | 53,248 |
Over 10 years | 0 | 192,724 |
No specific maturity | 6,313 | 6,182 |
Carrying amount | 6,313 | 321,299 |
Available-for-sale | ||
Within 3 months | 22,009 | 60,493 |
3 to 12 months | 95,904 | 57,009 |
1 to 5 years | 533,939 | 482,858 |
5 to 10 years | 787,413 | 306,439 |
Over 10 years | 1,893,473 | 1,294,550 |
No specific maturity | 0 | 0 |
Carrying amount | 3,332,738 | 2,201,349 |
Trading, Available-for-sale and Held-to-maturity Securities | ||
Within 3 months | 22,009 | 67,982 |
3 to 12 months | 95,904 | 81,883 |
1 to 5 years | 544,627 | 519,640 |
5 to 10 years | 818,567 | 405,351 |
Over 10 years | 2,912,734 | 2,142,892 |
No specific maturity | 6,313 | 6,182 |
Carrying amount | 4,400,154 | 3,223,930 |
US dollars | ||
Trading, Available-for-sale and Held-to-maturity Securities | ||
Within 3 months | 22,009 | 67,982 |
3 to 12 months | 95,904 | 81,883 |
1 to 5 years | 544,627 | 519,640 |
5 to 10 years | 818,567 | 405,351 |
Over 10 years | 2,912,734 | 2,142,892 |
No specific maturity | 6,091 | 5,903 |
Carrying amount | 4,399,932 | 3,223,651 |
Other | ||
Trading, Available-for-sale and Held-to-maturity Securities | ||
Within 3 months | 0 | 0 |
3 to 12 months | 0 | 0 |
1 to 5 years | 0 | 0 |
5 to 10 years | 0 | 0 |
Over 10 years | 0 | 0 |
No specific maturity | 222 | 279 |
Carrying amount | 222 | 279 |
Mutual funds | ||
Trading | ||
Within 3 months | 0 | 0 |
3 to 12 months | 0 | 0 |
1 to 5 years | 0 | 0 |
5 to 10 years | 0 | 0 |
Over 10 years | 0 | 0 |
No specific maturity | 6,313 | 6,182 |
Carrying amount | 6,313 | 6,182 |
US government and federal agencies | ||
Trading | ||
Within 3 months | 0 | |
3 to 12 months | 24,874 | |
1 to 5 years | 8,497 | |
5 to 10 years | 53,248 | |
Over 10 years | 192,724 | |
No specific maturity | 0 | |
Carrying amount | 279,343 | |
Available-for-sale | ||
Within 3 months | 0 | 0 |
3 to 12 months | 6,364 | 0 |
1 to 5 years | 87,257 | 126,163 |
5 to 10 years | 653,603 | 202,385 |
Over 10 years | 1,683,178 | 1,075,951 |
No specific maturity | 0 | 0 |
Carrying amount | 2,430,402 | 1,404,499 |
Held-to-maturity | ||
Within 3 months | 0 | 0 |
3 to 12 months | 0 | 0 |
1 to 5 years | 10,688 | 0 |
5 to 10 years | 31,154 | 45,664 |
Over 10 years | 1,019,261 | 655,618 |
No specific maturity | 0 | 0 |
Carrying amount | 1,061,103 | 701,282 |
Non-US governments debt securities | ||
Trading | ||
Within 3 months | 7,489 | |
3 to 12 months | 0 | |
1 to 5 years | 0 | |
5 to 10 years | 0 | |
Over 10 years | 0 | |
No specific maturity | 0 | |
Carrying amount | 7,489 | |
Available-for-sale | ||
Within 3 months | 0 | 0 |
3 to 12 months | 1,371 | 1,360 |
1 to 5 years | 3,967 | 5,399 |
5 to 10 years | 21,682 | 22,816 |
Over 10 years | 0 | 0 |
No specific maturity | 0 | 0 |
Carrying amount | 27,020 | 29,575 |
Corporate debt securities | ||
Available-for-sale | ||
Within 3 months | 22,009 | 60,493 |
3 to 12 months | 88,169 | 55,649 |
1 to 5 years | 404,297 | 351,296 |
5 to 10 years | 0 | 38,706 |
Over 10 years | 0 | 0 |
No specific maturity | 0 | 0 |
Carrying amount | 514,475 | 506,144 |
Asset-backed securities - Student loans | ||
Trading | ||
Within 3 months | 0 | |
3 to 12 months | 0 | |
1 to 5 years | 28,285 | |
5 to 10 years | 0 | |
Over 10 years | 0 | |
No specific maturity | 0 | |
Carrying amount | 28,285 | |
Available-for-sale | ||
Within 3 months | 0 | 0 |
3 to 12 months | 0 | 0 |
1 to 5 years | 0 | 0 |
5 to 10 years | 0 | 0 |
Over 10 years | 12,493 | 12,161 |
No specific maturity | 0 | 0 |
Carrying amount | 12,493 | 12,161 |
Commercial mortgage-backed securities | ||
Available-for-sale | ||
Within 3 months | 0 | 0 |
3 to 12 months | 0 | 0 |
1 to 5 years | 38,418 | 0 |
5 to 10 years | 112,128 | 42,532 |
Over 10 years | 0 | 106,194 |
No specific maturity | 0 | 0 |
Carrying amount | 150,546 | 148,726 |
Residential mortgage-backed securities | ||
Available-for-sale | ||
Within 3 months | 0 | 0 |
3 to 12 months | 0 | 0 |
1 to 5 years | 0 | 0 |
5 to 10 years | 0 | 0 |
Over 10 years | 197,802 | 100,244 |
No specific maturity | 0 | 0 |
Carrying amount | $ 197,802 | $ 100,244 |
Investment in securities - Pled
Investment in securities - Pledged Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Investments, Debt and Equity Securities [Abstract] | ||
Available-for-sale, Amortised cost | $ 211,342 | $ 304,493 |
Available-for-sale, Fair value | 212,995 | 307,513 |
Held-to-maturity, Amortised cost | 320,942 | 372,546 |
Held-to-maturity, Fair value | $ 315,635 | $ 372,868 |
Investment in securities - Sale
Investment in securities - Sale Proceeds and Realised Gains and Losses of AFS Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Sale proceeds | $ 60,548 | $ 238,756 | $ 130,453 |
Gross realised gains | 1,622 | 328 | 8,732 |
Gross realised (losses) | (76) | (4,735) | (52) |
US government and federal agencies | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Sale proceeds | 59,939 | 232,372 | 96,031 |
Gross realised gains | 1,013 | 0 | 0 |
Gross realised (losses) | (76) | (4,465) | (52) |
Residential mortgage-backed securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Sale proceeds | 0 | 6,056 | |
Gross realised gains | 0 | 0 | |
Gross realised (losses) | 0 | (270) | |
Pass-through note | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Sale proceeds | 609 | 328 | 34,422 |
Gross realised gains | 609 | 328 | 8,732 |
Gross realised (losses) | $ 0 | $ 0 | $ 0 |
Loans - Schedule of Loans (Deta
Loans - Schedule of Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Receivables [Abstract] | |||
Effective yield | 4.78% | 4.57% | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | $ 3,614,725 | $ 4,049,457 | |
Less specific allowance for credit losses | (44,247) | (49,302) | |
Loans, net of allowance for credit losses | 3,570,478 | 4,000,155 | |
Less specific allowance for credit losses | (11,738) | (19,105) | $ (18,811) |
Less general allowance for credit losses | (32,509) | (30,197) | (28,671) |
Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 1,945,204 | 2,131,802 | |
Loans, net of allowance for credit losses | 1,909,093 | 2,096,624 | |
Less specific allowance for credit losses | (11,161) | (15,002) | |
Less general allowance for credit losses | (24,950) | (20,176) | |
Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 1,669,521 | 1,917,655 | |
Loans, net of allowance for credit losses | 1,661,385 | 1,903,531 | |
Less specific allowance for credit losses | (577) | (4,103) | |
Less general allowance for credit losses | (7,559) | (10,021) | |
Commercial loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 469,596 | 608,620 | |
Less specific allowance for credit losses | (577) | (590) | |
Loans, net of allowance for credit losses | 469,019 | 608,030 | |
Less specific allowance for credit losses | (577) | (590) | (417) |
Less general allowance for credit losses | (2,800) | (8,133) | (7,414) |
Commercial loans | Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 247,269 | 359,239 | |
Less specific allowance for credit losses | (577) | (590) | |
Loans, net of allowance for credit losses | 246,692 | 358,649 | |
Commercial loans | Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 222,327 | 249,381 | |
Less specific allowance for credit losses | 0 | 0 | |
Loans, net of allowance for credit losses | 222,327 | 249,381 | |
Commercial loans | Overdrafts | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 25,361 | 40,733 | |
Commercial loans | Overdrafts | Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 22,594 | 34,997 | |
Commercial loans | Overdrafts | Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 2,767 | 5,736 | |
Commercial loans | Governments | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 112,412 | 225,178 | |
Commercial loans | Governments | Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 94,504 | 202,776 | |
Commercial loans | Governments | Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 17,908 | 22,402 | |
Commercial loans | Commercial and industrial | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 331,823 | 342,709 | |
Commercial loans | Commercial and industrial | Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 130,171 | 121,466 | |
Commercial loans | Commercial and industrial | Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 201,652 | 221,243 | |
Commercial real estate loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 610,507 | 678,976 | |
Less specific allowance for credit losses | (750) | (2,951) | |
Loans, net of allowance for credit losses | 609,757 | 676,025 | |
Less specific allowance for credit losses | (750) | (2,951) | (1,822) |
Less general allowance for credit losses | (15,474) | (3,561) | (4,098) |
Commercial real estate loans | Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 388,482 | 421,143 | |
Less specific allowance for credit losses | (750) | (727) | |
Loans, net of allowance for credit losses | 387,732 | 420,416 | |
Commercial real estate loans | Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 222,025 | 257,833 | |
Less specific allowance for credit losses | 0 | (2,224) | |
Loans, net of allowance for credit losses | 222,025 | 255,609 | |
Commercial real estate loans | Commercial mortgage | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 581,622 | 665,369 | |
Commercial real estate loans | Commercial mortgage | Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 363,982 | 415,747 | |
Commercial real estate loans | Commercial mortgage | Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 217,640 | 249,622 | |
Commercial real estate loans | Construction | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 28,885 | 13,607 | |
Commercial real estate loans | Construction | Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 24,500 | 5,396 | |
Commercial real estate loans | Construction | Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 4,385 | 8,211 | |
Consumer loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 198,089 | 227,821 | |
Less specific allowance for credit losses | (278) | (274) | |
Loans, net of allowance for credit losses | 197,811 | 227,547 | |
Less specific allowance for credit losses | (278) | (274) | (355) |
Less general allowance for credit losses | (687) | (2,489) | (2,442) |
Consumer loans | Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 103,985 | 108,199 | |
Less specific allowance for credit losses | (275) | (274) | |
Loans, net of allowance for credit losses | 103,710 | 107,925 | |
Consumer loans | Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 94,104 | 119,622 | |
Less specific allowance for credit losses | (3) | 0 | |
Loans, net of allowance for credit losses | 94,101 | 119,622 | |
Consumer loans | Overdrafts | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 5,582 | 12,915 | |
Consumer loans | Overdrafts | Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 2,380 | 4,750 | |
Consumer loans | Overdrafts | Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 3,202 | 8,165 | |
Consumer loans | Automobile financing | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 19,982 | 19,864 | |
Consumer loans | Automobile financing | Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 13,077 | 12,308 | |
Consumer loans | Automobile financing | Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 6,905 | 7,556 | |
Consumer loans | Credit card | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 78,541 | 78,958 | |
Consumer loans | Credit card | Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 57,730 | 59,119 | |
Consumer loans | Credit card | Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 20,811 | 19,839 | |
Consumer loans | Other consumer | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 93,984 | 116,084 | |
Consumer loans | Other consumer | Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 30,798 | 32,022 | |
Consumer loans | Other consumer | Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 63,186 | 84,062 | |
Residential mortgage loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 2,336,533 | 2,534,040 | |
Less specific allowance for credit losses | (10,133) | (15,290) | |
Loans, net of allowance for credit losses | 2,326,400 | 2,518,750 | |
Less specific allowance for credit losses | (10,133) | (15,290) | (16,217) |
Less general allowance for credit losses | (13,548) | (16,014) | $ (14,717) |
Residential mortgage loans | Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 1,205,468 | 1,243,221 | |
Less specific allowance for credit losses | (9,559) | (13,411) | |
Loans, net of allowance for credit losses | 1,195,909 | 1,229,810 | |
Residential mortgage loans | Non-Bermuda | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans, gross | 1,131,065 | 1,290,819 | |
Less specific allowance for credit losses | (574) | (1,879) | |
Loans, net of allowance for credit losses | $ 1,130,491 | $ 1,288,940 |
Loans - Age Analysis of Past Du
Loans - Age Analysis of Past Due Loans (Including Non-Accrual Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | $ 94,112 | $ 129,357 |
Total current | 3,520,613 | 3,920,100 |
Total loans | 3,614,725 | 4,049,457 |
30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 30,558 | 44,422 |
60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 5,109 | 10,322 |
More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 58,445 | 74,613 |
Commercial loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 3,298 | 658 |
Total current | 466,298 | 607,962 |
Total loans | 469,596 | 608,620 |
Commercial loans | 30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 2,712 | 11 |
Commercial loans | 60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 14 |
Commercial loans | More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 586 | 633 |
Commercial loans | Overdrafts | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 2 | 25 |
Total current | 25,359 | 40,708 |
Total loans | 25,361 | 40,733 |
Commercial loans | Overdrafts | 30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial loans | Overdrafts | 60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial loans | Overdrafts | More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 2 | 25 |
Commercial loans | Governments | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Total current | 112,412 | 225,178 |
Total loans | 112,412 | 225,178 |
Commercial loans | Governments | 30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial loans | Governments | 60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial loans | Governments | More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 3,296 | 633 |
Total current | 328,527 | 342,076 |
Total loans | 331,823 | 342,709 |
Commercial loans | Commercial and industrial | 30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 2,712 | 11 |
Commercial loans | Commercial and industrial | 60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 14 |
Commercial loans | Commercial and industrial | More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 584 | 608 |
Commercial real estate loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 6,516 | 7,791 |
Total current | 603,991 | 671,185 |
Total loans | 610,507 | 678,976 |
Commercial real estate loans | 30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 552 | 1,133 |
Commercial real estate loans | 60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial real estate loans | More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 5,964 | 6,658 |
Commercial real estate loans | Commercial mortgage | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 6,341 | 7,791 |
Total current | 575,281 | 657,578 |
Total loans | 581,622 | 665,369 |
Commercial real estate loans | Commercial mortgage | 30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 377 | 1,133 |
Commercial real estate loans | Commercial mortgage | 60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial real estate loans | Commercial mortgage | More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 5,964 | 6,658 |
Commercial real estate loans | Construction | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 175 | 0 |
Total current | 28,710 | 13,607 |
Total loans | 28,885 | 13,607 |
Commercial real estate loans | Construction | 30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 175 | 0 |
Commercial real estate loans | Construction | 60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Commercial real estate loans | Construction | More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Consumer loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 3,569 | 5,861 |
Total current | 194,520 | 221,960 |
Total loans | 198,089 | 227,821 |
Consumer loans | 30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 1,172 | 2,485 |
Consumer loans | 60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 764 | 1,397 |
Consumer loans | More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 1,633 | 1,979 |
Consumer loans | Overdrafts | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 17 | 538 |
Total current | 5,565 | 12,377 |
Total loans | 5,582 | 12,915 |
Consumer loans | Overdrafts | 30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Consumer loans | Overdrafts | 60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 0 | 0 |
Consumer loans | Overdrafts | More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 17 | 538 |
Consumer loans | Automobile financing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 334 | 353 |
Total current | 19,648 | 19,511 |
Total loans | 19,982 | 19,864 |
Consumer loans | Automobile financing | 30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 86 | 194 |
Consumer loans | Automobile financing | 60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 23 | 81 |
Consumer loans | Automobile financing | More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 225 | 78 |
Consumer loans | Credit card | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 935 | 1,928 |
Total current | 77,606 | 77,030 |
Total loans | 78,541 | 78,958 |
Consumer loans | Credit card | 30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 366 | 1,459 |
Consumer loans | Credit card | 60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 177 | 337 |
Consumer loans | Credit card | More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 392 | 132 |
Consumer loans | Other consumer | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 2,283 | 3,042 |
Total current | 91,701 | 113,042 |
Total loans | 93,984 | 116,084 |
Consumer loans | Other consumer | 30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 720 | 832 |
Consumer loans | Other consumer | 60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 564 | 979 |
Consumer loans | Other consumer | More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 999 | 1,231 |
Residential mortgage loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 80,729 | 115,047 |
Total current | 2,255,804 | 2,418,993 |
Total loans | 2,336,533 | 2,534,040 |
Residential mortgage loans | 30 - 59 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 26,122 | 40,793 |
Residential mortgage loans | 60 - 89 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | 4,345 | 8,911 |
Residential mortgage loans | More than 90 days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due loans | $ 50,262 | $ 65,343 |
Loans - Loans' Credit Quality (
Loans - Loans' Credit Quality (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | $ 3,614,725 | $ 4,049,457 |
Commercial loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 469,596 | 608,620 |
Commercial loans | Overdrafts | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 25,361 | 40,733 |
Commercial loans | Governments | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 112,412 | 225,178 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 331,823 | 342,709 |
Commercial real estate loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 610,507 | 678,976 |
Commercial real estate loans | Commercial mortgage | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 581,622 | 665,369 |
Commercial real estate loans | Construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 28,885 | 13,607 |
Consumer loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 198,089 | 227,821 |
Consumer loans | Overdrafts | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 5,582 | 12,915 |
Consumer loans | Automobile financing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 19,982 | 19,864 |
Consumer loans | Credit card | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 78,541 | 78,958 |
Consumer loans | Other consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 93,984 | 116,084 |
Residential mortgage loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2,336,533 | 2,534,040 |
Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 3,380,460 | 3,753,571 |
Pass | Commercial loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 453,511 | 583,798 |
Pass | Commercial loans | Overdrafts | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 22,976 | 36,017 |
Pass | Commercial loans | Governments | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 104,611 | 213,928 |
