Cover Page
Cover Page | 12 Months Ended |
Dec. 31, 2022 shares | |
Entity Listings [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2022 |
Current Fiscal Year End Date | --12-31 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-37877 |
Entity Registrant Name | The Bank of N.T. Butterfield & Son Limited |
Entity Incorporation, State or Country Code | D0 |
Entity Address, Address Line One | 65 Front Street |
Entity Address, City or Town | Hamilton |
Entity Address, Postal Zip Code | HM 12 |
Entity Address, Country | BM |
Title of 12(g) Security | None |
Entity Common Stock, Shares Outstanding (in shares) | 50,277,466 |
Entity Well Known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Amendment Flag | false |
Entity Central Index Key | 0001653242 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
New York Stock Exchange | |
Entity Listings [Line Items] | |
Title of 12(b) Security | Voting ordinary shares of par value BM$ 0.01 each |
Trading Symbol | NTB |
Security Exchange Name | NYSE |
Bermuda Stock Exchange | |
Entity Listings [Line Items] | |
Title of 12(b) Security | Voting ordinary shares of par value BM$ 0.01 each |
Trading Symbol | NTB.BH |
Business Contact | |
Entity Listings [Line Items] | |
Entity Address, Address Line One | 65 Front Street |
Entity Address, City or Town | Hamilton |
Entity Address, Postal Zip Code | HM 12 |
Entity Address, Country | BM |
Contact Personnel Name | Shaun Morris |
City Area Code | 441 |
Local Phone Number | 295-1111 |
Contact Personnel Fax Number | (441) 292-4365 |
Contact Personnel Email Address | Shaun.Morris@Butterfieldgroup.com |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers Ltd. |
Auditor Firm ID | 1403 |
Auditor Location | Hamilton, Bermuda |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and demand deposits with banks - Non-interest bearing | $ 93,032 | $ 115,651 |
Demand deposits with banks - Interest bearing | 258,239 | 437,644 |
Cash equivalents - Interest bearing | 1,749,516 | 1,626,538 |
Cash and cash equivalents | 2,100,787 | 2,179,833 |
Securities purchased under agreements to resell | 59,871 | 96,107 |
Short-term investments | 884,478 | 1,198,918 |
Investment in securities | ||
Equity securities at fair value | 236 | 222 |
Available-for-sale at fair value (amortized cost: $2,209,078 (2021: $3,495,564)) | 1,988,865 | 3,473,730 |
Held-to-maturity (fair value: $3,197,508 (2021: $2,786,112)) | 3,738,080 | 2,763,344 |
Total investment in securities | 5,727,181 | 6,237,296 |
Loans | ||
Loans | 5,121,391 | 5,268,743 |
Allowance for credit losses | (24,961) | (28,073) |
Loans, net of allowance for credit losses | 5,096,430 | 5,240,670 |
Premises, equipment and computer software, net | 146,141 | 138,686 |
Goodwill | 22,892 | 25,356 |
Other intangible assets, net | 51,478 | 60,750 |
Equity method investments | 12,484 | 12,614 |
Other real estate owned, net | 800 | 691 |
Accrued interest and other assets | 203,520 | 144,279 |
Total assets | 14,306,062 | 15,335,200 |
Deposits | ||
Non-interest bearing | 3,039,701 | 2,820,609 |
Interest bearing | 9,951,375 | 11,049,614 |
Total deposits | 12,991,076 | 13,870,223 |
Employee benefit plans | 92,018 | 126,230 |
Accrued interest and other liabilities | 185,864 | 189,378 |
Total other liabilities | 277,882 | 315,608 |
Long-term debt | 172,289 | 171,876 |
Total liabilities | 13,441,247 | 14,357,707 |
Commitments, contingencies and guarantees (Note 12) | ||
Shareholders' equity | ||
Common share capital (BMD 0.01 par; authorized voting ordinary shares 2,000,000,000 and non-voting ordinary shares 6,000,000,000) issued and outstanding: 50,277,466 (2021: 49,911,351) | 503 | 499 |
Additional paid-in capital | 1,032,632 | 1,017,640 |
Retained earnings (Accumulated deficit) | 229,732 | 104,329 |
Less: treasury common shares, at cost: 619,212 (2021: 619,212) | (20,600) | (20,058) |
Accumulated other comprehensive income (loss) | (377,452) | (124,917) |
Total shareholders’ equity | 864,815 | 977,493 |
Total liabilities and shareholders’ equity | $ 14,306,062 | $ 15,335,200 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) $ in Thousands | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares |
Available-for-sale, amortized cost | $ | $ 2,209,078 | $ 3,495,564 |
Held-to-maturity, fair value | $ | $ 3,197,508 | $ 2,786,112 |
Common shares, par value (in BMD per share) | $ / shares | $ 0.01 | $ 0.01 |
Common shares, issued (in shares) | 50,277,466 | 49,911,351 |
Common shares, outstanding (in shares) | 50,277,466 | 49,911,351 |
Treasury common shares, at cost (in shares) | 619,212 | 619,212 |
Voting Common Stock | ||
Common shares, authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Non-voting Common Stock | ||
Common shares, authorized (in shares) | 6,000,000,000 | 6,000,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Non-interest income | |||
Asset management | $ 29,727 | $ 29,853 | $ 29,225 |
Banking | 57,120 | 51,920 | 47,346 |
Foreign exchange revenue | 47,831 | 43,434 | 37,180 |
Trust | 52,312 | 52,873 | 50,653 |
Custody and other administration services | 13,626 | 15,232 | 13,845 |
Other non-interest income | 5,971 | 4,795 | 5,610 |
Total non-interest income | 206,587 | 198,107 | 183,859 |
Interest income | |||
Interest and fees on loans | 249,390 | 221,544 | 230,656 |
Investments (none of the investment securities are intrinsically tax-exempt) | |||
Available-for-sale | 38,939 | 48,422 | 50,621 |
Held-to-maturity | 76,853 | 53,488 | 58,607 |
Deposits with banks and other | 33,201 | 1,444 | 12,125 |
Total interest income | 398,383 | 324,898 | 352,009 |
Interest expense | |||
Deposits | 45,176 | 15,490 | 25,116 |
Long-term debt | 9,601 | 9,601 | 9,294 |
Securities sold under agreement to repurchase | 22 | 0 | 0 |
Total interest expense | 54,799 | 25,091 | 34,410 |
Net interest income before provision for credit losses | 343,584 | 299,807 | 317,599 |
Provision for credit (losses) recoveries | (2,396) | 3,128 | (8,491) |
Net interest income after provision for credit losses | 341,188 | 302,935 | 309,108 |
Net gains (losses) on equity securities | 14 | 85 | 658 |
Net realized gains (losses) on available-for-sale investments | (19) | (239) | 1,220 |
Net gains (losses) on other real estate owned | 448 | (53) | (104) |
Net other gains (losses) | 1,079 | (1,154) | (552) |
Total other gains (losses) | 1,522 | (1,361) | 1,222 |
Total net revenue | 549,297 | 499,681 | 494,189 |
Non-interest expense | |||
Salaries and other employee benefits | 166,189 | 161,317 | 173,662 |
Technology and communications | 56,740 | 63,843 | 65,156 |
Professional and outside services | 19,640 | 21,400 | 21,263 |
Property | 31,442 | 30,862 | 29,392 |
Indirect taxes | 21,982 | 22,091 | 21,323 |
Non-service employee benefits expense | 3,775 | 3,888 | 2,640 |
Marketing | 6,357 | 4,561 | 4,443 |
Amortization of intangible assets | 5,680 | 6,011 | 5,819 |
Other expenses | 19,790 | 19,917 | 20,896 |
Total non-interest expense | 331,595 | 333,890 | 344,594 |
Net income before income taxes | 217,702 | 165,791 | 149,595 |
Income tax benefit (expense) | (3,682) | (3,123) | (2,378) |
Net income | $ 214,020 | $ 162,668 | $ 147,217 |
Earnings per common share | |||
Basic earnings per share (in dollars per share) | $ 4.32 | $ 3.28 | $ 2.91 |
Diluted earnings per share (in dollars per share) | $ 4.29 | $ 3.26 | $ 2.90 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 214,020 | $ 162,668 | $ 147,217 |
Other comprehensive income (loss), net of taxes | |||
Unrealized net gains (losses) on translation of net investment in foreign operations | (4,787) | 152 | (247) |
Net changes on investments transferred to held-to-maturity | (91,303) | 151 | 665 |
Unrealized net gains (losses) on available-for-sale investments | (198,363) | (94,761) | 60,971 |
Employee benefit plans adjustments | 41,918 | 19,221 | (23,972) |
Other comprehensive income (loss), net of taxes | (252,535) | (75,237) | 37,417 |
Total comprehensive income (loss) | $ (38,515) | $ 87,431 | $ 184,634 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Total | Common share capital | Additional paid-in capital | Retained earnings (Accumulated deficit) | Retained earnings (Accumulated deficit) Cumulative Effect, Period of Adoption, Adjustment | Treasury common shares | Accumulated other comprehensive income (loss) |
Balance at beginning of year (in shares) at Dec. 31, 2019 | 53,005,177 | ||||||
Balance at beginning of year at Dec. 31, 2019 | $ 530,000 | $ 1,081,569,000 | $ (9,237,000) | $ (7,841,000) | $ (22,022,000) | $ (87,097,000) | |
Balance at beginning of year (in shares) at Dec. 31, 2019 | 619,212 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Retirement of shares (in shares) | (3,452,000) | (3,452,000) | |||||
Retirement of shares | $ (35,000) | (85,222,000) | (7,289,000) | $ 92,546,000 | |||
Issuance of common shares (in shares) | 457,771 | ||||||
Issuance of common shares | $ 5,000 | 1,734,000 | |||||
Share-based compensation | 14,608,000 | ||||||
Share-based settlements | 637,000 | ||||||
Net Income for the year | $ 147,217,000 | 147,217,000 | |||||
Common share cash dividends declared and paid, 1.76 per share (2021: $1.76 per share) | (88,932,000) | ||||||
Purchase of treasury common shares (in shares) | 3,452,000 | 3,452,000 | |||||
Purchase of treasury common shares | $ (86,639,889) | $ (86,640,000) | |||||
Other comprehensive income (loss), net of taxes | 37,417,000 | 37,417,000 | |||||
Balance at end of year (in shares) at Dec. 31, 2020 | 50,010,948 | ||||||
Balance at end of year at Dec. 31, 2020 | 981,948,000 | $ 500,000 | 1,013,326,000 | 33,918,000 | $ (7,800,000) | $ (16,116,000) | (49,680,000) |
Balance at end of year (in shares) at Dec. 31, 2020 | 619,212 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Retirement of shares (in shares) | (534,828) | (534,828) | |||||
Retirement of shares | $ (5,000) | (10,834,000) | (4,972,000) | $ 15,812,000 | |||
Issuance of common shares (in shares) | 435,231 | ||||||
Issuance of common shares | $ 4,000 | (3,000) | |||||
Share-based compensation | 14,539,000 | ||||||
Share-based settlements | 612,000 | ||||||
Net Income for the year | $ 162,668,000 | 162,668,000 | |||||
Common share cash dividends declared and paid, 1.76 per share (2021: $1.76 per share) | (87,285,000) | ||||||
Purchase of treasury common shares (in shares) | 534,828 | 534,828 | |||||
Purchase of treasury common shares | $ (19,753,336) | $ (19,754,000) | |||||
Other comprehensive income (loss), net of taxes | (75,237,000) | (75,237,000) | |||||
Balance at end of year (in shares) at Dec. 31, 2021 | 49,911,351 | ||||||
Balance at end of year at Dec. 31, 2021 | $ 977,493,000 | $ 499,000 | 1,017,640,000 | 104,329,000 | $ (20,058,000) | (124,917,000) | |
Balance at end of year (in shares) at Dec. 31, 2021 | 619,212 | 619,212 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Retirement of shares (in shares) | (102,000) | (102,000) | (102,000) | ||||
Retirement of shares | $ (1,000) | (2,080,000) | (1,274,000) | $ 3,355,000 | |||
Issuance of common shares (in shares) | 468,115 | ||||||
Issuance of common shares | $ 5,000 | (5,000) | |||||
Share-based compensation | 16,441,000 | ||||||
Share-based settlements | 636,000 | ||||||
Net Income for the year | $ 214,020,000 | 214,020,000 | |||||
Common share cash dividends declared and paid, 1.76 per share (2021: $1.76 per share) | (87,343,000) | ||||||
Purchase of treasury common shares (in shares) | 102,000 | 102,000 | |||||
Purchase of treasury common shares | $ (3,897,268) | $ (3,897,000) | |||||
Other comprehensive income (loss), net of taxes | (252,535,000) | (252,535,000) | |||||
Balance at end of year (in shares) at Dec. 31, 2022 | 50,277,466 | ||||||
Balance at end of year at Dec. 31, 2022 | $ 864,815,000 | $ 503,000 | $ 1,032,632,000 | $ 229,732,000 | $ (20,600,000) | $ (377,452,000) | |
Balance at end of year (in shares) at Dec. 31, 2022 | 619,212 | 619,212 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Common share cash dividends declared (in dollars per share) | $ 1.76 | $ 1.76 |
Common share cash dividends paid (in dollars per share) | 1.76 | 1.76 |
Retained earnings (Accumulated deficit) | ||
Common share cash dividends declared (in dollars per share) | 1.76 | 1.76 |
Common share cash dividends paid (in dollars per share) | $ 1.76 | $ 1.76 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | |||
Net income | $ 214,020 | $ 162,668 | $ 147,217 |
Adjustments to reconcile net income to operating cash flows | |||
Depreciation and amortization | 40,177 | 69,456 | 62,435 |
Provision for credit losses (recoveries) | 2,396 | (3,128) | 8,491 |
Share-based payments and settlements | 17,077 | 15,151 | 15,245 |
Net change in equity securities at fair value | (14) | 7,096 | 102 |
Net realized (gains) losses on available-for-sale investments | 19 | 239 | (1,220) |
Net (gains) losses on other real estate owned | (448) | 53 | 104 |
(Increase) decrease in carrying value of equity method investments | (39) | (123) | (1,298) |
Dividends received from equity method investments | 169 | 442 | 2,845 |
Changes in operating assets and liabilities | |||
(Increase) decrease in accrued interest receivable and other assets | (54,021) | 13,295 | (8,143) |
Increase (decrease) in employee benefit plans, accrued interest payable and other liabilities | (65) | (13,800) | (37,628) |
Cash provided by (used in) operating activities | 219,271 | 251,349 | 188,150 |
Cash flows from investing activities | |||
(Increase) decrease in securities purchased under agreements to resell | 36,236 | 100,932 | (54,756) |
Short-term investments other than restricted cash: proceeds from maturities and sales | 2,745,132 | 2,365,631 | 2,214,870 |
Short-term investments other than restricted cash: purchases | (2,548,734) | (2,748,942) | (1,815,887) |
Available-for-sale investments: proceeds from sale | 7,631 | 189,417 | 352,965 |
Available-for-sale investments: proceeds from maturities and pay downs | 230,718 | 650,347 | 565,028 |
Available-for-sale investments: purchases | (83,900) | (1,771,776) | (1,313,884) |
Held-to-maturity investments: proceeds from maturities and pay downs | 403,424 | 652,359 | 538,345 |
Held-to-maturity investments: purchases | (383,332) | (1,233,329) | (533,379) |
Net (increase) decrease in loans | (90,185) | (99,007) | 25,555 |
Additions to premises, equipment and computer software | (26,876) | (15,724) | (20,566) |
Proceeds from sale of other real estate owned | 1,909 | 4,430 | 0 |
Cash provided by (used in) investing activities | 292,023 | (1,905,662) | (41,709) |
Cash flows from financing activities | |||
Net increase (decrease) in deposits | (415,566) | 642,815 | 692,635 |
Issuance of subordinated capital, net of underwriting fees | 0 | 0 | 97,647 |
Repayment of long-term debt | 0 | 0 | (70,000) |
Common shares repurchased | (3,897) | (19,754) | (86,640) |
Proceeds from stock option exercises | 0 | 0 | 1,739 |
Cash dividends paid on common shares | (87,343) | (87,285) | (88,932) |
Cash provided by (used in) financing activities | (506,806) | 535,776 | 546,449 |
Net effect of exchange rates on cash, cash equivalents and restricted cash | (91,439) | 7,536 | 42,707 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (86,951) | (1,111,001) | 735,597 |
Cash, cash equivalents and restricted cash: beginning of year | 2,203,497 | 3,314,498 | 2,578,901 |
Cash, cash equivalents and restricted cash: end of year | 2,116,546 | 2,203,497 | 3,314,498 |
Components of cash, cash equivalents and restricted cash at end of year | |||
Cash and cash equivalents | 2,100,787 | 2,179,833 | 3,289,592 |
Restricted cash included in short-term investments on the consolidated balance sheets | 15,759 | 23,664 | 24,906 |
Total cash, cash equivalents and restricted cash at end of year | 2,116,546 | 2,203,497 | 3,314,498 |
Supplemental disclosure of cash flow information | |||
Cash interest paid | 48,643 | 24,464 | 39,125 |
Cash income taxes paid | 4,818 | 463 | 5,052 |
Supplemental disclosure of non-cash items | |||
Transfer to (out of) other real estate owned | 1,603 | 704 | 314 |
Transfers of HTM | 998,157 | 0 | 0 |
Initial recognition of right-of-use assets and operating lease liabilities | 3,476 | 1,575 | 323 |
Reduction in net loans due to initial adoption of a current expected credit loss model | $ 0 | $ 0 | $ 7,841 |
Nature of business
Nature of business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of business | Note 1: Nature of business The Bank of N.T. Butterfield & Son Limited (“Butterfield”, the “Bank” or the “Company”) is incorporated under the laws of Bermuda and has a banking license under the Banks and Deposit Companies Act, 1999 (“the Act”). Butterfield is regulated by the Bermuda Monetary Authority (“BMA”), which operates in accordance with Basel principles. Butterfield is a full service bank and wealth manager headquartered in Hamilton, Bermuda. The Bank operates its business through three geographic segments: Bermuda, the Cayman Islands, and the Channel Islands and the United Kingdom ("UK"), where its principal banking operations are located and where it offers specialized financial services. Butterfield offers banking services, comprised of retail and corporate banking, and wealth management, which consists of trust, private banking, and asset management. In the Bermuda and Cayman Islands segments, Butterfield offers both banking and wealth management. In the Channel Islands and the UK segment, the Bank offers wealth management and residential property lending. Butterfield also has operations in the jurisdictions of The Bahamas, Canada, Mauritius, Singapore and Switzerland, which are included in our Other segment. |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant accounting policies | Note 2: Significant accounting policies The Bank's reporting currency is United States ("US") dollars and the functional currency is Bermuda ("BMD") dollars. Assets, liabilities, revenues and expenses denominated in Bermuda dollars are translated to US dollars at par. A. Basis of Presentation and Use of Estimates and Assumptions The accounting and financial reporting policies of the Bank and its subsidiaries conform to generally accepted accounting principles in the United States of America (“GAAP”). The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the year, and actual results could differ from those estimates. Critical accounting estimates are those that require management to make subjective or complex judgments about the effect of matters that are inherently uncertain and may change in subsequent periods. Changes that may be required in the underlying assumptions or estimates in these areas could have a material impact on the future financial condition and results of operations. Management believes that the most critical accounting estimates 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 of financial instruments • Impairment of goodwill • Employee benefit plans • Share-based compensation B. Basis of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (collectively the “Bank”). Intercompany accounts and transactions have been eliminated. The Bank consolidates entities where it holds, directly or indirectly, more than 50% of the voting rights or where it otherwise exercises control. Entities where the Bank holds 20% to 50% of the voting rights and/or has the ability to exercise significant influence are accounted for under the equity method, and the pro rata share of their income (loss) is included in other non-interest income. C. Foreign Currency Translation Assets, liabilities, revenues and expenses denominated in Bermuda dollars are translated to US dollars at par. Assets and liabilities of the parent company arising from other foreign currency transactions are translated into US dollars at the rates of exchange prevailing at the balance sheet date. The resulting gains or losses are included in foreign exchange revenue in the consolidated statements of operations. The assets and liabilities of foreign currency-based subsidiaries are translated at the rate of exchange prevailing on the balance sheet date, while associated revenues and expenses are translated to US dollars at the average rates of exchange prevailing throughout the year. Unrealized translation gains or losses on investments in foreign currency- based subsidiaries are recorded as a separate component of Shareholders' equity within accumulated other comprehensive income (loss) (“AOCIL”). 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 and cash equivalents Cash and cash equivalents includes cash on hand, cash items in the process of collection, amounts due from correspondent banks and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in fair value. Such investments are those with a maturity of three months or less from the date of acquisition and include unrestricted term deposits, certificates of deposit and treasury bills. F. Securities Purchased Under Agreement to Resell Securities purchased under agreement to resell are treated as collateralized lending transactions. The obligation to resell is recorded at the value of the cash paid on purchase adjusted for the amortization of the difference between the purchase price and the agreed resell price. The amortization of this amount is recorded as interest income. G. Short-Term Investments Short-term investments have maturities of one year or less 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 are reported on the consolidated balance sheets at their trade date. 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. Equity securities with readily determinable fair values are carried at fair value in the consolidated balance sheets, with unrealized gains and losses included in the consolidated statements of operations as net gains (losses) on equity securities. Contained within other assets are investments in private equity for which the Bank does not have sufficient rights or ownership interests to follow the equity method of accounting. Unquoted equity investments which are held directly by the Bank and which do not have readily determinable fair values are recorded at cost, less impairment, plus or minus observable price changes from transactions of identical or similar securities. Debt securities are classified as available-for-sale (“AFS”) or held-to-maturity (“HTM”). Investments are classified primarily as AFS when used to manage the Bank’s exposure to interest rate and liquidity movements, as well as to make strategic longer-term investments. AFS investments are carried at fair value in the consolidated balance sheets with unrealized gains and losses reported in AOCIL, net of the allowance for credit losses. Investments that the Bank has the positive intent and ability to hold to maturity are classified as HTM and are carried at amortized cost in the consolidated balance sheets, net of the allowance for credit losses. Unrecognized gains and losses on HTM securities are disclosed in the notes to the consolidated financial statements. The specific identification method is used to determine realized gains and losses on investments, which are included in net gains (losses) on equity securities and net realized gains (losses) on AFS investments respectively, in the consolidated statements of operations. Dividend and interest income, including amortization of premiums and discounts, on securities for which cash flows are not considered uncertain are included in interest income in the consolidated statements of operations. Impairment and credit losses (From January 1, 2020) For debt securities, where management does not expect to recover the entire amortized cost basis of the security and intends to sell such securities or it is more likely than not that the Bank will be required to sell the securities before recovering the amortized cost, the Bank recognizes an impairment loss equal to the full difference between the amortized cost basis and the fair value of those securities through the statement of operations. Following the recognition of impairment, the security's new amortized cost basis is the previous basis less impairment. When management does not intend to sell or it is more likely than not that the Bank will hold such securities until recovering the amortized cost, management determines whether any credit losses exist. See "Note 2.J: Allowance for Credit Losses". Recognition of other-than-temporary impairments (Prior to January 1, 2020) For debt securities, management considers a decline in fair value to be other-than-temporary when it does not expect to recover the entire amortized cost basis of the security. Investments in debt securities in unrealized loss positions are analyzed as part of management’s ongoing assessment of other-than-temporary impairment (“OTTI”). When management intends to sell such securities or it is more likely than not that the Bank will be required to sell the securities before recovering the amortized cost, it recognizes an impairment loss equal to the full difference between the amortized cost basis and the fair value of those securities. When management does not intend to sell or it is more likely than not that the Bank will hold such securities until recovering the amortized cost, management determines whether any credit losses exist to identify any OTTI. Under certain circumstances, management will perform a qualitative determination and consider a variety of factors, including the length of time and extent to which the fair value has been less than cost; adverse conditions specifically related to the industry, geographic area or financial condition of the issuer or underlying collateral of a security; payment structure of the security; changes to the rating of the security by a rating agency; the volatility of the fair value changes; and changes in fair value of the security after the balance sheet date. Alternatively, management estimates cash flows over the remaining lives of the underlying security to assess whether credit losses exist. In situations where there is a credit loss, only the amount of impairment relating to credit losses on AFS and HTM investments is recognized in net income. For AFS investments, the decrease in fair value relating to factors other than credit losses is recognized in AOCIL. Cash flow estimates take into account expectations of relevant market and economic data as of the end of the reporting period, including, for example, underlying loan-level data, and structural features of securitization, such as subordination, excess spread, over collateralization or other forms of credit enhancement. The degree of judgment involved in determining the recoverable value of an investment security is dependent upon the availability of observable market prices or observable market parameters. When observable market prices and parameters do not exist, judgment is necessary to estimate recoverable value which gives rise to added uncertainty in the assessment. The assessment takes into consideration factors such as interest rate changes, movements in credit spreads, default rate assumptions, prepayment assumptions, type and quality of collateral, and market sentiment. Management's fair valuations may include inputs and assumptions that are less observable or require greater estimation, thereby resulting in values which may be greater or lower than the actual value at which the investments may be ultimately sold or the ultimate cash flows that may be recovered. If the assumptions on which management based its fair valuations change, the Bank may experience additional OTTI or realized losses or gains, and the period-to-period changes in value could vary significantly. I. Loans Loans are reported as the principal amount outstanding, net of allowance for credit losses, unearned income, fair value adjustments arising from hedge accounting and net deferred loan fees. Interest income is recognized over the term of the loan using the effective interest method, or on a basis approximating a level rate of return over the term of the loan, except for loans classified as non-accrual. Prepayments are treated as a reduction of principal outstanding which is recognized upon receipt of payment. Prepayment penalties, if applicable under the terms of the specific loan agreement, are recognized also upon receipt of payment. Acquired loans Acquired loans that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit quality since origination, are accounted for as purchased credit-deteriorated ("PCD") loans. PCD loans are recorded at their purchase price with an adjustment to the amortized cost basis for the initial expected credit losses at the time of acquisition, i.e. via a balance sheet gross-up. Changes in estimates of expected credit losses after acquisition are recognized as a movement in provision for credit recoveries (losses) in the statement of operations. Generally, acquired loans that meet the Bank's definition for non-accrual status are considered to be PCD loans. The Bank's purchased credit-impaired (“PCI”) loans outstanding as at January 1, 2020 are now classified as PCD loans and both the amortized cost and an allowance for expected credit losses are disclosed and included with other non-PCD loans' figures. The Bank will continue to recognize the amortization of the noncredit discount, if any, as interest income based on the yield of such assets as at the date of purchase. Participated or Assigned Loans The Bank may act as lead lender on large loans from time to time and may for strategic or commercial reasons, assign portions of such loans to other market participants. Such assignments are without full right of recourse to the Bank as the lead lender and participants/assignees accept all risks and obligations of the ultimate borrower associated with their proportional participation and assignment in such loans. The Bank records the unassigned portion of the principal outstanding in such loans on the consolidated balance sheets and records only its proportional share of interest income on the unassigned portion of the loan in the consolidated statement of operations. Impaired loans A loan is considered to be impaired when, based on current information and events, the Bank determines that it will not be able to collect all amounts due according to the original loan contract, including scheduled interest payments. Impaired loans include all non-accruing loans and all loans modified in a troubled debt restructuring (‘‘TDR’’) even if full collectability is expected following the restructuring. If the Bank determines that the expected realizable value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate. If the Bank determines that part of the allowance is uncollectible, that amount is charged off. Non-accrual Commercial, commercial real estate and consumer loans (excluding credit card consumer loans) are placed on non-accrual status if: • in the opinion of management, full payment of principal or interest is in doubt; or • principal or interest is 90 days past due. Residential mortgages are placed on non-accrual status immediately if: • in the opinion of management, full payment of principal or interest is in doubt; or • when principal or interest is 90 days past due, unless the loan is well secured and any ongoing collection efforts are reasonably expected to result in repayment of all amounts due under the contractual terms of the loan. Cash received on non-accrual loans is applied firstly against the past due principal amount of the loan and secondly to past due interest and fees. Interest income on these loans is recognized only after the entire past due principal balance receivable is recovered and only to the extent that interest payments are received in cash. Loans are returned to accrual status when: • none of the principal or accrued interest is past due (with certain exceptions as noted below) and the Bank expects repayment of the remaining contractual obligation; or • when the loan becomes well secured and in the process of collection. Loans modified in a TDR A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession from originally agreed terms. If a restructuring is considered a TDR, the Bank is required to make certain disclosures to the notes of the consolidated financial statements and evaluate the restructured loan for impairment. The Bank employs various types of concessions when modifying a loan which may include extension of repayment periods, interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. Commercial and industrial loans modified in a TDR may involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor may be requested. Commercial mortgage and construction loans modified in a TDR may involve extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period. Residential mortgage modifications generally involve a short-term forbearance period after which the missed payments are added to the end of the loan term, thereby extending the maturity date. Interest continues to accrue on the missed payments and as a result, the effective yield on the mortgage remains unchanged. As the forbearance period usually involves an insignificant payment delay they typically do not meet the reporting criteria for a TDR. Automobile loans modified in a TDR are primarily composed of loans where the Bank has lowered monthly payments by extending the term. When a loan undergoes a TDR, the determination of the loan's accrual versus non-accrual status following the modification depends on several factors. As with the risk rating process, the accrual status decision for such a loan is a separate and distinct process from the loan's TDR analysis and determination. Management considers the following in determining the accrual status of restructured loans: • If the loan was appropriately on accrual status prior to the restructuring, the borrower has demonstrated performance under the previous terms, and the Bank's credit evaluation shows the borrower's capacity to continue to perform under the restructured terms (both principal and interest payments), it is likely that the appropriate conclusion is for the loan to remain on accrual at the time of the restructuring. This evaluation must include consideration of the borrower's sustained historical repayment performance for a reasonable period prior to the date on which the loan was restructured. A sustained period of repayment performance generally would be a minimum of six months and would involve payments of cash or cash equivalents; or • If the loan was on non-accrual status before the restructuring, but the Bank's credit evaluation shows the borrower's capacity to meet the restructured terms, the loan would likely remain as non-accrual until the borrower has demonstrated a reasonable period of sustained repayment performance. As noted above, this period generally would be at least six months (thereby providing reasonable assurance as to the ultimate collection of principal and interest in full under the modified terms). Sustained performance before the restructuring may be taken into account. Loans that have been modified in a TDR are restored to accrual status only when interest and principal payments are brought current for a continuous period of six months under the modified terms. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on non-accrual status. A loan that is modified in a TDR prior to becoming impaired will be left on accrual status if full collectability in accordance with the restructured terms is expected. The Bank may enter into a TDR for loans that are in default, or at risk of defaulting, even if the loan is not impaired. A loan that had previously been modified in a TDR and is subsequently refinanced under current underwriting standards at a market rate with no concessionary terms is accounted for as a new loan and is no longer reported as a TDR. Delinquencies The entire balance of an account is contractually delinquent if the minimum payment of principal or interest is not received by the specified due date. Delinquency is reported on loans that are more than 30 days past due. Charge-offs The Bank recognizes charge-offs when it determines that loans are uncollectible, and this generally occurs when all commercially reasonable means of recovering the loan balance have been exhausted. Commercial and consumer loans are either fully or partially charged-off down to the fair value of collateral securing the loans when: • management judges the loan to be uncollectible; • repayment is expected to be protracted beyond reasonable time frames; • the asset has been classified as a loss by either the Bank’s internal loan review process or third party appraisers; or • the customer has filed bankruptcy and the loss becomes evident owing to a lack of assets or cash flow. The outstanding balance of commercial and consumer real estate secured loans and residential mortgages that are in excess of the estimated property value, less costs to sell, is charged-off once there is reasonable assurance that such excess outstanding balance is not recoverable. Credit card consumer loans that are contractually 180 days past due and other consumer loans with an outstanding balance under $100,000 that are contractually 180 days past due are generally written off and reported as charge-offs. J. Allowance for Credit Losses Accounting for Financial instruments - Credit losses Starting on January 1, 2020 the Bank adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (Topic 326). Accordingly, from the date of adoption, the Bank uses a current expected credit loss model ("CECL") which is based on expected losses. The model used by the Bank up to December 31, 2019 to estimate credit losses was based on incurred losses. The CECL model is applied by the Bank to the measurement of credit losses on financial instruments at amortized cost, including loan receivables and HTM debt securities. The Bank also applies the CECL model to certain off-balance sheet credit exposures such as undrawn loan commitments, standby letters of credit, financial guarantees, and other similar instruments. In line with Topic 326, the Bank will present credit losses on AFS securities as a valuation allowance rather than as a direct write-down. Changes in expected credit losses are recorded through the respective credit loss allowances on the consolidated balance sheets as well as in the provision for credit losses (recoveries) in the consolidated statements of operations. The Bank's PCI loans outstanding as at January 1, 2020 were classified as PCD loans and both the amortized cost and an allowance for expected credit losses were disclosed and included with other non-PCD loans' figures. The Bank will continue to recognize the amortization of the noncredit discount, if any, as interest income based on the yield of such assets. The Bank has not restated comparative information previously accounted for under the incurred loss and the PCI models. The total adjustment resulting from the adoption of this methodology on the opening balance of the Bank’s accumulated deficit as at January 1, 2020 was a negative adjustment of $7.8 million relating to the Bank's loan portfolio. Under the CECL model, the Bank collects and maintains attributes as they relate to its financial instruments that are within the scope of CECL including fair value of collateral, expected performance over the lifetime of the instruments and reasonable and supportable assumptions about future economic conditions. The Bank's measurement of expected losses takes into account historical loss information and is primarily based on the product of: the respective instrument’s probability of default (“PD”), loss given default (“LGD”) and exposure at default (“EAD”). For AFS securities, any allowance for credit losses is based on an impairment assessment. The Bank made the accounting policy election to write off accrued interest receivable on loans that are placed on non-accrual status by reversing the then accrued interest balance against interest income revenue. The Bank maintains an allowance for credit losses, which in management’s opinion is adequate to absorb all estimated credit-related losses that are expected in its lending and off-balance sheet credit-related arrangements at the balance sheet date. Management measures expected credit losses on HTM and AFS debt securities on a collective basis by major security type when similar risk characteristics exist, or failing that, on an individual basis. For AFS debt securities in an unrealized loss position, the Bank first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Bank evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Losses are charged against the allowance when management believes the uncollectibility of an AFS debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met. The allowance for credit losses on loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries typically do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts as well as the Bank's internal risk rating framework. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in the current-loan specific risk characteristics such as differences in underwriting practices, vintage, portfolio mix, delinquency level, term as well as changes in environmental conditions, such as changes in macroeconomic factors and collateral values. The allowance for credit losses is measured on a collective pool basis when similar risk characteristics exist. In each of its jurisdictions, the Bank has identified the following portfolio segments: Residential mortgages, Consumer loans (including overdrafts), Commercial loans, Commercial overdrafts, Commercial real estate loans and Credit cards. For loans and overdrafts, management uses a PD and LGD model to estimate the allowance for credit losses. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. For Credit cards, management uses a loss rate to estimate expected credit losses. Expected credit losses are estimated over the contractual term of the loans. The contractual term excludes potential extensions, renewals and modifications unless management has a reasonable expectation at the reporting date that the extension or renewal options included in the original contract will occur or that a troubled debt restructuring will be executed. Credit card receivables do not have stated maturities, therefore establishing a contractual term is performed by using an analytical approximation of behavior. K. Business Combinations, Goodwill and Intangible Assets All business combinations are accounted for using the acquisition method. Identifiable intangible assets (mostly customer relationships) are recognized separately from goodwill and are initially valued at fair value using discounted cash flow calculations and other recognized valuation techniques. Goodwill represents the excess of the fair value of the consideration paid for the acquisition of a business over the fair value of the net assets acquired. A contingent purchase consideration is measured at its fair value and recorded on the purchase date. Any subsequent changes in the fair value of a contingent consideration liability will be recorded through the consolidated statements of operations. Goodwill is tested annually for impairment at the reporting unit level, or more frequently if events or circumstances indicate there may be impairment. If the carrying amount of a reporting unit, including the allocated goodwill, exceeds its fair value, goodwill impairment is measured as the excess of the carrying amount of the reporting unit's allocated goodwill over the implied fair value of the goodwill. Other acquired intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives, not exceeding 15 years. Intangible assets' estimated lives are re-evaluated annually and an impairment test is carried out if certain indicators of impairment exist. 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 3 to 10 years for other equipment. For leasehold improvements the Bank uses the straight-line method over the lesser of the remaining term of the leased facility or the estimated economic life of the improvement. The Bank capitalizes certain costs, including interest costs incurred during the development phase, associated with the acquisition or development of internal use software. Once the software is ready for its intended use, these costs are amortized on a straight-line basis over the software's expected useful life, which is between 5 and 10 years. The Bank capitalizes certain implementation costs for cloud computing arrangements, which includes infrastructure as a service, and these costs are then amortized on a straight-line basis over the term of the arrangement. Management reviews the recoverability of the carrying amount of premises, equipment and computer software when indicators of impairment exist and an impairment charge is recorded when the carrying amount of the reviewed asset is deemed not recoverable by future expected cash flows to be derived from the use and disposition of the asset. If there is a disposition of premises, equipment and computer software, a gain is recorded if the difference of the proceeds on disposition is in excess of the asset's carrying value. Otherwise, a loss is recorded. If there is an abandonment out of premises, equipment and computer software, the full carrying value of the asset is recognized as a loss. M. Other Real Estate Owned Other real estate owned (“OREO”) comprises real estate property held for sale and commercial and residential real e |
Cash and cash equivalents
Cash and cash equivalents | 12 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Cash and cash equivalents | Note 3: Cash and cash equivalents December 31, 2022 December 31, 2021 Non-interest bearing Cash and demand deposits with banks 93,032 115,651 Interest bearing¹ Demand deposits with banks 258,239 437,644 Cash equivalents 1,749,516 1,626,538 Sub-total - Interest bearing 2,007,755 2,064,182 Total cash and cash equivalents 2,100,787 2,179,833 ¹ Interest bearing cash and cash equivalents includes certain demand deposits with banks as at December 31, 2022 in the amount of $157.2 million (December 31, 2021: $280.5 million) that are earning interest at a negligible rate. |
Short-term investments
Short-term investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term investments | Note 4: Short-term investments December 31, 2022 December 31, 2021 Unrestricted Maturing within three months 390,540 818,340 Maturing between three to six months 421,734 252,340 Maturing between six to twelve months 56,445 104,574 Total unrestricted short-term investments 868,719 1,175,254 Affected by drawing restrictions related to minimum reserve and derivative margin requirements Interest earning demand and term deposits 15,759 23,664 Total restricted short-term investments 15,759 23,664 Total short-term investments 884,478 1,198,918 |
Investment in securities
Investment in securities | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment in securities | Note 5: Investment in securities Amortized Cost, Carrying Amount and Fair Value On the consolidated balance sheets, equity securities and AFS investments are carried at fair value and HTM investments are carried at amortized cost. December 31, 2022 December 31, 2021 Amortized Gross Gross Fair value Amortized Gross Gross Fair value Equity securities Mutual funds 724 — (488) 236 724 — (502) 222 Total equity securities 724 — (488) 236 724 — (502) 222 Available-for-sale US government and federal agencies 1,919,285 14 (206,523) 1,712,776 3,163,964 30,945 (51,285) 3,143,624 Non-US governments debt securities 262,892 — (11,429) 251,463 291,119 — (1,526) 289,593 Asset-backed securities - Student loans 5,640 — (14) 5,626 13,290 — (116) 13,174 Residential mortgage-backed securities 21,261 — (2,261) 19,000 27,191 218 (70) 27,339 Total available-for-sale 2,209,078 14 (220,227) 1,988,865 3,495,564 31,163 (52,997) 3,473,730 Held-to-maturity¹ US government and federal agencies 3,738,080 — (540,572) 3,197,508 2,763,344 57,497 (34,729) 2,786,112 Total held-to-maturity 3,738,080 — (540,572) 3,197,508 2,763,344 57,497 (34,729) 2,786,112 ¹ For the years ended December 31, 2022, 2021 and 2020, impairments recognized in other comprehensive income for HTM investments were nil. Investments with Unrealized Loss Positions The Bank does not believe that the AFS debt securities that were in an unrealized loss position as of December 31, 2022, comprising 163 securities representing 99.8% of the AFS portfolios' carrying value (December 31, 2021: 67 and 73.6%), represent credit losses. Total gross unrealized AFS losses were 11.1% of the fair value of the affected securities (December 31, 2021: 2.1%). The Bank’s HTM debt securities are comprised of US government and federal agencies securities and have a zero credit loss assumption under the CECL model. HTM debt securities that were in an unrealized loss position as of December 31, 2022, were comprised of 220 securities representing 100.0% of the HTM portfolios’ carrying value (December 31, 2021: 57 and 59.1%). Total gross unrealized HTM losses were 16.9% of the fair value of affected securities (December 31, 2021: 2.2%). Management does not intend to sell and it is likely that management will not be required to sell the securities prior to the anticipated recovery of the cost of these securities. Unrealized losses were attributable primarily to changes in market interest rates, relative to when the investment securities were purchased, and not due to a decrease in the credit quality of the investment securities. The issuers continue to make timely principal and interest payments on the securities. The following describes the processes for identifying credit impairment in security types with the most significant unrealized losses as shown in the preceding tables. Management believes that all the US government and federal agencies securities do not have any credit losses, given the explicit and implicit guarantees provided by the US federal government. Management believes that all the Non-US governments debt securities do not have any credit losses, given the explicit guarantee provided by the issuing government. Investments in Asset-backed securities - Student loans are composed primarily of securities collateralized by Federal Family Education Loan Program loans (“FFELP loans”). FFELP loans benefit from a US federal government guarantee of at least 97% of defaulted principal and accrued interest, with additional credit support provided in the form of over-collateralization, subordination and excess spread, which collectively total in excess of 100%. Accordingly, the vast majority of FFELP loan-backed securities are not exposed to traditional consumer credit risk. Investments in Residential mortgage-backed securities relate to 13 securities (December 31, 2021: 4) which are rated AAA and possess similar significant credit enhancement as described above. No credit losses were recognized on these securities as the weighted average credit support and the weighted average loan-to-value ratios range from 16% - 49% and 47% - 56%, respectively. Current credit support is significantly greater than any delinquencies experienced on the underlying mortgages. In the following tables, debt securities with unrealized losses that are not deemed to be credit impaired and for which an allowance for credit losses has not been recorded are categorized as being in a loss position for "less than 12 months" or "12 months or more" based on the point in time that the fair value most recently declined below the amortized cost basis. Less than 12 months 12 months or more December 31, 2022 Fair Gross Fair Gross Total Total gross Available-for-sale securities with unrealized losses US government and federal agencies 713,462 (68,016) 995,154 (138,507) 1,708,616 (206,523) Non-US governments debt securities — — 251,463 (11,429) 251,463 (11,429) Asset-backed securities - Student loans — — 5,626 (14) 5,626 (14) Residential mortgage-backed securities 14,474 (1,618) 4,526 (643) 19,000 (2,261) Total available-for-sale securities with unrealized losses 727,936 (69,634) 1,256,769 (150,593) 1,984,705 (220,227) Held-to-maturity securities with unrealized losses US government and federal agencies 1,462,005 (142,228) 1,735,504 (398,344) 3,197,509 (540,572) Less than 12 months 12 months or more December 31, 2021 Fair Gross Fair Gross Total Total gross Available-for-sale securities with unrealized losses US government and federal agencies 2,144,105 (47,214) 102,428 (4,071) 2,246,533 (51,285) Non-US governments debt securities 267,201 (1,125) 22,392 (401) 289,593 (1,526) Asset-backed securities - Student loans — — 13,174 (116) 13,174 (116) Residential mortgage-backed securities 8,051 (70) — — 8,051 (70) Total available-for-sale securities with unrealized losses 2,419,357 (48,409) 137,994 (4,588) 2,557,351 (52,997) Held-to-maturity securities with unrealized losses US government and federal agencies 1,568,315 (33,554) 29,713 (1,175) 1,598,028 (34,729) Investment Maturities The following table presents the remaining term to contractual maturity of the Bank’s securities. The actual maturities may differ as certain securities offer prepayment options to the borrowers. Remaining term to maturity December 31, 2022 Within 3 to 12 1 to 5 5 to 10 Over No specific or single Carrying Available-for-sale US government and federal agencies — 145,471 532,645 160,823 — 873,837 1,712,776 Non-US governments debt securities — 22,392 229,071 — — — 251,463 Asset-backed securities - Student loans — — — — — 5,626 5,626 Residential mortgage-backed securities — — — — — 19,000 19,000 Total available-for-sale — 167,863 761,716 160,823 — 898,463 1,988,865 Held-to-maturity US government and federal agencies — — — — — 3,738,080 3,738,080 Pledged Investments The Bank pledges certain US government and federal agencies investment securities to further secure the Bank's issued customer deposit products. The secured party does not have the right to sell or repledge the collateral. December 31, 2022 December 31, 2021 Pledged Investments Amortized Fair Amortized Fair Available-for-sale — — 807 842 Held-to-maturity 32,938 24,991 33,102 31,958 Sale Proceeds and Realized Gains and Losses of AFS Securities Year ended December 31, 2022 December 31, 2021 December 31, 2020 Sale proceeds Gross realized gains Gross realized Transfers of HTM 1 Sale Gross realized Gross realized Transfers of HTM Sale Gross realized Gross realized Transfers of HTM US government and federal agencies — — — 998,157 189,417 1,563 (1,802) — 349,699 1,171 (55) — Non-US governments debt securities — — — — — — — — 3,266 104 — — Asset-backed securities - Student loans 7,631 — (19) — — — — — — — — — Total 7,631 — (19) 998,157 189,417 1,563 (1,802) — 352,965 1,275 (55) — 1 During the year ended December 31, 2022, certain investments were transferred out of the AFS categorization and into HTM. The transfers were recorded at the fair value of the securities on the date of transfer. The related net unrealized losses of $99.1 million that were recorded in AOCIL will be accreted into net income over the remaining life of the transferred investments using the effective interest rate method. 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, 2022 | |
