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

Good morning. My name is Tom, and I will be your conference operator today. At this time, I would like to welcome everyone to the third quarter 2021 earnings call for the Bank of N.T. Butterfield & Son Limited. Should you need assistance, please signal a conference specialist by pressing star, then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Noah Fields, Butterfield's Head of Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us. Today, we will be reviewing Butterfield's third quarter 2021 financial results. On the call, I am 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 third 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 different 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's results in the third quarter of 2021 continue to demonstrate the bank's earnings power and resilience in an ultra-low interest rate environment and health and credit uncertainty in most of our markets. So far in 2021, Butterfield has performed really well through a difficult period in our small and wealthy island market. During the recent fourth COVID wave, people and businesses were better prepared and have learned to live with it. We anticipate this to continue, and since our local economy is taking on more of a business as usual approach, without the need for further economy-wide lockdowns. I will turn now to slide four, where we provide a summary of third quarter highlights. Butterfield reported net income for the third quarter of $39.8 million, or $0.80 per diluted common share, and core net income of $40 million, or $0.80 per diluted common share. This represented a core return on average tangible common equity of 17.9%. The Board of Directors maintained a $0.44 per share dividend rate, which reflects the stability of our earnings and targets a through-cycle dividend payout ratio. of approximately 50%. In addition to the quarterly cash dividend, we continue to evaluate share repurchases and utilize our share buyback authorization as part of our broader capital management program. Opportunities for organic growth, such as the Channel Islands mortgage product and M&A pipeline also remain important factors. During the third quarter, the bank reached a resolution with the United States Department of Justice concerning the inquiry into Butterfield's legacy business with U.S. clients that was first reported in November 2013. The resolution is in the form of a non-prosecution agreement with a three-year term. The bank paid $5.6 million in respect of forfeiture and tax restitution amounts, which were in line with the provision that was included in the bank's financial statements as recorded in 2015 and 2016. While we are required to comply with obligations under the non-prosecution agreement, we are pleased to have this investigation resolved. I will now turn the call over to Michael Scrum to provide more details on the third quarter.