6-K - NTB - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of April, 2020

Commission File Number: 001-37877

The Bank of N.T. Butterfield & Son Limited

(Translation of registrant’s name into English)

65 Front Street

Hamilton, HM 12

Bermuda

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ý Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

DOCUMENTS INCLUDED AS PART OF THIS FORM 6-K

Attached hereto (i) as Exhibit 99.1 is the earnings release, (ii) as Exhibit 99.2 is the financial statements and (iii) as Exhibit 99.3 is the earnings call presentation, all for the three months ended March 31, 2020 and (iv) as Exhibit 99.4 is the press release announcing changes to the Board of Directors, all for The Bank of N.T. Butterfield & Son Limited.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 30, 2020	THE BANK OF N.T. BUTTERFIELD & SON LIMITED
	By:	/s/ Shaun Morris
	Name:	Shaun Morris
	Title:	General Counsel and Group Chief Legal Officer	2
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EXHIBIT INDEX

Exhibit	Description
99.1	Earnings release - First quarter 2020 results
99.2	Financial statements - First quarter 2020 results
99.3	Earnings call presentation - First quarter 2020 results
99.4	Press release - Butterfield announces Board changes	3
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		Exhibit

Butterfield Reports First Quarter 2020 Results

Financial highlights for the first quarter of 2020:

•	Net income of $40.3 million, or $0.77 per share and core net income^1^ of $40.8 million, or $0.78 per share
•	Return on average common equity of 16.6% and core return on average tangible common equity^1^ of 18.6%
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•	Net interest margin of 2.63%
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•	Credit quality metrics remain strong; CECL reserve build of $5.2 million
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•	Board declares a dividend of $0.44 per share
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•	Bank operational with COVID-19 action plan implemented
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Hamilton, Bermuda - April 30, 2020: The Bank of N.T. Butterfield & Son Limited ("Butterfield" or the "Bank") (BSX: NTB.BH; NYSE: NTB) today announced financial results for the first quarter ended March 31, 2020.

Net income for the three months ended March 31, 2020 was $40.3 million, or $0.77 per diluted common share, compared to $52.1 million, or $0.96 per diluted common share, for the period ended March 31, 2019. Core net income^1^ for the three months ended March 31, 2020 was $40.8 million, or $0.78 per diluted common share, compared to $51.7 million, or $0.95 per diluted common share, for the period ended March 31, 2019.

The core return on average tangible common equity^1^ for the three months ended March 31, 2020 was 18.6%, compared to 25.6% for the period ended March 31, 2019. The core efficiency ratio^1^ for the three months ended March 31, 2020 was 63.8%, compared with 60.1% for the period ended March 31, 2019.

Michael Collins, Butterfield's Chairman and Chief Executive Officer commented, "Our first quarter financial results were relatively strong despite the early headwinds that we experienced from the global COVID-19 health crisis. As an essential service provider, Butterfield continues to offer financial services for our customers, while maintaining social distancing and taking necessary steps to reduce the spread of the virus. We are acutely aware of the personal and financial challenges being experienced throughout the communities in which we operate. We have taken appropriate measures, such as temporarily deferring mortgage payments, reducing fees, safeguarding our colleagues and customers in retail banking, and operating remotely where possible. We have also significantly increased our contributions to community programs for people in the greatest need.

"We are working closely with our regulators and government officials. Our capital and liquidity profile remains strong. We continue to stress test our risk positions and believe that our historically conservative underwriting criteria now places the Bank in a strong position to manage through this crisis, and we are beginning to plan for possible economic recovery scenarios. It is important to note that the impacts to Butterfield from this health crisis will vary depending on a variety of factors, including the length and severity of the economic downturn, the interest rate environment and the time it takes for tourism in Bermuda and Cayman to recover. We are monitoring the changing operating environment closely while preparing for a challenging economic base case and continue to take appropriate actions to balance the interests of all stakeholders."