Receivables [Abstract] | |
Loans | Note 6: Loans The principal means of securing residential mortgages, personal, credit card and business loans are entitlements over assets and guarantees. Mortgage loans are generally repayable over periods of up to thirty years and personal and business loans are generally repayable over terms not exceeding five years. Government loans are repayable over a variety of terms which are individually negotiated. Amounts owing on credit cards are revolving and typically a minimum amount is due within 30 days from billing. The effective yield on total loans as at December 31, 2022 is 5.91% (December 31, 2021: 4.00%). The interest receivable on total loans as at December 31, 2022 is $16.6 million (December 31, 2021: $7.6 million). The interest receivable is included in Accrued interest and other assets on the consolidated balance sheets and is excluded from all loan amounts disclosed in this note. Loans' Credit Quality The four credit quality classifications set out in the following tables are defined below and describe the credit quality of the Bank's lending portfolio. These classifications each encompass a range of more granular internal credit rating grades. Loans' internal credit ratings are assigned by the Bank's customer relationship managers as well as members of the Bank's jurisdictional and Group Credit Committees. The borrowers' financial condition is documented at loan origination and maintained periodically thereafter at a frequency which can be up to monthly for certain loans. The loans' performing status, as well as current economic trends, are continuously monitored. The Bank's jurisdictional and Group Credit Committees meet on a monthly basis. The Bank also has a group Provisions and Impairments Committee which is responsible for approving significant provisions and other impairment charges. A pass loan shall mean a loan that is expected to be repaid as agreed. A loan is classified as pass where the Bank is not expected to face repayment difficulties because the present and projected cash flows are sufficient to repay the debt and the repayment schedule as established by the agreement is being followed. Loans in this category are reviewed by the Bank’s management on at least an annual basis. A special mention loan shall mean a loan under close monitoring by the Bank’s management on at least a quarterly basis. Loans in this category are currently still performing, but are potentially weak and present an undue credit risk exposure, but not to the point of justifying a classification of substandard. A substandard loan shall mean a loan whose evident unreliability makes repayment doubtful and there is a threat of loss to the Bank unless the unreliability is averted. Loans in this category are under close monitoring by the Bank’s management on at least a quarterly basis. A non-accrual loan shall mean either management is of the opinion full payment of principal or interest is in doubt or when principal or interest is 90 days past due unless it is a residential mortgage loan which is well secured and collection efforts are reasonably expected to result in amounts due. Loans in this category are under close monitoring by the Bank’s management on at least a quarterly basis. The amortized cost of loans by credit quality classifications and allowance for expected credit losses by class of loans is as follows: December 31, 2022 Pass Special Substandard Non-accrual Total amortized cost Allowance for expected credit losses Total net loans Commercial loans Government 281,518 — — — 281,518 (1,368) 280,150 Commercial and industrial 298,137 — 796 18,461 317,394 (10,359) 307,035 Commercial overdrafts 123,874 — 632 45 124,551 (416) 124,135 Total commercial loans 703,529 — 1,428 18,506 723,463 (12,143) 711,320 Commercial real estate loans Commercial mortgage 613,090 2,082 1,503 3,182 619,857 (884) 618,973 Construction 7,474 — — — 7,474 — 7,474 Total commercial real estate loans 620,564 2,082 1,503 3,182 627,331 (884) 626,447 Consumer loans Automobile financing 20,673 — — 161 20,834 (93) 20,741 Credit card 77,419 — 295 — 77,714 (1,043) 76,671 Overdrafts 44,414 — — 6 44,420 (355) 44,065 Other consumer 1 56,699 — — 801 57,500 (1,205) 56,295 Total consumer loans 199,205 — 295 968 200,468 (2,696) 197,772 Residential mortgage loans 3,419,186 8,132 102,413 40,398 3,570,129 (9,238) 3,560,891 Total 4,942,484 10,214 105,639 63,054 5,121,391 (24,961) 5,096,430 1 Other consumer loans’ amortized cost includes $9 million of cash and portfolio secured lending and $37 million of lending secured by buildings in construction or other collateral. December 31, 2021 Pass Special Substandard Non-accrual Total Allowance Total net loans Commercial loans Government 259,572 — — — 259,572 (969) 258,603 Commercial and industrial 353,337 — 1,079 18,549 372,965 (10,115) 362,850 Commercial overdrafts 104,814 145 446 2 105,407 (42) 105,365 Total commercial loans 717,723 145 1,525 18,551 737,944 (11,126) 726,818 Commercial real estate loans Commercial mortgage 673,167 4,034 1,578 4,740 683,519 (1,168) 682,351 Construction 9,645 — — — 9,645 — 9,645 Total commercial real estate loans 682,812 4,034 1,578 4,740 693,164 (1,168) 691,996 Consumer loans Automobile financing 21,412 — — 117 21,529 (88) 21,441 Credit card 72,569 — 284 — 72,853 (1,420) 71,433 Overdrafts 42,293 — — 4 42,297 (236) 42,061 Other consumer 1 76,963 — 72 1,038 78,073 (1,276) 76,797 Total consumer loans 213,237 — 356 1,159 214,752 (3,020) 211,732 Residential mortgage loans 3,464,857 14,070 107,361 36,595 3,622,883 (12,759) 3,610,124 Total 5,078,629 18,249 110,820 61,045 5,268,743 (28,073) 5,240,670 1 Other consumer loans’ amortized cost includes $13 million of cash and portfolio secured lending and $57 million of lending secured by buildings in construction or other collateral. Based on the most recent analysis performed, the amortized cost of loans by year of origination and credit quality indicator is as follows: December 31, 2022 Pass Special Substandard Non-accrual Total amortized cost Loans by origination year 2022 971,776 — — 4 971,780 2021 646,436 — — 20 646,456 2020 485,944 142 508 23 486,617 2019 680,939 — 277 3,118 684,334 2018 393,623 — 12,133 1,355 407,111 Prior 1,499,410 9,767 91,795 58,483 1,659,455 Overdrafts and credit cards 264,356 305 926 51 265,638 Total amortized cost 4,942,484 10,214 105,639 63,054 5,121,391 December 31, 2021 Pass Special Substandard Non-accrual Total amortized cost Loans by origination year 2021 911,403 — 232 13 911,648 2020 605,139 — — 3 605,142 2019 917,700 — 290 181 918,171 2018 513,293 6,060 12,548 1,154 533,055 2017 493,091 — 3,400 12,215 508,706 Prior 1,393,929 11,131 93,620 47,474 1,546,154 Overdrafts and credit cards 244,074 1,058 730 5 245,867 Total amortized cost 5,078,629 18,249 110,820 61,045 5,268,743 Age Analysis of Past Due Loans (Including Non-Accrual Loans) The following tables summarize the past due status of the loans. The aging of past due amounts are determined based on the contractual delinquency status of payments under the loan and this aging may be affected by the timing of the last business day at period end. Loans less than 30 days past due are included in current loans. December 31, 2022 30 - 59 60 - 89 More than 90 days Total past Total Total Commercial loans Government — — — — 281,518 281,518 Commercial and industrial 5 — 18,461 18,466 298,928 317,394 Commercial overdrafts — — 45 45 124,506 124,551 Total commercial loans 5 — 18,506 18,511 704,952 723,463 Commercial real estate loans Commercial mortgage 363 — 3,181 3,544 616,313 619,857 Construction — — — — 7,474 7,474 Total commercial real estate loans 363 — 3,181 3,544 623,787 627,331 Consumer loans Automobile financing 104 5 160 269 20,565 20,834 Credit card 423 231 295 949 76,765 77,714 Overdrafts — — 6 6 44,414 44,420 Other consumer 179 16 797 992 56,508 57,500 Total consumer loans 706 252 1,258 2,216 198,252 200,468 Residential mortgage loans 30,813 4,081 49,486 84,380 3,485,749 3,570,129 Total amortized cost 31,887 4,333 72,431 108,651 5,012,740 5,121,391 December 31, 2021 30 - 59 60 - 89 More than 90 days Total past Total Total Commercial loans Government — — — — 259,572 259,572 Commercial and industrial 53 — 18,549 18,602 354,363 372,965 Commercial overdrafts — — 1 1 105,406 105,407 Total commercial loans 53 — 18,550 18,603 719,341 737,944 Commercial real estate loans Commercial mortgage — — 4,739 4,739 678,780 683,519 Construction — — — — 9,645 9,645 Total commercial real estate loans — — 4,739 4,739 688,425 693,164 Consumer loans Automobile financing 56 34 118 208 21,321 21,529 Credit card 471 681 285 1,437 71,416 72,853 Overdrafts — — 5 5 42,292 42,297 Other consumer 67 15 1,038 1,120 76,953 78,073 Total consumer loans 594 730 1,446 2,770 211,982 214,752 Residential mortgage loans 12,602 1,501 44,763 58,866 3,564,017 3,622,883 Total amortized cost 13,249 2,231 69,498 84,978 5,183,765 5,268,743 Changes in Allowances For Credit Losses The decrease in the allowance for expected credit losses as at December 31, 2022 was primarily attributable to a decrease in provisioned non-accrual loans, net paydowns and foreign exchange movements in the portfolio. This was partially offset by weaker forward-looking economic forecasts and the extension of a large, long-term government facility in the Cayman Islands. The provision increase during the year ended December 31, 2022 was driven by the aforementioned weaker forward-looking economic forecasts and the extension of a large, long-term government facility in the Cayman Islands. As per the Bank’s accounting policy, as disclosed in Note 2, the Bank continuously collects and maintains attributes related to financial instruments within the scope of CECL, including current conditions, and reasonable and supportable assumptions about future economic conditions. Year ended December 31, 2022 Commercial Commercial Consumer Residential Total Balance at the beginning of year 11,126 1,168 3,020 12,759 28,073 Provision increase (decrease) 2,378 (285) 1,252 (675) 2,670 Recoveries of previous charge-offs 1 — 1,150 262 1,413 Charge-offs (1,314) — (2,721) (2,912) (6,947) Other (48) 1 (5) (196) (248) Allowances for expected credit losses at end of year 12,143 884 2,696 9,238 24,961 Year ended December 31, 2021 Commercial Commercial Consumer Residential Total Balance at the beginning of year 11,609 2,104 4,476 15,909 34,098 Provision increase (decrease) (431) (936) (1,552) (581) (3,500) Recoveries of previous charge-offs 65 — 1,344 262 1,671 Charge-offs (112) — (1,248) (2,806) (4,166) Other (5) — — (25) (30) Allowances for expected credit losses at end of year 11,126 1,168 3,020 12,759 28,073 Collateral-dependent loans Management identified that the repayment of certain commercial and consumer mortgage loans is expected to be provided substantially through the operation or the sale of the collateral pledged to the Bank ("collateral-dependent loans"). The Bank believes that for the vast majority of loans identified as collateral-dependent, the sale of the collateral will be sufficient to fully reimburse the loan's carrying amount. Non-Performing Loans During the year ended December 31, 2022, no interest was recognized on non-accrual loans. Non-performing loans at December 31, 2022 include PCD loans, which have all been on non-accrual status since their acquisition. No credit deteriorated loans were purchased during the period. December 31, 2022 December 31, 2021 Non-accrual loans with an allowance Non-accrual loans without an allowance Past due more than 90 days and accruing Total non- Non-accrual loans with an allowance Non-accrual loans without an allowance Past due more than 90 days and accruing Total non- Commercial loans Commercial and industrial 18,159 302 — 18,461 18,530 19 — 18,549 Commercial overdrafts — 45 — 45 — 2 — 2 Total commercial loans 18,159 347 — 18,506 18,530 21 — 18,551 Commercial real estate loans Commercial mortgage 1,494 1,688 — 3,182 885 3,855 — 4,740 Total commercial real estate loans 1,494 1,688 — 3,182 885 3,855 — 4,740 Consumer loans Automobile financing 141 20 — 161 117 — — 117 Credit card — — 295 295 — — 284 284 Overdrafts — 6 — 6 — 4 — 4 Other consumer 649 152 — 801 850 188 — 1,038 Total consumer loans 790 178 295 1,263 967 192 284 1,443 Residential mortgage loans 20,621 19,777 10,964 51,362 29,549 7,046 12,969 49,564 Total non-performing loans 41,064 21,990 11,259 74,313 49,931 11,114 13,253 74,298 Loans modified in a TDR As at December 31, 2022, the Bank had nil loans that were modified in a TDR during the preceding 12 months that subsequently defaulted (December 31, 2021: nil; December 31, 2020: nil). TDRs entered into during the period Year ended December 31, 2022 Number of contracts Pre-modification recorded loans Modification: interest capitalization Post- Residential mortgage loans 6 2,836 425 3,261 Year ended December 31, 2021 Number of Pre- Modification: interest capitalization Post- Residential mortgage loans 1 284 2 286 TDRs Outstanding December 31, 2022 December 31, 2021 Accrual Non-accrual Accrual Non-accrual Commercial loans 796 — 847 — Commercial real estate loans 1,503 2,357 1,578 2,445 Residential mortgage loans 59,175 10,342 60,453 12,653 Total TDRs outstanding 61,474 12,699 62,878 15,098 |
Credit risk concentrations
Credit risk concentrations | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Credit risk concentrations | Note 7: Credit risk concentrations Concentrations of credit risk in the lending and off-balance sheet credit-related arrangements portfolios arise when a number of customers are engaged in similar business activities, are in the same geographic region, or when they have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. The Bank regularly monitors various segments of its credit risk portfolio to assess potential concentrations of risks and to obtain collateral when deemed necessary. In the Bank's commercial portfolio, risk concentrations are evaluated primarily by industry and by geographic region of loan origination. In the consumer portfolio, concentrations are evaluated primarily by products. Credit exposures include loans, guarantees and acceptances, letters of credit and commitments for undrawn lines of credit. Unconditionally cancellable credit cards and overdraft lines of credit are excluded from the tables below. The following table summarizes the credit exposure of the Bank by geographic region. The exposure amounts disclosed below do not include accrued interest and are gross of allowance s for credit losses and gross of collateral hel d. December 31, 2022 December 31, 2021 Geographic region Cash and cash equivalents, resell agreements and Loans Off-balance Total credit Cash and cash equivalents, resell agreements and Loans Off-balance Total credit Belgium 2,641 — — 2,641 8,675 — — 8,675 Bermuda 40,671 1,920,467 243,904 2,205,042 46,683 2,080,385 297,731 2,424,799 Canada 1,216,876 — — 1,216,876 1,193,387 — — 1,193,387 Cayman 36,609 1,236,373 233,599 1,506,581 39,018 1,060,328 379,518 1,478,864 Germany 20,422 — — 20,422 85,886 — — 85,886 Guernsey 1 674,562 199,714 874,277 1 735,786 169,904 905,691 Ireland 26,597 — — 26,597 37,236 — — 37,236 Japan 13,071 — — 13,071 4,873 — — 4,873 Jersey — 150,769 35,042 185,811 — 78,048 34,298 112,346 Norway 99,777 — — 99,777 57,132 — — 57,132 Switzerland 2,748 — — 2,748 2,441 — — 2,441 The Bahamas 1,521 7,510 — 9,031 1,511 9,361 — 10,872 United Kingdom 715,750 1,131,710 108,406 1,955,866 990,624 1,304,835 117,200 2,412,659 United States 865,671 — — 865,671 1,003,365 — — 1,003,365 Other 2,781 — — 2,781 4,026 — — 4,026 Total gross exposure 3,045,136 5,121,391 820,665 8,987,192 3,474,858 5,268,743 998,651 9,742,252 |
Premises, equipment and compute
Premises, equipment and computer software | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Premises, equipment and computer software | Note 8: Premises, equipment and computer software December 31, 2022 December 31, 2021 Category Cost Accumulated Net carrying Cost Accumulated Net carrying Land 8,333 — 8,333 8,333 — 8,333 Buildings 181,929 (81,184) 100,745 169,806 (77,229) 92,577 Equipment 25,527 (17,764) 7,763 26,129 (17,509) 8,620 Computer hardware and software in use 197,846 (182,353) 15,493 197,941 (175,612) 22,329 Computer software in development 13,807 — 13,807 6,827 — 6,827 Total 427,442 (281,301) 146,141 409,036 (270,350) 138,686 Year ended Depreciation charged to operating expenses December 31, 2022 December 31, 2021 December 31, 2020 Buildings (included in Property expense) 5,963 6,005 5,511 Equipment (included in Property expense) 2,390 2,323 1,929 Computer hardware and software (included in Technology and communication expense) 10,124 18,902 21,773 Total depreciation charged to operating expenses 18,477 27,230 29,213 |
Goodwill and other intangible a
Goodwill and other intangible assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets | Note 9: Goodwill and other intangible assets Goodwill Segment Cayman Channel Islands and the UK Other Total Balance at December 31, 2019 551 22,245 2,042 24,838 Foreign exchange translation adjustment — 719 70 789 Balance at December 31, 2020 551 22,964 2,112 25,627 Foreign exchange translation adjustment — (226) (45) (271) Balance at December 31, 2021 551 22,738 2,067 25,356 Foreign exchange translation adjustment — (2,466) 2 (2,464) Balance at December 31, 2022 551 20,272 2,069 22,892 Customer Relationship Intangible Assets December 31, 2022 December 31, 2021 Segment Cost Accumulated Net carrying Cost Accumulated Net carrying Bermuda 29,785 (17,868) 11,917 29,785 (16,438) 13,347 Cayman 16,517 (7,764) 8,753 16,517 (6,663) 9,854 Channel Islands and the UK 89,396 (62,380) 27,016 89,396 (56,030) 33,366 Other 5,563 (1,771) 3,792 5,563 (1,380) 4,183 Total 141,261 (89,783) 51,478 141,261 (80,511) 60,750 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 years ended December 31, 2022 and 2021, no new customer intangible assets were acquired. During the year ended December 31, 2022, no amounts were written off (December 31, 2021: $1.9 million). The amortization expense amounted to $5.7 million (December 31, 2021: $6.0 million, December 31, 2020: $5.8 million) and the foreign exchange translation adjustment increased the net carrying amount by $3.6 million (December 31, 2021: increased by $0.4 million, December 31, 2020: decreased by $1.3 million). The estimated aggregate amortization expense for each of the succeeding five years is $5.7 million. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2022 | |
Deposits [Abstract] | |
Deposits | Note 10: Deposits By Maturity Demand Total Term Total December 31, 2022 Non-interest Interest Within 3 3 to 6 6 to 12 After 12 months Total Demand or less than $100k¹ 3,039,701 6,844,127 9,883,828 32,764 9,814 12,848 11,391 66,817 9,950,645 Term - $100k or more N/A N/A — 2,093,464 447,471 423,737 75,759 3,040,431 3,040,431 Total deposits 3,039,701 6,844,127 9,883,828 2,126,228 457,285 436,585 87,150 3,107,248 12,991,076 Demand Total Term Total December 31, 2021 Non-interest Interest Within 3 3 to 6 6 to 12 After 12 months Total Demand or less than $100k¹ 2,820,609 8,104,668 10,925,277 30,181 8,949 13,094 12,426 64,650 10,989,927 Term - $100k or more N/A N/A — 1,627,330 578,096 589,161 85,709 2,880,296 2,880,296 Total deposits 2,820,609 8,104,668 10,925,277 1,657,511 587,045 602,255 98,135 2,944,946 13,870,223 ¹ The weighted-average interest rate on interest-bearing demand deposits as at December 31, 2022 is 0.47% (December 31, 2021: -0.03%). By Type and Segment December 31, 2022 December 31, 2021 Payable Payable on a Total Payable Payable on a Total Bermuda 3,813,274 674,895 4,488,169 3,820,647 690,102 4,510,749 Cayman 3,641,646 651,168 4,292,814 4,087,131 524,918 4,612,049 Channel Islands and the UK 2,428,908 1,781,185 4,210,093 3,017,499 1,729,926 4,747,425 Total deposits 9,883,828 3,107,248 12,991,076 10,925,277 2,944,946 13,870,223 |
Employee benefit plans
Employee benefit plans | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee benefit plans | Note 11: Employee benefit plans The Bank maintains trusteed pension plans including non-contributory defined benefit plans and a number of defined contribution plans, and provides post-retirement medical benefits to its qualifying retirees. The defined benefit provisions under the pension plans are generally based upon years of service and average salary during the relevant years of employment. The defined benefit and post-retirement medical plans are not open to new participants and are non-contributory and the funding required is provided by the Bank, based upon the advice of independent actuaries. The defined benefit pension plans are in the Bermuda, Guernsey and UK jurisdictions, and the defined benefit post-retirement medical plan is in Bermuda. The Bank has a residual obligation on top of its defined contribution plan in Mauritius. Bermuda Defined Benefit and Post-Retirement Medical Benefit Plan The Bank amortizes prior service credit resulting from plan amendments that occurred when plan members were active employees, on a linear basis over the expected average remaining service period (to full eligibility) of active members expected to receive benefits under the plan. Such remaining service periods are as follows: 3.1 years for the 2010 plan amendments and 4.6 years for the 2011 plan amendments. Plan amendments occurring in 2014 and 2019 resulted in the recognition of new prior service costs on December 31, 2014 and December 31, 2019 on a plan for which substantially all members are now inactive. The Bank has elected to amortize these new prior service costs on a linear basis over 21 years and 16 years, respectively, which was the average remaining life expectancy of members eligible for benefits under the plan at the time of the amendments. Guernsey Defined Benefit Pension Plan Effective October 2014, all the participants of the Guernsey defined benefit pension plan became inactive and in accordance with GAAP, the net actuarial loss of the Guernsey defined benefit pension plan is amortized over the then estimated average remaining life expectancy of the inactive participants of 39 years. Prior to all of the Guernsey participants being inactive, the net actuarial loss of the Guernsey defined benefit pension plan was amortized to net income over the estimated average remaining service period for active members of 15 years. UK Defined Benefit Pension Plan The UK defined benefit pension plan closed to new members effective April 1, 2002 and subsequently closed to further accrual of new benefits effective October 1, 2012. During the years ended December 31, 2018 and 2017, the pension plan settled in cash the liability of several plan members and an insurance policy was purchased in the name of the trustees of the plan to match the liabilities of remaining members who were pensioners as at March 31, 2016. Mauritius Portable Retirement Gratuity Fund Under the Mauritius Workers’ Right Act of 2019, the Portable Retirement Gratuity Fund (the "Fund") was established for the purpose of providing for the payment of a gratuity on the death or retirement of an employee and came into effect on January 1, 2020. The Fund operates as a centralized defined contribution scheme with employers required to make upfront contributions at prescribed rates based on employees' monthly remuneration. Any shortfall in this lump sum gratuity in an employees accumulated fund upon death or retirement, is to be funded by the Bank. Accordingly, the Bank recognizes the related service and net interest costs as well as the related net actuarial liability. The following table presents the financial position of the Bank’s defined benefit pension plans and the Bank’s post-retirement medical benefit plan, which is unfunded. The Bank measures the benefit obligations and plan assets annually on each December 31 and therefore, the most recent measurement date is December 31, 2022. The 2022 net actuarial gain recognized in the defined benefit plans is largely due to an increase in discount rates used to value the benefit obligation, partially offset by actual returns on investments being lower than expected. December 31, 2022 December 31, 2021 December 31, 2020 Pension Post- Pension Post- Pension Post- Accumulated benefit obligation at end of year 106,748 91,983 157,478 125,968 179,018 128,167 Change in projected benefit obligation Projected benefit obligation at beginning of year 157,478 125,968 179,018 128,167 168,791 110,347 Service cost — 130 — 82 43 66 Interest cost 3,026 3,114 2,729 2,594 3,957 3,270 Benefits paid (9,153) (5,774) (9,050) (3,712) (7,412) (4,069) Prior service cost — — 403 — 48 — Settlement and curtailment of liability — — (5,906) — (7,505) — Actuarial (gain) loss (37,425) (31,455) (9,093) (1,163) 18,326 18,553 Foreign exchange translation adjustment (7,178) — (623) — 2,770 — Projected benefit obligation at end of year 106,748 91,983 157,478 125,968 179,018 128,167 Change in plan assets Fair value of plan assets at beginning of year 179,025 — 182,516 — 175,400 — Actual return on plan assets (24,574) — 10,265 — 14,945 — Employer contribution 207 5,774 1,680 3,712 2,917 4,069 Plan settlement — — (5,625) — (5,903) — Benefits paid (9,153) (5,774) (9,050) (3,712) (7,412) (4,069) Foreign exchange translation adjustment (8,211) — (761) — 2,569 — Fair value of plan assets at end of year 137,294 — 179,025 — 182,516 — Amounts recognized in the consolidated balance sheets consist of: Prepaid benefit cost included in other assets 30,581 — 21,809 — 6,610 — Accrued pension benefit cost included in employee benefit plans liability (35) (91,983) (262) (125,968) (3,112) (128,167) Surplus (deficit) of plan assets over projected benefit obligation at measurement date 30,546 (91,983) 21,547 (125,968) 3,498 (128,167) Year ended December 31, 2022 December 31, 2021 December 31, 2020 Pension Post- Pension Post- Pension Post- Amounts recognized in accumulated other comprehensive income (loss) consist of: Net actuarial gain (loss), excluding deferred taxes (47,452) 14,528 (55,809) (18,371) (73,506) (21,213) Net prior service credit (cost) (453) (6,818) (591) (7,342) (226) (7,866) Deferred income taxes assets (liabilities) — — — — 1,477 — Net amount recognized in accumulated other comprehensive income (loss) (47,905) 7,710 (56,400) (25,713) (72,255) (29,079) Annual benefit expense Expense component Line item in the consolidated statements of operations Service cost Salaries and other employee benefits — 130 58 82 97 66 Interest cost Non-service employee benefits expense 3,027 3,114 2,729 2,594 3,960 3,270 Expected return on plan assets Non-service employee benefits expense (6,633) — (6,437) N/A (7,547) N/A Amortization of net actuarial (gains) losses Non-service employee benefits expense 2,218 1,444 2,766 1,679 2,412 — Amortization of prior service (credit) loss Non-service employee benefits expense 81 524 (25) 524 21 524 (Gain) loss on settlement Net other gains (losses)/Non-service employee benefits expense (907) — 1,679 — 1,326 — Defined benefit (income) expense (2,214) 5,212 770 4,879 269 3,860 Defined contribution expense 7,825 — 8,259 — 8,933 — Total benefit (income) expense 5,611 5,212 9,029 4,879 9,202 3,860 The components of benefit expense (income) other than the service cost component are included in the line item non-service employee benefits expense in the consolidated statements of operations. Other changes recognized in other comprehensive income (loss) Net gain (loss) arising during the year 6,218 31,455 14,772 1,163 (8,363) (18,553) Net loss (gain) on settlement reclassified to net income (907) — — — — — Prior service credit (cost) arising during the year — — (399) — (47) — Amortization of net actuarial (gains) losses 2,218 1,444 2,766 1,679 2,412 — Amortization of prior service (credit) cost 81 524 (25) 524 20 524 Change in deferred taxes — — (1,462) — 456 — Foreign exchange adjustment 885 — 203 — (421) — Total changes recognized in other comprehensive income (loss) 8,495 33,423 15,855 3,366 (5,943) (18,029) To develop the expected long-term rate of return on the plan assets assumption for each plan, the Bank considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocations of the assets. The weighted average discount rate used to determine benefit obligations at the end of the year is derived from interest rates on high quality corporate bonds with maturities that match the expected benefit payments. Actuarial Assumptions Year ended December 31, 2022 December 31, 2021 December 31, 2020 Pension Post- Pension Post- Pension Post- Actuarial assumptions used to determine annual benefit expense Weighted average discount rate 2.30 % 2.88 % 1.90 % 2.53 % 2.65 % 3.38 % Weighted average rate of compensation increases 1 3.00 % N/A 2.20 % N/A 2.30 % N/A Weighted average expected long-term rate of return on plan assets 4.45 % N/A 3.65 % N/A 4.60 % N/A Weighted average annual medical cost increase rate N/A 7.0% to 4.5% in 2040 N/A 7.2% to 4.5% in 2040 N/A 7.2% to 4.5% in 2040 Actuarial assumptions used to determine benefit obligations at end of year Weighted average discount rate 5.20 % 5.37 % 2.30 % 2.88 % 1.90 % 2.53 % Weighted average rate of compensation increases 1 3.00 % N/A 3.00 % N/A 2.20 % N/A Weighted average annual medical cost increase rate N/A 6.9% to 4.5% in 2040 N/A 7.0% to 4.5% in 2040 N/A 7.0% to 4.5% in 2040 1 Only the UK subsidiary plan is impacted by potential future compensation increases. Investments Policies and Strategies The pension plans’ assets are managed according to each plan's investment policy statement, which outlines the purpose of the plan, statement of objectives and guidelines and investment policy. The asset allocation is diversified and any use of derivatives is limited to hedging purposes only. December 31, 2022 December 31, 2021 Weighted average actual and target asset allocations of the pension plans by asset category Actual Target Actual Target Debt securities (including debt mutual funds) 71 % 74 % 39 % 32 % Equity securities (including equity mutual funds) 19 % 9 % 51 % 53 % Other 10 % 17 % 10 % 15 % Total 100 % 100 % 100 % 100 % Fair Value Measurements of Pension Plans' Assets The following table presents the fair value of the plans' assets by category and level of inputs used in their respective fair value determination as described in "Note 2: Significant accounting policies", except the level 3 security, for which the valuation determination is described following the below table: December 31, 2022 December 31, 2021 Fair value determination Fair value determination Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total US government and federal agencies — 35,332 — 35,332 — 23,040 — 23,040 Non-US governments debt securities — 43,728 — 43,728 — 1,090 — 1,090 Corporate debt securities — 18,050 — 18,050 — 45,596 — 45,596 Equity securities and mutual funds 954 25,172 — 26,126 1,111 90,193 — 91,304 Other 600 2,504 10,954 14,058 180 431 17,384 17,995 Total fair value of plans' assets 1,554 124,786 10,954 137,294 1,291 160,350 17,384 179,025 The Level 3 assets consist of insured annuity policies covering the full pension benefits of certain plan members. The fair value of these policies is deemed equal to the actuarial value of the projected benefit obligation for the insured benefits. At December 31, 2022, 18.4% (December 31, 2021: 29.2%) of the assets of the pension plans were mutual funds and equity securities managed or administered by wholly-owned subsidiaries of the Bank. At December 31, 2022, 0.7% (December 31, 2021: 0.6%) of the plans' assets were invested in common shares of the Bank. The investments of the pension funds are diversified across a range of asset classes and are diversified within each asset class. The assets are generally actively managed with the goal of adding some incremental value through security selection and asset allocation. Estimated 2023 Bank contribution to and estimated benefit payments for the next ten years under the pension and post-retirement medical benefit plans are as follows: Pension Post- Estimated Bank contributions for the full year ending December 31, 2023 — 5,044 Estimated benefit payments by year: 2023 7,300 5,044 2024 7,200 5,286 2025 7,100 5,536 2026 7,100 5,786 2027 7,700 5,999 2028-2032 36,000 32,319 |
Credit-related arrangements, re
Credit-related arrangements, repurchase agreements and commitments | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Credit-related arrangements, repurchase agreements and commitments | Note 12: Credit related arrangements, repurchase agreements and commitments Commitments As at December 31, 2022, the Bank was committed to expenditures under contract for information technology services sourcing of $42.9 million (December 31, 2021: $53.3 million). The Bank funded its expenditures with its own resources and plans to fund those currently in progress with its own resources, which may be obtained through cash on hand, cash flows from operations and issuances of debt and equity securities. The following table summarizes the Bank's commitments for sourcing and other agreements: Year ending December 31 Sourcing Other Total 2023 12,584 12,915 25,499 2024 11,114 5,936 17,050 2025 10,602 3,120 13,722 2026 8,572 1,078 9,650 2027 — 1,084 1,084 2028 & thereafter — 1,405 1,405 Total commitments 42,872 25,538 68,410 The Bank enters into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Substantially all of the Bank's commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of loan funding. Management assesses the credit risk associated with certain commitments to extend credit in determining the level of the allowance for expected credit losses. The Bank has a facility with one of its custodians, whereby the Bank may offer up to US $200 million of standby letters of credit to its customers on a fully secured basis. Under the standard terms of the facility, the custodian has the right to set-off against securities held of 110% of the utilized facility. At December 31, 2022, $121.3 million (December 31, 2021: $145.7 million) of standby letters of credit were issued under this facility. Outstanding unfunded commitments to extend credit December 31, 2022 December 31, 2021 Commitments to extend credit 564,324 717,077 Documentary and commercial letters of credit 2,331 1,522 Total unfunded commitments to extend credit 566,655 718,599 Allowance for credit losses (274) (551) Credit-Related Arrangements Standby letters of credit and letters of guarantee are issued at the request of a Bank customer in order to secure the customer’s payment or performance obligations to a third party. These guarantees represent an irrevocable obligation of the Bank to pay the third party beneficiary upon presentation of the guarantee and satisfaction of the documentary requirements stipulated therein, without investigation as to the validity of the beneficiary’s claim against the customer. Generally, the term of the standby letters of credit does not exceed one year, while the term of the letters of guarantee does not exceed four years. The types and amounts of collateral security held by the Bank for these standby letters of credit and letters of guarantee are generally represented by deposits with the Bank or a charge over assets held in mutual funds. The Bank considers the fees collected in connection with the issuance of standby letters of credit and letters of guarantee to be representative of the fair value of its obligation undertaken in issuing the guarantee. In accordance with applicable accounting standards related to guarantees, the Bank defers fees collected in connection with the issuance of standby letters of credit and letters of guarantee. The fees are then recognized in income proportionately over the life of the credit agreements. The following table presents the outstanding financial guarantees. Collateral is shown at estimated market value less selling cost. Where the collateral is cash, it is shown gross including accrued income. December 31, 2022 December 31, 2021 Outstanding financial guarantees Gross Collateral Net Gross Collateral Net Standby letters of credit 250,543 243,393 7,150 276,464 269,204 7,260 Letters of guarantee 3,467 3,431 36 3,588 3,552 36 Total 254,010 246,824 7,186 280,052 272,756 7,296 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 collateral involved is appropriate and by monitoring the value of the securities posted or received as collateral on a daily basis. As at December 31, 2022, the Bank had 2 open positions (December 31, 2021: 19) in resell agreements with a remaining maturity of less than 30 days involving pools of mortgages issued by US federal agencies. The amortized cost of these resell agreements is $59.9 million (December 31, 2021: $96.1 million) and are included in securities purchased under agreements to resell on the consolidated balance sheets. As at December 31, 2022, there were no positions (December 31, 2021: no positions) which were offset on the consolidated balance sheets to arrive at the carrying value, and there was no collateral amount which was available to offset against the future settlement amount. Legal Proceedings There are actions and legal proceedings pending against the Bank and its subsidiaries which arose in the normal course of its business. Management, after reviewing all actions and proceedings pending against or involving the Bank and its subsidiaries, considers that the resolution of these matters would in the aggregate not be material to the consolidated financial position of the Bank, except as noted in the following paragraph. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 13 : Leases The Bank enters into operating lease agreements either as the lessee or the lessor, mostly for office and parking spaces as well as for small office equipment. The terms of the existing leases, including renewal options that are reasonably certain to be exercised, extend up to the year 2035. Certain lease payments will be adjusted during the related lease's term based on movements in the relevant consumer price index. Year ended December 31, 2022 December 31, 2021 Lease costs Operating lease costs 7,576 8,248 Short-term lease costs 2,387 1,407 Sublease income (1,197) (1,359) Total net lease cost 8,766 8,296 Operating lease income 1,012 1,243 Other information for the period Right-of-use assets related to new operating lease liabilities 3,476 1,575 Operating cash flows from operating leases 7,630 8,402 Year ended Other information at end of period December 31, 2022 December 31, 2021 Operating leases right-of-use assets (included in other assets on the balance sheets) 33,641 39,525 Operating lease liabilities (included in other liabilities on the balance sheets) 32,965 38,789 Weighted average remaining lease term for operating leases (in years) 9.24 9.81 Weighted average discount rate for operating leases 5.40 % 5.25 % The following table summarizes the maturity analysis of the Bank's commitments for long-term leases as at December 31, 2022: Year ending December 31 Operating Leases 2023 7,129 2024 6,457 2025 4,133 2026 3,357 2027 3,152 2028 & thereafter 17,735 Total commitments 41,963 Less: effect of discounting cash flows to their present value (8,998) Operating lease liabilities 32,965 |
Leases | Note 13 : Leases The Bank enters into operating lease agreements either as the lessee or the lessor, mostly for office and parking spaces as well as for small office equipment. The terms of the existing leases, including renewal options that are reasonably certain to be exercised, extend up to the year 2035. Certain lease payments will be adjusted during the related lease's term based on movements in the relevant consumer price index. Year ended December 31, 2022 December 31, 2021 Lease costs Operating lease costs 7,576 8,248 Short-term lease costs 2,387 1,407 Sublease income (1,197) (1,359) Total net lease cost 8,766 8,296 Operating lease income 1,012 1,243 Other information for the period Right-of-use assets related to new operating lease liabilities 3,476 1,575 Operating cash flows from operating leases 7,630 8,402 Year ended Other information at end of period December 31, 2022 December 31, 2021 Operating leases right-of-use assets (included in other assets on the balance sheets) 33,641 39,525 Operating lease liabilities (included in other liabilities on the balance sheets) 32,965 38,789 Weighted average remaining lease term for operating leases (in years) 9.24 9.81 Weighted average discount rate for operating leases 5.40 % 5.25 % The following table summarizes the maturity analysis of the Bank's commitments for long-term leases as at December 31, 2022: Year ending December 31 Operating Leases 2023 7,129 2024 6,457 2025 4,133 2026 3,357 2027 3,152 2028 & thereafter 17,735 Total commitments 41,963 Less: effect of discounting cash flows to their present value (8,998) Operating lease liabilities 32,965 |
Loan interest income
Loan interest income | 12 Months Ended |
Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Loan interest income | Note 14: Loan interest income Year ended December 31, 2022 December 31, 2021 December 31, 2020 Contractual interest earned 243,115 214,539 224,474 Amortization Amortization of fair value hedge (259) (281) (300) Amortization of loan origination fees (net of amortized costs) 6,026 6,847 5,436 Amortization of fair value adjustment on purchased loans 508 439 1,046 Total loan interest income 249,390 221,544 230,656 Balance of unamortized fair value hedge included in loans as at year end 836 1,095 1,376 Balance of unamortized loan fees included in loans as at year end 11,878 11,926 12,204 |
Segmented information
Segmented information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segmented information | Note 15: Segmented information The Bank is managed by the Chairman & Chief Executive Officer (“CEO”) on a geographic basis. The Bank presents four reportable segments, three geographical and one other: Bermuda, Cayman, Channel Islands and the UK, and Other. The Other segment is composed of several non-reportable operating segments that have been aggregated in accordance with GAAP. Each reportable segment has a managing director who reports to the Chairman & CEO. The Chairman & CEO and the segment managing director have final authority over resource allocation decisions and performance assessment. The geographic segments reflect this management structure and the manner in which financial information is currently evaluated by the Chairman & CEO. Segment results are determined based on the Bank's management reporting system, which assigns balance sheet and statement of operations items to each of the geographic segments. The process is designed around the Bank's organizational and management structure and, accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions. A description of each reportable segment and table of financial results is presented below. Accounting policies of the reportable segments are the same as those described in Note 2: Significant accounting policies. Transactions between segments are accounted for on an accrual basis and are all eliminated upon consolidation. The Bank generally does not allocate assets, revenues and expenses among its business segments, with the exception of certain corporate overhead expenses and loan participation revenue and expenses. Loan participation revenue and expenses are allocated pro-rata based upon the percentage of the total loan funded by each jurisdiction participating in the loan. The Bermuda segment provides a 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, automated teller machines (“ATMs”) and debit cards. Retail services include deposit services, consumer and mortgage lending, credit cards and personal insurance products. Commercial banking includes commercial lending and mortgages, cash management, payroll services, remote banking and letters of credit. Treasury services include money market and foreign exchange activities. Bermuda’s wealth management offering consists of Butterfield Asset Management Limited, which provides investment management, advisory and brokerage services and Butterfield Trust (Bermuda) Limited, which provides trust, estate, company management and custody services. Bermuda is also the location of the Bank's head offices and accordingly, retains the unallocated corporate overhead expenses. The Cayman segment provides a comprehensive range of retail, commercial and private banking services. Retail services are offered to individuals and small to medium-sized businesses through three branch locations and through internet banking, mobile banking, ATMs and debit cards. Retail services include deposit services, consumer and mortgage lending, credit cards and property/auto insurance. Commercial banking includes commercial lending and mortgages, cash management, payroll services, remote banking and letters of credit. Treasury services include money market and foreign exchange activities. Cayman’s wealth management offering comprises investment management, advisory and brokerage services and Butterfield Trust (Cayman) Limited, which provides trust, estate and company management. The Channel Islands and the UK segment includes the jurisdictions of Guernsey and Jersey (Channel Islands), and the UK. In the Channel Islands, a broad range of services are provided to private clients and financial intermediaries including mortgage lending, private banking and treasury services, internet banking, wealth management and fiduciary services. The jurisdiction also offers mortgage lending to the retail market. The UK jurisdiction provides mortgage services for high-value residential properties. The Other segment includes the jurisdictions of The Bahamas, Canada, Mauritius, Singapore and Switzerland. These operating segments individually and collectively do not meet the quantitative threshold for segmented reporting and are therefore aggregated as non-reportable operating segments. Total Assets by Segment December 31, 2022 December 31, 2021 Bermuda 5,405,365 5,728,466 Cayman 4,566,144 4,973,402 Channel Islands and the UK 4,626,183 5,234,880 Other 35,874 33,059 Total assets before inter-segment eliminations 14,633,566 15,969,807 Less: inter-segment eliminations (327,504) (634,607) Total 14,306,062 15,335,200 2022 Net interest income Provision for credit (losses) recoveries Non-interest Net revenue Gains and Total net revenue Total Net income Year ended December 31 Customer Inter- segment Bermuda 165,330 (3,388) (1,226) 87,855 248,571 22 248,593 188,676 59,917 Cayman 113,301 2,593 (573) 66,696 182,017 (19) 181,998 62,120 119,878 Channel Islands and the UK 64,928 795 (597) 40,485 105,611 1,503 107,114 73,955 33,159 Other 25 — — 29,425 29,450 16 29,466 28,400 1,066 Total before eliminations 343,584 — (2,396) 224,461 565,649 1,522 567,171 353,151 214,020 Inter-segment eliminations — — — (17,874) (17,874) — (17,874) (17,874) — Total 343,584 — (2,396) 206,587 547,775 1,522 549,297 335,277 214,020 2021 Net interest income Provision for credit (losses) recoveries Non-interest Net revenue Gains and Total net revenue Total Net income Year ended December 31 Customer Inter- segment Bermuda 147,295 (1,304) 2,206 84,641 232,838 880 233,718 186,806 46,912 Cayman 89,757 1,241 1,415 58,058 150,471 213 150,684 58,945 91,739 Channel Islands and the UK 62,752 63 (493) 45,294 107,616 (2,454) 105,162 81,654 23,508 Other 3 — — 27,549 27,552 — 27,552 27,043 509 Total before eliminations 299,807 — 3,128 215,542 518,477 (1,361) 517,116 354,448 162,668 Inter-segment eliminations — — — (17,435) (17,435) — (17,435) (17,435) — Total 299,807 — 3,128 198,107 501,042 (1,361) 499,681 337,013 162,668 2020 Net interest income Provision for credit (losses) recoveries Non-interest Net revenue Gains and Total net revenue Total Net income Year ended December 31 Customer Inter- segment Bermuda 158,790 778 (8,750) 85,216 236,034 1,970 238,004 192,781 45,223 Cayman 94,211 1,149 483 49,294 145,137 491 145,628 62,605 83,023 Channel Islands and the UK 64,591 (1,927) (224) 40,698 103,138 (1,238) 101,900 82,057 19,843 Other 7 — — 14,384 14,391 (1) 14,390 15,262 (872) Total before eliminations 317,599 — (8,491) 189,592 498,700 1,222 499,922 352,705 147,217 Inter-segment eliminations — — — (5,733) (5,733) — (5,733) (5,733) — Total 317,599 — (8,491) 183,859 492,967 1,222 494,189 346,972 147,217 |
Derivative instruments and risk