Pass | Commercial loans | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 325,924 | 333,853 |
Pass | Commercial real estate loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 531,803 | 555,802 |
Pass | Commercial real estate loans | Commercial mortgage | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 502,918 | 542,195 |
Pass | Commercial real estate loans | Construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 28,885 | 13,607 |
Pass | Consumer loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 194,339 | 222,248 |
Pass | Consumer loans | Overdrafts | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 5,533 | 11,618 |
Pass | Consumer loans | Automobile financing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 19,309 | 19,378 |
Pass | Consumer loans | Credit card | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 78,149 | 78,826 |
Pass | Consumer loans | Other consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 91,348 | 112,426 |
Pass | Residential mortgage loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2,200,807 | 2,391,723 |
Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 116,301 | 150,489 |
Special mention | Commercial loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 6,568 | 19,876 |
Special mention | Commercial loans | Overdrafts | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2,145 | 4,493 |
Special mention | Commercial loans | Governments | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 301 | 11,250 |
Special mention | Commercial loans | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 4,122 | 4,133 |
Special mention | Commercial real estate loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 71,038 | 86,285 |
Special mention | Commercial real estate loans | Commercial mortgage | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 71,038 | 86,285 |
Special mention | Commercial real estate loans | Construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Special mention | Consumer loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,956 | 1,750 |
Special mention | Consumer loans | Overdrafts | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 32 | 54 |
Special mention | Consumer loans | Automobile financing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 360 | 388 |
Special mention | Consumer loans | Credit card | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Special mention | Consumer loans | Other consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,564 | 1,308 |
Special mention | Residential mortgage loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 36,739 | 42,578 |
Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 69,501 | 80,145 |
Substandard | Commercial loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 8,932 | 4,303 |
Substandard | Commercial loans | Overdrafts | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 238 | 197 |
Substandard | Commercial loans | Governments | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 7,500 | 0 |
Substandard | Commercial loans | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,194 | 4,106 |
Substandard | Commercial real estate loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,702 | 26,629 |
Substandard | Commercial real estate loans | Commercial mortgage | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,702 | 26,629 |
Substandard | Commercial real estate loans | Construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Substandard | Consumer loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 780 | 2,420 |
Substandard | Consumer loans | Overdrafts | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 1,232 |
Substandard | Consumer loans | Automobile financing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 28 | 0 |
Substandard | Consumer loans | Credit card | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 392 | 132 |
Substandard | Consumer loans | Other consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 360 | 1,056 |
Substandard | Residential mortgage loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 58,087 | 46,793 |
Non-accrual | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 48,463 | 65,252 |
Non-accrual | Commercial loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 585 | 643 |
Non-accrual | Commercial loans | Overdrafts | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2 | 26 |
Non-accrual | Commercial loans | Governments | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Non-accrual | Commercial loans | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 583 | 617 |
Non-accrual | Commercial real estate loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 5,964 | 10,260 |
Non-accrual | Commercial real estate loans | Commercial mortgage | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 5,964 | 10,260 |
Non-accrual | Commercial real estate loans | Construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Non-accrual | Consumer loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,014 | 1,403 |
Non-accrual | Consumer loans | Overdrafts | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 17 | 11 |
Non-accrual | Consumer loans | Automobile financing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 285 | 98 |
Non-accrual | Consumer loans | Credit card | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Non-accrual | Consumer loans | Other consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 712 | 1,294 |
Non-accrual | Residential mortgage loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | $ 40,900 | $ 52,946 |
Loans - Evaluation of Loans For
Loans - Evaluation of Loans For Impairment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Individually evaluated | $ 146,390 | $ 169,684 |
Collectively evaluated | 3,468,335 | 3,879,773 |
Commercial loans | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Individually evaluated | 9,686 | 13,607 |
Collectively evaluated | 459,910 | 595,013 |
Commercial real estate loans | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Individually evaluated | 21,893 | 38,019 |
Collectively evaluated | 588,614 | 640,957 |
Consumer loans | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Individually evaluated | 1,746 | 1,882 |
Collectively evaluated | 196,343 | 225,939 |
Residential mortgage loans | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Individually evaluated | 113,065 | 116,176 |
Collectively evaluated | $ 2,223,468 | $ 2,417,864 |
Loans - Changes in General and
Loans - Changes in General and Specific Allowances For Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Allowances at beginning of year | $ 49,302 | $ 47,482 | $ 52,755 |
Provision taken (released) | 4,399 | 5,741 | 8,048 |
Recoveries | 1,443 | 2,852 | 2,324 |
Charge-offs | (10,411) | (6,563) | (15,467) |
Other | (486) | (210) | (178) |
Allowances at end of year | 44,247 | 49,302 | 47,482 |
Allowances at end of year: individually evaluated for impairment | 11,738 | 19,105 | 18,811 |
Allowances at end of year: collectively evaluated for impairment | 32,509 | 30,197 | 28,671 |
Commercial loans | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Allowances at beginning of year | 8,723 | 7,831 | 8,340 |
Provision taken (released) | (5,265) | 440 | 282 |
Recoveries | 97 | 788 | 67 |
Charge-offs | (138) | (318) | (838) |
Other | (40) | (18) | (20) |
Allowances at end of year | 3,377 | 8,723 | 7,831 |
Allowances at end of year: individually evaluated for impairment | 577 | 590 | 417 |
Allowances at end of year: collectively evaluated for impairment | 2,800 | 8,133 | 7,414 |
Commercial real estate loans | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Allowances at beginning of year | 6,512 | 5,920 | 9,816 |
Provision taken (released) | 14,459 | 1,027 | 2,789 |
Recoveries | 12 | 182 | 0 |
Charge-offs | (4,520) | (513) | (6,621) |
Other | (239) | (104) | (64) |
Allowances at end of year | 16,224 | 6,512 | 5,920 |
Allowances at end of year: individually evaluated for impairment | 750 | 2,951 | 1,822 |
Allowances at end of year: collectively evaluated for impairment | 15,474 | 3,561 | 4,098 |
Consumer loans | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Allowances at beginning of year | 2,763 | 2,797 | 3,442 |
Provision taken (released) | (1,076) | 586 | (686) |
Recoveries | 1,264 | 1,455 | 1,983 |
Charge-offs | (1,916) | (2,031) | (1,895) |
Other | (70) | (44) | (47) |
Allowances at end of year | 965 | 2,763 | 2,797 |
Allowances at end of year: individually evaluated for impairment | 278 | 274 | 355 |
Allowances at end of year: collectively evaluated for impairment | 687 | 2,489 | 2,442 |
Residential mortgage loans | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Allowances at beginning of year | 31,304 | 30,934 | 31,157 |
Provision taken (released) | (3,719) | 3,688 | 5,663 |
Recoveries | 70 | 427 | 274 |
Charge-offs | (3,837) | (3,701) | (6,113) |
Other | (137) | (44) | (47) |
Allowances at end of year | 23,681 | 31,304 | 30,934 |
Allowances at end of year: individually evaluated for impairment | 10,133 | 15,290 | 16,217 |
Allowances at end of year: collectively evaluated for impairment | $ 13,548 | $ 16,014 | $ 14,717 |
Loans - Non-Performing Loans (e
Loans - Non-Performing Loans (excluding purchased credit-impaired loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | $ 3,614,725 | $ 4,049,457 |
Non-accrual | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 48,463 | 65,252 |
Commercial loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 469,596 | 608,620 |
Commercial loans | Non-accrual | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 585 | 643 |
Commercial loans | Overdrafts | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 25,361 | 40,733 |
Commercial loans | Overdrafts | Non-accrual | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 2 | 26 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 331,823 | 342,709 |
Commercial loans | Commercial and industrial | Non-accrual | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 583 | 617 |
Commercial real estate loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 610,507 | 678,976 |
Commercial real estate loans | Non-accrual | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 5,964 | 10,260 |
Commercial real estate loans | Commercial mortgage | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 581,622 | 665,369 |
Commercial real estate loans | Commercial mortgage | Non-accrual | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 5,964 | 10,260 |
Consumer loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 198,089 | 227,821 |
Consumer loans | Non-accrual | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 1,014 | 1,403 |
Consumer loans | Overdrafts | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 5,582 | 12,915 |
Consumer loans | Overdrafts | Non-accrual | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 17 | 11 |
Consumer loans | Automobile financing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 19,982 | 19,864 |
Consumer loans | Automobile financing | Non-accrual | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 285 | 98 |
Consumer loans | Credit card | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 78,541 | 78,958 |
Consumer loans | Credit card | Non-accrual | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 0 | 0 |
Consumer loans | Other consumer | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 93,984 | 116,084 |
Consumer loans | Other consumer | Non-accrual | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 712 | 1,294 |
Residential mortgage loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 2,336,533 | 2,534,040 |
Residential mortgage loans | Non-accrual | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans | 40,900 | 52,946 |
Nonperforming Financial Instruments | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual | 48,463 | 65,252 |
Past due more than 90 days and accruing | 9,170 | 14,251 |
Loans | 57,633 | 79,503 |
Nonperforming Financial Instruments | Commercial loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual | 585 | 643 |
Past due more than 90 days and accruing | 0 | 10 |
Loans | 585 | 653 |
Nonperforming Financial Instruments | Commercial loans | Overdrafts | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual | 2 | 26 |
Past due more than 90 days and accruing | 0 | 10 |
Loans | 2 | 36 |
Nonperforming Financial Instruments | Commercial loans | Commercial and industrial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual | 583 | 617 |
Past due more than 90 days and accruing | 0 | 0 |
Loans | 583 | 617 |
Nonperforming Financial Instruments | Commercial real estate loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual | ||
Past due more than 90 days and accruing | ||
Loans | ||
Nonperforming Financial Instruments | Commercial real estate loans | Commercial mortgage | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual | 5,964 | 10,260 |
Past due more than 90 days and accruing | 0 | 737 |
Loans | 5,964 | 10,997 |
Nonperforming Financial Instruments | Consumer loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual | 1,014 | 1,403 |
Past due more than 90 days and accruing | 694 | 744 |
Loans | 1,708 | 2,147 |
Nonperforming Financial Instruments | Consumer loans | Overdrafts | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual | 17 | 11 |
Past due more than 90 days and accruing | 0 | 527 |
Loans | 17 | 538 |
Nonperforming Financial Instruments | Consumer loans | Automobile financing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual | 285 | 98 |
Past due more than 90 days and accruing | 2 | 0 |
Loans | 287 | 98 |
Nonperforming Financial Instruments | Consumer loans | Credit card | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual | 0 | 0 |
Past due more than 90 days and accruing | 392 | 132 |
Loans | 392 | 132 |
Nonperforming Financial Instruments | Consumer loans | Other consumer | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual | 712 | 1,294 |
Past due more than 90 days and accruing | 300 | 85 |
Loans | 1,012 | 1,379 |
Nonperforming Financial Instruments | Residential mortgage loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual | 40,900 | 52,946 |
Past due more than 90 days and accruing | 8,476 | 12,760 |
Loans | $ 49,376 | $ 65,706 |
Loans - Impaired Loans (excludi
Loans - Impaired Loans (excluding purchased credit-impaired loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Receivables [Abstract] | |||
Gross interest income that would have been recorded had impaired loans been current | $ 2,700 | $ 3,100 | $ 5,200 |
Financing Receivable, Impaired [Line Items] | |||
Impaired loans with an allowance, Gross recorded investment | 33,039 | 49,237 | |
Impaired loans, Specific allowance | (11,566) | (19,105) | |
Impaired loans with an allowance, Net loans | 21,473 | 30,132 | |
Gross recorded investment of impaired loans without an allowance | 59,643 | 58,720 | |
Impaired loans, Gross recorded investment | 92,682 | 107,957 | |
Impaired loans, Net loans | 81,116 | 88,852 | |
Purchased Credit-Impaired Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Impaired loans, Specific allowance | (200) | ||
Commercial loans | |||
Financing Receivable, Impaired [Line Items] | |||
Impaired loans with an allowance, Gross recorded investment | 579 | 599 | |
Impaired loans, Specific allowance | (577) | (590) | |
Impaired loans with an allowance, Net loans | 2 | 9 | |
Gross recorded investment of impaired loans without an allowance | 1,050 | 1,122 | |
Impaired loans, Gross recorded investment | 1,629 | 1,721 | |
Impaired loans, Net loans | 1,052 | 1,131 | |
Commercial loans | Commercial and merchandising | |||
Financing Receivable, Impaired [Line Items] | |||
Impaired loans with an allowance, Gross recorded investment | 579 | 599 | |
Impaired loans, Specific allowance | (577) | (590) | |
Impaired loans with an allowance, Net loans | 2 | 9 | |
Gross recorded investment of impaired loans without an allowance | 1,048 | 1,096 | |
Impaired loans, Gross recorded investment | 1,627 | 1,695 | |
Impaired loans, Net loans | 1,050 | 1,105 | |
Commercial loans | Overdrafts | |||
Financing Receivable, Impaired [Line Items] | |||
Impaired loans with an allowance, Gross recorded investment | 0 | 0 | |
Impaired loans, Specific allowance | 0 | 0 | |
Impaired loans with an allowance, Net loans | 0 | 0 | |
Gross recorded investment of impaired loans without an allowance | 2 | 26 | |
Impaired loans, Gross recorded investment | 2 | 26 | |
Impaired loans, Net loans | 2 | 26 | |
Commercial real estate loans | Commercial mortgage | |||
Financing Receivable, Impaired [Line Items] | |||
Impaired loans with an allowance, Gross recorded investment | 1,722 | 6,127 | |
Impaired loans, Specific allowance | (750) | (2,951) | |
Impaired loans with an allowance, Net loans | 972 | 3,176 | |
Gross recorded investment of impaired loans without an allowance | 5,944 | 17,198 | |
Impaired loans, Gross recorded investment | 7,666 | 23,325 | |
Impaired loans, Net loans | 6,916 | 20,374 | |
Consumer loans | |||
Financing Receivable, Impaired [Line Items] | |||
Impaired loans with an allowance, Gross recorded investment | 408 | 366 | |
Impaired loans, Specific allowance | (278) | (274) | |
Impaired loans with an allowance, Net loans | 130 | 92 | |
Gross recorded investment of impaired loans without an allowance | 606 | 1,117 | |
Impaired loans, Gross recorded investment | 1,014 | 1,483 | |
Impaired loans, Net loans | 736 | 1,209 | |
Consumer loans | Overdrafts | |||
Financing Receivable, Impaired [Line Items] | |||
Impaired loans with an allowance, Gross recorded investment | 0 | 0 | |
Impaired loans, Specific allowance | 0 | 0 | |
Impaired loans with an allowance, Net loans | 0 | 0 | |
Gross recorded investment of impaired loans without an allowance | 17 | 11 | |
Impaired loans, Gross recorded investment | 17 | 11 | |
Impaired loans, Net loans | 17 | 11 | |
Consumer loans | Automobile financing | |||
Financing Receivable, Impaired [Line Items] | |||
Impaired loans with an allowance, Gross recorded investment | 155 | 0 | |
Impaired loans, Specific allowance | (75) | 0 | |
Impaired loans with an allowance, Net loans | 80 | 0 | |
Gross recorded investment of impaired loans without an allowance | 130 | 98 | |
Impaired loans, Gross recorded investment | 285 | 98 | |
Impaired loans, Net loans | 210 | 98 | |
Consumer loans | Other consumer | |||
Financing Receivable, Impaired [Line Items] | |||
Impaired loans with an allowance, Gross recorded investment | 253 | 366 | |
Impaired loans, Specific allowance | (203) | (274) | |
Impaired loans with an allowance, Net loans | 50 | 92 | |
Gross recorded investment of impaired loans without an allowance | 459 | 1,008 | |
Impaired loans, Gross recorded investment | 712 | 1,374 | |
Impaired loans, Net loans | 509 | 1,100 | |
Residential mortgage loans | |||
Financing Receivable, Impaired [Line Items] | |||
Impaired loans with an allowance, Gross recorded investment | 30,330 | 42,145 | |
Impaired loans, Specific allowance | (9,961) | (15,290) | |
Impaired loans with an allowance, Net loans | 20,369 | 26,855 | |
Gross recorded investment of impaired loans without an allowance | 52,043 | 39,283 | |
Impaired loans, Gross recorded investment | 82,373 | 81,428 | |
Impaired loans, Net loans | $ 72,412 | $ 66,138 |
Loans - Average Impaired Loan B
Loans - Average Impaired Loan Balances and Related Recognised Interest Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Financing Receivable, Impaired [Line Items] | |||
Average gross recorded investment | $ 100,321 | $ 110,106 | $ 123,682 |
Interest income recognised¹ | 2,502 | 1,755 | 1,701 |
Commercial loans | |||
Financing Receivable, Impaired [Line Items] | |||
Average gross recorded investment | 1,675 | 1,280 | 1,741 |
Interest income recognised¹ | 64 | 0 | 0 |
Commercial loans | Commercial and merchandising | |||
Financing Receivable, Impaired [Line Items] | |||
Average gross recorded investment | 1,661 | 1,214 | 1,452 |
Interest income recognised¹ | 64 | 0 | 0 |
Commercial loans | Overdrafts | |||
Financing Receivable, Impaired [Line Items] | |||
Average gross recorded investment | 14 | 66 | 289 |
Interest income recognised¹ | 0 | 0 | 0 |
Commercial real estate loans | Commercial mortgage | |||
Financing Receivable, Impaired [Line Items] | |||
Average gross recorded investment | 15,496 | 28,612 | 48,581 |
Interest income recognised¹ | 237 | 311 | 675 |
Consumer loans | |||
Financing Receivable, Impaired [Line Items] | |||
Average gross recorded investment | 1,249 | 1,781 | 2,437 |
Interest income recognised¹ | 0 | 2 | 5 |
Consumer loans | Overdrafts | |||
Financing Receivable, Impaired [Line Items] | |||
Average gross recorded investment | 14 | 27 | 132 |
Interest income recognised¹ | 0 | 0 | 0 |
Consumer loans | Automobile financing | |||
Financing Receivable, Impaired [Line Items] | |||
Average gross recorded investment | 192 | 137 | 307 |
Interest income recognised¹ | 0 | 0 | 0 |
Consumer loans | Credit card | |||
