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

Good morning. My name is Chuck, and I'll be your conference operator today. At this time, I would like to welcome everyone to the second quarter 2021 earnings call for the Bank of N.T. Butterfield and Sun Limited. All participants will be in a 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 one on your touchtone phone. And to withdraw your question, please press star then two. I would now like to turn the conference over to Mr. Noah Fields, Butterfield's Head of Investor Relations. Please go ahead, sir.

Thank you. Good morning, everyone, and thank you for joining us. Today, we will be reviewing Butterfield's second 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 second 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. For a reconciliation of these measures to U.S. 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. 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. Butterfield continues to produce strong financial results during the second quarter of 2021 with profitable and longstanding core banking and wealth management businesses in Bermuda, the Cayman Islands, and the Channel Islands, as well as Singapore, the UK, the Bahamas, and Switzerland, where we offer a variety of specialized financial services and products. All of our operating jurisdictions fared reasonably well during the pandemic. Despite the closure of airports and sea borders, which is a testament to the resilience and strong domestic economies of the small island nations where we operate. International businesses in our jurisdictions were largely unaffected due to the success of remote working models. This backdrop has aided us in our efforts to keep banking services open and available and to continue to produce long-term growth. I will now turn to slide four where we provide a summary of second quarter highlights. Butterfield reported net income for the second quarter of $39.6 million, or 79 cents per diluted common share, and core net income of $40.1 million, or 80 cents per diluted common share. This resulted in a core return on average tangible common equity of 18.7%, despite a sustained low interest rate environment. Our credit portfolio has performed well, and in the second quarter, we had a credit provision release of $1 million, primarily due to an improved economic forecast. The Board of Directors again declared the $0.44 per share dividend, which is in line with our target through-cycle dividend payout ratio of approximately 50%, with flexibility around share buybacks, depending on market conditions and potential M&A opportunities. We continue to evaluate potential acquisition targets in private trusts, wealth management, and banking. As we have stated previously, from the point of initial discussions, these deals can take nine months to a year before they are announced. I cannot offer a specific timeline at the moment, but can say that M&A growth remains a priority for us, and we are committed to pursuing deals that meet our strategic and financial goals. I will now turn the call over to Michael Scrum to provide more details on the second quarter.