Derivative instruments and risk management | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative instruments and risk management | Note 16: Derivative instruments and risk management The Bank uses derivatives for risk management purposes and to meet the needs of its customers. The Bank’s derivative contracts principally involve over-the-counter ("OTC") transactions that are negotiated privately between the Bank and the counterparty to the contract and include interest rate contracts and foreign exchange contracts. The Bank may pursue opportunities to reduce its exposure to credit losses on derivatives by entering into International Swaps and Derivatives Association master agreements (“ISDAs”). Depending on the nature of the derivative transaction, bilateral collateral arrangements may be used, as well. When the Bank is engaged in more than one outstanding derivative transaction with the same counterparty, and also has a legally enforceable master netting agreement with that counterparty, the net marked-to-market exposure represents the netting of the positive and negative exposures with that counterparty. When there is a net negative exposure, the Bank regards its credit exposure to the counterparty as being zero. The net marked-to-market position with a particular counterparty represents a reasonable measure of credit risk when there is a legally enforceable master netting agreement between the Bank and that counterparty. Certain of these agreements contain credit risk-related contingent features in which the counterparty has the option to accelerate cash settlement of the Bank's net derivative liabilities with the counterparty in the event the Bank's credit rating falls below specified levels or the liabilities reach certain levels. All derivative financial instruments, whether designated as hedges or not, are recorded on the consolidated balance sheets at fair value within other assets or other liabilities. These amounts include the effect of netting. The accounting for changes in the fair value of a derivative in the consolidated statements of operations depends on whether the contract has been designated as a hedge and qualifies for hedge accounting. Notional Amounts The notional amounts are not recorded as assets or liabilities on the consolidated balance sheets as they represent the face amount of the contract to which a rate or price is applied to determine the amount of cash flows to be exchanged. Notional amounts represent the volume of outstanding transactions and do not represent the potential gain or loss associated with market risk or credit risk of such instruments. Credit risk is limited to the positive fair value of the derivative instrument, which is significantly less than the notional amount. Fair Value Derivative instruments, in the absence of any compensating up-front cash payments, generally have no market value at inception. They obtain value, positive or negative, as relevant interest rates, exchange rates, equity or commodity prices or indices change. The potential for derivatives to increase or decrease in value as a result of the foregoing factors is generally referred to as market risk. Market risk is managed within clearly defined parameters as prescribed by senior management of the Bank. The fair value is defined as the profit or loss associated with replacing the derivative contracts at prevailing market prices. Risk Management Derivatives The Bank enters into interest derivative contracts as part of its overall interest rate risk management strategy to minimize significant unplanned fluctuations in earnings that are caused by interest rate volatility. The Bank’s goal is to manage interest rate sensitivity by modifying the repricing or maturity characteristics of certain consolidated balance sheet assets and liabilities so that movements in interest rates do not adversely affect the net interest margin. Derivative instruments that are used as part of the Bank’s risk management strategy include interest rate swap contracts that have indices related to the pricing of specific consolidated balance sheet assets and liabilities. Interest rate swaps generally involve the exchange of fixed and variable-rate interest payments between two parties, based on a common notional principal amount and maturity date. The Bank uses foreign currency derivative instruments to hedge its exposure to foreign currency risk. Certain hedging relationships are formally designated and qualify for hedge accounting as fair value or net investment hedges. Risk management derivatives comprise fair value hedges, net investment hedges and derivatives not formally designated as hedges as described below. Fair value hedges include designated currency swaps that are used to minimize the Bank's exposure to variability in the fair value of AFS investments due to movements in foreign exchange rates. The effective portion of changes in the fair value of the hedged items attributable to foreign exchange rates is recognized in current year earnings consistent with the related change in fair value of the hedging instrument. For fair value hedges, hedging effectiveness of the hedged item and the hedging instrument are assessed and managed at inception and on an ongoing basis using a partial-term method. Net investment hedges include designated currency swaps and qualifying non-derivative instruments and are used to minimize the Bank’s exposure to variability in the foreign currency translation of net investments in foreign operations. The effective portion of changes in the fair value of the hedging instrument is recognized in AOCIL consistent with the related translation gains and losses of the hedged net investment. For net investment hedges, all critical terms of the hedged item and the hedging instrument are matched at inception and on an ongoing basis to minimize the risk of hedge ineffectiveness. For derivatives designated as net investment hedges, the Bank follows the method based on changes in spot exchange rates. Accordingly: - The change in the fair value of the derivative instrument that is reported in AOCIL (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 AOCIL 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 AOCIL 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 income (loss)" for details on the amount recognized into AOCIL during the current period from translation gain or loss. Derivatives not formally designated as hedges are entered into to manage the foreign exchange risk of the Bank's exposure. Changes in the fair value of derivative instruments not formally designated as hedges are recognized in foreign exchange revenue. Client service derivatives The Bank enters into foreign exchange contracts primarily to meet the foreign exchange needs of its customers. Foreign exchange contracts are agreements to exchange specific amounts of currencies at a future date at a specified rate of exchange. Changes in the fair value of client services derivative instruments are recognized in foreign exchange revenue. The following table shows the aggregate notional amounts of derivative contracts outstanding listed by type and respective gross positive or negative fair values and classified by those used for risk management (sub-classified as hedging and those that do not qualify for hedge accounting), client services and credit derivatives. Fair value of derivatives is recorded in the consolidated balance sheets in other assets and other liabilities. Gross positive fair values are recorded in other assets and gross negative fair values are recorded in other liabilities, subject to netting when master netting agreements are in place. December 31, 2022 Derivative instrument Number of contracts Notional Gross Gross Net Risk management derivatives Net investment hedges Currency swaps 1 5,207 — (215) (215) Fair value hedges Currency swaps 4 130,751 2,714 (191) 2,523 Derivatives not formally designated as hedging instruments Currency swaps 63 1,884,169 8,052 (10,269) (2,217) Subtotal risk management derivatives 2,020,127 10,766 (10,675) 91 Client services derivatives Spot and forward foreign exchange 160 312,772 2,401 (2,237) 164 Total derivative instruments 2,332,899 13,167 (12,912) 255 December 31, 2021 Derivative instrument Number of contracts Notional Gross Gross Net Risk management derivatives Net investment hedges Currency swaps 4 61,641 1,071 (163) 908 Fair value hedges Currency swaps 4 174,169 1,216 (2,535) (1,319) Derivatives not formally designated as hedging instruments Currency swaps 36 1,552,733 14,538 (9,566) 4,972 Subtotal risk management derivatives 1,788,543 16,825 (12,264) 4,561 Client services derivatives Spot and forward foreign exchange 125 331,837 1,138 (1,003) 135 Total derivative instruments 2,120,380 17,963 (13,267) 4,696 In addition to the above, as at December 31, 2022 foreign denominated deposits of £235.5 million (December 31, 2021: £192.3 million) and CHF 0.4 million (December 31, 2021: CHF 0.4 million) were designated as a hedge of foreign exchange risk associated with the net investment in foreign operations. We manage derivative exposure by monitoring the credit risk associated with each counterparty using counterparty specific credit risk limits, using master netting arrangements where appropriate and obtaining collateral. The Bank elected to offset in the consolidated balance sheets certain gross derivative assets and liabilities subject to netting agreements. The Bank also elected not to offset certain derivative assets or liabilities and all collateral received or paid that the Bank or the counterparties could legally offset in the event of default. In the tables below, these positions are deducted from the net fair value presented in the consolidated balance sheets in order to present the net exposures. The collateral values presented in the following table are limited to the related net derivative asset or liability balance and, accordingly, do not include excess collateral received or paid. Gross fair Less: offset Net fair value Less: positions not offset in the consolidated balance sheets December 31, 2022 Gross fair value of derivatives Cash collateral received / paid Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 13,167 (6,658) 6,509 — (9) 6,500 Derivative liabilities Spot and forward foreign exchange and currency swaps 12,912 (6,658) 6,254 — (352) 5,902 Net positive fair value 255 Gross fair Less: offset Net fair value Less: positions not offset in the consolidated balance sheets December 31, 2021 Gross fair value of derivatives Cash collateral Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 17,963 (9,843) 8,120 — — 8,120 Derivative liabilities Spot and forward foreign exchange and currency swaps 13,267 (9,843) 3,424 — (818) 2,606 Net positive fair value 4,696 The following tables show the location and amount of gains (losses) recorded in either the consolidated statements of operations or consolidated statements of comprehensive income on derivative instruments outstanding. Year ended Derivative instrument Consolidated statements of operations line item December 31, 2022 December 31, 2021 December 31, 2020 Spot and forward foreign exchange Foreign exchange revenue 28 (131) (191) Currency swaps, not designated as hedge Foreign exchange revenue (7,188) 23,531 (18,854) Currency swaps - fair value hedges Foreign exchange revenue 3,842 (5,357) 4,039 Total net gains (losses) recognized in net income (3,318) 18,043 (15,006) Derivative instrument Consolidated statements of comprehensive income line item December 31, 2022 December 31, 2021 December 31, 2020 Currency swaps - net investment hedge Unrealized net gains (losses) on translation of net investment in foreign operations (1,123) 5,495 (4,469) Total net gains (losses) recognized in comprehensive income (1,123) 5,495 (4,469) |
Fair value measurements
Fair value measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Note 17: Fair value measurements The following table presents the financial assets and liabilities that are measured at fair value on a recurring basis. Management classifies these items based on the type of inputs used in their respective fair value determination as described in "Note 2: Significant accounting policies". Management reviews the price of each security monthly, comparing market values to expectations and to the prior month’s price. Management's expectations are based upon knowledge of prevailing market conditions and developments relating to specific issuers and/or asset classes held in the investment portfolio. Where there are unusual or significant price movements, or where a certain asset class has performed out-of-line with expectations, the matter is reviewed by management. Financial instruments in Level 1 include US and UK Government Treasury notes. Financial instruments in Level 2 include government debt securities, mortgage-backed securities and other asset-backed securities, forward foreign exchange contracts and mutual funds not actively traded. Financial instruments in Level 3 include asset-backed securities for which the market is relatively illiquid and for which information about actual trading prices is not readily available. During the year ended December 31, 2022, there were no transfers between Level 1 and Level 2. There was a transfer out of Level 3 into Level 2 due to increased price observability. There were no transfers between Level 1 and Level 2 or Level 2 and Level 3 during the year ended December 31, 2021. December 31, 2022 December 31, 2021 Fair value Total carrying Fair value Total carrying Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Items that are recognized at fair value on a recurring basis: Financial assets Equity securities Mutual funds — 236 — 236 — 222 — 222 Total equity securities — 236 — 236 — 222 — 222 Available-for-sale investments US government and federal agencies 838,938 873,838 — 1,712,776 823,809 2,319,815 — 3,143,624 Non-US governments debt securities 229,071 22,392 — 251,463 267,200 22,393 — 289,593 Asset-backed securities - Student loans — 5,626 — 5,626 — — 13,174 13,174 Residential mortgage-backed securities — 19,000 — 19,000 — 27,339 — 27,339 Total available-for-sale 1,068,009 920,856 — 1,988,865 1,091,009 2,369,547 13,174 3,473,730 Other assets - Derivatives — 6,509 — 6,509 — 8,120 — 8,120 Financial liabilities Other liabilities - Derivatives — 6,254 — 6,254 — 3,424 — 3,424 Level 3 Reconciliation The Level 3 financial instrument, shown as Asset-backed securities - Student loans in the above table, is a federal family education loan program guaranteed student loan security and was valued using a non-binding quote from an external security pricing service. During the year ended December 31, 2022, this instrument was transferred to Level 2 due to increased price observability. The table below summarizes realized and unrealized gains and losses for Level 3 assets still held at the reporting date. December 31, 2022 December 31, 2021 December 31, 2020 Available- Available- Available- Carrying amount at beginning of year 13,174 12,945 12,891 Proceeds from sales, paydowns and maturities (7,631) — — Change in unrealized gains (losses) recognized in other comprehensive income 102 229 54 Realized and unrealized gains recognized in net income (19) — — Transfers in (out of) Level 3 out of (into) Level 2 - AFS (5,626) — — Carrying amount at end of year — 13,174 12,945 Cumulative gain (loss) recognized in other comprehensive income (14) (116) (345) Items Other Than Those Recognized at Fair Value on a Recurring Basis: December 31, 2022 December 31, 2021 Level Carrying Fair Appreciation / Carrying Fair Appreciation / Financial assets Cash and cash equivalents Level 1 2,100,787 2,100,787 — 2,179,833 2,179,833 — Securities purchased under agreements to resell Level 2 59,871 59,871 — 96,107 96,107 — Short-term investments Level 1 884,478 884,478 — 1,198,918 1,198,918 — Investments held-to-maturity Level 2 3,738,080 3,197,508 (540,572) 2,763,344 2,786,112 22,768 Loans, net of allowance for credit losses Level 2 5,096,430 5,049,570 (46,860) 5,240,670 5,265,049 24,379 Other real estate owned¹ Level 2 800 800 — 691 691 — Financial liabilities Term deposits Level 2 3,107,248 3,108,511 (1,263) 2,944,946 2,948,625 (3,679) Long-term debt Level 2 172,289 177,919 (5,630) 171,876 158,993 12,883 ¹ The current carrying value of OREO is adjusted to fair value only when there is devaluation below carrying value. Note 18: Interest rate risk The following tables set out the assets, liabilities and shareholders' equity on the date of the earlier of contractual maturity, expected maturity or repricing date. Use of these tables to derive information about the Bank’s interest rate risk position is limited by the fact that customers may choose to terminate their financial instruments at a date earlier than the contractual maturity or repricing date. Examples of this include fixed-rate mortgages, which are shown at contractual maturity but which may pre-pay earlier, and certain term deposits, which are shown at contractual maturity but which may be withdrawn before their contractual maturity subject to prepayment penalties. Investments are shown based on remaining contractual maturities. The remaining contractual principal maturities for mortgage-backed securities (primarily US government agencies) do not consider prepayments. Remaining expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations before the underlying mortgages mature. December 31, 2022 Earlier of contractual maturity or repricing date (in $ millions) Within 3 3 to 6 6 to 12 1 to 5 After Non-interest Total Assets Cash and cash equivalents 2,008 — — — — 93 2,101 Securities purchased under agreement to resell 60 — — — — — 60 Short-term investments 406 422 56 — — — 884 Investments 6 8 179 943 4,592 — 5,728 Loans 2,927 35 166 1,533 406 29 5,096 Other assets — — — — — 437 437 Total assets 5,407 465 401 2,476 4,998 559 14,306 Liabilities and shareholders' equity Shareholders’ equity — — — — — 865 865 Demand deposits 6,819 25 — — — 3,040 9,884 Term deposits 2,126 457 437 87 — — 3,107 Other liabilities — — — — — 278 278 Long-term debt — 75 — 97 — — 172 Total liabilities and shareholders' equity 8,945 557 437 184 — 4,183 14,306 Interest rate sensitivity gap (3,538) (92) (36) 2,292 4,998 (3,624) — Cumulative interest rate sensitivity gap (3,538) (3,630) (3,666) (1,374) 3,624 — — December 31, 2021 Earlier of contractual maturity or repricing date (in $ millions) Within 3 3 to 6 6 to 12 1 to 5 After Non-interest Total Assets Cash and cash equivalents 2,064 — — — — 116 2,180 Securities purchased under agreement to resell 96 — — — — — 96 Short-term investments 842 252 105 — — — 1,199 Investments 14 9 14 1,173 5,027 — 6,237 Loans 4,208 22 91 705 182 33 5,241 Other assets — — — — — 382 382 Total assets 7,224 283 210 1,878 5,209 531 15,335 Liabilities and shareholders' equity Shareholders’ equity — — — — — 977 977 Demand deposits 8,077 — 27 — — 2,821 10,925 Term deposits 1,658 587 602 98 — — 2,945 Other liabilities — — — — — 316 316 Long-term debt — — — 172 — — 172 Total liabilities and shareholders' equity 9,735 587 629 270 — 4,114 15,335 Interest rate sensitivity gap (2,511) (304) (419) 1,608 5,209 (3,583) — Cumulative interest rate sensitivity gap (2,511) (2,815) (3,234) (1,626) 3,583 — — |
Interest rate risk
Interest rate risk | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Interest rate risk | Note 17: Fair value measurements The following table presents the financial assets and liabilities that are measured at fair value on a recurring basis. Management classifies these items based on the type of inputs used in their respective fair value determination as described in "Note 2: Significant accounting policies". Management reviews the price of each security monthly, comparing market values to expectations and to the prior month’s price. Management's expectations are based upon knowledge of prevailing market conditions and developments relating to specific issuers and/or asset classes held in the investment portfolio. Where there are unusual or significant price movements, or where a certain asset class has performed out-of-line with expectations, the matter is reviewed by management. Financial instruments in Level 1 include US and UK Government Treasury notes. Financial instruments in Level 2 include government debt securities, mortgage-backed securities and other asset-backed securities, forward foreign exchange contracts and mutual funds not actively traded. Financial instruments in Level 3 include asset-backed securities for which the market is relatively illiquid and for which information about actual trading prices is not readily available. During the year ended December 31, 2022, there were no transfers between Level 1 and Level 2. There was a transfer out of Level 3 into Level 2 due to increased price observability. There were no transfers between Level 1 and Level 2 or Level 2 and Level 3 during the year ended December 31, 2021. December 31, 2022 December 31, 2021 Fair value Total carrying Fair value Total carrying Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Items that are recognized at fair value on a recurring basis: Financial assets Equity securities Mutual funds — 236 — 236 — 222 — 222 Total equity securities — 236 — 236 — 222 — 222 Available-for-sale investments US government and federal agencies 838,938 873,838 — 1,712,776 823,809 2,319,815 — 3,143,624 Non-US governments debt securities 229,071 22,392 — 251,463 267,200 22,393 — 289,593 Asset-backed securities - Student loans — 5,626 — 5,626 — — 13,174 13,174 Residential mortgage-backed securities — 19,000 — 19,000 — 27,339 — 27,339 Total available-for-sale 1,068,009 920,856 — 1,988,865 1,091,009 2,369,547 13,174 3,473,730 Other assets - Derivatives — 6,509 — 6,509 — 8,120 — 8,120 Financial liabilities Other liabilities - Derivatives — 6,254 — 6,254 — 3,424 — 3,424 Level 3 Reconciliation The Level 3 financial instrument, shown as Asset-backed securities - Student loans in the above table, is a federal family education loan program guaranteed student loan security and was valued using a non-binding quote from an external security pricing service. During the year ended December 31, 2022, this instrument was transferred to Level 2 due to increased price observability. The table below summarizes realized and unrealized gains and losses for Level 3 assets still held at the reporting date. December 31, 2022 December 31, 2021 December 31, 2020 Available- Available- Available- Carrying amount at beginning of year 13,174 12,945 12,891 Proceeds from sales, paydowns and maturities (7,631) — — Change in unrealized gains (losses) recognized in other comprehensive income 102 229 54 Realized and unrealized gains recognized in net income (19) — — Transfers in (out of) Level 3 out of (into) Level 2 - AFS (5,626) — — Carrying amount at end of year — 13,174 12,945 Cumulative gain (loss) recognized in other comprehensive income (14) (116) (345) Items Other Than Those Recognized at Fair Value on a Recurring Basis: December 31, 2022 December 31, 2021 Level Carrying Fair Appreciation / Carrying Fair Appreciation / Financial assets Cash and cash equivalents Level 1 2,100,787 2,100,787 — 2,179,833 2,179,833 — Securities purchased under agreements to resell Level 2 59,871 59,871 — 96,107 96,107 — Short-term investments Level 1 884,478 884,478 — 1,198,918 1,198,918 — Investments held-to-maturity Level 2 3,738,080 3,197,508 (540,572) 2,763,344 2,786,112 22,768 Loans, net of allowance for credit losses Level 2 5,096,430 5,049,570 (46,860) 5,240,670 5,265,049 24,379 Other real estate owned¹ Level 2 800 800 — 691 691 — Financial liabilities Term deposits Level 2 3,107,248 3,108,511 (1,263) 2,944,946 2,948,625 (3,679) Long-term debt Level 2 172,289 177,919 (5,630) 171,876 158,993 12,883 ¹ The current carrying value of OREO is adjusted to fair value only when there is devaluation below carrying value. Note 18: Interest rate risk The following tables set out the assets, liabilities and shareholders' equity on the date of the earlier of contractual maturity, expected maturity or repricing date. Use of these tables to derive information about the Bank’s interest rate risk position is limited by the fact that customers may choose to terminate their financial instruments at a date earlier than the contractual maturity or repricing date. Examples of this include fixed-rate mortgages, which are shown at contractual maturity but which may pre-pay earlier, and certain term deposits, which are shown at contractual maturity but which may be withdrawn before their contractual maturity subject to prepayment penalties. Investments are shown based on remaining contractual maturities. The remaining contractual principal maturities for mortgage-backed securities (primarily US government agencies) do not consider prepayments. Remaining expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations before the underlying mortgages mature. December 31, 2022 Earlier of contractual maturity or repricing date (in $ millions) Within 3 3 to 6 6 to 12 1 to 5 After Non-interest Total Assets Cash and cash equivalents 2,008 — — — — 93 2,101 Securities purchased under agreement to resell 60 — — — — — 60 Short-term investments 406 422 56 — — — 884 Investments 6 8 179 943 4,592 — 5,728 Loans 2,927 35 166 1,533 406 29 5,096 Other assets — — — — — 437 437 Total assets 5,407 465 401 2,476 4,998 559 14,306 Liabilities and shareholders' equity Shareholders’ equity — — — — — 865 865 Demand deposits 6,819 25 — — — 3,040 9,884 Term deposits 2,126 457 437 87 — — 3,107 Other liabilities — — — — — 278 278 Long-term debt — 75 — 97 — — 172 Total liabilities and shareholders' equity 8,945 557 437 184 — 4,183 14,306 Interest rate sensitivity gap (3,538) (92) (36) 2,292 4,998 (3,624) — Cumulative interest rate sensitivity gap (3,538) (3,630) (3,666) (1,374) 3,624 — — December 31, 2021 Earlier of contractual maturity or repricing date (in $ millions) Within 3 3 to 6 6 to 12 1 to 5 After Non-interest Total Assets Cash and cash equivalents 2,064 — — — — 116 2,180 Securities purchased under agreement to resell 96 — — — — — 96 Short-term investments 842 252 105 — — — 1,199 Investments 14 9 14 1,173 5,027 — 6,237 Loans 4,208 22 91 705 182 33 5,241 Other assets — — — — — 382 382 Total assets 7,224 283 210 1,878 5,209 531 15,335 Liabilities and shareholders' equity Shareholders’ equity — — — — — 977 977 Demand deposits 8,077 — 27 — — 2,821 10,925 Term deposits 1,658 587 602 98 — — 2,945 Other liabilities — — — — — 316 316 Long-term debt — — — 172 — — 172 Total liabilities and shareholders' equity 9,735 587 629 270 — 4,114 15,335 Interest rate sensitivity gap (2,511) (304) (419) 1,608 5,209 (3,583) — Cumulative interest rate sensitivity gap (2,511) (2,815) (3,234) (1,626) 3,583 — — |
Long-term debt
Long-term debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-term debt | Note 19: Long-term debt On June 27, 2005, the Bank issued US $150 million of Subordinated Lower Tier II capital notes. The notes were issued at par in two tranches, namely US $90 million in Series A notes due 2015, which were redeemed at face value in January 2014, and US $60 million in Series B notes due 2020. The issuance was by way of private placement with US institutional investors. The notes were listed on the BSX in the specialist debt securities category. The Series B notes paid a fixed coupon of 5.11% until July 2, 2015 when they became redeemable in whole at the Bank’s option. The Series B notes were priced at a spread of 1.10% over the 10-year US Treasury yield. During September 2011, the Bank repurchased $15 million of the outstanding 5.11% 2005 Series B notes and the balance of $45 million matured on July 2, 2020. On May 27, 2008, the Bank issued US $78 million of Subordinated Lower Tier II capital notes. The notes were issued at par and in two tranches, namely US $53 million in Series A notes due 2018, which were redeemed at face value in May 2013 and US $25 million in Series B notes due 2023. The issuance was by way of private placement with US institutional investors. The notes were listed on the BSX in the specialist debt securities category. The proceeds of the issue were used to repay the entire amount of the US $78 million outstanding subordinated notes redeemed in May 2008. The Series B notes paid a fixed coupon of 8.44% until May 27, 2018 when they became redeemable in whole at the Bank’s option. The Series B notes were priced at a spread of 4.51% over the 10-year US Treasury yield and were redeemed at face value in November 2020. On May 24, 2018, the Bank issued US $75 million of Subordinated Lower Tier II capital notes. The notes were issued at par and due on June 1, 2028. The issuance was by way of a registered offering with US institutional investors. The notes are listed on the BSX in the specialist debt securities category. The proceeds of the issue were used, among others, to repay the entire amount of the US $47 million outstanding subordinated notes series 2003-B. The notes issued pay a fixed coupon of 5.25% until June 1, 2023 when they become redeemable in whole at the option of the Bank. The notes were priced at a spread of 2.27% over the 10-year US Treasury yield. The Bank incurred $1.8 million of costs directly related to the issuance of these capital notes. These costs have been capitalized directly against the carrying value of these notes on the balance sheet, and will be amortized over the life of the notes. On June 11, 2020, the Bank issued US $100 million of Subordinated Lower Tier II capital notes. The notes were issued at par and due on June 15, 2030. The issuance was by way of a registered offering with US institutional investors. The notes are listed on the BSX in the specialist debt securities category. The proceeds of the issue were used, among others, to repay the entire amount of the US $45 million outstanding subordinated notes series 2005-B which matured on July 2, 2020. The notes issued pay a fixed coupon of 5.25% until June 15, 2025 when they become redeemable in whole at the option of the Bank. The notes were priced at a spread of 4.43% over the 10-year US Treasury yield. The Bank incurred $2.3 million o f costs directly related to the issuance of these capital notes. These costs have been capitalized directly against the carrying value of these notes on the balance sheet, and will be amortized over the life of the notes. No interest was capitalized during the years ended December 31, 2022, 2021 and 2020. In the event the Bank would be in a position to redeem long-term debt, priority would go to the redemption of the higher interest-bearing Series, subject to availability relative to the earliest date the Series is redeemable at the Bank's option. The following table presents the contractual maturity and interest payments for long-term debt issued by the Bank as at December 31, 2022. The interest payments are calculated until contractual maturity using the current LIBOR and Secured Overnight Financing Rate ("SOFR"). Interest payments until contractual maturity Long-term debt Earliest date redeemable at the Bank's option Contractual maturity date Interest rate until date redeemable Interest rate from earliest date redeemable to contractual maturity Principal Outstanding Within 1 to 5 After Bermuda 2018 issuance June 1, 2023 June 1, 2028 5.25 % 3 months US$ LIBOR + 2.255% 75,000 4,646 21,374 2,677 2020 issuance June 15, 2025 June 15, 2030 5.25 % 3 months US$ SOFR + 5.060% 100,000 5,250 31,613 23,738 Total 175,000 9,896 52,987 26,415 Unamortized debt issuance costs (2,711) Long-term debt less unamortized debt issuance costs 172,289 |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per share | Note 20: Earnings per share Earnings per share have been calculated using the weighted average number of common shares outstanding during the year after deduction of the shares held as treasury stock. The dilutive effect of share-based compensation plans was calculated using the treasury stock method, whereby the proceeds received from the exercise of share-based awards are assumed to be used to repurchase outstanding shares, using the average market price of the Bank’s shares for the year. Numbers of shares are expressed in thousands. During the year ended December 31, 2022, there were no options to purchase common shares outstanding (December 31, 2021: 0.0 million, December 31, 2020: 0.1 million). During the year ended December 31, 2022, the average number of outstanding awards of unvested common shares was 1.1 million (December 31, 2021: 1.0 million, December 31, 2020: 0.9 million). Only awards for which the sum of 1) the expense that will be recognized in the future (i.e., the unrecognized expense) and 2) its exercise price, if any, was lower than the average market price of the Bank‘s common shares were considered dilutive and, therefore, included in the computation of diluted earnings per share. An award's unrecognized expense is also considered to be the proceeds the employees would need to pay to purchase accelerated vesting of the awards. For purposes of calculating dilution, such proceeds are assumed to be used by the Bank to buy back common shares at the average market price. The weighted-average number of outstanding awards, net of the assumed weighted-average number of common shares bought back, is included in the number of diluted participating shares. Year ended December 31, 2022 December 31, 2021 December 31, 2020 Net income 214,020 162,668 147,217 Basic Earnings Per Share Weighted average number of common shares issued 50,214 50,145 51,128 Weighted average number of common shares held as treasury stock (619) (619) (619) Weighted average number of common shares (in thousands) 49,595 49,526 50,509 Basic Earnings Per Share 4.32 3.28 2.91 Diluted Earnings Per Share Weighted average number of common shares 49,595 49,526 50,509 Net dilution impact related to options to purchase common shares — — 55 Net dilution impact related to awards of unvested common shares 265 349 286 Weighted average number of diluted common shares (in thousands) 49,860 49,875 50,850 Diluted Earnings Per Share 4.29 3.26 2.90 |
Share-based payments
Share-based payments | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based payments | Note 21: Share-based payments The common shares transferred to employees under all share-based payments are either taken from the Bank's common treasury shares or from newly issued shares. All share-based payments are settled by the ultimate parent company which, pursuant to Bermuda law, is not taxed on income. There are no income tax benefits in relation to the issue of such shares as a form of compensation. In conjunction with the 2010 capital raise, the Board of Directors approved the 2010 Omnibus Plan (the "2010 Plan"). Under the 2010 Plan, 5% of the Bank’s fully diluted common shares, equal to approximately 2.95 million shares, were initially available for grant to certain officers in the form of stock options or unvested share awards. Both types of awards are detailed below. In 2012 and 2016, the Board of Directors approved an increase to the equivalent number of shares allowed to be granted under the 2010 Plan to 5.0 million and 7.5 million shares, respectively. In May 2020, the Board of Directors approved the 2020 Omnibus Plan (the "2020 Plan") which replaces the 2010 Plan. Under the 2020 Plan, 3.0 million shares are initially available for grant to employees in the form of stock options or unvested share awards. Both types of awards are detailed below. Stock Option Awards 2010 and 2020 Plans Under the 2010 and 2020 Plans, options are awarded to Bank employees and executive management, based on predetermined vesting conditions that entitle the holder to purchase one common share at a subscription price usually equal to the price of the most recently traded common share when granted and have a term of 10 years. The subscription price is reduced for all special dividends declared by the Bank. Stock option awards granted under the 2010 and 2020 Plans vest based on two specific types of vesting conditions, i.e., time and performance conditions, as detailed below: Time vesting condition 50% of each option award was granted in the form of time vested options and vested 25% on each of the second, third, fourth and fifth anniversaries of the effective grant date. In addition to the time vesting conditions noted above, the options will generally vest immediately: • by reason of the employee’s death or disability, • upon termination, by the Bank, of the holder’s employment, unless if in relation with the holder’s misconduct, or • in limited circumstances and specifically approved by the Board, as stipulated in the holder’s employment contract. In the event of the employee’s resignation, any unvested portion of the awards shall generally be forfeited and any vested portion of the options shall generally remain exercisable during the 90-day period following the termination date or, if earlier, until the expiration date, and any vested portion of the options not exercised as of the expiration of such period shall be forfeited without any consideration therefore. Performance vesting condition 50% of each option award was granted in the form of performance options and would vest (partially or fully) on a “valuation event” date (the date that any of the March 2, 2010 new investors transfers at least 5% of the total number of common shares or the date that there is a change in control and any of the new investors realize a predetermined multiple of invested capital (“MOIC”)). On September 21, 2016, it was determined that a valuation event occurred during which a new investor realized a MOIC of more than 200% of the original invested capital of $12.09 per share and accordingly, all outstanding unvested performance options vested. Changes in Outstanding Stock Option Plans Number of shares transferable upon exercise (thousands) Weighted average Weighted average Aggregate Year ended December 31, 2020 2010 Stock 2010 Stock 2010 Stock Outstanding at beginning of year 159 12.07 Exercised (143) 12.13 2,192 Forfeitures and cancellations (16) 11.50 Outstanding at end of year — — 0.00 — Vested and exercisable at end of year — — 0.00 There were no stock options outstanding as at December 31, 2022 and December 31, 2021. Share-Based Incentive Programs Recipients of unvested share awards are entitled to the related common shares at no cost, at the time the award vests. Recipients of unvested shares may be entitled to receive additional unvested shares having a value equal to the cash dividends that would have been paid had the unvested shares been issued and vested. Such additional unvested shares granted as dividend equivalents are subject to the same vesting schedule and conditions as the underlying unvested shares. Unvested shares subject only to the time vesting condition generally vest upon retirement, death, disability or upon termination, by the Bank, of the holder’s employment unless if in connection with the holder’s misconduct. Unvested shares subject to both time vesting and performance vesting conditions remain outstanding and unvested upon retirement and will vest only if the performance conditions are met. Unvested shares can also vest in limited circumstances and if specifically approved by the Board, as stipulated in the holder’s employment contract. In all other circumstances, unvested shares are generally forfeited when employment ends. The grant date weighted average fair value of unvested share awards granted in the years ended December 31, 2022, 2021 and 2020 was $35.05, $33.26 and $33.35, respectively. The Bank expects to settle these awards by issuing new shares. Employee Deferred Incentive Program (“EDIP”) Under the Bank’s EDIP, shares are awarded to Bank employees and executive management based on the time vesting condition, which states that the shares will vest equally over a three-year period from the effective grant date. Executive Long-Term Incentive Share Program (“ELTIP”) Under the Bank’s ELTIP, performance shares as well as time-vesting shares were awarded to executive management. The performance shares will generally vest upon the achievement of certain performance targets in the three-year period from the effective grant date. The time-vesting shares will generally vest over the three-year period from the effective grant date. Employee Share Purchase Plan ("ESPP") The Bank's ESPP was approved in July 2021 and registered in November 2021. The first offering period started in May 2022. Under the Bank's ESPP, eligible employees may elect to contribute up to 15% of their regular compensation toward the purchase of Bank's shares at a 10% discount from market price on the closing date of each offering period. The ESPP specifies two consecutive six month offering periods per year. In the case of termination of employment or voluntary partial or full withdrawal from the plan, the related current offering period ESPP contributions are refunded to the employee and thus cannot be used to purchase shares under the ESPP. During the year ended December 31, 2022, 10,143 shares were issued under the ESPP. Changes in Outstanding ELTIP and EDIP awards (in thousands of shares transferable upon vesting) Year ended December 31, 2022 December 31, 2021 December 31, 2020 EDIP ELTIP EDIP ELTIP EDIP ELTIP Outstanding at beginning of year 297 704 364 658 251 618 Granted 486 280 118 283 245 209 Vested (fair value in 2022: $17.3 million, 2021: $13.9 million; 2020: $9.6 million) (162) (279) (183) (237) (129) (162) Forfeitures (resignations, retirements, redundancies) — — (2) — (3) (7) Outstanding at end of year 621 705 297 704 364 658 Share-based Compensation Cost Recognized in Net Income Year ended December 31, 2022 December 31, 2021 December 31, 2020 EDIP and EDIP and EDIP and Cost recognized in net income 16,215 14,539 14,608 Year ended Unrecognized Share-based Compensation Cost December 31, 2022 December 31, 2021 Unrecognized cost Weighted average years over which it is expected to be recognized Unrecognized cost Weighted average years over which it is expected to be recognized EDIP 14,234 3.35 4,896 1.45 ELTIP Time vesting shares — 0.00 17 0.12 Performance vesting shares 10,232 1.75 8,840 1.76 Total unrecognized expense 24,466 13,753 |
Share repurchase plans
Share repurchase plans | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Share repurchase plans | Note 22: Share repurchase programs From time to time, the Bank may seek to repurchase and retire equity securities of the Bank, through cash purchase, privately negotiated transactions, or otherwise. Such transactions, if any, depend on prevailing market conditions, liquidity and capital requirements, contractual restrictions, and other factors. Common Share Repurchase Program On December 6, 2018, the Board approved, with effect from December 10, 2018 to February 29, 2020, a common share repurchase program, authorizing the purchase of up to 2.5 million common shares. On December 2, 2019, the Board approved a new $125 million common share repurchase program, authorizing the purchase of up to 3.5 million common shares through to February 28, 2021. The new program came into effect on December 20, 2019 following the completion of the previous program. On February 10, 2021, the Board approved a new common share repurchase program, authorizing the purchase of up to 2.0 million common shares through to February 28, 2022. On February 14, 2022, the Board approved a new common share repurchase program, authorizing the purchase of up to 2.0 million common shares through to February 28, 2023. On February 13, 2023, the Board approved a new common share repurchase program, authorizing the purchase of up to 3.0 million common shares through to February 29, 2024. In the year ended December 31, 2022, the Bank repurchased and retired 102,000 shares. Year ended December 31 Common share repurchases 2022 2021 2020 Acquired number of shares (to the nearest 1) 102,000 534,828 3,452,000 Average cost per common share 38.21 36.93 25.10 Total cost (in US dollars) 3,897,268 19,753,336 86,639,889 |
Accumulated other comprehensive
Accumulated other comprehensive income (loss) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Accumulated other comprehensive income (loss) | Note 23: Accumulated other comprehensive income (loss) Unrealized net gains (losses) Unrealized net Unrealized net Employee benefit plans adjustments Year ended December 31, 2022 Pension Post-retirement Subtotal - Total AOCIL Balance at beginning of year (20,913) 91 (21,982) (56,400) (25,713) (82,113) (124,917) Transfer of AFS investments to HTM investments — (99,143) 99,143 — — — — Other comprehensive income (loss), net of taxes (4,787) 7,840 (297,506) 8,495 33,423 41,918 (252,535) Balance at end of year (25,700) (91,212) (220,345) (47,905) 7,710 (40,195) (377,452) Unrealized net gains (losses) Unrealized net Unrealized net Employee benefit plans adjustments Year ended December 31, 2021 Pension Post- retirement Subtotal - Total AOCIL Balance at beginning of year (21,065) (60) 72,779 (72,255) (29,079) (101,334) (49,680) Other comprehensive income (loss), net of taxes 152 151 (94,761) 15,855 3,366 19,221 (75,237) Balance at end of year (20,913) 91 (21,982) (56,400) (25,713) (82,113) (124,917) Unrealized net gains (losses) Unrealized net Unrealized net Employee benefit plans adjustments Year ended December 31, 2020 Pension Post- retirement Subtotal - Total AOCIL Balance at beginning of year (20,818) (725) 11,808 (66,312) (11,050) (77,362) (87,097) Other comprehensive income (loss), net of taxes (247) 665 60,971 (5,943) (18,029) (23,972) 37,417 Balance at end of year (21,065) (60) 72,779 (72,255) (29,079) (101,334) (49,680) Net Change of AOCIL Components Year ended Line item in the consolidated statements of operations, if any December 31, 2022 December 31, 2021 December 31, 2020 Net unrealized gains (losses) on translation of net investment in foreign operations adjustments Foreign currency translation adjustments N/A (38,925) (3,129) 9,991 Gains (losses) on net investment hedge N/A 34,138 3,281 (10,238) Net change (4,787) 152 (247) Held-to-maturity investment adjustments Net unamortized gains (losses) transferred from AFS N/A (99,143) — — Amortization of net gains (losses) to net income Interest income on investments 7,840 151 665 Net change (91,303) 151 665 Available-for-sale investment adjustments Gross unrealized gains (losses) N/A (298,768) (94,960) 62,191 Net unrealized (gains) losses transferred to HTM N/A 99,143 — — Transfer of realized (gains) losses to net income Net realized gains (losses) on AFS investments 19 239 (1,220) Foreign currency translation adjustments of related balances N/A 1,243 (40) — Net change (198,363) (94,761) 60,971 Employee benefit plans adjustments Defined benefit pension plan Net actuarial gain (loss) N/A 6,218 14,772 (8,363) Net loss (gain) on settlement reclassified to net income Net other gains (losses) (907) — — Prior service credit (cost) arising during the year N/A — (399) (47) Amortization of net actuarial (gains) losses Non-service employee benefits expense 2,218 2,766 2,412 Change in deferred taxes N/A — (1,462) 456 Amortization of prior service (credit) cost Non-service employee benefits expense 81 (25) 20 Foreign currency translation adjustments of related balances N/A 885 203 (421) Net change 8,495 15,855 (5,943) Post-retirement healthcare plan Net actuarial gain (loss) N/A 31,455 1,163 (18,553) Amortization of net actuarial (gains) losses Non-service employee benefits expense 1,444 1,679 — Amortization of prior service (credit) cost Non-service employee benefits expense 524 524 524 Net change 33,423 3,366 (18,029) Other comprehensive income (loss), net of taxes (252,535) (75,237) 37,417 |
Capital structure
Capital structure | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Capital structure | Note 24: Capital structure Authorized Capital The Bank trades on the New York Stock Exchange under the ticker symbol "NTB" and on the BSX under the symbol "NTB.BH". The par value of each issued common share and each authorized but unissued common share is BM$0.01 and the authorized share capital of the Bank comprises 2,000,000,000 common shares of par value BM$0.01 each, 6,000,000,000 non‑voting ordinary shares of par value BM$0.01 each, 110,200,001 preference shares of par value US$0.01 each and 50,000,000 preference shares of par value £0.01 each. Dividends Declared During the year ended December 31, 2022, the Bank declared and paid cash dividends of $1.76 (December 31, 2021: $1.76, December 31, 2020: $1.76) for each common share as of the related record dates. On February 13, 2023, the Board of Directors declared an interim dividend of $0.44 per common share to be paid on March 14, 2023 to shareholders of record on February 27, 2023. The Bank is required to comply with Section 54 of the Companies Act 1981 issued by the Government of Bermuda (the “Companies Act”) each time a dividend is declared or paid by the Bank and also obtain a letter of no objection from the BMA pursuant to the Banks and Deposit Companies Act 1999 for any dividends declared. The Bank has complied with Section 54 and has obtained the BMA's letter of no objection for all dividends declared during the periods presented. Regulatory Capital The Bank’s regulatory capital is determined in accordance with current Basel III guidelines as issued by the BMA. The Bank is fully compliant with all regulatory capital requirements to which it is subject, and it maintains capital ratios in excess of regulatory minimums as at December 31, 2022 and 2021. The following table sets forth the Bank's capital adequacy in accordance with the Basel III framework: December 31, 2022 December 31, 2021 Actual Regulatory minimum Actual Regulatory minimum Capital CET 1 capital 983,342 N/A 896,263 N/A Tier 1 capital 983,342 N/A 896,263 N/A Tier 2 capital 183,640 N/A 183,998 N/A Total capital 1,166,982 N/A 1,080,261 N/A Risk Weighted Assets 4,843,370 N/A 5,101,474 N/A Leverage Ratio Exposure Measure 14,774,309 N/A 15,921,624 N/A Capital Ratios (%) CET 1 capital 20.3 % 10.0 % 17.6 % 10.0 % Tier 1 capital 20.3 % 11.5 % 17.6 % 11.5 % Total capital 24.1 % 13.5 % 21.2 % 13.5 % Leverage ratio 6.7 % 5.0 % 5.6 % 5.0 % |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 25: Income taxes The Bank is incorporated in Bermuda, and pursuant to Bermuda law is not taxed on either income or capital gains. The Bank’s subsidiaries in the Cayman Islands and The Bahamas are not subject to any taxes in their respective jurisdictions on either income or capital gains under current law applicable in the respective jurisdictions. The Bank’s subsidiaries in Canada, the United Kingdom, Guernsey, Jersey, Switzerland, Singapore and Mauritius are subject to the tax laws of those jurisdictions. For the years ended December 31, 2022, 2021, and 2020, the Bank did not record any unrecognized tax benefits or expenses and has no uncertain tax positions as at December 31, 2022, 2021, and 2020. The Bank records income taxes based on the enacted tax laws and rates applicable in the relevant jurisdictions for the years ended December 31, 2022, 2021, and 2020. For the years ended December 31, 2022, 2021, and 2020, the Bank did not incur any interest or pay any penalties. Year ended Income taxes in consolidated statements of operations December 31, 2022 December 31, 2021 December 31, 2020 Current tax expense 3,223 2,818 2,382 Deferred tax (recovery) expense 459 305 (4) Total tax (benefit) expense 3,682 3,123 2,378 Reconciliation between the Effective Income Tax Rate and the Statutory Income Tax Rate Year ended December 31, 2022 December 31, 2021 December 31, 2020 $ % $ % $ % Income tax expense in international offices taxed at different rates 4,349 2.0 3,366 2.0 2,695 1.8 Expenses not deductible for tax purposes 283 0.1 408 0.2 299 0.2 Prior year tax adjustments 83 — (231) (0.1) 41 — Effect of change in tax rate 125 0.1 (1,217) (0.7) — — Change in valuation allowance (1,364) (0.6) 585 0.4 (582) (0.4) Other - net 206 0.1 212 0.1 (75) (0.1) Income tax (benefit) expense at effective tax rate 3,682 1.7 3,123 1.9 2,378 1.6 Deferred income taxes December 31, 2022 December 31, 2021 Deferred income tax asset Tax loss carried forward 5,863 8,269 Allowance for compensated absence 19 — Deferred income tax asset before valuation allowance 5,882 8,269 Less: valuation allowance (3,478) (4,842) Deferred income tax asset after valuation allowance 2,404 3,427 Deferred income tax liability Fixed assets (477) (735) Allowance for compensated absence — (27) Total deferred income tax liability (477) (762) Net deferred income tax assets 1,927 2,665 Management assesses the available positive and negative evidence to evaluate if sufficient future taxable income will be generated to use the existing deferred tax assets. On the basis of this evaluation, as at December 31, 2022, a valuation allowance of $3.5 million (December 31, 2021: $4.8 million) has been recognized to record only the portion of the deferred tax asset that more likely than not will be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carry-forward period change, or if there are changes in the available positive and negative evidence. The Bank has net taxable loss carry forwards related to the Bank’s international operations of approximately $27.8 million (December 31, 2021: $41.4 million). Of these losses available to carry forward, $27.3 million (December 31, 2021: $39.9 million) have an indefinite life. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related-party transactions | Note 26: Related party transactions Financing Transactions Certain directors and executives of the Bank, companies in which they are principal owners and/or members of the board, and trusts in which they are involved, have deposits with the Bank, have loans and/or are guarantors for 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 for preferential rates. All of these loans were considered performing loans as at December 31, 2022 and December 31, 2021. Loan balances with directors and executives of the Bank, companies in which they are principal owners and/or members of the board, and trusts in which they are involved were as follows: Balance at December 31, 2020 42,391 Net loans issued (repaid) during the year (40,448) Effect of changes in the composition of related parties 5,432 Balance at December 31, 2021 7,375 Net loans issued (repaid) during year (5,362) Effect of changes in the composition of related parties 18,380 Balance at December 31, 2022 20,393 Consolidated balance sheets December 31, 2022 December 31, 2021 Deposits 92,806 21,683 Year ended December 31 Consolidated statement of operations 2022 2021 2020 Interest and fees on loans 900 1,209 1,444 Certain affiliates of the Bank have loans and deposits with the Bank which were made and are maintained in the ordinary course of business on normal commercial terms. Balances with these parties were as follows: Consolidated balance sheets December 31, 2022 December 31, 2021 Loans 10,211 10,489 Deposits 560 441 Year ended December 31 Consolidated statement of operations 2022 2021 2020 Interest and fees on loans 669 618 654 Other gains/losses — 99 742 Total non-interest expense 1,720 1,519 1,431 Other non-interest income 242 — — Investments The Bank held seed investments in Butterfield mutual funds, which were managed by a wholly-owned subsidiary of the Bank. These investments were sold during the year ended December 31, 2021. As at December 31, 2022, several Butterfield mutual funds which are managed by a wholly owned subsidiary of the Bank, had loan balances and deposit balances held with the Bank. The Bank also earned asset management revenue and custody and other administration services revenue from funds managed by a wholly-owned subsidiary of the Bank and from directors and executives, companies in which they are principal owners and/or members of the board and trusts in which they are involved, as well as other income from other related parties. Consolidated balance sheets December 31, 2022 December 31, 2021 Deposits 20,549 22,346 Year ended December 31 Consolidated statement of operations 2022 2021 2020 Asset management 7,379 5,217 7,131 Custody and other administration services 839 622 1,108 Other non-interest income — 6 729 |
Condensed financial statements
