ANNUAL REPORT 2020 THE BANK OF N.T. BUTTERFIELD & SON LIMITED ANNUAL REPORT 2020 REPORT ANNUAL Banking, trust, investments, by . Established as Bermuda’s first bank in 1858, Butterfield today offers a range of community banking and bespoke financial services from eight leading international financial centers, supported by centralized service centers in Canada and Mauritius. The Butterfield team comprises 1,314 employees working together to help our clients manage their wealth and protect it for future generations, while creating sustainable, long-term value for our shareholders. Vision Mission To be the leading independent offshore bank To build relationships and wealth. and trust company. Values APPROACHABLE COLLABORATIVE EMPOWERED IMPACTFUL We commit to We collaborate for We foster We celebrate personal service. effective teamwork. individual initiative. collective success. Locations The Bahamas Bermuda Jersey United Kingdom Cayman Islands Canada* Switzerland Mauritius* Singapore Guernsey *Non-client-facing service center. Results Core Net Income* (millions) Core Return on Average Tangible Total Assets (millions) $250 Common Equity* 30.0% $16,000 $13,922 $14,739 $197.0 $197.9 25.6% $14,000 $200 25.0% 22.4% 23.4% 20.5% $12,000 $11,103 $10,779 $10,773 $158.9 $154.5 20.0% $150 17.3% $10,000 $123.0 15.0% $8,000 $100 $6,000 10.0% $4,000 $50 5.0% $2,000 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Capital** 25.0% 22.4% 19.9% 19.6% 19.6% 19.8% 20.0% 19.4% 17.6% 18.2% 18.2% 17.3% 17.3% 16.1% 16.1% 15.3% 15.3% 15.0% 10.0% 6.9% 7.6% 5.8% 5.9% 5.3% 5.0% 2016 2017 2018 2019 2020 Tier 1 Capital Ratio Total Capital Ratio Common Equity Tier 1 Capital Ratio Leverage Ratio Awards Ratings The PWM Global Banker The Banker Finance Agency Short-Term Debt Long-Term Senior Debt BANK OF BEST BEST BANK THE YEAR PRIVATE BANK IN BERMUDA Moody’s P-2 A3 BERMUDA BERMUDA 2021 2020 2020 Global Global Global Finance Finance Finance Standard A-2 BBB+ & Poor’s OUTSTANDING BEST PRIVATE BEST CRISIS BANK FOR PRIVATE BANK LEADERSHIP ENTREPRENEURS BERMUDA & KBRA 2020 CARIBBEAN CAYMAN K1 A+ 2020 2021 All information is as at December 31, 2020 unless otherwise specified. *Non-GAAP measure. See “Reconciliation of Non-GAAP Financial Measures” on page 7 of the Annual Report on Form 20-F within this publication for a reconciliation of US GAAP results to non-GAAP measures. ** The Bank’s regulatory capital is determined in accordance with current Basel III guidelines as issued by the BMA. Letter to Shareholders Dear Shareholders, Historically low bond yields in 2020 contributed to significantly lower net interest earnings, which increased emphasis on improving operating I am pleased with Butterfield’s strong performance in 2020. The onset of leverage. As a result, we implemented a bank-wide restructuring program the global pandemic in the second quarter created challenging conditions, to lower headcount and accelerate our multi-year strategy to transfer but it also highlighted the strength and resilience of our strategy and non-client facing positions to our service center in Halifax, Nova Scotia. business model. Our technology and collaborative culture allowed us to maintain safe and uninterrupted services for our clients as we moved Butterfield also helped support our local communities at a time when between office-based and remote working environments, and navigated many people faced tremendous uncertainty. We were proud to offer complex and rapidly evolving health and safety regulations. Our low-risk mortgage deferrals and assist our communities with food security credit strategy was validated by the uncertainty and economic downturn programs and other targeted charitable actions. caused by COVID-19. We remain confident that the Bank’s balance sheet and capital strength will continue to position Butterfield for During 2020 I also implemented a number of changes to the Executive long term growth. Committee. We introduced fresh perspectives and management experience in Trust, Compliance and Operations, Risk, Communications As a leading independent offshore bank and trust company, we continue and Human Resources. I am proud of the whole management team and to focus on our core profitable banking and wealth management have confidence in our bench strength to continue to lead and platforms in Bermuda, the Cayman Islands, and the Channel Islands. grow Butterfield. We also provide specialized financial services to clients in The