Date: July 31, 2023 | THE BANK OF N.T. BUTTERFIELD & SON LIMITED | |||||||
By: | /s/ Shaun Morris | |||||||
Name: | Shaun Morris | |||||||
Title: | General Counsel and Group Chief Legal Officer |
2 | ||
Exhibit | Description | |||||||
Earnings release - Second quarter 2023 results |
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Financial Statements - Second quarter 2023 results |
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Earnings call presentation - Second quarter 2023 results |
3 | ||
Income statement | Three months ended (Unaudited) | |||||||||||||||||||
(in $ millions) | June 30, 2023 | March 31, 2023 | June 30, 2022 | |||||||||||||||||
Non-interest income | 50.2 | 50.2 | 51.8 | |||||||||||||||||
Net interest income before provision for credit losses | 92.5 | 97.4 | 82.0 | |||||||||||||||||
Total net revenue before provision for credit losses and other gains (losses) | 142.6 | 147.5 | 133.8 | |||||||||||||||||
Provision for credit (losses) recoveries | (1.5) | (0.7) | (0.7) | |||||||||||||||||
Total other gains (losses) | 4.0 | 0.1 | 0.1 | |||||||||||||||||
Total net revenue | 145.1 | 147.0 | 133.2 | |||||||||||||||||
Non-interest expenses | (83.5) | (84.1) | (83.0) | |||||||||||||||||
Total net income before taxes | 61.5 | 62.9 | 50.2 | |||||||||||||||||
Income tax benefit (expense) | (0.5) | (0.7) | (1.1) | |||||||||||||||||
Net income | 61.0 | 62.2 | 49.1 | |||||||||||||||||
Net earnings per share | ||||||||||||||||||||
Basic |
1.23 | 1.25 | 0.99 | |||||||||||||||||
Diluted |
1.22 | 1.24 | 0.99 | |||||||||||||||||
Per diluted share impact of other non-core items 1 |
(0.08) | — | 0.02 | |||||||||||||||||
Core earnings per share on a fully diluted basis 1 |
1.14 | 1.24 | 1.01 | |||||||||||||||||
Adjusted weighted average number of participating shares on a fully diluted basis (in thousands of shares) |
49,890 | 50,131 | 49,772 | |||||||||||||||||
Key financial ratios | ||||||||||||||||||||
Return on common equity | 25.9 | % | 28.0 | % | 24.5 | % | ||||||||||||||
Core return on average tangible common equity 1 |
26.3 | % | 30.5 | % | 27.8 | % | ||||||||||||||
Return on average assets |
1.8 | % | 1.8 | % | 1.3 | % | ||||||||||||||
Net interest margin | 2.83 | % | 2.88 | % | 2.26 | % | ||||||||||||||
Core efficiency ratio 1 |
57.6 | % | 56.0 | % | 60.2 | % |
Balance Sheet | As at | |||||||||||||
(in $ millions) | June 30, 2023 | December 31, 2022 | ||||||||||||
Cash and cash equivalents | 1,795 | 2,101 | ||||||||||||
Securities purchased under agreements to resell | 60 | 60 | ||||||||||||
Short-term investments | 670 | 884 | ||||||||||||
Investments in securities | 5,546 | 5,727 | ||||||||||||
Loans, net of allowance for credit losses | 5,003 | 5,096 | ||||||||||||
Premises, equipment and computer software, net | 153 | 146 | ||||||||||||
Goodwill and intangibles, net | 74 | 74 | ||||||||||||
Accrued interest and other assets | 208 | 217 | ||||||||||||
Total assets | 13,510 | 14,306 | ||||||||||||
Total deposits | 12,192 | 12,991 | ||||||||||||
Accrued interest and other liabilities | 269 | 278 | ||||||||||||
Long-term debt | 98 | 172 | ||||||||||||
Total liabilities | 12,559 | 13,441 | ||||||||||||
Common shareholders’ equity | 950 | 865 | ||||||||||||
Total shareholders' equity | 950 | 865 | ||||||||||||
Total liabilities and shareholders' equity | 13,510 | 14,306 | ||||||||||||
Key Balance Sheet Ratios: | June 30, 2023 | December 31, 2022 | ||||||||||||
Common equity tier 1 capital ratio1 |
22.7 | % | 20.3 | % | ||||||||||
Tier 1 capital ratio1 |
22.7 | % | 20.3 | % | ||||||||||
Total capital ratio1 |
25.1 | % | 24.1 | % | ||||||||||
Leverage ratio1 |
7.6 | % | 6.7 | % | ||||||||||
Risk-Weighted Assets (in $ millions) | 4,628 | 4,843 | ||||||||||||
Risk-Weighted Assets / total assets | 34.3 | % | 33.9 | % | ||||||||||
Tangible common equity ratio | 6.5 | % | 5.6 | % | ||||||||||
Book value per common share (in $) | 19.34 | 17.42 | ||||||||||||
Tangible book value per share (in $) | 17.83 | 15.92 | ||||||||||||
Non-accrual loans/gross loans | 1.2 | % | 1.2 | % | ||||||||||
Non-performing assets/total assets | 0.7 | % | 0.5 % | |||||||||||
Allowance for credit losses/total loans | 0.5 | % | 0.5 | % | ||||||||||
For the three months ended | |||||||||||||||||||||||||||||||||||
June 30, 2023 | March 31, 2023 | June 30, 2022 | |||||||||||||||||||||||||||||||||
(in $ millions) |
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Assets | |||||||||||||||||||||||||||||||||||
Cash and cash equivalents and short-term investments | 2,488.2 | 25.2 | 4.06 | 2,943.9 | 27.1 | 3.74 | 3,364.5 | 4.2 | 0.50 | ||||||||||||||||||||||||||
Investment in securities | 5,614.7 | 28.9 | 2.07 | 5,720.2 | 29.8 | 2.12 | 6,143.9 | 29.0 | 1.89 | ||||||||||||||||||||||||||
Available-for-sale | 1,970.7 | 8.8 | 1.78 | 2,005.6 | 8.9 | 1.80 | 2,759.9 | 9.6 | 1.40 | ||||||||||||||||||||||||||
Held-to-maturity | 3,644.0 | 20.2 | 2.22 | 3,714.6 | 20.9 | 2.28 | 3,384.0 | 19.3 | 2.29 | ||||||||||||||||||||||||||
Loans | 4,984.1 | 79.8 | 6.42 | 5,040.7 | 77.5 | 6.23 | 5,066.9 | 56.5 | 4.48 | ||||||||||||||||||||||||||
Commercial | 1,396.7 | 23.0 | 6.59 | 1,409.8 | 22.6 | 6.51 | 1,455.3 | 17.3 | 4.76 | ||||||||||||||||||||||||||
Consumer | 3,587.4 | 56.8 | 6.35 | 3,630.9 | 54.9 | 6.13 | 3,611.6 | 39.3 | 4.36 | ||||||||||||||||||||||||||
Interest earning assets | 13,087.0 | 133.9 | 4.10 | 13,704.7 | 134.5 | 3.98 | 14,575.4 | 89.7 | 2.47 | ||||||||||||||||||||||||||
Other assets | 402.0 | 395.9 | 359.1 | ||||||||||||||||||||||||||||||||
Total assets | 13,489.0 | 14,100.7 | 14,934.5 | ||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Deposits | 9,308.0 | (38.5) | (1.66) | 9,786.5 | (34.7) | (1.44) | 10,590.3 | (5.4) | (0.20) | ||||||||||||||||||||||||||
Securities sold under agreement to repurchase | 0.4 | — | (5.45) | 0.4 | — | (4.50) | — | — | — | ||||||||||||||||||||||||||
Long-term debt | 147.4 | (2.9) | (8.02) | 172.3 | (2.4) | (5.65) | 172.0 | (2.4) | (5.60) | ||||||||||||||||||||||||||
Interest bearing liabilities | 9,455.8 | (41.4) | (1.76) | 9,959.2 | (37.1) | (1.51) | 10,762.3 | (7.8) | (0.29) | ||||||||||||||||||||||||||
Non-interest bearing current accounts | 2,863.2 | 2,993.5 | 2,997.8 | ||||||||||||||||||||||||||||||||
Other liabilities | 243.6 | 241.1 | 300.8 | ||||||||||||||||||||||||||||||||
Total liabilities | 12,562.6 | 13,193.7 | 14,061.0 | ||||||||||||||||||||||||||||||||
Shareholders’ equity | 926.4 | 906.9 | 873.6 | ||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | 13,489.0 | 14,100.7 | 14,934.5 | ||||||||||||||||||||||||||||||||
Non-interest bearing funds net of non-interest earning assets (free balance) |
3,631.2 | 3,745.6 | 3,813.1 | ||||||||||||||||||||||||||||||||
Net interest margin | 92.5 | 2.83 | 97.4 | 2.88 | 82.0 | 2.26 |
Core Earnings | Three months ended | ||||||||||||||||
(in $ millions except per share amounts) | June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||||||||||||
Net income | 61.0 | 62.2 | 49.1 | ||||||||||||||
Non-core items | |||||||||||||||||
Non-core (gains) losses | |||||||||||||||||
Liquidation settlement from an investment previously written-off |
(4.0) | — | — | ||||||||||||||
Total non-core (gains) losses | (4.0) | — | — | ||||||||||||||
Non-core expenses | |||||||||||||||||
Early retirement program, voluntary separation, redundancies and other non-core compensation costs | — | — | 1.0 | ||||||||||||||
Total non-core expenses | — | — | 1.1 | ||||||||||||||
Total non-core items | (4.0) | — | 1.1 | ||||||||||||||
Core net income | 57.0 | 62.2 | 50.2 | ||||||||||||||
Average common equity | 943.3 | 902.5 | 804.6 | ||||||||||||||
Less: average goodwill and intangible assets | (74.0) | (74.2) | (80.0) | ||||||||||||||
Average tangible common equity | 869.3 | 828.3 | 724.6 | ||||||||||||||
Core earnings per share fully diluted | 1.14 | 1.24 | 1.01 | ||||||||||||||
Return on common equity | 25.9 | % | 28.0 | % | 24.5 | % | |||||||||||
Core return on average tangible common equity | 26.3 | % | 30.5 | % | 27.8 | % | |||||||||||
Shareholders' equity | 950.3 | 936.9 | 802.4 | ||||||||||||||
Less: goodwill and intangible assets | (74.0) | (74.1) | (77.5) | ||||||||||||||
Tangible common equity | 876.3 | 862.8 | 725.0 | ||||||||||||||
Basic participating shares outstanding (in millions) | 49.1 | 49.8 | 49.6 | ||||||||||||||
Tangible book value per common share | 17.83 | 17.32 | 14.61 | ||||||||||||||
Non-interest expenses | 83.5 | 84.1 | 83.0 | ||||||||||||||
Less: non-core expenses | — | — | (1.1) | ||||||||||||||
Less: amortization of intangibles | (1.4) | (1.4) | (1.4) | ||||||||||||||
Core non-interest expenses before amortization of intangibles | 82.1 | 82.7 | 80.5 | ||||||||||||||
Core revenue before other gains and losses and provision for credit losses | 142.6 | 147.5 | 133.8 | ||||||||||||||
Core efficiency ratio | 57.6 | % | 56.0 | % | 60.2 | % |
Unaudited Consolidated Financial Statements | Page | ||||
Consolidated Balance Sheets (unaudited) as of June 30, 2023 and December 31, 2022 |
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Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2023 and 2022 |
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Consolidated Statements of Comprehensive Income (unaudited) for the Three and Six Months Ended June 30, 2023 and 2022 |
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Consolidated Statements of Changes in Shareholders’ Equity (unaudited) for the Three and Six Months Ended June 30, 2023 and 2022 |
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Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2023 and 2022 |
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Notes to the Consolidated Financial Statements (unaudited) |
As at | ||||||||
June 30, 2023 | December 31, 2022 | |||||||
Assets | ||||||||
Cash and demand deposits with banks - Non-interest bearing | 93,495 | 93,032 | ||||||
Demand deposits with banks - Interest bearing | 172,684 | 258,239 | ||||||
Cash equivalents - Interest bearing | 1,528,675 | 1,749,516 | ||||||
Cash and cash equivalents | 1,794,854 | 2,100,787 | ||||||
Securities purchased under agreements to resell | 59,693 | 59,871 | ||||||
Short-term investments | 669,714 | 884,478 | ||||||
Investment in securities | ||||||||
Equity securities at fair value | — | 236 | ||||||
Available-for-sale at fair value (amortized cost: $2,156,855 (2022: $2,209,078)) | 1,949,560 | 1,988,865 | ||||||
Held-to-maturity (fair value: $3,077,037 (2022: $3,197,508)) | 3,596,889 | 3,738,080 | ||||||
Total investment in securities | 5,546,449 | 5,727,181 | ||||||
Loans | ||||||||
Loans | 5,029,487 | 5,121,391 | ||||||
Allowance for credit losses | (26,008) | (24,961) | ||||||
Loans, net of allowance for credit losses | 5,003,479 | 5,096,430 | ||||||
Premises, equipment and computer software, net | 152,919 | 146,141 | ||||||
Goodwill | 23,948 | 22,892 | ||||||
Other intangible assets, net | 50,051 | 51,478 | ||||||
Equity method investments | 7,293 | 12,484 | ||||||
Other real estate owned, net | 1,165 | 800 | ||||||
Accrued interest and other assets | 199,966 | 203,520 | ||||||
Total assets | 13,509,531 | 14,306,062 | ||||||
Liabilities | ||||||||
Deposits | ||||||||
Non-interest bearing | 2,838,416 | 3,039,701 | ||||||
Interest bearing | 9,353,636 | 9,951,375 | ||||||
Total deposits | 12,192,052 | 12,991,076 | ||||||
Employee benefit plans | 92,567 | 92,018 | ||||||
Accrued interest and other liabilities | 176,262 | 185,864 | ||||||
Total other liabilities | 268,829 | 277,882 | ||||||
Long-term debt | 98,372 | 172,289 | ||||||
Total liabilities | 12,559,253 | 13,441,247 | ||||||
Commitments, contingencies and guarantees (Note 10) | ||||||||
Shareholders' equity | ||||||||
Common share capital (BMD 0.01 par; authorized voting ordinary shares 2,000,000,000 and
non-voting ordinary shares 6,000,000,000) issued and outstanding: 49,757,131 (2022: 50,277,466)
|
498 | 503 | ||||||
Additional paid-in capital | 1,024,846 | 1,032,632 | ||||||
Retained earnings (Accumulated deficit) | 300,375 | 229,732 | ||||||
Less: treasury common shares, at cost: 619,212 (2022: 619,212) | (17,651) | (20,600) | ||||||
Accumulated other comprehensive income (loss) | (357,790) | (377,452) | ||||||
Total shareholders’ equity | 950,278 | 864,815 | ||||||
Total liabilities and shareholders’ equity | 13,509,531 | 14,306,062 | ||||||
Three months ended | Six months ended | |||||||||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||
Non-interest income | ||||||||||||||
Asset management | 8,228 | 7,410 | 16,166 | 14,881 | ||||||||||
Banking | 12,553 | 12,919 | 26,153 | 25,596 | ||||||||||
Foreign exchange revenue | 11,283 | 12,044 | 21,995 | 24,477 | ||||||||||
Trust | 14,257 | 13,266 | 27,095 | 26,004 | ||||||||||
Custody and other administration services | 3,327 | 3,338 | 6,663 | 6,928 | ||||||||||
Other non-interest income | 502 | 2,834 | 2,263 | 3,845 | ||||||||||
Total non-interest income | 50,150 | 51,811 | 100,335 | 101,731 | ||||||||||
Interest income | ||||||||||||||
Interest and fees on loans | 79,785 | 56,542 | 157,273 | 110,598 | ||||||||||
Investments (none of the investment securities are intrinsically tax-exempt) | ||||||||||||||
Available-for-sale | 8,758 | 9,637 | 17,666 | 21,505 | ||||||||||
Held-to-maturity | 20,172 | 19,340 | 41,093 | 34,903 | ||||||||||
Cash and cash equivalents, securities purchased under agreements to resell and short-term investments | 25,203 | 4,219 | 52,341 | 5,256 | ||||||||||
Total interest income | 133,918 | 89,738 | 268,373 | 172,262 | ||||||||||
Interest expense | ||||||||||||||
Deposits | 38,489 | 5,368 | 73,185 | 9,625 | ||||||||||
Long-term debt | 2,949 | 2,401 | 5,349 | 4,801 | ||||||||||
Securities sold under agreement to repurchase | 5 | — | 9 | — | ||||||||||
Total interest expense | 41,443 | 7,769 | 78,543 | 14,426 | ||||||||||
Net interest income before provision for credit losses | 92,475 | 81,969 | 189,830 | 157,836 | ||||||||||
Provision for credit (losses) recoveries | (1,527) | (690) | (2,198) | 10 | ||||||||||
Net interest income after provision for credit losses | 90,948 | 81,279 | 187,632 | 157,846 | ||||||||||
Net gains (losses) on equity securities | (7) | 42 | 43 | (14) | ||||||||||
Net realized gains (losses) on available-for-sale investments | (3) | — | (11) | — | ||||||||||
Net gains (losses) on other real estate owned | (30) | 65 | 29 | 39 | ||||||||||
Net other gains (losses) | 4,006 | (29) | 4,015 | 856 | ||||||||||
Total other gains (losses) | 3,966 | 78 | 4,076 | 881 | ||||||||||
Total net revenue | 145,064 | 133,168 | 292,043 | 260,458 | ||||||||||
Non-interest expense | ||||||||||||||
Salaries and other employee benefits | 41,192 | 41,336 | 83,523 | 81,419 | ||||||||||
Technology and communications | 14,895 | 14,012 | 28,824 | 28,116 | ||||||||||
Professional and outside services | 4,760 | 5,426 | 9,793 | 10,484 | ||||||||||
Property | 7,502 | 7,576 | 14,938 | 15,491 | ||||||||||
Indirect taxes | 5,296 | 5,468 | 11,043 | 11,407 | ||||||||||
Non-service employee benefits expense | 1,397 | 940 | 2,795 | 1,865 | ||||||||||
Marketing | 1,695 | 1,610 | 3,198 | 3,091 | ||||||||||
Amortization of intangible assets | 1,436 | 1,405 | 2,854 | 2,884 | ||||||||||
Other expenses | 5,375 | 5,211 | 10,686 | 10,191 | ||||||||||
Total non-interest expense | 83,548 | 82,984 | 167,654 | 164,948 | ||||||||||
Net income before income taxes | 61,516 | 50,184 | 124,389 | 95,510 | ||||||||||
Income tax benefit (expense) | (516) | (1,055) | (1,185) | (2,030) | ||||||||||
Net income | 61,000 | 49,129 | 123,204 | 93,480 | ||||||||||
Earnings per common share | ||||||||||||||
Basic earnings per share | 1.23 | 0.99 | 2.48 | 1.89 | ||||||||||
Diluted earnings per share | 1.22 | 0.99 | 2.47 | 1.88 | ||||||||||
Three months ended | Six months ended | |||||||||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||
Net income | 61,000 | 49,129 | 123,204 | 93,480 | ||||||||||
Other comprehensive income (loss), net of taxes | ||||||||||||||
Unrealized net gains (losses) on translation of net investment in foreign operations |
400 | (3,084) | 356 | (4,083) | ||||||||||
Net changes on investments transferred to held-to-maturity |
2,604 | (51,148) | 4,631 | (96,940) | ||||||||||
Unrealized net gains (losses) on available-for-sale investments | (15,758) | (18,404) | 14,058 | (130,109) | ||||||||||
Employee benefit plans adjustments | 299 | 1,748 | 617 | 2,609 | ||||||||||
Other comprehensive income (loss), net of taxes | (12,455) | (70,888) | 19,662 | (228,523) | ||||||||||
Total comprehensive income (loss) | 48,545 | (21,759) | 142,866 | (135,043) |
Three months ended | Six months ended | |||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||||||||||||
Number of shares | In thousands of US dollars |
Number of shares | In thousands of US dollars |
Number of shares | In thousands of US dollars |
Number of shares | In thousands of US dollars |
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Common share capital issued and outstanding | ||||||||||||||||||||||||||
Balance at beginning of period | 50,447,997 | 504 | 50,211,963 | 502 | 50,277,466 | 503 | 49,911,351 | 499 | ||||||||||||||||||
Retirement of shares | (723,066) | (7) | — | — | (867,995) | (9) | (102,000) | (1) | ||||||||||||||||||
Issuance of common shares | 32,200 | 1 | 36,927 | — | 347,660 | 4 | 439,539 | 4 | ||||||||||||||||||
Balance at end of period | 49,757,131 | 498 | 50,248,890 | 502 | 49,757,131 | 498 | 50,248,890 | 502 | ||||||||||||||||||
Additional paid-in capital | ||||||||||||||||||||||||||
Balance at beginning of period | 1,035,074 | 1,018,876 | 1,032,632 | 1,017,640 | ||||||||||||||||||||||
Share-based compensation | 5,013 | 3,626 | 9,486 | 6,946 | ||||||||||||||||||||||
Share-based settlements | 512 | 595 | 535 | 595 | ||||||||||||||||||||||
Retirement of shares | (15,752) | — | (17,803) | (2,080) | ||||||||||||||||||||||
Issuance of common shares, net of underwriting discounts and commissions |
(1) | — | (4) | (4) | ||||||||||||||||||||||
Balance at end of period | 1,024,846 | 1,023,097 | 1,024,846 | 1,023,097 | ||||||||||||||||||||||
Retained earnings (Accumulated deficit) | ||||||||||||||||||||||||||
Balance at beginning of period | 267,169 | 125,573 | 229,732 | 104,329 | ||||||||||||||||||||||
Net Income for the period | 61,000 | 49,129 | 123,204 | 93,480 | ||||||||||||||||||||||
Common share cash dividends declared and paid, $0.44 and $0.88 per share (2022: $0.44 and $0.88 per share) |
(21,849) | (21,822) | (43,824) | (43,655) | ||||||||||||||||||||||
Retirement of shares | (5,945) | — | (8,737) | (1,274) | ||||||||||||||||||||||
Balance at end of period | 300,375 | 152,880 | 300,375 | 152,880 | ||||||||||||||||||||||
Treasury common shares | ||||||||||||||||||||||||||
Balance at beginning of period | 619,212 | (20,511) | 619,212 | (20,600) | 619,212 | (20,600) | 619,212 | (20,058) | ||||||||||||||||||
Purchase of treasury common shares | 723,066 | (18,844) | — | — | 867,995 | (23,600) | 102,000 | (3,897) | ||||||||||||||||||
Retirement of shares | (723,066) | 21,704 | — | — | (867,995) | 26,549 | (102,000) | 3,355 | ||||||||||||||||||
Balance at end of period | 619,212 | (17,651) | 619,212 | (20,600) | 619,212 | (17,651) | 619,212 | (20,600) | ||||||||||||||||||
Accumulated other comprehensive income (loss) | ||||||||||||||||||||||||||
Balance at beginning of period | (345,335) | (282,552) | (377,452) | (124,917) | ||||||||||||||||||||||
Other comprehensive income (loss), net of taxes |
(12,455) | (70,888) | 19,662 | (228,523) | ||||||||||||||||||||||
Balance at end of period | (357,790) | (353,440) | (357,790) | (353,440) | ||||||||||||||||||||||
Total shareholders' equity | 950,278 | 802,439 | 950,278 | 802,439 |
Six months ended | ||||||||
June 30, 2023 | June 30, 2022 | |||||||
Cash flows from operating activities | ||||||||
Net income | 123,204 | 93,480 | ||||||
Adjustments to reconcile net income to operating cash flows | ||||||||
Depreciation and amortization | 17,762 | 21,386 | ||||||
Provision for credit losses (recoveries) | 2,198 | (10) | ||||||
Share-based payments and settlements | 10,021 | 7,541 | ||||||
Net change in equity securities at fair value | 236 | 14 | ||||||
Net realized (gains) losses on available-for-sale investments | 11 | — | ||||||
Net (gains) losses on other real estate owned | (29) | (39) | ||||||
(Increase) decrease in carrying value of equity method investments | 10 | 222 | ||||||
Dividends received from equity method investments | 5,181 | 79 | ||||||
Net other non-cash movements | 1,089 | — | ||||||
Changes in operating assets and liabilities | ||||||||
(Increase) decrease in accrued interest receivable and other assets | 8,333 | (13,233) | ||||||
Increase (decrease) in employee benefit plans, accrued interest payable and other liabilities | (14,075) | (6,844) | ||||||
Cash provided by (used in) operating activities | 153,941 | 102,596 | ||||||
Cash flows from investing activities | ||||||||
(Increase) decrease in securities purchased under agreements to resell | 178 | (168,594) | ||||||
Short-term investments other than restricted cash: proceeds from maturities and sales | 1,247,780 | 1,545,871 | ||||||
Short-term investments other than restricted cash: purchases | (989,492) | (1,683,417) | ||||||
Available-for-sale investments: proceeds from sale | 4,539 | — | ||||||
Available-for-sale investments: proceeds from maturities and pay downs | 58,948 | 153,230 | ||||||
Available-for-sale investments: purchases | — | (34,443) | ||||||
Held-to-maturity investments: proceeds from maturities and pay downs | 139,589 | 227,850 | ||||||
Held-to-maturity investments: purchases | — | (343,107) | ||||||
Net (increase) decrease in loans | 193,174 | (111,142) | ||||||
Additions to premises, equipment and computer software | (14,993) | (13,226) | ||||||
Proceeds from sale of other real estate owned | — | 730 | ||||||
Cash provided by (used in) investing activities | 639,723 | (426,248) | ||||||
Cash flows from financing activities | ||||||||
Net increase (decrease) in deposits | (972,869) | (364,716) | ||||||
Repayment of long-term debt | (75,000) | — | ||||||
Common shares repurchased | (23,600) | (3,897) | ||||||
Cash dividends paid on common shares | (43,824) | (43,655) | ||||||
Cash provided by (used in) financing activities | (1,115,293) | (412,268) | ||||||
Net effect of exchange rates on cash, cash equivalents and restricted cash | 24,159 | (97,582) | ||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | (297,470) | (833,502) | ||||||
Cash, cash equivalents and restricted cash: beginning of period | 2,116,546 | 2,203,497 | ||||||
Cash, cash equivalents and restricted cash: end of period | 1,819,076 | 1,369,995 | ||||||
Components of cash, cash equivalents and restricted cash at end of period | ||||||||
Cash and cash equivalents | 1,794,854 | 1,339,503 | ||||||
Restricted cash included in short-term investments on the consolidated balance sheets | 24,222 | 30,492 | ||||||
Total cash, cash equivalents and restricted cash at end of period | 1,819,076 | 1,369,995 | ||||||
Supplemental disclosure of non-cash items | ||||||||
Transfer to (out of) other real estate owned | 336 | 773 | ||||||
Transfer of available-for-sale investments to held-to-maturity investments | — | 998,157 | ||||||
Initial recognition of right-of-use assets and operating lease liabilities | — | 138 | ||||||
June 30, 2023 | December 31, 2022 | |||||||
Non-interest bearing | ||||||||
Cash and demand deposits with banks | 93,495 | 93,032 | ||||||
Interest bearing¹ | ||||||||
Demand deposits with banks | 172,684 | 258,239 | ||||||
Cash equivalents | 1,528,675 | 1,749,516 | ||||||
Sub-total - Interest bearing | 1,701,359 | 2,007,755 | ||||||
Total cash and cash equivalents | 1,794,854 | 2,100,787 |
June 30, 2023 | December 31, 2022 | |||||||
Unrestricted | ||||||||
Maturing within three months | 358,510 | 390,540 | ||||||
Maturing between three to six months | 268,527 | 421,734 | ||||||
Maturing between six to twelve months | 18,455 | 56,445 | ||||||
Total unrestricted short-term investments | 645,492 | 868,719 | ||||||
Affected by drawing restrictions related to minimum reserve and derivative margin requirements | ||||||||
Interest earning demand and term deposits | 24,222 | 15,759 | ||||||
Total restricted short-term investments | 24,222 | 15,759 | ||||||
Total short-term investments | 669,714 | 884,478 |
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Amortized cost |
Gross unrealized gains |
Gross unrealized losses |
Fair value | Amortized cost |
Gross unrealized gains |
Gross unrealized losses |
Fair value | |||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
Mutual funds | — | — | — | — | 724 | — | (488) | 236 | ||||||||||||||||||
Total equity securities | — | — | — | — | 724 | — | (488) | 236 | ||||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||||
US government and federal agencies | 1,859,515 | — | (193,579) | 1,665,936 | 1,919,285 | 14 | (206,523) | 1,712,776 | ||||||||||||||||||
Non-US governments debt securities | 275,845 | — | (11,451) | 264,394 | 262,892 | — | (11,429) | 251,463 | ||||||||||||||||||
Asset-backed securities - Student loans | 1,090 | — | (3) | 1,087 | 5,640 | — | (14) | 5,626 | ||||||||||||||||||
Residential mortgage-backed securities | 20,405 | — | (2,262) | 18,143 | 21,261 | — | (2,261) | 19,000 | ||||||||||||||||||
Total available-for-sale | 2,156,855 | — | (207,295) | 1,949,560 | 2,209,078 | 14 | (220,227) | 1,988,865 | ||||||||||||||||||
Held-to-maturity¹ | ||||||||||||||||||||||||||
US government and federal agencies | 3,596,889 | — | (519,852) | 3,077,037 | 3,738,080 | — | (540,572) | 3,197,508 | ||||||||||||||||||
Total held-to-maturity | 3,596,889 | — | (519,852) | 3,077,037 | 3,738,080 | — | (540,572) | 3,197,508 |
Less than 12 months | 12 months or more | |||||||||||||||||||
June 30, 2023 | Fair value |
Gross unrealized losses |
Fair value |
Gross unrealized losses |
Total fair value |
Total gross unrealized losses |
||||||||||||||
Available-for-sale securities with unrealized losses | ||||||||||||||||||||
US government and federal agencies | 91,678 | (2,693) | 1,574,257 | (190,886) | 1,665,935 | (193,579) | ||||||||||||||
Non-US governments debt securities | — | — | 264,394 | (11,451) | 264,394 | (11,451) | ||||||||||||||
Asset-backed securities - Student loans | — | — | 1,087 | (3) | 1,087 | (3) | ||||||||||||||
Residential mortgage-backed securities | — | — | 18,144 | (2,262) | 18,144 | (2,262) | ||||||||||||||
Total available-for-sale securities with unrealized losses | 91,678 | (2,693) | 1,857,882 | (204,602) | 1,949,560 | (207,295) | ||||||||||||||
Held-to-maturity securities with unrealized losses | ||||||||||||||||||||
US government and federal agencies | 609,326 | (46,392) | 2,467,711 | (473,460) | 3,077,037 | (519,852) | ||||||||||||||
Less than 12 months | 12 months or more | |||||||||||||||||||
December 31, 2022 | Fair value |
Gross unrealized losses |
Fair value |
Gross unrealized losses |
Total fair value |
Total gross unrealized losses |
||||||||||||||
Available-for-sale securities with unrealized losses | ||||||||||||||||||||
US government and federal agencies | 713,462 | (68,016) | 995,154 | (138,507) | 1,708,616 | (206,523) | ||||||||||||||
Non-US governments debt securities | — | — | 251,463 | (11,429) | 251,463 | (11,429) | ||||||||||||||
Asset-backed securities - Student loans | — | — | 5,626 | (14) | 5,626 | (14) | ||||||||||||||
Residential mortgage-backed securities | 14,474 | (1,618) | 4,526 | (643) | 19,000 | (2,261) | ||||||||||||||
Total available-for-sale securities with unrealized losses | 727,936 | (69,634) | 1,256,769 | (150,593) | 1,984,705 | (220,227) | ||||||||||||||
Held-to-maturity securities with unrealized losses | ||||||||||||||||||||
US government and federal agencies | 1,462,005 | (142,228) | 1,735,504 | (398,344) | 3,197,509 | (540,572) | ||||||||||||||
Remaining term to maturity | |||||||||||||||||||||||
June 30, 2023 | Within 3 months |
3 to 12 months |
1 to 5 years |
5 to 10 years |
Over 10 years |
No specific or single maturity |
Carrying amount |
||||||||||||||||
Available-for-sale | |||||||||||||||||||||||
US government and federal agencies | 148,770 | 58,583 | 639,075 | — | — | 819,508 | 1,665,936 | ||||||||||||||||
Non-US governments debt securities | — | 176,491 | 87,903 | — | — | — | 264,394 | ||||||||||||||||
Asset-backed securities - Student loans | — | — | — | — | — | 1,087 | 1,087 | ||||||||||||||||
Residential mortgage-backed securities | — | — | — | — | — | 18,143 | 18,143 | ||||||||||||||||
Total available-for-sale | 148,770 | 235,074 | 726,978 | — | — | 838,738 | 1,949,560 | ||||||||||||||||
Held-to-maturity | |||||||||||||||||||||||
US government and federal agencies | — | — | — | — | — | 3,596,889 | 3,596,889 | ||||||||||||||||
June 30, 2023 | December 31, 2022 | |||||||||||||
Pledged Investments | Amortized cost |
Fair value |
Amortized cost |
Fair value |
||||||||||
Held-to-maturity | 40,295 | 33,991 | 32,938 | 24,991 |
Six months ended | ||||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | |||||||||||||||||||||||||
Sale proceeds | Gross realized gains | Gross realized (losses) |
Transfers to HTM | Sale proceeds |
Gross realized gains |
Gross realized (losses) |
Transfers to HTM1 |
|||||||||||||||||||
Asset-backed securities - Student loans | 4,539 | — | (11) | — | — | — | — | — | ||||||||||||||||||
US government and federal agencies | — | — | — | — | — | — | — | 998,157 | ||||||||||||||||||
Total | 4,539 | — | (11) | — | — | — | — | 998,157 |
June 30, 2023 | Pass | Special mention |
Substandard | Non-accrual | Total amortized cost | Allowance for expected credit losses | Total net loans | ||||||||||||||||||||||
Commercial loans | |||||||||||||||||||||||||||||
Government | 276,433 | — | — | — | 276,433 | (1,011) | 275,422 | ||||||||||||||||||||||
Commercial and industrial | 273,622 | — | 887 | 18,424 | 292,933 | (10,354) | 282,579 | ||||||||||||||||||||||
Commercial overdrafts | 106,820 | — | — | 377 | 107,197 | (442) | 106,755 | ||||||||||||||||||||||
Total commercial loans | 656,875 | — | 887 | 18,801 | 676,563 | (11,807) | 664,756 | ||||||||||||||||||||||
Commercial real estate loans | |||||||||||||||||||||||||||||
Commercial mortgage | 593,367 | 732 | 2,656 | 3,116 | 599,871 | (1,518) | 598,353 | ||||||||||||||||||||||
Construction | 6,240 | — | — | — | 6,240 | — | 6,240 | ||||||||||||||||||||||
Total commercial real estate loans | 599,607 | 732 | 2,656 | 3,116 | 606,111 | (1,518) | 604,593 | ||||||||||||||||||||||
Consumer loans | |||||||||||||||||||||||||||||
Automobile financing | 19,364 | — | — | 120 | 19,484 | (78) | 19,406 | ||||||||||||||||||||||
Credit card | 74,942 | — | 304 | — | 75,246 | (1,961) | 73,285 | ||||||||||||||||||||||
Overdrafts | 44,644 | — | — | 14 | 44,658 | (372) | 44,286 | ||||||||||||||||||||||
Other consumer1 |
45,373 | — | 1,676 | 707 | 47,756 | (875) | 46,881 | ||||||||||||||||||||||
Total consumer loans | 184,323 | — | 1,980 | 841 | 187,144 | (3,286) | 183,858 | ||||||||||||||||||||||
Residential mortgage loans | 3,361,636 | 38,000 | 124,695 | 35,338 | 3,559,669 | (9,397) | 3,550,272 | ||||||||||||||||||||||
Total | 4,802,441 | 38,732 | 130,218 | 58,096 | 5,029,487 | (26,008) | 5,003,479 |
December 31, 2022 | Pass | Special mention |
Substandard | Non-accrual | Total amortized cost | Allowance for expected credit losses | Total net loans | ||||||||||||||||||||||
Commercial loans | |||||||||||||||||||||||||||||
Government | 281,518 | — | — | — | 281,518 | (1,368) | 280,150 | ||||||||||||||||||||||
Commercial and industrial | 298,137 | — | 796 | 18,461 | 317,394 | (10,359) | 307,035 | ||||||||||||||||||||||
Commercial overdrafts | 123,874 | — | 632 | 45 | 124,551 | (416) | 124,135 | ||||||||||||||||||||||
Total commercial loans | 703,529 | — | 1,428 | 18,506 | 723,463 | (12,143) | 711,320 | ||||||||||||||||||||||
Commercial real estate loans | |||||||||||||||||||||||||||||
Commercial mortgage | 613,090 | 2,082 | 1,503 | 3,182 | 619,857 | (884) | 618,973 | ||||||||||||||||||||||
Construction | 7,474 | — | — | — | 7,474 | — | 7,474 | ||||||||||||||||||||||
Total commercial real estate loans | 620,564 | 2,082 | 1,503 | 3,182 | 627,331 | (884) | 626,447 | ||||||||||||||||||||||
Consumer loans | |||||||||||||||||||||||||||||
Automobile financing | 20,673 | — | — | 161 | 20,834 | (93) | 20,741 | ||||||||||||||||||||||
Credit card | 77,419 | — | 295 | — | 77,714 | (1,043) | 76,671 | ||||||||||||||||||||||
Overdrafts | 44,414 | — | — | 6 | 44,420 | (355) | 44,065 | ||||||||||||||||||||||
Other consumer1 |
56,699 | — | — | 801 | 57,500 | (1,205) | 56,295 | ||||||||||||||||||||||
Total consumer loans | 199,205 | — | 295 | 968 | 200,468 | (2,696) | 197,772 | ||||||||||||||||||||||
Residential mortgage loans | 3,419,186 | 8,132 | 102,413 | 40,398 | 3,570,129 | (9,238) | 3,560,891 | ||||||||||||||||||||||
Total | 4,942,484 | 10,214 | 105,639 | 63,054 | 5,121,391 | (24,961) | 5,096,430 |
June 30, 2023 | Pass | Special mention |
Substandard | Non-accrual | Total amortized cost | ||||||||||||
Loans by origination year | |||||||||||||||||
2023 | 251,363 | — | — | — | 251,363 | ||||||||||||
2022 | 929,349 | — | — | 567 | 929,916 | ||||||||||||
2021 | 611,501 | 3,094 | — | 3 | 614,598 | ||||||||||||
2020 | 435,067 | 534 | 2,644 | — | 438,245 | ||||||||||||
2019 | 651,238 | — | 6,205 | 3,128 | 660,571 | ||||||||||||
Prior | 1,681,724 | 34,854 | 121,067 | 54,005 | 1,891,650 | ||||||||||||
Overdrafts and credit cards | 242,199 | 250 | 302 | 393 | 243,144 | ||||||||||||
Total amortized cost | 4,802,441 | 38,732 | 130,218 | 58,096 | 5,029,487 |
December 31, 2022 | Pass | Special mention |
Substandard | Non-accrual | Total amortized cost | ||||||||||||
Loans by origination year | |||||||||||||||||
2022 | 971,776 | — | — | 4 | 971,780 | ||||||||||||
2021 | 646,436 | — | — | 20 | 646,456 | ||||||||||||
2020 | 485,944 | 142 | 508 | 23 | 486,617 | ||||||||||||
2019 | 680,939 | — | 277 | 3,118 | 684,334 | ||||||||||||
2018 | 393,623 | — | 12,133 | 1,355 | 407,111 | ||||||||||||
Prior | 1,499,410 | 9,767 | 91,795 | 58,483 | 1,659,455 | ||||||||||||
Overdrafts and credit cards | 264,356 | 305 | 926 | 51 | 265,638 | ||||||||||||
Total amortized cost | 4,942,484 | 10,214 | 105,639 | 63,054 | 5,121,391 |
June 30, 2023 | 30 - 59 days |
60 - 89 days |
More than 90 days | Total past due loans |
Total current |
Total amortized cost |
||||||||||||||
Commercial loans | ||||||||||||||||||||
Government | — | — | — | — | 276,433 | 276,433 | ||||||||||||||
Commercial and industrial | 550 | 2 | 18,424 | 18,976 | 273,957 | 292,933 | ||||||||||||||
Commercial overdrafts | — | — | 377 | 377 | 106,820 | 107,197 | ||||||||||||||
Total commercial loans | 550 | 2 | 18,801 | 19,353 | 657,210 | 676,563 | ||||||||||||||
Commercial real estate loans | ||||||||||||||||||||
Commercial mortgage | 466 | 361 | 3,116 | 3,943 | 595,928 | 599,871 | ||||||||||||||
Construction | — | — | — | — | 6,240 | 6,240 | ||||||||||||||
Total commercial real estate loans | 466 | 361 | 3,116 | 3,943 | 602,168 | 606,111 | ||||||||||||||
Consumer loans | ||||||||||||||||||||
Automobile financing | 104 | 30 | 120 | 254 | 19,230 | 19,484 | ||||||||||||||
Credit card | 530 | 230 | 304 | 1,064 | 74,182 | 75,246 | ||||||||||||||
Overdrafts | — | — | 14 | 14 | 44,644 | 44,658 | ||||||||||||||
Other consumer | 731 | 184 | 2,375 | 3,290 | 44,466 | 47,756 | ||||||||||||||
Total consumer loans | 1,365 | 444 | 2,813 | 4,622 | 182,522 | 187,144 | ||||||||||||||
Residential mortgage loans | 36,659 | 11,648 | 65,734 | 114,041 | 3,445,628 | 3,559,669 | ||||||||||||||
Total amortized cost | 39,040 | 12,455 | 90,464 | 141,959 | 4,887,528 | 5,029,487 |
December 31, 2022 | 30 - 59 days |
60 - 89 days |
More than 90 days | Total past due loans |
Total current |
Total amortized cost |
||||||||||||||
Commercial loans | ||||||||||||||||||||
Government | — | — | — | — | 281,518 | 281,518 | ||||||||||||||
Commercial and industrial | 5 | — | 18,461 | 18,466 | 298,928 | 317,394 | ||||||||||||||
Commercial overdrafts | — | — | 45 | 45 | 124,506 | 124,551 | ||||||||||||||
Total commercial loans | 5 | — | 18,506 | 18,511 | 704,952 | 723,463 | ||||||||||||||
Commercial real estate loans | ||||||||||||||||||||
Commercial mortgage | 363 | — | 3,181 | 3,544 | 616,313 | 619,857 | ||||||||||||||
Construction | — | — | — | — | 7,474 | 7,474 | ||||||||||||||
Total commercial real estate loans | 363 | — | 3,181 | 3,544 | 623,787 | 627,331 | ||||||||||||||
Consumer loans | ||||||||||||||||||||
Automobile financing | 104 | 5 | 160 | 269 | 20,565 | 20,834 | ||||||||||||||
Credit card | 423 | 231 | 295 | 949 | 76,765 | 77,714 | ||||||||||||||
Overdrafts | — | — | 6 | 6 | 44,414 | 44,420 | ||||||||||||||
Other consumer | 179 | 16 | 797 | 992 | 56,508 | 57,500 | ||||||||||||||
Total consumer loans | 706 | 252 | 1,258 | 2,216 | 198,252 | 200,468 | ||||||||||||||
Residential mortgage loans | 30,813 | 4,081 | 49,486 | 84,380 | 3,485,749 | 3,570,129 | ||||||||||||||
Total amortized cost | 31,887 | 4,333 | 72,431 | 108,651 | 5,012,740 | 5,121,391 |
Six months ended June 30, 2023 | |||||||||||||||||
Commercial | Commercial real estate |
Consumer | Residential mortgage |
Total | |||||||||||||
Balance at the beginning of period | 12,143 | 884 | 2,696 | 9,238 | 24,961 | ||||||||||||
Provision increase (decrease) | 356 | 644 | 621 | 560 | 2,181 | ||||||||||||
Recoveries of previous charge-offs | 67 | — | 564 | 306 | 937 | ||||||||||||
Charge-offs, by origination year | |||||||||||||||||
2023 | — | — | — | — | — | ||||||||||||
2022 | — | — | — | — | — | ||||||||||||
2021 | — | — | (16) | — | (16) | ||||||||||||
2020 | — | — | (20) | — | (20) | ||||||||||||
2019 | — | — | — | — | — | ||||||||||||
Prior | (704) | (8) | (122) | (737) | (1,571) | ||||||||||||
Overdrafts and credit cards | (62) | — | (431) | — | (493) | ||||||||||||
Other | 7 | (2) | (6) | 30 | 29 | ||||||||||||
Allowances for expected credit losses at end of period | 11,807 | 1,518 | 3,286 | 9,397 | 26,008 |
Six months ended June 30, 2022 | |||||||||||||||||
Commercial | Commercial real estate |
Consumer | Residential mortgage |
Total | |||||||||||||
Balance at the beginning of period | 11,126 | 1,168 | 3,020 | 12,759 | 28,073 | ||||||||||||
Provision increase (decrease) | 874 | (259) | 316 | (574) | 357 | ||||||||||||
Recoveries of previous charge-offs | 1 | — | 617 | 187 | 805 | ||||||||||||
Charge-offs | (17) | — | (1,346) | (2,742) | (4,105) | ||||||||||||
Other | (37) | — | (6) | (109) | (152) | ||||||||||||
Allowances for expected credit losses at end of period | 11,947 | 909 | 2,601 | 9,521 | 24,978 |
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Non-accrual loans with an allowance | Non-accrual loans without an allowance | Past due more than 90 days and accruing |
Total non- performing loans |
Non-accrual loans with an allowance | Non-accrual loans without an allowance | Past due more than 90 days and accruing |
Total non- performing loans |
|||||||||||||||||||
Commercial loans | ||||||||||||||||||||||||||
Commercial and industrial | 18,122 | 302 | — | 18,424 | 18,159 | 302 | — | 18,461 | ||||||||||||||||||
Commercial overdrafts | — | 377 | — | 377 | — | 45 | — | 45 | ||||||||||||||||||
Total commercial loans | 18,122 | 679 | — | 18,801 | 18,159 | 347 | — | 18,506 | ||||||||||||||||||
Commercial real estate loans | ||||||||||||||||||||||||||
Commercial mortgage | 1,469 | 1,647 | — | 3,116 | 1,494 | 1,688 | — | 3,182 | ||||||||||||||||||
Total commercial real estate loans | 1,469 | 1,647 | — | 3,116 | 1,494 | 1,688 | — | 3,182 | ||||||||||||||||||
Consumer loans | ||||||||||||||||||||||||||
Automobile financing | 117 | 3 | — | 120 | 141 | 20 | — | 161 | ||||||||||||||||||
Credit card | — | — | 304 | 304 | — | — | 295 | 295 | ||||||||||||||||||
Overdrafts | — | 14 | — | 14 | — | 6 | — | 6 | ||||||||||||||||||
Other consumer | 551 | 156 | 1,676 | 2,383 | 649 | 152 | — | 801 | ||||||||||||||||||
Total consumer loans | 668 | 173 | 1,980 | 2,821 | 790 | 178 | 295 | 1,263 | ||||||||||||||||||
Residential mortgage loans | 21,367 | 13,971 | 35,093 | 70,431 | 20,621 | 19,777 | 10,964 | 51,362 | ||||||||||||||||||
Total non-performing loans | 41,626 | 16,470 | 37,073 | 95,169 | 41,064 | 21,990 | 11,259 | 74,313 |
Amortized cost basis | Weighted average financial effects | ||||||||||||||||||||||||||||
June 30, 2023 | Significant payment delay |
Term extension | Interest rate reduction |
In % of the class of loans | Months of payment delay |
Months of term extension | Interest rate reduction |
||||||||||||||||||||||
Residential mortgage loans | 2,478 | 4,557 | 0.2 | % | 34 | 3.4 | % | ||||||||||||||||||||||
December 31, 2022 | ||||||||
TDRs (prior to January 1, 2023) Outstanding | Accrual | Non-accrual | ||||||
Commercial loans | 796 | — | ||||||
Commercial real estate loans | 1,503 | 2,357 | ||||||
Residential mortgage loans | 59,175 | 10,342 | ||||||
Total TDRs outstanding | 61,474 | 12,699 |
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Geographic region | Cash due from banks, resell agreements and short-term investments |
Loans | Off-balance sheet |
Total credit exposure |
Cash due from banks, resell agreements and short-term investments |
Loans | Off-balance sheet |
Total credit exposure |
||||||||||||||||||
Belgium | 2,792 | — | — | 2,792 | 2,641 | — | — | 2,641 | ||||||||||||||||||
Bermuda | 42,090 | 1,826,698 | 233,887 | 2,102,675 | 40,671 | 1,920,467 | 243,904 | 2,205,042 | ||||||||||||||||||
Canada | 577,507 | — | — | 577,507 | 1,216,876 | — | — | 1,216,876 | ||||||||||||||||||
Cayman | 32,526 | 1,202,234 | 208,014 | 1,442,774 | 36,609 | 1,236,373 | 233,599 | 1,506,581 | ||||||||||||||||||
Germany | 3,808 | — | — | 3,808 | 20,422 | — | — | 20,422 | ||||||||||||||||||
Guernsey | 2 | 644,163 | 216,294 | 860,459 | 1 | 674,562 | 199,714 | 874,277 | ||||||||||||||||||
Ireland | 21,622 | — | — | 21,622 | 26,597 | — | — | 26,597 | ||||||||||||||||||
Japan | 16,845 | — | — | 16,845 | 13,071 | — | — | 13,071 | ||||||||||||||||||
Jersey | — | 172,802 | 15,120 | 187,922 | — | 150,769 | 35,042 | 185,811 | ||||||||||||||||||
Norway | 363,271 | — | — | 363,271 | 99,777 | — | — | 99,777 | ||||||||||||||||||
Switzerland | 1,401 | — | — | 1,401 | 2,748 | — | — | 2,748 | ||||||||||||||||||
The Bahamas | 1,602 | 6,419 | — | 8,021 | 1,521 | 7,510 | — | 9,031 | ||||||||||||||||||
United Kingdom | 473,743 | 1,177,171 | 69,529 | 1,720,443 | 715,750 | 1,131,710 | 108,406 | 1,955,866 | ||||||||||||||||||
United States | 982,818 | — | — | 982,818 | 865,671 | — | — | 865,671 | ||||||||||||||||||
Other | 4,234 | — | — | 4,234 | 2,781 | — | — | 2,781 | ||||||||||||||||||
Total gross exposure | 2,524,261 | 5,029,487 | 742,844 | 8,296,592 | 3,045,136 | 5,121,391 | 820,665 | 8,987,192 |
By Maturity | |||||||||||||||||||||||||||||
Demand | Total demand deposits |
Term | Total term deposits |
||||||||||||||||||||||||||
June 30, 2023 | Non-interest bearing |
Interest bearing |
Within 3 months |
3 to 6 months |
6 to 12 months |
After 12 months | Total deposits |
||||||||||||||||||||||
Demand or less than $100k¹ | 2,838,416 | 6,029,833 | 8,868,249 | 40,082 | 10,322 | 16,802 | 11,565 | 78,771 | 8,947,020 | ||||||||||||||||||||
Term - $100k or more | N/A | N/A | — | 2,277,348 | 296,292 | 590,854 | 80,538 | 3,245,032 | 3,245,032 | ||||||||||||||||||||
Total deposits | 2,838,416 | 6,029,833 | 8,868,249 | 2,317,430 | 306,614 | 607,656 | 92,103 | 3,323,803 | 12,192,052 | ||||||||||||||||||||
Demand | Total demand deposits |
Term | Total term deposits |
||||||||||||||||||||||||||
December 31, 2022 | Non-interest bearing |
Interest bearing |
Within 3 months |
3 to 6 months |
6 to 12 months |
After 12 months | Total deposits |
||||||||||||||||||||||
Demand or less than $100k¹ | 3,039,701 | 6,844,127 | 9,883,828 | 32,764 | 9,814 | 12,848 | 11,391 | 66,817 | 9,950,645 | ||||||||||||||||||||
Term - $100k or more | N/A | N/A | — | 2,093,464 | 447,471 | 423,737 | 75,759 | 3,040,431 | 3,040,431 | ||||||||||||||||||||
Total deposits | 3,039,701 | 6,844,127 | 9,883,828 | 2,126,228 | 457,285 | 436,585 | 87,150 | 3,107,248 | 12,991,076 | ||||||||||||||||||||
By Type and Segment | June 30, 2023 | December 31, 2022 | ||||||||||||||||||
Payable on demand |
Payable on a fixed date |
Total | Payable on demand |
Payable on a fixed date |
Total | |||||||||||||||
Bermuda | 3,795,231 | 771,666 | 4,566,897 | 3,813,274 | 674,895 | 4,488,169 | ||||||||||||||
Cayman | 3,269,403 | 773,159 | 4,042,562 | 3,641,646 | 651,168 | 4,292,814 | ||||||||||||||
Channel Islands and the UK | 1,803,615 | 1,778,978 | 3,582,593 | 2,428,908 | 1,781,185 | 4,210,093 | ||||||||||||||
Total deposits | 8,868,249 | 3,323,803 | 12,192,052 | 9,883,828 | 3,107,248 | 12,991,076 |
Three months ended | Six months ended | ||||||||||||||||
Line item in the consolidated statements of operations | June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||
Defined benefit pension expense (income) | |||||||||||||||||
Interest cost | Non-service employee benefits expense | 1,346 | 759 | 2,678 | 1,539 | ||||||||||||
Expected return on plan assets | Non-service employee benefits expense | (1,534) | (1,665) | (3,052) | (3,374) | ||||||||||||
Amortization of net actuarial (gains) losses | Non-service employee benefits expense | 572 | 555 | 1,142 | 1,114 | ||||||||||||
Amortization of prior service (credit) cost | Non-service employee benefits expense | 20 | 20 | 39 | 44 | ||||||||||||
Settlement (gain) loss | Net other gains (losses) | — | 28 | — | (820) | ||||||||||||
Total defined benefit pension expense (income) | 404 | (303) | 807 | (1,497) | |||||||||||||
Post-retirement medical benefit expense (income) | |||||||||||||||||
Service cost | Salaries and other employee benefits | 19 | 32 | 38 | 65 | ||||||||||||
Interest cost | Non-service employee benefits expense | 1,196 | 779 | 2,393 | 1,558 | ||||||||||||
Amortization of net actuarial (gains) losses | Non-service employee benefits expense | 131 | 361 | 262 | 722 | ||||||||||||
Amortization of prior service (credit) cost | Non-service employee benefits expense | (334) | 131 | (667) | 262 | ||||||||||||
Total post-retirement medical benefit expense (income) | 1,012 | 1,303 | 2,026 | 2,607 | |||||||||||||
Outstanding unfunded commitments to extend credit | June 30, 2023 | December 31, 2022 | ||||||
Commitments to extend credit | 488,502 | 564,324 | ||||||
Documentary and commercial letters of credit | 1,540 | 2,331 | ||||||
Total unfunded commitments to extend credit | 490,042 | 566,655 | ||||||
Allowance for credit losses | (292) | (274) |
June 30, 2023 | December 31, 2022 | |||||||||||||||||||
Outstanding financial guarantees | Gross | Collateral | Net | Gross | Collateral | Net | ||||||||||||||
Standby letters of credit | 249,303 | 242,153 | 7,150 | 250,543 | 243,393 | 7,150 | ||||||||||||||
Letters of guarantee | 3,499 | 3,463 | 36 | 3,467 | 3,431 | 36 | ||||||||||||||
Total | 252,802 | 245,616 | 7,186 | 254,010 | 246,824 | 7,186 |
Three months ended | Six months ended | |||||||||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||
Lease costs | ||||||||||||||
Operating lease costs | 1,918 | 1,939 | 3,797 | 3,977 | ||||||||||
Short-term lease costs | 640 | 576 | 1,222 | 924 | ||||||||||
Sublease income | (186) | (306) | (558) | (647) | ||||||||||
Total net lease cost | 2,372 | 2,209 | 4,461 | 4,254 | ||||||||||
Operating lease income | 246 | 247 | 512 | 502 | ||||||||||
Other information for the period | ||||||||||||||
Right-of-use assets related to new operating lease liabilities | — | — | — | 138 | ||||||||||
Operating cash flows from operating leases | 1,973 | 1,982 | 3,903 | 3,981 | ||||||||||
Other information at end of period | June 30, 2023 | December 31, 2022 | ||||||||||||
Operating leases right-of-use assets (included in other assets on the balance sheets) | 33,404 | 33,641 | ||||||||||||
Operating lease liabilities (included in other liabilities on the balance sheets) | 32,639 | 32,965 | ||||||||||||
Weighted average remaining lease term for operating leases (in years) | 8.96 | 9.24 | ||||||||||||
Weighted average discount rate for operating leases | 5.40 | % | 5.40 | % | ||||||||||
The following table summarizes the maturity analysis of the Bank's commitments for long-term leases as at December 31, 2022: | ||||||||||||||
Year ending December 31 | Operating Leases | |||||||||||||
2023 | 7,129 | |||||||||||||
2024 | 6,457 | |||||||||||||
2025 | 4,133 | |||||||||||||
2026 | 3,357 | |||||||||||||
2027 | 3,152 | |||||||||||||
2028 & thereafter | 17,735 | |||||||||||||
Total commitments | 41,963 | |||||||||||||
Less: effect of discounting cash flows to their present value | (8,998) | |||||||||||||
Operating lease liabilities | 32,965 | |||||||||||||
Total Assets by Segment | June 30, 2023 | December 31, 2022 | ||||||
Bermuda | 5,268,967 | 5,405,365 | ||||||
Cayman | 4,339,888 | 4,566,144 | ||||||
Channel Islands and the UK | 4,025,520 | 4,626,183 | ||||||
Other | 42,753 | 35,874 | ||||||
Total assets before inter-segment eliminations | 13,677,128 | 14,633,566 | ||||||
Less: inter-segment eliminations | (167,597) | (327,504) | ||||||
Total | 13,509,531 | 14,306,062 |
Net interest income | Provision for credit (losses) recoveries |
Non-interest income |
Net revenue before gains and losses |
Gains and losses |
Total net revenue | Total expenses |
Net income | ||||||||||||||||||||||
Three months ended June 30, 2023 | Customer | Inter- segment | |||||||||||||||||||||||||||
Bermuda | 45,978 | (660) | (1,877) | 21,392 | 64,833 | 3,967 | 68,800 | 46,452 | 22,348 | ||||||||||||||||||||
Cayman | 33,261 | 1,402 | 171 | 15,444 | 50,278 | 2 | 50,280 | 15,559 | 34,721 | ||||||||||||||||||||
Channel Islands and the UK | 13,225 | (742) | 179 | 9,476 | 22,138 | (3) | 22,135 | 18,880 | 3,255 | ||||||||||||||||||||
Other | 11 | — | — | 8,578 | 8,589 | — | 8,589 | 7,913 | 676 | ||||||||||||||||||||
Total before eliminations | 92,475 | — | (1,527) | 54,890 | 145,838 | 3,966 | 149,804 | 88,804 | 61,000 | ||||||||||||||||||||
Inter-segment eliminations | — | — | — | (4,740) | (4,740) | — | (4,740) | (4,740) | — | ||||||||||||||||||||
Total | 92,475 | — | (1,527) | 50,150 | 141,098 | 3,966 | 145,064 | 84,064 | 61,000 | ||||||||||||||||||||
Net interest income | Provision for credit (losses) recoveries |
Non-interest income |
Net revenue before gains and losses |
Gains and losses |
Total net revenue | Total expenses |
Net income | ||||||||||||||||||||||
Three months ended June 30, 2022 | Customer | Inter- segment | |||||||||||||||||||||||||||
Bermuda | 38,909 | (725) | 348 | 21,293 | 59,825 | 107 | 59,932 | 47,531 | 12,401 | ||||||||||||||||||||
Cayman | 25,712 | 441 | (921) | 17,063 | 42,295 | — | 42,295 | 15,301 | 26,994 | ||||||||||||||||||||
Channel Islands and the UK | 17,345 | 284 | (117) | 10,428 | 27,940 | (29) | 27,911 | 18,655 | 9,256 | ||||||||||||||||||||
Other | 3 | — | — | 7,463 | 7,466 | — | 7,466 | 6,988 | 478 | ||||||||||||||||||||
Total before eliminations | 81,969 | — | (690) | 56,247 | 137,526 | 78 | 137,604 | 88,475 | 49,129 | ||||||||||||||||||||
Inter-segment eliminations | — | — | — | (4,436) | (4,436) | — | (4,436) | (4,436) | — | ||||||||||||||||||||
Total | 81,969 | — | (690) | 51,811 | 133,090 | 78 | 133,168 | 84,039 | 49,129 |
Net interest income | Provision for credit (losses) recoveries |
Non-interest income |
Net revenue before gains and losses |
Gains and losses |
Total net revenue | Total expenses |
Net income | ||||||||||||||||||||||
Six months ended June 30, 2023 |
Customer | Inter- segment | |||||||||||||||||||||||||||
Bermuda | 93,847 | (1,881) | (2,502) | 43,239 | 132,703 | 4,079 | 136,782 | 94,185 | 42,597 | ||||||||||||||||||||
Cayman | 67,862 | 2,811 | 206 | 32,295 | 103,174 | (1) | 103,173 | 30,908 | 72,265 | ||||||||||||||||||||
Channel Islands and the UK | 28,100 | (930) | 98 | 17,994 | 45,262 | (2) | 45,260 | 37,992 | 7,268 | ||||||||||||||||||||
Other | 21 | — | — | 16,211 | 16,232 | — | 16,232 | 15,158 | 1,074 | ||||||||||||||||||||
Total before eliminations | 189,830 | — | (2,198) | 109,739 | 297,371 | 4,076 | 301,447 | 178,243 | 123,204 | ||||||||||||||||||||
Inter-segment eliminations | — | — | — | (9,404) | (9,404) | — | (9,404) | (9,404) | — | ||||||||||||||||||||
Total | 189,830 | — | (2,198) | 100,335 | 287,967 | 4,076 | 292,043 | 168,839 | 123,204 | ||||||||||||||||||||
Net interest income | Provision for credit (losses) recoveries |
Non-interest income |
Net revenue before gains and losses |
Gains and losses |
Total net revenue | Total expenses |
Net income | ||||||||||||||||||||||
Six months ended June 30, 2022 |
Customer | Inter- segment | |||||||||||||||||||||||||||
Bermuda | 75,305 | (1,237) | 892 | 42,317 | 117,277 | 24 | 117,301 | 93,874 | 23,427 | ||||||||||||||||||||
Cayman | 48,515 | 779 | (693) | 32,415 | 81,016 | — | 81,016 | 30,277 | 50,739 | ||||||||||||||||||||
Channel Islands and the UK | 34,013 | 458 | (189) | 21,267 | 55,549 | 857 | 56,406 | 37,806 | 18,600 | ||||||||||||||||||||
Other | 3 | — | — | 14,334 | 14,337 | — | 14,337 | 13,623 | 714 | ||||||||||||||||||||
Total before eliminations | 157,836 | — | 10 | 110,333 | 268,179 | 881 | 269,060 | 175,580 | 93,480 | ||||||||||||||||||||
Inter-segment eliminations | — | — | — | (8,602) | (8,602) | — | (8,602) | (8,602) | — | ||||||||||||||||||||
Total | 157,836 | — | 10 | 101,731 | 259,577 | 881 | 260,458 | 166,978 | 93,480 |
June 30, 2023 | Derivative instrument | Number of contracts | Notional amounts |
Gross positive fair value |
Gross negative fair value |
Net fair value |
||||||||||||||
Risk management derivatives | ||||||||||||||||||||
Net investment hedges | Currency swaps | 2 | 15,989 | 97 | (628) | (531) | ||||||||||||||
Fair value hedges | Currency swaps | 4 | 157,095 | 3,557 | (66) | 3,491 | ||||||||||||||
Derivatives not formally designated as hedging instruments | Currency swaps | 62 | 1,439,241 | 2,855 | (13,507) | (10,652) | ||||||||||||||
Subtotal risk management derivatives | 1,612,325 | 6,509 | (14,201) | (7,692) | ||||||||||||||||
Client services derivatives | Spot and forward foreign exchange | 150 | 385,234 | 2,498 | (2,297) | 201 | ||||||||||||||
Total derivative instruments | 1,997,559 | 9,007 | (16,498) | (7,491) | ||||||||||||||||
December 31, 2022 | Derivative instrument | Number of contracts | Notional amounts |
Gross positive fair value |
Gross negative fair value |
Net fair value |
||||||||||||||
Risk management derivatives | ||||||||||||||||||||
Net investment hedges | Currency swaps | 1 | 5,207 | — | (215) | (215) | ||||||||||||||
Fair value hedges | Currency swaps | 4 | 130,751 | 2,714 | (191) | 2,523 | ||||||||||||||
Derivatives not formally designated as hedging instruments | Currency swaps | 63 | 1,884,169 | 8,052 | (10,269) | (2,217) | ||||||||||||||
Subtotal risk management derivatives | 2,020,127 | 10,766 | (10,675) | 91 | ||||||||||||||||
Client services derivatives | Spot and forward foreign exchange | 160 | 312,772 | 2,401 | (2,237) | 164 | ||||||||||||||
Total derivative instruments | 2,332,899 | 13,167 | (12,912) | 255 |
Gross fair value recognized |
Less: offset applied under master netting agreements |
Net fair value presented in the consolidated balance sheets |
Less: positions not offset in the consolidated balance sheets | |||||||||||||||||
June 30, 2023 | Gross fair value of derivatives | Cash collateral received / paid |
Net exposures | |||||||||||||||||
Derivative assets | ||||||||||||||||||||
Spot and forward foreign exchange and currency swaps | 9,007 | (6,605) | 2,402 | — | — | 2,402 | ||||||||||||||
Derivative liabilities | ||||||||||||||||||||
Spot and forward foreign exchange and currency swaps | 16,498 | (6,605) | 9,893 | — | (4,048) | 5,845 | ||||||||||||||
Net negative fair value | (7,491) | |||||||||||||||||||
Gross fair value recognized |
Less: offset applied under master netting agreements |
Net fair value presented in the consolidated balance sheets |
Less: positions not offset in the consolidated balance sheets | |||||||||||||||||
December 31, 2022 | Gross fair value of derivatives | Cash collateral received / paid |
Net exposures | |||||||||||||||||
Derivative assets | ||||||||||||||||||||
Spot and forward foreign exchange and currency swaps | 13,167 | (6,658) | 6,509 | — | (9) | 6,500 | ||||||||||||||
Derivative liabilities | ||||||||||||||||||||
Spot and forward foreign exchange and currency swaps | 12,912 | (6,658) | 6,254 | — | (352) | 5,902 | ||||||||||||||
Net positive fair value | 255 |
Three months ended | Six months ended | ||||||||||||||||
Derivative instrument | Consolidated statements of operations line item | June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||||||||
Spot and forward foreign exchange | Foreign exchange revenue | (88) | (122) | 38 | 16 | ||||||||||||
Currency swaps, not designated as hedge | Foreign exchange revenue | (6,091) | 17,418 | (8,434) | 6,273 | ||||||||||||
Currency swaps - fair value hedges | Foreign exchange revenue | 69 | 520 | 967 | (4,086) | ||||||||||||
Total net gains (losses) recognized in net income | (6,110) | 17,816 | (7,429) | 2,203 | |||||||||||||
Three months ended | Six months ended | ||||||||||||||||
Derivative instrument | Consolidated statements of comprehensive income line item | June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||||||||
Currency swaps - net investment hedge | Unrealized net gains (losses) on translation of net investment in foreign operations | (828) | (1,538) | (317) | (847) | ||||||||||||
Total net gains (losses) recognized in comprehensive income | (828) | (1,538) | (317) | (847) |
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Fair value | Total carrying amount / fair value |
Fair value | Total carrying amount / fair value |
|||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
Items that are recognized at fair value on a recurring basis: | ||||||||||||||||||||||||||
Financial assets | ||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
Mutual funds | — | — | — | — | — | 236 | — | 236 | ||||||||||||||||||
Total equity securities | — | — | — | — | — | 236 | — | 236 | ||||||||||||||||||
Available-for-sale investments | ||||||||||||||||||||||||||
US government and federal agencies | 846,428 | 819,508 | — | 1,665,936 | 838,938 | 873,838 | — | 1,712,776 | ||||||||||||||||||
Non-US governments debt securities | 242,002 | 22,392 | — | 264,394 | 229,071 | 22,392 | — | 251,463 | ||||||||||||||||||
Asset-backed securities - Student loans | — | 1,087 | — | 1,087 | — | 5,626 | — | 5,626 | ||||||||||||||||||
Residential mortgage-backed securities | — | 18,143 | — | 18,143 | — | 19,000 | — | 19,000 | ||||||||||||||||||
Total available-for-sale | 1,088,430 | 861,130 | — | 1,949,560 | 1,068,009 | 920,856 | — | 1,988,865 | ||||||||||||||||||
Other assets - Derivatives | — | 2,402 | — | 2,402 | — | 6,509 | — | 6,509 | ||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||
Other liabilities - Derivatives | — | 9,893 | — | 9,893 | — | 6,254 | — | 6,254 |
Six months ended June 30, 2023 |
Year ended December 31, 2022 |
|||||||
Available- for-sale investments |
Available- for-sale investments |
|||||||
Carrying amount at beginning of period | — | 13,174 | ||||||
Proceeds from sales, paydowns and maturities | — | (7,631) | ||||||
Change in unrealized gains (losses) recognized in other comprehensive income | — | 102 | ||||||
Realized and unrealized gains recognized in net income | — | (19) | ||||||
Transfers in (out of) Level 3 out of (into) Level 2 - AFS | — | (5,626) | ||||||
Carrying amount at end of period | — | — | ||||||
Cumulative gain (loss) recognized in other comprehensive income | — | (14) |
Items Other Than Those Recognized at Fair Value on a Recurring Basis: | |||||||||||||||||||||||
June 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Level | Carrying amount |
Fair value |
Appreciation / (depreciation) |
Carrying amount |
Fair value |
Appreciation / (depreciation) |
|||||||||||||||||
Financial assets | |||||||||||||||||||||||
Cash and cash equivalents | Level 1 | 1,794,854 | 1,794,854 | — | 2,100,787 | 2,100,787 | — | ||||||||||||||||
Securities purchased under agreements to resell | Level 2 | 59,693 | 59,693 | — | 59,871 | 59,871 | — | ||||||||||||||||
Short-term investments | Level 1 | 669,714 | 669,714 | — | 884,478 | 884,478 | — | ||||||||||||||||
Investments held-to-maturity | Level 2 | 3,596,889 | 3,077,037 | (519,852) | 3,738,080 | 3,197,508 | (540,572) | ||||||||||||||||
Loans, net of allowance for credit losses | Level 2 | 5,003,479 | 4,934,377 | (69,102) | 5,096,430 | 5,049,570 | (46,860) | ||||||||||||||||
Other real estate owned¹ | Level 2 | 1,165 | 1,165 | — | 800 | 800 | — | ||||||||||||||||
Financial liabilities | |||||||||||||||||||||||
Term deposits | Level 2 | 3,323,803 | 3,328,070 | (4,267) | 3,107,248 | 3,108,511 | (1,263) | ||||||||||||||||
Long-term debt | Level 2 | 98,372 | 93,978 | 4,394 | 172,289 | 177,919 | (5,630) |
June 30, 2023 | Earlier of contractual maturity or repricing date | ||||||||||||||||||||||
(in $ millions) | Within 3 months |
3 to 6 months |
6 to 12 months |
1 to 5 years |
After 5 years |
Non-interest bearing funds |
Total | ||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents | 1,701 | — | — | — | — | 94 | 1,795 | ||||||||||||||||
Securities purchased under agreement to resell | 60 | — | — | — | — | — | 60 | ||||||||||||||||
Short-term investments | 382 | 270 | 18 | — | — | — | 670 | ||||||||||||||||
Investments | 152 | 34 | 216 | 892 | 4,252 | — | 5,546 | ||||||||||||||||
Loans | 2,643 | 52 | 172 | 1,693 | 420 | 24 | 5,004 | ||||||||||||||||
Other assets | — | — | — | — | — | 435 | 435 | ||||||||||||||||
Total assets | 4,938 | 356 | 406 | 2,585 | 4,672 | 553 | 13,510 | ||||||||||||||||
Liabilities and shareholders' equity | |||||||||||||||||||||||
Shareholders’ equity | — | — | — | — | — | 950 | 950 | ||||||||||||||||
Demand deposits | 6,030 | — | — | — | — | 2,838 | 8,868 | ||||||||||||||||
Term deposits | 2,317 | 307 | 608 | 92 | — | — | 3,324 | ||||||||||||||||
Other liabilities | — | — | — | — | — | 270 | 270 | ||||||||||||||||
Long-term debt | — | — | — | 98 | — | — | 98 | ||||||||||||||||
Total liabilities and shareholders' equity | 8,347 | 307 | 608 | 190 | — | 4,058 | 13,510 | ||||||||||||||||
Interest rate sensitivity gap | (3,409) | 49 | (202) | 2,395 | 4,672 | (3,505) | — | ||||||||||||||||
Cumulative interest rate sensitivity gap | (3,409) | (3,360) | (3,562) | (1,167) | 3,505 | — | — | ||||||||||||||||
December 31, 2022 | Earlier of contractual maturity or repricing date | ||||||||||||||||||||||
(in $ millions) | Within 3 months |
3 to 6 months |
6 to 12 months |
1 to 5 years |
After 5 years |
Non-interest bearing funds |
Total | ||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents | 2,008 | — | — | — | — | 93 | 2,101 | ||||||||||||||||
Securities purchased under agreement to resell | 60 | — | — | — | — | — | 60 | ||||||||||||||||
Short-term investments | 406 | 422 | 56 | — | — | — | 884 | ||||||||||||||||
Investments | 6 | 8 | 179 | 943 | 4,592 | — | 5,728 | ||||||||||||||||
Loans | 2,927 | 35 | 166 | 1,533 | 406 | 29 | 5,096 | ||||||||||||||||
Other assets | — | — | — | — | — | 437 | 437 | ||||||||||||||||
Total assets | 5,407 | 465 | 401 | 2,476 | 4,998 | 559 | 14,306 | ||||||||||||||||
Liabilities and shareholders' equity | |||||||||||||||||||||||
Shareholders’ equity | — | — | — | — | — | 865 | 865 | ||||||||||||||||
Demand deposits | 6,819 | 25 | — | — | — | 3,040 | 9,884 | ||||||||||||||||
Term deposits | 2,126 | 457 | 437 | 87 | — | — | 3,107 | ||||||||||||||||
Other liabilities | — | — | — | — | — | 278 | 278 | ||||||||||||||||
Long-term debt | — | 75 | — | 97 | — | — | 172 | ||||||||||||||||
Total liabilities and shareholders' equity | 8,945 | 557 | 437 | 184 | — | 4,183 | 14,306 | ||||||||||||||||
Interest rate sensitivity gap | (3,538) | (92) | (36) | 2,292 | 4,998 | (3,624) | — | ||||||||||||||||
Cumulative interest rate sensitivity gap | (3,538) | (3,630) | (3,666) | (1,374) | 3,624 | — | — |
Interest payments until contractual maturity | |||||||||||||||||||||||||||||
Long-term debt | Earliest date redeemable at the Bank's option | Contractual maturity date | Interest rate until date redeemable | Interest rate from earliest date redeemable to contractual maturity | Principal Outstanding | Within 1 year |
1 to 5 years |
After 5 years |
|||||||||||||||||||||
Bermuda | |||||||||||||||||||||||||||||
2020 issuance | June 15, 2025 | June 15, 2030 | 5.25 | % | 3 months US$ SOFR + 5.060% | 100,000 | 5,250 | 36,151 | 20,582 | ||||||||||||||||||||
Unamortized debt issuance costs | (1,628) | ||||||||||||||||||||||||||||
Long-term debt less unamortized debt issuance costs | 98,372 |
Three months ended | Six months ended | |||||||||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||
