First Quarter 2022 Earnings Presentation The Bank of N.T. Butterfield & Son Limited May 3, 2022
2 Forward-Looking Statements Forward-Looking Statements: Certain of the statements made in this release are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions estimates, intentions, and future performance, including, without limitation, our dividend payout target, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of Butterfield to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements due to a variety of factors, including worldwide economic conditions and fluctuations of interest rates, a decline in Bermuda’s sovereign credit rating, the successful completion and integration of acquisitions or the realization of the anticipated benefits of such acquisitions in the expected time-frames or at all, success in business retention and obtaining new business, the impact of the COVID-19 pandemic, the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, the eventual timing and duration of economic stabilization and recovery from the pandemic and other factors. Forward-looking statements can be identified by words such as "anticipate," "assume," "believe," "estimate," "expect," "indicate," "intend," "may," "plan," "point to," "predict," "project," "seek," "target," "potential," "will," "would," "could," "should," "continue," "contemplate" and other similar expressions, although not all forward-looking statements contain these identifying words. All statements other than statements of historical fact are statements that could be forward-looking statements. All forward-looking statements in this disclosure are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our Securities and Exchange Commission (“SEC”) reports and filings, including under the caption "Risk Factors" in our most recent Form 20-F. Such reports are available upon request from Butterfield, or from the SEC, including through the SEC’s website at https://www.sec.gov. Any forward-looking statements made by Butterfield are current views as at the date they are made. Except as otherwise required by law, Butterfield assumes no obligation and does not undertake to review, update, revise or correct any of the forward-looking statements included in this disclosure, whether as a result of new information, future events or other developments. You are cautioned not to place undue reliance on the forward-looking statements made by Butterfield in this disclosure. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, and should only be viewed as historical data. About Non-GAAP Financial Measures: This presentation contains non-GAAP financial measures including “core” net income and other financial measures presented on a “core” basis. We believe such measures provide useful information to investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, our non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. Reconciliations of these non-GAAP measures to corresponding GAAP financial measures are provided in the Appendix of this presentation.
3 Agenda and Overview Ten International Locations Butterfield Overview Michael Collins Chairman and Chief Executive Officer Craig Bridgewater Group Chief Financial Officer Michael Schrum President and Group Chief Risk Officer • Leading Bank in Attractive Markets • Strong Capital Generation and Return • Resilient, Capital Efficient, Diversified Fee Revenue Model • Efficient, Conservative Balance Sheet • Experienced Leadership Team • Overview • First Quarter 2022 Financials • Q&A Awards Presenters Agenda • Leading market positions in Bermuda & Cayman • Expanding loan and mortgage offerings in The Channel Islands • Well-secured lending in all markets, including Central London, UK • Award winning wealth management offerings
4 First Quarter 2022 Highlights Core Net Income** (In US$ millions) Core Return on Average Tangible Common Equity** (In US$ millions) vs. Q4 2021 vs. Q1 2021 Q1 2022 $ % $ % Net Interest Income $ 75.9 $ 1.4 $ 1.0 Non-Interest Income 49.9 (2.8) 2.3 Credit Recoveries 0.7 0.1 (0.8) Non-Interest Expenses* (82.9) 1.6 (1.3) Other Gains (Losses) 0.8 2.4 1.6 Net Income $ 44.4 $ 2.7 6.5 % $ 2.7 6.6 % Non-Core Items** 0.3 (0.3) 0.3 Core Net Income** $ 44.7 $ 3.0 7.1 % $ 3.1 7.4 % • Net income of $44.4 million, or $0.89 per share • Core net income** of $44.7 million or $0.90 per share • Return on average common equity of 19.7%; core return on average tangible common equity** of 21.9% • Net Interest Margin of 2.03%, cost of deposits of 0.12% • Cash dividend rate of $0.44 per common share and share repurchases during the quarter * Includes income taxes ** See the Appendix for a reconciliation of the non-GAAP measure $41.6 $40.1 $40.0 $41.7 $44.7 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 19.3% 18.7% 17.9% 18.8% 21.9% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022