(1)	See table "Reconciliation of US GAAP Results to Core Earnings" below for reconciliation of US GAAP results to non-GAAP measures. 1

Net income decreased in the first quarter of 2020 versus the prior quarter due principally to lower fee income and a $5.2 million reserve build for future expected credit losses under CECL, which were partially offset by lower non-interest expenses and higher net interest income.

Net interest income (“NII”) for the first quarter of 2020 was $87.6 million, an increase of $1.4 million compared with NII of $86.2 million in the previous quarter and $88.0 million in the first quarter of 2019.

Net interest margin (“NIM”) for the first quarter of 2020 was 2.63%, an increase of 4 basis points from 2.59% in the previous quarter and down 68 basis points from 3.31% in the first quarter of 2019. NIM increased in the first quarter of 2020 compared to the prior quarter due to lower fixed rate deposit costs that were partially offset by lower asset yields driven by a lower global interest rate environment.

Non-interest income decreased to $47.6 million for the first quarter of 2020, compared with $49.7 million in the previous quarter and $43.4 million in the first quarter of 2019. The decrease versus the prior quarter was mostly due to lower banking fees, particularly card services, which benefited from seasonal increases in the fourth quarter of 2019 and was partly offset by increased foreign exchange commissions.

Non-interest expenses were $88.1 million in the first quarter of 2020, compared to $93.9 million in the previous quarter and $80.9 million in the first quarter of 2019. Core non-interest expenses^1^ were $87.6 million in the first quarter of 2020, compared with $91.6 million in the previous quarter and $80.3 million in the first quarter of 2019. Non-interest expenses were lower in the first quarter of 2020 compared to the prior quarter due to re-sequencing the Bank's re-branding initiative, as well as lower travel expenses and client event costs.

Capital Management

The Bank adheres to a disciplined and balanced capital return policy. The Board declared a quarterly dividend of $0.44 per common share to be paid on May 28, 2020 to shareholders of record on May 14, 2020. During the first quarter of 2020, Butterfield repurchased 1.3 million common shares under the Bank's current 3.5 million common share repurchase plan authorization.

The current total regulatory capital ratio as at March 31, 2020 was 19.8% as calculated under Basel III, compared to 19.4% as at December 31, 2019. Both of these ratios are significantly above regulatory requirements applicable to the Bank.

