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

Good morning. My name is Matt, and I will be your conference operator today. At this time, I would like to welcome everyone to the fourth quarter and full year 2021 earnings call for the Bank of N.T. Butterfield & Son 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 1 on a touchtone phone. To withdraw your question, please press star then 2. 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 fourth quarter and full year 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 fourth quarter and full year results. The press release and 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. To 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. I am pleased with Butterfield's performance over the past year, both in terms of our strong financial results and our continued development as a leading offshore bank and trust company. In Bermuda and the Cayman Islands, we benefited from our market-leading bank and trust businesses while we continue to grow our product offerings in the Channel Islands, specifically Guernsey and Jersey. These locations are complemented by our private trust platforms in the Bahamas, Switzerland, Singapore, and in the United Kingdom, where we provide mortgage lending in high-end central London. The businesses are supported by our service centers in Canada and Mauritius, which have once again helped drive improvement in operating efficiency. Along with the rest of the world, Butterfield's island jurisdictions faced health and safety challenges related to the COVID-19 pandemic. Through various quarantines and work from home mandates, Butterfield continued to provide safe and uninterrupted services to our customers. Our Cayman Islands business had strong deposit and loan growth in 2021 and now represents our fastest growth sector. The resilience of our island jurisdictions was evident in our credit book, which had a net credit release of $3.1 million in 2021, reflecting lower levels of non-performing loans and an improved economic outlook. Turning now to slide four, I am pleased to report another year of excellent financial results with net income of $163 million and core net income of $164 million, or $3.28 per diluted share. This translates to a return on common equity of 16.8% and core return on tangible common equity of 18.7%. Net income and core net income are up year over year, 10.5% and 5.9% respectively. These results reflect the market-leading position in banking and wealth and the strength of our fee-based businesses, which helped offset some of the impact of continued low interest rates. For the full year, Butterfield's net interest margin was 2.02%, with our cost of deposits at 11 basis points. We remain committed to actively managing our capital. Our strong earnings and ROEs allowed us to pay out quarterly dividends totaling $1.76 per share, or approximately 54% of net income for the year, and we continue to target a through-cycle dividend payout ratio of approximately 50%. In addition, we repurchased over half a million shares at an average price of $36.93. I am also pleased to announce that the Board has authorized a new share repurchase plan of up to 2 million shares for 2022. I will now turn the call over to Michael Scrum to provide an overview of results for the fourth quarter.