Financials
6 Net Interest Income before Provision for Credit Losses - Trend (In US$ millions) $74.9 $74.5 $75.9 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Net Interest Margin & Yields Income Statement Net Interest Income • Net interest income (“NII”) increased by $1.4 million versus the prior quarter due to slower prepayment rates, which decreased amortization in addition to higher rates on the Bank's shorter-term assets • Average investment balances decreased slightly during the quarter due to increasing total net unrealized losses in the AFS portfolio, which are carried at fair value • Average loan balances decreased in the first quarter compared to the prior quarter, primarily in the Channel Islands and UK segment, as a result of repayments and a decrease in the GBP/USD FX rate (In US$ millions) Q1 2022 vs. Q4 2021 Avg. Balance Yield Avg. Balance Yield Cash, S/T Inv. & Repos $ 3,809.2 0.11 % $ 492.9 0.08 % Investments 6,226.5 1.79 % (39.6) 0.14 % Loans (net) 5,144.3 4.26 % (41.1) 0.08 % Interest Earning Assets 15,180.0 2.20 % 412.3 0.03 % Interest Bearing Liabilities 11,242.4 (0.24) % 352.2 (0.01) % Net Interest Margin 2.03 % 0.03 %
7 Non-Interest Income Trend (In US$ millions)(In US$ millions) Q1 2022 vs. Q4 2021 Asset management $ 7.5 $ (0.1) Banking 12.7 (2.7) Foreign exchange revenue 12.4 1.5 Trust 12.7 (1.4) Custody and other 3.6 (0.3) Other 1.0 0.2 Total Non-Interest Income $ 49.9 $ (2.8) $47.6 $52.7 $49.9 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 • Non-interest income still holding up, but decreased in the quarter due to lower banking fees driven by last quarter's seasonally higher consumer spending supporting interchange revenue and higher trust income driven by both new business and higher activity-based fees. This was partially offset by higher foreign exchange revenue driven by increased volumes • Fee income ratio of 39.5% in the first quarter of 2022 continues to demonstrate a resilient, capital-efficient and diversified revenue stream that continues to compare favorably to the peer average* Income Statement Non-Interest Income * Includes US banks identified by management as a peer group. Please see the Appendix for a list of these banks. Q4 2021 comparative data is used as Q1 2022 peer information was not widely available at time of publication.
8 Core Non-Interest Expense* Trend (In US$ millions)Core Non-Interest Expenses* vs. Q4 2021 (In US$ millions) Q1 2022 $ % Salaries & Benefits** $ 41.0 $ (0.1) (0.2) % Technology & Comm. 14.1 (1.6) (10.4) % Professional & O/S Services 4.9 (0.6) (10.2) % Property 7.9 (0.1) (0.9) % Indirect Taxes 5.9 0.5 8.5 % Intangible Amortization 1.5 — (0.7) % Marketing 1.5 0.2 19.6 % Other 4.8 (0.5) (8.8) % Total Core Non-Interest Expenses* $ 81.6 $ (2.1) (2.5) % Non-Core Expenses* 0.3 0.3 100.0 % Non-Interest Expenses $ 82.0 $ (1.8) (2.2) % $80.9 $83.7 $81.6 64.8% 64.7% 63.7% Core Efficiency Ratio* Core Non-Interest Expenses* Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 • Core non-interest expenses* decreased by 2.5% or $2.1 million in the first quarter of 2022 compared to the prior quarter primarily due to lower technology and communications expenses due to the expiring amortization period for the Bank’s banking system in the prior quarter, which were partially offset by cyclical indirect taxes • Core efficiency ratio* of 63.7% trending favorably and better than the prior quarter due to lower non-interest expenses and increased revenue • Expenses returned to quarterly expectations * See the Appendix for a reconciliation of the non-GAAP measure ** Includes Non-Service Employee Benefits Expense Income Statement Non-Interest Expenses