ANALYSIS AND DISCUSSION OF FIRST QUARTER RESULTS

Income statement	Three months ended (Unaudited)
(in $ millions)	March 31, 2020		December 31, 2019		March 31, 2019
Non-interest income	47.6		49.7		43.4
Net interest income before provision for credit losses	87.6		86.2		88.0
Total net revenue before provision for credit losses and other gains (losses)	135.2		136.0		131.4
Provision for credit recoveries (losses)	(5.2	)	(0.4	)	—
Total other gains (losses)	(0.6	)	0.3		1.8
Total net revenue	129.4		135.9		133.1
Non-interest expenses	(88.1	)	(93.9	)	(80.9	)
Total net income before taxes	41.3		42.0		52.2
Income tax benefit (expense)	(1.0	)	1.9		(0.1	)
Net income	40.3		43.9		52.1
Net earnings per share
Basic	0.77		0.83		0.97
Diluted	0.77		0.82		0.96
Per diluted share impact of other non-core items ^1^	0.01		0.05		(0.01	)
Core earnings per share on a fully diluted basis ^1^	0.78		0.87		0.95
Adjusted weighted average number of participating shares on a fully diluted basis^^(in thousands of shares)	52,406		53,273		54,229
Key financial ratios
Return on common equity	16.6	%	18.0	%	23.7	%
Core return on average tangible common equity ^1^	18.6	%	21.1	%	25.6	%
Return on average assets	1.2	%	1.3	%	1.9	%
Net interest margin	2.63	%	2.59	%	3.31	%
Core efficiency ratio ^1^	63.8	%	66.3	%	60.1	%
^(1)^	See table "Reconciliation of US GAAP Results to Core Earnings" below for reconciliation of US GAAP results to non-GAAP measures.
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Balance Sheet	As at
(in $ millions)	March 31, 2020		December 31, 2019
Cash due from banks	1,978		2,550
Securities purchased under agreements to resell	192		142
Short-term investments	1,048		1,218
Investments in securities	4,538		4,436
Loans, net of allowance for credit losses	5,001		5,143
Premises, equipment and computer software, net of accumulated depreciation	156		158
Goodwill and intangibles, net	91		97
Accrued interest and other assets	194		177
Total assets	13,197		13,922
Total deposits	11,753		12,442
Accrued interest and other liabilities	320		373
Long-term debt	144		144
Total liabilities	12,217		12,958
Common shareholders’ equity	981		964
Total shareholders' equity	981		964
Total liabilities and shareholders' equity	13,197		13,922
Key Balance Sheet Ratios:	March 31, 2020		December 31, 2019
Common equity tier 1 capital ratio^1^	17.5	%	17.3	%
Tier 1 capital ratio^1^	17.5	%	17.3	%
Total capital ratio^1^	19.8	%	19.4	%
Leverage ratio	6.1	%	5.9	%
Risk-Weighted Assets (in $ millions)	4,782		4,898
Risk-Weighted Assets / total assets	36.2	%	35.2	%
Tangible common equity ratio	6.8	%	6.3	%
Book value per common share (in $)	19.09		18.40
Tangible book value per share (in $)	17.31		16.55
Non-accrual loans/gross loans	1.1	%	1.0	%
Non-performing assets/total assets	0.5	%	0.4	%
Total coverage ratio	68.2	%	46.8	%
^(1)^	In accordance with regulatory capital guidance, the Bank has elected to make use of transitional arrangements which allow the deferral of the January 1, 2020 CECL impact of $7.8 million on its regulatory capital over a period of 5 years.
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QUARTER ENDED MARCH 31, 2020 COMPARED WITH THE QUARTER ENDED DECEMBER 31, 2019

Net Income

Net income for the quarter ended March 31, 2020 was $40.3 million, down $3.6 million from $43.9 million in the prior quarter.

The $3.6 million decrease in net income in the quarter ended March 31, 2020 over the previous quarter was due principally to the following:

•	$1.4 million increase in net interest income before provision for credit losses due to a $2.5 million decrease in interest expense on deposits due to both lower volumes and the impact of deposit repricing in the Channel Islands and a $0.8 million increase in interest income on loans due to loan growth in the Channel Islands and UK segment. This was partially offset by a $1.9 million decrease in interest income from investments and banks driven by reduced rates as a result of recent fed rate cuts;
•	$3.3 million decrease in staff-related costs due primarily to normalizing the Bank's footprint in the Channel Islands following the ABN AMRO acquisition in 2019;
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•	$1.6 million decrease in marketing expenses associated with lower costs on the Bank's re-branding initiative, lower travel expenses and client event costs;
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•	$2.1 million decrease in non-interest income primarily due to a $2.8 million decrease in banking income due to reduced card services income as a result of seasonal increases in the fourth quarter of 2019 as well as
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lower current quarter transaction volumes offset by a $0.9 million increase in foreign exchange revenue driven by higher volumes;

•	$4.8 million increase in provision for expected credit losses due to the negative revised macroeconomic forecasts impacting future expected credit loss estimates;
•	$0.9 million decrease in total other gains/(losses) due to mark-to-market losses; and
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•	$2.9 million increase in tax expense due to prior quarter recognition of a deferred tax asset in the UK.
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Non-Core Items^1^

Non-core items resulted in expenses of $0.5 million in the quarter ended March 31, 2020, which improved by $1.8 million compared to expenses of $2.3 million in the prior quarter. Non-core items for the period were incurred in the final implementation of a target staffing model for the combined Channel Islands segment following the ABN AMRO (Channel Islands) acquisition.

Management does not believe that the expenses, gains or losses identified as non-core are indicative of the results of operations of the Bank in the ordinary course of business.

^(1)^	See table "Reconciliation of US GAAP Results to Core Earnings" below for reconciliation of US GAAP results to non-GAAP measures.