Condensed financial statements of the parent company only | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed financial statements of the parent company only | Note 27: Condensed financial statements of the parent company only Condensed financial statements of the Bank of N.T. Butterfield & Son Limited (the ultimate parent company) without consolidation of its subsidiaries were as follows: The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Balance Sheets (In thousands of US dollars) As at December 31, 2022 December 31, 2021 Assets Cash and demand deposits with banks - Non-interest-bearing 38,835 41,993 Demand deposits with banks - Interest-bearing 142,213 135,038 Cash equivalents - Interest-bearing 723,323 591,294 Cash and cash equivalents 904,371 768,325 Securities purchased under agreements to resell 59,871 96,107 Short-term investments 80,315 242,691 Investment in securities Equity securities at fair value 236 222 Available-for-sale (amortized cost: $944,746 (2021: 1,419,712)) 853,749 1,417,117 Held-to-maturity (fair value: $1,238,333 (2021: $1,030,969)) 1,421,556 1,011,584 Total investment in securities 2,275,541 2,428,923 Net assets of subsidiaries - Banks 480,297 594,930 Net assets of subsidiaries - Non-banks 1,563 17,091 Loans to third parties, net of allowance for credit losses 1,839,622 1,966,895 Loans to subsidiaries - Banks — 13,534 Loans to subsidiaries - Non-banks 58,056 61,901 Other assets, including accrued interest, premises, equipment and computer software, equity method investments, receivables from subsidiaries and other real estate owned 242,796 188,263 Total assets 5,942,432 6,378,660 Liabilities Deposits Non-interest bearing 1,811,455 1,686,985 Interest bearing 2,936,307 3,360,185 Total deposits 4,747,762 5,047,170 Employee benefit plans 91,983 125,968 Other liabilities, including accrued interest and payables to subsidiaries 65,583 56,153 Total other liabilities 157,566 182,121 Long-term debt 172,289 171,876 Total liabilities 5,077,617 5,401,167 Total shareholders’ equity 864,815 977,493 Total liabilities and shareholders’ equity 5,942,432 6,378,660 The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Operations (In thousands of US dollars) Year ended December 31, 2022 December 31, 2021 December 31, 2020 Non-interest income Banking 26,116 24,465 24,429 Foreign exchange revenue 11,858 9,660 9,166 Custody and other administration services 6,869 7,693 6,927 Other non-interest income 1,269 3,372 5,924 Dividends from subsidiaries - Banks 72,268 82,327 121,522 Dividends from subsidiaries - Non-banks 21,318 22,656 19,864 Total non-interest income 139,698 150,173 187,832 Interest income Interest and fees on loans 118,829 116,031 123,774 Investments 49,790 44,663 52,135 Deposits with banks and other 14,499 2,056 3,109 Total interest income 183,118 162,750 179,018 Interest expense Deposits 10,834 6,405 9,386 Long-term debt 9,601 9,601 9,294 Securities sold under agreement to resell 22 — — Total interest expense 20,457 16,006 18,680 Net interest income before provision for credit losses 162,661 146,744 160,338 Provision for credit (losses) recoveries (1,226) 2,206 (8,750) Net interest income after provision for credit losses 161,435 148,950 151,588 Net gains (losses) on equity securities 14 85 658 Net realized gains (losses) on available-for-sale investments — — 702 Net gains (losses) on other real estate owned 9 (84) (104) Net other gains (losses) — 850 714 Total other gains (losses) 23 851 1,970 Total net revenue 301,156 299,974 341,390 Non-interest expense Salaries and other employee benefits 65,789 62,405 69,521 Technology and communications 29,551 35,675 35,434 Professional and outside services 29,744 27,726 27,791 Property 10,232 9,586 9,092 Indirect taxes 15,714 15,906 15,633 Non-service employee benefits expense 4,845 4,493 3,462 Marketing 3,629 2,497 2,418 Amortization of intangible assets 169 169 169 Other expenses 9,613 9,502 9,896 Total non-interest expense 169,286 167,959 173,416 Net income before equity in undistributed earnings of subsidiaries 131,870 132,015 167,974 Equity in undistributed earnings of subsidiaries 82,150 30,653 (20,757) Net income 214,020 162,668 147,217 Other comprehensive income, net of tax (252,535) (75,237) 37,417 Total comprehensive income (38,515) 87,431 184,634 The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Cash Flows (In thousands of US dollars) Year ended December 31, 2022 December 31, 2021 December 31, 2020 Cash flows from operating activities Net income 214,020 162,668 147,217 Adjustments to reconcile net income to operating cash flows Depreciation and amortization 14,922 28,617 26,562 Provision for credit losses (recoveries) 1,226 (2,206) 8,750 Share-based payments and settlements 17,077 15,151 15,245 Net change in equity securities at fair value (14) 7,096 102 Net realized (gains) losses on available-for-sale investments — — (702) Net (gains) losses on other real estate owned (9) 84 104 (Increase) decrease in carrying value of equity method investments 120 31 (1,376) Dividends received from equity method investments 12 291 2,710 Equity in undistributed earnings of subsidiaries (82,150) (30,653) 20,757 Changes in operating assets and liabilities (Increase) decrease in accrued interest receivable and other assets (25,888) 10,665 754 Increase (decrease) in employee benefit plans, accrued interest payable and other liabilities 15,386 (14,597) 9,456 Cash provided by (used in) operating activities 154,702 177,147 229,579 Cash flows from investing activities (Increase) decrease in securities purchased under agreements to resell 36,236 100,932 (54,756) Short-term investments other than restricted cash: proceeds from maturities and sales 821,645 163,396 68,272 Short-term investments other than restricted cash: purchases (666,837) (391,996) (35,319) Available-for-sale investments: proceeds from sale — 367 205,770 Available-for-sale investments: proceeds from maturities and pay downs 112,274 299,367 295,547 Available-for-sale investments: purchases (44,504) (669,391) (317,451) Held-to-maturity investments: proceeds from maturities and pay downs 158,665 269,311 229,576 Held-to-maturity investments: purchases (203,867) (316,820) (195,898) Net (increase) decrease in loans to third parties 125,215 60,395 8,263 Net (increase) decrease in loans to bank subsidiaries 13,534 135 (428) Net (increase) decrease in loans to non-bank subsidiaries 3,845 (3,386) (1,564) Additions to premises, equipment and computer software (20,567) (10,372) (11,313) Proceeds from sale of other real estate owned 730 314 — Injection of capital in subsidiary (6,083) (1,465) (1,522) Return of capital from a subsidiary — — 3,314 Cash provided by (used in) investing activities 330,286 (499,213) 192,491 The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Cash Flows (In thousands of US dollars) Year ended December 31, 2022 December 31, 2021 December 31, 2020 Cash flows from financing activities Net increase (decrease) in demand and term deposit liabilities (265,270) (192,756) 630,141 Issuance of subordinated capital, net of underwriting fees — — 97,647 Repayment of long-term debt — — (70,000) Common shares repurchased (3,897) (19,754) (86,640) Proceeds from stock option exercises — — 1,739 Cash dividends paid on common shares (87,343) (87,285) (88,932) Cash provided by (used in) financing activities (356,510) (299,795) 483,955 Net increase (decrease) in cash, cash equivalent and restricted cash 128,478 (621,861) 906,025 Cash, cash equivalents and restricted cash: beginning of year 782,415 1,404,276 498,251 Cash, cash equivalents and restricted cash: end of year 910,893 782,415 1,404,276 Components of cash, cash equivalents and restricted cash at end of year Cash and cash equivalents 904,371 768,325 1,387,999 Restricted cash included in short-term investments on the consolidated balance sheets 6,522 14,090 16,277 Total cash, cash equivalents and restricted cash at end of year 910,893 782,415 1,404,276 Supplemental disclosure of cash flow information Cash interest paid 18,680 15,156 19,532 Supplemental disclosure of non-cash items Transfer to (out of) other real estate owned 830 307 314 Transfer of available-for-sale investments to held-to-maturity investments 364,983 — — Initial recognition of right-of-use assets and operating lease liabilities — 536 — Reduction in net loans due to initial adoption of a current expected credit loss model — — 3,899 |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 28: Subsequent events On February 13, 2023, the Board of Directors declared an interim dividend of $0.44 per common share to be paid on March 14, 2023 to shareholders of record on February 27, 2023. |
Significant accounting polici_2
Significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Use of Estimates and AssumptionsThe 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 and Assumptions | 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 estimates 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 of financial instruments • Impairment of goodwill • Employee benefit plans • Share-based compensation |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (collectively the “Bank”). Intercompany accounts and transactions have been eliminated. The Bank consolidates entities where it holds, directly or indirectly, more than 50% of the voting rights or where it otherwise exercises control. Entities where the Bank holds 20% to 50% of the voting rights and/or has the ability to exercise significant influence are accounted for under the equity method, and the pro rata share of their income (loss) is included in other non-interest income. |
Foreign Currency Translation | Foreign Currency Translation Assets, liabilities, revenues and expenses denominated in Bermuda dollars are translated to US dollars at par. Assets and liabilities of the parent company arising from other foreign currency transactions are translated into US dollars at the rates of exchange prevailing at the balance sheet date. The resulting gains or losses are included in foreign exchange revenue in the consolidated statements of operations. The assets and liabilities of foreign currency-based subsidiaries are translated at the rate of exchange prevailing on the balance sheet date, while associated revenues and expenses are translated to US dollars at the average rates of exchange prevailing throughout the year. Unrealized translation gains or losses on investments in foreign currency- based subsidiaries are recorded as a separate component of Shareholders' equity within accumulated other comprehensive income (loss) (“AOCIL”). Gains and losses on foreign currency-based subsidiaries are recorded in the consolidated statements of operations when the Bank ceases to have a controlling financial interest in a foreign currency-based subsidiary. |
Assets Held in Trust or Custody | Assets Held in Trust or CustodySecurities and properties (other than cash and deposits held with the Bank and its subsidiaries) held in trust, custody, agency or fiduciary capacity for customers are not included in the consolidated balance sheets because the Bank is not the beneficiary of these assets. |
Cash and Cash Equivalents and Consolidated Statements of Cash Flows | Cash and cash equivalentsCash and cash equivalents includes cash on hand, cash items in the process of collection, amounts due from correspondent banks and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in fair value. Such investments are those with a maturity of three months or less from the date of acquisition and include unrestricted term deposits, certificates of deposit and treasury bills.Consolidated Statements of Cash FlowsFor the purposes of the consolidated statements of cash flows, cash and cash equivalents includes cash on hand, cash items in the process of collection, amounts due from correspondent banks and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in fair value, and restricted cash included in short-term investments on the consolidated balance sheets. |
Securities Purchased under Agreement to Resell and Collateral | Securities Purchased Under Agreement to ResellSecurities purchased under agreement to resell are treated as collateralized lending transactions. The obligation to resell is recorded at the value of the cash paid on purchase adjusted for the amortization of the difference between the purchase price and the agreed resell price. The amortization of this amount is recorded as interest income.CollateralThe Bank pledges assets as collateral as required for various transactions involving security repurchase agreements, deposit products and derivative financial instruments. Assets that have been pledged as collateral, including those that can be sold or repledged by the secured party, continue to be reported on the Bank’s consolidated balance sheets under the same line items as non-pledged assets of the same type. |
Short-Term Investments and Investments | Short-Term InvestmentsShort-term investments have maturities of one year or less 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 are reported on the consolidated balance sheets at their trade date. 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. Equity securities with readily determinable fair values are carried at fair value in the consolidated balance sheets, with unrealized gains and losses included in the consolidated statements of operations as net gains (losses) on equity securities. Contained within other assets are investments in private equity for which the Bank does not have sufficient rights or ownership interests to follow the equity method of accounting. Unquoted equity investments which are held directly by the Bank and which do not have readily determinable fair values are recorded at cost, less impairment, plus or minus observable price changes from transactions of identical or similar securities. Debt securities are classified as available-for-sale (“AFS”) or held-to-maturity (“HTM”). Investments are classified primarily as AFS when used to manage the Bank’s exposure to interest rate and liquidity movements, as well as to make strategic longer-term investments. AFS investments are carried at fair value in the consolidated balance sheets with unrealized gains and losses reported in AOCIL, net of the allowance for credit losses. Investments that the Bank has the positive intent and ability to hold to maturity are classified as HTM and are carried at amortized cost in the consolidated balance sheets, net of the allowance for credit losses. Unrecognized gains and losses on HTM securities are disclosed in the notes to the consolidated financial statements. The specific identification method is used to determine realized gains and losses on investments, which are included in net gains (losses) on equity securities and net realized gains (losses) on AFS investments respectively, in the consolidated statements of operations. Dividend and interest income, including amortization of premiums and discounts, on securities for which cash flows are not considered uncertain are included in interest income in the consolidated statements of operations. Impairment and credit losses (From January 1, 2020) For debt securities, where management does not expect to recover the entire amortized cost basis of the security and intends to sell such securities or it is more likely than not that the Bank will be required to sell the securities before recovering the amortized cost, the Bank recognizes an impairment loss equal to the full difference between the amortized cost basis and the fair value of those securities through the statement of operations. Following the recognition of impairment, the security's new amortized cost basis is the previous basis less impairment. When management does not intend to sell or it is more likely than not that the Bank will hold such securities until recovering the amortized cost, management determines whether any credit losses exist. See "Note 2.J: Allowance for Credit Losses". Recognition of other-than-temporary impairments (Prior to January 1, 2020) For debt securities, management considers a decline in fair value to be other-than-temporary when it does not expect to recover the entire amortized cost basis of the security. Investments in debt securities in unrealized loss positions are analyzed as part of management’s ongoing assessment of other-than-temporary impairment (“OTTI”). When management intends to sell such securities or it is more likely than not that the Bank will be required to sell the securities before recovering the amortized cost, it recognizes an impairment loss equal to the full difference between the amortized cost basis and the fair value of those securities. When management does not intend to sell or it is more likely than not that the Bank will hold such securities until recovering the amortized cost, management determines whether any credit losses exist to identify any OTTI. Under certain circumstances, management will perform a qualitative determination and consider a variety of factors, including the length of time and extent to which the fair value has been less than cost; adverse conditions specifically related to the industry, geographic area or financial condition of the issuer or underlying collateral of a security; payment structure of the security; changes to the rating of the security by a rating agency; the volatility of the fair value changes; and changes in fair value of the security after the balance sheet date. Alternatively, management estimates cash flows over the remaining lives of the underlying security to assess whether credit losses exist. In situations where there is a credit loss, only the amount of impairment relating to credit losses on AFS and HTM investments is recognized in net income. For AFS investments, the decrease in fair value relating to factors other than credit losses is recognized in AOCIL. Cash flow estimates take into account expectations of relevant market and economic data as of the end of the reporting period, including, for example, underlying loan-level data, and structural features of securitization, such as subordination, excess spread, over collateralization or other forms of credit enhancement. The degree of judgment involved in determining the recoverable value of an investment security is dependent upon the availability of observable market prices or observable market parameters. When observable market prices and parameters do not exist, judgment is necessary to estimate recoverable value which gives rise to added uncertainty in the assessment. The assessment takes into consideration factors such as interest rate changes, movements in credit spreads, default rate assumptions, prepayment assumptions, type and quality of collateral, and market sentiment. Management's fair valuations may include inputs and assumptions that are less observable or require greater estimation, thereby resulting in values which may be greater or lower than the actual value at which the investments may be ultimately sold or the ultimate cash flows that may be recovered. If the assumptions on which management based its fair valuations change, the Bank may experience additional OTTI or realized losses or gains, and the period-to-period changes in value could vary significantly. |
Loans | Loans Loans are reported as the principal amount outstanding, net of allowance for credit losses, unearned income, fair value adjustments arising from hedge accounting and net deferred loan fees. Interest income is recognized over the term of the loan using the effective interest method, or on a basis approximating a level rate of return over the term of the loan, except for loans classified as non-accrual. Prepayments are treated as a reduction of principal outstanding which is recognized upon receipt of payment. Prepayment penalties, if applicable under the terms of the specific loan agreement, are recognized also upon receipt of payment. Acquired loans Acquired loans that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit quality since origination, are accounted for as purchased credit-deteriorated ("PCD") loans. PCD loans are recorded at their purchase price with an adjustment to the amortized cost basis for the initial expected credit losses at the time of acquisition, i.e. via a balance sheet gross-up. Changes in estimates of expected credit losses after acquisition are recognized as a movement in provision for credit recoveries (losses) in the statement of operations. Generally, acquired loans that meet the Bank's definition for non-accrual status are considered to be PCD loans. The Bank's purchased credit-impaired (“PCI”) loans outstanding as at January 1, 2020 are now classified as PCD loans and both the amortized cost and an allowance for expected credit losses are disclosed and included with other non-PCD loans' figures. The Bank will continue to recognize the amortization of the noncredit discount, if any, as interest income based on the yield of such assets as at the date of purchase. Participated or Assigned Loans The Bank may act as lead lender on large loans from time to time and may for strategic or commercial reasons, assign portions of such loans to other market participants. Such assignments are without full right of recourse to the Bank as the lead lender and participants/assignees accept all risks and obligations of the ultimate borrower associated with their proportional participation and assignment in such loans. The Bank records the unassigned portion of the principal outstanding in such loans on the consolidated balance sheets and records only its proportional share of interest income on the unassigned portion of the loan in the consolidated statement of operations. Impaired loans A loan is considered to be impaired when, based on current information and events, the Bank determines that it will not be able to collect all amounts due according to the original loan contract, including scheduled interest payments. Impaired loans include all non-accruing loans and all loans modified in a troubled debt restructuring (‘‘TDR’’) even if full collectability is expected following the restructuring. If the Bank determines that the expected realizable value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate. If the Bank determines that part of the allowance is uncollectible, that amount is charged off. Non-accrual Commercial, commercial real estate and consumer loans (excluding credit card consumer loans) are placed on non-accrual status if: • in the opinion of management, full payment of principal or interest is in doubt; or • principal or interest is 90 days past due. Residential mortgages are placed on non-accrual status immediately if: • in the opinion of management, full payment of principal or interest is in doubt; or • when principal or interest is 90 days past due, unless the loan is well secured and any ongoing collection efforts are reasonably expected to result in repayment of all amounts due under the contractual terms of the loan. Cash received on non-accrual loans is applied firstly against the past due principal amount of the loan and secondly to past due interest and fees. Interest income on these loans is recognized only after the entire past due principal balance receivable is recovered and only to the extent that interest payments are received in cash. Loans are returned to accrual status when: • none of the principal or accrued interest is past due (with certain exceptions as noted below) and the Bank expects repayment of the remaining contractual obligation; or • when the loan becomes well secured and in the process of collection. Loans modified in a TDR A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession from originally agreed terms. If a restructuring is considered a TDR, the Bank is required to make certain disclosures to the notes of the consolidated financial statements and evaluate the restructured loan for impairment. The Bank employs various types of concessions when modifying a loan which may include extension of repayment periods, interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. Commercial and industrial loans modified in a TDR may involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor may be requested. Commercial mortgage and construction loans modified in a TDR may involve extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period. Residential mortgage modifications generally involve a short-term forbearance period after which the missed payments are added to the end of the loan term, thereby extending the maturity date. Interest continues to accrue on the missed payments and as a result, the effective yield on the mortgage remains unchanged. As the forbearance period usually involves an insignificant payment delay they typically do not meet the reporting criteria for a TDR. Automobile loans modified in a TDR are primarily composed of loans where the Bank has lowered monthly payments by extending the term. When a loan undergoes a TDR, the determination of the loan's accrual versus non-accrual status following the modification depends on several factors. As with the risk rating process, the accrual status decision for such a loan is a separate and distinct process from the loan's TDR analysis and determination. Management considers the following in determining the accrual status of restructured loans: • If the loan was appropriately on accrual status prior to the restructuring, the borrower has demonstrated performance under the previous terms, and the Bank's credit evaluation shows the borrower's capacity to continue to perform under the restructured terms (both principal and interest payments), it is likely that the appropriate conclusion is for the loan to remain on accrual at the time of the restructuring. This evaluation must include consideration of the borrower's sustained historical repayment performance for a reasonable period prior to the date on which the loan was restructured. A sustained period of repayment performance generally would be a minimum of six months and would involve payments of cash or cash equivalents; or • If the loan was on non-accrual status before the restructuring, but the Bank's credit evaluation shows the borrower's capacity to meet the restructured terms, the loan would likely remain as non-accrual until the borrower has demonstrated a reasonable period of sustained repayment performance. As noted above, this period generally would be at least six months (thereby providing reasonable assurance as to the ultimate collection of principal and interest in full under the modified terms). Sustained performance before the restructuring may be taken into account. Loans that have been modified in a TDR are restored to accrual status only when interest and principal payments are brought current for a continuous period of six months under the modified terms. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on non-accrual status. A loan that is modified in a TDR prior to becoming impaired will be left on accrual status if full collectability in accordance with the restructured terms is expected. The Bank may enter into a TDR for loans that are in default, or at risk of defaulting, even if the loan is not impaired. A loan that had previously been modified in a TDR and is subsequently refinanced under current underwriting standards at a market rate with no concessionary terms is accounted for as a new loan and is no longer reported as a TDR. Delinquencies The entire balance of an account is contractually delinquent if the minimum payment of principal or interest is not received by the specified due date. Delinquency is reported on loans that are more than 30 days past due. Charge-offs The Bank recognizes charge-offs when it determines that loans are uncollectible, and this generally occurs when all commercially reasonable means of recovering the loan balance have been exhausted. Commercial and consumer loans are either fully or partially charged-off down to the fair value of collateral securing the loans when: • management judges the loan to be uncollectible; • repayment is expected to be protracted beyond reasonable time frames; • the asset has been classified as a loss by either the Bank’s internal loan review process or third party appraisers; or • the customer has filed bankruptcy and the loss becomes evident owing to a lack of assets or cash flow. The outstanding balance of commercial and consumer real estate secured loans and residential mortgages that are in excess of the estimated property value, less costs to sell, is charged-off once there is reasonable assurance that such excess outstanding balance is not recoverable. Credit card consumer loans that are contractually 180 days past due and other consumer loans with an outstanding balance under $100,000 that are contractually 180 days past due are generally written off and reported as charge-offs. |
Allowance for Credit Losses | Allowance for Credit Losses Accounting for Financial instruments - Credit losses Starting on January 1, 2020 the Bank adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (Topic 326). Accordingly, from the date of adoption, the Bank uses a current expected credit loss model ("CECL") which is based on expected losses. The model used by the Bank up to December 31, 2019 to estimate credit losses was based on incurred losses. The CECL model is applied by the Bank to the measurement of credit losses on financial instruments at amortized cost, including loan receivables and HTM debt securities. The Bank also applies the CECL model to certain off-balance sheet credit exposures such as undrawn loan commitments, standby letters of credit, financial guarantees, and other similar instruments. In line with Topic 326, the Bank will present credit losses on AFS securities as a valuation allowance rather than as a direct write-down. Changes in expected credit losses are recorded through the respective credit loss allowances on the consolidated balance sheets as well as in the provision for credit losses (recoveries) in the consolidated statements of operations. The Bank's PCI loans outstanding as at January 1, 2020 were classified as PCD loans and both the amortized cost and an allowance for expected credit losses were disclosed and included with other non-PCD loans' figures. The Bank will continue to recognize the amortization of the noncredit discount, if any, as interest income based on the yield of such assets. The Bank has not restated comparative information previously accounted for under the incurred loss and the PCI models. The total adjustment resulting from the adoption of this methodology on the opening balance of the Bank’s accumulated deficit as at January 1, 2020 was a negative adjustment of $7.8 million relating to the Bank's loan portfolio. Under the CECL model, the Bank collects and maintains attributes as they relate to its financial instruments that are within the scope of CECL including fair value of collateral, expected performance over the lifetime of the instruments and reasonable and supportable assumptions about future economic conditions. The Bank's measurement of expected losses takes into account historical loss information and is primarily based on the product of: the respective instrument’s probability of default (“PD”), loss given default (“LGD”) and exposure at default (“EAD”). For AFS securities, any allowance for credit losses is based on an impairment assessment. The Bank made the accounting policy election to write off accrued interest receivable on loans that are placed on non-accrual status by reversing the then accrued interest balance against interest income revenue. The Bank maintains an allowance for credit losses, which in management’s opinion is adequate to absorb all estimated credit-related losses that are expected in its lending and off-balance sheet credit-related arrangements at the balance sheet date. Management measures expected credit losses on HTM and AFS debt securities on a collective basis by major security type when similar risk characteristics exist, or failing that, on an individual basis. For AFS debt securities in an unrealized loss position, the Bank first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Bank evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Losses are charged against the allowance when management believes the uncollectibility of an AFS debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met. The allowance for credit losses on loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries typically do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts as well as the Bank's internal risk rating framework. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in the current-loan specific risk characteristics such as differences in underwriting practices, vintage, portfolio mix, delinquency level, term as well as changes in environmental conditions, such as changes in macroeconomic factors and collateral values. The allowance for credit losses is measured on a collective pool basis when similar risk characteristics exist. In each of its jurisdictions, the Bank has identified the following portfolio segments: Residential mortgages, Consumer loans (including overdrafts), Commercial loans, Commercial overdrafts, Commercial real estate loans and Credit cards. For loans and overdrafts, management uses a PD and LGD model to estimate the allowance for credit losses. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. For Credit cards, management uses a loss rate to estimate expected credit losses. Expected credit losses are estimated over the contractual term of the loans. The contractual term excludes potential extensions, renewals and modifications unless management has a reasonable expectation at the reporting date that the extension or renewal options included in the original contract will occur or that a troubled debt restructuring will be executed. Credit card receivables do not have stated maturities, therefore establishing a contractual term is performed by using an analytical approximation of behavior. |
Business Combinations | All business combinations are accounted for using the acquisition method. |
Goodwill and Intangible Assets | Identifiable intangible assets (mostly customer relationships) are recognized separately from goodwill and are initially valued at fair value using discounted cash flow calculations and other recognized valuation techniques. Goodwill represents the excess of the fair value of the consideration paid for the acquisition of a business over the fair value of the net assets acquired. A contingent purchase consideration is measured at its fair value and recorded on the purchase date. Any subsequent changes in the fair value of a contingent consideration liability will be recorded through the consolidated statements of operations.Goodwill is tested annually for impairment at the reporting unit level, or more frequently if events or circumstances indicate there may be impairment. If the carrying amount of a reporting unit, including the allocated goodwill, exceeds its fair value, goodwill impairment is measured as the excess of the carrying amount of the reporting unit's allocated goodwill over the implied fair value of the goodwill. Other acquired intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives, not exceeding 15 years. Intangible assets' estimated lives are re-evaluated annually and an impairment test is carried out if certain indicators of impairment exist. |
Premises, Equipment and Computer Software | Premises, Equipment and Computer SoftwareLand is carried at cost. Buildings, equipment and computer software, including leasehold improvements, are carried at cost less accumulated depreciation. The Bank generally computes depreciation using the straight-line method over the estimated useful life of an asset, which is 50 years for buildings, and 3 to 10 years for other equipment. For leasehold improvements the Bank uses the straight-line method over the lesser of the remaining term of the leased facility or the estimated economic life of the improvement. The Bank capitalizes certain costs, including interest costs incurred during the development phase, associated with the acquisition or development of internal use software. Once the software is ready for its intended use, these costs are amortized on a straight-line basis over the software's expected useful life, which is between 5 and 10 years. The Bank capitalizes certain implementation costs for cloud computing arrangements, which includes infrastructure as a service, and these costs are then amortized on a straight-line basis over the term of the arrangement. Management reviews the recoverability of the carrying amount of premises, equipment and computer software when indicators of impairment exist and an impairment charge is recorded when the carrying amount of the reviewed asset is deemed not recoverable by future expected cash flows to be derived from the use and disposition of the asset. If there is a disposition of premises, equipment and computer software, a gain is recorded if the difference of the proceeds on disposition is in excess of the asset's carrying value. Otherwise, a loss is recorded. If there is an abandonment out of premises, equipment and computer software, the full carrying value of the asset is recognized as a loss. |
Other Real Estate Owned | Other Real Estate OwnedOther real estate owned (“OREO”) comprises real estate property held for sale and commercial and residential real estate properties acquired in partial or total satisfaction of loans acquired through foreclosure proceedings, acceptance of a deed-in-lieu of foreclosure or by taking possession of assets that were used as loan collateral. These properties are initially recorded at fair value less estimated costs to sell the property. If the recorded investment in the loan exceeds the property’s fair value at the time of acquisition, a charge-off is recorded against the specific allowance. If the carrying value of the real estate exceeds the property’s fair value at the time of reclassification, an impairment charge is recorded in the consolidated statements of operations. Subsequent decreases in the property’s fair value below the new cost basis are recorded through the use of a valuation allowance. Subsequent increases in the fair value of a property may be used to reduce the allowance but not below zero. Any operating expenses of the property are recognized through charges to non-interest expense. |
Leases | Leases In the normal course of operations, the Bank enters into leasing agreements either as the lessee or the lessor. The Bank recognizes right-of-use assets and lease liabilities for operating leases. Lease liabilities are measured as the present value of future lease payments, including term renewals that are reasonably certain to occur, discounted using the Bank’s incremental borrowing interest rate. Right-of-use assets are measured as the carrying amount of the related lease liabilities adjusted for prepaid or accrued lease payments, unamortized lease incentive received, unamortized initial direct costs and any impairment of the right-of-use asset. The Bank made accounting policy elections not to separate lease components from non-lease components for all classes of underlying assets; and not to recognize a right-of-use asset and a lease liability for leases with a term at inception of 12 months or less, including renewal options that are reasonably certain to be exercised (referred to as “short term leases”). |
Derivatives | Derivatives All derivatives are recognized on the consolidated balance sheets at their fair value. On the date that the Bank enters into a derivative contract, it designates the derivative as either: a hedge of the fair value of a recognized asset or liability (a fair value hedge); a hedge of a forecasted transaction or the variability of cash flows that are to be received or paid in connection with a recognized asset or liability (a cash flow hedge); a hedge of an exposure to foreign currency risk of a net investment in a foreign operation (a net investment hedge); or, an instrument that is held for trading or non-hedging purposes (a trading or non-hedging derivative instrument). All instruments utilized as a hedging instrument in a fair value hedge or cash flow hedge must have one or more underlying notional amounts, no or a minimal net initial investment and a provision for net settlement in the contract to meet the definition of a derivative instrument. Instruments utilized as a hedging instrument in a hedge of a net investment in foreign operations may be derivative instruments or non-derivatives. The changes in the fair value of a derivative that is designated and qualifies as a fair value hedge, along with changes in the fair value of the hedged asset or liability that are attributable to the hedged risk, are recorded in the consolidated statements of operations. The changes in the fair value of a derivative that is designated and qualifies as a cash flow hedge, to the extent that the hedge is effective, are recorded in other comprehensive income ("OCI") and the ineffective portion is recorded in the statement of operations. That is, ineffectiveness from a derivative that overcompensates for changes in the hedged cash flows is recorded in the consolidated statements of operations. However, the ineffectiveness from a derivative that under compensates is not recorded in the consolidated statements of operations. The changes in the fair value of a derivative that is designated and qualifies as a foreign currency hedge is recorded in either current year earnings or OCI, depending on whether the hedging relationship satisfies the criteria for a fair value or cash flow hedge. If, however, a derivative is used as a hedge of a net investment in a foreign operation, the changes in the derivative’s fair value, to the extent that the derivative is effective as a hedge, are recorded in the CTA account within OCI. Changes in the fair value of trading and non-hedging derivative instruments are reported in the consolidated statements of operations. The Bank formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair value, cash flow, or foreign currency hedges to specific assets and liabilities on the consolidated balance sheets or specific firm commitments or forecasted transactions. The Bank also formally assesses whether the derivatives that are used in hedging transactions have been highly effective in offsetting changes in the fair value or cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods. For those hedge relationships that are terminated, hedge designations that are elected to be removed, forecasted transactions that are no longer expected to occur, or where 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 AOCIL unless it is probable that the forecasted transaction will not occur in the originally specified time period. |
Employee Benefit Plans | Employee Benefit Plans The Bank maintains trusteed pension plans for substantially all employees as either non-contributory defined benefit plans or defined contribution plans. Benefits under the defined benefit plans are based primarily on the employee's years of credited service and average annual salary during the final years of employment as defined in the plans. The Bank also provides post-retirement medical benefits for certain qualifying active and retired Bermuda-based employees. Expense for the defined benefit pension plans and the post-retirement medical benefits plan is composed of (a) the actuarially determined benefits for the current year's service, (b) imputed interest on the actuarially determined liability of the plan, (c) in the case of the defined benefit pension plans, the expected investment return on the fair value of plan assets and (d) amortization of certain items over the expected average remaining service life of employees in the case of the active defined benefit pension plans, estimated average remaining life expectancy of the inactive participants in the case of the inactive defined benefit pension plans and the expected average remaining service life to full eligibility age of employees covered by the plan in the case of the post-retirement medical benefits plan. The items amortized are amounts arising as a result of experience gains and losses, changes in assumptions, plan amendments and the change in the net pension asset or post-retirement medical benefits liability arising on adoption of revised accounting standards. For each of the defined benefit pension plans and for the post-retirement medical benefits plan, the assets and liabilities recognized for accounting purposes are reported in other assets and employee benefit plans respectively. The actuarial gains and losses, transition obligation and prior service costs of the defined pension plans and post-retirement medical benefits plan are recognized in OCI net of tax and amortized to net income over the average service period for the active defined benefit pension plans and post-retirement medical benefits plan and average remaining life expectancy for the inactive defined benefit pension plans. For the defined contribution pension plans, the Bank and participating employees provide an annual contribution based on each participating employee's pensionable earnings. Amounts accrued are expensed in the period. |
Share-based Compensation | Share-Based Compensation The Bank engages in equity settled share-based payment transactions in respect of services received from eligible employees. The fair value of the services received is measured by reference to the fair value of the shares or share options granted on the date of the grant. The cost of the employee services received in respect of the shares or share options granted is recognized in the consolidated statements of operations over the shorter of the vesting or service period. The fair value of the options granted is determined using option pricing models, which take into account the exercise price of the option, the current share price, the risk-free interest rate, expected dividend rate, the expected volatility of the share price over the life of the option and other relevant factors. The fair value of unvested share awards is deemed to be the closing price of the publicly traded Bank shares on grant date. The fair value of time vesting conditions is taken into account by adjusting the number of shares or share options included in the measurement of the costs of employee services so that ultimately, the amount recognized in the consolidated statements of operations reflects the number of vested shares or share options. The Bank recognizes compensation cost for awards with performance conditions if and when the Bank concludes that it is probable that the performance condition will be achieved, net of an estimate of pre-vesting forfeitures (e.g., due to termination of employment prior to vesting). |
Revenue Recognition | Revenue Recognition Trust, custody and other administration services fees include fees for private and institutional trust, executorship, and custody services. Asset management fees include fees for investment management, investment advice and brokerage services. Fees are recognized as revenue over the period of the relationship or when the Bank has rendered all services to the client and is entitled to collect the fee from the client, as long as there are no contingencies associated with the fees. Banking services fees primarily include fees for letters of credit and other financial guarantees, compensating balances, overdraft facilities and other financial services-related products as well as credit card fees. Letters of credit and other financial guarantees fees are recognized as revenue over the period in which the related guarantee is outstanding. Credit card fees are comprised of merchant discounts, late fees and membership fees, net of interchange and rewards costs. Credit card fees and other fees are recognized in the period in which the service is provided. Foreign exchange revenue includes fees earned on currency exchange transactions which are recognized when such transactions occur, as well as gains and losses recognized when translating financial instruments held or due in currencies other than the local functional currency at the rates of exchange prevailing at the balance sheet date. Loan interest income is accrued and recognized in revenues over time and also includes the amortization of deferred non-refundable loan origination and commitment fees. These fees are recognized as an adjustment of yield over the life of the related loan. Loan origination and commitment fees are offset by their related direct costs and only the net amounts are deferred and amortized into interest income. Dividend and interest income, including amortization of premiums and discounts, on securities for which cash flows are not considered uncertain are included in interest income in the consolidated statements of operations. Loans placed on non-accrual status and investments with uncertain cash flows are accounted for under the cost recovery method, whereby all principal, dividends, interest and coupon payments received are applied as a reduction of the amortized cost and carrying amount. |
Fair Values | Fair Values Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Bank determines the fair values of assets and liabilities based on the fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The relevant accounting standard describes three levels of inputs that may be used to measure fair value. Equity securities and debt investments classified as AFS, and derivative assets and liabilities, are recognized in the consolidated balance sheets at fair value. Level 1, 2 and 3 valuation inputs Management classifies items that are recognized at fair value on a recurring basis based on the level of inputs used in their respective fair value determination as described below. Fair value inputs are considered Level 1 when based on unadjusted quoted prices in active markets for identical assets. Fair value inputs are considered Level 2 when based on inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active. Fair value inputs are considered Level 3 when based on internally developed models using significant unobservable assumptions involving management's estimations or non-binding bid quotes from brokers. The following methods and assumptions were used in the determination of the fair value of financial instruments: Cash and cash equivalents The carrying amount of cash and demand deposits with banks, being short-term in nature, is deemed to approximate fair value. Cash equivalents include unrestricted term deposits, certificates of deposits and treasury bills with a maturity of less than three months from the date of acquisition and the carrying value at cost is considered to approximate fair value because they are short-term in nature, bear interest rates that approximate market rates, and generally have negligible credit risk. Short-term investments Short-term investments comprise restricted term and demand deposits and unrestricted term deposits, certificates of deposit and treasury bills with less than one year but greater than three months' maturity from the date of acquisition. The carrying value at cost is considered to approximate fair value because they are short-term in nature, bear interest rates that approximate market rates, and generally have negligible credit risk. Equity securities, defined benefit pension plan equity securities, and mutual funds The fair value of listed equity securities is based upon quoted market values. Investments in actively traded mutual funds are based on their published net asset values. AFS and HTM investments and defined benefit pension plan fixed income securities The fair values for AFS investments are generally sourced from third parties. The fair value of fixed income securities is based upon quoted market values where available, “evaluated bid” prices provided by third party pricing services (“pricing services”) where quoted market values are not available, or by reference to broker or underwriter bid indications where pricing services do not provide coverage for a particular security. To the extent the Bank believes current trading conditions represent distressed transactions, the Bank may elect to utilize internally generated models. The pricing services typically use market approaches for valuations using primarily Level 2 inputs (in the vast majority of valuations), or some form of discounted cash flow analysis. Pricing services indicate that they will only produce an estimate of fair value if there is objectively verifiable information available to produce a valuation. Standard inputs to the valuations provided by the pricing services listed in approximate order of priority for use when available include: reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data. The pricing services may prioritize inputs differently on any given day for any security, and not all inputs listed are available for use in the evaluation process on any given day for each security evaluation. However, the pricing services also monitor market indicators and industry and economic events. When these inputs are not available, pricing services identify “buckets” of similar securities (allocated by asset class types, sectors, sub-sectors, contractual cash flows/structure, and credit rating characteristics) and apply some form of matrix or other modeled pricing to determine an appropriate security value which represents their best estimate as to what a buyer in the marketplace would pay for a security in a current sale. It is common industry practice to utilize pricing services as a source for determining the fair values of investments where the pricing services are able to obtain sufficient market corroborating information to allow them to produce a valuation at a reporting date. In addition, in the majority of cases, although a value may be obtained from a particular pricing service for a security or class of similar securities, these values are corroborated against values provided by other pricing services. While the Bank receives values for the majority of the investment securities it holds from pricing services, it is ultimately management’s responsibility to determine whether the values received and recorded in the financial statements are representative of appropriate fair value measurements. Broker/dealer quotations are used to value investments with fixed maturities where prices are unavailable from pricing services due to factors specific to the security such as limited liquidity, lack of current transactions, or trades only taking place in privately negotiated transactions. These are considered Level 3 valuations, as significant inputs utilized by brokers may be difficult to corroborate with observable market data, or sufficient information regarding the specific inputs utilized by the broker was not available to support a Level 2 classification. For disclosure purposes, HTM investments are fair valued using the same methods described above. Loans The majority of loans are variable rate and re-price in response to changes in market rates and hence management estimates that the fair value of loans is not significantly different than their carrying amount. For significant fixed-rate loan exposures, fair value is estimated by discounting the future cash flows, using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities, of such loans. Management includes the effects of any credit losses recorded against individual loans, which factors in a loan's credit quality, as well as accrued interest in determining the fair value of loans. Accrued interest The carrying amounts of accrued interest receivable and payable are assumed to approximate their fair values given their short-term nature. OREO OREO assets are carried at the lower of cost or fair value less estimated costs to sell. The determination of fair value, which aims at estimating the realizable value of the properties, is based either on third-party appraisals, when available, or on internal valuation models. Appraisals of OREO properties are updated on an annual basis. Where the fair value of the related property is based on an unadjusted appraised value, the OREO is generally classified as Level 2. Where significant adjustments are made to the appraised value, or based on an internally generated valuation model, the OREO is generally classified as Level 3. Deposits The fair value of fixed-rate deposits has been estimated by discounting the contractual cash flows, using market interest rates offered at the balance sheet date for deposits of similar terms. The carrying amount of deposits with no stated maturity date is deemed to equate to the fair value. Long-term debt The fair value of the long-term debt has been estimated by discounting the contractual cash flows, using current market interest rates. Derivatives Derivative contracts can be exchange traded or over-the-counter (“OTC”) derivative contracts and may include forward, swap and option contracts relating to interest rates or foreign currencies. Exchange-traded derivatives typically fall within Level 1 of the fair value hierarchy depending on whether they are deemed to be actively traded or not. OTC derivatives are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, model calibration to market clearing transactions, broker or dealer quotations or alternative pricing sources where an understanding of the inputs utilized in arriving at the valuations is obtained. Where models are used, the selection of a particular model to value an OTC derivative depends upon the contractual terms and specific risks inherent in the instrument as well as the availability of pricing information in the market. The Bank generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit curves, measures of volatility, prepayment rates and correlations of such inputs. For OTC derivatives that trade in liquid markets, such as generic forwards, interest rate swaps and options, model inputs can generally be verified and model selection does not involve significant management judgment. Goodwill The fair value of reporting units for which goodwill is recognized is determined when an impairment assessment is performed by discounting estimated future cash flows using discount rates reflecting valuation-date market conditions and risks specific to the reporting unit. |