Financing Receivable, Impaired [Line Items] | |||
Average gross recorded investment | 0 | 0 | 35 |
Interest income recognised¹ | 0 | 0 | 0 |
Consumer loans | Other consumer | |||
Financing Receivable, Impaired [Line Items] | |||
Average gross recorded investment | 1,043 | 1,617 | 1,963 |
Interest income recognised¹ | 0 | 2 | 5 |
Residential mortgage loans | |||
Financing Receivable, Impaired [Line Items] | |||
Average gross recorded investment | 81,901 | 78,433 | 70,923 |
Interest income recognised¹ | $ 2,201 | $ 1,442 | $ 1,021 |
Loans - Loans Modified in a TDR
Loans - Loans Modified in a TDR (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)contract | Dec. 31, 2015USD ($)contract | Dec. 31, 2014USD ($)contract | |
Receivables [Abstract] | |||
Subsequent default, number of contracts | contract | 1 | 1 | 4 |
Subsequent default, recorded investment | $ 900 | $ 800 | $ 2,400 |
Financing Receivable, Modifications [Line Items] | |||
Number of contracts | contract | 21,000 | 21,000 | 20 |
Pre- modification recorded investment | $ 12,543 | $ 14,283 | $ 13,857 |
Modification: interest capitalisation | 81 | 1,168 | 259 |
Post- modification recorded investment | 12,624 | 15,451 | $ 14,116 |
TDRs outstanding, Accrual | 44,219 | 42,705 | |
TDRs outstanding, Non-accrual | $ 6,545 | $ 8,783 | |
Residential mortgage loans | |||
Financing Receivable, Modifications [Line Items] | |||
Number of contracts | contract | 21,000 | 20,000 | 20 |
Pre- modification recorded investment | $ 12,543 | $ 13,283 | $ 13,857 |
Modification: interest capitalisation | 81 | 1,081 | 259 |
Post- modification recorded investment | 12,624 | 14,364 | $ 14,116 |
TDRs outstanding, Accrual | 41,473 | 28,482 | |
TDRs outstanding, Non-accrual | 5,006 | $ 7,175 | |
Commercial loans | |||
Financing Receivable, Modifications [Line Items] | |||
Number of contracts | contract | 1,000 | ||
Pre- modification recorded investment | $ 1,000 | ||
Modification: interest capitalisation | 87 | ||
Post- modification recorded investment | 1,087 | ||
TDRs outstanding, Accrual | 1,044 | 1,078 | |
TDRs outstanding, Non-accrual | 0 | 0 | |
Commercial real estate loans | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs outstanding, Accrual | 1,702 | 13,065 | |
TDRs outstanding, Non-accrual | 1,539 | 1,608 | |
Consumer loans | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs outstanding, Accrual | 0 | 80 | |
TDRs outstanding, Non-accrual | $ 0 | $ 0 |
Loans - Purchased Credit-Impair
Loans - Purchased Credit-Impaired Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Contractual principal | |||
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | |||
Balance at beginning of year | $ 8,709 | $ 11,020 | $ 0 |
Purchases | 11,001 | ||
Advances and increases in cash flows expected to be collected | 166 | 150 | 19 |
Reductions resulting from repayments | (464) | (1,554) | |
Reductions resulting from changes in allowances for credit losses | 0 | ||
Reductions resulting from charge-offs | (395) | (907) | |
Accretion | 0 | ||
Balance at end of year | 8,016 | 8,709 | 11,020 |
Non-accretable difference | |||
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | |||
Balance at beginning of year | (2,248) | (3,804) | 0 |
Purchases | (3,804) | ||
Advances and increases in cash flows expected to be collected | 408 | 631 | 0 |
Reductions resulting from repayments | 0 | 0 | |
Reductions resulting from changes in allowances for credit losses | (172) | ||
Reductions resulting from charge-offs | 395 | 818 | |
Accretion | 107 | ||
Balance at end of year | (1,617) | (2,248) | (3,804) |
Accretable difference | |||
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | |||
Balance at beginning of year | (631) | 0 | 0 |
Purchases | 0 | ||
Advances and increases in cash flows expected to be collected | (396) | (631) | 0 |
Reductions resulting from repayments | 216 | 107 | |
Reductions resulting from changes in allowances for credit losses | 0 | ||
Reductions resulting from charge-offs | 0 | 0 | |
Accretion | (107) | ||
Balance at end of year | (811) | (631) | 0 |
Carrying amount | |||
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | |||
Balance at beginning of year | 5,830 | 7,216 | 0 |
Purchases | 7,197 | ||
Advances and increases in cash flows expected to be collected | 178 | 150 | 19 |
Reductions resulting from repayments | (248) | (1,447) | |
Reductions resulting from changes in allowances for credit losses | (172) | ||
Reductions resulting from charge-offs | 0 | (89) | |
Accretion | 0 | ||
Balance at end of year | $ 5,588 | $ 5,830 | $ 7,216 |
Credit risk concentrations (Det
Credit risk concentrations (Details) - Credit Availability Concentration Risk - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | $ 7,034,052 | $ 7,387,664 |
Credit exposure, General allowance | (32,509) | (30,197) |
Credit exposure, Total | 7,001,543 | 7,357,467 |
Australia | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 14,242 | 14,187 |
Barbados | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 7,500 | 11,250 |
Belgium | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 1,722 | 3,352 |
Bermuda | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 2,451,254 | 2,663,331 |
Canada | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 514,861 | 365,037 |
Cayman | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 978,561 | 939,693 |
Guernsey | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 444,119 | 488,282 |
Japan | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 20,963 | 23,424 |
New Zealand | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 785 | 999 |
Norway | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 42,477 | 289 |
Saint Lucia | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 65,117 | 65,285 |
Sweden | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 1,550 | 3,659 |
Switzerland | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 5,833 | 3,905 |
The Bahamas | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 26,682 | 31,932 |
United Kingdom | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 1,581,547 | 1,611,899 |
United States | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 876,642 | 1,161,106 |
Other | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 197 | 34 |
Cash due from banks, resell agreements and short-term investments | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 2,770,219 | 2,698,372 |
Credit exposure, General allowance | 0 | 0 |
Credit exposure, Total | 2,770,219 | 2,698,372 |
Cash due from banks, resell agreements and short-term investments | Australia | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 14,242 | 14,187 |
Cash due from banks, resell agreements and short-term investments | Barbados | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Cash due from banks, resell agreements and short-term investments | Belgium | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 1,722 | 3,352 |
Cash due from banks, resell agreements and short-term investments | Bermuda | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 23,505 | 22,009 |
Cash due from banks, resell agreements and short-term investments | Canada | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 514,861 | 365,037 |
Cash due from banks, resell agreements and short-term investments | Cayman | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 40,356 | 19,086 |
Cash due from banks, resell agreements and short-term investments | Guernsey | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 1 | 1 |
Cash due from banks, resell agreements and short-term investments | Japan | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 20,963 | 23,424 |
Cash due from banks, resell agreements and short-term investments | New Zealand | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 785 | 999 |
Cash due from banks, resell agreements and short-term investments | Norway | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 42,477 | 289 |
Cash due from banks, resell agreements and short-term investments | Saint Lucia | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Cash due from banks, resell agreements and short-term investments | Sweden | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 1,550 | 3,659 |
Cash due from banks, resell agreements and short-term investments | Switzerland | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 5,833 | 3,905 |
Cash due from banks, resell agreements and short-term investments | The Bahamas | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 2,822 | 3,196 |
Cash due from banks, resell agreements and short-term investments | United Kingdom | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 1,224,263 | 1,078,088 |
Cash due from banks, resell agreements and short-term investments | United States | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 876,642 | 1,161,106 |
Cash due from banks, resell agreements and short-term investments | Other | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 197 | 34 |
Loans | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 3,602,987 | 4,030,352 |
Credit exposure, General allowance | (32,509) | (30,197) |
Credit exposure, Total | 3,570,478 | 4,000,155 |
Loans | Australia | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Loans | Barbados | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 7,500 | 11,250 |
Loans | Belgium | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Loans | Bermuda | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 2,105,195 | 2,269,635 |
Loans | Canada | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Loans | Cayman | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 706,994 | 713,468 |
Loans | Guernsey | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 337,037 | 434,531 |
Loans | Japan | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Loans | New Zealand | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Loans | Norway | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Loans | Saint Lucia | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 65,117 | 65,285 |
Loans | Sweden | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Loans | Switzerland | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Loans | The Bahamas | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 23,860 | 28,736 |
Loans | United Kingdom | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 357,284 | 507,447 |
Loans | United States | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Loans | Other | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Loans | Banks and financial services | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 321,680 | 243,776 |
Loans | Commercial and merchandising | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 266,976 | 230,376 |
Loans | Governments | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 112,857 | 223,699 |
Loans | Individuals | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 2,299,852 | 2,532,209 |
Loans | Primary industry and manufacturing | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 34,304 | 36,299 |
Loans | Real estate | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 418,946 | 632,548 |
Loans | Hospitality industry | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 142,707 | 125,471 |
Loans | Transport and communication | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 5,665 | 5,974 |
Off-balance sheet | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 660,846 | 658,940 |
Credit exposure, General allowance | 0 | 0 |
Credit exposure, Total | 660,846 | 658,940 |
Off-balance sheet | Australia | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Off-balance sheet | Barbados | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Off-balance sheet | Belgium | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Off-balance sheet | Bermuda | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 322,554 | 371,687 |
Off-balance sheet | Canada | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Off-balance sheet | Cayman | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 231,211 | 207,139 |
Off-balance sheet | Guernsey | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 107,081 | 53,750 |
Off-balance sheet | Japan | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Off-balance sheet | New Zealand | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Off-balance sheet | Norway | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Off-balance sheet | Saint Lucia | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Off-balance sheet | Sweden | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Off-balance sheet | Switzerland | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Off-balance sheet | The Bahamas | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Off-balance sheet | United Kingdom | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 26,364 |
Off-balance sheet | United States | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Off-balance sheet | Other | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Off-balance sheet | Banks and financial services | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 393,148 | 320,934 |
Off-balance sheet | Commercial and merchandising | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 139,264 | 107,545 |
Off-balance sheet | Governments | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 709 | 102,782 |
Off-balance sheet | Individuals | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 108,810 | 95,956 |
Off-balance sheet | Primary industry and manufacturing | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 2,095 | 978 |
Off-balance sheet | Real estate | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 12,467 | 15,891 |
Off-balance sheet | Hospitality industry | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 4,353 | 14,854 |
Off-balance sheet | Transport and communication | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 0 | 0 |
Total credit exposure | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 4,263,833 | 4,689,292 |
Credit exposure, General allowance | (32,509) | (30,197) |
Credit exposure, Total | 4,231,324 | 4,659,095 |
Total credit exposure | Banks and financial services | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 714,828 | 564,710 |
Total credit exposure | Commercial and merchandising | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 406,240 | 337,921 |
Total credit exposure | Governments | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 113,566 | 326,481 |
Total credit exposure | Individuals | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 2,408,662 | 2,628,165 |
Total credit exposure | Primary industry and manufacturing | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 36,399 | 37,277 |
Total credit exposure | Real estate | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 431,413 | 648,439 |
Total credit exposure | Hospitality industry | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | 147,060 | 140,325 |
Total credit exposure | Transport and communication | ||
Concentration Risk [Line Items] | ||
Credit exposure, Sub-total | $ 5,665 | $ 5,974 |
Premises, equipment and compu85
Premises, equipment and computer software - Schedule of Premise, Equipment, and Computer Software (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Cost | $ 350,468 | $ 354,610 | |
Accumulated depreciation | (182,695) | (171,232) | |
Net carrying value | 167,773 | 183,378 | |
Total depreciation charged to operating expenses | 24,277 | 24,864 | $ 24,750 |
Impairment of buildings' carrying value (included in Impairment of fixed assets) | 0 | 0 | 1,986 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 9,008 | 9,008 | |
Accumulated depreciation | 0 | 0 | |
Net carrying value | 9,008 | 9,008 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 137,110 | 135,684 | |
Accumulated depreciation | (58,606) | (55,030) | |
Net carrying value | 78,504 | 80,654 | |
Total depreciation charged to operating expenses | 4,058 | 4,183 | 4,434 |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 28,837 | 31,108 | |
Accumulated depreciation | (25,637) | (27,620) | |
Net carrying value | 3,200 | 3,488 | |
Total depreciation charged to operating expenses | 1,462 | 1,605 | 1,728 |
Computer hardware and software in use | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 170,138 | 174,162 | |
Accumulated depreciation | (98,452) | (88,582) | |
Net carrying value | 71,686 | 85,580 | |
Total depreciation charged to operating expenses | 18,757 | 19,076 | $ 18,588 |
Computer software in development | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 5,375 | 4,648 | |
Accumulated depreciation | 0 | 0 | |
Net carrying value | $ 5,375 | $ 4,648 |
Premises, equipment and compu86
Premises, equipment and computer software (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)floor | Dec. 31, 2015USD ($)property | Dec. 31, 2014USD ($)property | |
Property, Plant and Equipment [Line Items] | |||
(Gain) on sale of premises, equipment and computer software | $ 37 | $ (28) | $ 0 |
Premises, Equipment, and Computer Software | |||
Property, Plant and Equipment [Line Items] | |||
Proceeds from sale of property, plant, and equipment | 11,200 | ||
(Gain) on sale of premises, equipment and computer software | $ 500 | ||
Bermuda | |||
Property, Plant and Equipment [Line Items] | |||
Number of properties sold | property | 4 | ||
Bermuda | Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Number of properties, intended use changed | property | 3 | ||
Impairment of real estate | $ 1,200 | ||
Write down of carrying amount to fair value less cost to sell | $ 800 | ||
Cayman | Premises, Equipment, and Computer Software | |||
Property, Plant and Equipment [Line Items] | |||
Number of properties sold | property | 1 | ||
Number of floors under leaseback agreement | floor | 2 | ||
Sale leaseback transaction, annual lease payments | $ 400 | ||
Sale leaseback transaction, term | 3 years | ||
United Kingdom | |||
Property, Plant and Equipment [Line Items] | |||
Impairment of core banking system | $ 5,100 |
Goodwill and other intangible87
Goodwill and other intangible assets Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | |||
Balance at beginning of year | $ 23,462 | $ 24,821 | $ 7,086 |
Acquisitions during the year | 0 | 0 | 19,291 |
Foreign exchange translation adjustment | (3,840) | (1,359) | (1,556) |
Balance at end of year | $ 19,622 | $ 23,462 | $ 24,821 |
Goodwill and other intangible88
Goodwill and other intangible assets - Customer Relationship Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Net carrying amount | $ 42,289 | $ 27,669 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 100,529 | 79,086 |
Accumulated amortisation | (58,240) | (51,417) |
Net carrying amount | 42,289 | 27,669 |
Bermuda | Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 29,785 | 8,342 |
Accumulated amortisation | (7,762) | (6,258) |
Net carrying amount | 22,023 | 2,084 |
Cayman | Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 12,324 | 12,324 |
Accumulated amortisation | (2,782) | (1,960) |
Net carrying amount | 9,542 | 10,364 |
Guernsey | Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 58,420 | 58,420 |
Accumulated amortisation | (47,696) | (43,199) |
Net carrying amount | $ 10,724 | $ 15,221 |
Goodwill and other intangible89
Goodwill and other intangible assets - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortisation expense | $ 4,514,000 | $ 4,424,000 | $ 4,281,000 |
Customer Relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Assets acquired | 21,400,000 | 0 | 26,600,000 |
Amortisation expense | 4,500,000 | 4,400,000 | 4,300,000 |
Foreign currency translation gain (loss) | (2,300,000) | $ (900,000) | $ (1,300,000) |
Estimated aggregate amortisation expense, next twelve months | 4,200,000 | ||
Estimated aggregate amortisation expense, year two | 4,200,000 | ||
Estimated aggregate amortisation expense, year three | 4,200,000 | ||
Estimated aggregate amortisation expense, year four | 4,200,000 | ||
Estimated aggregate amortisation expense, year five | $ 4,200,000 |
Customer deposits and deposit90
Customer deposits and deposits from banks (Details) $ in Thousands | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Time Deposits [Line Items] | ||
Demand Deposits, Bearing a Special Negligible Interest Rate | $ 150,000 | $ 175,000 |
Term, Within 3 months | 1,491,824 | 988,554 |
Term, 3 to 6 months | 165,586 | 296,385 |
Term, 6 to 12 months | 91,755 | 153,246 |
Term, After 12 months | 71,180 | 78,739 |
Total term | 1,820,345 | 1,516,924 |
Total deposits | 10,033,649 | 9,182,146 |
Non-interest-bearing, Demand | 2,385,353 | 1,882,148 |
Interest-bearing, Demand | 5,827,951 | 5,783,074 |
Total demand deposits | $ 8,213,304 | $ 7,665,222 |
Weighted average interest rate, demand deposits | 0.0006 | 0.0010 |
Customers | ||
Time Deposits [Line Items] | ||
Term, Within 3 months | $ 1,488,219 | $ 984,655 |
Term, 3 to 6 months | 165,486 | 296,385 |
Term, 6 to 12 months | 91,755 | 153,246 |