BALANCE SHEET COMMENTARY AT MARCH 31, 2020 COMPARED WITH DECEMBER 31, 2019

Total Assets

Total assets of the Bank were $13.2 billion at March 31, 2020, a decrease of $0.7 billion from December 31, 2019. The Bank maintained a highly liquid position at March 31, 2020, with $7.8 billion of cash and demand deposits with banks, reverse repurchase agreements and liquid investments representing 58.8% of total assets, compared with 60.0% at December 31, 2019.

Loans Receivable

The loan portfolio totaled $5.0 billion at March 31, 2020, which was a decrease of $141.7 million compared to December 31, 2019, due primarily to the impact of a weaker GBP currency on the Channel Islands portfolio.

Allowance for credit losses at March 31, 2020 totaled $36.2 million, an increase of $12.6 million from December 31, 2019. The movement was primarily due to the adoption of the new CECL standard.

The loan portfolio represented 37.9% of total assets at March 31, 2020 (December 31, 2019: 36.9%), while loans as a percentage of customer deposits increased from 41.3% at December 31, 2019 to 42.6% at March 31, 2020. The increases in both are due principally to a decrease in customer deposits at March 31, 2020 related to expected Euro deposit declines in the Channel Islands.

As of March 31, 2020, the Bank had gross non-accrual loans of $53.1 million, representing 1.1% of total gross loans, a slight increase from the $50.4 million, or 1.0%, of total loans at December 31, 2019. Butterfield continues to engage proactively with clients who experience financial difficulty.

Other real estate owned (“OREO”) increased by $0.4 million from year-end 2019 to $4.2 million at March 31, 2020, as a result of one new foreclosure during the first quarter of 2020.

Investment in Securities

The investment portfolio was $4.5 billion at March 31, 2020, up $101.2 million from December 31, 2019.

The investment portfolio is made up of high quality assets with 99.8% invested in A-or-better-rated securities. The investment yield increased from 2.77% in the previous quarter to 2.78% as at March 31, 2020. Total net unrealized gains were $155.0 million, compared to total net unrealized gains of $60.8 million at December 31, 2019, which was due to lower long term US dollar interest rates.

Deposits

Average deposits were $12.4 billion in the first quarter of 2020 compared to $12.2 billion in the quarter ended December 31, 2019. The cost of deposits decreased 8 basis points from the previous quarter reflecting customer rate decreases in term deposit products and driven by active repricing initiatives in the Channel Islands.

Average Balance Sheet^2^

	For the three months ended
	March 31, 2020				December 31, 2019				March 31, 2019
(in $ millions)	Average<br><br>balance<br><br>($)	Interest()	Average<br><br>rate<br><br>(%)		Average<br><br>balance<br><br>($)	Interest()	Average<br><br>rate<br><br>(%)		Average<br><br>balance<br><br>($)	Interest()	Average<br><br>rate<br><br>(%)
Assets
Cash due from banks and short‑term investments	3,681.2	9.4	1.03		3,791.9	10.9	1.14		2,441.2	9.9	1.65
Investment in securities	4,503.2	31.2	2.78		4,533.6	31.7	2.77		4,295.6	32.5	3.07
Equity securities at fair value	2.3	—	—		1.2	—	—		1.0	—	—
Available-for-sale	2,319.8	15.0	2.59		2,271.7	14.7	2.57		2,180.9	15.5	2.87
Held-to-maturity	2,181.1	16.2	2.99		2,260.7	17.0	2.98		2,113.7	17.0	3.27
Loans	5,159.8	61.7	4.80		4,880.6	60.9	4.95		4,055.0	56.7	5.67
Commercial	1,792.4	23.2	5.19		1,600.1	22.2	5.50		1,280.2	19.5	6.16
Consumer	3,367.4	38.5	4.59		3,280.5	38.8	4.69		2,774.8	37.3	5.45
Interest earning assets	13,344.1	102.4	3.08		13,206.2	103.5	3.11		10,791.8	99.2	3.73
Other assets	403.5				398.8				348.3
Total assets	13,747.6	102.4			13,605.0	103.5			11,140.1	99.2
Liabilities
Deposits	10,172.2	(12.9	(0.51	)	10,050.5	(15.4	(0.61	)	7,634.8	(9.2	(0.49	)
Securities sold under agreement to repurchase	—	—	—		2.6	—	(2.10	)	—	—	—
Long-term debt	143.5	(1.9	(5.22	)	143.5	(1.9	(5.28	)	143.3	(2.0	(5.71	)
Interest bearing liabilities	10,315.7	(14.8	(0.58	)	10,196.6	(17.3	(0.67	)	7,778.1	(11.2	(0.58	)
Non-interest bearing current accounts	2,227.3				2,132.6				2,154.3
Other liabilities	316.6				348.0				274.8
Total liabilities	12,859.6	(14.8			12,677.3	(17.3			10,207.2	(11.2
Shareholders’ equity	888.0				927.7				932.9
Total liabilities and shareholders’ equity	13,747.6				13,605.0				11,140.1
Non‑interest‑bearing funds net of<br><br>non‑interest earning assets<br><br>(free balance)	3,028.4				3,009.6				3,013.7
Net interest margin		87.6	2.63			86.2	2.59			88.0	3.31