9 Capital Requirements and Dividend Return Leverage Capital • Regulatory capital levels remain strong and well above requirements • Quarterly dividend rate continues at $0.44 per common share • TCE/TA ratio of 5.0% due to continued elevated deposit levels and a reduction in other comprehensive income in the ‘available for sale’ investment portfolio due to higher US Dollar market interest rates • TCE/TA ex-cash and ex-OCI are 5.8% and 6.9%, respectively Regulatory Capital (Basel III) - Total Capital Ratio* 20.9% 13.5% 14.8% Butterfield Current BMA Minimum US Peer Median*** *** Includes US banks identified by management as a peer group. Please see the Appendix for a list of these banks. Q4 2021 comparative data is used as Q1 2022 peer information was not widely available at time of publication. 5.8% 9.8% 5.0% 8.4% 0.8% 1.4% TCE/TA TCE/TA Ex Cash Butterfield - Current US Peer Median*** 52.9% 60.5% 53.7% 48.9% 2019 2020 2021 Q1 2022 Dividend Payout Ratio** * In accordance with regulatory capital guidance, the Bank has elected to make use of transitional arrangements which allow the deferral of the January 1, 2020 CECL impact of $7.8 million on its regulatory capital over a period of 5 years. ** 2022 is based on year-to-date dividend and earnings per share
10 Balance Sheet Total Assets (In US$ billions) • Deposit balances remained flat at $13.9 billion compared to the prior quarter and above deposit balances of $13.4 billion at the end of the first quarter of 2021 • During the first quarter of 2022, movement in the investment portfolio consisted of reinvestment of pay-downs from amortizing securities offset by changes in fair value of securities held • Butterfield’s balance sheet remains low in risk density (risk weighted assets/total assets) at 33.0% vs Q4 2021 (In US$ millions) Q1 2022 Q4 2021 % Cash & Equivalents $ 2,103 $ 2,180 (4) % Reverse Repos & S/T Investments 1,601 1,295 24 % Investments 6,111 6,237 (2) % Loans (net) 5,068 5,241 (3) % Other Assets 383 382 — % Total Assets $ 15,266 $ 15,335 (1) % Int. Bearing Deposits $ 10,944 $ 11,050 (1) % Non-Int. Bearing Deposits 2,989 2,821 6 % Other Liabilities 491 487 1 % Shareholders’ Equity 842 977 (14) % Total Liab. & Equity $ 15,266 $ 15,335 (1) % $14.8 $15.3 $15.3 $5.4 $6.2 $6.1 $5.1 $5.2 $5.1 Total assets Investments Loans Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 $13.4 $13.9 $13.9 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Total Deposits (In US$ billions)
11 Asset Quality Non-Accrual Loans (In US$ millions) $70.2 $61.0 $58.7 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Res Mtg 69.7% Consumer 3.9% Comm’l R/E 13.1% Other Comm’l 8.9% Government 4.5% Loan Distribution 0.01% 0.05% 0.01% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 0.00% 0.05% 0.10% 0.15% 0.20% Net Charge-Off Ratio AAA 95.2% AA 4.4% A 0.4% $5.1 billion $6.1 billion Investment Portfolio Rating Distribution • Investment portfolio continues to be of very high credit quality with 95% comprised of AAA rated securities, primarily US Government guaranteed mortgage backed securities • Non-accrual loans remained at 1.2% of gross loans, consistent with the prior quarter • Allowance for credit losses at $26.6 million represented an ACL/Total loans of 0.5% • The net charge off ratio continues to be very low at 0.01%
12 Interest Rate Sensitivity Interest Rate SensitivityAverage Balance - Balance Sheet Average Balances (US$Mil) Weighted Average LifeQ1 2022 vs. Q4 2021 Duration vs. Q4 2021 Cash & Reverse Repos & S/T Invest. 3,809.2 492.9 0.2 <0.05 N/A AFS 3,352.8 (146.8) 4.1 0.1 5.6 HTM** 2,873.6 107.1 5.6 1.1 8.5 Total 10,035.6 453.2 11.1% 6.0% 12.0% (6.3)% 6.5% 10.5% NTB US Peer Median * -100bps +100bps +200bps • Total investment portfolio duration increased to 4.9 years from 4.2 years in the previous quarter as prepayments continue to slow • Movement in AFS and HTM duration (4.0 years and 4.5 years, respectively on December 31, 2021) also reflected the transfer of debt securities from AFS to HTM, with some of the longer durations previously in the AFS portfolio • NII models exhibit strong asset sensitivity with robust growth in yields expected in a rising rate environment • As of March 31, 2022, the Bank had $133.5 million in net unrealized losses in the AFS portfolio, compared with net unrealized losses of $21.8 million as at the end of the fourth quarter of 2021 as a result of changes in fair value due to rising long-term US dollar market interest rates * Includes US banks identified by management as a peer group. Please see the Appendix for a list of these banks. Q4 2021 comparative data is used as Q1 2022 peer information was not widely available at time of publication. ** The HTM portfolio is comprised of securities with negative convexity which typically exhibit lower prepayment speeds when assuming higher future rates.