Impairment or Disposal of Long-Lived Assets | Impairment or Disposal of Long-Lived AssetsImpairment losses are recognized when the carrying amount of a long-lived asset exceeds the sum of the undiscounted cash flows expected from its use and disposal. The impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Long-lived assets that are to be disposed of other than by sale are classified and accounted for as held for use until the date of disposal or abandonment. Assets that meet certain criteria are classified as held for sale and are measured at the lower of their carrying amounts or fair value less estimated costs to sell. |
Credit-Related Arrangements | Credit-Related Arrangements In the normal course of business, the Bank enters into various commitments to meet the credit requirements of its customers. Such commitments, which are not included in the consolidated balance sheet, include: • commitments to extend credit, which represent undertakings to make credit available in the form of loans or other financing for specific amounts and maturities, subject to certain conditions; • standby letters of credit, which represent irrevocable obligations to make payments to third parties in the event that the customer is unable to meet its financial obligations; and, • documentary and commercial letters of credit, related primarily to the import of goods by customers, which represent agreements to honor drafts presented by third parties upon completion of specific activities. These credit arrangements are subject to the Bank's normal credit standards and collateral is obtained where appropriate. The contractual amounts for these commitments set out in the table in Note 12 represent the maximum payments the Bank would have to make should the contracts be fully drawn, the counterparty default, and any collateral held prove to be of no value. As many of these arrangements will expire or terminate without being drawn upon or are fully collateralized, the contractual amounts do not necessarily represent future cash requirements. The Bank does not carry any liability for these obligations. |
Income Taxes | Income Taxes The Bank uses the asset and liability method of accounting for income taxes. Under this method, deferred income taxes reflect the net tax effect of temporary differences between the consolidated financial statements' carrying amounts of assets and liabilities and their respective tax bases. Accordingly, a deferred income tax asset or liability is determined for each temporary difference based on the enacted tax rates to be in effect on the expected reversal date of the temporary difference. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Bank records net deferred tax assets to the extent the Bank believes these assets will more likely than not be realized. Net deferred income tax assets or liabilities accumulated as a result of temporary differences are included in other assets or other liabilities, respectively. A valuation allowance is established to reduce deferred income tax assets to the amount more likely than not to be realized. In making such a determination, the Bank considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the event the Bank were to determine that it would be able to realize the deferred income tax assets in the future in excess of their net recorded amount, the Bank would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Bank records uncertain tax positions on the basis of a two-step process whereby (1) the Bank determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position; and (2) where those tax positions that meet the more-likely-than-not recognition threshold, the Bank recognizes the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Income taxes on the consolidated statements of operations include the current and deferred portions of the income taxes. The Bank recognizes accrued interest and penalties related to income taxes in operating expenses. Income taxes applicable to items charged or credited directly to shareholders’ equity are included in such items. |
Earnings Per Share | Earnings Per ShareEarnings per share have been calculated using the weighted average number of common shares outstanding during the year (see also Note 20: Earnings per share). In periods when basic earnings per share is positive, the dilutive effect of share-based compensation plans is calculated using the treasury stock method, whereby the proceeds received from the exercise of share-based awards are assumed to be used to repurchase outstanding common shares, using the quarterly average market price of the Bank’s shares for the period. |
New Accounting Pronouncements | New Accounting Pronouncements The following accounting developments were issued during the year ended December 31, 2022 or are accounting standards pending adoption: In March 2022, the Financial Accounting Standards Board ("FASB") published ASU 2022-01, Derivatives and Hedging (Topic 815), Fair Value Hedging - Portfolio Layer Method, which will expand companies' abilities to hedge the benchmark interest rate risk of portfolios of financial assets (or beneficial interests) in a fair value hedge. The ASU expands the use of the portfolio layer method (previously referred to as the last-of-layer method) to allow multiple hedges of a single closed portfolio of assets using spot starting, forward starting, and amortizing-notional swaps. The ASU also permits both prepayable and nonprepayable financial assets to be included in the closed portfolio of assets hedged in a portfolio layer hedge. The ASU further requires that basis adjustments not be allocated to individual assets for active portfolio layer method hedges, but rather be maintained on the closed portfolio of assets as a whole. The ASU is effective for public business entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and early adoption is permitted. The Bank does not anticipate that this ASU will have a material impact on its consolidated financial statements. In March 2022, the FASB published ASU 2022-02, Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 addresses areas identified by the FASB as part of its post-implementation review of the credit losses standard (ASU 2016-13) that introduced the CECL model. The amendments eliminate the accounting guidance for troubled debt restructurings ("TDRs") by creditors that have adopted the CECL model and enhance the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require a public business entity to disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. For entities that have adopted ASU 2016-13, ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted if an entity has adopted ASU 2016-13. An entity may elect to early adopt the amendments related to TDRs separately from the amendments related to vintage disclosures. Entities can elect to adopt the guidance on TDRs using either a prospective or modified retrospective transition. If an entity elects to apply a modified retrospective transition, it will record a cumulative effect adjustment to retained earnings in the period of adoption, representing any change in the allowance for credit losses for loans modified in TDRs under ASC 310-40. The Bank has determined that this ASU will only have an effect on certain disclosures from the date of adoption. In June 2022, the FASB published ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The update was issued to increase the comparability of financial information across reporting entities that hold these investments. The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security. As a result, it should not be considered in measuring fair value. New disclosures are required about the nature of the restrictions and their remaining duration. The ASU is effective for public business entities for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years and early adoption is permitted. The Bank does not anticipate that this ASU will have a material impact on its consolidated financial statements. In September 2022, the FASB published ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations which establishes the disclosure requirements of supplier finance programs to increase their transparency. FASB investor outreach identified a lack of transparency about supplier finance programs, as no explicit disclosure requirements were in GAAP. Entities that participate in supplier finance programs typically present such obligations in the same balance sheet line item as accounts payable, which can obscure the nature of this activity for financial statement users. The amendments in this Update address investor and other financial statement user requests for additional information about the use of supplier finance programs by the buyer party to understand the effect of those programs on an entity’s working capital, liquidity, and cash flows. The ASU is effective for all entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023 and early adoption is permitted. The Bank does not anticipate that this ASU will have a material impact on its consolidated financial statements. In December 2022, the FASB published ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. As the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The ASU is effective on December 21, 2022 however, as the Bank elected to early adopt the relief in Topic 848 as at December 31, 2020, this ASU will not have a material impact on its consolidated financial statements. |
Fair Value of Financial Instruments | Management reviews the price of each security monthly, comparing market values to expectations and to the prior month’s price. Management's expectations are based upon knowledge of prevailing market conditions and developments relating to specific issuers and/or asset classes held in the investment portfolio. Where there are unusual or significant price movements, or where a certain asset class has performed out-of-line with expectations, the matter is reviewed by management. Financial instruments in Level 1 include US and UK Government Treasury notes. Financial instruments in Level 2 include government debt securities, mortgage-backed securities and other asset-backed securities, forward foreign exchange contracts and mutual funds not actively traded. Financial instruments in Level 3 include asset-backed securities for which the market is relatively illiquid and for which information about actual trading prices is not readily available. |
Cash and cash equivalents (Tabl
Cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash and cash equivalents | December 31, 2022 December 31, 2021 Non-interest bearing Cash and demand deposits with banks 93,032 115,651 Interest bearing¹ Demand deposits with banks 258,239 437,644 Cash equivalents 1,749,516 1,626,538 Sub-total - Interest bearing 2,007,755 2,064,182 Total cash and cash equivalents 2,100,787 2,179,833 ¹ Interest bearing cash and cash equivalents includes certain demand deposits with banks as at December 31, 2022 in the amount of $157.2 million (December 31, 2021: $280.5 million) that are earning interest at a negligible rate. |
Short-term investments (Tables)
Short-term investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of short-term investments | December 31, 2022 December 31, 2021 Unrestricted Maturing within three months 390,540 818,340 Maturing between three to six months 421,734 252,340 Maturing between six to twelve months 56,445 104,574 Total unrestricted short-term investments 868,719 1,175,254 Affected by drawing restrictions related to minimum reserve and derivative margin requirements Interest earning demand and term deposits 15,759 23,664 Total restricted short-term investments 15,759 23,664 Total short-term investments 884,478 1,198,918 |
Investment in securities (Table
Investment in securities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of marketable securities | December 31, 2022 December 31, 2021 Amortized Gross Gross Fair value Amortized Gross Gross Fair value Equity securities Mutual funds 724 — (488) 236 724 — (502) 222 Total equity securities 724 — (488) 236 724 — (502) 222 Available-for-sale US government and federal agencies 1,919,285 14 (206,523) 1,712,776 3,163,964 30,945 (51,285) 3,143,624 Non-US governments debt securities 262,892 — (11,429) 251,463 291,119 — (1,526) 289,593 Asset-backed securities - Student loans 5,640 — (14) 5,626 13,290 — (116) 13,174 Residential mortgage-backed securities 21,261 — (2,261) 19,000 27,191 218 (70) 27,339 Total available-for-sale 2,209,078 14 (220,227) 1,988,865 3,495,564 31,163 (52,997) 3,473,730 Held-to-maturity¹ US government and federal agencies 3,738,080 — (540,572) 3,197,508 2,763,344 57,497 (34,729) 2,786,112 Total held-to-maturity 3,738,080 — (540,572) 3,197,508 2,763,344 57,497 (34,729) 2,786,112 In the following tables, debt securities with unrealized losses that are not deemed to be credit impaired and for which an allowance for credit losses has not been recorded are categorized as being in a loss position for "less than 12 months" or "12 months or more" based on the point in time that the fair value most recently declined below the amortized cost basis. Less than 12 months 12 months or more December 31, 2022 Fair Gross Fair Gross Total Total gross Available-for-sale securities with unrealized losses US government and federal agencies 713,462 (68,016) 995,154 (138,507) 1,708,616 (206,523) Non-US governments debt securities — — 251,463 (11,429) 251,463 (11,429) Asset-backed securities - Student loans — — 5,626 (14) 5,626 (14) Residential mortgage-backed securities 14,474 (1,618) 4,526 (643) 19,000 (2,261) Total available-for-sale securities with unrealized losses 727,936 (69,634) 1,256,769 (150,593) 1,984,705 (220,227) Held-to-maturity securities with unrealized losses US government and federal agencies 1,462,005 (142,228) 1,735,504 (398,344) 3,197,509 (540,572) Less than 12 months 12 months or more December 31, 2021 Fair Gross Fair Gross Total Total gross Available-for-sale securities with unrealized losses US government and federal agencies 2,144,105 (47,214) 102,428 (4,071) 2,246,533 (51,285) Non-US governments debt securities 267,201 (1,125) 22,392 (401) 289,593 (1,526) Asset-backed securities - Student loans — — 13,174 (116) 13,174 (116) Residential mortgage-backed securities 8,051 (70) — — 8,051 (70) Total available-for-sale securities with unrealized losses 2,419,357 (48,409) 137,994 (4,588) 2,557,351 (52,997) Held-to-maturity securities with unrealized losses US government and federal agencies 1,568,315 (33,554) 29,713 (1,175) 1,598,028 (34,729) December 31, 2022 December 31, 2021 Pledged Investments Amortized Fair Amortized Fair Available-for-sale — — 807 842 Held-to-maturity 32,938 24,991 33,102 31,958 |
Summary of investments maturities | The following table presents the remaining term to contractual maturity of the Bank’s securities. The actual maturities may differ as certain securities offer prepayment options to the borrowers. Remaining term to maturity December 31, 2022 Within 3 to 12 1 to 5 5 to 10 Over No specific or single Carrying Available-for-sale US government and federal agencies — 145,471 532,645 160,823 — 873,837 1,712,776 Non-US governments debt securities — 22,392 229,071 — — — 251,463 Asset-backed securities - Student loans — — — — — 5,626 5,626 Residential mortgage-backed securities — — — — — 19,000 19,000 Total available-for-sale — 167,863 761,716 160,823 — 898,463 1,988,865 Held-to-maturity US government and federal agencies — — — — — 3,738,080 3,738,080 |
Schedule of sale proceeds and realized gains and losses of AFS securities | Sale Proceeds and Realized Gains and Losses of AFS Securities Year ended December 31, 2022 December 31, 2021 December 31, 2020 Sale proceeds Gross realized gains Gross realized Transfers of HTM 1 Sale Gross realized Gross realized Transfers of HTM Sale Gross realized Gross realized Transfers of HTM US government and federal agencies — — — 998,157 189,417 1,563 (1,802) — 349,699 1,171 (55) — Non-US governments debt securities — — — — — — — — 3,266 104 — — Asset-backed securities - Student loans 7,631 — (19) — — — — — — — — — Total 7,631 — (19) 998,157 189,417 1,563 (1,802) — 352,965 1,275 (55) — |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of financing receivable credit quality indicators | The amortized cost of loans by credit quality classifications and allowance for expected credit losses by class of loans is as follows: December 31, 2022 Pass Special Substandard Non-accrual Total amortized cost Allowance for expected credit losses Total net loans Commercial loans Government 281,518 — — — 281,518 (1,368) 280,150 Commercial and industrial 298,137 — 796 18,461 317,394 (10,359) 307,035 Commercial overdrafts 123,874 — 632 45 124,551 (416) 124,135 Total commercial loans 703,529 — 1,428 18,506 723,463 (12,143) 711,320 Commercial real estate loans Commercial mortgage 613,090 2,082 1,503 3,182 619,857 (884) 618,973 Construction 7,474 — — — 7,474 — 7,474 Total commercial real estate loans 620,564 2,082 1,503 3,182 627,331 (884) 626,447 Consumer loans Automobile financing 20,673 — — 161 20,834 (93) 20,741 Credit card 77,419 — 295 — 77,714 (1,043) 76,671 Overdrafts 44,414 — — 6 44,420 (355) 44,065 Other consumer 1 56,699 — — 801 57,500 (1,205) 56,295 Total consumer loans 199,205 — 295 968 200,468 (2,696) 197,772 Residential mortgage loans 3,419,186 8,132 102,413 40,398 3,570,129 (9,238) 3,560,891 Total 4,942,484 10,214 105,639 63,054 5,121,391 (24,961) 5,096,430 1 Other consumer loans’ amortized cost includes $9 million of cash and portfolio secured lending and $37 million of lending secured by buildings in construction or other collateral. December 31, 2021 Pass Special Substandard Non-accrual Total Allowance Total net loans Commercial loans Government 259,572 — — — 259,572 (969) 258,603 Commercial and industrial 353,337 — 1,079 18,549 372,965 (10,115) 362,850 Commercial overdrafts 104,814 145 446 2 105,407 (42) 105,365 Total commercial loans 717,723 145 1,525 18,551 737,944 (11,126) 726,818 Commercial real estate loans Commercial mortgage 673,167 4,034 1,578 4,740 683,519 (1,168) 682,351 Construction 9,645 — — — 9,645 — 9,645 Total commercial real estate loans 682,812 4,034 1,578 4,740 693,164 (1,168) 691,996 Consumer loans Automobile financing 21,412 — — 117 21,529 (88) 21,441 Credit card 72,569 — 284 — 72,853 (1,420) 71,433 Overdrafts 42,293 — — 4 42,297 (236) 42,061 Other consumer 1 76,963 — 72 1,038 78,073 (1,276) 76,797 Total consumer loans 213,237 — 356 1,159 214,752 (3,020) 211,732 Residential mortgage loans 3,464,857 14,070 107,361 36,595 3,622,883 (12,759) 3,610,124 Total 5,078,629 18,249 110,820 61,045 5,268,743 (28,073) 5,240,670 1 Other consumer loans’ amortized cost includes $13 million of cash and portfolio secured lending and $57 million of lending secured by buildings in construction or other collateral. Based on the most recent analysis performed, the amortized cost of loans by year of origination and credit quality indicator is as follows: December 31, 2022 Pass Special Substandard Non-accrual Total amortized cost Loans by origination year 2022 971,776 — — 4 971,780 2021 646,436 — — 20 646,456 2020 485,944 142 508 23 486,617 2019 680,939 — 277 3,118 684,334 2018 393,623 — 12,133 1,355 407,111 Prior 1,499,410 9,767 91,795 58,483 1,659,455 Overdrafts and credit cards 264,356 305 926 51 265,638 Total amortized cost 4,942,484 10,214 105,639 63,054 5,121,391 December 31, 2021 Pass Special Substandard Non-accrual Total amortized cost Loans by origination year 2021 911,403 — 232 13 911,648 2020 605,139 — — 3 605,142 2019 917,700 — 290 181 918,171 2018 513,293 6,060 12,548 1,154 533,055 2017 493,091 — 3,400 12,215 508,706 Prior 1,393,929 11,131 93,620 47,474 1,546,154 Overdrafts and credit cards 244,074 1,058 730 5 245,867 Total amortized cost 5,078,629 18,249 110,820 61,045 5,268,743 |
Schedule of age analysis and past due loans | The following tables summarize the past due status of the loans. The aging of past due amounts are determined based on the contractual delinquency status of payments under the loan and this aging may be affected by the timing of the last business day at period end. Loans less than 30 days past due are included in current loans. December 31, 2022 30 - 59 60 - 89 More than 90 days Total past Total Total Commercial loans Government — — — — 281,518 281,518 Commercial and industrial 5 — 18,461 18,466 298,928 317,394 Commercial overdrafts — — 45 45 124,506 124,551 Total commercial loans 5 — 18,506 18,511 704,952 723,463 Commercial real estate loans Commercial mortgage 363 — 3,181 3,544 616,313 619,857 Construction — — — — 7,474 7,474 Total commercial real estate loans 363 — 3,181 3,544 623,787 627,331 Consumer loans Automobile financing 104 5 160 269 20,565 20,834 Credit card 423 231 295 949 76,765 77,714 Overdrafts — — 6 6 44,414 44,420 Other consumer 179 16 797 992 56,508 57,500 Total consumer loans 706 252 1,258 2,216 198,252 200,468 Residential mortgage loans 30,813 4,081 49,486 84,380 3,485,749 3,570,129 Total amortized cost 31,887 4,333 72,431 108,651 5,012,740 5,121,391 December 31, 2021 30 - 59 60 - 89 More than 90 days Total past Total Total Commercial loans Government — — — — 259,572 259,572 Commercial and industrial 53 — 18,549 18,602 354,363 372,965 Commercial overdrafts — — 1 1 105,406 105,407 Total commercial loans 53 — 18,550 18,603 719,341 737,944 Commercial real estate loans Commercial mortgage — — 4,739 4,739 678,780 683,519 Construction — — — — 9,645 9,645 Total commercial real estate loans — — 4,739 4,739 688,425 693,164 Consumer loans Automobile financing 56 34 118 208 21,321 21,529 Credit card 471 681 285 1,437 71,416 72,853 Overdrafts — — 5 5 42,292 42,297 Other consumer 67 15 1,038 1,120 76,953 78,073 Total consumer loans 594 730 1,446 2,770 211,982 214,752 Residential mortgage loans 12,602 1,501 44,763 58,866 3,564,017 3,622,883 Total amortized cost 13,249 2,231 69,498 84,978 5,183,765 5,268,743 |
Schedule of allowance for credit loss | Year ended December 31, 2022 Commercial Commercial Consumer Residential Total Balance at the beginning of year 11,126 1,168 3,020 12,759 28,073 Provision increase (decrease) 2,378 (285) 1,252 (675) 2,670 Recoveries of previous charge-offs 1 — 1,150 262 1,413 Charge-offs (1,314) — (2,721) (2,912) (6,947) Other (48) 1 (5) (196) (248) Allowances for expected credit losses at end of year 12,143 884 2,696 9,238 24,961 Year ended December 31, 2021 Commercial Commercial Consumer Residential Total Balance at the beginning of year 11,609 2,104 4,476 15,909 34,098 Provision increase (decrease) (431) (936) (1,552) (581) (3,500) Recoveries of previous charge-offs 65 — 1,344 262 1,671 Charge-offs (112) — (1,248) (2,806) (4,166) Other (5) — — (25) (30) Allowances for expected credit losses at end of year 11,126 1,168 3,020 12,759 28,073 |
Schedule of non-accrual status for non-performing loans | December 31, 2022 December 31, 2021 Non-accrual loans with an allowance Non-accrual loans without an allowance Past due more than 90 days and accruing Total non- Non-accrual loans with an allowance Non-accrual loans without an allowance Past due more than 90 days and accruing Total non- Commercial loans Commercial and industrial 18,159 302 — 18,461 18,530 19 — 18,549 Commercial overdrafts — 45 — 45 — 2 — 2 Total commercial loans 18,159 347 — 18,506 18,530 21 — 18,551 Commercial real estate loans Commercial mortgage 1,494 1,688 — 3,182 885 3,855 — 4,740 Total commercial real estate loans 1,494 1,688 — 3,182 885 3,855 — 4,740 Consumer loans Automobile financing 141 20 — 161 117 — — 117 Credit card — — 295 295 — — 284 284 Overdrafts — 6 — 6 — 4 — 4 Other consumer 649 152 — 801 850 188 — 1,038 Total consumer loans 790 178 295 1,263 967 192 284 1,443 Residential mortgage loans 20,621 19,777 10,964 51,362 29,549 7,046 12,969 49,564 Total non-performing loans 41,064 21,990 11,259 74,313 49,931 11,114 13,253 74,298 |
Schedule of troubled debt restructuring | TDRs entered into during the period Year ended December 31, 2022 Number of contracts Pre-modification recorded loans Modification: interest capitalization Post- Residential mortgage loans 6 2,836 425 3,261 Year ended December 31, 2021 Number of Pre- Modification: interest capitalization Post- Residential mortgage loans 1 284 2 286 TDRs Outstanding December 31, 2022 December 31, 2021 Accrual Non-accrual Accrual Non-accrual Commercial loans 796 — 847 — Commercial real estate loans 1,503 2,357 1,578 2,445 Residential mortgage loans 59,175 10,342 60,453 12,653 Total TDRs outstanding 61,474 12,699 62,878 15,098 |
Credit risk concentrations (Tab
Credit risk concentrations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Summary of credit exposure | The following table summarizes the credit exposure of the Bank by geographic region. The exposure amounts disclosed below do not include accrued interest and are gross of allowance s for credit losses and gross of collateral hel d. December 31, 2022 December 31, 2021 Geographic region Cash and cash equivalents, resell agreements and Loans Off-balance Total credit Cash and cash equivalents, resell agreements and Loans Off-balance Total credit Belgium 2,641 — — 2,641 8,675 — — 8,675 Bermuda 40,671 1,920,467 243,904 2,205,042 46,683 2,080,385 297,731 2,424,799 Canada 1,216,876 — — 1,216,876 1,193,387 — — 1,193,387 Cayman 36,609 1,236,373 233,599 1,506,581 39,018 1,060,328 379,518 1,478,864 Germany 20,422 — — 20,422 85,886 — — 85,886 Guernsey 1 674,562 199,714 874,277 1 735,786 169,904 905,691 Ireland 26,597 — — 26,597 37,236 — — 37,236 Japan 13,071 — — 13,071 4,873 — — 4,873 Jersey — 150,769 35,042 185,811 — 78,048 34,298 112,346 Norway 99,777 — — 99,777 57,132 — — 57,132 Switzerland 2,748 — — 2,748 2,441 — — 2,441 The Bahamas 1,521 7,510 — 9,031 1,511 9,361 — 10,872 United Kingdom 715,750 1,131,710 108,406 1,955,866 990,624 1,304,835 117,200 2,412,659 United States 865,671 — — 865,671 1,003,365 — — 1,003,365 Other 2,781 — — 2,781 4,026 — — 4,026 Total gross exposure 3,045,136 5,121,391 820,665 8,987,192 3,474,858 5,268,743 998,651 9,742,252 |
Premises, equipment and compu_2
Premises, equipment and computer software (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of premise, equipment, and computer software | December 31, 2022 December 31, 2021 Category Cost Accumulated Net carrying Cost Accumulated Net carrying Land 8,333 — 8,333 8,333 — 8,333 Buildings 181,929 (81,184) 100,745 169,806 (77,229) 92,577 Equipment 25,527 (17,764) 7,763 26,129 (17,509) 8,620 Computer hardware and software in use 197,846 (182,353) 15,493 197,941 (175,612) 22,329 Computer software in development 13,807 — 13,807 6,827 — 6,827 Total 427,442 (281,301) 146,141 409,036 (270,350) 138,686 Year ended Depreciation charged to operating expenses December 31, 2022 December 31, 2021 December 31, 2020 Buildings (included in Property expense) 5,963 6,005 5,511 Equipment (included in Property expense) 2,390 2,323 1,929 Computer hardware and software (included in Technology and communication expense) 10,124 18,902 21,773 Total depreciation charged to operating expenses 18,477 27,230 29,213 |
Goodwill and other intangible_2
Goodwill and other intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Segment Cayman Channel Islands and the UK Other Total Balance at December 31, 2019 551 22,245 2,042 24,838 Foreign exchange translation adjustment — 719 70 789 Balance at December 31, 2020 551 22,964 2,112 25,627 Foreign exchange translation adjustment — (226) (45) (271) Balance at December 31, 2021 551 22,738 2,067 25,356 Foreign exchange translation adjustment — (2,466) 2 (2,464) Balance at December 31, 2022 551 20,272 2,069 22,892 |
Schedule of customer relationship intangible assets | December 31, 2022 December 31, 2021 Segment Cost Accumulated Net carrying Cost Accumulated Net carrying Bermuda 29,785 (17,868) 11,917 29,785 (16,438) 13,347 Cayman 16,517 (7,764) 8,753 16,517 (6,663) 9,854 Channel Islands and the UK 89,396 (62,380) 27,016 89,396 (56,030) 33,366 Other 5,563 (1,771) 3,792 5,563 (1,380) 4,183 Total 141,261 (89,783) 51,478 141,261 (80,511) 60,750 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deposits [Abstract] | |
Schedule of maturities of deposits | By Maturity Demand Total Term Total December 31, 2022 Non-interest Interest Within 3 3 to 6 6 to 12 After 12 months Total Demand or less than $100k¹ 3,039,701 6,844,127 9,883,828 32,764 9,814 12,848 11,391 66,817 9,950,645 Term - $100k or more N/A N/A — 2,093,464 447,471 423,737 75,759 3,040,431 3,040,431 Total deposits 3,039,701 6,844,127 9,883,828 2,126,228 457,285 436,585 87,150 3,107,248 12,991,076 Demand Total Term Total December 31, 2021 Non-interest Interest Within 3 3 to 6 6 to 12 After 12 months Total Demand or less than $100k¹ 2,820,609 8,104,668 10,925,277 30,181 8,949 13,094 12,426 64,650 10,989,927 Term - $100k or more N/A N/A — 1,627,330 578,096 589,161 85,709 2,880,296 2,880,296 Total deposits 2,820,609 8,104,668 10,925,277 1,657,511 587,045 602,255 98,135 2,944,946 13,870,223 ¹ The weighted-average interest rate on interest-bearing demand deposits as at December 31, 2022 is 0.47% (December 31, 2021: -0.03%). |
Schedule of deposits by type and segment | By Type and Segment December 31, 2022 December 31, 2021 Payable Payable on a Total Payable Payable on a Total Bermuda 3,813,274 674,895 4,488,169 3,820,647 690,102 4,510,749 Cayman 3,641,646 651,168 4,292,814 4,087,131 524,918 4,612,049 Channel Islands and the UK 2,428,908 1,781,185 4,210,093 3,017,499 1,729,926 4,747,425 Total deposits 9,883,828 3,107,248 12,991,076 10,925,277 2,944,946 13,870,223 |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Summary of financial position of the Bank’s defined benefit pension plans and the Bank’s post-retirement medical benefits | The following table presents the financial position of the Bank’s defined benefit pension plans and the Bank’s post-retirement medical benefit plan, which is unfunded. The Bank measures the benefit obligations and plan assets annually on each December 31 and therefore, the most recent measurement date is December 31, 2022. The 2022 net actuarial gain recognized in the defined benefit plans is largely due to an increase in discount rates used to value the benefit obligation, partially offset by actual returns on investments being lower than expected. December 31, 2022 December 31, 2021 December 31, 2020 Pension Post- Pension Post- Pension Post- Accumulated benefit obligation at end of year 106,748 91,983 157,478 125,968 179,018 128,167 Change in projected benefit obligation Projected benefit obligation at beginning of year 157,478 125,968 179,018 128,167 168,791 110,347 Service cost — 130 — 82 43 66 Interest cost 3,026 3,114 2,729 2,594 3,957 3,270 Benefits paid (9,153) (5,774) (9,050) (3,712) (7,412) (4,069) Prior service cost — — 403 — 48 — Settlement and curtailment of liability — — (5,906) — (7,505) — Actuarial (gain) loss (37,425) (31,455) (9,093) (1,163) 18,326 18,553 Foreign exchange translation adjustment (7,178) — (623) — 2,770 — Projected benefit obligation at end of year 106,748 91,983 157,478 125,968 179,018 128,167 Change in plan assets Fair value of plan assets at beginning of year 179,025 — 182,516 — 175,400 — Actual return on plan assets (24,574) — 10,265 — 14,945 — Employer contribution 207 5,774 1,680 3,712 2,917 4,069 Plan settlement — — (5,625) — (5,903) — Benefits paid (9,153) (5,774) (9,050) (3,712) (7,412) (4,069) Foreign exchange translation adjustment (8,211) — (761) — 2,569 — Fair value of plan assets at end of year 137,294 — 179,025 — 182,516 — Amounts recognized in the consolidated balance sheets consist of: Prepaid benefit cost included in other assets 30,581 — 21,809 — 6,610 — Accrued pension benefit cost included in employee benefit plans liability (35) (91,983) (262) (125,968) (3,112) (128,167) Surplus (deficit) of plan assets over projected benefit obligation at measurement date 30,546 (91,983) 21,547 (125,968) 3,498 (128,167) |
Schedule of amounts recognized in accumulated other comprehensive loss | Year ended December 31, 2022 December 31, 2021 December 31, 2020 Pension Post- Pension Post- Pension Post- Amounts recognized in accumulated other comprehensive income (loss) consist of: Net actuarial gain (loss), excluding deferred taxes (47,452) 14,528 (55,809) (18,371) (73,506) (21,213) Net prior service credit (cost) (453) (6,818) (591) (7,342) (226) (7,866) Deferred income taxes assets (liabilities) — — — — 1,477 — Net amount recognized in accumulated other comprehensive income (loss) (47,905) 7,710 (56,400) (25,713) (72,255) (29,079) Annual benefit expense Expense component Line item in the consolidated statements of operations Service cost Salaries and other employee benefits — 130 58 82 97 66 Interest cost Non-service employee benefits expense 3,027 3,114 2,729 2,594 3,960 3,270 Expected return on plan assets Non-service employee benefits expense (6,633) — (6,437) N/A (7,547) N/A Amortization of net actuarial (gains) losses Non-service employee benefits expense 2,218 1,444 2,766 1,679 2,412 — Amortization of prior service (credit) loss Non-service employee benefits expense 81 524 (25) 524 21 524 (Gain) loss on settlement Net other gains (losses)/Non-service employee benefits expense (907) — 1,679 — 1,326 — Defined benefit (income) expense (2,214) 5,212 770 4,879 269 3,860 Defined contribution expense 7,825 — 8,259 — 8,933 — Total benefit (income) expense 5,611 5,212 9,029 4,879 9,202 3,860 The components of benefit expense (income) other than the service cost component are included in the line item non-service employee benefits expense in the consolidated statements of operations. Other changes recognized in other comprehensive income (loss) Net gain (loss) arising during the year 6,218 31,455 14,772 1,163 (8,363) (18,553) Net loss (gain) on settlement reclassified to net income (907) — — — — — Prior service credit (cost) arising during the year — — (399) — (47) — Amortization of net actuarial (gains) losses 2,218 1,444 2,766 1,679 2,412 — Amortization of prior service (credit) cost 81 524 (25) 524 20 524 Change in deferred taxes — — (1,462) — 456 — Foreign exchange adjustment 885 — 203 — (421) — Total changes recognized in other comprehensive income (loss) 8,495 33,423 15,855 3,366 (5,943) (18,029) |
Schedule of actuarial assumptions | Actuarial Assumptions Year ended December 31, 2022 December 31, 2021 December 31, 2020 Pension Post- Pension Post- Pension Post- Actuarial assumptions used to determine annual benefit expense Weighted average discount rate 2.30 % 2.88 % 1.90 % 2.53 % 2.65 % 3.38 % Weighted average rate of compensation increases 1 3.00 % N/A 2.20 % N/A 2.30 % N/A Weighted average expected long-term rate of return on plan assets 4.45 % N/A 3.65 % N/A 4.60 % N/A Weighted average annual medical cost increase rate N/A 7.0% to 4.5% in 2040 N/A 7.2% to 4.5% in 2040 N/A 7.2% to 4.5% in 2040 Actuarial assumptions used to determine benefit obligations at end of year Weighted average discount rate 5.20 % 5.37 % 2.30 % 2.88 % 1.90 % 2.53 % Weighted average rate of compensation increases 1 3.00 % N/A 3.00 % N/A 2.20 % N/A Weighted average annual medical cost increase rate N/A 6.9% to 4.5% in 2040 N/A 7.0% to 4.5% in 2040 N/A 7.0% to 4.5% in 2040 1 Only the UK subsidiary plan is impacted by potential future compensation increases. |
Schedule of allocation of plan assets | December 31, 2022 December 31, 2021 Weighted average actual and target asset allocations of the pension plans by asset category Actual Target Actual Target Debt securities (including debt mutual funds) 71 % 74 % 39 % 32 % Equity securities (including equity mutual funds) 19 % 9 % 51 % 53 % Other 10 % 17 % 10 % 15 % Total 100 % 100 % 100 % 100 % The following table presents the fair value of the plans' assets by category and level of inputs used in their respective fair value determination as described in "Note 2: Significant accounting policies", except the level 3 security, for which the valuation determination is described following the below table: December 31, 2022 December 31, 2021 Fair value determination Fair value determination Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total US government and federal agencies — 35,332 — 35,332 — 23,040 — 23,040 Non-US governments debt securities — 43,728 — 43,728 — 1,090 — 1,090 Corporate debt securities — 18,050 — 18,050 — 45,596 — 45,596 Equity securities and mutual funds 954 25,172 — 26,126 1,111 90,193 — 91,304 Other 600 2,504 10,954 14,058 180 431 17,384 17,995 Total fair value of plans' assets 1,554 124,786 10,954 137,294 1,291 160,350 17,384 179,025 |
Schedule of expected benefit payments | Estimated 2023 Bank contribution to and estimated benefit payments for the next ten years under the pension and post-retirement medical benefit plans are as follows: Pension Post- Estimated Bank contributions for the full year ending December 31, 2023 — 5,044 Estimated benefit payments by year: 2023 7,300 5,044 2024 7,200 5,286 2025 7,100 5,536 2026 7,100 5,786 2027 7,700 5,999 2028-2032 36,000 32,319 |
Credit-related arrangements, _2
Credit-related arrangements, repurchase agreements and commitments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual obligation, fiscal year maturity schedule | The following table summarizes the Bank's commitments for sourcing and other agreements: Year ending December 31 Sourcing Other Total 2023 12,584 12,915 25,499 2024 11,114 5,936 17,050 2025 10,602 3,120 13,722 2026 8,572 1,078 9,650 2027 — 1,084 1,084 2028 & thereafter — 1,405 1,405 Total commitments 42,872 25,538 68,410 |
Schedule of fair value, off-balance sheet risks | Outstanding unfunded commitments to extend credit December 31, 2022 December 31, 2021 Commitments to extend credit 564,324 717,077 Documentary and commercial letters of credit 2,331 1,522 Total unfunded commitments to extend credit 566,655 718,599 Allowance for credit losses (274) (551) |
Summary of credit-related arrangements | The following table presents the outstanding financial guarantees. Collateral is shown at estimated market value less selling cost. Where the collateral is cash, it is shown gross including accrued income. December 31, 2022 December 31, 2021 Outstanding financial guarantees Gross Collateral Net Gross Collateral Net Standby letters of credit 250,543 243,393 7,150 276,464 269,204 7,260 Letters of guarantee 3,467 3,431 36 3,588 3,552 36 Total 254,010 246,824 7,186 280,052 272,756 7,296 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Summary of lease costs | Year ended December 31, 2022 December 31, 2021 Lease costs Operating lease costs 7,576 8,248 Short-term lease costs 2,387 1,407 Sublease income (1,197) (1,359) Total net lease cost 8,766 8,296 Operating lease income 1,012 1,243 Other information for the period Right-of-use assets related to new operating lease liabilities 3,476 1,575 Operating cash flows from operating leases 7,630 8,402 Year ended Other information at end of period December 31, 2022 December 31, 2021 Operating leases right-of-use assets (included in other assets on the balance sheets) 33,641 39,525 Operating lease liabilities (included in other liabilities on the balance sheets) 32,965 38,789 Weighted average remaining lease term for operating leases (in years) 9.24 9.81 Weighted average discount rate for operating leases 5.40 % 5.25 % |
Summary of lessee operating lease liability maturity | The following table summarizes the maturity analysis of the Bank's commitments for long-term leases as at December 31, 2022: Year ending December 31 Operating Leases 2023 7,129 2024 6,457 2025 4,133 2026 3,357 2027 3,152 2028 & thereafter 17,735 Total commitments 41,963 Less: effect of discounting cash flows to their present value (8,998) Operating lease liabilities 32,965 |
Loan interest income (Tables)
Loan interest income (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Summary of interest and other income | Year ended December 31, 2022 December 31, 2021 December 31, 2020 Contractual interest earned 243,115 214,539 224,474 Amortization Amortization of fair value hedge (259) (281) (300) Amortization of loan origination fees (net of amortized costs) 6,026 6,847 5,436 Amortization of fair value adjustment on purchased loans 508 439 1,046 Total loan interest income 249,390 221,544 230,656 Balance of unamortized fair value hedge included in loans as at year end 836 1,095 1,376 Balance of unamortized loan fees included in loans as at year end 11,878 11,926 12,204 |
Segmented information (Tables)
Segmented information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Total Assets by Segment December 31, 2022 December 31, 2021 Bermuda 5,405,365 5,728,466 Cayman 4,566,144 4,973,402 Channel Islands and the UK 4,626,183 5,234,880 Other 35,874 33,059 Total assets before inter-segment eliminations 14,633,566 15,969,807 Less: inter-segment eliminations (327,504) (634,607) Total 14,306,062 15,335,200 2022 Net interest income Provision for credit (losses) recoveries Non-interest Net revenue Gains and Total net revenue Total Net income Year ended December 31 Customer Inter- segment Bermuda 165,330 (3,388) (1,226) 87,855 248,571 22 248,593 188,676 59,917 Cayman 113,301 2,593 (573) 66,696 182,017 (19) 181,998 62,120 119,878 Channel Islands and the UK 64,928 795 (597) 40,485 105,611 1,503 107,114 73,955 33,159 Other 25 — — 29,425 29,450 16 29,466 28,400 1,066 Total before eliminations 343,584 — (2,396) 224,461 565,649 1,522 567,171 353,151 214,020 Inter-segment eliminations — — — (17,874) (17,874) — (17,874) (17,874) — Total 343,584 — (2,396) 206,587 547,775 1,522 549,297 335,277 214,020 2021 Net interest income Provision for credit (losses) recoveries Non-interest Net revenue Gains and Total net revenue Total Net income Year ended December 31 Customer Inter- segment Bermuda 147,295 (1,304) 2,206 84,641 232,838 880 233,718 186,806 46,912 Cayman 89,757 1,241 1,415 58,058 150,471 213 150,684 58,945 91,739 Channel Islands and the UK 62,752 63 (493) 45,294 107,616 (2,454) 105,162 81,654 23,508 Other 3 — — 27,549 27,552 — 27,552 27,043 509 Total before eliminations 299,807 — 3,128 215,542 518,477 (1,361) 517,116 354,448 162,668 Inter-segment eliminations — — — (17,435) (17,435) — (17,435) (17,435) — Total 299,807 — 3,128 198,107 501,042 (1,361) 499,681 337,013 162,668 2020 Net interest income Provision for credit (losses) recoveries Non-interest Net revenue Gains and Total net revenue Total Net income Year ended December 31 Customer Inter- segment Bermuda 158,790 778 (8,750) 85,216 236,034 1,970 238,004 192,781 45,223 Cayman 94,211 1,149 483 49,294 145,137 491 145,628 62,605 83,023 Channel Islands and the UK 64,591 (1,927) (224) 40,698 103,138 (1,238) 101,900 82,057 19,843 Other 7 — — 14,384 14,391 (1) 14,390 15,262 (872) Total before eliminations 317,599 — (8,491) 189,592 498,700 1,222 499,922 352,705 147,217 Inter-segment eliminations — — — (5,733) (5,733) — (5,733) (5,733) — Total 317,599 — (8,491) 183,859 492,967 1,222 494,189 346,972 147,217 |
Derivative instruments and ri_2
Derivative instruments and risk management (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts and related fair value measurements of derivative instruments | The following table shows the aggregate notional amounts of derivative contracts outstanding listed by type and respective gross positive or negative fair values and classified by those used for risk management (sub-classified as hedging and those that do not qualify for hedge accounting), client services and credit derivatives. Fair value of derivatives is recorded in the consolidated balance sheets in other assets and other liabilities. Gross positive fair values are recorded in other assets and gross negative fair values are recorded in other liabilities, subject to netting when master netting agreements are in place. December 31, 2022 Derivative instrument Number of contracts Notional Gross Gross Net Risk management derivatives Net investment hedges Currency swaps 1 5,207 — (215) (215) Fair value hedges Currency swaps 4 130,751 2,714 (191) 2,523 Derivatives not formally designated as hedging instruments Currency swaps 63 1,884,169 8,052 (10,269) (2,217) Subtotal risk management derivatives 2,020,127 10,766 (10,675) 91 Client services derivatives Spot and forward foreign exchange 160 312,772 2,401 (2,237) 164 Total derivative instruments 2,332,899 13,167 (12,912) 255 December 31, 2021 Derivative instrument Number of contracts Notional Gross Gross Net Risk management derivatives Net investment hedges Currency swaps 4 61,641 1,071 (163) 908 Fair value hedges Currency swaps 4 174,169 1,216 (2,535) (1,319) Derivatives not formally designated as hedging instruments Currency swaps 36 1,552,733 14,538 (9,566) 4,972 Subtotal risk management derivatives 1,788,543 16,825 (12,264) 4,561 Client services derivatives Spot and forward foreign exchange 125 331,837 1,138 (1,003) 135 Total derivative instruments 2,120,380 17,963 (13,267) 4,696 |
Schedule of offsetting assets | The Bank also elected not to offset certain derivative assets or liabilities and all collateral received or paid that the Bank or the counterparties could legally offset in the event of default. In the tables below, these positions are deducted from the net fair value presented in the consolidated balance sheets in order to present the net exposures. The collateral values presented in the following table are limited to the related net derivative asset or liability balance and, accordingly, do not include excess collateral received or paid. Gross fair Less: offset Net fair value Less: positions not offset in the consolidated balance sheets December 31, 2022 Gross fair value of derivatives Cash collateral received / paid Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 13,167 (6,658) 6,509 — (9) 6,500 Derivative liabilities Spot and forward foreign exchange and currency swaps 12,912 (6,658) 6,254 — (352) 5,902 Net positive fair value 255 Gross fair Less: offset Net fair value Less: positions not offset in the consolidated balance sheets December 31, 2021 Gross fair value of derivatives Cash collateral Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 17,963 (9,843) 8,120 — — 8,120 Derivative liabilities Spot and forward foreign exchange and currency swaps 13,267 (9,843) 3,424 — (818) 2,606 Net positive fair value 4,696 |
Schedule of offsetting liabilities | The Bank also elected not to offset certain derivative assets or liabilities and all collateral received or paid that the Bank or the counterparties could legally offset in the event of default. In the tables below, these positions are deducted from the net fair value presented in the consolidated balance sheets in order to present the net exposures. The collateral values presented in the following table are limited to the related net derivative asset or liability balance and, accordingly, do not include excess collateral received or paid. Gross fair Less: offset Net fair value Less: positions not offset in the consolidated balance sheets December 31, 2022 Gross fair value of derivatives Cash collateral received / paid Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 13,167 (6,658) 6,509 — (9) 6,500 Derivative liabilities Spot and forward foreign exchange and currency swaps 12,912 (6,658) 6,254 — (352) 5,902 Net positive fair value 255 Gross fair Less: offset Net fair value Less: positions not offset in the consolidated balance sheets December 31, 2021 Gross fair value of derivatives Cash collateral Net exposures Derivative assets Spot and forward foreign exchange and currency swaps 17,963 (9,843) 8,120 — — 8,120 Derivative liabilities Spot and forward foreign exchange and currency swaps 13,267 (9,843) 3,424 — (818) 2,606 Net positive fair value 4,696 |
Schedule of location and amount of gains (losses) recorded in either the consolidated statements of operations or consolidated statements of comprehensive income on derivative instruments outstanding | The following tables show the location and amount of gains (losses) recorded in either the consolidated statements of operations or consolidated statements of comprehensive income on derivative instruments outstanding. Year ended Derivative instrument Consolidated statements of operations line item December 31, 2022 December 31, 2021 December 31, 2020 Spot and forward foreign exchange Foreign exchange revenue 28 (131) (191) Currency swaps, not designated as hedge Foreign exchange revenue (7,188) 23,531 (18,854) Currency swaps - fair value hedges Foreign exchange revenue 3,842 (5,357) 4,039 Total net gains (losses) recognized in net income (3,318) 18,043 (15,006) Derivative instrument Consolidated statements of comprehensive income line item December 31, 2022 December 31, 2021 December 31, 2020 Currency swaps - net investment hedge Unrealized net gains (losses) on translation of net investment in foreign operations (1,123) 5,495 (4,469) Total net gains (losses) recognized in comprehensive income (1,123) 5,495 (4,469) |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities measured at fair value | December 31, 2022 December 31, 2021 Fair value Total carrying Fair value Total carrying Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Items that are recognized at fair value on a recurring basis: Financial assets Equity securities Mutual funds — 236 — 236 — 222 — 222 Total equity securities — 236 — 236 — 222 — 222 Available-for-sale investments US government and federal agencies 838,938 873,838 — 1,712,776 823,809 2,319,815 — 3,143,624 Non-US governments debt securities 229,071 22,392 — 251,463 267,200 22,393 — 289,593 Asset-backed securities - Student loans — 5,626 — 5,626 — — 13,174 13,174 Residential mortgage-backed securities — 19,000 — 19,000 — 27,339 — 27,339 Total available-for-sale 1,068,009 920,856 — 1,988,865 1,091,009 2,369,547 13,174 3,473,730 Other assets - Derivatives — 6,509 — 6,509 — 8,120 — 8,120 Financial liabilities Other liabilities - Derivatives — 6,254 — 6,254 — 3,424 — 3,424 |
Schedule of level 3 reconciliation | The table below summarizes realized and unrealized gains and losses for Level 3 assets still held at the reporting date. December 31, 2022 December 31, 2021 December 31, 2020 Available- Available- Available- Carrying amount at beginning of year 13,174 12,945 12,891 Proceeds from sales, paydowns and maturities (7,631) — — Change in unrealized gains (losses) recognized in other comprehensive income 102 229 54 Realized and unrealized gains recognized in net income (19) — — Transfers in (out of) Level 3 out of (into) Level 2 - AFS (5,626) — — Carrying amount at end of year — 13,174 12,945 Cumulative gain (loss) recognized in other comprehensive income (14) (116) (345) |
Items other than those recognized at fair value on a recurring basis | Items Other Than Those Recognized at Fair Value on a Recurring Basis: December 31, 2022 December 31, 2021 Level Carrying Fair Appreciation / Carrying Fair Appreciation / Financial assets Cash and cash equivalents Level 1 2,100,787 2,100,787 — 2,179,833 2,179,833 — Securities purchased under agreements to resell Level 2 59,871 59,871 — 96,107 96,107 — Short-term investments Level 1 884,478 884,478 — 1,198,918 1,198,918 — Investments held-to-maturity Level 2 3,738,080 3,197,508 (540,572) 2,763,344 2,786,112 22,768 Loans, net of allowance for credit losses Level 2 5,096,430 5,049,570 (46,860) 5,240,670 5,265,049 24,379 Other real estate owned¹ Level 2 800 800 — 691 691 — Financial liabilities Term deposits Level 2 3,107,248 3,108,511 (1,263) 2,944,946 2,948,625 (3,679) Long-term debt Level 2 172,289 177,919 (5,630) 171,876 158,993 12,883 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, 2022 | |
Fair Value Disclosures [Abstract] | |