All values are in US Dollars.

^(2)^Averages are based upon a daily averages for the periods indicated.

Assets Under Administration and Assets Under Management

Total assets under administration for the trust and custody businesses were $91.6 billion and $27.0 billion, respectively, at March 31, 2020, while assets under management were $5.2 billion at March 31, 2020. This compares with $91.7 billion, $30.3 billion and $5.6 billion, respectively, at December 31, 2019.

Reconciliation of US GAAP Results to Core Earnings

The table below shows the reconciliation of net income in accordance with US GAAP to core earnings, a non-GAAP measure, which excludes certain significant items that are included in our US GAAP results of operations. We focus on core net income, which we calculate by adjusting net income to exclude certain income or expense items that are not representative of our business operations, or “non-core”. Core net income includes revenue, gains, losses and expense items incurred in the normal course of business. We believe that expressing earnings and certain other financial measures excluding these non-core items provides a meaningful base for period-to-period comparisons, which management believes will assist investors in analyzing the operating results of the Bank and predicting future performance. We believe that presentation of these non-GAAP financial measures will permit investors to assess the performance of the Bank on the same basis as management.

Core Earnings	Three months ended
(in $ millions except per share amounts)	March 31, 2020		December 31, 2019		March 31, 2019
Net income to common shareholders	40.3		43.9		52.1
Non-core items
Non-core (gains) losses
Gain on disposal of a pass-through note investment (formerly a SIV)	—		—		(1.0	)
Total non-core (gains) losses	—		—		(1.0	)
Non-core expenses
Early retirement program, redundancies and other non-core compensation costs	0.4		2.2		—
Business acquisition costs	0.1		0.1		0.6
Total non-core expenses	0.5		2.3		0.6
Total non-core items	0.5		2.3		(0.4	)
Core net income	40.8		46.2		51.7
Average common equity	973.3		964.8		893.4
Less: average goodwill and intangible assets	(94.2	)	(95.3	)	(74.9	)
Average tangible common equity	879.1		869.5		818.5
Core earnings per share fully diluted	0.78		0.87		0.95
Return on common equity	16.6	%	18.0	%	23.7	%
Core return on average tangible common equity	18.6	%	21.1	%	25.6	%
Shareholders equity	980.5		963.7		896.2
Less: goodwill and intangible assets	(91.2	)	(96.5	)	(74.1	)
Tangible common equity	889.3		867.2		822.1
Basic participating shares outstanding (in millions)	51.4		52.4		53.3
Tangible book value per common share	17.31		16.55		15.42
Non-interest expenses	88.1		93.9		80.9
Less: non-core expenses	(0.5	)	(2.3	)	(0.6	)
Less: amortization of intangibles	(1.4	)	(1.5	)	(1.3	)
Core non-interest expenses before amortization of intangibles	86.2		90.1		79.0
Core revenue before other gains and losses and provision for credit losses	135.2		136.0		131.4
Core efficiency ratio	63.8	%	66.3	%	60.1	%