Term, After 12 months | 71,180 | 78,739 |
Total term | 1,816,640 | 1,513,025 |
Total deposits | 10,009,853 | 9,167,668 |
Non-interest-bearing, Demand | 2,385,013 | 1,881,745 |
Interest-bearing, Demand | 5,808,200 | 5,772,898 |
Total demand deposits | 8,193,213 | 7,654,643 |
Banks | ||
Time Deposits [Line Items] | ||
Term, Within 3 months | 3,605 | 3,899 |
Term, 3 to 6 months | 100 | 0 |
Term, 6 to 12 months | 0 | 0 |
Term, After 12 months | 0 | 0 |
Total term | 3,705 | 3,899 |
Total deposits | 23,796 | 14,478 |
Non-interest-bearing, Demand | 340 | 403 |
Interest-bearing, Demand | 19,751 | 10,176 |
Total demand deposits | 20,091 | 10,579 |
Bermuda | Customers | ||
Time Deposits [Line Items] | ||
Non-interest-bearing, Demand | 1,733,684 | 1,348,878 |
Interest-bearing, Demand | 3,013,401 | 2,390,952 |
Total demand deposits | 4,747,085 | 3,739,830 |
Term, less than $100k, Within 3 months | 14,091 | 15,902 |
Term, less than $100k, 3 to 6 months | 4,309 | 4,757 |
Term, less than $100k, 6 to 12 months | 9,068 | 10,035 |
Term, less than $100k, After 12 months | 16,380 | 15,881 |
Total term, less than $100k | 43,848 | 46,575 |
Total deposits, less than $100k | 4,790,933 | 3,786,405 |
Term, $100k or More, Within 3 months | 1,013,159 | 329,433 |
Term, $100k or More, 3 to 6 months | 37,550 | 37,925 |
Term, $100k or More, 6 to 12 months | 60,952 | 64,943 |
Term, $100k or More, After 12 months | 44,507 | 53,002 |
Total term, $100k or More | 1,156,168 | 485,303 |
Total deposits, More than $100k | 1,156,168 | 485,303 |
Term, Within 3 months | 1,027,250 | 345,335 |
Term, 3 to 6 months | 41,859 | 42,682 |
Term, 6 to 12 months | 70,020 | 74,978 |
Term, After 12 months | 60,887 | 68,883 |
Total term | 1,200,016 | 531,878 |
Total deposits | 5,947,101 | 4,271,708 |
Bermuda | Banks | ||
Time Deposits [Line Items] | ||
Non-interest-bearing, Demand | 340 | 403 |
Interest-bearing, Demand | 0 | 0 |
Total demand deposits | 340 | 403 |
Term, less than $100k, Within 3 months | 4 | 0 |
Term, less than $100k, 3 to 6 months | 0 | 0 |
Term, less than $100k, 6 to 12 months | 0 | 0 |
Term, less than $100k, After 12 months | 0 | 0 |
Total term, less than $100k | 4 | 0 |
Total deposits, less than $100k | 344 | 403 |
Non-Bermuda | Customers | ||
Time Deposits [Line Items] | ||
Term, less than $100k, Within 3 months | 20,295 | 22,878 |
Term, less than $100k, 3 to 6 months | 4,108 | 6,714 |
Term, less than $100k, 6 to 12 months | 4,145 | 4,238 |
Term, less than $100k, After 12 months | 783 | 376 |
Total term, less than $100k | 29,331 | 34,206 |
Total deposits, less than $100k | 3,475,459 | 3,949,019 |
Term, $100k or More, Within 3 months | 440,674 | 616,442 |
Term, $100k or More, 3 to 6 months | 119,519 | 246,989 |
Term, $100k or More, 6 to 12 months | 17,590 | 74,030 |
Term, $100k or More, After 12 months | 9,510 | 9,480 |
Total term, $100k or More | 587,293 | 946,941 |
Total deposits, More than $100k | 587,293 | 946,941 |
Term, Within 3 months | 460,969 | 639,320 |
Term, 3 to 6 months | 123,627 | 253,703 |
Term, 6 to 12 months | 21,735 | 78,268 |
Term, After 12 months | 10,293 | 9,856 |
Total term | 616,624 | 981,147 |
Total deposits | 4,062,752 | 4,895,960 |
Non-interest-bearing, Demand | 651,329 | 532,867 |
Interest-bearing, Demand | 2,794,799 | 3,381,946 |
Total demand deposits | 3,446,128 | 3,914,813 |
Non-Bermuda | Banks | ||
Time Deposits [Line Items] | ||
Term, less than $100k, Within 3 months | 0 | 0 |
Term, less than $100k, 3 to 6 months | 0 | 0 |
Term, less than $100k, 6 to 12 months | 0 | 0 |
Term, less than $100k, After 12 months | 0 | 0 |
Total term, less than $100k | 0 | 0 |
Total deposits, less than $100k | 19,751 | 10,176 |
Term, $100k or More, Within 3 months | 3,601 | 3,899 |
Term, $100k or More, 3 to 6 months | 100 | 0 |
Term, $100k or More, 6 to 12 months | 0 | 0 |
Term, $100k or More, After 12 months | 0 | 0 |
Total term, $100k or More | 3,701 | 3,899 |
Total deposits, More than $100k | 3,701 | 3,899 |
Term, Within 3 months | 3,601 | 3,899 |
Term, 3 to 6 months | 100 | 0 |
Term, 6 to 12 months | 0 | 0 |
Term, After 12 months | 0 | 0 |
Total term | 3,701 | 3,899 |
Total deposits | 23,452 | 14,075 |
Non-interest-bearing, Demand | 0 | 0 |
Interest-bearing, Demand | 19,751 | 10,176 |
Total demand deposits | $ 19,751 | $ 10,176 |
Customer deposits and deposit91
Customer deposits and deposits from banks - By Type and Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Time Deposits [Line Items] | ||
Payable on demand | $ 8,213,304 | $ 7,665,222 |
Payable on a fixed date | 1,820,345 | 1,516,924 |
Total deposits | 10,033,649 | 9,182,146 |
Customers | ||
Time Deposits [Line Items] | ||
Payable on demand | 8,193,213 | 7,654,643 |
Payable on a fixed date | 1,816,640 | 1,513,025 |
Total deposits | 10,009,853 | 9,167,668 |
Customers | Bermuda | ||
Time Deposits [Line Items] | ||
Payable on demand | 4,747,086 | 3,739,829 |
Payable on a fixed date | 1,200,016 | 531,877 |
Total deposits | 5,947,102 | 4,271,706 |
Customers | Cayman | ||
Time Deposits [Line Items] | ||
Payable on demand | 2,606,305 | 2,596,642 |
Payable on a fixed date | 417,750 | 416,489 |
Total deposits | 3,024,055 | 3,013,131 |
Customers | Guernsey | ||
Time Deposits [Line Items] | ||
Payable on demand | 781,119 | 996,343 |
Payable on a fixed date | 185,457 | 248,866 |
Total deposits | 966,576 | 1,245,209 |
Customers | The Bahamas | ||
Time Deposits [Line Items] | ||
Payable on demand | 58,703 | 36,078 |
Payable on a fixed date | 13,417 | 3,602 |
Total deposits | 72,120 | 39,680 |
Customers | United Kingdom | ||
Time Deposits [Line Items] | ||
Payable on demand | 0 | 285,751 |
Payable on a fixed date | 0 | 312,191 |
Total deposits | 0 | 597,942 |
Banks | ||
Time Deposits [Line Items] | ||
Payable on demand | 20,091 | 10,579 |
Payable on a fixed date | 3,705 | 3,899 |
Total deposits | 23,796 | 14,478 |
Banks | Bermuda | ||
Time Deposits [Line Items] | ||
Payable on demand | 341 | 403 |
Payable on a fixed date | 4 | 0 |
Total deposits | 345 | 403 |
Banks | Cayman | ||
Time Deposits [Line Items] | ||
Payable on demand | 19,615 | 9,365 |
Payable on a fixed date | 3,701 | 3,899 |
Total deposits | 23,316 | 13,264 |
Banks | Guernsey | ||
Time Deposits [Line Items] | ||
Payable on demand | 0 | 669 |
Payable on a fixed date | 0 | 0 |
Total deposits | 0 | 669 |
Banks | United Kingdom | ||
Time Deposits [Line Items] | ||
Payable on demand | 135 | 142 |
Payable on a fixed date | 0 | 0 |
Total deposits | $ 135 | $ 142 |
Employee benefit plans - Narrat
Employee benefit plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2014 | |
Bermuda | Postretirement Health Coverage 2014 Amendment | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Benefit obligation, period increase (decrease) | $ 7.9 | |
Remaining life expectancy | 21 years | |
Bermuda | Postretirement Health Coverage 2010 Amendment | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Remaining service period | 3 years 1 month 6 days | |
Bermuda | Postretirement Health Coverage 2011 Amendment | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Remaining service period | 4 years 7 months 6 days | |
Guernsey | Pension plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Remaining life expectancy, inactive participants | 39 years | |
Remaining life expectancy, active members | 15 years |
Employee benefit plans - Financ
Employee benefit plans - Financial Position of Defined Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Amounts recognised in the consolidated balance sheets consist of: | |||
Accrued pension benefit cost included in employee benefit plans liability | $ (139,967) | $ (122,135) | |
Pension plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation at end of year | 178,067 | 166,815 | $ 188,890 |
Change in projected benefit obligation | |||
Projected benefit obligation at beginning of year | 166,815 | 188,890 | 167,469 |
Service cost | 0 | 0 | 1,203 |
Employee contributions | 0 | 0 | 99 |
Interest cost | 5,781 | 6,958 | 7,760 |
Benefits paid | (10,477) | (7,573) | (8,771) |
Plan amendment | 0 | 0 | 0 |
Settlement and curtailment of liability | 0 | (2,509) | (4,662) |
Actuarial (gain) loss | 30,953 | (14,157) | 31,604 |
Foreign exchange translation adjustment | (15,004) | (4,794) | (5,812) |
Projected benefit obligation at end of year | 178,068 | 166,815 | 188,890 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 179,961 | 194,007 | 186,412 |
Actual return on plan assets | 18,615 | 687 | 18,451 |
Employer contribution | 678 | 808 | 4,172 |
Employee contributions | 0 | 0 | 99 |
Plan settlement | 0 | (2,424) | 0 |
Benefits paid | (10,477) | (7,573) | (8,771) |
Foreign exchange translation adjustment | (16,571) | (5,544) | (6,356) |
Fair value of plan assets at end of year | 172,206 | 179,961 | 194,007 |
Amounts recognised in the consolidated balance sheets consist of: | |||
Prepaid benefit cost included in other assets | 7,771 | 16,174 | 8,374 |
Accrued pension benefit cost included in employee benefit plans liability | (13,633) | (3,028) | (3,257) |
Surplus (deficit) of plan assets over projected benefit obligation at measurement date | (5,862) | 13,146 | 5,117 |
Pension plans | Bermuda | |||
Change in projected benefit obligation | |||
Projected benefit obligation at end of year | 150,000 | ||
Change in plan assets | |||
Fair value of plan assets at end of year | 136,300 | ||
Post-retirement medical benefit plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation at end of year | 0 | 0 | 0 |
Change in projected benefit obligation | |||
Projected benefit obligation at beginning of year | 119,107 | 114,640 | 89,109 |
Service cost | 118 | 341 | 825 |
Employee contributions | 0 | 0 | 0 |
Interest cost | 4,792 | 4,745 | 4,503 |
Benefits paid | (3,594) | (2,871) | (3,590) |
Plan amendment | 0 | 0 | 7,901 |
Settlement and curtailment of liability | 0 | 0 | 0 |
Actuarial (gain) loss | 5,911 | 2,252 | 15,892 |
Foreign exchange translation adjustment | 0 | 0 | 0 |
Projected benefit obligation at end of year | 126,334 | 119,107 | 114,640 |
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 | 3,594 | 2,871 | 3,590 |
Employee contributions | 0 | 0 | 0 |
Plan settlement | 0 | 0 | 0 |
Benefits paid | (3,594) | (2,871) | (3,590) |
Foreign exchange translation adjustment | 0 | 0 | 0 |
Fair value of plan assets at end of year | 0 | 0 | 0 |
Amounts recognised 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 | (126,334) | (119,107) | (114,640) |
Surplus (deficit) of plan assets over projected benefit obligation at measurement date | $ (126,334) | $ (119,107) | $ (114,640) |
Employee benefit plans - Amount
Employee benefit plans - Amounts Recognised in AOCI, Benefit Expense (Income), and OCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension plans | |||
Amounts recognised in accumulated other comprehensive loss consist of: | |||
Net actuarial loss, excluding deferred taxes | $ (64,852) | $ (46,696) | $ (53,970) |
Prior service credit, net of prior service cost | 0 | 0 | 0 |
Deferred income taxes assets | 1,620 | 365 | 801 |
Net amount recognised in accumulated other comprehensive loss | (63,232) | (46,331) | (53,169) |
Expense component | |||
Service cost | 0 | 0 | 1,203 |
Interest cost | 5,781 | 6,958 | 7,760 |
Expected return on plan assets | (8,943) | (9,585) | (10,653) |
Amortisation of net actuarial losses | 1,702 | 1,607 | 1,058 |
Amortisation of prior service credit | 0 | 0 | 0 |
Loss on settlement | 0 | 101 | 0 |
Defined benefit expense (income) | (1,460) | (919) | (632) |
Defined contribution expense | 6,606 | 6,907 | 6,892 |
Total benefit expense (income) | 5,146 | 5,988 | 6,260 |
Other Changes Recognised in Other Comprehensive Income (Loss) | |||
Net gain (loss) arising during the year | (19,956) | 5,096 | (18,947) |
Prior service cost arising during the year | 0 | 0 | 0 |
Amortisation of net actuarial losses | 1,702 | 1,703 | 1,058 |
Amortisation of prior service credit | 0 | 0 | 0 |
Change in deferred taxes | 1,315 | (391) | 83 |
Foreign exchange adjustment | 38 | 430 | 253 |
Total changes recognised in other comprehensive income (loss) | (16,901) | 6,838 | (17,553) |
Future amortization of actuarial gain (loss) | (2,200) | ||
Post-retirement medical benefit plan | |||
Amounts recognised in accumulated other comprehensive loss consist of: | |||
Net actuarial loss, excluding deferred taxes | (31,959) | (28,779) | (29,874) |
Prior service credit, net of prior service cost | (5,678) | 665 | 7,008 |
Deferred income taxes assets | 0 | 0 | 0 |
Net amount recognised in accumulated other comprehensive loss | (37,637) | (28,114) | (22,866) |
Expense component | |||
Service cost | 118 | 341 | 825 |
Interest cost | 4,792 | 4,745 | 4,503 |
Expected return on plan assets | 0 | 0 | 0 |
Amortisation of net actuarial losses | 2,731 | 3,347 | 922 |
Amortisation of prior service credit | (6,343) | (6,343) | (6,719) |
Loss on settlement | 0 | 0 | 0 |
Defined benefit expense (income) | 1,298 | 2,090 | (469) |
Defined contribution expense | 0 | 0 | 0 |
Total benefit expense (income) | 1,298 | 2,090 | (469) |
Other Changes Recognised in Other Comprehensive Income (Loss) | |||
Net gain (loss) arising during the year | (5,911) | (2,252) | (15,892) |
Prior service cost arising during the year | 0 | 0 | (7,901) |
Amortisation of net actuarial losses | 2,731 | 3,347 | 922 |
Amortisation of prior service credit | (6,343) | (6,343) | (6,719) |
Change in deferred taxes | 0 | 0 | 0 |
Foreign exchange adjustment | 0 | 0 | 0 |
Total changes recognised in other comprehensive income (loss) | (9,523) | $ (5,248) | $ (29,590) |
Future amortization of actuarial gain (loss) | (3,500) | ||
Future amortization of prior service cost (credit) | $ (800) |
Employee benefit plans - Actuar
Employee benefit plans - Actuarial Assumptions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension plans | |||
Actuarial assumptions used to determine annual benefit expense | |||
Weighted average discount rate | 3.90% | 3.80% | 4.75% |
Weighted average rate of compensation increases | 2.30% | 2.20% | 4.30% |
Weighted average expected long-term rate of return on plan assets | 5.30% | 5.10% | 5.80% |
Actuarial assumptions used to determine benefit obligations at end of year | |||
Weighted average discount rate | 3.40% | 4.20% | 3.80% |
Weighted average rate of compensation increases | 2.50% | 2.30% | 2.80% |
Post-retirement medical benefit plan | |||
Actuarial assumptions used to determine annual benefit expense | |||
Weighted average discount rate | 4.70% | 4.20% | 5.10% |
Actuarial assumptions used to determine benefit obligations at end of year | |||
Weighted average discount rate | 4.37% | 4.70% | 4.20% |
Post-retirement medical benefit plan sensitivity to trend rate assumptions | |||
Effect of one percentage point increase on service and interest cost components | $ 772 | $ 909 | $ 952 |
Effect of one percentage point increase on accumulated postretirement benefit obligation | 19,513 | 18,792 | 20,339 |
Effect of one percentage point decrease on service and interest cost components | (694) | (781) | (771) |
Effect of one percentage point decrease on accumulated postretirement benefit obligation | $ (16,255) | $ (15,496) | $ (16,514) |
Post-retirement medical benefit plan | Minimum | |||
Actuarial assumptions used to determine annual benefit expense | |||
Weighted average annual medical cost increase rate | 8.00% | 7.10% | 7.30% |
Actuarial assumptions used to determine benefit obligations at end of year | |||
Weighted average annual medical cost increase rate | 7.80% | 8.00% | 7.10% |
Post-retirement medical benefit plan | Maximum | |||
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 | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
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 | ||
Weighted average actual and target asset allocations of the pension plans by asset category | ||
Actual allocation | 40.00% | 42.00% |
Target allocation | 46.00% | 53.00% |
Equity securities | ||
Weighted average actual and target asset allocations of the pension plans by asset category | ||
Actual allocation | 60.00% | 58.00% |
Target allocation | 49.00% | 47.00% |
Other | ||
Weighted average actual and target asset allocations of the pension plans by asset category | ||
Actual allocation | 0.00% | 0.00% |
Target allocation | 5.00% | 0.00% |
Employee benefit plans - Fair V
Employee benefit plans - Fair Value Measurements of Pension Plans' Assets (Details) - Pension plans - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 172,206 | $ 179,961 | $ 194,007 | $ 186,412 |
Actual allocation | 100.00% | 100.00% | ||
Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 0 | $ 11,845 | ||
Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 172,206 | 168,116 | ||
Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 0 | 0 | ||
US government and federal agencies | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 9,777 | 7,532 | ||
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 | 9,777 | 7,532 | ||
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 | 23,255 | 0 | ||
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 | 23,255 | 0 | ||
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 | 36,184 | 68,166 | ||
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 | 36,184 | 68,166 | ||
Corporate debt securities | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 0 | 0 | ||
Equity securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 102,627 | $ 103,547 | ||
Actual allocation | 60.00% | 58.00% | ||
Equity securities | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 0 | $ 11,845 | ||
Equity securities | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 102,627 | 91,702 | ||
Equity securities | 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 | $ 363 | $ 716 | ||
Actual allocation | 0.00% | 0.00% | ||
Other | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 0 | $ 0 | ||
Other | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 363 | 716 | ||
Other | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 0 | $ 0 | ||
Mutual Funds And Equity Securities Managed Or Administered By Wholly-Owned Subsidiaries | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Actual allocation | 31.20% | 34.80% | ||
Parent Company Common Stock | Common Stock | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Actual allocation | 0.50% | 0.30% | ||
Parent Company Preferred Stock | Preference Shares | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Actual allocation | 0.00% | 1.20% |
Employee benefit plans - Estima
Employee benefit plans - Estimated Future Contributions (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Pension plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated Bank contributions for the full year ending 31 December 2017 | $ 330 |
Estimated benefit payments by year: | |
2,017 | 7,300 |
2,018 | 7,300 |
2,019 | 7,300 |
2,020 | 7,300 |
2,021 | 7,300 |
2022-2026 | 36,000 |
Post-retirement medical benefit plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated Bank contributions for the full year ending 31 December 2017 | 4,571 |
Estimated benefit payments by year: | |
2,017 | 4,571 |
2,018 | 4,896 |
2,019 | 5,237 |
2,020 | 5,581 |
2,021 | 5,942 |
2022-2026 | $ 34,940 |
Credit-related arrangements, 99
Credit-related arrangements, repurchase agreements and commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating leases, rent expense | $ 5,100 | $ 4,800 | $ 5,300 |
Sourcing | |||
2,017 | 17,157 | ||
2,018 | 13,876 | ||
2,019 | 13,746 | ||
2,020 | 13,666 | ||
2,021 | 11,373 | ||
2022 & thereafter | 0 | ||
Total commitments | 69,818 | 16,300 | |
Leases | |||
2,017 | 4,761 | ||
2,018 | 3,705 | ||
2,019 | 2,900 | ||
2,020 | 2,759 | ||
2,021 | 2,665 | ||
2022 & thereafter | 2,508 | ||
Total commitments | 19,298 | $ 20,000 | |
Other | |||
2,017 | 2,503 | ||
2,018 | 2,440 | ||
2,019 | 2,440 | ||
2,020 | 600 | ||
2,021 | 600 | ||
2022 & thereafter | 600 | ||
Total commitments | 9,183 | ||
Total | |||
2,017 | 24,421 | ||
2,018 | 20,021 | ||
2,019 | 19,086 | ||
2,020 | 17,025 | ||
2,021 | 14,638 | ||
2022 & thereafter | 3,108 | ||
Total commitments | $ 98,299 |
Credit-related arrangements,100
Credit-related arrangements, repurchase agreements and commitments - Credit-Related Arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Offsetting Liabilities [Line Items] | ||
Outstanding financial guarantees, Gross | $ 247,209 | $ 267,988 |
Outstanding financial guarantees, Collateral | 247,209 | 265,618 |
Outstanding financial guarantees, Net | $ 0 | 2,370 |
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 | $ 242,437 | 258,851 |
Outstanding financial guarantees, Collateral | 242,437 | 257,200 |
Outstanding financial guarantees, Net | 0 | 1,651 |
Letters of guarantee | ||
Offsetting Liabilities [Line Items] | ||
Outstanding financial guarantees, Gross | 4,772 | 9,137 |
Outstanding financial guarantees, Collateral | 4,772 | 8,418 |
Outstanding financial guarantees, Net | $ 0 | $ 719 |
Credit-related arrangements,101