Assets, liabilities and shareholders' equity and off-balance sheet instruments on the date of the earlier of contractual maturity, expected maturity or repricing date | The following tables set out the assets, liabilities and shareholders' equity on the date of the earlier of contractual maturity, expected maturity or repricing date. Use of these tables to derive information about the Bank’s interest rate risk position is limited by the fact that customers may choose to terminate their financial instruments at a date earlier than the contractual maturity or repricing date. Examples of this include fixed-rate mortgages, which are shown at contractual maturity but which may pre-pay earlier, and certain term deposits, which are shown at contractual maturity but which may be withdrawn before their contractual maturity subject to prepayment penalties. Investments are shown based on remaining contractual maturities. The remaining contractual principal maturities for mortgage-backed securities (primarily US government agencies) do not consider prepayments. Remaining expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations before the underlying mortgages mature. December 31, 2022 Earlier of contractual maturity or repricing date (in $ millions) Within 3 3 to 6 6 to 12 1 to 5 After Non-interest Total Assets Cash and cash equivalents 2,008 — — — — 93 2,101 Securities purchased under agreement to resell 60 — — — — — 60 Short-term investments 406 422 56 — — — 884 Investments 6 8 179 943 4,592 — 5,728 Loans 2,927 35 166 1,533 406 29 5,096 Other assets — — — — — 437 437 Total assets 5,407 465 401 2,476 4,998 559 14,306 Liabilities and shareholders' equity Shareholders’ equity — — — — — 865 865 Demand deposits 6,819 25 — — — 3,040 9,884 Term deposits 2,126 457 437 87 — — 3,107 Other liabilities — — — — — 278 278 Long-term debt — 75 — 97 — — 172 Total liabilities and shareholders' equity 8,945 557 437 184 — 4,183 14,306 Interest rate sensitivity gap (3,538) (92) (36) 2,292 4,998 (3,624) — Cumulative interest rate sensitivity gap (3,538) (3,630) (3,666) (1,374) 3,624 — — December 31, 2021 Earlier of contractual maturity or repricing date (in $ millions) Within 3 3 to 6 6 to 12 1 to 5 After Non-interest Total Assets Cash and cash equivalents 2,064 — — — — 116 2,180 Securities purchased under agreement to resell 96 — — — — — 96 Short-term investments 842 252 105 — — — 1,199 Investments 14 9 14 1,173 5,027 — 6,237 Loans 4,208 22 91 705 182 33 5,241 Other assets — — — — — 382 382 Total assets 7,224 283 210 1,878 5,209 531 15,335 Liabilities and shareholders' equity Shareholders’ equity — — — — — 977 977 Demand deposits 8,077 — 27 — — 2,821 10,925 Term deposits 1,658 587 602 98 — — 2,945 Other liabilities — — — — — 316 316 Long-term debt — — — 172 — — 172 Total liabilities and shareholders' equity 9,735 587 629 270 — 4,114 15,335 Interest rate sensitivity gap (2,511) (304) (419) 1,608 5,209 (3,583) — Cumulative interest rate sensitivity gap (2,511) (2,815) (3,234) (1,626) 3,583 — — |
Long-term debt (Tables)
Long-term debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of maturities of long-term debt | The following table presents the contractual maturity and interest payments for long-term debt issued by the Bank as at December 31, 2022. The interest payments are calculated until contractual maturity using the current LIBOR and Secured Overnight Financing Rate ("SOFR"). Interest payments until contractual maturity Long-term debt Earliest date redeemable at the Bank's option Contractual maturity date Interest rate until date redeemable Interest rate from earliest date redeemable to contractual maturity Principal Outstanding Within 1 to 5 After Bermuda 2018 issuance June 1, 2023 June 1, 2028 5.25 % 3 months US$ LIBOR + 2.255% 75,000 4,646 21,374 2,677 2020 issuance June 15, 2025 June 15, 2030 5.25 % 3 months US$ SOFR + 5.060% 100,000 5,250 31,613 23,738 Total 175,000 9,896 52,987 26,415 Unamortized debt issuance costs (2,711) Long-term debt less unamortized debt issuance costs 172,289 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | Year ended December 31, 2022 December 31, 2021 December 31, 2020 Net income 214,020 162,668 147,217 Basic Earnings Per Share Weighted average number of common shares issued 50,214 50,145 51,128 Weighted average number of common shares held as treasury stock (619) (619) (619) Weighted average number of common shares (in thousands) 49,595 49,526 50,509 Basic Earnings Per Share 4.32 3.28 2.91 Diluted Earnings Per Share Weighted average number of common shares 49,595 49,526 50,509 Net dilution impact related to options to purchase common shares — — 55 Net dilution impact related to awards of unvested common shares 265 349 286 Weighted average number of diluted common shares (in thousands) 49,860 49,875 50,850 Diluted Earnings Per Share 4.29 3.26 2.90 |
Share-based payments (Tables)
Share-based payments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of changes in outstanding stock options | Changes in Outstanding Stock Option Plans Number of shares transferable upon exercise (thousands) Weighted average Weighted average Aggregate Year ended December 31, 2020 2010 Stock 2010 Stock 2010 Stock Outstanding at beginning of year 159 12.07 Exercised (143) 12.13 2,192 Forfeitures and cancellations (16) 11.50 Outstanding at end of year — — 0.00 — Vested and exercisable at end of year — — 0.00 |
Schedule of changes in outstanding ELTIP and EDIP awards | Changes in Outstanding ELTIP and EDIP awards (in thousands of shares transferable upon vesting) Year ended December 31, 2022 December 31, 2021 December 31, 2020 EDIP ELTIP EDIP ELTIP EDIP ELTIP Outstanding at beginning of year 297 704 364 658 251 618 Granted 486 280 118 283 245 209 Vested (fair value in 2022: $17.3 million, 2021: $13.9 million; 2020: $9.6 million) (162) (279) (183) (237) (129) (162) Forfeitures (resignations, retirements, redundancies) — — (2) — (3) (7) Outstanding at end of year 621 705 297 704 364 658 |
Schedule of share-based compensation cost recognized in net income | Share-based Compensation Cost Recognized in Net Income Year ended December 31, 2022 December 31, 2021 December 31, 2020 EDIP and EDIP and EDIP and Cost recognized in net income 16,215 14,539 14,608 |
Schedule of unrecognized compensation cost | Year ended Unrecognized Share-based Compensation Cost December 31, 2022 December 31, 2021 Unrecognized cost Weighted average years over which it is expected to be recognized Unrecognized cost Weighted average years over which it is expected to be recognized EDIP 14,234 3.35 4,896 1.45 ELTIP Time vesting shares — 0.00 17 0.12 Performance vesting shares 10,232 1.75 8,840 1.76 Total unrecognized expense 24,466 13,753 |
Share repurchase plans (Tables)
Share repurchase plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of share repurchase programs | Year ended December 31 Common share repurchases 2022 2021 2020 Acquired number of shares (to the nearest 1) 102,000 534,828 3,452,000 Average cost per common share 38.21 36.93 25.10 Total cost (in US dollars) 3,897,268 19,753,336 86,639,889 |
Accumulated other comprehensi_2
Accumulated other comprehensive income (loss) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of AOCL components | Unrealized net gains (losses) Unrealized net Unrealized net Employee benefit plans adjustments Year ended December 31, 2022 Pension Post-retirement Subtotal - Total AOCIL Balance at beginning of year (20,913) 91 (21,982) (56,400) (25,713) (82,113) (124,917) Transfer of AFS investments to HTM investments — (99,143) 99,143 — — — — Other comprehensive income (loss), net of taxes (4,787) 7,840 (297,506) 8,495 33,423 41,918 (252,535) Balance at end of year (25,700) (91,212) (220,345) (47,905) 7,710 (40,195) (377,452) Unrealized net gains (losses) Unrealized net Unrealized net Employee benefit plans adjustments Year ended December 31, 2021 Pension Post- retirement Subtotal - Total AOCIL Balance at beginning of year (21,065) (60) 72,779 (72,255) (29,079) (101,334) (49,680) Other comprehensive income (loss), net of taxes 152 151 (94,761) 15,855 3,366 19,221 (75,237) Balance at end of year (20,913) 91 (21,982) (56,400) (25,713) (82,113) (124,917) Unrealized net gains (losses) Unrealized net Unrealized net Employee benefit plans adjustments Year ended December 31, 2020 Pension Post- retirement Subtotal - Total AOCIL Balance at beginning of year (20,818) (725) 11,808 (66,312) (11,050) (77,362) (87,097) Other comprehensive income (loss), net of taxes (247) 665 60,971 (5,943) (18,029) (23,972) 37,417 Balance at end of year (21,065) (60) 72,779 (72,255) (29,079) (101,334) (49,680) |
Schedule of net change in AOCL components | Net Change of AOCIL Components Year ended Line item in the consolidated statements of operations, if any December 31, 2022 December 31, 2021 December 31, 2020 Net unrealized gains (losses) on translation of net investment in foreign operations adjustments Foreign currency translation adjustments N/A (38,925) (3,129) 9,991 Gains (losses) on net investment hedge N/A 34,138 3,281 (10,238) Net change (4,787) 152 (247) Held-to-maturity investment adjustments Net unamortized gains (losses) transferred from AFS N/A (99,143) — — Amortization of net gains (losses) to net income Interest income on investments 7,840 151 665 Net change (91,303) 151 665 Available-for-sale investment adjustments Gross unrealized gains (losses) N/A (298,768) (94,960) 62,191 Net unrealized (gains) losses transferred to HTM N/A 99,143 — — Transfer of realized (gains) losses to net income Net realized gains (losses) on AFS investments 19 239 (1,220) Foreign currency translation adjustments of related balances N/A 1,243 (40) — Net change (198,363) (94,761) 60,971 Employee benefit plans adjustments Defined benefit pension plan Net actuarial gain (loss) N/A 6,218 14,772 (8,363) Net loss (gain) on settlement reclassified to net income Net other gains (losses) (907) — — Prior service credit (cost) arising during the year N/A — (399) (47) Amortization of net actuarial (gains) losses Non-service employee benefits expense 2,218 2,766 2,412 Change in deferred taxes N/A — (1,462) 456 Amortization of prior service (credit) cost Non-service employee benefits expense 81 (25) 20 Foreign currency translation adjustments of related balances N/A 885 203 (421) Net change 8,495 15,855 (5,943) Post-retirement healthcare plan Net actuarial gain (loss) N/A 31,455 1,163 (18,553) Amortization of net actuarial (gains) losses Non-service employee benefits expense 1,444 1,679 — Amortization of prior service (credit) cost Non-service employee benefits expense 524 524 524 Net change 33,423 3,366 (18,029) Other comprehensive income (loss), net of taxes (252,535) (75,237) 37,417 |
Capital structure (Tables)
Capital structure (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of compliance with regulatory capital requirements | The following table sets forth the Bank's capital adequacy in accordance with the Basel III framework: December 31, 2022 December 31, 2021 Actual Regulatory minimum Actual Regulatory minimum Capital CET 1 capital 983,342 N/A 896,263 N/A Tier 1 capital 983,342 N/A 896,263 N/A Tier 2 capital 183,640 N/A 183,998 N/A Total capital 1,166,982 N/A 1,080,261 N/A Risk Weighted Assets 4,843,370 N/A 5,101,474 N/A Leverage Ratio Exposure Measure 14,774,309 N/A 15,921,624 N/A Capital Ratios (%) CET 1 capital 20.3 % 10.0 % 17.6 % 10.0 % Tier 1 capital 20.3 % 11.5 % 17.6 % 11.5 % Total capital 24.1 % 13.5 % 21.2 % 13.5 % Leverage ratio 6.7 % 5.0 % 5.6 % 5.0 % |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of income taxes in consolidated statements of operations | Year ended Income taxes in consolidated statements of operations December 31, 2022 December 31, 2021 December 31, 2020 Current tax expense 3,223 2,818 2,382 Deferred tax (recovery) expense 459 305 (4) Total tax (benefit) expense 3,682 3,123 2,378 |
Schedule of reconciliation between the effective income tax rate and the statutory income tax rate | Reconciliation between the Effective Income Tax Rate and the Statutory Income Tax Rate Year ended December 31, 2022 December 31, 2021 December 31, 2020 $ % $ % $ % Income tax expense in international offices taxed at different rates 4,349 2.0 3,366 2.0 2,695 1.8 Expenses not deductible for tax purposes 283 0.1 408 0.2 299 0.2 Prior year tax adjustments 83 — (231) (0.1) 41 — Effect of change in tax rate 125 0.1 (1,217) (0.7) — — Change in valuation allowance (1,364) (0.6) 585 0.4 (582) (0.4) Other - net 206 0.1 212 0.1 (75) (0.1) Income tax (benefit) expense at effective tax rate 3,682 1.7 3,123 1.9 2,378 1.6 |
Schedule of deferred income taxes | Deferred income taxes December 31, 2022 December 31, 2021 Deferred income tax asset Tax loss carried forward 5,863 8,269 Allowance for compensated absence 19 — Deferred income tax asset before valuation allowance 5,882 8,269 Less: valuation allowance (3,478) (4,842) Deferred income tax asset after valuation allowance 2,404 3,427 Deferred income tax liability Fixed assets (477) (735) Allowance for compensated absence — (27) Total deferred income tax liability (477) (762) Net deferred income tax assets 1,927 2,665 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Loan balances with directors and executives of the Bank, companies in which they are principal owners and/or members of the board, and trusts in which they are involved were as follows: Balance at December 31, 2020 42,391 Net loans issued (repaid) during the year (40,448) Effect of changes in the composition of related parties 5,432 Balance at December 31, 2021 7,375 Net loans issued (repaid) during year (5,362) Effect of changes in the composition of related parties 18,380 Balance at December 31, 2022 20,393 Consolidated balance sheets December 31, 2022 December 31, 2021 Deposits 92,806 21,683 Year ended December 31 Consolidated statement of operations 2022 2021 2020 Interest and fees on loans 900 1,209 1,444 Certain affiliates of the Bank have loans and deposits with the Bank which were made and are maintained in the ordinary course of business on normal commercial terms. Balances with these parties were as follows: Consolidated balance sheets December 31, 2022 December 31, 2021 Loans 10,211 10,489 Deposits 560 441 Year ended December 31 Consolidated statement of operations 2022 2021 2020 Interest and fees on loans 669 618 654 Other gains/losses — 99 742 Total non-interest expense 1,720 1,519 1,431 Other non-interest income 242 — — Consolidated balance sheets December 31, 2022 December 31, 2021 Deposits 20,549 22,346 Year ended December 31 Consolidated statement of operations 2022 2021 2020 Asset management 7,379 5,217 7,131 Custody and other administration services 839 622 1,108 Other non-interest income — 6 729 |
Condensed financial statement_2
Condensed financial statements of the parent company only (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Balance Sheet | The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Balance Sheets (In thousands of US dollars) As at December 31, 2022 December 31, 2021 Assets Cash and demand deposits with banks - Non-interest-bearing 38,835 41,993 Demand deposits with banks - Interest-bearing 142,213 135,038 Cash equivalents - Interest-bearing 723,323 591,294 Cash and cash equivalents 904,371 768,325 Securities purchased under agreements to resell 59,871 96,107 Short-term investments 80,315 242,691 Investment in securities Equity securities at fair value 236 222 Available-for-sale (amortized cost: $944,746 (2021: 1,419,712)) 853,749 1,417,117 Held-to-maturity (fair value: $1,238,333 (2021: $1,030,969)) 1,421,556 1,011,584 Total investment in securities 2,275,541 2,428,923 Net assets of subsidiaries - Banks 480,297 594,930 Net assets of subsidiaries - Non-banks 1,563 17,091 Loans to third parties, net of allowance for credit losses 1,839,622 1,966,895 Loans to subsidiaries - Banks — 13,534 Loans to subsidiaries - Non-banks 58,056 61,901 Other assets, including accrued interest, premises, equipment and computer software, equity method investments, receivables from subsidiaries and other real estate owned 242,796 188,263 Total assets 5,942,432 6,378,660 Liabilities Deposits Non-interest bearing 1,811,455 1,686,985 Interest bearing 2,936,307 3,360,185 Total deposits 4,747,762 5,047,170 Employee benefit plans 91,983 125,968 Other liabilities, including accrued interest and payables to subsidiaries 65,583 56,153 Total other liabilities 157,566 182,121 Long-term debt 172,289 171,876 Total liabilities 5,077,617 5,401,167 Total shareholders’ equity 864,815 977,493 Total liabilities and shareholders’ equity 5,942,432 6,378,660 |
Condensed Income Statement | The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Operations (In thousands of US dollars) Year ended December 31, 2022 December 31, 2021 December 31, 2020 Non-interest income Banking 26,116 24,465 24,429 Foreign exchange revenue 11,858 9,660 9,166 Custody and other administration services 6,869 7,693 6,927 Other non-interest income 1,269 3,372 5,924 Dividends from subsidiaries - Banks 72,268 82,327 121,522 Dividends from subsidiaries - Non-banks 21,318 22,656 19,864 Total non-interest income 139,698 150,173 187,832 Interest income Interest and fees on loans 118,829 116,031 123,774 Investments 49,790 44,663 52,135 Deposits with banks and other 14,499 2,056 3,109 Total interest income 183,118 162,750 179,018 Interest expense Deposits 10,834 6,405 9,386 Long-term debt 9,601 9,601 9,294 Securities sold under agreement to resell 22 — — Total interest expense 20,457 16,006 18,680 Net interest income before provision for credit losses 162,661 146,744 160,338 Provision for credit (losses) recoveries (1,226) 2,206 (8,750) Net interest income after provision for credit losses 161,435 148,950 151,588 Net gains (losses) on equity securities 14 85 658 Net realized gains (losses) on available-for-sale investments — — 702 Net gains (losses) on other real estate owned 9 (84) (104) Net other gains (losses) — 850 714 Total other gains (losses) 23 851 1,970 Total net revenue 301,156 299,974 341,390 Non-interest expense Salaries and other employee benefits 65,789 62,405 69,521 Technology and communications 29,551 35,675 35,434 Professional and outside services 29,744 27,726 27,791 Property 10,232 9,586 9,092 Indirect taxes 15,714 15,906 15,633 Non-service employee benefits expense 4,845 4,493 3,462 Marketing 3,629 2,497 2,418 Amortization of intangible assets 169 169 169 Other expenses 9,613 9,502 9,896 Total non-interest expense 169,286 167,959 173,416 Net income before equity in undistributed earnings of subsidiaries 131,870 132,015 167,974 Equity in undistributed earnings of subsidiaries 82,150 30,653 (20,757) Net income 214,020 162,668 147,217 Other comprehensive income, net of tax (252,535) (75,237) 37,417 Total comprehensive income (38,515) 87,431 184,634 |
Condensed Cash Flow Statement | The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Cash Flows (In thousands of US dollars) Year ended December 31, 2022 December 31, 2021 December 31, 2020 Cash flows from operating activities Net income 214,020 162,668 147,217 Adjustments to reconcile net income to operating cash flows Depreciation and amortization 14,922 28,617 26,562 Provision for credit losses (recoveries) 1,226 (2,206) 8,750 Share-based payments and settlements 17,077 15,151 15,245 Net change in equity securities at fair value (14) 7,096 102 Net realized (gains) losses on available-for-sale investments — — (702) Net (gains) losses on other real estate owned (9) 84 104 (Increase) decrease in carrying value of equity method investments 120 31 (1,376) Dividends received from equity method investments 12 291 2,710 Equity in undistributed earnings of subsidiaries (82,150) (30,653) 20,757 Changes in operating assets and liabilities (Increase) decrease in accrued interest receivable and other assets (25,888) 10,665 754 Increase (decrease) in employee benefit plans, accrued interest payable and other liabilities 15,386 (14,597) 9,456 Cash provided by (used in) operating activities 154,702 177,147 229,579 Cash flows from investing activities (Increase) decrease in securities purchased under agreements to resell 36,236 100,932 (54,756) Short-term investments other than restricted cash: proceeds from maturities and sales 821,645 163,396 68,272 Short-term investments other than restricted cash: purchases (666,837) (391,996) (35,319) Available-for-sale investments: proceeds from sale — 367 205,770 Available-for-sale investments: proceeds from maturities and pay downs 112,274 299,367 295,547 Available-for-sale investments: purchases (44,504) (669,391) (317,451) Held-to-maturity investments: proceeds from maturities and pay downs 158,665 269,311 229,576 Held-to-maturity investments: purchases (203,867) (316,820) (195,898) Net (increase) decrease in loans to third parties 125,215 60,395 8,263 Net (increase) decrease in loans to bank subsidiaries 13,534 135 (428) Net (increase) decrease in loans to non-bank subsidiaries 3,845 (3,386) (1,564) Additions to premises, equipment and computer software (20,567) (10,372) (11,313) Proceeds from sale of other real estate owned 730 314 — Injection of capital in subsidiary (6,083) (1,465) (1,522) Return of capital from a subsidiary — — 3,314 Cash provided by (used in) investing activities 330,286 (499,213) 192,491 The Bank of N.T. Butterfield & Son Limited (parent company only) Condensed Statements of Cash Flows (In thousands of US dollars) Year ended December 31, 2022 December 31, 2021 December 31, 2020 Cash flows from financing activities Net increase (decrease) in demand and term deposit liabilities (265,270) (192,756) 630,141 Issuance of subordinated capital, net of underwriting fees — — 97,647 Repayment of long-term debt — — (70,000) Common shares repurchased (3,897) (19,754) (86,640) Proceeds from stock option exercises — — 1,739 Cash dividends paid on common shares (87,343) (87,285) (88,932) Cash provided by (used in) financing activities (356,510) (299,795) 483,955 Net increase (decrease) in cash, cash equivalent and restricted cash 128,478 (621,861) 906,025 Cash, cash equivalents and restricted cash: beginning of year 782,415 1,404,276 498,251 Cash, cash equivalents and restricted cash: end of year 910,893 782,415 1,404,276 Components of cash, cash equivalents and restricted cash at end of year Cash and cash equivalents 904,371 768,325 1,387,999 Restricted cash included in short-term investments on the consolidated balance sheets 6,522 14,090 16,277 Total cash, cash equivalents and restricted cash at end of year 910,893 782,415 1,404,276 Supplemental disclosure of cash flow information Cash interest paid 18,680 15,156 19,532 Supplemental disclosure of non-cash items Transfer to (out of) other real estate owned 830 307 314 Transfer of available-for-sale investments to held-to-maturity investments 364,983 — — Initial recognition of right-of-use assets and operating lease liabilities — 536 — Reduction in net loans due to initial adoption of a current expected credit loss model — — 3,899 |
Nature of business (Details)
Nature of business (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 3 |
Significant accounting polici_3
Significant accounting policies (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
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 | |||
Negative adjustment to loan portfolio | $ 864,815,000 | $ 977,493,000 | $ 981,948,000 | |
Retained earnings (Accumulated deficit) | ||||
Property, Plant and Equipment [Line Items] | ||||
Negative adjustment to loan portfolio | $ 229,732,000 | $ 104,329,000 | 33,918,000 | $ (9,237,000) |
Cumulative Effect, Period of Adoption, Adjustment | Retained earnings (Accumulated deficit) | ||||
Property, Plant and Equipment [Line Items] | ||||
Negative adjustment to loan portfolio | $ (7,800,000) | $ (7,841,000) | ||
Buildings | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 50 years | |||
Equipment | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 3 years | |||
Equipment | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 10 years | |||
Software and Software Development Costs | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 5 years | |||
Software and Software Development Costs | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 10 years | |||
Other Intangible Assets | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Other acquired intangible assets, useful life (not exceeding) | 15 years |
Cash and cash equivalents (Deta
Cash and cash equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Non-interest bearing | ||
Cash and demand deposits with banks | $ 93,032 | $ 115,651 |
Interest bearing | ||
Demand deposits with banks | 258,239 | 437,644 |
Cash equivalents | 1,749,516 | 1,626,538 |
Sub-total - Interest bearing | 2,007,755 | 2,064,182 |
Cash and cash equivalents | 2,100,787 | 2,179,833 |
Interest-bearing deposits in banks bearing negligible interest | $ 157,200 | $ 280,500 |
Short-term investments (Details
Short-term investments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Investment [Line Items] | ||
Short-term investments | $ 884,478 | $ 1,198,918 |
Unrestricted | ||
Investment [Line Items] | ||
Short-term investments | 868,719 | 1,175,254 |
Affected by drawing restrictions related to minimum reserve and derivative margin requirements | ||
Investment [Line Items] | ||
Short-term investments | 15,759 | 23,664 |
Affected by drawing restrictions related to minimum reserve and derivative margin requirements | Interest earning demand and term deposits | ||
Investment [Line Items] | ||
Short-term investments | 15,759 | 23,664 |
Maturing within three months | Unrestricted | ||
Investment [Line Items] | ||
Short-term investments | 390,540 | 818,340 |
Maturing between three to six months | Unrestricted | ||
Investment [Line Items] | ||
Short-term investments | 421,734 | 252,340 |
Maturing between six to twelve months | Unrestricted | ||
Investment [Line Items] | ||
Short-term investments | $ 56,445 | $ 104,574 |
Investment in securities - Amor
Investment in securities - Amortized Cost, Carrying Amount and Fair Value (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity securities | |||
Amortized cost | $ 724,000 | $ 724,000 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | (488,000) | (502,000) | |
Fair value | 236,000 | 222,000 | |
Available-for-sale | |||
Available-for-sale, amortized cost | 2,209,078,000 | 3,495,564,000 | |
Gross unrealized gains | 14,000 | 31,163,000 | |
Gross unrealized losses | (220,227,000) | (52,997,000) | |
Available-for-sale investments | 1,988,865,000 | 3,473,730,000 | |
Held-to-maturity | |||
Amortized cost | 3,738,080,000 | 2,763,344,000 | |
Gross unrealized gains | 0 | 57,497,000 | |
Gross unrealized losses | (540,572,000) | (34,729,000) | |
Held-to-maturity, fair value | 3,197,508,000 | 2,786,112,000 | |
Non-credit impairments recognized in accumulated other comprehensive loss, held-to-maturity investments | 0 | 0 | $ 0 |
Mutual funds | |||
Equity securities | |||
Amortized cost | 724,000 | 724,000 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | (488,000) | (502,000) | |
Fair value | 236,000 | 222,000 | |
US government and federal agencies | |||
Available-for-sale | |||
Available-for-sale, amortized cost | 1,919,285,000 | 3,163,964,000 | |
Gross unrealized gains | 14,000 | 30,945,000 | |
Gross unrealized losses | (206,523,000) | (51,285,000) | |
Available-for-sale investments | 1,712,776,000 | 3,143,624,000 | |
Held-to-maturity | |||
Amortized cost | 3,738,080,000 | 2,763,344,000 | |
Gross unrealized gains | 0 | 57,497,000 | |
Gross unrealized losses | (540,572,000) | (34,729,000) | |
Held-to-maturity, fair value | 3,197,508,000 | 2,786,112,000 | |
Non-US governments debt securities | |||
Available-for-sale | |||
Available-for-sale, amortized cost | 262,892,000 | 291,119,000 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | (11,429,000) | (1,526,000) | |
Available-for-sale investments | 251,463,000 | 289,593,000 | |
Asset-backed securities - Student loans | |||
Available-for-sale | |||
Available-for-sale, amortized cost | 5,640,000 | 13,290,000 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | (14,000) | (116,000) | |
Available-for-sale investments | 5,626,000 | 13,174,000 | |
Residential mortgage-backed securities | |||
Available-for-sale | |||
Available-for-sale, amortized cost | 21,261,000 | 27,191,000 | |
Gross unrealized gains | 0 | 218,000 | |
Gross unrealized losses | (2,261,000) | (70,000) | |
Available-for-sale investments | $ 19,000,000 | $ 27,339,000 |
Investment in securities - Narr
Investment in securities - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 USD ($) security | Dec. 31, 2021 security | |
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, unrealized loss position, number of positions | 163 | 67 |
Debt securities, available-for-sale, securities in unrealized loss positions, percentage of portfolio fair value | 99.80% | 73.60% |
Debt securities, available-for-sale, securities in unrealized loss positions, percentage of fair value of affected securities | (11.10%) | (2.10%) |
Available-for-sale securities, transfers to held to maturity, unrealized losses | $ | $ 99.1 | |
US government and federal agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Held-to-maturity, securities in unrealized loss positions, number of positions | 220 | 57 |
Held-to-maturity, securities in unrealized loss positions, percentage of portfolio fair value | 100% | 59.10% |
Held-to-maturity, securities in unrealized loss positions, percentage of fair value of affected securities | 16.90% | 2.20% |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, unrealized loss position, number of positions | 13 | |
Residential mortgage-backed securities | Minimum | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of weighted average credit support | 16% | |
Percentage of loan to value ratio | 47% | |
Residential mortgage-backed securities | Maximum | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of weighted average credit support | 49% | |
Percentage of loan to value ratio | 56% |
Investment in securities - Cont
Investment in securities - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Available-for-sale securities with unrealized losses | ||
Available-for-sale securities with unrealized losses, Less than 12 months, Fair value | $ 727,936 | $ 2,419,357 |
Available-for-sale securities with unrealized losses, Less than 12 months, Gross unrealized losses | (69,634) | (48,409) |
Available-for-sale securities with unrealized losses,12 months or more, Fair value | 1,256,769 | 137,994 |
Available-for-sale securities with unrealized losses,12 months or more, Gross unrealized losses | (150,593) | (4,588) |
Available-for-sale securities with unrealized losses, Total fair value | 1,984,705 | 2,557,351 |
Available-for-sale securities with unrealized losses, Total gross unrealized losses | (220,227) | (52,997) |
Held-to-maturity securities with unrealized losses, Less than 12 months, Fair Value | 1,462,005 | 1,568,315 |
Held-to-maturity securities with unrealized losses, Less than 12 months, Gross unrealized losses | (142,228) | (33,554) |
Held-to-maturity securities with unrealized losses, 12 months or more, Fair value | 1,735,504 | 29,713 |
Held-to-maturity securities with unrealized losses, 12 months or more, Gross unrealized losses | (398,344) | (1,175) |
Held-to-maturity securities with unrealized losses, Total fair value | 3,197,509 | 1,598,028 |
Held-to-maturity securities with unrealized losses, Total gross unrealized losses | (540,572) | (34,729) |
US government and federal agencies | ||
Available-for-sale securities with unrealized losses | ||
Available-for-sale securities with unrealized losses, Less than 12 months, Fair value | 713,462 | 2,144,105 |
Available-for-sale securities with unrealized losses, Less than 12 months, Gross unrealized losses | (68,016) | (47,214) |
Available-for-sale securities with unrealized losses,12 months or more, Fair value | 995,154 | 102,428 |
Available-for-sale securities with unrealized losses,12 months or more, Gross unrealized losses | (138,507) | (4,071) |
Available-for-sale securities with unrealized losses, Total fair value | 1,708,616 | 2,246,533 |
Available-for-sale securities with unrealized losses, Total gross unrealized losses | (206,523) | (51,285) |
Non-US governments debt securities | ||
Available-for-sale securities with unrealized losses | ||
Available-for-sale securities with unrealized losses, Less than 12 months, Fair value | 0 | 267,201 |
Available-for-sale securities with unrealized losses, Less than 12 months, Gross unrealized losses | 0 | (1,125) |
Available-for-sale securities with unrealized losses,12 months or more, Fair value | 251,463 | 22,392 |
Available-for-sale securities with unrealized losses,12 months or more, Gross unrealized losses | (11,429) | (401) |
Available-for-sale securities with unrealized losses, Total fair value | 251,463 | 289,593 |
Available-for-sale securities with unrealized losses, Total gross unrealized losses | (11,429) | (1,526) |
Asset-backed securities - Student loans | ||
Available-for-sale securities with unrealized losses | ||
Available-for-sale securities with unrealized losses, Less than 12 months, Fair value | 0 | 0 |
Available-for-sale securities with unrealized losses, Less than 12 months, Gross unrealized losses | 0 | 0 |
Available-for-sale securities with unrealized losses,12 months or more, Fair value | 5,626 | 13,174 |
Available-for-sale securities with unrealized losses,12 months or more, Gross unrealized losses | (14) | (116) |
Available-for-sale securities with unrealized losses, Total fair value | 5,626 | 13,174 |
Available-for-sale securities with unrealized losses, Total gross unrealized losses | (14) | (116) |
Residential mortgage-backed securities | ||
Available-for-sale securities with unrealized losses | ||
Available-for-sale securities with unrealized losses, Less than 12 months, Fair value | 14,474 | 8,051 |
Available-for-sale securities with unrealized losses, Less than 12 months, Gross unrealized losses | (1,618) | (70) |
Available-for-sale securities with unrealized losses,12 months or more, Fair value | 4,526 | 0 |
Available-for-sale securities with unrealized losses,12 months or more, Gross unrealized losses | (643) | 0 |
Available-for-sale securities with unrealized losses, Total fair value | 19,000 | 8,051 |
Available-for-sale securities with unrealized losses, Total gross unrealized losses | $ (2,261) | $ (70) |
Investment in securities - Inve
Investment in securities - Investment Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Available-for-sale | ||
Within 3 months | $ 0 | |
3 to 12 months | 167,863 | |
1 to 5 years | 761,716 | |
5 to 10 years | 160,823 | |
Over 10 years | 0 | |
No specific or single maturity | 898,463 | |
Carrying amount | 1,988,865 | $ 3,473,730 |
US government and federal agencies | ||
Available-for-sale | ||
Within 3 months | 0 | |
3 to 12 months | 145,471 | |
1 to 5 years | 532,645 | |
5 to 10 years | 160,823 | |
Over 10 years | 0 | |
No specific or single maturity | 873,837 | |
Carrying amount | 1,712,776 | 3,143,624 |
Held-to-maturity | ||
Within 3 months | 0 | |
3 to 12 months | 0 | |
1 to 5 years | 0 | |
5 to 10 years | 0 | |
Over 10 years | 0 | |
No specific or single maturity | 3,738,080 | |
Carrying amount | 3,738,080 | |
Non-US governments debt securities | ||
Available-for-sale | ||
Within 3 months | 0 | |
3 to 12 months | 22,392 | |
1 to 5 years | 229,071 | |
5 to 10 years | 0 | |
Over 10 years | 0 | |
No specific or single maturity | 0 | |
Carrying amount | 251,463 | 289,593 |
Asset-backed securities - Student loans | ||
Available-for-sale | ||
Within 3 months | 0 | |
3 to 12 months | 0 | |
1 to 5 years | 0 | |
5 to 10 years | 0 | |
Over 10 years | 0 | |
No specific or single maturity | 5,626 | |
Carrying amount | 5,626 | 13,174 |
Residential mortgage-backed securities | ||
Available-for-sale | ||
Within 3 months | 0 | |
3 to 12 months | 0 | |
1 to 5 years | 0 | |
5 to 10 years | 0 | |
Over 10 years | 0 | |
No specific or single maturity | 19,000 | |
Carrying amount | $ 19,000 | $ 27,339 |
Investment in securities - Pled
Investment in securities - Pledged Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Available-for-sale, amortized cost | $ 2,209,078 | $ 3,495,564 |
Available-for-sale at fair value (amortized cost: $2,209,078 (2021: $3,495,564)) | 1,988,865 | 3,473,730 |
Held-to-maturity (fair value: $1,238,333 (2021: $1,030,969)) | 3,738,080 | 2,763,344 |
Held-to-maturity, fair value | 3,197,508 | 2,786,112 |
Asset Pledged as Collateral with Right | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Available-for-sale, amortized cost | 0 | 807 |
Available-for-sale at fair value (amortized cost: $2,209,078 (2021: $3,495,564)) | 0 | 842 |
Held-to-maturity (fair value: $1,238,333 (2021: $1,030,969)) | 32,938 | 33,102 |
Held-to-maturity, fair value | $ 24,991 | $ 31,958 |
Investment in securities - Sale
Investment in securities - Sale Proceeds and Realized Gains and Losses of AFS Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Securities, Available-for-sale [Line Items] | |||
Sale proceeds | $ 7,631 | $ 189,417 | $ 352,965 |
Gross realized gains | 0 | 1,563 | 1,275 |
Gross realized (losses) | (19) | (1,802) | (55) |
Transfers of HTM | 998,157 | 0 | 0 |
US government and federal agencies | |||
Debt Securities, Available-for-sale [Line Items] | |||
Sale proceeds | 0 | 189,417 | 349,699 |
Gross realized gains | 0 | 1,563 | 1,171 |
Gross realized (losses) | 0 | (1,802) | (55) |
Transfers of HTM | 998,157 | 0 | 0 |
Non-US governments debt securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Sale proceeds | 0 | 0 | 3,266 |
Gross realized gains | 0 | 0 | 104 |
Gross realized (losses) | 0 | 0 | 0 |
Transfers of HTM | 0 | 0 | 0 |
Asset-backed securities - Student loans | |||
Debt Securities, Available-for-sale [Line Items] | |||
Sale proceeds | 7,631 | 0 | 0 |
Gross realized gains | 0 | 0 | 0 |
Gross realized (losses) | $ (19) | $ 0 | $ 0 |
Loans - Additional Information
Loans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Receivables [Abstract] | ||
Effective yield | 5.91% | 4% |
Accrued interest | $ 16.6 | $ 7.6 |
Loans - Loans' Credit Quality (
Loans - Loans' Credit Quality (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | $ 5,121,391 | $ 5,268,743 | |
Allowance for expected credit losses | (24,961) | (28,073) | $ (34,098) |
Total net loans | 5,096,430 | 5,240,670 | |
Loans originated current year | 971,780 | 911,648 | |
Loans originated 1 year past | 646,456 | 605,142 | |
Loans originated 2 years past | 486,617 | 918,171 | |
Loans originated 3 years past | 684,334 | 533,055 | |
Loans originated 4 years past | 407,111 | 508,706 | |
Loans originated prior | 1,659,455 | 1,546,154 | |
Overdrafts and credit cards | 265,638 | 245,867 | |
Total amortized cost | 5,121,391 | 5,268,743 | |
Commercial loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 723,463 | 737,944 | |
Allowance for expected credit losses | (12,143) | (11,126) | (11,609) |
Total net loans | 711,320 | 726,818 | |
Total amortized cost | 723,463 | 737,944 | |
Commercial loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 124,551 | 105,407 | |
Allowance for expected credit losses | (416) | (42) | |
Total net loans | 124,135 | 105,365 | |
Total amortized cost | 124,551 | 105,407 | |
Commercial loans | Government | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 281,518 | 259,572 | |
Allowance for expected credit losses | (1,368) | (969) | |
Total net loans | 280,150 | 258,603 | |
Total amortized cost | 281,518 | 259,572 | |
Commercial loans | Commercial and industrial | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 317,394 | 372,965 | |
Allowance for expected credit losses | (10,359) | (10,115) | |
Total net loans | 307,035 | 362,850 | |
Total amortized cost | 317,394 | 372,965 | |
Commercial real estate loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 627,331 | 693,164 | |
Allowance for expected credit losses | (884) | (1,168) | (2,104) |
Total net loans | 626,447 | 691,996 | |
Total amortized cost | 627,331 | 693,164 | |
Commercial real estate loans | Commercial mortgage | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 619,857 | 683,519 | |
Allowance for expected credit losses | (884) | (1,168) | |
Total net loans | 618,973 | 682,351 | |
Total amortized cost | 619,857 | 683,519 | |
Commercial real estate loans | Construction | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 7,474 | 9,645 | |
Allowance for expected credit losses | 0 | 0 | |
Total net loans | 7,474 | 9,645 | |
Total amortized cost | 7,474 | 9,645 | |
Consumer loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 200,468 | 214,752 | |
Allowance for expected credit losses | (2,696) | (3,020) | (4,476) |
Total net loans | 197,772 | 211,732 | |
Total amortized cost | 200,468 | 214,752 | |
Consumer loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 44,420 | 42,297 | |
Allowance for expected credit losses | (355) | (236) | |
Total net loans | 44,065 | 42,061 | |
Total amortized cost | 44,420 | 42,297 | |
Consumer loans | Automobile financing | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 20,834 | 21,529 | |
Allowance for expected credit losses | (93) | (88) | |
Total net loans | 20,741 | 21,441 | |
Total amortized cost | 20,834 | 21,529 | |
Consumer loans | Credit card | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 77,714 | 72,853 | |
Allowance for expected credit losses | (1,043) | (1,420) | |
Total net loans | 76,671 | 71,433 | |
Total amortized cost | 77,714 | 72,853 | |
Consumer loans | Other consumer | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 57,500 | 78,073 | |
Allowance for expected credit losses | (1,205) | (1,276) | |
Total net loans | 56,295 | 76,797 | |
Total amortized cost | 57,500 | 78,073 | |
Consumer loans | Other consumer | Cash and Portfolio Secured Lending Collateral | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 9,000 | 13,000 | |
Consumer loans | Other consumer | Buildings in Construction or Other Collateral | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 37,000 | 57,000 | |
Residential mortgage loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 3,570,129 | 3,622,883 | |
Allowance for expected credit losses | (9,238) | (12,759) | $ (15,909) |
Total net loans | 3,560,891 | 3,610,124 | |
Total amortized cost | 3,570,129 | 3,622,883 | |
Pass | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 4,942,484 | 5,078,629 | |
Loans originated current year | 971,776 | 911,403 | |
Loans originated 1 year past | 646,436 | 605,139 | |
Loans originated 2 years past | 485,944 | 917,700 | |
Loans originated 3 years past | 680,939 | 513,293 | |
Loans originated 4 years past | 393,623 | 493,091 | |
Loans originated prior | 1,499,410 | 1,393,929 | |
Overdrafts and credit cards | 264,356 | 244,074 | |
Total amortized cost | 4,942,484 | 5,078,629 | |
Pass | Commercial loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 703,529 | 717,723 | |
Pass | Commercial loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 123,874 | 104,814 | |
Pass | Commercial loans | Government | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 281,518 | 259,572 | |
Pass | Commercial loans | Commercial and industrial | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 298,137 | 353,337 | |
Pass | Commercial real estate loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 620,564 | 682,812 | |
Pass | Commercial real estate loans | Commercial mortgage | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 613,090 | 673,167 | |
Pass | Commercial real estate loans | Construction | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 7,474 | 9,645 | |
Pass | Consumer loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 199,205 | 213,237 | |
Pass | Consumer loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 44,414 | 42,293 | |
Pass | Consumer loans | Automobile financing | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 20,673 | 21,412 | |
Pass | Consumer loans | Credit card | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 77,419 | 72,569 | |
Pass | Consumer loans | Other consumer | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 56,699 | 76,963 | |
Pass | Residential mortgage loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 3,419,186 | 3,464,857 | |
Special mention | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 10,214 | 18,249 | |
Loans originated current year | 0 | 0 | |
Loans originated 1 year past | 0 | 0 | |
Loans originated 2 years past | 142 | 0 | |
Loans originated 3 years past | 0 | 6,060 | |
Loans originated 4 years past | 0 | 0 | |
Loans originated prior | 9,767 | 11,131 | |
Overdrafts and credit cards | 305 | 1,058 | |
Total amortized cost | 10,214 | 18,249 | |
Special mention | Commercial loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 145 | |
Special mention | Commercial loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 145 | |
Special mention | Commercial loans | Government | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Special mention | Commercial loans | Commercial and industrial | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Special mention | Commercial real estate loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 2,082 | 4,034 | |
Special mention | Commercial real estate loans | Commercial mortgage | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 2,082 | 4,034 | |
Special mention | Commercial real estate loans | Construction | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Special mention | Consumer loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Special mention | Consumer loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Special mention | Consumer loans | Automobile financing | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Special mention | Consumer loans | Credit card | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Special mention | Consumer loans | Other consumer | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Special mention | Residential mortgage loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 8,132 | 14,070 | |
Substandard | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 105,639 | 110,820 | |
Loans originated current year | 0 | 232 | |
Loans originated 1 year past | 0 | 0 | |
Loans originated 2 years past | 508 | 290 | |
Loans originated 3 years past | 277 | 12,548 | |
Loans originated 4 years past | 12,133 | 3,400 | |
Loans originated prior | 91,795 | 93,620 | |
Overdrafts and credit cards | 926 | 730 | |
Total amortized cost | 105,639 | 110,820 | |
Substandard | Commercial loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 1,428 | 1,525 | |
Substandard | Commercial loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 632 | 446 | |
Substandard | Commercial loans | Government | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Substandard | Commercial loans | Commercial and industrial | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 796 | 1,079 | |
Substandard | Commercial real estate loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 1,503 | 1,578 | |
Substandard | Commercial real estate loans | Commercial mortgage | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 1,503 | 1,578 | |
Substandard | Commercial real estate loans | Construction | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Substandard | Consumer loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 295 | 356 | |
Substandard | Consumer loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Substandard | Consumer loans | Automobile financing | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Substandard | Consumer loans | Credit card | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 295 | 284 | |
Substandard | Consumer loans | Other consumer | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 72 | |
Substandard | Residential mortgage loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 102,413 | 107,361 | |
Non-accrual | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 63,054 | 61,045 | |
Loans originated current year | 4 | 13 | |
Loans originated 1 year past | 20 | 3 | |
Loans originated 2 years past | 23 | 181 | |
Loans originated 3 years past | 3,118 | 1,154 | |
Loans originated 4 years past | 1,355 | 12,215 | |
Loans originated prior | 58,483 | 47,474 | |
Overdrafts and credit cards | 51 | 5 | |
Total amortized cost | 63,054 | 61,045 | |
Non-accrual | Commercial loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 18,506 | 18,551 | |
Non-accrual | Commercial loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 45 | 2 | |
Non-accrual | Commercial loans | Government | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Non-accrual | Commercial loans | Commercial and industrial | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 18,461 | 18,549 | |
Non-accrual | Commercial real estate loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 3,182 | 4,740 | |
Non-accrual | Commercial real estate loans | Commercial mortgage | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 3,182 | 4,740 | |
Non-accrual | Commercial real estate loans | Construction | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Non-accrual | Consumer loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 968 | 1,159 | |
Non-accrual | Consumer loans | Overdrafts | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 6 | 4 | |
Non-accrual | Consumer loans | Automobile financing | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 161 | 117 | |
Non-accrual | Consumer loans | Credit card | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 0 | 0 | |
Non-accrual | Consumer loans | Other consumer | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | 801 | 1,038 | |
Non-accrual | Residential mortgage loans | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total amortized cost | $ 40,398 | $ 36,595 |
Loans - Age Analysis of Past Du
Loans - Age Analysis of Past Due Loans (Including Non-Accrual Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | $ 5,121,391 | $ 5,268,743 |
Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 108,651 | 84,978 |
30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 31,887 | 13,249 |
60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 4,333 | 2,231 |
More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 72,431 | 69,498 |
Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 5,012,740 | 5,183,765 |
Commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 723,463 | 737,944 |
Commercial loans | Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 18,511 | 18,603 |
Commercial loans | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 5 | 53 |
Commercial loans | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial loans | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 18,506 | 18,550 |
Commercial loans | Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 704,952 | 719,341 |
Commercial loans | Overdrafts | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 124,551 | 105,407 |
Commercial loans | Overdrafts | Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 45 | 1 |
Commercial loans | Overdrafts | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial loans | Overdrafts | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial loans | Overdrafts | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 45 | 1 |
Commercial loans | Overdrafts | Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 124,506 | 105,406 |
Commercial loans | Government | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 281,518 | 259,572 |
Commercial loans | Government | Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial loans | Government | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial loans | Government | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial loans | Government | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial loans | Government | Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 281,518 | 259,572 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 317,394 | 372,965 |
Commercial loans | Commercial and industrial | Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 18,466 | 18,602 |
Commercial loans | Commercial and industrial | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 5 | 53 |
Commercial loans | Commercial and industrial | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial loans | Commercial and industrial | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 18,461 | 18,549 |
Commercial loans | Commercial and industrial | Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 298,928 | 354,363 |
Commercial real estate loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 627,331 | 693,164 |
Commercial real estate loans | Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 3,544 | 4,739 |
Commercial real estate loans | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 363 | 0 |
Commercial real estate loans | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial real estate loans | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 3,181 | 4,739 |
Commercial real estate loans | Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 623,787 | 688,425 |
Commercial real estate loans | Commercial mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 619,857 | 683,519 |
Commercial real estate loans | Commercial mortgage | Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 3,544 | 4,739 |
Commercial real estate loans | Commercial mortgage | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 363 | 0 |
Commercial real estate loans | Commercial mortgage | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial real estate loans | Commercial mortgage | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 3,181 | 4,739 |
Commercial real estate loans | Commercial mortgage | Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 616,313 | 678,780 |
Commercial real estate loans | Construction | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 7,474 | 9,645 |
Commercial real estate loans | Construction | Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial real estate loans | Construction | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial real estate loans | Construction | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial real estate loans | Construction | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Commercial real estate loans | Construction | Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 7,474 | 9,645 |
Consumer loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 200,468 | 214,752 |
Consumer loans | Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 2,216 | 2,770 |
Consumer loans | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 706 | 594 |
Consumer loans | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 252 | 730 |
Consumer loans | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 1,258 | 1,446 |
Consumer loans | Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 198,252 | 211,982 |
Consumer loans | Overdrafts | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 44,420 | 42,297 |
Consumer loans | Overdrafts | Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 6 | 5 |
Consumer loans | Overdrafts | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Consumer loans | Overdrafts | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 0 | 0 |
Consumer loans | Overdrafts | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 6 | 5 |
Consumer loans | Overdrafts | Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 44,414 | 42,292 |
Consumer loans | Automobile financing | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 20,834 | 21,529 |
Consumer loans | Automobile financing | Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 269 | 208 |