Conference Call Information:

Butterfield will host a conference call to discuss the Bank’s results on Friday, May 1, 2020 at 10:00 a.m. Eastern Time. Callers may access the conference call by dialing +1 (844) 855 9501 (toll-free) or +1 (412) 858 4603 (international) ten minutes prior to the start of the call. A live webcast of the conference call, including a slide presentation, will be available in the investor relations section of Butterfield’s website at www.butterfieldgroup.com. A replay of the call will be archived on the Butterfield website thereafter.

About Non-GAAP Financial Measures:

Certain statements in this release involve the use of non-GAAP financial measures. We believe such measures provide useful information to investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with US GAAP; however, our non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with US GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. See "Reconciliation of US GAAP Results to Core Earnings" for additional information.

Forward-Looking Statements:

Certain of the statements made in this release are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “could,” “intend,” “target” and other similar words and expressions of the future. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Bank to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements due to a variety of factors, including the impact of the COVID-19 pandemic, the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, worldwide economic conditions and fluctuations of interest rates, the successful completion and integration of acquisitions or the realization of the anticipated benefits of such acquisitions in the expected time-frames or at all, success in business retention and obtaining new business and other factors. All statements other than statements of historical fact are statements that could be forward-looking statements.

All forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our Securities and Exchange Commission (“SEC”) reports and filings. Such reports are available upon request from the Bank, or from the SEC, including through the SEC’s website at https://www.sec.gov. Except otherwise required by law, Butterfield assumes no obligation and does not undertake to review, update, revise or correct any of the forward-looking statements included herein, whether as a result of new information, future events or other developments. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

About Butterfield:

Butterfield is a full-service bank and wealth manager headquartered in Hamilton, Bermuda, providing services to clients from Bermuda, the Cayman Islands, Guernsey and Jersey, where our principal banking operations are located, and The Bahamas, Switzerland, Singapore and the United Kingdom, where we offer specialized financial services. Banking services comprise deposit, cash management and lending solutions for individual, business and institutional clients. Wealth management services are composed of trust, private banking, asset management and custody. In Bermuda, the Cayman Islands and Guernsey, we offer both banking and wealth management. In The Bahamas, Singapore and Switzerland, we offer select wealth management services. In the UK, we offer residential property lending. In Jersey, we offer select banking and wealth management services. Butterfield is publicly traded on the New York Stock Exchange (symbol: NTB) and the Bermuda Stock Exchange (symbol: NTB.BH). Further details on the Butterfield Group can be obtained from our website at: www.butterfieldgroup.com.

Investor Relations Contact: Media Relations Contact:

Noah Fields Mark Johnson

Investor Relations Group Head of Communications

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

Phone: (441) 299 3816 Phone: (441) 299 1624

E-mail: [email protected] E-mail: [email protected]

		Exhibit

INDEX TO FINANCIAL STATEMENTS

Unaudited Consolidated Financial Statements	Page
Consolidated Balance Sheets (unaudited) as of March 31, 2020 and December 31, 2019	2
Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2020 and 2019	3
Consolidated Statements of Comprehensive Income (unaudited) for the Three Months Ended March 31, 2020 and 2019	4
Consolidated Statements of Changes in Shareholders’ Equity (unaudited) for the Three Months Ended March 31, 2020 and 2019	5
Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2020 and 2019	6
Notes to the Consolidated Financial Statements (unaudited)	7

The Bank of N.T. Butterfield & Son Limited

Consolidated Balance Sheets (unaudited)

(In thousands of US dollars, except share and per share data)