Appendix
14 Average Deposit Volume and Cost of Deposits (In US$ millions) 72.6% 72.6% 73.3% 21.1% 21.5% 21.3% 6.3% 5.8% 5.4% USD / USD Pegged GBP Other Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 De po sit s 0.66% 0.64% 0.63% 0.12% 0.12% 0.12% Bermuda Demand Deposits Bermuda Term Deposits Cayman Demand Deposits Cayman Term Deposits Channel Islands Demand Deposits Channel Islands Term Deposits Term deposit cost Overall cost of deposits Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 21.0% 20.3% 21.5% 58.3% 58.5% 57.1% 20.7% 21.2% 21.4% Non-interest bearing demand deposits Interest bearing demand deposits Term deposits Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Deposit Composition By Currency By Type Appendix Customer Deposits
15 42% 34% 32% 29% 30% 21% 18% 18% 21% 21% 37% 48% 49% 50% 49% $2.7 $3.2 $3.4 $3.6 $3.5 Bermuda Cayman UK and Channel Islands 2018 2019 2020 2021 Q1 2022 42% 32% 29% 26% 27% 3% 2% 5% 7% 7% 9% 22% 18% 18% 17% 47% 45% 49% 48% 49% $1.2 $1.7 $1.6 $1.4 $1.3 Commercial and Industrial Commercial Overdrafts Government Commercial Real Estate 2018 2019 2020 2021 Q1 2022 • Stable loan book composed of well-seasoned residential mortgage books with 70% of mortgages at 70% or below loan- to-value • Loans are individually underwritten in all markets • Minimal wholesale or cross-border lending outside of current jurisdictions Residential Mortgage Loans (US$ Billions) Commercial Loans (US$ Billion) Appendix
16 (in millions of US Dollars, unless otherwise indicated) 2022 2021 2020 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Assets Cash & Equivalents $ 2,103 $ 2,180 $ 2,310 $ 2,766 $ 2,582 $ 3,290 $ 2,161 $ 2,228 $ 1,978 Reverse Repos & S/T Investments 1,601 1,295 1,446 1,651 1,236 1,020 1,133 1,136 1,240 Investments 6,111 6,237 5,984 5,605 5,426 4,863 4,725 4,354 4,538 Loans, Net 5,068 5,241 5,204 5,221 5,149 5,161 5,035 5,018 5,001 Other Assets 383 382 389 421 412 405 406 415 441 Total Assets $ 15,266 $ 15,335 $ 15,332 $ 15,665 $ 14,805 $ 14,739 $ 13,461 $ 13,151 $ 13,197 Liabilities and Equity Total Deposits $ 13,933 $ 13,870 $ 13,861 $ 14,193 $ 13,361 $ 13,250 $ 11,891 $ 11,616 $ 11,753 Long-Term Debt 172 172 172 172 172 171 196 241 144 Other Liabilities 319 316 325 334 335 335 384 303 320 Total Liabilities $ 14,424 $ 14,358 $ 14,358 $ 14,698 $ 13,868 $ 13,757 $ 12,472 $ 12,160 $ 12,217 Common Equity $ 842 $ 977 $ 974 $ 967 $ 936 $ 982 $ 989 $ 990 $ 981 Total Equity $ 842 $ 977 $ 974 $ 967 $ 936 $ 982 $ 989 $ 990 $ 981 Total Liabilities and Equity $ 15,266 $ 15,335 $ 15,332 $ 15,665 $ 14,805 $ 14,739 $ 13,461 $ 13,151 $ 13,197 Key Metrics CET 1 Ratio 17.3 % 17.6 % 16.9 % 16.1 % 16.4 % 16.1 % 16.6 % 17.0 % 17.5 % Total