Credit-related arrangements, repurchase agreements and commitments - Commitments (Details) $ in Thousands | Dec. 31, 2016USD ($)custodian | Dec. 31, 2015USD ($) |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Number of custodians | custodian | 1 | |
Commitments to extend credit | $ 412,568 | $ 390,497 |
Documentary and commercial letters of credit | 1,069 | 455 |
Total unfunded commitments to extend credit | $ 413,637 | 390,952 |
Custodian | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Right to set-off against securities held, percent of utilised facility | 110.00% | |
Commitments to extend credit | $ 200,000 | |
Custodian | Standby Letters of Credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to extend credit | $ 110,300 | $ 123,700 |
Credit-related arrangements,102
Credit-related arrangements, repurchase agreements and commitments - Repurchase Agreements (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)position | Dec. 31, 2015USD ($)position | |
Loss Contingencies [Line Items] | ||
Securities purchased under agreement to resell | $ 148,813 | $ 0 |
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises | ||
Loss Contingencies [Line Items] | ||
Resell agreements, number of open positions | position | 8 | 0 |
Resell agreements, maturity period (less than) | 30 days | |
Securities purchased under agreement to resell | $ 148,800 |
Credit-related arrangements,103
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, 2016USD ($) | Dec. 31, 2015USD ($) | |
Loss Contingencies [Line Items] | |||
Number of defendants | institution | 6 | ||
Loss contingency provision | $ | $ 5.5 | $ 4.8 |
Exit cost obligations (Details)
Exit cost obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Cost and Reserve [Line Items] | ||||
Expense recognised by year | $ 6,266 | $ 2,183 | $ 0 | |
United Kingdom | Wind Down of Deposit Taking and Investment Management Business | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expense recognised by year | 6,266 | 2,183 | ||
Expense recognised by year, Costs to be recognised in the future | 2,772 | |||
Expense recognised by year, Total exit costs expected to be incurred | 11,221 | |||
Amounts paid by year | 8,264 | 0 | ||
Exit cost liability | $ 2,183 | 185 | 2,183 | |
United Kingdom | Staff redundancy expenses | Wind Down of Deposit Taking and Investment Management Business | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, amount expensed | 5,100 | |||
Expense recognised by year | 2,810 | 634 | ||
Expense recognised by year, Costs to be recognised in the future | 116 | |||
Expense recognised by year, Total exit costs expected to be incurred | 3,560 | |||
Amounts paid by year | 3,329 | 0 | ||
Exit cost liability | 634 | 115 | 634 | |
United Kingdom | Professional services | Wind Down of Deposit Taking and Investment Management Business | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expense recognised by year | 2,284 | 1,549 | ||
Expense recognised by year, Costs to be recognised in the future | 219 | |||
Expense recognised by year, Total exit costs expected to be incurred | 4,052 | |||
Amounts paid by year | 3,763 | 0 | ||
Exit cost liability | 1,549 | 70 | 1,549 | |
United Kingdom | Lease termination expenses | Wind Down of Deposit Taking and Investment Management Business | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expense recognised by year | 0 | 0 | ||
Expense recognised by year, Costs to be recognised in the future | 1,513 | |||
Expense recognised by year, Total exit costs expected to be incurred | 1,513 | |||
Amounts paid by year | 0 | 0 | ||
Exit cost liability | 0 | 0 | 0 | |
United Kingdom | Other expenses | Wind Down of Deposit Taking and Investment Management Business | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expense recognised by year | 1,172 | 0 | ||
Expense recognised by year, Costs to be recognised in the future | 924 | |||
Expense recognised by year, Total exit costs expected to be incurred | 2,096 | |||
Amounts paid by year | 1,172 | 0 | ||
Exit cost liability | $ 0 | $ 0 | $ 0 |
Loan interest income (Details)
Loan interest income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Contractual interest | |||
Contractual interest earned on mortgages | $ 103,820 | $ 104,194 | $ 106,321 |
Contractual interest earned on other loans | 81,509 | 79,506 | 82,395 |
Subtotal contractual interest earned | 185,329 | 183,700 | 188,716 |
Amortisation | |||
Amortisation of fair value hedge | (1,120) | (1,471) | (1,548) |
Amortisation of loan origination fees (net of amortised costs) | 3,791 | 4,257 | 4,818 |
Total loan interest income | 188,000 | 186,486 | 191,986 |
Balance of unamortised fair value hedge included in loans as at year end | 3,215 | 4,335 | 5,806 |
Balance of unamortised loan fees included in loans as at year end | $ 6,313 | $ 7,319 | $ 7,072 |
Segmented information (Details)
Segmented information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)segmentbranch | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | segment | 6 | ||
Assets | $ 11,103,545 | $ 10,275,563 | |
Net interest income | 258,480 | 239,266 | $ 238,487 |
Provision for credit losses | (4,399) | (5,741) | (8,048) |
Non-interest income | 147,473 | 140,172 | 134,830 |
Total net revenue | 401,554 | 373,697 | 365,269 |
Gains and losses | 1,014 | (9,437) | 15,688 |
Total net revenue | 402,568 | 364,260 | 380,957 |
Total expenses | 286,626 | 286,521 | 272,798 |
Net income | 115,942 | 77,739 | 108,159 |
Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 258,480 | 239,266 | 238,487 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Assets | 11,526,687 | 10,627,743 | |
Provision for credit losses | (4,399) | (5,741) | (8,048) |
Non-interest income | 150,163 | 141,751 | 136,716 |
Total net revenue | 404,244 | 375,276 | 367,155 |
Gains and losses | 1,014 | (9,437) | 15,688 |
Total net revenue | 405,258 | 365,839 | 382,843 |
Total expenses | 289,316 | 288,100 | 274,684 |
Net income | $ 115,942 | 77,739 | 108,159 |
Operating Segments | Bermuda | |||
Segment Reporting Information [Line Items] | |||
Number of branch locations | branch | 5 | ||
Assets | $ 6,765,125 | 5,113,718 | |
Provision for credit losses | (7,263) | (3,625) | (6,425) |
Non-interest income | 71,765 | 61,050 | 60,692 |
Total net revenue | 226,610 | 202,513 | 198,959 |
Gains and losses | 1,412 | (2,503) | 6,908 |
Total net revenue | 228,022 | 200,010 | 205,867 |
Total expenses | 164,503 | 159,474 | 145,696 |
Net income | $ 63,519 | 40,536 | 60,171 |
Operating Segments | Cayman | |||
Segment Reporting Information [Line Items] | |||
Number of branch locations | branch | 3 | ||
Assets | $ 3,393,256 | 3,282,319 | |
Provision for credit losses | 2,135 | (466) | (557) |
Non-interest income | 41,364 | 39,508 | 33,515 |
Total net revenue | 123,531 | 105,967 | 92,328 |
Gains and losses | (532) | (793) | 36 |
Total net revenue | 122,999 | 105,174 | 92,364 |
Total expenses | 60,613 | 58,115 | 58,829 |
Net income | 62,386 | 47,059 | 33,535 |
Operating Segments | Guernsey | |||
Segment Reporting Information [Line Items] | |||
Assets | 1,132,663 | 1,391,126 | |
Provision for credit losses | (395) | (103) | (154) |
Non-interest income | 24,623 | 26,171 | 26,814 |
Total net revenue | 38,374 | 42,666 | 44,721 |
Gains and losses | (1,027) | (1,066) | 4,432 |
Total net revenue | 37,347 | 41,600 | 49,153 |
Total expenses | 35,547 | 39,872 | 39,580 |
Net income | 1,800 | 1,728 | 9,573 |
Operating Segments | Switzerland | |||
Segment Reporting Information [Line Items] | |||
Assets | 2,173 | 2,713 | |
Provision for credit losses | 0 | 0 | 0 |
Non-interest income | 3,798 | 3,420 | 2,486 |
Total net revenue | 3,839 | 3,420 | 2,486 |
Gains and losses | 0 | 0 | 0 |
Total net revenue | 3,839 | 3,420 | 2,486 |
Total expenses | 3,366 | 3,320 | 2,867 |
Net income | 473 | 100 | (381) |
Operating Segments | The Bahamas | |||
Segment Reporting Information [Line Items] | |||
Assets | 81,604 | 49,434 | |
Provision for credit losses | 0 | 0 | 0 |
Non-interest income | 4,666 | 5,295 | 5,492 |
Total net revenue | 4,742 | 5,419 | 5,643 |
Gains and losses | 0 | 1 | 0 |
Total net revenue | 4,742 | 5,420 | 5,643 |
Total expenses | 5,032 | 5,068 | 5,548 |
Net income | (290) | 352 | 95 |
Operating Segments | United Kingdom | |||
Segment Reporting Information [Line Items] | |||
Assets | 151,866 | 788,433 | |
Provision for credit losses | 1,124 | (1,547) | (912) |
Non-interest income | 3,947 | 6,307 | 7,717 |
Total net revenue | 7,148 | 15,291 | 23,018 |
Gains and losses | 1,161 | (5,076) | 4,312 |
Total net revenue | 8,309 | 10,215 | 27,330 |
Total expenses | 20,255 | 22,251 | 22,164 |
Net income | (11,946) | (12,036) | 5,166 |
Intersegment Eliminations | |||
Segment Reporting Information [Line Items] | |||
Assets | (423,142) | (352,180) | |
Provision for credit losses | 0 | 0 | 0 |
Non-interest income | (2,690) | (1,579) | (1,886) |
Total net revenue | (2,690) | (1,579) | (1,886) |
Gains and losses | 0 | 0 | 0 |
Total net revenue | (2,690) | (1,579) | (1,886) |
Total expenses | (2,690) | (1,579) | (1,886) |
Net income | 0 | 0 | 0 |
Intersegment Eliminations | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 0 | 0 | |
Customer | Operating Segments | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 258,480 | 239,266 | 238,487 |
Customer | Operating Segments | Bermuda | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 160,466 | 142,488 | 141,528 |
Customer | Operating Segments | Cayman | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 79,644 | 66,317 | 58,442 |
Customer | Operating Segments | Guernsey | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 14,469 | 17,025 | 19,303 |
Customer | Operating Segments | Switzerland | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 41 | 0 | 0 |
Customer | Operating Segments | The Bahamas | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 46 | 8 | (15) |
Customer | Operating Segments | United Kingdom | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 3,814 | 13,428 | 19,229 |
Customer | Intersegment Eliminations | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 0 | ||
Inter- segment | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 0 | 0 | 0 |
Inter- segment | Operating Segments | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 0 | 0 | 0 |
Inter- segment | Operating Segments | Bermuda | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 1,642 | 2,600 | 3,164 |
Inter- segment | Operating Segments | Cayman | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 388 | 608 | 928 |
Inter- segment | Operating Segments | Guernsey | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | (323) | (427) | (1,242) |
Inter- segment | Operating Segments | Switzerland | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 0 | 0 | 0 |
Inter- segment | Operating Segments | The Bahamas | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 30 | 116 | 166 |
Inter- segment | Operating Segments | United Kingdom | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | (1,737) | (2,897) | (3,016) |
Inter- segment | Intersegment Eliminations | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | $ 0 | $ 0 | $ 0 |
Derivative instruments and r107
Derivative instruments and risk management (Details) $ in Thousands | Dec. 31, 2016USD ($)contract | Dec. 31, 2015USD ($)contract |
Derivatives, Fair Value [Line Items] | ||
Number of contracts | contract | ||
Notional amounts | $ 2,793,667 | $ 2,728,076 |
Gross positive fair value | 37,055 | 20,821 |
Gross negative fair value | (18,280) | (16,056) |
Net fair value | $ 18,775 | $ 4,765 |
Risk Management Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Number of contracts | contract | ||
Notional amounts | $ 754,526 | $ 155,551 |
Gross positive fair value | 21,645 | 4,395 |
Gross negative fair value | (3,013) | (95) |
Net fair value | $ 18,632 | $ 4,300 |
Currency Swap | Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Number of contracts | contract | 11 | 4 |
Notional amounts | $ 676,856 | $ 77,881 |
Gross positive fair value | 5,901 | 273 |
Gross negative fair value | (3,013) | (95) |
Net fair value | $ 2,888 | $ 178 |
Spot and forward foreign exchange | ||
Derivatives, Fair Value [Line Items] | ||
Number of contracts | contract | 106 | 128 |
Notional amounts | $ 2,039,141 | $ 2,572,525 |
Gross positive fair value | 15,410 | 16,426 |
Gross negative fair value | (15,267) | (15,961) |
Net fair value | $ 143 | $ 465 |
Net Investment Hedging | Currency Swap | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Number of contracts | contract | 1 | 1 |
Notional amounts | $ 77,670 | $ 77,670 |
Gross positive fair value | 15,744 | 4,122 |
Gross negative fair value | 0 | 0 |
Net fair value | 15,744 | 4,122 |
Net Investment Hedging | Foreign Exchange Contract | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Foreign deposits | $ 34,500 | $ 29,500 |
Derivative instruments and r108
Derivative instruments and risk management - Offsetting (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Derivative assets | ||
Derivative assets, Gross fair value recognised | $ 37,055 | $ 20,821 |
Derivative assets, Offset applied under master netting agreements | (6,959) | (7,127) |
Derivative assets, Net fair value presented in the consolidated balance sheets | 30,096 | 13,694 |
Derivative assets, Positions not offset in the consolidated balance sheets, Gross fair value of derivatives | (6,811) | (78) |
Derivative assets, Positions not offset in the consolidated balance sheets, Cash collateral received/paid | (8,292) | (269) |
Derivative assets, Net exposures | 14,993 | 13,347 |
Derivative liabilities | ||
Derivative liabilities, Gross fair value recognised | 18,280 | 16,056 |
Derivative liabilities, Offset applied under master netting agreements | (6,959) | (7,127) |
Derivative liabilities, Net fair value presented in the consolidated balance sheets | 11,321 | 8,929 |
Derivative liabilities, Positions not offset in the consolidated balance sheets, Gross fair value of derivatives | (6,811) | (78) |
Derivative liabilities, Positions not offset in the consolidated balance sheets, Cash collateral received/paid | 0 | (185) |
Derivative liabilities, Net exposures | 4,510 | 8,666 |
Net fair value | $ 18,775 | $ 4,765 |
Derivative instruments and r109
Derivative instruments and risk management - Location and Amount of Gains (Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognised in net income | $ 1,297 | $ 4,084 | $ 7,934 |
Total net gains recognised in comprehensive income | 12,713 | 4,254 | 6,799 |
Spot and forward foreign exchange | Foreign exchange revenue | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognised in net income | (322) | 110 | (724) |
Currency Swap | Designated as Hedging Instrument | Net change in unrealised gains and losses on translation of net investment in foreign operations | Net Investment Hedging | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains recognised in comprehensive income | 12,713 | 4,254 | 6,799 |
Currency Swap | Foreign exchange revenue | Not Designated as Hedging Instrument | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognised in net income | 2,710 | 1,643 | 7,916 |
Currency Swap | Foreign exchange revenue | Designated as Hedging Instrument | Net Investment Hedging | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognised in net income | $ (1,091) | $ 2,331 | $ 742 |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financial assets | ||
Trading | $ 6,313 | $ 321,299 |
Available-for-sale | 3,332,738 | 2,201,349 |
Other assets - Derivatives | 30,096 | 13,694 |
Financial liabilities | ||
Other liabilities - Derivatives | 11,321 | 8,929 |
Fair Value, Measurements, Recurring | ||
Financial assets | ||
Trading | 6,313 | 321,299 |
Available-for-sale | 3,332,738 | 2,201,349 |
Other assets - Derivatives | 30,096 | 13,694 |
Financial liabilities | ||
Other liabilities - Derivatives | 11,321 | 8,929 |
Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Trading | 6,091 | 5,903 |
Available-for-sale | 0 | 0 |
Other assets - Derivatives | 0 | 0 |
Financial liabilities | ||
Other liabilities - Derivatives | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Trading | 222 | 315,396 |
Available-for-sale | 3,320,245 | 2,189,188 |
Other assets - Derivatives | 30,096 | 13,694 |
Financial liabilities | ||
Other liabilities - Derivatives | 11,321 | 8,929 |
Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Trading | 0 | 0 |
Available-for-sale | 12,493 | 12,161 |
Other assets - Derivatives | 0 | 0 |
Financial liabilities | ||
Other liabilities - Derivatives | 0 | 0 |
US government and federal agencies | ||
Financial assets | ||
Trading | 0 | 279,343 |
US government and federal agencies | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Trading | 0 | 279,343 |
Available-for-sale | 2,430,402 | 1,404,499 |
US government and federal agencies | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Trading | 0 | 0 |
Available-for-sale | 0 | 0 |
US government and federal agencies | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Trading | 0 | 279,343 |
Available-for-sale | 2,430,402 | 1,404,499 |
US government and federal agencies | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Trading | 0 | 0 |
Available-for-sale | 0 | 0 |
Non-US governments debt securities | ||
Financial assets | ||
Trading | 0 | 7,489 |
Non-US governments debt securities | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Trading | 0 | 7,489 |
Available-for-sale | 27,020 | 29,575 |
Non-US governments debt securities | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Trading | 0 | 0 |
Available-for-sale | 0 | 0 |
Non-US governments debt securities | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Trading | 0 | 7,489 |
Available-for-sale | 27,020 | 29,575 |
Non-US governments debt securities | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Trading | 0 | 0 |
Available-for-sale | 0 | 0 |
Asset-backed securities - Student loans | ||
Financial assets | ||
Trading | 0 | 28,285 |
Asset-backed securities - Student loans | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Trading | 0 | 28,285 |
Available-for-sale | 12,493 | 12,161 |
Asset-backed securities - Student loans | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Trading | 0 | 0 |
Available-for-sale | 0 | 0 |
Asset-backed securities - Student loans | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Trading | 0 | 28,285 |
Available-for-sale | 0 | 0 |
Asset-backed securities - Student loans | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Trading | 0 | 0 |
Available-for-sale | 12,493 | 12,161 |
Mutual funds | ||
Financial assets | ||
Trading | 6,313 | 6,182 |
Mutual funds | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Trading | 6,313 | 6,182 |
Mutual funds | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Trading | 6,091 | 5,903 |
Mutual funds | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Trading | 222 | 279 |
Mutual funds | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Trading | 0 | 0 |
Corporate debt securities | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Available-for-sale | 514,475 | 506,144 |
Corporate debt securities | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Available-for-sale | 0 | 0 |
Corporate debt securities | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Available-for-sale | 514,475 | 506,144 |
Corporate debt securities | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Available-for-sale | 0 | 0 |
Commercial mortgage-backed securities | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Available-for-sale | 150,546 | 148,726 |
Commercial mortgage-backed securities | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Available-for-sale | 0 | 0 |
Commercial mortgage-backed securities | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Available-for-sale | 150,546 | 148,726 |
Commercial mortgage-backed securities | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Available-for-sale | 0 | 0 |
Residential mortgage-backed securities | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Available-for-sale | 197,802 | 100,244 |
Residential mortgage-backed securities | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Available-for-sale | 0 | 0 |
Residential mortgage-backed securities | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Available-for-sale | 197,802 | 100,244 |
Residential mortgage-backed securities | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Available-for-sale | $ 0 | $ 0 |
Fair value measurements - Level
Fair value measurements - Level 3 Reconciliation (Details) - Unrealised gains (losses) on AFS investments - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Carrying amount at beginning of year | $ 12,161 | $ 12,226 | $ 45,304 |
Proceeds from sales, paydowns and maturities | 0 | 0 | (36,439) |
Accretion recognised in net income | 0 | 0 | 915 |
Realised and unrealised gains (losses) recognised in other comprehensive income | 332 | (65) | (6,286) |
Realised and unrealised gains recognised in net income | 0 | 0 | 8,732 |