	As at
	March 31, 2020		December 31, 2019
Assets
Cash and demand deposits with banks - Non-interest bearing	116,241		88,031
Demand deposits with banks - Interest bearing	824,451		839,320
Cash equivalents - Interest bearing	1,037,534		1,622,719
Cash due from banks	1,978,226		2,550,070
Securities purchased under agreements to resell	192,296		142,283
Short-term investments	1,047,628		1,218,380
Investment in securities
Equity securities at fair value	6,766		7,419
Available-for-sale at fair value	2,399,811		2,220,341
Held-to-maturity (fair value: $2,234,673 (2019: $2,255,987))	2,131,084		2,208,663
Total investment in securities	4,537,661		4,436,423
Loans
Loans	5,037,185		5,166,210
Allowance for credit losses	(36,217	)	(23,588	)
Loans, net of allowance for credit losses	5,000,968		5,142,622
Premises, equipment and computer software, net of accumulated depreciation	155,894		158,233
Goodwill	23,402		24,838
Other Intangible assets, net	67,796		71,665
Equity method investments	14,736		14,480
Other real estate owned, net	4,227		3,842
Accrued interest and other assets	174,553		158,739
Total assets	13,197,387		13,921,575
Liabilities
Deposits
Non-interest bearing	2,136,503		2,238,256
Interest bearing	9,616,344		10,203,369
Total deposits	11,752,847		12,441,625
Employee benefit plans	110,215		110,347
Accrued interest and other liabilities	210,272		262,360
Total other liabilities	320,487		372,707
Long-term debt	143,545		143,500
Total liabilities	12,216,879		12,957,832
Commitments, contingencies and guarantees (Note 10)
Shareholders' equity
Common share capital (BMD 0.01 par; authorized voting ordinary shares 2,000,000,000 and <br> non-voting ordinary shares 6,000,000,000) issued and outstanding: 51,994,190 (2019: 53,005,177)	520		530
Additional paid-in capital	1,043,512		1,081,569
Retained earnings (Accumulated deficit)	258		(9,237	)
Less: treasury common shares, at cost: 619,212 (2019: 619,212)	(15,734	)	(22,022	)
Accumulated other comprehensive loss	(48,048	)	(87,097	)
Total shareholders’ equity	980,508		963,743
Total liabilities and shareholders’ equity	13,197,387		13,921,575

The accompanying notes are an integral part of these consolidated financial statements.

The Bank of N.T. Butterfield & Son Limited

Consolidated Statements of Operations (unaudited)

(In thousands of US dollars, except per share data)

	Three months ended
	March 31, 2020		March 31, 2019
Non-interest income
Asset management	7,825		6,738
Banking	11,217		11,151
Foreign exchange revenue	10,784		8,760
Trust	12,150		12,607
Custody and other administration services	3,591		2,681
Other non-interest income	2,003		1,443
Total non-interest income	47,570		43,380
Interest income
Interest and fees on loans	61,716		56,727
Investments (none of the investment securities are intrinsically tax-exempt)
Available-for-sale	15,003		15,456
Held-to-maturity	16,243		17,038
Deposits with banks	9,427		9,930
Total interest income	102,389		99,151
Interest expense
Deposits	12,931		9,155
Long-term debt	1,867		2,018
Total interest expense	14,798		11,173
Net interest income before provision for credit losses	87,591		87,978
Provision for credit recoveries (losses)	(5,177	)	39
Net interest income after provision for credit losses	82,414		88,017
Net gains (losses) on equity securities	(653	)	447
Net realized gains (losses) on available-for-sale investments	—		972
Net gains (losses) on other real estate owned	71		128
Net other gains (losses)	2		204
Total other gains (losses)	(580	)	1,751
Total net revenue	129,404		133,148
Non-interest expense
Salaries and other employee benefits	43,831		41,462
Technology and communications	16,415		14,610
Professional and outside services	5,802		5,600
Property	7,310		5,377
Indirect taxes	5,492		5,222
Non-service employee benefits expense	738		1,328
Marketing	1,569		1,674
Amortization of intangible assets	1,440		1,338
Other expenses	5,517		4,304
Total non-interest expense	88,114		80,915
Net income before income taxes	41,290		52,233
Income tax benefit (expense)	(1,013	)	(126	)
Net income	40,277		52,107
Earnings per common share
Basic earnings per share	0.77		0.97
Diluted earnings per share	0.77		0.96

The accompanying notes are an integral part of these consolidated financial statements.