Tier 1 Capital Ratio 17.3 % 17.6 % 16.9 % 16.1 % 16.4 % 16.1 % 16.6 % 17.0 % 17.5 % Total Capital Ratio 20.9 % 21.2 % 20.4 % 19.5 % 20.0 % 19.8 % 20.8 % 21.2 % 19.8 % Leverage ratio 5.5 % 5.6 % 5.5 % 5.2 % 5.4 % 5.3 % 5.9 % 6.0 % 6.1 % Risk-Weighted Assets (in $ millions) 5,043 5,101 5,185 5,321 5,105 5,069 4,939 4,879 4,782 Risk-Weighted Assets / total assets 33.0 % 33.3 % 33.8 % 34.0 % 34.5 % 34.4 % 36.7 % 37.1 % 36.2 % Tangible common equity ratio 5.0 % 5.8 % 5.8 % 5.6 % 5.7 % 6.1 % 6.7 % 6.9 % 6.8 % Book value per common share (in $) 16.97 19.83 19.68 19.49 18.84 19.88 19.98 19.73 19.09 Tangible book value per share (in $) 15.30 18.08 17.92 17.67 17.00 18.00 18.15 17.94 17.31 Non-accrual loans/gross loans 1.2 % 1.2 % 1.2 % 1.3 % 1.4 % 1.4 % 1.5 % 1.5 % 1.1 % Non-performing assets/total assets 0.5 % 0.5 % 0.5 % 0.6 % 0.7 % 0.6 % 0.7 % 0.7 % 0.5 % Allowance for credit losses/total loans 0.5 % 0.5 % 0.5 % 0.6 % 0.6 % 0.7 % 0.8 % 0.8 % 0.7 % Appendix Balance Sheet Trends
17 (in millions of US Dollars, unless otherwise indicated) Q1 2022 Q4 2021 Q1 2021 Assets Average balance ($) Interest ($) Average rate (%) Average balance ($) Interest ($) Average rate (%) Average balance ($) Interest ($) Average rate (%) Cash due from banks, reverse repurchase agreements and short-term investments $ 3,809.2 $ 1.0 0.11 % $ 3,316.3 $ 0.3 0.03 % $ 4,180.1 $ 0.6 0.06 % Investment in securities 6,226.5 27.4 1.79 % 6,266.1 26.1 1.65 % 5,206.5 25.1 1.95 % AFS 3,352.8 11.9 1.44 % 3,499.6 12.2 1.38 % 2,864.6 11.9 1.69 % HTM 2,873.6 15.6 2.20 % 2,766.5 13.9 1.99 % 2,341.8 13.1 2.27 % Loans 5,144.3 54.1 4.26 % 5,185.4 54.6 4.18 % 5,161.9 55.6 4.37 % Commercial 1,454.2 16.3 4.56 % 1,520.9 16.8 4.39 % 1,612.2 18.9 4.75 % Consumer 3,690.1 37.7 4.14 % 3,664.5 37.8 4.09 % 3,549.7 36.7 4.20 % Total interest earning assets 15,180.0 82.5 2.20 % 14,767.7 81.0 2.17 % 14,548.6 81.2 2.26 % Other assets 367.2 359.4 373.2 Total assets $ 15,547.1 $ 15,127.2 $ 14,921.8 Liabilities Interest bearing deposits $ 11,070.5 $ (4.3) (0.16) % $ 10,718.3 $ (4.0) (0.15) % $ 10,538.7 $ (3.9) (0.15) % Long-term debt 171.9 (2.4) (5.66) % 171.8 (2.4) (5.54) % 171.5 (2.4) (5.68) % Interest bearing liabilities 11,242.4 (6.7) (0.24) % 10,890.1 (6.4) (0.23) % 10,710.2 (6.3) (0.24) % Non-interest bearing customer deposits 3,024.3 2,928.2 2,839.9 Other liabilities 323.3 277.5 294.3 Total liabilities $ 14,589.9 $ 14,095.9 $ 13,844.4 Shareholders’ equity 957.2 1,031.3 1,077.4 Total liabilities and shareholders’ equity $ 15,547.1 $ 15,127.2 $ 14,921.8 Non-interest bearing funds net of non-interest earning assets (free balance) $ 3,937.6 $ 3,877.6 $ 3,838.3 Net interest margin $ 75.9 2.03 % $ 74.5 2.00 % $ 74.9 2.09 % Appendix Average Balance Sheet Trends