Carrying amount at end of year | $ 12,493 | $ 12,161 | $ 12,226 |
Fair value measurements - Items
Fair value measurements - Items Other Than Those Recognised at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financial assets | ||
Short-term investments | $ 519,755 | $ 409,482 |
Investments held-to-maturity | 1,046,828 | 701,495 |
Other real estate owned | 14,199 | 11,206 |
Carrying amount | Nonrecurring | Level 1 | ||
Financial assets | ||
Cash due from banks | 2,101,651 | 2,288,890 |
Short-term investments | 519,755 | 409,482 |
Carrying amount | Nonrecurring | Level 2 | ||
Financial assets | ||
Securities purchased under agreement to resell | 148,813 | 0 |
Investments held-to-maturity | 1,061,103 | 701,282 |
Loans to third parties, net of allowance for credit losses | 3,570,478 | 4,000,155 |
Other real estate owned | 14,199 | 11,206 |
Financial liabilities | ||
Long-term debt | 117,000 | 117,000 |
Carrying amount | Nonrecurring | Level 2 | Banks | ||
Financial liabilities | ||
Payable on demand | 23,796 | 14,478 |
Carrying amount | Nonrecurring | Level 2 | Demand Deposits | Customers | ||
Financial liabilities | ||
Payable on demand | 8,193,213 | 7,654,643 |
Carrying amount | Nonrecurring | Level 2 | Time Deposits | Customers | ||
Financial liabilities | ||
Payable on demand | 1,816,640 | 1,513,025 |
Fair value | Nonrecurring | Level 1 | ||
Financial assets | ||
Cash due from banks | 2,101,651 | 2,288,890 |
Short-term investments | 519,755 | 409,482 |
Fair value | Nonrecurring | Level 2 | ||
Financial assets | ||
Securities purchased under agreement to resell | 148,813 | 0 |
Investments held-to-maturity | 1,046,828 | 701,495 |
Loans to third parties, net of allowance for credit losses | 3,566,812 | 3,996,443 |
Other real estate owned | 14,199 | 11,206 |
Financial liabilities | ||
Long-term debt | 117,683 | 116,606 |
Fair value | Nonrecurring | Level 2 | Banks | ||
Financial liabilities | ||
Payable on demand | 23,796 | 14,478 |
Fair value | Nonrecurring | Level 2 | Demand Deposits | Customers | ||
Financial liabilities | ||
Payable on demand | 8,193,213 | 7,654,643 |
Fair value | Nonrecurring | Level 2 | Time Deposits | Customers | ||
Financial liabilities | ||
Payable on demand | 1,817,564 | 1,514,126 |
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 agreement to resell | 0 | 0 |
Investments held-to-maturity | (14,275) | 213 |
Loans to third parties, net of allowance for credit losses | (3,666) | (3,712) |
Other real estate owned | 0 | 0 |
Financial liabilities | ||
Long-term debt | (683) | 394 |
Appreciation / (depreciation) | Nonrecurring | Level 2 | Banks | ||
Financial liabilities | ||
Payable on demand | 0 | 0 |
Appreciation / (depreciation) | Nonrecurring | Level 2 | Demand Deposits | Customers | ||
Financial liabilities | ||
Payable on demand | 0 | 0 |
Appreciation / (depreciation) | Nonrecurring | Level 2 | Time Deposits | Customers | ||
Financial liabilities | ||
Payable on demand | $ (924) | $ (1,101) |
Interest rate risk (Details)
Interest rate risk (Details) - Fair Value, Concentration of Risk, Market Risk Management, Gap Analysis - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash due from banks | $ 2,102 | $ 2,289 |
Securities purchased under agreement to resell | 149 | |
Short-term investments | 520 | 409 |
Investments | 4,400 | 3,224 |
Loans | 3,570 | 4,000 |
Other assets | 363 | 354 |
Total assets | 11,104 | 10,276 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 711 | 750 |
Demand deposits | 8,213 | 7,665 |
Term deposits | 1,821 | 1,517 |
Other liabilities | 242 | 227 |
Long-term debt | 117 | 117 |
Total liabilities and shareholders' equity | 11,104 | 10,276 |
Interest rate sensitivity gap | 0 | 0 |
Cumulative interest rate sensitivity gap | 0 | 0 |
Interest Bearing Funds | Within 3 months | ||
Assets | ||
Cash due from banks | 1,991 | 2,178 |
Securities purchased under agreement to resell | 149 | |
Short-term investments | 135 | 117 |
Investments | 1,343 | 871 |
Loans | 3,339 | 3,735 |
Other assets | 0 | 0 |
Total assets | 6,957 | 6,901 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 5,828 | 5,783 |
Term deposits | 1,492 | 989 |
Other liabilities | 0 | 0 |
Long-term debt | 92 | 92 |
Total liabilities and shareholders' equity | 7,412 | 6,864 |
Interest rate sensitivity gap | (455) | 37 |
Cumulative interest rate sensitivity gap | (455) | 37 |
Interest Bearing Funds | 3 to 6 months | ||
Assets | ||
Cash due from banks | 0 | 0 |
Securities purchased under agreement to resell | 0 | |
Short-term investments | 385 | 291 |
Investments | 15 | 79 |
Loans | 53 | 84 |
Other assets | 0 | 0 |
Total assets | 453 | 454 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 0 | 0 |
Term deposits | 166 | 296 |
Other liabilities | 0 | 0 |
Long-term debt | 0 | 0 |
Total liabilities and shareholders' equity | 166 | 296 |
Interest rate sensitivity gap | 287 | 158 |
Cumulative interest rate sensitivity gap | (168) | 195 |
Interest Bearing Funds | 6 to 12 months | ||
Assets | ||
Cash due from banks | 0 | 0 |
Securities purchased under agreement to resell | 0 | |
Short-term investments | 0 | 1 |
Investments | 81 | 19 |
Loans | 57 | 53 |
Other assets | 0 | 0 |
Total assets | 138 | 73 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 0 | 0 |
Term deposits | 92 | 153 |
Other liabilities | 0 | 0 |
Long-term debt | 0 | 0 |
Total liabilities and shareholders' equity | 92 | 153 |
Interest rate sensitivity gap | 46 | (80) |
Cumulative interest rate sensitivity gap | (122) | 115 |
Interest Bearing Funds | 1 to 5 years | ||
Assets | ||
Cash due from banks | 0 | 0 |
Securities purchased under agreement to resell | 0 | |
Short-term investments | 0 | 0 |
Investments | 704 | 620 |
Loans | 81 | 67 |
Other assets | 0 | 0 |
Total assets | 785 | 687 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 0 | 0 |
Term deposits | 71 | 79 |
Other liabilities | 0 | 0 |
Long-term debt | 25 | 25 |
Total liabilities and shareholders' equity | 96 | 104 |
Interest rate sensitivity gap | 689 | 583 |
Cumulative interest rate sensitivity gap | 567 | 698 |
Interest Bearing Funds | After 5 years | ||
Assets | ||
Cash due from banks | 0 | 0 |
Securities purchased under agreement to resell | 0 | |
Short-term investments | 0 | 0 |
Investments | 2,251 | 1,629 |
Loans | 38 | 47 |
Other assets | 0 | 0 |
Total assets | 2,289 | 1,676 |
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 | 2,289 | 1,676 |
Cumulative interest rate sensitivity gap | 2,856 | 2,374 |
Non-Interest Bearing Funds | ||
Assets | ||
Cash due from banks | 111 | 111 |
Securities purchased under agreement to resell | 0 | |
Short-term investments | 0 | 0 |
Investments | 6 | 6 |
Loans | 2 | 14 |
Other assets | 363 | 354 |
Total assets | 482 | 485 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 711 | 750 |
Demand deposits | 2,385 | 1,882 |
Term deposits | 0 | 0 |
Other liabilities | 242 | 227 |
Long-term debt | 0 | 0 |
Total liabilities and shareholders' equity | 3,338 | 2,859 |
Interest rate sensitivity gap | (2,856) | (2,374) |
Cumulative interest rate sensitivity gap | $ 0 | $ 0 |
Long-term debt (Details)
Long-term debt (Details) | May 27, 2008USD ($)tranche | Jun. 27, 2005USD ($)tranche | May 28, 2003USD ($)tranche | May 31, 2013 | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jan. 31, 2004USD ($) |
Debt Instrument [Line Items] | |||||||
Interest costs capitalized | $ 0 | $ 0 | |||||
Subordinated Lower Tier II Debt | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 78,000,000 | $ 150,000,000 | $ 125,000,000 | ||||
Number of tranches | tranche | 2 | 2 | 2 | ||||
Subordinated Lower Tier II Debt | Senior A Notes Due 2013 | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 78,000,000 | ||||||
Fixed interest rate | 3.94% | ||||||
Subordinated Lower Tier II Debt | Series B Notes Due 2018 | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 47,000,000 | ||||||
Fixed interest rate | 5.15% | 5.15% | |||||
Subordinated Lower Tier II Debt | Series B Notes Due 2018 | 10-Year US Treasury Yield | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.35% | ||||||
Subordinated Lower Tier II Debt | Notes Redeemed in July 2003 | |||||||
Debt Instrument [Line Items] | |||||||
Repayments of debt | $ 75,000,000 | ||||||
Subordinated Lower Tier II Debt | Series A Notes Due 2015 | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 90,000,000 | ||||||
Fixed interest rate | 4.81% | ||||||
Subordinated Lower Tier II Debt | Series A Notes Due 2015 | Five-Year US Treasury Yield | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.00% | ||||||
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% | |||||
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 | 2005 Series B Notes | |||||||
Debt Instrument [Line Items] | |||||||
Repayments of debt | $ 13,875,000 | ||||||
Fixed interest rate | 5.11% | ||||||
Repurchased face amount | $ 15,000,000 | ||||||
Gain (loss) on repurchase of debt instrument | $ 1,125,000 | ||||||
Subordinated Lower Tier II Debt | 2005 Series A | |||||||
Debt Instrument [Line Items] | |||||||
Repurchased face amount | $ 90,000,000 | ||||||
Subordinated Lower Tier II Debt | Series A Notes Due 2018 | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 53,000,000 | ||||||
Fixed interest rate | 7.59% | ||||||
Subordinated Lower Tier II Debt | Series B Notes Due 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 25,000,000 | ||||||
Fixed interest rate | 8.44% | 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 |
Long-term debt - Contractual Ma
Long-term debt - Contractual Maturity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | May 31, 2013 | Jun. 27, 2005 | May 28, 2003 | |
Debt Instrument [Line Items] | |||||
Principal Outstanding | $ 117,000 | $ 117,000 | |||
Subordinated Lower Tier II Debt | |||||
Debt Instrument [Line Items] | |||||
Principal Outstanding | 117,000 | ||||
Interest payments until contractual maturity, Within 1 year | 4,622 | ||||
Interest payments until contractual maturity, 1 to 5 years | 10,041 | ||||
Interest payments until contractual maturity, After 5 years | $ 2,188 | ||||
Subordinated Lower Tier II Debt | Series B Notes Due 2018 | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate | 5.15% | 5.15% | |||
Principal Outstanding | $ 47,000 | ||||
Interest payments until contractual maturity, Within 1 year | 1,354 | ||||
Interest payments until contractual maturity, 1 to 5 years | 672 | ||||
Interest payments until contractual maturity, After 5 years | $ 0 | ||||
Subordinated Lower Tier II Debt | Series B Notes Due 2018 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Interest rate from earliest date redeemable to contractual maturity, basis spread on variable rate | 2.00% | ||||
Subordinated Lower Tier II Debt | Series B Notes Due 2020 | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate | 5.11% | 5.11% | |||
Principal Outstanding | $ 45,000 | ||||
Interest payments until contractual maturity, Within 1 year | 1,158 | ||||
Interest payments until contractual maturity, 1 to 5 years | 3,184 | ||||
Interest payments until contractual maturity, After 5 years | $ 0 | ||||
Subordinated Lower Tier II Debt | Series B Notes Due 2020 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Interest rate from earliest date redeemable to contractual maturity, basis spread on variable rate | 1.695% | ||||
Subordinated Lower Tier II Debt | Series B Notes Due 2023 | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate | 8.44% | 8.44% | |||
Principal Outstanding | $ 25,000 | ||||
Interest payments until contractual maturity, Within 1 year | 2,110 | ||||
Interest payments until contractual maturity, 1 to 5 years | 6,185 | ||||
Interest payments until contractual maturity, After 5 years | $ 2,188 | ||||
Subordinated Lower Tier II Debt | Series B Notes Due 2023 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Interest rate from earliest date redeemable to contractual maturity, basis spread on variable rate | 4.929% |
Earnings per share (Details)
Earnings per share (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Mar. 30, 2015 | Jun. 22, 2009$ / shares | |
Class of Stock [Line Items] | |||||
Preferred stock, dividend payment basis as compared to common shareholders | 1 | ||||
Options outstanding (in shares) | shares | 2,600 | 2,900 | 3,100 | ||
Average number of outstanding awards of unvested shares (in shares) | shares | 800 | 900 | 1,000 | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | shares | 430 | 430 | 430 | ||
Antidilutive securities excluded from computation of earnings per share, exercise price (in dollars per share) | $ 34.72 | $ 34.72 | $ 34.89 | ||
Net income | $ | $ 115,942 | $ 77,739 | $ 108,159 | ||
Less: Preference dividends declared and guarantee fee | $ | (15,655) | (16,455) | (16,546) | ||
Premium paid on repurchase of preference shares | $ | (41,913) | (28) | (96) | ||
Net income attributable to common shareholders | $ | 58,374 | 61,256 | 91,517 | ||
Less: Dividend paid on common shares | $ | (19,346) | (24,708) | (27,088) | ||
Less: Dividend paid on contingent value convertible preference shares | $ | 0 | (138) | (352) | ||
Undistributed earnings attributable for participating shares | $ | $ 39,028 | $ 36,410 | $ 64,077 | ||
Basic Earnings Per Share | |||||
Basic Earnings Per Share (in dollars per share) | $ 1.20 | $ 1.25 | $ 1.67 | ||
Diluted Earnings Per Share | |||||
Diluted Earnings Per Share (in dollars per share) | 1.18 | $ 1.23 | $ 1.65 | ||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share, exercise price (in dollars per share) | $ 34.72 | $ 70.10 | |||
Basic Earnings Per Share | |||||
Weighted average number of shares issued | shares | 49,128 | 49,842 | 54,994 | ||
Weighted average number of common shares held as treasury stock | shares | (506) | (1,079) | (934) | ||
Weighted average number of participating shares (in thousands) | shares | 48,622 | 48,763 | 54,060 | ||
Allocation of undistributed earnings - Basic | $ | $ 39,028 | $ 36,292 | $ 63,259 | ||
Distributed earnings per share (in dollars per share) | $ 0.40 | $ 0.50 | $ 0.50 | ||
Undistributed earnings per share (in dollars per share) | 0.80 | 0.75 | 1.17 | ||
Basic Earnings Per Share (in dollars per share) | $ 1.20 | $ 1.25 | $ 1.67 | ||
Diluted Earnings Per Share | |||||
Adjusted weighted average number of participating shares outstanding | shares | 48,622 | 48,763 | 54,060 | ||
Net dilution impact related to options to purchase common shares | shares | 607 | 472 | 393 | ||
Net dilution impact related to awards of unvested common shares | shares | 382 | 609 | 496 | ||
Weighted average number of diluted participating shares (in thousands) | shares | 49,611 | 49,844 | 54,949 | ||
Allocation of undistributed earnings - Diluted | $ | $ 39,028 | $ 36,294 | $ 63,272 | ||
Distributed earnings per share (in dollars per share) | $ 0.40 | $ 0.50 | $ 0.50 | ||
Undistributed earnings per share (in dollars per share) | 0.78 | 0.73 | 1.15 | ||
Diluted Earnings Per Share (in dollars per share) | $ 1.18 | $ 1.23 | $ 1.65 | ||
Contingent value convertible preference shares | |||||
Basic Earnings Per Share | |||||
Weighted average number of shares issued | shares | 159 | 699 | |||
Weighted average number of participating shares (in thousands) | shares | 159 | 699 | |||
Allocation of undistributed earnings - Basic | $ | $ 118 | $ 818 | |||
Distributed earnings per share (in dollars per share) | $ 0.20 | $ 0.50 | |||
Undistributed earnings per share (in dollars per share) | 0.19 | 1.17 | |||
Basic Earnings Per Share (in dollars per share) | $ 0.39 | $ 1.67 | |||
Diluted Earnings Per Share | |||||
Adjusted weighted average number of participating shares outstanding | shares | 159 | 699 | |||
Weighted average number of diluted participating shares (in thousands) | shares | 159 | 699 | |||
Allocation of undistributed earnings - Diluted | $ | $ 116 | $ 805 | |||
Distributed earnings per share (in dollars per share) | $ 0.20 | $ 0.50 | |||
Undistributed earnings per share (in dollars per share) | 0.19 | 1.15 | |||
Diluted Earnings Per Share (in dollars per share) | $ 0.39 | $ 1.65 |
Share-based payments (Details)
Share-based payments (Details) | Mar. 01, 2010shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2010conditionshares | Dec. 31, 2012shares | Dec. 31, 2016USD ($)shares | Sep. 21, 2016$ / shares | Dec. 31, 2015USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Tax benefit from compensation expense | $ | $ 0 | ||||||
2010 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized (in shares) | shares | 7,500,000 | 2,950,000 | 5,000,000 | 7,500,000 | |||
2010 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% | ||||||
Number of shares issued upon exercise of each option (in shares) | shares | 1 | ||||||
Expiration period | 10 years | ||||||
Number of vesting conditions | condition | 2 | ||||||
2010 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% | ||||||
Compensation not yet recognised | $ | $ 0 | $ 0 | $ 8,000 | ||||
2010 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 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 | ||||||
Compensation not yet recognised | $ | $ 0 | $ 0 | $ 8,689,000 | ||||
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) | 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% | ||||||
1997 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% | ||||||
1997 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% | ||||||
1997 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% | ||||||
EDIP | Time Vesting Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years | ||||||
2012 and 2011 ELTIP | Time Vesting Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years | ||||||
Percent of option award granted, time vested | 50.00% | ||||||
2012 and 2011 ELTIP | Time Vesting Shares and Performance Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of vesting conditions | 2 | ||||||
2012 and 2011 ELTIP | Performance Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years | ||||||
Percent of option award granted, performance vesting | 50.00% | ||||||
2016, 2015, 2014, 2013 ELTIP | Performance Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years |
Share-based payments - Grant Da
Share-based payments - Grant Date Fair Value (Details) - 2010 Plan - $ / shares | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Time Vesting Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value of stock options granted (in dollars per share) | $ 4.20 | $ 4.10 |
Performance Vesting Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value of stock options granted (in dollars per share) | $ 4.40 | $ 4.30 |
Share-based payments - Changes
Share-based payments - Changes in Outstanding Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of shares transferable upon exercise | |||
Outstanding at beginning of year (in shares) | 2,826,000 | 3,030,000 | 3,180,000 |
Exercised (in shares) | (625,000) | (55,000) | (103,000) |
Forfeitures and cancellations (in shares) | (107,000) | (136,000) | (44,000) |
Resignations, retirements, redundancies (in shares) | (28,000) | (13,000) | (3,000) |
Outstanding at end of year (in shares) | 2,066,000 | 2,826,000 | 3,030,000 |
Vested and exercisable at end of year (in shares) | 2,066,000 | 1,460,000 | 1,220,000 |
Additional Disclosures | |||
Aggregate intrinsic value, Exercised | $ 8,938 | $ 393 | $ 874 |
Aggregate intrinsic value, Outstanding at end of year | $ 38,489 | $ 20,594 | $ 22,233 |
1997 Stock Option Plan | |||
Number of shares transferable upon exercise | |||
Outstanding at beginning of year (in shares) | 218,000 | 352,000 | 399,000 |
Exercised (in shares) | 0 | 0 | 0 |
Forfeitures and cancellations (in shares) | (102,000) | (134,000) | (44,000) |
Resignations, retirements, redundancies (in shares) | 0 | 0 | (3,000) |
Outstanding at end of year (in shares) | 116,000 | 218,000 | 352,000 |
Vested and exercisable at end of year (in shares) | 116,000 | 218,000 | 352,000 |
Weighted average exercise price | |||
Outstanding at beginning of year (in dollars per share) | $ 135.19 | $ 130.70 | $ 128.30 |
Exercised (in dollars per share) | 0 | 0 | 0 |
Forfeitures and cancellations (in dollars per share) | 138.79 | 123.30 | 108.60 |
Resignations, retirements, redundancies (in dollars per share) | 0 | 0 | 137.60 |
Outstanding at end of year (in dollars per share) | 132.13 | 135.19 | 130.70 |
Vested and exercisable at end of year (in dollars per share) | $ 132.13 | $ 135.19 | $ 130.70 |
Additional Disclosures | |||
Weighted average remaining life, Outstanding at end of year | 1 year 2 months 5 days | 1 year 9 months 11 days | 2 years 4 months 17 days |
Weighted average remaining life, Vested and exercisable at end of year | 1 year 2 months 5 days | 1 year 9 months 11 days | 2 years 4 months 17 days |
2010 Plan | |||
Number of shares transferable upon exercise | |||
Outstanding at beginning of year (in shares) | 2,608,000 | 2,678,000 | 2,781,000 |
Exercised (in shares) | (625,000) | (55,000) | (103,000) |
Forfeitures and cancellations (in shares) | (5,000) | (2,000) | 0 |
Resignations, retirements, redundancies (in shares) | (28,000) | (13,000) | 0 |