Consumer loans | Automobile financing | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 104 | 56 |
Consumer loans | Automobile financing | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 5 | 34 |
Consumer loans | Automobile financing | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 160 | 118 |
Consumer loans | Automobile financing | Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 20,565 | 21,321 |
Consumer loans | Credit card | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 77,714 | 72,853 |
Consumer loans | Credit card | Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 949 | 1,437 |
Consumer loans | Credit card | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 423 | 471 |
Consumer loans | Credit card | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 231 | 681 |
Consumer loans | Credit card | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 295 | 285 |
Consumer loans | Credit card | Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 76,765 | 71,416 |
Consumer loans | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 57,500 | 78,073 |
Consumer loans | Other consumer | Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 992 | 1,120 |
Consumer loans | Other consumer | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 179 | 67 |
Consumer loans | Other consumer | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 16 | 15 |
Consumer loans | Other consumer | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 797 | 1,038 |
Consumer loans | Other consumer | Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 56,508 | 76,953 |
Residential mortgage loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 3,570,129 | 3,622,883 |
Residential mortgage loans | Total past due loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 84,380 | 58,866 |
Residential mortgage loans | 30 - 59 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 30,813 | 12,602 |
Residential mortgage loans | 60 - 89 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 4,081 | 1,501 |
Residential mortgage loans | More than 90 days | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | 49,486 | 44,763 |
Residential mortgage loans | Total current | ||
Financing Receivable, Past Due [Line Items] | ||
Total amortized cost | $ 3,485,749 | $ 3,564,017 |
Loans - Changes in Allowances f
Loans - Changes in Allowances for Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at the beginning of year | $ 28,073 | $ 34,098 |
Provision increase (decrease) | 2,670 | (3,500) |
Recoveries of previous charge-offs | 1,413 | 1,671 |
Charge-offs | (6,947) | (4,166) |
Other | (248) | (30) |
Allowances for expected credit losses at end of year | 24,961 | 28,073 |
Commercial loans | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at the beginning of year | 11,126 | 11,609 |
Provision increase (decrease) | 2,378 | (431) |
Recoveries of previous charge-offs | 1 | 65 |
Charge-offs | (1,314) | (112) |
Other | (48) | (5) |
Allowances for expected credit losses at end of year | 12,143 | 11,126 |
Commercial real estate loans | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at the beginning of year | 1,168 | 2,104 |
Provision increase (decrease) | (285) | (936) |
Recoveries of previous charge-offs | 0 | 0 |
Charge-offs | 0 | 0 |
Other | 1 | 0 |
Allowances for expected credit losses at end of year | 884 | 1,168 |
Consumer loans | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at the beginning of year | 3,020 | 4,476 |
Provision increase (decrease) | 1,252 | (1,552) |
Recoveries of previous charge-offs | 1,150 | 1,344 |
Charge-offs | (2,721) | (1,248) |
Other | (5) | 0 |
Allowances for expected credit losses at end of year | 2,696 | 3,020 |
Residential mortgage loans | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at the beginning of year | 12,759 | 15,909 |
Provision increase (decrease) | (675) | (581) |
Recoveries of previous charge-offs | 262 | 262 |
Charge-offs | (2,912) | (2,806) |
Other | (196) | (25) |
Allowances for expected credit losses at end of year | $ 9,238 | $ 12,759 |
Loans - Non-Performing Loans (D
Loans - Non-Performing Loans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Financing Receivable, Past Due [Line Items] | ||
Financing receivable, nonaccrual, interest income | $ 0 | |
Non-Performing Financial Instruments | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 41,064,000 | $ 49,931,000 |
Non-accrual loans without an allowance | 21,990,000 | 11,114,000 |
Past due more than 90 days and accruing | 11,259,000 | 13,253,000 |
Total amortized cost | 74,313,000 | 74,298,000 |
Non-Performing Financial Instruments | Commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 18,159,000 | 18,530,000 |
Non-accrual loans without an allowance | 347,000 | 21,000 |
Past due more than 90 days and accruing | 0 | 0 |
Total amortized cost | 18,506,000 | 18,551,000 |
Non-Performing Financial Instruments | Commercial loans | Overdrafts | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 0 | 0 |
Non-accrual loans without an allowance | 45,000 | 2,000 |
Past due more than 90 days and accruing | 0 | 0 |
Total amortized cost | 45,000 | 2,000 |
Non-Performing Financial Instruments | Commercial loans | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 18,159,000 | 18,530,000 |
Non-accrual loans without an allowance | 302,000 | 19,000 |
Past due more than 90 days and accruing | 0 | 0 |
Total amortized cost | 18,461,000 | 18,549,000 |
Non-Performing Financial Instruments | Commercial real estate loans | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 1,494,000 | 885,000 |
Non-accrual loans without an allowance | 1,688,000 | 3,855,000 |
Past due more than 90 days and accruing | 0 | 0 |
Total amortized cost | 3,182,000 | 4,740,000 |
Non-Performing Financial Instruments | Commercial real estate loans | Commercial mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 1,494,000 | 885,000 |
Non-accrual loans without an allowance | 1,688,000 | 3,855,000 |
Past due more than 90 days and accruing | 0 | 0 |
Total amortized cost | 3,182,000 | 4,740,000 |
Non-Performing Financial Instruments | Consumer loans | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 790,000 | 967,000 |
Non-accrual loans without an allowance | 178,000 | 192,000 |
Past due more than 90 days and accruing | 295,000 | 284,000 |
Total amortized cost | 1,263,000 | 1,443,000 |
Non-Performing Financial Instruments | Consumer loans | Overdrafts | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 0 | 0 |
Non-accrual loans without an allowance | 6,000 | 4,000 |
Past due more than 90 days and accruing | 0 | 0 |
Total amortized cost | 6,000 | 4,000 |
Non-Performing Financial Instruments | Consumer loans | Automobile financing | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 141,000 | 117,000 |
Non-accrual loans without an allowance | 20,000 | 0 |
Past due more than 90 days and accruing | 0 | 0 |
Total amortized cost | 161,000 | 117,000 |
Non-Performing Financial Instruments | Consumer loans | Credit card | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 0 | 0 |
Non-accrual loans without an allowance | 0 | 0 |
Past due more than 90 days and accruing | 295,000 | 284,000 |
Total amortized cost | 295,000 | 284,000 |
Non-Performing Financial Instruments | Consumer loans | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 649,000 | 850,000 |
Non-accrual loans without an allowance | 152,000 | 188,000 |
Past due more than 90 days and accruing | 0 | 0 |
Total amortized cost | 801,000 | 1,038,000 |
Non-Performing Financial Instruments | Residential mortgage loans | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual loans with an allowance | 20,621,000 | 29,549,000 |
Non-accrual loans without an allowance | 19,777,000 | 7,046,000 |
Past due more than 90 days and accruing | 10,964,000 | 12,969,000 |
Total amortized cost | $ 51,362,000 | $ 49,564,000 |
Loans - Loans Modified in a TDR
Loans - Loans Modified in a TDR (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) contract | Dec. 31, 2021 USD ($) contract | Dec. 31, 2020 contract | |
Receivables [Abstract] | |||
Subsequent default, number of contracts | contract | 0 | 0 | 0 |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
TDRs outstanding, Accrual | $ 61,474 | $ 62,878 | |
TDRs outstanding, Non-accrual | 12,699 | 15,098 | |
Commercial loans | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
TDRs outstanding, Accrual | 796 | 847 | |
TDRs outstanding, Non-accrual | 0 | 0 | |
Commercial real estate loans | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
TDRs outstanding, Accrual | 1,503 | 1,578 | |
TDRs outstanding, Non-accrual | $ 2,357 | $ 2,445 | |
Residential mortgage loans | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Number of contracts | contract | 6 | 1 | |
Pre-modification recorded loans | $ 2,836 | $ 284 | |
Modification: interest capitalization | 425 | 2 | |
Post- modification recorded loans | 3,261 | 286 | |
TDRs outstanding, Accrual | 59,175 | 60,453 | |
TDRs outstanding, Non-accrual | $ 10,342 | $ 12,653 |
Credit risk concentrations (Det
Credit risk concentrations (Details) - Credit Availability Concentration Risk - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Total Credit Exposure | ||
Concentration Risk [Line Items] | ||
Total gross exposure | $ 8,987,192 | $ 9,742,252 |
Total Credit Exposure | Belgium | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 2,641 | 8,675 |
Total Credit Exposure | Bermuda | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 2,205,042 | 2,424,799 |
Total Credit Exposure | Canada | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,216,876 | 1,193,387 |
Total Credit Exposure | Cayman | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,506,581 | 1,478,864 |
Total Credit Exposure | Germany | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 20,422 | 85,886 |
Total Credit Exposure | Guernsey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 874,277 | 905,691 |
Total Credit Exposure | Ireland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 26,597 | 37,236 |
Total Credit Exposure | Japan | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 13,071 | 4,873 |
Total Credit Exposure | Jersey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 185,811 | 112,346 |
Total Credit Exposure | Norway | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 99,777 | 57,132 |
Total Credit Exposure | Switzerland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 2,748 | 2,441 |
Total Credit Exposure | The Bahamas | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 9,031 | 10,872 |
Total Credit Exposure | United Kingdom | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,955,866 | 2,412,659 |
Total Credit Exposure | United States | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 865,671 | 1,003,365 |
Total Credit Exposure | Other | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 2,781 | 4,026 |
Cash and cash equivalents, resell agreements and short-term investments | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 3,045,136 | 3,474,858 |
Cash and cash equivalents, resell agreements and short-term investments | Belgium | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 2,641 | 8,675 |
Cash and cash equivalents, resell agreements and short-term investments | Bermuda | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 40,671 | 46,683 |
Cash and cash equivalents, resell agreements and short-term investments | Canada | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,216,876 | 1,193,387 |
Cash and cash equivalents, resell agreements and short-term investments | Cayman | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 36,609 | 39,018 |
Cash and cash equivalents, resell agreements and short-term investments | Germany | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 20,422 | 85,886 |
Cash and cash equivalents, resell agreements and short-term investments | Guernsey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1 | 1 |
Cash and cash equivalents, resell agreements and short-term investments | Ireland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 26,597 | 37,236 |
Cash and cash equivalents, resell agreements and short-term investments | Japan | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 13,071 | 4,873 |
Cash and cash equivalents, resell agreements and short-term investments | Jersey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Cash and cash equivalents, resell agreements and short-term investments | Norway | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 99,777 | 57,132 |
Cash and cash equivalents, resell agreements and short-term investments | Switzerland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 2,748 | 2,441 |
Cash and cash equivalents, resell agreements and short-term investments | The Bahamas | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,521 | 1,511 |
Cash and cash equivalents, resell agreements and short-term investments | United Kingdom | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 715,750 | 990,624 |
Cash and cash equivalents, resell agreements and short-term investments | United States | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 865,671 | 1,003,365 |
Cash and cash equivalents, resell agreements and short-term investments | Other | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 2,781 | 4,026 |
Loans | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 5,121,391 | 5,268,743 |
Loans | Belgium | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Bermuda | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,920,467 | 2,080,385 |
Loans | Canada | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Cayman | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,236,373 | 1,060,328 |
Loans | Germany | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Guernsey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 674,562 | 735,786 |
Loans | Ireland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Japan | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Jersey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 150,769 | 78,048 |
Loans | Norway | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Switzerland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | The Bahamas | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 7,510 | 9,361 |
Loans | United Kingdom | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 1,131,710 | 1,304,835 |
Loans | United States | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Loans | Other | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 820,665 | 998,651 |
Off-balance sheet | Belgium | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Bermuda | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 243,904 | 297,731 |
Off-balance sheet | Canada | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Cayman | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 233,599 | 379,518 |
Off-balance sheet | Germany | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Guernsey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 199,714 | 169,904 |
Off-balance sheet | Ireland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Japan | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Jersey | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 35,042 | 34,298 |
Off-balance sheet | Norway | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Switzerland | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | The Bahamas | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | United Kingdom | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 108,406 | 117,200 |
Off-balance sheet | United States | ||
Concentration Risk [Line Items] | ||
Total gross exposure | 0 | 0 |
Off-balance sheet | Other | ||
Concentration Risk [Line Items] | ||
Total gross exposure | $ 0 | $ 0 |
Premises, equipment and compu_3
Premises, equipment and computer software - Schedule of Premise, Equipment, and Computer Software (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Cost | $ 427,442 | $ 409,036 | |
Accumulated depreciation | (281,301) | (270,350) | |
Net carrying value | 146,141 | 138,686 | |
Total depreciation charged to operating expenses | 18,477 | 27,230 | $ 29,213 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 8,333 | 8,333 | |
Accumulated depreciation | 0 | 0 | |
Net carrying value | 8,333 | 8,333 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 181,929 | 169,806 | |
Accumulated depreciation | (81,184) | (77,229) | |
Net carrying value | 100,745 | 92,577 | |
Total depreciation charged to operating expenses | 5,963 | 6,005 | 5,511 |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 25,527 | 26,129 | |
Accumulated depreciation | (17,764) | (17,509) | |
Net carrying value | 7,763 | 8,620 | |
Total depreciation charged to operating expenses | 2,390 | 2,323 | 1,929 |
Computer hardware and software in use | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 197,846 | 197,941 | |
Accumulated depreciation | (182,353) | (175,612) | |
Net carrying value | 15,493 | 22,329 | |
Total depreciation charged to operating expenses | 10,124 | 18,902 | $ 21,773 |
Computer software in development | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 13,807 | 6,827 | |
Accumulated depreciation | 0 | 0 | |
Net carrying value | $ 13,807 | $ 6,827 |
Goodwill and other intangible_3
Goodwill and other intangible assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | |||
Balance at beginning of year | $ 25,356 | $ 25,627 | $ 24,838 |
Foreign exchange translation adjustment | (2,464) | (271) | 789 |
Balance at end of year | 22,892 | 25,356 | 25,627 |
Cayman | |||
Goodwill [Roll Forward] | |||
Balance at beginning of year | 551 | 551 | 551 |
Foreign exchange translation adjustment | 0 | 0 | 0 |
Balance at end of year | 551 | 551 | 551 |
Channel Islands and the UK | |||
Goodwill [Roll Forward] | |||
Balance at beginning of year | 22,738 | 22,964 | 22,245 |
Foreign exchange translation adjustment | (2,466) | (226) | 719 |
Balance at end of year | 20,272 | 22,738 | 22,964 |
Other | |||
Goodwill [Roll Forward] | |||
Balance at beginning of year | 2,067 | 2,112 | 2,042 |
Foreign exchange translation adjustment | 2 | (45) | 70 |
Balance at end of year | $ 2,069 | $ 2,067 | $ 2,112 |
Goodwill and other intangible_4
Goodwill and other intangible assets - Customer Relationship Intangible Assets (Details) - Customer Relationships - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 141,261 | $ 141,261 |
Accumulated amortization | (89,783) | (80,511) |
Net carrying amount | 51,478 | 60,750 |
Bermuda | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 29,785 | 29,785 |
Accumulated amortization | (17,868) | (16,438) |
Net carrying amount | 11,917 | 13,347 |
Cayman | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 16,517 | 16,517 |
Accumulated amortization | (7,764) | (6,663) |
Net carrying amount | 8,753 | 9,854 |
Channel Islands and the UK | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 89,396 | 89,396 |
Accumulated amortization | (62,380) | (56,030) |
Net carrying amount | 27,016 | 33,366 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 5,563 | 5,563 |
Accumulated amortization | (1,771) | (1,380) |
Net carrying amount | $ 3,792 | $ 4,183 |
Goodwill and other intangible_5
Goodwill and other intangible assets - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 5,680,000 | $ 6,011,000 | $ 5,819,000 |
Customer Relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Assets acquired | 0 | 0 | |
Intangible assets written off | 0 | 1,900,000 | |
Amortization expense | 5,700,000 | 6,000,000 | 5,800,000 |
Foreign currency translation increase (decrease) in net carrying amount | 3,600,000 | $ 400,000 | $ (1,300,000) |
Estimated aggregate amortization expense, next twelve months | 5,700,000 | ||
Estimated aggregate amortization expense, year two | 5,700,000 | ||
Estimated aggregate amortization expense, year three | 5,700,000 | ||
Estimated aggregate amortization expense, year four | 5,700,000 | ||
Estimated aggregate amortization expense, year five | $ 5,700,000 |
Deposits - Contractual Maturiti
Deposits - Contractual Maturities (Details) $ in Thousands | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Total demand deposits | ||
Non-interest bearing | $ 3,039,701 | $ 2,820,609 |
Interest bearing | 6,844,127 | 8,104,668 |
Total demand deposits | 9,883,828 | 10,925,277 |
Demand or less than $100k | ||
Within 3 months | 32,764 | 30,181 |
3 to 6 months | 9,814 | 8,949 |
6 to 12 months | 12,848 | 13,094 |
After 12 months | 11,391 | 12,426 |
Total term deposits | 66,817 | 64,650 |
Total deposits, less than $100k | 9,950,645 | 10,989,927 |
Term - $100k or more | ||
Within 3 months | 2,093,464 | 1,627,330 |
3 to 6 months | 447,471 | 578,096 |
6 to 12 months | 423,737 | 589,161 |
After 12 months | 75,759 | 85,709 |
Total term deposits | 3,040,431 | 2,880,296 |
Term | ||
Within 3 months | 2,126,228 | 1,657,511 |
3 to 6 months | 457,285 | 587,045 |
6 to 12 months | 436,585 | 602,255 |
After 12 months | 87,150 | 98,135 |
Total term deposits | 3,107,248 | 2,944,946 |
Total deposits | $ 12,991,076 | $ 13,870,223 |
Weighted average interest rate, demand deposits | 0.0047 | (0.0003) |
Deposits - By Type and Segment
Deposits - By Type and Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deposit Liability [Line Items] | ||
Payable on demand | $ 9,883,828 | $ 10,925,277 |
Payable on a fixed date | 3,107,248 | 2,944,946 |
Total deposits | 12,991,076 | 13,870,223 |
Bermuda | ||
Deposit Liability [Line Items] | ||
Payable on demand | 3,813,274 | 3,820,647 |
Payable on a fixed date | 674,895 | 690,102 |
Total deposits | 4,488,169 | 4,510,749 |
Cayman | ||
Deposit Liability [Line Items] | ||
Payable on demand | 3,641,646 | 4,087,131 |
Payable on a fixed date | 651,168 | 524,918 |
Total deposits | 4,292,814 | 4,612,049 |
Channel Islands and the UK | ||
Deposit Liability [Line Items] | ||
Payable on demand | 2,428,908 | 3,017,499 |
Payable on a fixed date | 1,781,185 | 1,729,926 |
Total deposits | $ 4,210,093 | $ 4,747,425 |
Employee benefit plans - Narrat
Employee benefit plans - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2019 | Dec. 31, 2014 | |
Guernsey | Pension plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Remaining life expectancy, inactive participants | 39 years | ||
Remaining life expectancy, active members | 15 years | ||
Postretirement Health Coverage 2010 Amendment | Bermuda | Post- retirement medical benefit plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Remaining service period | 3 years 1 month 6 days | ||
Postretirement Health Coverage 2011 Amendment | Bermuda | Post- retirement medical benefit plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Remaining service period | 4 years 7 months 6 days | ||
Postretirement Health Coverage 2014 Amendment | Bermuda | Post- retirement medical benefit plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Remaining life expectancy | 16 years | 21 years |
Employee benefit plans - Financ
Employee benefit plans - Financial Position of Defined Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Amounts recognized in the consolidated balance sheets consist of: | |||
Accrued pension benefit cost included in employee benefit plans liability | $ (92,018) | $ (126,230) | |
Pension plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation at end of year | 106,748 | 157,478 | $ 179,018 |
Change in projected benefit obligation | |||
Projected benefit obligation at beginning of year | 157,478 | 179,018 | 168,791 |
Service cost | 0 | 0 | 43 |
Interest cost | 3,026 | 2,729 | 3,957 |
Benefits paid | (9,153) | (9,050) | (7,412) |
Prior service cost | 0 | 403 | 48 |
Settlement and curtailment of liability | 0 | (5,906) | (7,505) |
Actuarial (gain) loss | (37,425) | (9,093) | 18,326 |
Foreign exchange translation adjustment | (7,178) | (623) | 2,770 |
Projected benefit obligation at end of year | 106,748 | 157,478 | 179,018 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 179,025 | 182,516 | 175,400 |
Actual return on plan assets | (24,574) | 10,265 | 14,945 |
Employer contribution | 207 | 1,680 | 2,917 |
Plan settlement | 0 | (5,625) | (5,903) |
Benefits paid | (9,153) | (9,050) | (7,412) |
Foreign exchange translation adjustment | (8,211) | (761) | 2,569 |
Fair value of plan assets at end of year | 137,294 | 179,025 | 182,516 |
Amounts recognized in the consolidated balance sheets consist of: | |||
Prepaid benefit cost included in other assets | 30,581 | 21,809 | 6,610 |
Accrued pension benefit cost included in employee benefit plans liability | (35) | (262) | (3,112) |
Surplus (deficit) of plan assets over projected benefit obligation at measurement date | 30,546 | 21,547 | 3,498 |
Post- retirement medical benefit plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation at end of year | 91,983 | 125,968 | 128,167 |
Change in projected benefit obligation | |||
Projected benefit obligation at beginning of year | 125,968 | 128,167 | 110,347 |
Service cost | 130 | 82 | 66 |
Interest cost | 3,114 | 2,594 | 3,270 |
Benefits paid | (5,774) | (3,712) | (4,069) |
Prior service cost | 0 | 0 | 0 |
Settlement and curtailment of liability | 0 | 0 | 0 |
Actuarial (gain) loss | (31,455) | (1,163) | 18,553 |
Foreign exchange translation adjustment | 0 | 0 | 0 |
Projected benefit obligation at end of year | 91,983 | 125,968 | 128,167 |
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 | 5,774 | 3,712 | 4,069 |
Plan settlement | 0 | 0 | 0 |
Benefits paid | (5,774) | (3,712) | (4,069) |
Foreign exchange translation adjustment | 0 | 0 | 0 |
Fair value of plan assets at end of year | 0 | 0 | 0 |
Amounts recognized in the consolidated balance sheets consist of: | |||
Prepaid benefit cost included in other assets | 0 | 0 | 0 |
Accrued pension benefit cost included in employee benefit plans liability | (91,983) | (125,968) | (128,167) |
Surplus (deficit) of plan assets over projected benefit obligation at measurement date | $ (91,983) | $ (125,968) | $ (128,167) |
Employee benefit plans - Amount
Employee benefit plans - Amounts Recognized in AOCI, Benefit Expense (Income), and OCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Expense component | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Non-service employee benefits expense | Non-service employee benefits expense | Non-service employee benefits expense |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Non-service employee benefits expense | Non-service employee benefits expense | Non-service employee benefits expense |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Non-service employee benefits expense | Non-service employee benefits expense | Non-service employee benefits expense |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration] | Non-service employee benefits expense | Non-service employee benefits expense | Non-service employee benefits expense |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Settlement Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Non-service employee benefits expense, Net other gains (losses) | Non-service employee benefits expense, Net other gains (losses) | Non-service employee benefits expense, Net other gains (losses) |
Pension plans | |||
Amounts recognized in accumulated other comprehensive income (loss) consist of: | |||
Net actuarial gain (loss), excluding deferred taxes | $ (47,452) | $ (55,809) | $ (73,506) |
Net prior service credit (cost) | (453) | (591) | (226) |
Deferred income taxes assets (liabilities) | 0 | 0 | 1,477 |
Net amount recognized in accumulated other comprehensive income (loss) | (47,905) | (56,400) | (72,255) |
Expense component | |||
Service cost | 0 | 58 | 97 |
Interest cost | 3,027 | 2,729 | 3,960 |
Expected return on plan assets | (6,633) | (6,437) | (7,547) |
Amortization of net actuarial (gains) losses | 2,218 | 2,766 | 2,412 |
Amortization of prior service (credit) loss | 81 | (25) | 21 |
(Gain) loss on settlement | (907) | 1,679 | 1,326 |
Defined benefit (income) expense | (2,214) | 770 | 269 |
Defined contribution expense | 7,825 | 8,259 | 8,933 |
Total benefit (income) expense | 5,611 | 9,029 | 9,202 |
Other changes recognized in other comprehensive income (loss) | |||
Net gain (loss) arising during the year | 6,218 | 14,772 | (8,363) |
Net loss (gain) on settlement reclassified to net income | (907) | 0 | 0 |
Prior service credit (cost) arising during the year | 0 | (399) | (47) |
Amortization of net actuarial (gains) losses | 2,218 | 2,766 | 2,412 |
Amortization of prior service (credit) cost | 81 | (25) | 20 |
Change in deferred taxes | 0 | (1,462) | 456 |
Foreign exchange adjustment | 885 | 203 | (421) |
Total changes recognized in other comprehensive income (loss) | 8,495 | 15,855 | (5,943) |
Post- retirement medical benefit plan | |||
Amounts recognized in accumulated other comprehensive income (loss) consist of: | |||
Net actuarial gain (loss), excluding deferred taxes | 14,528 | (18,371) | (21,213) |
Net prior service credit (cost) | (6,818) | (7,342) | (7,866) |
Deferred income taxes assets (liabilities) | 0 | 0 | 0 |
Net amount recognized in accumulated other comprehensive income (loss) | 7,710 | (25,713) | (29,079) |
Expense component | |||
Service cost | 130 | 82 | 66 |
Interest cost | 3,114 | 2,594 | 3,270 |
Expected return on plan assets | 0 | ||
Amortization of net actuarial (gains) losses | 1,444 | 1,679 | 0 |
Amortization of prior service (credit) loss | 524 | 524 | 524 |
(Gain) loss on settlement | 0 | 0 | 0 |
Defined benefit (income) expense | 5,212 | 4,879 | 3,860 |
Defined contribution expense | 0 | 0 | 0 |
Total benefit (income) expense | 5,212 | 4,879 | 3,860 |
Other changes recognized in other comprehensive income (loss) | |||
Net gain (loss) arising during the year | 31,455 | 1,163 | (18,553) |
Net loss (gain) on settlement reclassified to net income | 0 | 0 | 0 |
Prior service credit (cost) arising during the year | 0 | 0 | 0 |
Amortization of net actuarial (gains) losses | 1,444 | 1,679 | 0 |
Amortization of prior service (credit) cost | 524 | 524 | 524 |
Change in deferred taxes | 0 | 0 | 0 |
Foreign exchange adjustment | 0 | 0 | 0 |
Total changes recognized in other comprehensive income (loss) | $ 33,423 | $ 3,366 | $ (18,029) |
Employee benefit plans - Actuar
Employee benefit plans - Actuarial Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Pension plans | |||
Actuarial assumptions used to determine annual benefit expense | |||
Weighted average discount rate | 2.30% | 1.90% | 2.65% |
Weighted average rate of compensation increases | 3% | 2.20% | 2.30% |
Weighted average expected long-term rate of return on plan assets | 4.45% | 3.65% | 4.60% |
Actuarial assumptions used to determine benefit obligations at end of year | |||
Weighted average discount rate | 5.20% | 2.30% | 1.90% |
Weighted average rate of compensation increases | 3% | 3% | 2.20% |
Post-retirement healthcare plan | |||
Actuarial assumptions used to determine annual benefit expense | |||
Weighted average discount rate | 2.88% | 2.53% | 3.38% |
Actuarial assumptions used to determine benefit obligations at end of year | |||
Weighted average discount rate | 5.37% | 2.88% | 2.53% |
Post-retirement healthcare plan | Maximum | |||
Actuarial assumptions used to determine annual benefit expense | |||
Weighted average annual medical cost increase rate | 7% | 7.20% | 7.20% |
Actuarial assumptions used to determine benefit obligations at end of year | |||
Weighted average annual medical cost increase rate | 6.90% | 7% | 7% |
Post-retirement healthcare plan | Minimum | |||
Actuarial assumptions used to determine annual benefit expense | |||
Weighted average annual medical cost increase rate | 4.50% | 4.50% | 4.50% |
Actuarial assumptions used to determine benefit obligations at end of year | |||
Weighted average annual medical cost increase rate | 4.50% | 4.50% | 4.50% |
Employee benefit plans - Invest
Employee benefit plans - Investments Policies and Strategies (Details) - Pension plans | Dec. 31, 2022 | Dec. 31, 2021 |
Weighted average actual and target asset allocations of the pension plans by asset category | ||
Actual allocation | 100% | 100% |
Target allocation | 100% | 100% |
Debt securities (including debt mutual funds) | ||
Weighted average actual and target asset allocations of the pension plans by asset category | ||
Actual allocation | 71% | 39% |
Target allocation | 74% | 32% |
Equity securities (including equity mutual funds) | ||
Weighted average actual and target asset allocations of the pension plans by asset category | ||
Actual allocation | 19% | 51% |
Target allocation | 9% | 53% |
Other | ||
Weighted average actual and target asset allocations of the pension plans by asset category | ||
Actual allocation | 10% | 10% |
Target allocation | 17% | 15% |
Employee benefit plans - Fair V
Employee benefit plans - Fair Value Measurements of Pension Plans' Assets (Details) - Pension plans - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 137,294 | $ 179,025 | $ 182,516 | $ 175,400 |
Actual allocation | 100% | 100% | ||
Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 1,554 | $ 1,291 | ||
Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 124,786 | 160,350 | ||
Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 10,954 | 17,384 | ||
US government and federal agencies | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 35,332 | 23,040 | ||
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 | 35,332 | 23,040 | ||
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 | 43,728 | 1,090 | ||
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 | 43,728 | 1,090 | ||
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 | 18,050 | 45,596 | ||
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 | 18,050 | 45,596 | ||
Corporate debt securities | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 0 | 0 | ||
Equity securities (including equity mutual funds) | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 26,126 | $ 91,304 | ||
Actual allocation | 19% | 51% | ||
Equity securities (including equity mutual funds) | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 954 | $ 1,111 | ||
Equity securities (including equity mutual funds) | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 25,172 | 90,193 | ||
Equity securities (including equity mutual funds) | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 0 | 0 | ||
Other | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 14,058 | $ 17,995 | ||
Actual allocation | 10% | 10% | ||
Other | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 600 | $ 180 | ||
Other | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | 2,504 | 431 | ||
Other | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total fair value of plans' assets | $ 10,954 | $ 17,384 | ||
Mutual Funds And Equity Securities Managed Or Administered By Wholly-Owned Subsidiaries | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Actual allocation | 18.40% | 29.20% | ||
Parent Company Common Stock | Voting Common Stock | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Actual allocation | 0.70% | 0.60% |
Employee benefit plans - Estima
Employee benefit plans - Estimated Future Contributions (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Pension plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated Bank contributions for the full year ending December 31, 2023 | $ 0 |
Estimated benefit payments by year: | |
2023 | 7,300 |
2024 | 7,200 |
2025 | 7,100 |
2026 | 7,100 |
2027 | 7,700 |
2028-2032 | 36,000 |
Post- retirement medical benefit plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated Bank contributions for the full year ending December 31, 2023 | 5,044 |
Estimated benefit payments by year: | |
2023 | 5,044 |
2024 | 5,286 |
2025 | 5,536 |
2026 | 5,786 |
2027 | 5,999 |
2028-2032 | $ 32,319 |
Credit-related arrangements, _3
Credit-related arrangements, repurchase agreements and commitments - Commitments (Details) | Dec. 31, 2022 USD ($) custodian | Dec. 31, 2021 USD ($) |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Purchase obligation | $ 42,872,000 | $ 53,300,000 |
Number of custodians | custodian | 1 | |
Commitments to extend credit | $ 564,324,000 | 717,077,000 |
Documentary and commercial letters of credit | 2,331,000 | 1,522,000 |
Total unfunded commitments to extend credit | 566,655,000 | 718,599,000 |
Allowance for credit losses | $ (274,000) | (551,000) |
Custodian | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Right to set-off against securities held, percent of utilized facility | 110% | |
Commitments to extend credit | $ 200,000,000 | |
Custodian | Standby Letters of Credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to extend credit | $ 121,300,000 | $ 145,700,000 |
Credit-related arrangements, _4
Credit-related arrangements, repurchase agreements and commitments - Contractual Obligation, Fiscal Year Maturity Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Sourcing | ||
2023 | $ 12,584 | |
2024 | 11,114 | |
2025 | 10,602 | |
2026 | 8,572 | |
2027 | 0 | |
2028 & thereafter | 0 | |
Total commitments | 42,872 | $ 53,300 |
Other | ||
2023 | 12,915 | |
2024 | 5,936 | |
2025 | 3,120 | |
2026 | 1,078 | |
2027 | 1,084 | |
2028 & thereafter | 1,405 | |
Total commitments | 25,538 | |
Total | ||
2023 | 25,499 | |
2024 | 17,050 | |
2025 | 13,722 | |
2026 | 9,650 | |
2027 | 1,084 | |
2028 & thereafter | 1,405 | |
Total commitments | $ 68,410 |
Credit-related arrangements, _5
Credit-related arrangements, repurchase agreements and commitments - Credit-Related Arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Offsetting Liabilities [Line Items] | ||
Outstanding financial guarantees, Gross | $ 254,010 | $ 280,052 |
Outstanding financial guarantees, Collateral | 246,824 | 272,756 |
Outstanding financial guarantees, Net | $ 7,186 | 7,296 |
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 | $ 250,543 | 276,464 |
Outstanding financial guarantees, Collateral | 243,393 | 269,204 |
Outstanding financial guarantees, Net | 7,150 | 7,260 |
Letters of guarantee | ||
Offsetting Liabilities [Line Items] | ||
Outstanding financial guarantees, Gross | 3,467 | 3,588 |
Outstanding financial guarantees, Collateral | 3,431 | 3,552 |
Outstanding financial guarantees, Net | $ 36 | $ 36 |
Credit-related arrangements, _6
Credit-related arrangements, repurchase agreements and commitments - Repurchase Agreements (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) position | Dec. 31, 2021 USD ($) position | |
Loss Contingencies [Line Items] | ||
Securities purchased under agreements to resell | $ 59,871 | $ 96,107 |
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises | ||
Loss Contingencies [Line Items] | ||
Resell agreements, number of open positions | position | 2 | 19 |
Resell agreements, maturity period (less than) | 30 days | |
Securities purchased under agreements to resell | $ 59,900 | $ 96,100 |
Credit-related arrangements, _7
Credit-related arrangements, repurchase agreements and commitments - Legal Proceedings (Details) $ in Millions | 1 Months Ended | 5 Months Ended |
Nov. 30, 2013 institution | Dec. 31, 2021 USD ($) | |
Settled Litigation | ||
Loss Contingencies [Line Items] | ||
Non-prosecution agreement, term | 3 years | |
John Doe Summonses | Pending Litigation | ||
Loss Contingencies [Line Items] | ||
Number of defendants | institution | 6 | |
John Doe Summonses | Settled Litigation | ||
Loss Contingencies [Line Items] | ||
Loss contingency accrual, payments | $ | $ 5.6 |
Leases - Lease Cost And Other I
Leases - Lease Cost And Other Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lease costs | ||
Operating lease costs | $ 7,576 | $ 8,248 |
Short-term lease costs | 2,387 | 1,407 |
Sublease income | (1,197) | (1,359) |
Total net lease cost | $ 8,766 | $ 8,296 |
OperatingLeaseIncomeComprehensiveIncomeExtensibleListNotDisclosedFla | Operating lease income | Operating lease income |
Operating lease income | $ 1,012 | $ 1,243 |
Right-of-use assets related to new operating lease liabilities | 3,476 | 1,575 |
Operating cash flows from operating leases | $ 7,630 | $ 8,402 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Accrued interest and other assets | Accrued interest and other assets |
Operating leases right-of-use assets (included in other assets on the balance sheets) | $ 33,641 | $ 39,525 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities | Other Liabilities |
Operating lease liabilities (included in other liabilities on the balance sheets) | $ 32,965 | $ 38,789 |
Weighted average remaining lease term for operating leases (in years) | 9 years 2 months 26 days | 9 years 9 months 21 days |
Weighted average discount rate for operating leases | 5.40% | 5.25% |
Leases - Schedule of Maturity (
Leases - Schedule of Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2023 | $ 7,129 | |
2024 | 6,457 | |
2025 | 4,133 | |
2026 | 3,357 | |
2027 | 3,152 | |
2028 & thereafter | 17,735 | |
Total commitments | 41,963 | |
Less: effect of discounting cash flows to their present value | (8,998) | |
Operating lease liabilities | $ 32,965 | $ 38,789 |
Loan interest income (Details)
Loan interest income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |||
Contractual interest earned | $ 243,115 | $ 214,539 | $ 224,474 |
Amortization | |||
Amortization of fair value hedge | (259) | (281) | (300) |
Amortization of loan origination fees (net of amortized costs) | 6,026 | 6,847 | 5,436 |
Amortization of fair value adjustment on purchased loans | 508 | 439 | 1,046 |
Total loan interest income | 249,390 | 221,544 | 230,656 |
Balance of unamortized fair value hedge included in loans as at year end | 836 | 1,095 | 1,376 |
Balance of unamortized loan fees included in loans as at year end | $ 11,878 | $ 11,926 | $ 12,204 |
Segmented information - Narrati
Segmented information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 segment branch | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | segment | 4 |
Operating Segments | Bermuda | |
Segment Reporting Information [Line Items] | |
Number of branch locations | 3 |
Operating Segments | Cayman | |
Segment Reporting Information [Line Items] | |
Number of branch locations | 3 |
Segmented information - Financi
Segmented information - Financial Information By Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Assets | $ 14,306,062 | $ 15,335,200 | |
Net interest income | 343,584 | 299,807 | $ 317,599 |
Provision for credit (losses) recoveries | (2,396) | 3,128 | (8,491) |
Non-interest income | 206,587 | 198,107 | 183,859 |
Net revenue before gains and losses | 547,775 | 501,042 | 492,967 |
Gains and losses | 1,522 | (1,361) | 1,222 |
Total net revenue | 549,297 | 499,681 | 494,189 |
Total expenses | 335,277 | 337,013 | 346,972 |
Net income | 214,020 | 162,668 | 147,217 |
Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 343,584 | 299,807 | 317,599 |
Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 0 | 0 | 0 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Assets | 14,633,566 | 15,969,807 | |
Provision for credit (losses) recoveries | (2,396) | 3,128 | (8,491) |
Non-interest income | 224,461 | 215,542 | 189,592 |
Net revenue before gains and losses | 565,649 | 518,477 | 498,700 |
Gains and losses | 1,522 | (1,361) | 1,222 |
Total net revenue | 567,171 | 517,116 | 499,922 |
Total expenses | 353,151 | 354,448 | 352,705 |
Net income | 214,020 | 162,668 | 147,217 |
Operating Segments | Customer | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 343,584 | 299,807 | 317,599 |
Operating Segments | Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 0 | 0 | 0 |
Operating Segments | Bermuda | |||
Segment Reporting Information [Line Items] | |||
Assets | 5,405,365 | 5,728,466 | |
Provision for credit (losses) recoveries | (1,226) | 2,206 | (8,750) |
Non-interest income | 87,855 | 84,641 | 85,216 |
Net revenue before gains and losses | 248,571 | 232,838 | 236,034 |
Gains and losses | 22 | 880 | 1,970 |
Total net revenue | 248,593 | 233,718 | 238,004 |
Total expenses | 188,676 | 186,806 | 192,781 |
Net income | 59,917 | 46,912 | 45,223 |
Operating Segments | Bermuda | Customer | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 165,330 | 147,295 | 158,790 |
Operating Segments | Bermuda | Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | (3,388) | (1,304) | 778 |
Operating Segments | Cayman | |||
Segment Reporting Information [Line Items] | |||
Assets | 4,566,144 | 4,973,402 | |
Provision for credit (losses) recoveries | (573) | 1,415 | 483 |
Non-interest income | 66,696 | 58,058 | 49,294 |
Net revenue before gains and losses | 182,017 | 150,471 | 145,137 |
Gains and losses | (19) | 213 | 491 |
Total net revenue | 181,998 | 150,684 | 145,628 |
Total expenses | 62,120 | 58,945 | 62,605 |
Net income | 119,878 | 91,739 | 83,023 |
Operating Segments | Cayman | Customer | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 113,301 | 89,757 | 94,211 |
Operating Segments | Cayman | Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 2,593 | 1,241 | 1,149 |
Operating Segments | Channel Islands and the UK | |||
Segment Reporting Information [Line Items] | |||
Assets | 4,626,183 | 5,234,880 | |
Provision for credit (losses) recoveries | (597) | (493) | (224) |
Non-interest income | 40,485 | 45,294 | 40,698 |
Net revenue before gains and losses | 105,611 | 107,616 | 103,138 |
Gains and losses | 1,503 | (2,454) | (1,238) |
Total net revenue | 107,114 | 105,162 | 101,900 |
Total expenses | 73,955 | 81,654 | 82,057 |
Net income | 33,159 | 23,508 | 19,843 |
Operating Segments | Channel Islands and the UK | Customer | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 64,928 | 62,752 | 64,591 |
Operating Segments | Channel Islands and the UK | Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 795 | 63 | (1,927) |
Operating Segments | Other | |||
Segment Reporting Information [Line Items] | |||
Assets | 35,874 | 33,059 | |
Provision for credit (losses) recoveries | 0 | 0 | 0 |
Non-interest income | 29,425 | 27,549 | 14,384 |
Net revenue before gains and losses | 29,450 | 27,552 | 14,391 |
Gains and losses | 16 | 0 | (1) |
Total net revenue | 29,466 | 27,552 | 14,390 |
Total expenses | 28,400 | 27,043 | 15,262 |
Net income | 1,066 | 509 | (872) |
Operating Segments | Other | Customer | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 25 | 3 | 7 |
Operating Segments | Other | Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 0 | 0 | 0 |
Inter-segment eliminations | |||
Segment Reporting Information [Line Items] | |||
Assets | (327,504) | (634,607) | |
Provision for credit (losses) recoveries | 0 | 0 | 0 |
Non-interest income | (17,874) | (17,435) | (5,733) |
Net revenue before gains and losses | (17,874) | (17,435) | (5,733) |
Gains and losses | 0 | 0 | 0 |
Total net revenue | (17,874) | (17,435) | (5,733) |
Total expenses | (17,874) | (17,435) | (5,733) |
Net income | 0 | 0 | 0 |
Inter-segment eliminations | Customer | |||
Segment Reporting Information [Line Items] | |||
Net interest income | 0 | 0 | 0 |
Inter-segment eliminations | Customer | Inter- segment | |||
Segment Reporting Information [Line Items] | |||
Net interest income | $ 0 | $ 0 | $ 0 |
Derivative instruments and ri_3
Derivative instruments and risk management - Schedule of Notional Amounts and Related Fair Value Measurements of Derivative Instruments (Details) $ in Thousands, € in Millions, SFr in Millions | Dec. 31, 2022 USD ($) contract | Dec. 31, 2022 EUR (€) contract | Dec. 31, 2022 CHF (SFr) contract | Dec. 31, 2021 USD ($) contract | Dec. 31, 2021 EUR (€) contract | Dec. 31, 2021 CHF (SFr) contract |
Derivatives, Fair Value [Line Items] | ||||||
Notional amounts | $ 2,332,899 | $ 2,120,380 | ||||
Gross positive fair value | 13,167 | 17,963 | ||||
Gross negative fair value | (12,912) | (13,267) | ||||
Net fair value | $ 255 | $ 4,696 | ||||
Currency swaps | Designated as Hedging Instrument | Net investment hedges | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Number of contracts | contract | 1 | 1 | 1 | 4 | 4 | 4 |
Notional amounts | $ 5,207 | $ 61,641 | ||||
Gross positive fair value | 0 | 1,071 | ||||
Gross negative fair value | (215) | (163) | ||||
Net fair value | $ (215) | $ 908 | ||||
Currency swaps | Designated as Hedging Instrument | Fair value hedges | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Number of contracts | contract | 4 | 4 | 4 | 4 | 4 | 4 |
Notional amounts | $ 130,751 | $ 174,169 | ||||
Gross positive fair value | 2,714 | 1,216 | ||||
Gross negative fair value | (191) | (2,535) | ||||
Net fair value | $ 2,523 | $ (1,319) | ||||
Currency swaps | Not Designated as Hedging Instrument | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Number of contracts | contract | 63 | 63 | 63 | 36 | 36 | 36 |
Notional amounts | $ 1,884,169 | $ 1,552,733 | ||||
Gross positive fair value | 8,052 | 14,538 | ||||
Gross negative fair value | (10,269) | (9,566) | ||||
Net fair value | (2,217) | 4,972 | ||||
Subtotal risk management derivatives | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional amounts | 2,020,127 | 1,788,543 | ||||
Gross positive fair value | 10,766 | 16,825 | ||||
Gross negative fair value | (10,675) | (12,264) | ||||
Net fair value | $ 91 | $ 4,561 | ||||
Spot and forward foreign exchange | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Number of contracts | contract | 160 | 160 | 160 | 125 | 125 | 125 |
Notional amounts | $ 312,772 | $ 331,837 | ||||
Gross positive fair value | 2,401 | 1,138 | ||||
Gross negative fair value | (2,237) | (1,003) | ||||
Net fair value | $ 164 | $ 135 | ||||
Foreign exchange contract | Designated as Hedging Instrument | Net investment hedges | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Foreign deposits | € 235.5 | SFr 0.4 | € 192.3 | SFr 0.4 |
Derivative instruments and ri_4
Derivative instruments and risk management - Offsetting (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative assets | ||
Gross fair value recognized | $ 13,167 | $ 17,963 |
Less: offset applied under master netting agreements | (6,658) | (9,843) |
Net fair value presented in the consolidated balance sheets | 6,509 | 8,120 |
Positions not offset in the consolidated balance sheets, Gross fair value of derivatives | 0 | 0 |
Positions not offset in the consolidated balance sheets, Cash collateral received/paid | (9) | 0 |
Net exposures | $ 6,500 | $ 8,120 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Spot and forward foreign exchange and currency swaps | Spot and forward foreign exchange and currency swaps |
Derivative liabilities | ||
Gross fair value recognized | $ 12,912 | $ 13,267 |
Less: offset applied under master netting agreements | (6,658) | (9,843) |
Net fair value presented in the consolidated balance sheets | 6,254 | 3,424 |
Positions not offset in the consolidated balance sheets, Gross fair value of derivatives | 0 | 0 |
Positions not offset in the consolidated balance sheets, Cash collateral received/paid | (352) | (818) |
Net exposures | 5,902 | 2,606 |
Net fair value | $ 255 | $ 4,696 |
Derivative instruments and ri_5
Derivative instruments and risk management - Location and Amount of Gains (Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognized in net income | $ (3,318) | $ 18,043 | $ (15,006) |
Total net gains (losses) recognized in comprehensive income | $ (1,123) | $ 5,495 | $ (4,469) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Foreign exchange revenue | Foreign exchange revenue | Foreign exchange revenue |
Spot and forward foreign exchange | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognized in net income | $ 28 | $ (131) | $ (191) |
Currency swaps | Not Designated as Hedging Instrument | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognized in net income | (7,188) | 23,531 | (18,854) |
Currency swaps | Designated as Hedging Instrument | Fair value hedges | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognized in net income | 3,842 | (5,357) | 4,039 |
Currency swaps | Designated as Hedging Instrument | Unrealized net gains (losses) on translation of net investment in foreign operations | Net investment hedges | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total net gains (losses) recognized in comprehensive income | $ (1,123) | $ 5,495 | $ (4,469) |
Fair value measurements - Finan
Fair value measurements - Financial Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financial assets | ||
Equity securities at fair value | $ 236 | $ 222 |
Available-for-sale investments | $ 1,988,865 | $ 3,473,730 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Accrued interest and other assets | Accrued interest and other assets |
Other assets - Derivatives | $ 6,509 | $ 8,120 |
Financial liabilities | ||
Other liabilities - Derivatives | 6,254 | 3,424 |
Fair Value, Measurements, Recurring | ||
Financial assets | ||
Equity securities at fair value | 236 | 222 |
Available-for-sale investments | 1,988,865 | 3,473,730 |
Other assets - Derivatives | 6,509 | 8,120 |
Financial liabilities | ||
Other liabilities - Derivatives | 6,254 | 3,424 |
Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Equity securities at fair value | 0 | 0 |
Available-for-sale investments | 1,068,009 | 1,091,009 |
Other assets - Derivatives | 0 | 0 |
Financial liabilities | ||
Other liabilities - Derivatives | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Equity securities at fair value | 236 | 222 |
Available-for-sale investments | 920,856 | 2,369,547 |
Other assets - Derivatives | 6,509 | 8,120 |
Financial liabilities | ||
Other liabilities - Derivatives | 6,254 | 3,424 |
Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Equity securities at fair value | 0 | 0 |
Available-for-sale investments | 0 | 13,174 |
Other assets - Derivatives | 0 | 0 |
Financial liabilities | ||
Other liabilities - Derivatives | 0 | 0 |
Mutual funds | ||
Financial assets | ||
Equity securities at fair value | 236 | 222 |
Mutual funds | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Equity securities at fair value | 236 | 222 |
Mutual funds | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Equity securities at fair value | 0 | 0 |
Mutual funds | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Equity securities at fair value | 236 | 222 |
Mutual funds | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Equity securities at fair value | 0 | 0 |
US government and federal agencies | ||
Financial assets | ||