18 (in millions of US Dollars, unless otherwise indicated) 2022 2021 2020 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Net Interest Income $ 75.9 $ 74.5 $ 75.7 $ 74.7 $ 74.9 $ 75.6 $ 75.3 $ 79.1 $ 87.6 Non-Interest Income 49.9 52.7 49.0 48.8 47.6 47.8 46.9 41.7 47.6 Prov. for Credit Recovery (Losses) 0.7 0.6 — 1.0 1.5 2.4 (1.4) (4.4) (5.2) Non-Interest Expenses* 82.9 84.6 85.2 85.6 81.7 83.3 91.8 82.8 89.1 Other Gains (Losses) 0.8 (1.6) 0.3 0.7 (0.8) (0.4) 1.5 0.7 (0.6) Net Income $ 44.4 $ 41.7 $ 39.8 $ 39.6 $ 41.6 $ 42.1 $ 30.5 $ 34.3 $ 40.3 Non-Core Items** $ 0.3 $ 0.1 $ 0.2 $ 0.5 $ — $ 0.8 $ 5.9 $ 0.1 $ 0.5 Core Net Income** $ 44.7 $ 41.7 $ 40.0 $ 40.1 $ 41.6 $ 42.9 $ 36.5 $ 34.4 $ 40.8 Key Metrics Loan Yield 4.26 % 4.18 % 4.22 % 4.28 % 4.37 % 4.42 % 4.43 % 4.53 % 4.80 % Securities Yield 1.79 1.65 1.77 1.82 1.95 2.11 2.26 2.52 2.78 Cost of Deposits 0.12 0.12 0.11 0.10 0.12 0.12 0.14 0.14 0.42 Net Interest Margin 2.03 2.00 1.97 2.01 2.09 2.25 2.30 2.48 2.63 Core Efficiency Ratio** 63.7 64.7 66.3 66.3 64.8 65.6 68.0 66.7 63.8 Core ROATCE** 21.9 18.8 17.9 18.7 19.3 19.0 16.2 15.5 18.6 Fee Income Ratio 39.5 41.2 39.3 39.2 38.4 38.0 38.8 35.8 36.6 Fully Diluted Share Count (in millions of common shares) 49.8 49.8 49.9 49.9 49.9 49.8 50.0 51.0 52.4 * Includes income taxes ** See the reconciliation of non-GAAP measures on pages 21-22 Appendix Income Statement Trends
19 (in millions of US Dollars, unless otherwise indicated) 2022 2021 2020 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Non-Interest Income Asset Management $ 7.5 $ 7.6 $ 7.4 $ 7.4 $ 7.4 $ 7.2 $ 6.8 $ 7.4 $ 7.8 Banking 12.7 15.4 12.6 12.5 11.4 13.6 13.4 9.1 11.2 FX Revenue 12.4 10.9 10.8 10.5 11.2 9.3 9.0 8.1 10.8 Trust 12.7 14.2 12.9 13.0 12.8 13.3 12.9 12.3 12.2 Custody & Other Admin. 3.6 3.9 3.7 3.8 3.8 3.4 3.6 3.3 3.6 Other 1.0 0.8 1.5 1.5 0.9 0.9 1.2 1.5 2.0 Total Non-Interest Income $ 49.9 $ 52.7 $ 49.0 $ 48.8 $ 47.6 $ 47.8 $ 46.9 $ 41.7 $ 47.6 Non-Interest Expense Salaries & Benefits* $ 41.0 $ 41.1 $ 42.0 $ 43.2 $ 39.0 $ 41.4 $ 48.8 $ 41.5 $ 44.6 Technology & Comm. 14.1 15.7 16.3 15.7 16.1 16.1 16.3 16.3 16.4 Professional & O/S Services 5.1 5.6 5.7 4.9 5.2 5.3 5.2 5.0 5.8 Property 7.9 8.0 7.8 7.6 7.4 7.4 7.5 7.2 7.3 Indirect Taxes 5.9 5.5 5.4 5.4 5.8 5.1 5.8 4.9 5.5 Marketing 1.5 1.2 0.9 1.0 1.4 1.6 0.6 0.7 1.6 Intangible Amortization 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.4 1.4 Other 5.0 5.2 4.8 5.4 4.6 4.9 5.5 5.0 5.5 Total Non-Interest Expense $ 82.0 $ 83.8 $ 84.4 $ 84.8 $ 80.9 $ 83.2 $ 91.3 $ 82.0 $ 88.1 Income Taxes 1.0 0.8 0.8 0.8 0.7 0.1 0.5 0.8 1.0 Total Expense incld. Taxes $ 82.9 $ 84.6 $ 85.2 $ 85.6 $ 81.7 $ 83.3 $ 91.8 $ 82.8 $ 89.1 *Includes non-service employee benefits Appendix Non-Interest Income & Expense Trends
