Butterfield (NTB, Financial) has announced its financial results for the first quarter of 2025, reporting revenues of $148.2 million. This figure surpasses market expectations, which had been set at $140.96 million, indicating a strong start to the year for the financial institution.
The company credits its performance to a solid balance sheet, characterized by an expanding net interest margin and higher net interest income. Butterfield has also emphasized its commitment to maintaining stable core efficiency and effective capital management. These factors are seen as vital in providing long-term value to clients, communities, and shareholders, even amidst fluctuating economic and interest rate environments.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for Bank of N.T Butterfield & Son Ltd (NTB, Financial) is $44.50 with a high estimate of $46.00 and a low estimate of $44.00. The average target implies an upside of 16.19% from the current price of $38.30. More detailed estimate data can be found on the Bank of N.T Butterfield & Son Ltd (NTB) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, Bank of N.T Butterfield & Son Ltd's (NTB, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Bank of N.T Butterfield & Son Ltd (NTB, Financial) in one year is $38.34, suggesting a upside of 0.1% from the current price of $38.3. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Bank of N.T Butterfield & Son Ltd (NTB) Summary page.
Key Business Developments
Release Date: February 11, 2025
- Net Income: $216.3 million for the full year 2024; $59.6 million for Q4 2024.
- Core Net Income: $218.9 million for the full year 2024; $59.6 million for Q4 2024.
- Core Return on Average Tangible Common Equity: 24% for the full year 2024; 25.2% for Q4 2024.
- Net Interest Margin: 2.64% for the full year 2024; 2.61% for Q4 2024.
- Cost of Deposits: 183 basis points for the full year 2024; 173 basis points for Q4 2024.
- Tangible Book Value per Common Share: Increased 12.5% to $21.70 at year-end 2024.
- Share Repurchase: Approximately 4.5 million shares repurchased at $155.3 million total value in 2024; 1.3 million shares repurchased at an average price of $37.42 per share in Q4 2024.
- Quarterly Cash Dividend: $0.44 per share approved for Q4 2024.
- Net Interest Income: $88.6 million for Q4 2024.
- Non-Interest Income: $63.2 million for Q4 2024, up 12.9% from the prior quarter.
- Core Non-Interest Expenses: $190.6 million for Q4 2024, a 2.2% increase from the prior quarter.
- Average Deposit Balance: $12.5 billion for Q4 2024.
- Loan Portfolio: Residential mortgage loans represent 68% of total loan assets.
- Non-Accrual Loans: 1.7% of gross loans.
- Charge Off Ratio: 4 basis points.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bank of N.T Butterfield & Son Ltd (NTB, Financial) reported strong financial performance in 2024 with a net income of $216.3 million and a core return on average tangible common equity of 24%.
- The company achieved a stable net interest margin in the fourth quarter, supported by lower funding costs and higher non-interest income.
- Tangible book value per common share increased by 12.5% to $21.70, reflecting strong capital management.
- The bank's diversified income streams, including wealth management and specialized financial services, contributed to its robust performance.
- Butterfield's balance sheet remains conservatively managed with a low risk density of 32% and strong asset quality, including a 99% AA-rated investment portfolio.
Negative Points
- Net interest margin decreased to 2.64% in 2024 from 2.80% in 2023, indicating pressure on interest income.
- The cost of deposits rose to 183 basis points from 140 basis points in 2023, impacting profitability.
- Non-interest expenses increased by 2.2% in the fourth quarter, driven by higher marketing and professional services costs.
- The bank anticipates continued inflationary pressures on salaries and expenses in 2025.
- There is potential downward pressure on net interest income due to expected deposit outflows and lower yields on cash and short-term securities.