Available-for-sale investments | 1,712,776 | 3,143,624 |
US government and federal agencies | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Available-for-sale investments | 1,712,776 | 3,143,624 |
US government and federal agencies | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Available-for-sale investments | 838,938 | 823,809 |
US government and federal agencies | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Available-for-sale investments | 873,838 | 2,319,815 |
US government and federal agencies | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Available-for-sale investments | 0 | 0 |
Non-US governments debt securities | ||
Financial assets | ||
Available-for-sale investments | 251,463 | 289,593 |
Non-US governments debt securities | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Available-for-sale investments | 251,463 | 289,593 |
Non-US governments debt securities | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Available-for-sale investments | 229,071 | 267,200 |
Non-US governments debt securities | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Available-for-sale investments | 22,392 | 22,393 |
Non-US governments debt securities | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Available-for-sale investments | 0 | 0 |
Asset-backed securities - Student loans | ||
Financial assets | ||
Available-for-sale investments | 5,626 | 13,174 |
Asset-backed securities - Student loans | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Available-for-sale investments | 5,626 | 13,174 |
Asset-backed securities - Student loans | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Available-for-sale investments | 0 | 0 |
Asset-backed securities - Student loans | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Available-for-sale investments | 5,626 | 0 |
Asset-backed securities - Student loans | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Available-for-sale investments | 0 | 13,174 |
Residential mortgage-backed securities | ||
Financial assets | ||
Available-for-sale investments | 19,000 | 27,339 |
Residential mortgage-backed securities | Fair Value, Measurements, Recurring | ||
Financial assets | ||
Available-for-sale investments | 19,000 | 27,339 |
Residential mortgage-backed securities | Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Available-for-sale investments | 0 | 0 |
Residential mortgage-backed securities | Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Available-for-sale investments | 19,000 | 27,339 |
Residential mortgage-backed securities | Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Available-for-sale investments | $ 0 | $ 0 |
Fair value measurements - Level
Fair value measurements - Level 3 Reconciliation (Details) - Unrealized net gains (losses) on AFS investments - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Carrying amount at beginning of year | $ 13,174 | $ 12,945 | $ 12,891 |
Proceeds from sales, paydowns and maturities | (7,631) | 0 | 0 |
Change in unrealized gains (losses) recognized in other comprehensive income | 102 | 229 | 54 |
Realized and unrealized gains recognized in net income | (19) | 0 | 0 |
Transfers in (out of) Level 3 out of (into) Level 2 - AFS | (5,626) | 0 | 0 |
Carrying amount at end of year | 0 | 13,174 | 12,945 |
Cumulative gain (loss) recognized in other comprehensive income | $ (14) | $ (116) | $ (345) |
Fair value measurements - Items
Fair value measurements - Items Other Than Those Recognized at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financial assets | ||
Short-term investments | $ 884,478 | $ 1,198,918 |
Investments held-to-maturity | 3,197,508 | 2,786,112 |
Other real estate owned, net | 800 | 691 |
Carrying amount | Nonrecurring | Level 1 | ||
Financial assets | ||
Cash and cash equivalents | 2,100,787 | 2,179,833 |
Short-term investments | 884,478 | 1,198,918 |
Carrying amount | Nonrecurring | Level 2 | ||
Financial assets | ||
Securities purchased under agreements to resell | 59,871 | 96,107 |
Investments held-to-maturity | 3,738,080 | 2,763,344 |
Loans, net of allowance for credit losses | 5,096,430 | 5,240,670 |
Other real estate owned, net | 800 | 691 |
Financial liabilities | ||
Long-term debt | 172,289 | 171,876 |
Carrying amount | Nonrecurring | Level 2 | Term deposits | ||
Financial liabilities | ||
Term deposits | 3,107,248 | 2,944,946 |
Fair value | Nonrecurring | Level 1 | ||
Financial assets | ||
Cash and cash equivalents | 2,100,787 | 2,179,833 |
Short-term investments | 884,478 | 1,198,918 |
Fair value | Nonrecurring | Level 2 | ||
Financial assets | ||
Securities purchased under agreements to resell | 59,871 | 96,107 |
Investments held-to-maturity | 3,197,508 | 2,786,112 |
Loans, net of allowance for credit losses | 5,049,570 | 5,265,049 |
Other real estate owned, net | 800 | 691 |
Financial liabilities | ||
Long-term debt | 177,919 | 158,993 |
Fair value | Nonrecurring | Level 2 | Term deposits | ||
Financial liabilities | ||
Term deposits | 3,108,511 | 2,948,625 |
Appreciation / (depreciation) | Nonrecurring | Level 1 | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Appreciation / (depreciation) | Nonrecurring | Level 2 | ||
Financial assets | ||
Securities purchased under agreements to resell | 0 | 0 |
Investments held-to-maturity | (540,572) | 22,768 |
Loans, net of allowance for credit losses | (46,860) | 24,379 |
Other real estate owned, net | 0 | 0 |
Financial liabilities | ||
Long-term debt | (5,630) | 12,883 |
Appreciation / (depreciation) | Nonrecurring | Level 2 | Term deposits | ||
Financial liabilities | ||
Term deposits | $ (1,263) | $ (3,679) |
Interest rate risk (Details)
Interest rate risk (Details) - Fair Value, Concentration of Risk, Market Risk Management, Gap Analysis - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 2,101 | $ 2,180 |
Securities purchased under agreement to resell | 60 | 96 |
Short-term investments | 884 | 1,199 |
Investments | 5,728 | 6,237 |
Loans | 5,096 | 5,241 |
Other assets | 437 | 382 |
Total assets | 14,306 | 15,335 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 865 | 977 |
Demand deposits | 9,884 | 10,925 |
Term deposits | 3,107 | 2,945 |
Other liabilities | 278 | 316 |
Long-term debt | 172 | 172 |
Total liabilities and shareholders' equity | 14,306 | 15,335 |
Interest rate sensitivity gap | 0 | 0 |
Cumulative interest rate sensitivity gap | 0 | 0 |
Interest Bearing Funds | Within 3 months | ||
Assets | ||
Cash and cash equivalents | 2,008 | 2,064 |
Securities purchased under agreement to resell | 60 | 96 |
Short-term investments | 406 | 842 |
Investments | 6 | 14 |
Loans | 2,927 | 4,208 |
Other assets | 0 | 0 |
Total assets | 5,407 | 7,224 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 6,819 | 8,077 |
Term deposits | 2,126 | 1,658 |
Other liabilities | 0 | 0 |
Long-term debt | 0 | 0 |
Total liabilities and shareholders' equity | 8,945 | 9,735 |
Interest rate sensitivity gap | (3,538) | (2,511) |
Cumulative interest rate sensitivity gap | (3,538) | (2,511) |
Interest Bearing Funds | 3 to 6 months | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Securities purchased under agreement to resell | 0 | 0 |
Short-term investments | 422 | 252 |
Investments | 8 | 9 |
Loans | 35 | 22 |
Other assets | 0 | 0 |
Total assets | 465 | 283 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 25 | 0 |
Term deposits | 457 | 587 |
Other liabilities | 0 | 0 |
Long-term debt | 75 | 0 |
Total liabilities and shareholders' equity | 557 | 587 |
Interest rate sensitivity gap | (92) | (304) |
Cumulative interest rate sensitivity gap | (3,630) | (2,815) |
Interest Bearing Funds | 6 to 12 months | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Securities purchased under agreement to resell | 0 | 0 |
Short-term investments | 56 | 105 |
Investments | 179 | 14 |
Loans | 166 | 91 |
Other assets | 0 | 0 |
Total assets | 401 | 210 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 0 | 27 |
Term deposits | 437 | 602 |
Other liabilities | 0 | 0 |
Long-term debt | 0 | 0 |
Total liabilities and shareholders' equity | 437 | 629 |
Interest rate sensitivity gap | (36) | (419) |
Cumulative interest rate sensitivity gap | (3,666) | (3,234) |
Interest Bearing Funds | 1 to 5 years | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Securities purchased under agreement to resell | 0 | 0 |
Short-term investments | 0 | 0 |
Investments | 943 | 1,173 |
Loans | 1,533 | 705 |
Other assets | 0 | 0 |
Total assets | 2,476 | 1,878 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 0 | 0 |
Term deposits | 87 | 98 |
Other liabilities | 0 | 0 |
Long-term debt | 97 | 172 |
Total liabilities and shareholders' equity | 184 | 270 |
Interest rate sensitivity gap | 2,292 | 1,608 |
Cumulative interest rate sensitivity gap | (1,374) | (1,626) |
Interest Bearing Funds | After 5 years | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Securities purchased under agreement to resell | 0 | 0 |
Short-term investments | 0 | 0 |
Investments | 4,592 | 5,027 |
Loans | 406 | 182 |
Other assets | 0 | 0 |
Total assets | 4,998 | 5,209 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 0 | 0 |
Demand deposits | 0 | 0 |
Term deposits | 0 | 0 |
Other liabilities | 0 | 0 |
Long-term debt | 0 | 0 |
Total liabilities and shareholders' equity | 0 | 0 |
Interest rate sensitivity gap | 4,998 | 5,209 |
Cumulative interest rate sensitivity gap | 3,624 | 3,583 |
Non-interest bearing funds | ||
Assets | ||
Cash and cash equivalents | 93 | 116 |
Securities purchased under agreement to resell | 0 | 0 |
Short-term investments | 0 | 0 |
Investments | 0 | 0 |
Loans | 29 | 33 |
Other assets | 437 | 382 |
Total assets | 559 | 531 |
Liabilities and shareholders' equity | ||
Shareholders’ equity | 865 | 977 |
Demand deposits | 3,040 | 2,821 |
Term deposits | 0 | 0 |
Other liabilities | 278 | 316 |
Long-term debt | 0 | 0 |
Total liabilities and shareholders' equity | 4,183 | 4,114 |
Interest rate sensitivity gap | (3,624) | (3,583) |
Cumulative interest rate sensitivity gap | $ 0 | $ 0 |
Long-term debt - Additional Inf
Long-term debt - Additional Information (Details) | 12 Months Ended | |||||||
Jun. 11, 2020 USD ($) | May 24, 2018 USD ($) | May 27, 2008 USD ($) tranche | Jun. 27, 2005 USD ($) tranche | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Sep. 30, 2011 USD ($) | |
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 172,289,000 | $ 171,876,000 | ||||||
Interest costs capitalized | 0 | $ 0 | $ 0 | |||||
Subordinated Lower Tier II Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 78,000,000 | $ 150,000,000 | ||||||
Number of tranches | tranche | 2 | 2 | ||||||
Long-term debt | $ 172,289,000 | |||||||
Subordinated Lower Tier II Debt | Series A Notes Due 2015 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 90,000,000 | |||||||
Subordinated Lower Tier II Debt | Series B Notes Due 2020 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 60,000,000 | |||||||
Fixed interest rate | 5.11% | 5.11% | ||||||
Repurchased face amount | $ 15,000,000 | |||||||
Long-term debt | $ 45,000,000 | |||||||
Repayments of debt | $ 45,000,000 | |||||||
Subordinated Lower Tier II Debt | Series B Notes Due 2020 | 10-Year US Treasury Yield | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.10% | |||||||
Subordinated Lower Tier II Debt | Series A Notes Due 2018 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 53,000,000 | |||||||
Subordinated Lower Tier II Debt | Series B Notes Due 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 25,000,000 | |||||||
Fixed interest rate | 8.44% | |||||||
Subordinated Lower Tier II Debt | Series B Notes Due 2023 | 10-Year US Treasury Yield | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 4.51% | |||||||
Subordinated Lower Tier II Debt | Notes Redeemed in May 2008 | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayments of debt | $ 78,000,000 | |||||||
Subordinated Lower Tier II Debt | Notes Due 2028 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 75,000,000 | |||||||
Fixed interest rate | 5.25% | 5.25% | ||||||
Payments of debt issuance costs | $ 1,800,000 | |||||||
Subordinated Lower Tier II Debt | Notes Due 2028 | 10-Year US Treasury Yield | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 2.27% | |||||||
Subordinated Lower Tier II Debt | Series B Notes Due 2018 | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayments of debt | $ 47,000,000 | |||||||
Subordinated Lower Tier II Debt | Notes Due 2030 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 100,000,000 | |||||||
Fixed interest rate | 5.25% | 5.25% | ||||||
Payments of debt issuance costs | $ 2,300,000 | |||||||
Subordinated Lower Tier II Debt | Notes Due 2030 | 10-Year US Treasury Yield | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 4.43% |
Long-term debt - Contractual Ma
Long-term debt - Contractual Maturity (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Jun. 11, 2020 | May 24, 2018 | |
Debt Instrument [Line Items] | ||||
Long-term debt less unamortized debt issuance costs | $ 172,289 | $ 171,876 | ||
Subordinated Lower Tier II Debt | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 175,000 | |||
Interest payments until contractual maturity, Within 1 year | 9,896 | |||
Interest payments until contractual maturity, 1 to 5 years | 52,987 | |||
Interest payments until contractual maturity, After 5 years | 26,415 | |||
Unamortized debt issuance costs | (2,711) | |||
Long-term debt less unamortized debt issuance costs | $ 172,289 | |||
Subordinated Lower Tier II Debt | Notes Due 2028 | ||||
Debt Instrument [Line Items] | ||||
Interest rate until date redeemable | 5.25% | 5.25% | ||
Principal Outstanding | $ 75,000 | |||
Interest payments until contractual maturity, Within 1 year | 4,646 | |||
Interest payments until contractual maturity, 1 to 5 years | 21,374 | |||
Interest payments until contractual maturity, After 5 years | $ 2,677 | |||
Subordinated Lower Tier II Debt | Notes Due 2028 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Interest rate from earliest date redeemable to contractual maturity, basis spread on variable rate | 2.255% | |||
Subordinated Lower Tier II Debt | Notes Due 2030 | ||||
Debt Instrument [Line Items] | ||||
Interest rate until date redeemable | 5.25% | 5.25% | ||
Principal Outstanding | $ 100,000 | |||
Interest payments until contractual maturity, Within 1 year | 5,250 | |||
Interest payments until contractual maturity, 1 to 5 years | 31,613 | |||
Interest payments until contractual maturity, After 5 years | $ 23,738 | |||
Subordinated Lower Tier II Debt | Notes Due 2030 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Interest rate from earliest date redeemable to contractual maturity, basis spread on variable rate | 5.06% |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||
Options outstanding (in shares) | 0 | 0 | 100 |
Average number of outstanding awards of unvested shares (in shares) | 1,100 | 1,000 | 900 |
Net income, basic | $ 214,020 | $ 162,668 | $ 147,217 |
Net income, diluted | $ 214,020 | $ 162,668 | $ 147,217 |
Basic Earnings Per Share | |||
Basic Earnings Per Share (in dollars per share) | $ 4.32 | $ 3.28 | $ 2.91 |
Diluted Earnings Per Share | |||
Diluted Earnings Per Share (in dollars per share) | $ 4.29 | $ 3.26 | $ 2.90 |
Voting Common Stock | |||
Basic Earnings Per Share | |||
Weighted average number of common shares issued (in shares) | 50,214 | 50,145 | 51,128 |
Weighted average number of common shares held as treasury stock (in shares) | (619) | (619) | (619) |
Weighted average number of participating shares (in shares) | 49,595 | 49,526 | 50,509 |
Basic Earnings Per Share (in dollars per share) | $ 4.32 | $ 3.28 | $ 2.91 |
Diluted Earnings Per Share | |||
Weighted average number of common shares (in shares) | 49,595 | 49,526 | 50,509 |
Net dilution impact related to options to purchase common shares (in shares) | 0 | 0 | 55 |
Net dilution impact related to awards of unvested common shares (in shares) | 265 | 349 | 286 |
Weighted average number of diluted common shares (in shares) | 49,860 | 49,875 | 50,850 |
Diluted Earnings Per Share (in dollars per share) | $ 4.29 | $ 3.26 | $ 2.90 |
Share-based payments - Addition
Share-based payments - Additional Information (Details) | 12 Months Ended | 96 Months Ended | 125 Months Ended | ||||||
Dec. 31, 2022 USD ($) offeringPeriod $ / shares shares | Dec. 31, 2021 $ / shares shares | Dec. 31, 2020 $ / shares shares | Dec. 31, 2020 shares | May 31, 2020 vestingCondition shares | Dec. 31, 2016 shares | Sep. 21, 2016 $ / shares | Dec. 31, 2012 shares | Dec. 31, 2010 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Tax benefit from compensation expense | $ | $ 0 | ||||||||
Stock Compensation Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Weighted average fair value of stock options granted (in dollars per share) | $ / shares | $ 35.05 | $ 33.26 | $ 33.35 | ||||||
Employee Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Eligible contribution of regularly compensation | 15% | ||||||||
Percentage of discount from market value | 10% | ||||||||
Number of consecutive offering periods | offeringPeriod | 2 | ||||||||
Share based payment award stock plan offering period | 6 months | ||||||||
Granted (in shares) | 10,143 | ||||||||
2010 Omnibus Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized (in shares) | 7,500,000 | 5,000,000 | 2,950,000 | ||||||
Stock options outstanding (in shares) | 0 | 0 | 0 | 0 | |||||
2010 Omnibus 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% | ||||||||
2010 Omnibus 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% | ||||||||
2010 Omnibus 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% | ||||||||
2010 Omnibus 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% | ||||||||
2010 Omnibus 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% | ||||||||
2010 Omnibus 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% | ||||||||
2010 Omnibus 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% | ||||||||
Valuation event, percent of total common shares transferred | 5% | ||||||||
Multiple of invested capital (more than) | 200% | ||||||||
Original capital invested (in dollars per share) | $ / shares | $ 12.09 | ||||||||
2020 Omnibus Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized (in shares) | 3,000,000 | ||||||||
2010 And 2020 Omnibus Plan | Employee Stock Option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares issued upon exercise of each option (in shares) | 1 | ||||||||
Expiration period | 10 years | ||||||||
Number of vesting conditions | vestingCondition | 2 | ||||||||
EDIP | Time vesting shares | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting period | 3 years | ||||||||
Granted (in shares) | 486,000 | 118,000 | 245,000 | ||||||
Executive Long-Term Incentive Share Plan 2016, 2015, 2014, 2013 | Time vesting shares | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting period | 3 years | ||||||||
Executive Long-Term Incentive Share Plan 2016, 2015, 2014, 2013 | Performance vesting shares | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting period | 3 years |
Share-based payments - Changes
Share-based payments - Changes in Outstanding Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
Additional Disclosures | |||
Aggregate intrinsic value, Exercised | $ 2,192 | ||
Aggregate intrinsic value, Outstanding at end of year | $ 0 | ||
2010 Omnibus Plan | |||
Number of shares transferable upon exercise | |||
Outstanding at beginning of year (in shares) | 159,000 | ||
Exercised (in shares) | (143,000) | ||
Forfeitures and cancellations (in shares) | (16,000) | ||
Outstanding at end of year (in shares) | 0 | ||
Vested and exercisable at end of year (in shares) | 0 | 0 | 0 |
Weighted average exercise price | |||
Outstanding at beginning of year (in dollars per share) | $ 12.07 | ||
Exercised (in dollars per share) | 12.13 | ||
Forfeitures and cancellations (in dollars per share) | 11.50 | ||
Outstanding at end of year (in dollars per share) | 0 | ||
Vested and exercisable at end of year (in dollars per share) | $ 0 | ||
Additional Disclosures | |||
Weighted average remaining life, Outstanding at end of year | 0 years | ||
Weighted average remaining life, Vested and exercisable at end of year | 0 years |
Share-based payments - Change_2
Share-based payments - Changes in Outstanding ELTIP and EDIP Awards (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
EDIP | Time vesting shares | |||
Changes in Outstanding ELTIP and EDIP Awards | |||
Outstanding at beginning of year (in shares) | 297 | 364 | 251 |
Granted (in shares) | 486 | 118 | 245 |
Vested (fair value in 2022: $__ million, 2021: $13.9 million, 2020: $9.6 million) (in shares) | (162) | (183) | (129) |
Forfeitures (resignations, retirements, redundancies) (in shares) | 0 | (2) | (3) |
Outstanding at end of year (in shares) | 621 | 297 | 364 |
Unrecognized cost | $ 14,234 | $ 4,896 | |
ELTIP | Time Vesting Shares and Performance Shares | |||
Changes in Outstanding ELTIP and EDIP Awards | |||
Outstanding at beginning of year (in shares) | 704 | 658 | 618 |
Granted (in shares) | 280 | 283 | 209 |
Vested (fair value in 2022: $__ million, 2021: $13.9 million, 2020: $9.6 million) (in shares) | (279) | (237) | (162) |
Forfeitures (resignations, retirements, redundancies) (in shares) | 0 | 0 | (7) |
Outstanding at end of year (in shares) | 705 | 704 | 658 |
ELTIP | Time vesting shares | |||
Changes in Outstanding ELTIP and EDIP Awards | |||
Unrecognized cost | $ 0 | $ 17 | |
ELTIP | Performance vesting shares | |||
Changes in Outstanding ELTIP and EDIP Awards | |||
Unrecognized cost | 10,232 | 8,840 | |
EDIP and ELTIP | |||
Changes in Outstanding ELTIP and EDIP Awards | |||
Fair value of awards vested | $ 17,300 | $ 13,900 | $ 9,600 |
Share-based payments - Share-ba
Share-based payments - Share-based Compensation Cost Recognized in Net Income (Details) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
EDIP and ELTIP | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Cost recognized in net income | $ 16,215 | $ 14,539 | $ 14,608 |
Share-based payments - Unrecogn
Share-based payments - Unrecognized Share-based Compensation Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Unrecognized Share-based Compensation Cost | ||
Total unrecognized expense | $ 24,466 | $ 13,753 |
EDIP | Time vesting shares | ||
Unrecognized Share-based Compensation Cost | ||
Unrecognized cost | $ 14,234 | $ 4,896 |
Weighted average years over which it is expected to be recognized | 3 years 4 months 6 days | 1 year 5 months 12 days |
ELTIP | Time vesting shares | ||
Unrecognized Share-based Compensation Cost | ||
Unrecognized cost | $ 0 | $ 17 |
Weighted average years over which it is expected to be recognized | 0 years | 1 month 13 days |
ELTIP | Performance vesting shares | ||
Unrecognized Share-based Compensation Cost | ||
Unrecognized cost | $ 10,232 | $ 8,840 |
Weighted average years over which it is expected to be recognized | 1 year 9 months | 1 year 9 months 3 days |
Share repurchase plans (Details
Share repurchase plans (Details) - USD ($) | 12 Months Ended | |||||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 13, 2023 | Feb. 14, 2022 | Feb. 10, 2021 | Dec. 02, 2019 | Dec. 06, 2018 | |
Equity, Class of Treasury Stock [Line Items] | ||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 2,000,000 | 2,000,000 | 3,500,000 | 2,500,000 | ||||
Common share repurchase program, authorized repurchase amount | $ 125,000,000 | |||||||
Repurchased and retired during period (in shares) | 102,000 | |||||||
Acquired number of shares (in shares) | 102,000 | 534,828 | 3,452,000 | |||||
Average cost per share (in dollars per share) | $ 38.21 | $ 36.93 | $ 25.10 | |||||
Total cost | $ 3,897,268 | $ 19,753,336 | $ 86,639,889 | |||||
Subsequent Event | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 3,000,000 |
Accumulated other comprehensi_3
Accumulated other comprehensive income (loss) - Schedule of AOCL Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | $ 977,493 | $ 981,948 | |
Other comprehensive income (loss), net of taxes | (252,535) | (75,237) | $ 37,417 |
Balance at end of year | 864,815 | 977,493 | 981,948 |
Unrealized net gains (losses) on translation of net investment in foreign operations | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (20,913) | (21,065) | (20,818) |
Transfer of AFS investments to HTM investments | 0 | ||
Other comprehensive income (loss), net of taxes | (4,787) | 152 | (247) |
Balance at end of year | (25,700) | (20,913) | (21,065) |
Accumulated net investment gain (loss) | Unrealized net gains (losses) on HTM investments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | 91 | (60) | (725) |
Transfer of AFS investments to HTM investments | (99,143) | 0 | 0 |
Other comprehensive income (loss), net of taxes | 7,840 | 151 | 665 |
Balance at end of year | (91,212) | 91 | (60) |
Accumulated net investment gain (loss) | Unrealized net gains (losses) on AFS investments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (21,982) | 72,779 | 11,808 |
Transfer of AFS investments to HTM investments | 99,143 | 0 | 0 |
Other comprehensive income (loss), net of taxes | (297,506) | (94,761) | 60,971 |
Balance at end of year | (220,345) | (21,982) | 72,779 |
Employee benefit plans adjustments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (82,113) | (101,334) | (77,362) |
Transfer of AFS investments to HTM investments | 0 | ||
Other comprehensive income (loss), net of taxes | 41,918 | 19,221 | (23,972) |
Balance at end of year | (40,195) | (82,113) | (101,334) |
Employee benefit plans adjustments | Defined benefit pension plan | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (56,400) | (72,255) | (66,312) |
Transfer of AFS investments to HTM investments | 0 | ||
Other comprehensive income (loss), net of taxes | 8,495 | 15,855 | (5,943) |
Balance at end of year | (47,905) | (56,400) | (72,255) |
Employee benefit plans adjustments | Post-retirement healthcare plan | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (25,713) | (29,079) | (11,050) |
Transfer of AFS investments to HTM investments | 0 | ||
Other comprehensive income (loss), net of taxes | 33,423 | 3,366 | (18,029) |
Balance at end of year | 7,710 | (25,713) | (29,079) |
Total AOCIL | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | |||
Balance at beginning of year | (124,917) | (49,680) | (87,097) |
Transfer of AFS investments to HTM investments | 0 | ||
Balance at end of year | $ (377,452) | $ (124,917) | $ (49,680) |
Accumulated other comprehensi_4
Accumulated other comprehensive income (loss) - Net Change of AOCL Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), net of taxes | $ (252,535) | $ (75,237) | $ 37,417 |
Unrealized net gains (losses) on translation of net investment in foreign operations | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Net changes on investments transferred to held-to-maturity | 0 | ||
Other comprehensive income (loss), net of taxes | (4,787) | 152 | (247) |
Unrealized net gains (losses) on translation of net investment in foreign operations | Defined benefit pension plan | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
OCI, before reclassifications, net of tax | 885 | 203 | (421) |
Unrealized net gains (losses) on translation of net investment in foreign operations | Available-for-sale Securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
OCI, before reclassifications, net of tax | 1,243 | (40) | 0 |
Foreign currency translation adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
OCI, before reclassifications, net of tax | (38,925) | (3,129) | 9,991 |
Gains (losses) on net investment hedge | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
OCI, before reclassifications, net of tax | 34,138 | 3,281 | (10,238) |
Accumulated net investment gain (loss) | Held-to-maturity Securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Net changes on investments transferred to held-to-maturity | (99,143) | 0 | 0 |
Reclassifications, net of tax | 7,840 | 151 | 665 |
Other comprehensive income (loss), net of taxes | (91,303) | 151 | 665 |
Accumulated net investment gain (loss) | Available-for-sale Securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
OCI, before reclassifications, net of tax | (298,768) | (94,960) | 62,191 |
Net changes on investments transferred to held-to-maturity | 99,143 | 0 | 0 |
Reclassifications, net of tax | 19 | 239 | (1,220) |
Other comprehensive income (loss), net of taxes | (198,363) | (94,761) | 60,971 |
Employee benefit plans adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Net changes on investments transferred to held-to-maturity | 0 | ||
Employee benefit plans adjustments | Defined benefit pension plan | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
OCI, before reclassifications, net of tax | 0 | (1,462) | 456 |
Net changes on investments transferred to held-to-maturity | 0 | ||
Reclassifications, net of tax | (907) | 0 | 0 |
Other comprehensive income (loss), net of taxes | 8,495 | 15,855 | (5,943) |
Employee benefit plans adjustments | Post-retirement healthcare plan | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Net changes on investments transferred to held-to-maturity | 0 | ||
Other comprehensive income (loss), net of taxes | 33,423 | 3,366 | (18,029) |
Net actuarial gain (loss) | Defined benefit pension plan | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
OCI, before reclassifications, net of tax | 6,218 | 14,772 | (8,363) |
Reclassifications, net of tax | 2,218 | 2,766 | 2,412 |
Net actuarial gain (loss) | Post-retirement healthcare plan | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
OCI, before reclassifications, net of tax | 31,455 | 1,163 | (18,553) |
Reclassifications, net of tax | 1,444 | 1,679 | 0 |
Prior service credit (cost) arising during the year | Defined benefit pension plan | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
OCI, before reclassifications, net of tax | 0 | (399) | (47) |
Reclassifications, net of tax | 81 | (25) | 20 |
Prior service credit (cost) arising during the year | Post-retirement healthcare plan | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Reclassifications, net of tax | $ 524 | $ 524 | $ 524 |
Capital structure - Authorized
Capital structure - Authorized Capital (Details) | Dec. 31, 2022 $ / shares shares | Dec. 31, 2022 $ / shares shares | Dec. 31, 2022 £ / shares shares | Dec. 31, 2021 $ / shares shares |
Class of Stock [Line Items] | ||||
Common shares, par value (in BMD per share) | $ 0.01 | $ 0.01 | ||
US dollars | ||||
Class of Stock [Line Items] | ||||
Preferred shares, authorized (in shares) | shares | 110,200,001 | 110,200,001 | 110,200,001 | |
Preference shares, par value (in dollars per share or pounds per share) | $ 0.01 | |||
United Kingdom, Pounds | ||||
Class of Stock [Line Items] | ||||
Preferred shares, authorized (in shares) | shares | 50,000,000 | 50,000,000 | 50,000,000 | |
Preference shares, par value (in dollars per share or pounds per share) | £ / shares | £ 0.01 | |||
Common Stock Issued And Common Stock Authorized But Unissued | ||||
Class of Stock [Line Items] | ||||
Common shares, par value (in BMD per share) | $ 0.01 | |||
Voting Common Stock | ||||
Class of Stock [Line Items] | ||||
Common shares, par value (in BMD per share) | $ 0.01 | |||
Common shares, authorized (in shares) | shares | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 |
Non-voting Common Stock | ||||
Class of Stock [Line Items] | ||||
Common shares, par value (in BMD per share) | $ 0.01 | |||
Common shares, authorized (in shares) | shares | 6,000,000,000 | 6,000,000,000 | 6,000,000,000 | 6,000,000,000 |
Capital structure - Dividends (
Capital structure - Dividends (Details) - $ / shares | 12 Months Ended | |||
Feb. 13, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | ||||
Common share cash dividends declared (in dollars per share) | $ 1.76 | $ 1.76 | $ 1.76 | |
Common share cash dividends paid (in dollars per share) | $ 1.76 | $ 1.76 | $ 1.76 | |
Subsequent Event | ||||
Class of Stock [Line Items] | ||||
Common share cash dividends declared (in dollars per share) | $ 0.44 |
Capital structure - Regulatory
Capital structure - Regulatory Capital (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Capital | ||
CET 1 capital | $ 983,342 | $ 896,263 |
Tier 1 capital | 983,342 | 896,263 |
Tier 2 capital | 183,640 | 183,998 |
Total capital | 1,166,982 | 1,080,261 |
Risk Weighted Assets | 4,843,370 | 5,101,474 |
Leverage Ratio Exposure Measure | $ 14,774,309 | $ 15,921,624 |
Capital Ratios (%) | ||
Common Equity Tier 1, Actual | 20.30% | 17.60% |
Common Equity Tier 1, Regulatory minimum | 10% | 10% |
Total Tier 1, Actual | 0.203 | 0.176 |
Total Tier 1, Regulatory minimum | 0.115 | 0.115 |
Total Capital, Actual | 0.241 | 0.212 |
Total Capital, Regulatory minimum | 0.135 | 0.135 |
Leverage ratio, Actual | 0.067 | 0.056 |
Leverage ratio, Regulatory minimum | 0.050 | 0.050 |
Income taxes - Income Taxes in
Income taxes - Income Taxes in Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Current tax expense | $ 3,223 | $ 2,818 | $ 2,382 |
Deferred tax (recovery) expense | 459 | 305 | (4) |
Total tax (benefit) expense | $ 3,682 | $ 3,123 | $ 2,378 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
$ | |||
Income tax expense in international offices taxed at different rates | $ 4,349 | $ 3,366 | $ 2,695 |
Expenses not deductible for tax purposes | 283 | 408 | 299 |
Prior year tax adjustments | 83 | (231) | 41 |
Effect of change in tax rate | 125 | (1,217) | 0 |
Change in valuation allowance | (1,364) | 585 | (582) |
Other - net | 206 | 212 | (75) |
Total tax (benefit) expense | $ 3,682 | $ 3,123 | $ 2,378 |
% | |||
Income tax expense in international offices taxed at different rates | 2% | 2% | 1.80% |
Expenses not deductible for tax purposes | 0.10% | 0.20% | 0.20% |
Prior year tax adjustments | 0% | (0.10%) | 0% |
Effect of change in tax rate | 0.10% | (0.70%) | 0% |
Change in valuation allowance | (0.60%) | 0.40% | (0.40%) |
Other - net | 0.10% | 0.10% | (0.10%) |
Income tax (benefit) expense at effective tax rate | 1.70% | 1.90% | 1.60% |
Income taxes - Deferred Income
Income taxes - Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred income tax asset | ||
Tax loss carried forward | $ 5,863 | $ 8,269 |
Allowance for compensated absence | 19 | 0 |
Deferred income tax asset before valuation allowance | 5,882 | 8,269 |
Less: valuation allowance | (3,478) | (4,842) |
Deferred income tax asset after valuation allowance | 2,404 | 3,427 |
Deferred income tax liability | ||
Fixed assets | (477) | (735) |
Allowance for compensated absence | 0 | (27) |
Total deferred income tax liability | (477) | (762) |
Net deferred income tax assets | $ 1,927 | $ 2,665 |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets, valuation allowance | $ 3,478 | $ 4,842 |
Foreign Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Tax loss carried forward | 27,800 | 41,400 |
Tax loss carried forward, no expiration date | 27,300 | 39,900 |
United Kingdom | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets, valuation allowance | $ 3,500 | $ 4,800 |
Related party transactions - Fi
Related party transactions - Financing Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Loans and Leases Receivable, Related Parties [Roll Forward] | |||
Deposits | $ 12,991,076 | $ 13,870,223 | |
Interest and fees on loans | 249,390 | 221,544 | $ 230,656 |
Net other gains (losses) | 1,079 | (1,154) | (552) |
Total non-interest expense | 331,595 | 333,890 | 344,594 |
Other non-interest income | 5,971 | 4,795 | 5,610 |
Directors and Executives | |||
Loans and Leases Receivable, Related Parties [Roll Forward] | |||
Beginning balance | 7,375 | 42,391 | |
Net loans issued (repaid) during the year | (5,362) | (40,448) | |
Effect of changes in the composition of related parties | 18,380 | 5,432 | |
Ending balance | 20,393 | 7,375 | 42,391 |
Deposits | 92,806 | 21,683 | |
Interest and fees on loans | 900 | 1,209 | 1,444 |
Affiliates | |||
Loans and Leases Receivable, Related Parties [Roll Forward] | |||
Loans | 10,211 | 10,489 | |
Deposits | 560 | 441 | |
Interest and fees on loans | 669 | 618 | 654 |
Net other gains (losses) | 0 | 99 | 742 |
Total non-interest expense | 1,720 | 1,519 | 1,431 |
Other non-interest income | $ 242 | $ 0 | $ 0 |
Related party transactions - _2
Related party transactions - Financial Transactions With Related Parties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Deposits | $ 12,991,076 | $ 13,870,223 | |
Asset management | 29,727 | 29,853 | $ 29,225 |
Custody and other administration services | 13,626 | 15,232 | 13,845 |
Wholly-owned subsidiary | |||
Related Party Transaction [Line Items] | |||
Loans | 10,211 | 10,489 | |
Deposits | 560 | 441 | |
Asset Management Arrangement | Wholly-owned subsidiary | |||
Related Party Transaction [Line Items] | |||
Deposits | 20,549 | 22,346 | |
Asset management | 7,379 | 5,217 | 7,131 |
Custody and other administration services | 839 | 622 | 1,108 |
Other non-interest income | $ 0 | $ 6 | $ 729 |
Condensed financial statement_3
Condensed financial statements of the parent company only - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | |||
Cash and demand deposits with banks - Non-interest bearing | $ 93,032 | $ 115,651 | |
Demand deposits with banks - Interest bearing | 258,239 | 437,644 | |
Cash equivalents - Interest bearing | 1,749,516 | 1,626,538 | |
Cash and cash equivalents | 2,100,787 | 2,179,833 | |
Securities purchased under agreements to resell | 59,871 | 96,107 | |
Short-term investments | 884,478 | 1,198,918 | |
Investment in securities | |||
Equity securities at fair value | 236 | 222 | |
Available-for-sale investments | 1,988,865 | 3,473,730 | |
Held-to-maturity (fair value: $1,238,333 (2021: $1,030,969)) | 3,738,080 | 2,763,344 | |
Total investment in securities | 5,727,181 | 6,237,296 | |
Loans to third parties, net of allowance for credit losses | 5,096,430 | 5,240,670 | |
Other assets, including accrued interest, premises, equipment and computer software, equity method investments, receivables from subsidiaries and other real estate owned | 203,520 | 144,279 | |
Total assets | 14,306,062 | 15,335,200 | |
Deposits | |||
Non-interest bearing | 3,039,701 | 2,820,609 | |
Interest bearing | 9,951,375 | 11,049,614 | |
Total deposits | 12,991,076 | 13,870,223 | |
Employee benefit plans | 92,018 | 126,230 | |
Other liabilities, including accrued interest and payables to subsidiaries | 185,864 | 189,378 | |
Total other liabilities | 277,882 | 315,608 | |
Long-term debt | 172,289 | 171,876 | |
Total liabilities | 13,441,247 | 14,357,707 | |
Shareholders' equity | |||
Total shareholders’ equity | 864,815 | 977,493 | $ 981,948 |
Total liabilities and shareholders’ equity | 14,306,062 | 15,335,200 | |
Available-for-sale, amortized cost | 2,209,078 | 3,495,564 | |
Held-to-maturity, fair value | 3,197,508 | 2,786,112 | |
Bank of N.T. Butterfield & Son Ltd | |||
Assets | |||
Cash and demand deposits with banks - Non-interest bearing | 38,835 | 41,993 | |
Demand deposits with banks - Interest bearing | 142,213 | 135,038 | |
Cash equivalents - Interest bearing | 723,323 | 591,294 | |
Cash and cash equivalents | 904,371 | 768,325 | |
Securities purchased under agreements to resell | 59,871 | 96,107 | |
Short-term investments | 80,315 | 242,691 | |
Investment in securities | |||
Equity securities at fair value | 236 | 222 | |
Available-for-sale investments | 853,749 | 1,417,117 | |
Held-to-maturity (fair value: $1,238,333 (2021: $1,030,969)) | 1,421,556 | 1,011,584 | |
Total investment in securities | 2,275,541 | 2,428,923 | |
Loans to third parties, net of allowance for credit losses | 1,839,622 | 1,966,895 | |
Other assets, including accrued interest, premises, equipment and computer software, equity method investments, receivables from subsidiaries and other real estate owned | 242,796 | 188,263 | |
Total assets | 5,942,432 | 6,378,660 | |
Deposits | |||
Non-interest bearing | 1,811,455 | 1,686,985 | |
Interest bearing | 2,936,307 | 3,360,185 | |
Total deposits | 4,747,762 | 5,047,170 | |
Employee benefit plans | 91,983 | 125,968 | |
Other liabilities, including accrued interest and payables to subsidiaries | 65,583 | 56,153 | |
Total other liabilities | 157,566 | 182,121 | |
Long-term debt | 172,289 | 171,876 | |
Total liabilities | 5,077,617 | 5,401,167 | |
Shareholders' equity | |||
Total shareholders’ equity | 864,815 | 977,493 | |
Total liabilities and shareholders’ equity | 5,942,432 | 6,378,660 | |
Available-for-sale, amortized cost | 944,746 | 1,419,712 | |
Held-to-maturity, fair value | 1,238,333 | 1,030,969 | |
Bank of N.T. Butterfield & Son Ltd | Banks | |||
Investment in securities | |||
Net assets of subsidiaries | 480,297 | 594,930 | |
Loans to subsidiaries | 0 | 13,534 | |
Bank of N.T. Butterfield & Son Ltd | Customers | |||
Investment in securities | |||
Net assets of subsidiaries | 1,563 | 17,091 | |
Loans to subsidiaries | $ 58,056 | $ 61,901 |
Condensed financial statement_4
Condensed financial statements of the parent company only - Condensed Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Non-interest income | |||
Banking | $ 57,120 | $ 51,920 | $ 47,346 |
Foreign exchange revenue | 47,831 | 43,434 | 37,180 |
Custody and other administration services | 13,626 | 15,232 | 13,845 |
Other non-interest income | 5,971 | 4,795 | 5,610 |
Total non-interest income | 206,587 | 198,107 | 183,859 |
Interest income | |||
Interest and fees on loans | 249,390 | 221,544 | 230,656 |
Deposits with banks and other | 33,201 | 1,444 | 12,125 |
Total interest income | 398,383 | 324,898 | 352,009 |
Interest expense | |||
Deposits | 45,176 | 15,490 | 25,116 |
Long-term debt | 9,601 | 9,601 | 9,294 |
Securities sold under agreement to repurchase | 22 | 0 | 0 |
Total interest expense | 54,799 | 25,091 | 34,410 |
Net interest income before provision for credit losses | 343,584 | 299,807 | 317,599 |
Provision for credit (losses) recoveries | (2,396) | 3,128 | (8,491) |
Net interest income after provision for credit losses | 341,188 | 302,935 | 309,108 |
Net gains (losses) on equity securities | 14 | 85 | 658 |
Net realized gains (losses) on available-for-sale investments | (19) | (239) | 1,220 |
Net gains (losses) on other real estate owned | 448 | (53) | (104) |
Net other gains (losses) | 1,079 | (1,154) | (552) |
Total other gains (losses) | 1,522 | (1,361) | 1,222 |
Total net revenue | 549,297 | 499,681 | 494,189 |
Non-interest expense | |||
Salaries and other employee benefits | 166,189 | 161,317 | 173,662 |
Technology and communications | 56,740 | 63,843 | 65,156 |
Professional and outside services | 19,640 | 21,400 | 21,263 |
Property | 31,442 | 30,862 | 29,392 |
Indirect taxes | 21,982 | 22,091 | 21,323 |
Non-service employee benefits expense | 3,775 | 3,888 | 2,640 |
Marketing | 6,357 | 4,561 | 4,443 |
Amortization of intangible assets | 5,680 | 6,011 | 5,819 |
Other expenses | 19,790 | 19,917 | 20,896 |
Total non-interest expense | 331,595 | 333,890 | 344,594 |
Net income | 214,020 | 162,668 | 147,217 |
Other comprehensive income (loss), net of taxes | (252,535) | (75,237) | 37,417 |
Total comprehensive income (loss) | (38,515) | 87,431 | 184,634 |
Bank of N.T. Butterfield & Son Ltd | |||
Non-interest income | |||
Banking | 26,116 | 24,465 | 24,429 |
Foreign exchange revenue | 11,858 | 9,660 | 9,166 |
Custody and other administration services | 6,869 | 7,693 | 6,927 |
Other non-interest income | 1,269 | 3,372 | 5,924 |
Total non-interest income | 139,698 | 150,173 | 187,832 |
Interest income | |||
Interest and fees on loans | 118,829 | 116,031 | 123,774 |
Investments | 49,790 | 44,663 | 52,135 |
Deposits with banks and other | 14,499 | 2,056 | 3,109 |
Total interest income | 183,118 | 162,750 | 179,018 |
Interest expense | |||
Deposits | 10,834 | 6,405 | 9,386 |
Long-term debt | 9,601 | 9,601 | 9,294 |
Securities sold under agreement to repurchase | 22 | 0 | 0 |
Total interest expense | 20,457 | 16,006 | 18,680 |
Net interest income before provision for credit losses | 162,661 | 146,744 | 160,338 |
Provision for credit (losses) recoveries | (1,226) | 2,206 | (8,750) |
Net interest income after provision for credit losses | 161,435 | 148,950 | 151,588 |
Net gains (losses) on equity securities | 14 | 85 | 658 |
Net realized gains (losses) on available-for-sale investments | 0 | 0 | 702 |
Net gains (losses) on other real estate owned | 9 | (84) | (104) |
Net other gains (losses) | 0 | 850 | 714 |
Total other gains (losses) | 23 | 851 | 1,970 |
Total net revenue | 301,156 | 299,974 | 341,390 |
Non-interest expense | |||
Salaries and other employee benefits | 65,789 | 62,405 | 69,521 |
Technology and communications | 29,551 | 35,675 | 35,434 |
Professional and outside services | 29,744 | 27,726 | 27,791 |
Property | 10,232 | 9,586 | 9,092 |
Indirect taxes | 15,714 | 15,906 | 15,633 |
Non-service employee benefits expense | 4,845 | 4,493 | 3,462 |
Marketing | 3,629 | 2,497 | 2,418 |
Amortization of intangible assets | 169 | 169 | 169 |
Other expenses | 9,613 | 9,502 | 9,896 |
Total non-interest expense | 169,286 | 167,959 | 173,416 |
Net income before equity in undistributed earnings of subsidiaries | 131,870 | 132,015 | 167,974 |
Equity in undistributed earnings of subsidiaries | 82,150 | 30,653 | (20,757) |
Net income | 214,020 | 162,668 | 147,217 |
Other comprehensive income (loss), net of taxes | (252,535) | (75,237) | 37,417 |
Total comprehensive income (loss) | (38,515) | 87,431 | 184,634 |
Bank of N.T. Butterfield & Son Ltd | Banks | |||
Non-interest income | |||
Dividends from subsidiaries | 72,268 | 82,327 | 121,522 |
Bank of N.T. Butterfield & Son Ltd | Customers | |||
Non-interest income | |||
Dividends from subsidiaries | $ 21,318 | $ 22,656 | $ 19,864 |
Condensed financial statement_5
Condensed financial statements of the parent company only - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | |||
Net income | $ 214,020 | $ 162,668 | $ 147,217 |
Adjustments to reconcile net income to operating cash flows | |||
Depreciation and amortization | 40,177 | 69,456 | 62,435 |
Provision for credit losses (recoveries) | 2,396 | (3,128) | 8,491 |
Share-based payments and settlements | 17,077 | 15,151 | 15,245 |
Net realized (gains) losses on available-for-sale investments | 19 | 239 | (1,220) |
Net (gains) losses on other real estate owned | (448) | 53 | 104 |
(Increase) decrease in carrying value of equity method investments | (39) | (123) | (1,298) |
Dividends received from equity method investments | 169 | 442 | 2,845 |
Changes in operating assets and liabilities | |||
Cash provided by (used in) operating activities | 219,271 | 251,349 | 188,150 |
Cash flows from investing activities | |||
Short-term investments other than restricted cash: proceeds from maturities and sales | 2,745,132 | 2,365,631 | 2,214,870 |
Short-term investments other than restricted cash: purchases | (2,548,734) | (2,748,942) | (1,815,887) |
Available-for-sale investments: proceeds from sale | 7,631 | 189,417 | 352,965 |
Available-for-sale investments: proceeds from maturities and pay downs | 230,718 | 650,347 | 565,028 |
Available-for-sale investments: purchases | (83,900) | (1,771,776) | (1,313,884) |
Held-to-maturity investments: proceeds from maturities and pay downs | 403,424 | 652,359 | 538,345 |
Held-to-maturity investments: purchases | (383,332) | (1,233,329) | (533,379) |
Net (increase) decrease in loans to third parties | (90,185) | (99,007) | 25,555 |
Additions to premises, equipment and computer software | (26,876) | (15,724) | (20,566) |
Proceeds from sale of other real estate owned | 1,909 | 4,430 | 0 |
Cash provided by (used in) investing activities | 292,023 | (1,905,662) | (41,709) |
Cash flows from financing activities | |||
Net increase (decrease) in demand and term deposit liabilities | (415,566) | 642,815 | 692,635 |
Issuance of subordinated capital, net of underwriting fees | 0 | 0 | 97,647 |
Repayment of long-term debt | 0 | 0 | (70,000) |
Common shares repurchased | (3,897) | (19,754) | (86,640) |
Proceeds from stock option exercises | 0 | 0 | 1,739 |
Cash dividends paid on common shares | (87,343) | (87,285) | (88,932) |
Cash provided by (used in) financing activities | (506,806) | 535,776 | 546,449 |
Cash, cash equivalents and restricted cash: beginning of year | 2,203,497 | 3,314,498 | 2,578,901 |
Cash, cash equivalents and restricted cash: end of year | 2,116,546 | 2,203,497 | 3,314,498 |
Components of cash, cash equivalents and restricted cash at end of year | |||
Cash and cash equivalents | 2,100,787 | 2,179,833 | 3,289,592 |
Restricted cash included in short-term investments on the consolidated balance sheets | 15,759 | 23,664 | 24,906 |
Total cash, cash equivalents and restricted cash at end of year | 2,116,546 | 2,203,497 | 3,314,498 |
Supplemental disclosure of non-cash items | |||
Transfer to (out of) other real estate owned | 1,603 | 704 | 314 |
Transfer of available-for-sale investments to held-to-maturity investments | 998,157 | 0 | 0 |
Initial recognition of right-of-use assets and operating lease liabilities | 3,476 | 1,575 | 323 |
Reduction in net loans due to initial adoption of a current expected credit loss model | 0 | 0 | 7,841 |
Bank of N.T. Butterfield & Son Ltd | |||
Cash flows from operating activities | |||
Net income | 214,020 | 162,668 | 147,217 |
Adjustments to reconcile net income to operating cash flows | |||
Depreciation and amortization | 14,922 | 28,617 | 26,562 |
Provision for credit losses (recoveries) | 1,226 | (2,206) | 8,750 |
Share-based payments and settlements | 17,077 | 15,151 | 15,245 |
Net change in equity securities at fair value | (14) | 7,096 | 102 |
Net realized (gains) losses on available-for-sale investments | 0 | 0 | (702) |
Net (gains) losses on other real estate owned | (9) | 84 | 104 |
(Increase) decrease in carrying value of equity method investments | 120 | 31 | (1,376) |
Dividends received from equity method investments | 12 | 291 | 2,710 |
Equity in undistributed earnings of subsidiaries | (82,150) | (30,653) | 20,757 |
Changes in operating assets and liabilities | |||
(Increase) decrease in accrued interest receivable and other assets | (25,888) | 10,665 | 754 |
Increase (decrease) in employee benefit plans, accrued interest payable and other liabilities | 15,386 | (14,597) | 9,456 |
Cash provided by (used in) operating activities | 154,702 | 177,147 | 229,579 |
Cash flows from investing activities | |||
(Increase) decrease in securities purchased under agreements to resell | 36,236 | 100,932 | (54,756) |
Short-term investments other than restricted cash: proceeds from maturities and sales | 821,645 | 163,396 | 68,272 |
Short-term investments other than restricted cash: purchases | (666,837) | (391,996) | (35,319) |
Available-for-sale investments: proceeds from sale | 0 | 367 | 205,770 |
Available-for-sale investments: proceeds from maturities and pay downs | 112,274 | 299,367 | 295,547 |
Available-for-sale investments: purchases | (44,504) | (669,391) | (317,451) |
Held-to-maturity investments: proceeds from maturities and pay downs | 158,665 | 269,311 | 229,576 |
Held-to-maturity investments: purchases | (203,867) | (316,820) | (195,898) |
Net (increase) decrease in loans to third parties | 125,215 | 60,395 | 8,263 |
Additions to premises, equipment and computer software | (20,567) | (10,372) | (11,313) |
Proceeds from sale of other real estate owned | 730 | 314 | 0 |
Injection of capital in subsidiary | (6,083) | (1,465) | (1,522) |
Return of capital from a subsidiary | 0 | 0 | 3,314 |
Cash provided by (used in) investing activities | 330,286 | (499,213) | 192,491 |
Cash flows from financing activities | |||
Net increase (decrease) in demand and term deposit liabilities | (265,270) | (192,756) | 630,141 |
Issuance of subordinated capital, net of underwriting fees | 0 | 0 | 97,647 |
Repayment of long-term debt | 0 | 0 | (70,000) |
Common shares repurchased | (3,897) | (19,754) | (86,640) |
Proceeds from stock option exercises | 0 | 0 | 1,739 |
Cash dividends paid on common shares | (87,343) | (87,285) | (88,932) |
Cash provided by (used in) financing activities | (356,510) | (299,795) | 483,955 |
Net increase (decrease) in cash, cash equivalent and restricted cash | 128,478 | (621,861) | 906,025 |
Cash, cash equivalents and restricted cash: beginning of year | 782,415 | 1,404,276 | 498,251 |
Cash, cash equivalents and restricted cash: end of year | 910,893 | 782,415 | 1,404,276 |
Components of cash, cash equivalents and restricted cash at end of year | |||
Cash and cash equivalents | 904,371 | 768,325 | 1,387,999 |
Restricted cash included in short-term investments on the consolidated balance sheets | 6,522 | 14,090 | 16,277 |
Total cash, cash equivalents and restricted cash at end of year | 910,893 | 782,415 | 1,404,276 |
Supplemental disclosure of cash flow information | |||
Cash interest paid | 18,680 | 15,156 | 19,532 |
Supplemental disclosure of non-cash items | |||
Transfer to (out of) other real estate owned | 830 | 307 | 314 |
Transfer of available-for-sale investments to held-to-maturity investments | 364,983 | 0 | 0 |
Initial recognition of right-of-use assets and operating lease liabilities | 0 | 536 | 0 |
Reduction in net loans due to initial adoption of a current expected credit loss model | 0 | 0 | 3,899 |
Bank of N.T. Butterfield & Son Ltd | Banks | |||
Cash flows from investing activities | |||
Net decrease in loans to subsidiaries | 13,534 | 135 | (428) |
Bank of N.T. Butterfield & Son Ltd | Customers | |||
Cash flows from investing activities | |||
Net decrease in loans to subsidiaries | $ 3,845 | $ (3,386) | $ (1,564) |
Subsequent events (Details)
Subsequent events (Details) - $ / shares | 12 Months Ended | |||||||
Feb. 13, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 14, 2022 | Feb. 10, 2021 | Dec. 02, 2019 | Dec. 06, 2018 | |
Subsequent Event [Line Items] | ||||||||
Common share cash dividends declared (in dollars per share) | $ 1.76 | $ 1.76 | $ 1.76 | |||||
Number of shares authorized to be repurchased (up to) (in shares) | 2,000,000 | 2,000,000 | 3,500,000 | 2,500,000 | ||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Common share cash dividends declared (in dollars per share) | $ 0.44 | |||||||
Number of shares authorized to be repurchased (up to) (in shares) | 3,000,000 |
Uncategorized Items - ntb-20221
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |