The Bank of N.T. Butterfield & Son Limited (NTB) Earnings Call Transcript & Summary

Good morning. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the 2020 Annual General Meeting for The Bank of N.T. Butterfield & Son Limited [Operator Instructions] I would now like to turn the conference over to Michael Collins, Chairman and Chief Executive Officer of Butterfield. Please go ahead, sir.

Thank you. Ladies and gentlemen, on behalf of the Board of Directors and the executive management team of the bank, I welcome you to Butterfield's 116th Annual General Meeting. With me at the bank's head office in Bermuda are Michael Schrum, Director and Group Chief Financial Officer; Sean Morris, General Counsel and Group Chief Legal Officer; and Noah Fields, Head of Investor Relations. Ms. Meredith Steinhaus, who joined us virtually will serve as the secretary for this meeting. We are also joined virtually by our directors and director candidates, Leslie Godridge and Jana Schreuder as well as representatives from PricewaterhouseCoopers , the bank's independent auditor. This is the first time in the bank's history that we have held our AGM virtually. But given the situation with the COVID-19 pandemic for the protection of shareholders who would normally attend in person and our employees, your Board determined that holding this year's meeting virtually was the best option. As previously mentioned, we will hold the question-and-answer period following the consideration of and vote on the 3 proposals detailed in the proxy statement dated July 17, 2020, that was distributed to shareholders, which constitutes the formal business of this meeting. The notice convening this meeting was distributed to all shareholders of record as of May '18, 2020, the record date for this meeting. I have been advised that a quorum of shareholders representing at least 25% of outstanding shares as of the record date, being at least 12,688,281 shares is represented by proxy or by attendees who register their attendance at this meeting virtually. As such, we can proceed, and I now declare this meeting open. Shareholders participating via the webcast who are entitled to vote at the meeting and have not yet voted or which to change their vote, may do so prior to the conclusion of the official portion of the meeting by pressing the vote here button on the bottom right portion of the screen. The polls will close at the conclusion of the meeting's official business. There are 3 proposals to be voted on today as detailed in the proxy statement. The Board unanimously recommends shareholders vote for all 3 proposals. Pursuant to the bank's bylaws, I request that the 3 proposals to come before the meeting be decided by a poll. Proposal one is the appointment of PricewaterhouseCoopers Limited as independent auditors for the ensuing financial period and authorizing the Board of Directors acting through the Audit Committee to set their remuneration. By proxy, a majority of shares have voted in favor of this proposal. Subject to final verification by scrutineers, this proposal is deemed to have been approved by shareholders. Proposal 2 is the election of the following individuals to serve as directors until the 2021 annual General Meeting or until their successors are duly elected or appointed. Myself, Michael Collins, Alastair Barbour, James Burr, Michael Covell; Leslie Godridge, Mark Lynch, Conor O'Dea, Jana Schreuder, Michael Schrum, Pamela Thomas-Graham and John Wright. By proxy, a majority of shares have voted in favor of the election of the 11 directors who today are nominated for board membership. Subject to final verification by scrutineers, the election of the nominees as directors is deemed to have been approved by shareholders. In accordance with Bermuda Stock Exchange listing regulation, 6.21 and consistent with the New York Stock Exchange's Rule 312.03 regarding shareholder approval for certain equity issuances, proposal 3 is as follow. To generally and unconditionally authorize the Board of Directors to dispose of or transfer all or any treasury shares and to allot, issue or grant shares, securities convertible into shares or options, warrants or similar rights to subscribe for any shares or such convertible securities, where the shares in question are of a class that is listed on the Bermuda Stock Exchange, BSX shares, provided that the BSX shares are allotted and issued pursuant hereto are in aggregate, less than 20% of the share capital of the bank issued and outstanding on the day before the 2020 Annual General Meeting to such persons, at such times, for such consideration, and upon such terms and conditions as the Board of Directors may determine. By proxy a majority of shares have voted in favor of this proposal. Subject to final verification by scrutineers, proposal 3 is deemed to have been approved by shareholders. That concludes the formal business of today's meeting. I declare the polls closed. The final results of the polls on the agenda items voted upon today will be publicized when available on the bank's website and in a filing with the Bermuda Stock Exchange and U.S. Securities and Exchange Commission. We will now take questions from shareholders. Facilitating the Q&A period will be Noah Fields, Head of Investor Relations.

Thank you, Michael. As mentioned previously, we will be taking written questions submitted through the Annual General Meeting portal and live questions over the phone. [Operator Instructions] We will respond to appropriate questions submitted by shareholders during this question-and-answer portion of the meeting. However, if multiple questions are submitted on the same topic, we will summarize and respond collectively. Depending on the number of questions submitted, we may not be able to answer all questions during the meeting. Responses to questions may contain 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. You should review the risks and uncertainties described in our SEC reports and filings and are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Operator, please open the phone line for the first question.

[Operator Instructions] I am showing no questions on the phone lines. We will now turn to the questions received through the virtual meeting platform.

As there are no questions, I will turn the meeting back to Michael Collins.

Thank you, Noah. On behalf of your Board of Directors, I would like to thank you for your continued support and interest in Butterfield. Along with financial institutions around the world, Butterfield has faced numerous challenges during 2020. I am proud of how well our bank has adapted to the new operating environment. Butterfield's capital, liquidity and balance sheet remained strong. Over the past decade, we have executed a low risk credit strategy derived from lessons learned in the 2010 financial crisis. So Butterfield is in excellent financial health and well prepared for a protracted COVID-19 disruption. However, with Central Bank's likely no interest rates, at 0 for years, Butterfield is facing spread compression and earnings pressure for 2020 and beyond. We are prepared for this economic crisis, and we'll continue to take action to mitigate the impact on Butterfield's earnings. We are developing new sources of noninterest income, migrating support functions to lower cost jurisdictions and making tactical, low risk changes to the balance sheet. We remain committed to capital management with an emphasis on maintaining our quarterly dividend, supporting organic growth, creating M&A opportunities and repurchasing shares when appropriate. I remain confident in Butterfield's long-term future and once again thank you all for your support over the years. The meeting is now adjourned.

Ladies and gentlemen, thank you for participating in today's conference. You may now all disconnect. Everyone, have a great day.