20 (in millions of US Dollars, unless otherwise indicated) 2022 2021 2020 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Salaries & Benefits** $ 41.0 $ 41.1 $ 42.0 $ 41.8 $ 39.0 $ 40.6 $ 42.2 $ 41.4 $ 44.1 Technology & Comm. 14.1 15.7 16.3 15.7 16.1 16.1 16.3 16.3 16.4 Professional & O/S Services 4.9 5.5 5.6 4.9 5.2 5.3 5.2 5.0 5.8 Property 7.9 8.0 7.8 7.6 7.4 7.4 7.5 7.2 7.3 Indirect Taxes 5.9 5.5 5.4 5.4 5.8 5.1 5.8 4.9 5.5 Marketing 1.5 1.2 0.9 1.0 1.4 1.6 0.6 0.7 1.6 Intangible Amortization 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.4 1.4 Other 4.8 5.2 4.7 5.4 4.6 4.9 5.5 5.0 5.5 Total Core Non-Interest Expense $ 81.6 $ 83.7 $ 84.2 $ 83.4 $ 80.9 $ 81.6 $ 82.4 $ 84.6 $ 81.9 $ 87.6 Income Taxes 1.0 0.8 0.8 0.8 0.7 0.1 0.5 0.8 1.0 Total Core Expense incld. Taxes $ 82.6 $ 84.5 $ 84.9 $ 84.2 $ 81.7 $ 82.5 $ 85.1 $ 82.7 $ 88.6 * See the reconciliation of non-GAAP measures on pages 21-22 ** Includes non-service employee benefits Appendix Core Non-Interest Expense* Trends
21 (in millions of US Dollars, unless otherwise indicated) 2022 2021 Q1 Q4 Q3 Q2 Q1 Net income A $ 44.4 $ 41.7 $ 39.8 $ 39.6 $ 41.6 Non-core (gains), losses and expenses Non-core (gains) losses Gain on transfer of Visa Inc. Class B shares — — — (0.9) — Total non-core (gains) losses B $ — $ — $ — $ (0.9) $ — Non-core expenses Early retirement program, voluntary separation, redundancies and other non-core compensation costs — — — 1.4 — Tax compliance review costs 0.1 0.1 0.1 — — Settlement of client-related tax inquiry 0.2 — 0.1 — — Total non-core expenses C $ 0.3 $ 0.1 $ 0.2 $ 1.4 $ — Total non-core (gains), losses and expenses D=B+C 0.3 0.1 0.2 0.5 — Core net income to common shareholders E=A+D $ 44.7 $ 41.7 $ 40.0 $ 40.1 $ 41.6 Average shareholders' equity 912.8 965.2 975.4 950.6 966.7 Average common equity F 912.8 965.2 975.4 950.6 966.7 Less: average goodwill and intangible assets (84.7) (86.6) (89.1) (91.4) (92.4) Average tangible common equity G 828.1 878.5 886.2 859.2 874.2 Return on equity A/F 19.7 % 17.1 % 16.2 % 16.7 % 17.5 % Core return on average tangible common equity E/G 21.9 % 18.8 % 17.9 % 18.7 % 19.3 % Core earnings per common share fully diluted Adjusted weighted average number of diluted common shares (in thousands) H 49.8 49.8 49.9 49.9 49.9 Earnings per common share fully diluted A/H 0.89 0.84 0.80 0.79 0.83 Non-core items per share D/H 0.01 — — 0.01 — Core earnings per common share fully diluted E/H 0.90 0.84 0.80 0.80 0.83 Core return on average tangible assets Total average assets I $ 15,449.0 $ 15,180.6 $ 15,599.0 $ 15,371.6 $ 14,900.2 Less: average goodwill and intangible assets (84.7) (86.6) (89.1) (91.4) (92.4) Average tangible assets J $ 15,364.3 $ 15,094.0 $ 15,509.9 $ 15,280.2 $ 14,807.7 Return on average assets A/I 1.2 % 1.1 % 1.0 % 1.0 % 1.1 % Core return on average tangible assets E/J 1.2 % 1.1 % 1.0 % 1.1 % 1.1 % Appendix Non-GAAP Reconciliation