Outstanding at end of year (in shares) | 1,950,000 | 2,608,000 | 2,678,000 |
Vested and exercisable at end of year (in shares) | 1,950,000 | 1,242,000 | 868,000 |
Weighted average exercise price | |||
Outstanding at beginning of year (in dollars per share) | $ 11.60 | $ 11.70 | $ 11.70 |
Exercised (in dollars per share) | 11.68 | 11.50 | 11.60 |
Forfeitures and cancellations (in dollars per share) | 11.50 | 11.50 | 11.60 |
Resignations, retirements, redundancies (in dollars per share) | 11.50 | 11.50 | 0 |
Outstanding at end of year (in dollars per share) | 11.57 | 11.60 | 11.70 |
Vested and exercisable at end of year (in dollars per share) | $ 11.57 | $ 11.60 | $ 11.70 |
Additional Disclosures | |||
Weighted average remaining life, Outstanding at end of year | 3 years 5 months 1 day | 4 years 8 months 1 day | 5 years 7 months 28 days |
Weighted average remaining life, Vested and exercisable at end of year | 3 years 5 months 1 day | 4 years 11 months 9 days | 5 years 7 months 24 days |
Share-based payments - Chang120
Share-based payments - Changes in Outstanding ELTIP and EDIP Awards (Details) - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
EDIP | Time Vesting Shares | |||
Changes in Outstanding ELTIP and EDIP Awards | |||
Outstanding at beginning of year (in shares) | 226 | 265 | 218 |
Granted (in shares) | 115 | 175 | 150 |
Vested (fair value in 2016: $6.9 million, 2015: $10.6 million) (in shares) | (118) | (207) | (103) |
Resignations, retirements, redundancies (in shares) | (8) | (7) | 0 |
Outstanding at end of year (in shares) | 215 | 226 | 265 |
ELTIP | Time Vesting Shares and Performance Shares | |||
Changes in Outstanding ELTIP and EDIP Awards | |||
Outstanding at beginning of year (in shares) | 606 | 706 | 644 |
Granted (in shares) | 360 | 253 | 255 |
Vested (fair value in 2016: $6.9 million, 2015: $10.6 million) (in shares) | (302) | (322) | (185) |
Resignations, retirements, redundancies (in shares) | (24) | (31) | (8) |
Outstanding at end of year (in shares) | 640 | 606 | 706 |
EDIP and ELTIP | |||
Changes in Outstanding ELTIP and EDIP Awards | |||
Fair value of awards vested | $ 6.9 | $ 10.6 |
Share-based payments - Share-ba
Share-based payments - Share-based Compensation Cost Recognised in Net Income (Details) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Cost recognised in net income | $ 14,072 | $ 7,703 | $ 8,869 |
Stock Option Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Cost recognised in net income | 8,697 | 521 | 1,915 |
EDIP and ELTIP | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Cost recognised in net income | $ 5,375 | $ 7,182 | $ 6,954 |
Share-based payments - Unrecogn
Share-based payments - Unrecognised Share-based Compensation Cost (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Unrecognised Share-based Compensation Cost | ||
Unrecognised expense | $ 8,830 | $ 14,248 |
2010 Plan | Time Vesting Employee Stock Option | ||
Unrecognised Share-based Compensation Cost | ||
Unrecognised expense | 0 | 8 |
2010 Plan | Performance Vesting Employee Stock Option | ||
Unrecognised Share-based Compensation Cost | ||
Unrecognised expense | 0 | 8,689 |
EDIP | Time Vesting Shares | ||
Unrecognised Share-based Compensation Cost | ||
Unrecognised expense | 2,040 | 2,098 |
ELTIP | Time Vesting Shares | ||
Unrecognised Share-based Compensation Cost | ||
Unrecognised expense | 2,988 | 21 |
ELTIP | Performance Shares | ||
Unrecognised Share-based Compensation Cost | ||
Unrecognised expense | $ 3,802 | $ 3,432 |
Share buy-back plans (Details)
Share buy-back plans (Details) | May 01, 2012programme | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | Dec. 31, 2012USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Feb. 19, 2016shares | Feb. 26, 2015shares | Apr. 28, 2014shares | Apr. 01, 2014shares |
Class of Stock [Line Items] | |||||||||||
Number of programs authorized | programme | 2 | ||||||||||
Period in force | 12 months | ||||||||||
2014 Common Share Buy-Back Programme | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 1,500,000 | ||||||||||
2015 Common Share Buy-Back Programme | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 800,000 | ||||||||||
2016 Common Share Buy-Back Programme | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 800,000 | ||||||||||
Common Share Buy-Back Programme | |||||||||||
Class of Stock [Line Items] | |||||||||||
Acquired number of shares (in shares) | 97,053 | 250,371 | 856,734 | 403,848 | 726,005 | 2,334,011 | |||||
Average cost per share (in dollars per share) | $ / shares | $ 16.36 | $ 19.42 | $ 19.86 | $ 13.89 | $ 12.40 | $ 16.31 | |||||
Total cost | $ | $ 1,588,189 | $ 4,862,248 | $ 17,018,412 | $ 5,610,907 | $ 8,999,061 | $ 38,078,817 | |||||
2014 Preference Share Buy-Back Programme | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 26,000 | ||||||||||
2015 Preference Share Buy-Back Programme | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 5,000 | ||||||||||
Preference Share Buy-Back Programme | |||||||||||
Class of Stock [Line Items] | |||||||||||
Period in force | 12 months | ||||||||||
Acquired number of shares (in shares) | 0 | 183 | 560 | 11,972 | 4,422 | 17,137 | |||||
Average cost per share (in dollars per share) | $ / shares | $ 0 | $ 1,151.55 | $ 1,172.26 | $ 1,230.26 | $ 1,218.40 | $ 1,224.46 | |||||
Total cost | $ | $ 0 | $ 210,734 | $ 656,465 | $ 14,728,624 | $ 5,387,777 | $ 20,983,600 |
Accumulated other comprehens124
Accumulated other comprehensive loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | $ 750,354 | $ 849,374 | |
Transfer of AFS investments to HTM investments | (71) | 365 | $ 0 |
Other comprehensive income (loss), net of taxes | (54,183) | (12,977) | (9,932) |
Balance at end of year | 710,742 | 750,354 | 849,374 |
HTM investments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Transfer of AFS investments to HTM investments | 1,442 | (2,715) | 0 |
Unrealised gains (losses) on AFS investments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Transfer of AFS investments to HTM investments | (1,442) | 2,715 | 0 |
Unrealised (losses) on translation of net investment in foreign operations | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (13,645) | (10,506) | (7,632) |
Transfer of AFS investments to HTM investments | 0 | 0 | |
Other comprehensive income (loss), net of taxes | (6,507) | (3,139) | (2,874) |
Balance at end of year | (20,152) | (13,645) | (10,506) |
Accumulated net investment gain (loss) | HTM investments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (2,350) | 0 | 0 |
Transfer of AFS investments to HTM investments | 1,442 | (2,715) | |
Other comprehensive income (loss), net of taxes | (71) | 365 | 0 |
Balance at end of year | (979) | (2,350) | 0 |
Accumulated net investment gain (loss) | Unrealised gains (losses) on AFS investments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (57) | 9,021 | (31,064) |
Transfer of AFS investments to HTM investments | (1,442) | 2,715 | |
Other comprehensive income (loss), net of taxes | (21,181) | (11,793) | 40,085 |
Balance at end of year | (22,680) | (57) | 9,021 |
Employee benefit plans | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (74,445) | (76,035) | (28,892) |
Transfer of AFS investments to HTM investments | 0 | 0 | |
Other comprehensive income (loss), net of taxes | (26,424) | 1,590 | (47,143) |
Balance at end of year | (100,869) | (74,445) | (76,035) |
Employee benefit plans | Pension plans | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (46,331) | (53,169) | (35,616) |
Transfer of AFS investments to HTM investments | 0 | 0 | |
Other comprehensive income (loss), net of taxes | (16,901) | 6,838 | (17,553) |
Balance at end of year | (63,232) | (46,331) | (53,169) |
Employee benefit plans | Post-retirement medical benefit plan | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (28,114) | (22,866) | 6,724 |
Transfer of AFS investments to HTM investments | 0 | 0 | |
Other comprehensive income (loss), net of taxes | (9,523) | (5,248) | (29,590) |
Balance at end of year | (37,637) | (28,114) | (22,866) |
Total AOCL | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (90,497) | (77,520) | (67,588) |
Transfer of AFS investments to HTM investments | 0 | 0 | |
Other comprehensive income (loss), net of taxes | (54,183) | (12,977) | (9,932) |
Balance at end of year | $ (144,680) | $ (90,497) | $ (77,520) |
Accumulated other comprehens125
Accumulated other comprehensive loss - Net Change of AOCL Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net unrealised gains (losses) on translation of net investment in foreign operations adjustments | |||
Foreign currency translation adjustments | $ (25,691) | $ (9,723) | $ (10,574) |
Gains (loss) on net investment hedge | 19,184 | 6,584 | 7,700 |
Net change | (6,507) | (3,139) | (2,874) |
Investment adjustments | |||
Gross unrealised gains (losses) | (21,181) | (11,793) | 40,085 |
Net unrealised (gains) losses transferred to HTM | (71) | 365 | 0 |
Employee benefit plans adjustments | |||
Other comprehensive income (loss), net of taxes | (54,183) | (12,977) | (9,932) |
Pension plans | |||
Employee benefit plans adjustments | |||
Net actuarial gain (loss) | (19,956) | 5,096 | (18,947) |
Prior service cost | 0 | 0 | 0 |
Change in deferred taxes | 1,315 | (391) | 83 |
Amortisation of actuarial losses | 1,702 | 1,703 | 1,058 |
Amortisation of prior service credit | 0 | 0 | 0 |
Foreign currency translation adjustments of related balances | 38 | 430 | 253 |
Total changes recognised in other comprehensive income (loss) | (16,901) | 6,838 | (17,553) |
Post-retirement medical benefit plan | |||
Employee benefit plans adjustments | |||
Net actuarial gain (loss) | (5,911) | (2,252) | (15,892) |
Prior service cost | 0 | 0 | (7,901) |
Change in deferred taxes | 0 | 0 | 0 |
Amortisation of actuarial losses | 2,731 | 3,347 | 922 |
Amortisation of prior service credit | (6,343) | (6,343) | (6,719) |
Total changes recognised in other comprehensive income (loss) | (9,523) | (5,248) | (29,590) |
Held-to-maturity Securities | |||
Investment adjustments | |||
Net unrealised (gains) losses transferred to HTM | 1,442 | (2,715) | 0 |
Transfer of realised (gains) losses to net income | (71) | 378 | 0 |
Foreign currency translation adjustments of related balances | 0 | (13) | 0 |
Net change | 1,371 | (2,350) | 0 |
Available-for-sale Securities | |||
Investment adjustments | |||
Gross unrealised gains (losses) | (19,635) | (16,337) | 48,703 |
Net unrealised (gains) losses transferred to HTM | (1,442) | 2,715 | 0 |
Transfer of realised (gains) losses to net income | (1,546) | 4,407 | (8,680) |
Foreign currency translation adjustments of related balances | 0 | 137 | 62 |
Net change | $ (22,623) | $ (9,078) | $ 40,085 |
Capital structure - Authorised
Capital structure - Authorised Capital (Details) | Sep. 16, 2016shares | Jul. 25, 2016 | Aug. 13, 2015USD ($)shareholder$ / sharesshares | Apr. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2016BMD / sharesshares | Dec. 31, 2016$ / sharesshares | Sep. 06, 2016BMD / sharesshares | Sep. 06, 2016$ / sharesshares | Sep. 06, 2016£ / sharesshares | Sep. 05, 2016BMD / sharesshares | Sep. 05, 2016$ / sharesshares | Sep. 05, 2016£ / sharesshares | Dec. 31, 2015BMD / sharesshares | Dec. 31, 2015$ / sharesshares | Jun. 22, 2009$ / shares |
Class of Stock [Line Items] | |||||||||||||||
Common stock, consolidation ratio | 0.1 | ||||||||||||||
Common shares, par value (in BMD per share) | BMD / shares | BMD 0.01 | BMD 0.10 | BMD 0.01 | BMD 0.01 | |||||||||||
Preference shares, par value (in dollars per share or pounds per share) | $ / shares | $ 0 | $ 0.01 | $ 1,000 | ||||||||||||
Retirement of shares | $ | $ 5,960,000 | ||||||||||||||
CIBC's outstanding shares acquired (in shares) | 53,284,872 | 53,284,872 | 47,293,253 | 47,293,253 | |||||||||||
Stock repurchased and retired during period, number of shareholders | shareholder | 2 | ||||||||||||||
CIBC | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Retirement of shares | $ | $ 120,000,000 | ||||||||||||||
Carlyle Global Financial Services, L.P. | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
CIBC's outstanding shares acquired (in shares) | 2,343,423 | ||||||||||||||
US dollars | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Preferred shares, authorized (in shares) | 110,200,001 | 110,200,001 | 110,200,001 | 110,200,001 | 110,200,001 | 110,200,001 | |||||||||
Preference shares, par value (in dollars per share or pounds per share) | $ / shares | $ 0.01 | $ 0.01 | |||||||||||||
United Kingdom, Pounds | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Preferred shares, authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||||||||
Preference shares, par value (in dollars per share or pounds per share) | £ / shares | £ 0.01 | £ 0.01 | |||||||||||||
Common Stock Issued And Common Stock Authorized But Unissued | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Common shares, par value (in BMD per share) | BMD / shares | BMD 0.01 | BMD 0.10 | |||||||||||||
Common Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Common shares, par value (in BMD per share) | BMD / shares | BMD 0.01 | BMD 0.10 | |||||||||||||
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 | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | |||||
Stock repurchased for cancellation (in shares) | 400,000 | ||||||||||||||
Share price (in dollars per share) | $ / shares | $ 14.90 | ||||||||||||||
Common Stock | CIBC | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Stock repurchased for cancellation (in shares) | 8,000,000 | ||||||||||||||
Share price (in dollars per share) | $ / shares | $ 15 | ||||||||||||||
Common Stock | Carlyle Global Financial Services, L.P. | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Share price (in dollars per share) | $ / shares | $ 15 | ||||||||||||||
Non-voting Common Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Common shares, par value (in BMD per share) | BMD / shares | BMD 0.01 | BMD 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 | 6,000,000,000 | 6,000,000,000 | 6,000,000,000 | 6,000,000,000 | 6,000,000,000 | |||||
Common Class A Prior To The Reverse Share Split [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Common shares, par value (in BMD per share) | BMD / shares | BMD 0.01 | ||||||||||||||
Common shares, authorized (in shares) | 20,000,000,000 | 20,000,000,000 | 20,000,000,000 | ||||||||||||
Nonvoting Common Stock Prior To The Reverse Share Split [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Common shares, par value (in BMD per share) | BMD / shares | BMD 0.01 | ||||||||||||||
Common shares, authorized (in shares) | 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 - Preference
Capital structure - Preference Shares (Details) - $ / shares | Jun. 22, 2009 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 15, 2016 | Dec. 31, 2014 | May 11, 2010 |
Class of Stock [Line Items] | ||||||||||||
Preference shares, issued (in shares) | 200,000 | 0 | 182,683 | |||||||||
Preferred stock, dividend rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | |||
Preference shares, par value (in dollars per share or pounds per share) | $ 1,000 | $ 0 | $ 0.01 | |||||||||
Preference shares, liquidation preference (in dollars per share) | $ 1,000 | 0 | 1,000 | |||||||||
Exercise price of warrants (in dollars per share) | $ 34.72 | $ 34.72 | $ 34.89 | |||||||||
Preferred stock, make-whole redemption payment per share (in dollars per share) | $ 1,180 | |||||||||||
Common Stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Number of securities called by warrants or rights (in shares) | 427,960 | 432,028 | ||||||||||
Exercise price of warrants (in dollars per share) | $ 70.10 | $ 34.72 | ||||||||||
Contingent value convertible preference shares | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preference shares, issued (in shares) | 826,415 | |||||||||||
Maximum allowable number of rights (in shares) | 10,743,801 | |||||||||||
Conversion ratio | 1 | 0.07692 |
Capital structure - Dividends D
Capital structure - Dividends Declared (Details) - $ / shares | Jun. 22, 2009 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Banking and Thrift [Abstract] | ||||||||||||
Common share cash dividends paid (in dollars per share) | $ 0.40 | $ 0.50 | $ 0.50 | |||||||||
Preferred stock, dividend rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% |
Capital structure - Regulatory
Capital structure - Regulatory Capital (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Capital | ||
Tier 1 capital | $ 666,847 | $ 699,278 |
Common Equity Tier 1 | 666,847 | |
Tier 2 capital | 102,709 | 119,164 |
Total capital | 769,556 | 818,442 |
Risk Weighted Assets | $ 4,365,440 | $ 4,304,074 |
Capital Ratios (%) | ||
Common Equity Tier 1, Actual | 15.30% | |
Common Equity Tier 1, Regulatory minimum | 8.10% | |
Total Tier 1, Actual | 15.30% | 16.20% |
Total Tier 1, Regulatory minimum | 9.60% | 4.00% |
Total Capital, Actual | 17.60% | 19.00% |
Total Capital, Regulatory minimum | 15.30% | 14.50% |
Leverage ratio, Actual | 5.80% | |
Leverage ratio, Regulatory minimum | 5.00% |
Income taxes - Income taxes in
Income taxes - Income taxes in consolidated statements of operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Current tax expense (benefit) | $ 727 | $ 819 | $ (169) |
Deferred tax expense | 0 | 457 | 0 |
Total tax expense (benefit) | $ 727 | $ 1,276 | $ (169) |
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, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
$ | |||
Income tax expense at Bermuda corporation tax rate of 0% | $ 0 | $ 0 | $ 0 |
Income tax expense in international offices taxed at different rates | (2,104) | (904) | 1,501 |
Change in valuation allowance | 87 | 466 | (1,429) |
Prior year tax adjustments | (71) | 80 | (956) |
Tax loss carried forward | 0 | 0 | 0 |
Other - net | 2,815 | 1,634 | 715 |
Total tax expense (benefit) | $ 727 | $ 1,276 | $ (169) |
% | |||
Income tax expense at Bermuda corporation tax rate of 0% | 0.00% | 0.00% | 0.00% |
Income tax expense in international offices taxed at different rates | (2.00%) | (1.00%) | 2.00% |
Change in valuation allowance | 0.00% | 1.00% | (2.00%) |
Prior year tax adjustments | 0.00% | 0.00% | (1.00%) |
Tax loss carried forward | 0.00% | 0.00% | 0.00% |
Other - net | 3.00% | 2.00% | 1.00% |
Income tax expense (benefit) at effective tax rate | 1.00% | 2.00% | 0.00% |
Income taxes - Deferred income
Income taxes - Deferred income taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred income tax asset | ||
Tax loss carried forward | $ 5,770 | $ 2,540 |
Pension liability | 1,594 | 365 |
Fixed assets | 11 | 741 |
Allowance for compensated absence | 8 | 9 |
Onerous leases | 9 | 11 |
Deferred income tax asset before valuation allowance | 7,392 | 3,666 |
Less: valuation allowance | (5,638) | (3,105) |
Net deferred income tax assets | 1,754 | 561 |
Deferred income tax liability | ||
Other | 0 | 0 |
Net deferred income tax asset | $ 1,754 | $ 561 |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets, valuation allowance | $ 5,638 | $ 3,105 |
United Kingdom | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets, valuation allowance | 5,600 | 3,100 |
Foreign Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Tax loss carried forward | $ 28,200 | $ 13,600 |
Business combinations - Narrati
Business combinations - Narrative (Details) | May 06, 2016USD ($) | Apr. 29, 2016USD ($)segmentsubsidiary | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Business Acquisition [Line Items] | ||||||
Professional and outside services | $ 18,851,000 | $ 27,638,000 | $ 24,022,000 | |||
Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Assets acquired | 21,400,000 | 0 | 26,600,000 | |||
BTCL and HSBCBB | ||||||
Business Acquisition [Line Items] | ||||||
Number of subsidiaries involved in acquisition activity | subsidiary | 2 | |||||
Consideration transferred, including contingent consideration | $ 22,000,000 | |||||
Payments to acquire businesses | $ 2,100,000 | 7,000,000 | $ 12,400,000 | |||
Contingent consideration, liability, current | $ 12,400,000 | |||||
Acquired finite-lived intangible assets, number of segments | segment | 3 | |||||
Acquisition related costs | $ 4,300,000 | 3,300,000 | 1,000,000 | |||
Professional and outside services | 700,000 | 1,000,000 | ||||
Revenue | 407,453,000 | 378,915,000 | 395,612,000 | |||
Earnings (loss) | 118,434,000 | $ 85,215,000 | $ 115,635,000 | |||
BTCL and HSBCBB | Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Assets acquired | $ 21,400,000 | |||||
Acquired finite-lived intangible assets, weighted average useful life | 15 years | |||||
HSBCBB | ||||||
Business Acquisition [Line Items] | ||||||
Revenue | 9,800,000 | |||||
Earnings (loss) | $ 5,000,000 |
Business combinations - Total C
Business combinations - Total Consideration Transferred (Details) - USD ($) $ in Thousands | Apr. 29, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets acquired | |||||
