Bank of N.T. Butterfield & Son Limited (The)

Good morning. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to the first quarter 2021 earnings call for the Bank of N.T. Butterfield & Sons Limited. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your touchtone phone. If you would like to withdraw from the question queue, please press star then 2. Please note this event is being recorded. I would now like to turn the call over to Noah Fields, Butterfield's Head of Investor Relations.

Thank you. Good morning, everyone, and thank you for joining us. Today, we will be reviewing Butterfield's first quarter 2021 financial results. On the call, I'm joined by Butterfield's chairman and chief executive officer, Michael Collins, and chief financial officer, Michael Scrum. Following their prepared remarks, we will open the call up for a question and answer session. Yesterday afternoon, we issued a press release announcing our first quarter results. The press release and financial statements, along with a slide presentation that we will refer to during our remarks on this call, are available on the investor relations section of our website at www.butterfieldgroup.com. Before I turn the call over to Michael Collins, I would like to remind everyone that today's discussions will refer to certain non-GAAP measures, which we believe are important in evaluating the company's performance. Please note that in the first quarter of 2021, we did not record any non-core items. As a result, any references to prior period core results are comparable to US GAAP results in the first quarter of 2021. For reconciliation of any non-GAAP measures to US GAAP, please refer to the earnings press release and slide presentation. Today's call and associated materials may also contain certain forward-looking statements which are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those contemplated by these statements. On slide 25 of the presentation, we've also included a list of potential factors relevant to the implications of COVID-19 for the bank. Additional information regarding these risks can be found in our SEC filings. I will now turn the call over to Michael Collins.

Thank you, Noah, and thanks to everyone joining the call today. During the first quarter of 2021, Butterfield continued to achieve strong operating results and delivered high returns with an actively managed low-risk profile. We provide market-leading financial products and services to clients seeking banking, wealth management, trust, and custody services in our primary markets of Bermuda, Cayman, and the Channel Islands. where we have longstanding, significant, and stable market shares. We also deliver trust and wealth management services through our offices in Singapore, Switzerland, and the Bahamas. In the United Kingdom, we offer mortgages to high net worth clients with properties in prime central London. As you will see on slide four, Butterfield continues to report strong results with net income and core net income of $41.6 million, or 83 cents per share, and a return on tangible common equity of 19.3%. We had stable net interest income and fees with improving expense trends. Based on an improved economic forecast and steady loan performance, we had a credit reserve release of $1.5 million in the first quarter of 2021 compared to a recovery of $2.4 million in the prior quarter and a provision of $5.2 million in the first quarter of last year. We are encouraged by the improving economic and interest rate outlook across our operating jurisdictions as we emerge from the COVID-19 pandemic. We will continue to work with a small number of borrowing customers to help them find solutions to any challenges they may face. So far, our credit portfolios have shown a high degree of resilience during a difficult operating environment. The Board of Directors again declared the $0.44 per share dividend which is consistent with our capital management philosophy of supporting a sustainable quarterly cash dividend with consideration for both organic and inorganic growth, as well as share repurchases. We continue to target a through cycle dividend payout ratio of approximately 50% with flexibility around share buybacks, depending on market conditions and potential M&A opportunities. I will now turn the call over to Michael Scrum to provide more details on the first quarter.