22 (in millions of US Dollars, unless otherwise indicated) 2022 2021 Q1 Q4 Q3 Q2 Q1 Tangible equity to tangible assets Shareholders' equity K $ 841.8 $ 977.5 $ 973.9 $ 966.6 $ 936.5 Less: goodwill and intangible assets (82.9) (86.1) (87.3) (90.2) (91.5) Tangible common equity L 758.9 891.4 886.6 876.4 844.9 Total assets M 15,266.0 15,335.2 15,332.2 15,664.8 14,804.8 Less: goodwill and intangible assets (82.9) (86.1) (87.3) (90.2) (91.5) Tangible assets N $ 15,183.1 $ 15,249.1 $ 15,244.9 $ 15,574.6 $ 14,713.2 Tangible common equity to tangible assets L/N 5.0 % 5.8 % 5.8 % 5.6 % 5.7 % Tangible book value per share Basic participating shares outstanding (in millions) O 49.6 49.3 49.5 49.6 49.7 Tangible book value per common share L/O 15.30 18.08 17.92 17.67 17.00 Efficiency ratio Non-interest expenses $ 82.0 $ 83.8 $ 84.4 $ 84.8 $ 80.9 Less: Amortization of intangibles (1.5) (1.5) (1.5) (1.5) (1.5) Non-interest expenses before amortization of intangibles P 80.5 82.3 82.9 83.2 79.4 Non-interest income 49.9 52.7 49.0 48.8 47.6 Net interest income before provision for credit losses 75.9 74.5 75.7 74.7 74.9 Net revenue before provision for credit losses and other gains/losses Q $ 125.8 $ 127.2 $ 124.7 $ 123.5 $ 122.5 Efficiency ratio P/Q 64.0 % 64.7 % 66.5 % 67.4 % 64.8 % Core efficiency ratio Non-interest expenses $ 82.0 $ 83.8 $ 84.4 $ 84.8 $ 80.9 Less: non-core expenses (C) (0.3) (0.1) (0.2) (1.4) — Less: amortization of intangibles (1.5) (1.5) (1.5) (1.5) (1.5) Core non-interest expenses before amortization of intangibles R 80.1 82.2 82.7 81.9 79.4 Net revenue before provision for credit losses and other gains/losses Q 125.8 127.2 124.7 123.5 122.5 Core efficiency ratio R/Q 63.7 % 64.7 % 66.3 % 66.3 % 64.8 % Appendix Non-GAAP Reconciliation (cont'd)
23 Our peer group includes the following banks, noted by their ticker symbols: Appendix Peer Group • First Republic Bank (FRC) • SVB Financial Group (SIVB) • East West Bancorp, Inc. (EWBC) • Cullen/Frost Bankers, Inc. (CFR) • Associated Banc-Corp (ASB) • Wintrust Financial Corporation (WTFC) • Commerce Bancshares, Inc. (CBSH) • UMB Financial Corporation (UMBF) • First Hawaiian, Inc. (FHB) • Bank of Hawaii Corporation (BOH) • Trustmark Corporation (TRMK) • International Bancshares Corporation (IBOC) • Community Bank System, Inc. (CBU) • First Financial Bankshares, Inc. (FFIN) • Westamerica Bancorporation (WABC)