Excess purchase price (goodwill) | $ 19,622 | $ 23,462 | $ 24,821 | $ 7,086 | |
BTCL and HSBCBB | |||||
Business Acquisition [Line Items] | |||||
Total consideration transferred | $ 21,778 | ||||
Assets acquired | |||||
Intangible assets | 21,443 | ||||
Other assets | 3,345 | ||||
Total assets acquired | 24,788 | ||||
Liabilities acquired | 3,010 | ||||
Excess purchase price (goodwill) | $ 0 |
Business combinations - Pro For
Business combinations - Pro Forma Information (Details) - BTCL and HSBCBB - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Unaudited pro forma financial information | |||
Total net revenue | $ 407,453 | $ 378,915 | $ 395,612 |
Total non-interest operating expense | 289,019 | 293,700 | 279,977 |
Pro forma net income post business combination | $ 118,434 | $ 85,215 | $ 115,635 |
Related party transactions - Fi
Related party transactions - Financing Transactions (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 27, 2013 | |
Non-Executive Employee | ||||
Related Party Transaction [Line Items] | ||||
Loans outstanding | $ 123,200,000 | $ 204,300,000 | ||
Interest expense | 3,700,000 | 5,300,000 | $ 6,200,000 | |
Director and Executive | ||||
Related Party Transaction [Line Items] | ||||
Loans outstanding | 12,100,000 | 63,900,000 | ||
Proceeds from loans receivable | 27,600,000 | 17,500,000 | 18.4 | |
Payments for loans receivable | 25,100,000 | 17,400,000 | 25,200,000 | |
Director | ||||
Related Party Transaction [Line Items] | ||||
Loans reclassified out of related party loans | 54,300,000 | |||
Significant Shareholder | Loan Agreement | ||||
Related Party Transaction [Line Items] | ||||
Loans outstanding | 0 | 0 | ||
Loan agreement, maximum lending capacity | $ 95,000,000 | |||
Interest income | $ 0 | $ 1,000,000 | $ 2,700,000 |
Related party transactions - Ca
Related party transactions - Capital Transaction (Details) $ / shares in Units, $ in Thousands | Aug. 13, 2015USD ($)shares | Apr. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2016person | Apr. 29, 2015 |
Related Party Transaction [Line Items] | ||||
Retirement of shares | $ | $ 5,960 | |||
Common Stock | ||||
Related Party Transaction [Line Items] | ||||
Stock repurchased for cancellation (in shares) | 400,000 | |||
Significant Shareholder | Carlyle Group | ||||
Related Party Transaction [Line Items] | ||||
Voting interest owned by related party | 14.00% | |||
Right to designate as members of the board of directors, number of persons | person | 2 | |||
Significant Shareholder | CIBC | ||||
Related Party Transaction [Line Items] | ||||
Voting interest owned by related party | 19.00% | |||
Significant Shareholder | CIBC | Repurchase for Cancellation of Stock | ||||
Related Party Transaction [Line Items] | ||||
Percent of outstanding shares repurchased for cancellation | 77.00% | |||
Retirement of shares | $ | $ 120,000 | |||
Significant Shareholder | CIBC | Repurchase for Cancellation of Stock | Common Stock | ||||
Related Party Transaction [Line Items] | ||||
Average cost per share (in dollars per share) | $ / shares | $ 15 | |||
Stock repurchased for cancellation (in shares) | 8,000,000 | |||
Significant Shareholder | Carlyle Global Financial Services, L.P. | ||||
Related Party Transaction [Line Items] | ||||
Percent of CIBC's outstanding shares acquired | 23.00% | |||
Issuance of common shares (in shares) | 2,300,000 |
Related party transactions -139
Related party transactions - Financial Transactions With Related Parties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||
Asset management revenue | $ 21,106 | $ 18,910 | $ 17,728 |
Wholly-owned subsidiary | |||
Related Party Transaction [Line Items] | |||
Investment in subsidiaries | 5,000 | 5,000 | |
Unrealized gain (loss) on trading investments | 1,100 | 900 | |
Asset management revenue | $ 5,700 | $ 6,400 | $ 4,300 |
Condensed financial statemen140
Condensed financial statements of the parent company only - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets | ||||
Cash and demand deposits with banks - Non-interest bearing | $ 110,741 | $ 110,895 | ||
Demand deposits with banks - Interest bearing | 326,437 | 378,629 | ||
Cash equivalents - Interest bearing | 1,664,473 | 1,799,366 | ||
Cash due from banks | 2,101,651 | 2,288,890 | $ 2,063,311 | $ 1,730,472 |
Securities purchased under agreement to resell | 148,813 | 0 | ||
Short-term investments | 519,755 | 409,482 | ||
Investment in securities | ||||
Trading | 6,313 | 321,299 | ||
Available-for-sale | 3,332,738 | 2,201,349 | ||
Held-to-maturity (fair value: $498,367 (2015: $421,588)) | 1,061,103 | 701,282 | ||
Total investment in securities | 4,400,154 | 3,223,930 | ||
Loans to third parties, net of allowance for credit losses | 3,570,478 | 4,000,155 | ||
Accrued interest | 22,780 | 17,460 | ||
Other assets | 82,549 | 77,145 | ||
Total assets | 11,103,545 | 10,275,563 | ||
Customer deposits | ||||
Non-interest bearing | 2,385,353 | 1,882,148 | ||
Interest bearing | 5,827,951 | 5,783,074 | ||
Total deposits | 10,033,649 | 9,182,146 | ||
Employee benefit plans | 139,967 | 122,135 | ||
Accrued interest | 2,143 | 2,744 | ||
Preference share dividends payable | 0 | 654 | ||
Other liabilities | 100,044 | 100,530 | ||
Total other liabilities | 242,154 | 226,063 | ||
Long-term debt | 117,000 | 117,000 | ||
Total liabilities | 10,392,803 | 9,525,209 | ||
Shareholders' equity | ||||
Total shareholders’ equity | 710,742 | 750,354 | 849,374 | |
Total liabilities and shareholders’ equity | 11,103,545 | 10,275,563 | ||
Held-to-maturity, fair value | 1,046,828 | 701,495 | ||
Banks | ||||
Customer deposits | ||||
Non-interest bearing | 340 | 403 | ||
Interest bearing | 19,751 | 10,176 | ||
Total deposits | 23,796 | 14,478 | ||
Customers | ||||
Customer deposits | ||||
Non-interest bearing | 2,385,013 | 1,881,745 | ||
Interest bearing | 5,808,200 | 5,772,898 | ||
Total deposits | 10,009,853 | 9,167,668 | ||
Bank of N.T. Butterfield & Son Ltd | ||||
Assets | ||||
Cash and demand deposits with banks - Non-interest bearing | 28,032 | 28,146 | ||
Demand deposits with banks - Interest bearing | 136,373 | 125,826 | ||
Cash equivalents - Interest bearing | 1,042,365 | 691,438 | ||
Cash due from banks | 1,206,770 | 845,410 | $ 694,596 | $ 558,364 |
Securities purchased under agreement to resell | 148,813 | 0 | ||
Short-term investments | 447,748 | 112,219 | ||
Investment in securities | ||||
Trading | 6,313 | 6,167 | ||
Available-for-sale | 2,170,155 | 1,227,953 | ||
Held-to-maturity (fair value: $498,367 (2015: $421,588)) | 507,239 | 422,000 | ||
Total investment in securities | 2,683,707 | 1,656,120 | ||
Loans to third parties, net of allowance for credit losses | 1,909,093 | 2,096,625 | ||
Accrued interest | 15,035 | 13,872 | ||
Other assets | 217,795 | 196,636 | ||
Total assets | 7,077,047 | 5,414,740 | ||
Customer deposits | ||||
Total deposits | 6,066,432 | 4,374,281 | ||
Securities sold under agreement to repurchase | 0 | 0 | ||
Employee benefit plans | 133,834 | 122,135 | ||
Accrued interest | 1,690 | 1,530 | ||
Preference share dividends payable | 0 | 654 | ||
Other liabilities | 47,348 | 48,786 | ||
Total other liabilities | 182,872 | 173,105 | ||
Long-term debt | 117,000 | 117,000 | ||
Total liabilities | 6,366,304 | 4,664,386 | ||
Shareholders' equity | ||||
Total shareholders’ equity | 710,743 | 750,354 | ||
Total liabilities and shareholders’ equity | 7,077,047 | 5,414,740 | ||
Held-to-maturity, fair value | 498,367 | 421,588 | ||
Bank of N.T. Butterfield & Son Ltd | Banks | ||||
Investment in securities | ||||
Net assets of subsidiaries | 327,149 | 355,062 | ||
Loans to subsidiaries | 54,207 | 71,331 | ||
Customer deposits | ||||
Total deposits | 119,331 | 102,574 | ||
Bank of N.T. Butterfield & Son Ltd | Customers | ||||
Investment in securities | ||||
Net assets of subsidiaries | 11,610 | 7,173 | ||
Loans to subsidiaries | 55,120 | 60,292 | ||
Customer deposits | ||||
Non-interest bearing | 1,733,684 | 1,348,877 | ||
Interest bearing | 4,213,417 | 2,922,830 | ||
Total deposits | $ 5,947,101 | $ 4,271,707 |
Condensed financial statemen141
Condensed financial statements of the parent company only - Condensed Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Non-interest income | |||
Banking | $ 39,342 | $ 35,221 | $ 34,280 |
Foreign exchange revenue | 30,606 | 31,896 | 29,379 |
Other non-interest income | 3,476 | 4,359 | 5,009 |
Total non-interest income | 147,473 | 140,172 | 134,830 |
Interest income | |||
Interest and fees on loans | 188,000 | 186,486 | 191,986 |
Deposits with banks | 9,759 | 6,517 | 5,358 |
Total interest income | 274,929 | 262,581 | 265,101 |
Interest expense | |||
Deposits | 11,831 | 18,446 | 20,903 |
Long-term debt | 4,500 | 4,861 | 5,628 |
Securities sold under repurchase agreements | 118 | 8 | 83 |
Total interest expense | 16,449 | 23,315 | 26,614 |
Net interest income before provision for credit losses | 258,480 | 239,266 | 238,487 |
Provision for credit losses | (4,399) | (5,741) | (8,048) |
Net interest income after provision for credit losses | 254,081 | 233,525 | 230,439 |
Net trading gains (losses) | 715 | (562) | 10,070 |
Net realised gains (losses) on available-for-sale investments | 1,546 | (4,407) | 8,680 |
Net gains (losses) on other real estate owned | (440) | 277 | (1,804) |
Impairment of fixed assets | 0 | (5,083) | (1,986) |
Net other gains (losses) | (807) | 338 | 451 |
Total other gains (losses) | 1,014 | (9,437) | 15,688 |
Total net revenue | 402,568 | 364,260 | 380,957 |
Non-interest expense | |||
Salaries and other employee benefits | 139,967 | 134,917 | 129,761 |
Technology and communications | 57,441 | 57,069 | 57,119 |
Property | 21,043 | 21,539 | 24,312 |
Professional and outside services | 18,851 | 27,638 | 24,022 |
Indirect taxes | 16,352 | 13,882 | 14,175 |
Amortisation of intangible assets | 4,514 | 4,424 | 4,281 |
Marketing | 4,513 | 3,919 | 3,802 |
Restructuring costs | 6,266 | 2,183 | 0 |
Other expenses | 16,952 | 19,674 | 15,495 |
Total non-interest expense | 285,899 | 285,245 | 272,967 |
Net income | 115,942 | 77,739 | 108,159 |
Other comprehensive income (loss), net of taxes | (54,183) | (12,977) | (9,932) |
Total comprehensive income | 61,759 | 64,762 | 98,227 |
Bank of N.T. Butterfield & Son Ltd | |||
Non-interest income | |||
Banking | 21,984 | 19,193 | 18,208 |
Foreign exchange revenue | 11,174 | 11,789 | 12,581 |
Other non-interest income | 3,516 | 4,671 | 4,592 |
Total non-interest income | 83,274 | 71,879 | 107,380 |
Interest income | |||
Interest and fees on loans | 123,370 | 117,124 | 119,846 |
Investments | 44,745 | 39,987 | 38,510 |
Deposits with banks | 6,293 | 1,600 | 1,398 |
Total interest income | 174,408 | 158,711 | 159,754 |
Interest expense | |||
Deposits | 6,882 | 7,947 | 8,541 |
Long-term debt | 4,500 | 4,861 | 5,628 |
Securities sold under repurchase agreements | 118 | 8 | 82 |
Total interest expense | 11,500 | 12,816 | 14,251 |
Net interest income before provision for credit losses | 162,908 | 145,895 | 145,503 |
Provision for credit losses | (7,263) | (3,624) | (6,425) |
Net interest income after provision for credit losses | 155,645 | 142,271 | 139,078 |
Net trading gains (losses) | 330 | 80 | 257 |
Net realised gains (losses) on available-for-sale investments | 1,222 | (2,841) | 8,714 |
Net gains (losses) on other real estate owned | (287) | (543) | (775) |
Impairment of fixed assets | 0 | 0 | (1,050) |
Net other gains (losses) | (325) | 19 | (10) |
Total other gains (losses) | 940 | (3,285) | 7,136 |
Total net revenue | 239,859 | 210,865 | 253,594 |
Non-interest expense | |||
Salaries and other employee benefits | 69,770 | 60,132 | 55,276 |
Technology and communications | 34,033 | 34,879 | 33,248 |
Property | 5,983 | 5,929 | 6,297 |
Professional and outside services | 9,379 | 19,043 | 14,140 |
Indirect taxes | 10,562 | 8,577 | 7,814 |
Amortisation of intangible assets | 113 | 0 | 0 |
Marketing | 2,138 | 1,730 | 1,309 |
Restructuring costs | 117 | 0 | 0 |
Other expenses | 5,373 | 8,017 | 4,846 |
Total non-interest expense | 137,468 | 138,307 | 122,930 |
Net income before equity in undistributed earnings of subsidiaries | 102,391 | 72,558 | 130,664 |
Equity in undistributed earnings of subsidiaries | 13,551 | 5,181 | (22,505) |
Net income | 115,942 | 77,739 | 108,159 |
Other comprehensive income (loss), net of taxes | (54,183) | (12,977) | (9,932) |
Total comprehensive income | 61,759 | 64,762 | 98,227 |
Bank of N.T. Butterfield & Son Ltd | Banks | |||
Non-interest income | |||
Dividends from subsidiaries | 40,000 | 36,226 | 43,343 |
Bank of N.T. Butterfield & Son Ltd | Customers | |||
Non-interest income | |||
Dividends from subsidiaries | $ 6,600 | $ 0 | $ 28,656 |
Condensed financial statemen142
Condensed financial statements of the parent company only - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net income | $ 115,942 | $ 77,739 | $ 108,159 |
Adjustments to reconcile net income to operating cash flows | |||
Depreciation and amortisation | 52,261 | 50,069 | 45,116 |
(Increase) in carrying value of equity method investments | (1,137) | (980) | (834) |
Share-based payments and settlements | 14,423 | 7,913 | 9,049 |
Net realised / unrealised losses on other real estate owned | 440 | (277) | 1,804 |
Net realised (gains) losses on available-for-sale investments | (1,546) | 4,407 | (8,680) |
Provision for credit losses | 4,399 | 5,741 | 8,048 |
Changes in operating assets and liabilities | |||
(Increase) decrease in accrued interest receivable | (6,054) | 1,417 | 594 |
(Increase) in other assets | (6,652) | (10,259) | (3,955) |
Increase (decrease) in accrued interest payable | (284) | (1,907) | 1,040 |
Increase (decrease) in employee benefit plans and other liabilities | 5,587 | 16,932 | (18,885) |
Cash provided by operating activities | 178,195 | 155,539 | 143,777 |
Cash flows from investing activities | |||
(Increase) in securities purchased under agreement to resell | (148,813) | 0 | 0 |
Net (increase) in short-term investments | (127,708) | (28,358) | (343,773) |
Net change in trading investments | 314,986 | 96,086 | 134,905 |
Available-for-sale investments: proceeds from sale | 60,548 | 238,756 | 130,453 |
Available-for-sale investments: proceeds from maturities and pay downs | 576,892 | 435,827 | 198,311 |
Available-for-sale investments: purchases | (1,884,554) | (1,018,759) | (800,865) |
Held-to-maturity investments: proceeds from maturities and pay downs | 73,725 | 26,965 | 12,426 |
Held-to-maturity investments: purchases | (360,959) | (50,283) | (18,073) |
Net (increase) decrease in loans to third parties | 321,722 | (36,876) | 145,023 |
Additions to premises, equipment and computer software | (9,804) | (1,477) | (6,128) |
Proceeds from sale of other real estate owned | 5,528 | 11,238 | 12,389 |
Dividends received on equity method investments | 441 | 1,032 | 806 |
Cash disbursed for business acquisitions | (21,778) | 0 | (34,757) |
Cash used in investing activities | (1,199,774) | (325,849) | (258,705) |
Cash flows from financing activities | |||
Net increase in demand and term deposit liabilities | 1,056,029 | 598,578 | 637,705 |
Net (decrease) in securities sold under agreement to repurchase | 0 | 0 | (25,535) |
Repayment of long-term debt | 0 | 0 | (90,000) |
Proceeds from issuance of common shares, net of underwriting discounts and commissions | 131,600 | 0 | 0 |
Cost of issuance of common shares | (5,458) | 0 | 0 |
Proceeds from loans sold under agreement to repurchase | 5,152 | 0 | 0 |
Cost of repurchase of loans under agreement to repurchase | (5,152) | 0 | 0 |
Common shares repurchased | (1,633) | (130,822) | (17,018) |
Preference shares repurchased | (212,121) | (211) | (656) |
Warrant repurchased | (100) | 0 | 0 |
Proceeds from stock option exercises | 6,919 | 640 | 1,198 |
Cash dividends paid on common and contingent value convertible preference shares | (19,346) | (24,846) | (27,440) |
Cash dividends paid on preference shares | (14,629) | (14,631) | (14,673) |
Preference shares guarantee fee paid | (1,676) | (1,824) | (1,834) |
Cash provided by financing activities | 939,585 | 426,884 | 461,747 |
Net increase (decrease) in cash due from banks | (187,239) | 225,579 | 332,839 |
Cash due from banks at beginning of year | 2,288,890 | 2,063,311 | 1,730,472 |
Cash due from banks at end of year | 2,101,651 | 2,288,890 | 2,063,311 |
Supplemental disclosure of cash flow information | |||
Cash interest paid | 16,165 | 21,408 | 27,654 |
Non-cash items | |||
Transfer to other real estate owned | 8,961 | 3,400 | 6,086 |
Bank of N.T. Butterfield & Son Ltd | |||
Cash flows from operating activities | |||
Net income | 115,942 | 77,739 | 108,159 |
Adjustments to reconcile net income to operating cash flows | |||
Depreciation and amortisation | 23,687 | 22,267 | 19,836 |
(Increase) in carrying value of equity method investments | (949) | (1,056) | (1,103) |
Share-based payments and settlements | 14,423 | 7,913 | 9,049 |
Equity in undistributed earnings of subsidiaries | (13,551) | (5,181) | 22,505 |
Net realised / unrealised losses on other real estate owned | 287 | 543 | 775 |
Net realised (gains) losses on available-for-sale investments | (1,222) | 2,841 | (8,714) |
Provision for credit losses | 7,263 | 3,624 | 6,425 |
Changes in operating assets and liabilities | |||
(Increase) decrease in accrued interest receivable | (1,163) | 6,904 | (982) |
(Increase) in other assets | (20,312) | 2,650 | (1,284) |
Increase (decrease) in accrued interest payable | 160 | (1,909) | 240 |
Increase (decrease) in employee benefit plans and other liabilities | 10,388 | 480 | (5,763) |
Cash provided by operating activities | 134,953 | 116,815 | 149,143 |
Cash flows from investing activities | |||
(Increase) in securities purchased under agreement to resell | (148,813) | 0 | 0 |
Net (increase) in short-term investments | (335,529) | (103,178) | (299) |
Net change in trading investments | (146) | 704 | 42,910 |
Available-for-sale investments: proceeds from sale | 25,489 | 404,575 | 84,360 |
Available-for-sale investments: proceeds from maturities and pay downs | 341,835 | 256,566 | 163,725 |
Available-for-sale investments: purchases | (1,332,836) | (473,834) | (392,719) |
Held-to-maturity investments: proceeds from maturities and pay downs | 38,430 | 10,077 | 4,533 |
Held-to-maturity investments: purchases | (124,325) | (276,723) | 0 |
Net (increase) decrease in loans to third parties | 177,823 | (70,821) | 18,645 |
Additions to premises, equipment and computer software | (5,700) | (4,239) | (222) |
Proceeds from sale of other real estate owned | 3,061 | 4,644 | 4,196 |
Dividends received on equity method investments | 319 | 884 | 359 |
Return (injection) of capital from (in) subsidiary | (6,945) | (94) | 607 |
Cash disbursed for business acquisitions | (2,540) | 0 | 0 |
Cash used in investing activities | (1,354,097) | (252,143) | (79,105) |
Cash flows from financing activities | |||
Net increase in demand and term deposit liabilities | 1,696,948 | 457,836 | 242,152 |
Net (decrease) in securities sold under agreement to repurchase | 0 | 0 | (25,535) |
Repayment of long-term debt | 0 | 0 | (90,000) |
Proceeds from issuance of common shares, net of underwriting discounts and commissions | 131,600 | 0 | 0 |
Cost of issuance of common shares | (5,458) | 0 | 0 |
Proceeds from loans sold under agreement to repurchase | 5,152 | 0 | 0 |
Cost of repurchase of loans under agreement to repurchase | (5,152) | 0 | 0 |
Common shares repurchased | (1,633) | (130,822) | (17,018) |
Preference shares repurchased | (212,121) | (211) | (656) |
Warrant repurchased | (100) | 0 | 0 |
Proceeds from stock option exercises | 6,919 | 640 | 1,198 |
Cash dividends paid on common and contingent value convertible preference shares | (19,346) | (24,846) | (27,440) |
Cash dividends paid on preference shares | (14,629) | (14,631) | (14,673) |
Preference shares guarantee fee paid | (1,676) | (1,824) | (1,834) |
Cash provided by financing activities | 1,580,504 | 286,142 | 66,194 |
Net increase (decrease) in cash due from banks | 361,360 | 150,814 | 136,232 |
Cash due from banks at beginning of year | 845,410 | 694,596 | 558,364 |
Cash due from banks at end of year | 1,206,770 | 845,410 | 694,596 |
Supplemental disclosure of cash flow information | |||
Cash interest paid | 11,660 | 10,907 | 14,491 |
Non-cash items | |||
Transfer to other real estate owned | 8,961 | 3,326 | 2,733 |
Bank of N.T. Butterfield & Son Ltd | Banks | |||
Cash flows from investing activities | |||
Net decrease in loans to subsidiaries | 10,608 | (2,761) | 4,318 |
Bank of N.T. Butterfield & Son Ltd | Customers | |||
Cash flows from investing activities | |||
Net decrease in loans to subsidiaries | $ 5,172 | $ 2,057 | $ (9,518) |
Subsequent events (Details)
Subsequent events (Details) - Subsequent Event - $ / shares | Feb. 12, 2017 | Feb. 27, 2017 |
Subsequent Event [Line Items] | ||
Common share cash dividends declared (in dollars per share) | $ 0.32 | |
Carlyle Global Financial Services, L.P. | ||
Subsequent Event [Line Items] | ||
Ownership percentage by noncontrolling owner | 14.00% |