Bahamas, Switzerland, Singapore and London. Our priority remains to provide As previously announced, Independent Directors Caroline Foulger, outstanding products and client service, while adhering to vigorous Meroe Park and Leslie Godridge departed the Board in 2020. All of compliance, tax and regulatory frameworks. their contributions and service to Butterfield were greatly appreciated. I was pleased to welcome Independent Directors Sonia Baxendale and In a year with market interest rates near zero, Butterfield recorded net Jana Schreuder, as well as Executive Director and Chief Financial Officer, income of $147.2 million, or $2.90 per share. Core net income* was Michael Schrum to the Board. Our Directors continue to be an inclusive $154.5 million or $3.04 per share, which equates to a core return on and increasingly diverse group, and I thank them for their support over average tangible common equity* of 17.3%. We paid a sustainable the past year. quarterly cash dividend of $0.44 per common share and completed our 3.5 million share repurchase program with the majority of the repurchase Butterfield is well positioned to benefit from the anticipated economic activity during the second and third quarters of 2020, when valuations recovery in 2021. We continue to focus on building a leading offshore were very attractive. We also improved our capital profile with a $100 bank and trust business with an aim to maintaining top quartile risk million 5.25% qualifying subordinated debt offering in June. adjusted returns with meaningful non-interest income contribution, limited credit risk, an emphasis on efficiency and balanced capital In the third quarter of 2020 we completed the final integration of the management. I owe a debt of thanks to our clients, staff, shareholders ABN AMRO Channel Islands acquisition. The Channel Islands continue and business partners for their support and dedication throughout 2020. to represent a growth opportunity for Butterfield, both organically and through potential acquisitions. Ratings Michael W. Collins Chairman and Chief Executive Officer BOARD OF DIRECTORS Michael Collins** James Burr Alastair Barbour Sonia Baxendale Michael Covell Mark Lynch Chairman & Chief Lead Independent Non-Executive Non-Executive Non-Executive Non-Executive Executive Officer Director Director Director Director Director Conor O’Dea Jana Schreuder Michael Schrum** Pamela John Wright Non-Executive Non-Executive Executive Director Thomas-Graham Non-Executive Director Director & Group Chief Non-Executive Director Financial Officer Director EXECUTIVE COMMITTEE Andrew Burns Kevin Dallas Bri Hidalgo Michael McWatt Shaun Morris Group Head of Group Head of Group Head of Managing Director, General Counsel & Human Resources Marketing & Compliance & Cayman Islands Group Chief Communications Operational Risk Legal Officer Michael Neff Jane Pearce Richard Saunders Sabeth Siddique Managing Director, Group Head of Managing Director, Group Chief Bermuda and Trust Channel Islands Risk Officer International Wealth and the UK *Non-GAAP measure. See “Reconciliation of Non-GAAP Financial Measures” on page 7 of the Annual Report on Form 20-F within this publication for a reconciliation of US GAAP to non-GAAP measures. **Michael Collins and Michael Schrum are also members of the Executive Committee. 1.585 in1.585 in Financials UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report . For the transition period from ___________________________ to ___________________________ Commission file number: 001-37877 The Bank of N.T. Butterfield & Son Limited (Exact name of Registrant as specified in its charter) Bermuda (Jurisdiction of incorporation or organization) 65 Front Street, Hamilton, HM 12 Bermuda (Address of principal executive offices) Shaun Morris, 65 Front Street, Hamilton, HM 12 Bermuda Telephone: (441) 295-1111; Fax: (441) 292-4365 E-mail: [email protected] (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act. Title of each class Trading Symbol (s) Name of each exchange on which registered Voting ordinary shares of par value BM$ 0.01 each NTB New York Stock Exchange Voting ordinary shares of par value BM$ 0.01 each NTB.BH Bermuda Stock Exchange Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report. As at December 31, 2020, there were 50,010,948 shares of the registrant's common stock outstanding. 1 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. xYes oNo If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.