Net income | 61,000 | 49,129 | 123,204 | 93,480 | ||||||||||
Basic Earnings Per Share | ||||||||||||||
Weighted average number of common shares issued | 50,139 | 50,223 | 50,238 | 50,173 | ||||||||||
Weighted average number of common shares held as treasury stock | (619) | (619) | (619) | (619) | ||||||||||
Weighted average number of common shares (in thousands) | 49,520 | 49,604 | 49,619 | 49,554 | ||||||||||
Basic Earnings Per Share | 1.23 | 0.99 | 2.48 | 1.89 | ||||||||||
Diluted Earnings Per Share | ||||||||||||||
Weighted average number of common shares | 49,520 | 49,604 | 49,619 | 49,554 | ||||||||||
Net dilution impact related to awards of unvested common shares | 370 | 168 | 360 | 252 | ||||||||||
Weighted average number of diluted common shares (in thousands) | 49,890 | 49,772 | 49,979 | 49,806 | ||||||||||
Diluted Earnings Per Share | 1.22 | 0.99 | 2.47 | 1.88 |
Changes in Outstanding ELTIP and EDIP awards (in thousands of shares transferable upon vesting) | ||||||||||||||
Six months ended | ||||||||||||||
June 30, 2023 | June 30, 2022 | |||||||||||||
EDIP | ELTIP | EDIP | ELTIP | |||||||||||
Outstanding at beginning of period | 621 | 705 | 297 | 704 | ||||||||||
Granted | 178 | 362 | 111 | 262 | ||||||||||
Vested (fair value in 2023: $10.6 million, 2022: $16.7 million) |
(133) | (185) | (145) | (278) | ||||||||||
Outstanding at end of period | 666 | 882 | 263 | 688 |
Share-based Compensation Cost Recognized in Net Income | ||||||||
Six months ended | ||||||||
June 30, 2023 | June 30, 2022 | |||||||
EDIP and ELTIP |
EDIP and ELTIP |
|||||||
Cost recognized in net income | 9,285 | 7,070 |
Unrecognized Share-based Compensation Cost | ||||||||||||||
June 30, 2023 | December 31, 2022 | |||||||||||||
Unrecognized cost | Weighted average years over which it is expected to be recognized | Unrecognized cost | Weighted average years over which it is expected to be recognized | |||||||||||
EDIP | 14,575 | 2.99 | 14,234 | 3.35 | ||||||||||
ELTIP | ||||||||||||||
Performance vesting shares | 17,119 | 2.10 | 10,232 | 1.75 | ||||||||||
Total unrecognized expense | 31,694 | 24,466 |
Six months ended | Year ended December 31 | ||||||||||
Common share repurchases | June 30, 2023 | 2022 | 2021 | ||||||||
Acquired number of shares (to the nearest 1) | 867,995 | 102,000 | 534,828 | ||||||||
Average cost per common share | 27.19 | 38.21 | 36.93 | ||||||||
Total cost (in US dollars) | 23,599,594 | 3,897,268 | 19,753,336 |
Unrealized net gains (losses) on translation of net investment in foreign operations |
Unrealized net gains (losses) on HTM investments |
Unrealized net gains (losses) on AFS investments |
Employee benefit plans adjustments | ||||||||||||||||||||
Six months ended June 30, 2023 | Pension | Post-retirement healthcare |
Subtotal - employee benefits plans |
Total AOCIL | |||||||||||||||||||
Balance at beginning of period | (25,700) | (91,212) | (220,345) | (47,905) | 7,710 | (40,195) | (377,452) | ||||||||||||||||
Other comprehensive income (loss), net of taxes | 356 | 4,631 | 14,058 | 1,022 | (405) | 617 | 19,662 | ||||||||||||||||
Balance at end of period | (25,344) | (86,581) | (206,287) | (46,883) | 7,305 | (39,578) | (357,790) | ||||||||||||||||
Unrealized net gains (losses) on translation of net investment in foreign operations |
Unrealized net gains (losses) on HTM investments |
Unrealized net gains (losses) on AFS investments |
Employee benefit plans adjustments | ||||||||||||||||||||
Six months ended June 30, 2022 | Pension | Post- retirement healthcare |
Subtotal - employee benefits plans |
Total AOCIL | |||||||||||||||||||
Balance at beginning of period | (20,913) | 91 | (21,982) | (56,400) | (25,713) | (82,113) | (124,917) | ||||||||||||||||
Transfer of AFS investments to HTM investments | — | (99,143) | 99,143 | — | — | — | — | ||||||||||||||||
Other comprehensive income (loss), net of taxes | (4,083) | 2,203 | (229,252) | 1,625 | 984 | 2,609 | (228,523) | ||||||||||||||||
Balance at end of period | (24,996) | (96,849) | (152,091) | (54,775) | (24,729) | (79,504) | (353,440) |
Net Change of AOCIL Components | Three months ended | Six months ended | |||||||||||||||
Line item in the consolidated statements of operations, if any |
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||
Net unrealized gains (losses) on translation of net investment in foreign operations adjustments | |||||||||||||||||
Foreign currency translation adjustments | N/A | 10,182 | (25,414) | 17,669 | (35,711) | ||||||||||||
Gains (losses) on net investment hedge | N/A | (9,782) | 22,330 | (17,313) | 31,628 | ||||||||||||
Net change | 400 | (3,084) | 356 | (4,083) | |||||||||||||
Held-to-maturity investment adjustments | |||||||||||||||||
Net unamortized gains (losses) transferred from AFS | N/A | — | (52,972) | — | (99,143) | ||||||||||||
Amortization of net gains (losses) to net income | Interest income on investments | 2,604 | 1,824 | 4,631 | 2,203 | ||||||||||||
Net change | 2,604 | (51,148) | 4,631 | (96,940) | |||||||||||||
Available-for-sale investment adjustments | |||||||||||||||||
Gross unrealized gains (losses) | N/A | (14,562) | (73,305) | 16,353 | (231,608) | ||||||||||||
Net unrealized (gains) losses transferred to HTM | N/A | — | 52,972 | — | 99,143 | ||||||||||||
Transfer of realized (gains) losses to net income | Net realized gains (losses) on AFS investments | 3 | — | 11 | — | ||||||||||||
Foreign currency translation adjustments of related balances | N/A | (1,199) | 1,929 | (2,306) | 2,356 | ||||||||||||
Net change | (15,758) | (18,404) | 14,058 | (130,109) | |||||||||||||
Employee benefit plans adjustments | |||||||||||||||||
Defined benefit pension plan | |||||||||||||||||
Net actuarial gain (loss) | N/A | — | — | — | 348 | ||||||||||||
Net loss (gain) on settlement reclassified to net income | Net other gains (losses) | — | 28 | — | (820) | ||||||||||||
Amortization of net actuarial (gains) losses | Non-service employee benefits expense | 572 | 555 | 1,142 | 1,114 | ||||||||||||
Amortization of prior service (credit) cost | Non-service employee benefits expense | 20 | 20 | 39 | 44 | ||||||||||||
Foreign currency translation adjustments of related balances | N/A | (90) | 653 | (159) | 939 | ||||||||||||
Net change | 502 | 1,256 | 1,022 | 1,625 | |||||||||||||
Post-retirement healthcare plan | |||||||||||||||||
Amortization of net actuarial (gains) losses | Non-service employee benefits expense | 131 | 361 | 262 | 722 | ||||||||||||
Amortization of prior service (credit) cost | Non-service employee benefits expense | (334) | 131 | (667) | 262 | ||||||||||||
Net change | (203) | 492 | (405) | 984 | |||||||||||||
Other comprehensive income (loss), net of taxes | (12,455) | (70,888) | 19,662 | (228,523) |
June 30, 2023 | December 31, 2022 | |||||||||||||
Actual | Regulatory minimum | Actual | Regulatory minimum | |||||||||||
Capital | ||||||||||||||
CET 1 capital | 1,052,203 | N/A | 983,342 | N/A | ||||||||||
Tier 1 capital | 1,052,203 | N/A | 983,342 | N/A | ||||||||||
Tier 2 capital | 109,143 | N/A | 183,640 | N/A | ||||||||||
Total capital | 1,161,346 | N/A | 1,166,982 | N/A | ||||||||||
Risk Weighted Assets | 4,627,552 | N/A | 4,843,370 | N/A | ||||||||||
Leverage Ratio Exposure Measure | 13,899,229 | N/A | 14,774,309 | N/A | ||||||||||
Capital Ratios (%) | ||||||||||||||
CET 1 capital | 22.7 | % | 10.0 | % | 20.3 | % | 10.0 | % | ||||||
Tier 1 capital | 22.7 | % | 11.5 | % | 20.3 | % | 11.5 | % | ||||||
Total capital | 25.1 | % | 13.5 | % | 24.1 | % | 13.5 | % | ||||||
Leverage ratio | 7.6 | % | 5.0 | % | 6.7 | % | 5.0 | % |
Balance at December 31, 2021 | 7,375 | ||||
Net loans issued (repaid) during the year | (5,362) | ||||
Effect of changes in the composition of related parties | 18,380 | ||||
Balance at December 31, 2022 | 20,393 | ||||
Net loans issued (repaid) during period | (515) | ||||
Balance at June 30, 2023 |
19,878 | ||||
Consolidated balance sheets | June 30, 2023 | December 31, 2022 | ||||||
Deposits | 86,087 | 92,806 |
Three months ended | Six months ended | |||||||||||||
Consolidated statement of operations | June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||||||
Interest and fees on loans | 285 | 273 | 556 | 326 | ||||||||||
Total non-interest expense | 80 | 78 | 125 | 126 | ||||||||||
Other non-interest income | 37 | — | 91 | — |
Consolidated balance sheets | June 30, 2023 | December 31, 2022 | ||||||
Loans | 10,009 | 10,211 | ||||||
Deposits | 275 | 560 | ||||||
Three months ended | Six months ended | |||||||||||||
Consolidated statement of operations | June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||||||
Interest and fees on loans | 207 | 152 | 405 | 299 | ||||||||||
Total non-interest expense | 397 | 383 | 772 | 741 | ||||||||||
Other non-interest income | 61 | 58 | 121 | 117 |
Consolidated balance sheets | June 30, 2023 | December 31, 2022 | ||||||
Loans | 992 | — | ||||||
Deposits | 35,461 | 20,549 | ||||||
Three months ended | Six months ended | |||||||||||||
Consolidated statement of operations | June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||||||
Asset management | 2,319 | 1,799 | 4,499 | 3,086 | ||||||||||
Custody and other administration services | 296 | 193 | 559 | 310 | ||||||||||