The Bank of N.T. Butterfield & Son Limited

Consolidated Statements of Comprehensive Income (unaudited)

(In thousands of US dollars)

	Three months ended
	March 31, 2020		March 31, 2019
Net income	40,277		52,107
Other comprehensive income (loss), net of taxes
Net change in unrealized gains and losses on translation of net investment in foreign operations	(1,225	)	814
Accretion of net unrealized gains and losses on held-to-maturity investments transferred from available-for-sale investments	44		7
Net change in unrealized gains and losses on available-for-sale investments	38,543		21,284
Employee benefit plans adjustments	1,687		504
Other comprehensive income (loss), net of taxes	39,049		22,609
Total comprehensive income	79,326		74,716

The accompanying notes are an integral part of these consolidated financial statements.

The Bank of N.T. Butterfield & Son Limited

Consolidated Statements of Changes in Shareholders' Equity (unaudited)


				March 31, 2019
		In thousands of<br>US dollars		Number of shares		In thousands of<br>US dollars
Common share capital issued and outstanding
Balance at beginning of period		530		55,359,218		554
Retirement of shares	)	(13	)	(780,000	)	(8	)
Issuance of common shares		3		357,615		3
Balance at end of period		520		54,936,833		549
Additional paid-in capital
Balance at beginning of period		1,081,569				1,171,435
Share-based compensation		4,077				3,911
Retirement of common shares		(42,161	)			(29,169	)
Issuance of common shares, net of underwriting discounts and commissions		27				5
Balance at end of period		1,043,512				1,146,182
Retained earnings (Accumulated deficit)
Balance at beginning of period		(9,237	)			(92,676	)
Cumulative effect from change in accounting policy (Note 2)		(7,841	)			—
Net income for period		40,277				52,107
Common share cash dividends declared and paid, 0.44 per share (2019: 0.44 per share)		(22,941	)			(23,618	)
Balance at end of period		258				(64,187	)
Treasury common shares
Balance at beginning of period		(22,022	)	1,254,212		(48,443	)
Purchase of treasury common shares		(35,886	)	1,145,000		(41,178	)
Retirement of shares	)	42,174		(780,000	)	29,177
Balance at end of period		(15,734	)	1,619,212		(60,444	)
Accumulated other comprehensive income (loss)
Balance at beginning of period		(87,097	)			(148,527	)
Other comprehensive income (loss), net of taxes		39,049				22,609
Balance at end of period		(48,048	)			(125,918	)
Total shareholders' equity		980,508				896,182

All values are in US Dollars.

The accompanying notes are an integral part of these consolidated financial statements.

The Bank of N.T. Butterfield & Son Limited

Consolidated Statements of Cash Flows (unaudited)

(In thousands of US dollars)

	Three months ended
	March 31, 2020		March 31, 2019
Cash flows from operating activities
Net income	40,277		52,107
Adjustments to reconcile net income to operating cash flows
Depreciation and amortization	13,185		10,574
Provision for credit (recoveries) losses	5,177		(39	)
Share-based payments and settlements	4,077		3,911
Net change in equity securities at fair value	653		(447	)
Net realized (gains) losses on available-for-sale investments	—		(972	)
Net (gains) losses on other real estate owned	(71	)	(128	)
(Increase) decrease in carrying value of equity method investments	(301	)	(32	)
Dividends received from equity method investments	45		—
Changes in operating assets and liabilities
(Increase) decrease in accrued interest receivable and other assets	(17,145	)	(39,300	)
Increase (decrease) in employee benefit plans, accrued interest payable and other liabilities	(47,053	)	14,234
Cash provided by (used in) operating activities	(1,156	)	40,355
Cash flows from investing activities
(Increase) decrease in securities purchased under agreements to resell	(50,013	)	(45,125	)
Short-term investments other than restricted cash: proceeds from maturities and sales	569,533		23,234
Short-term investments other than restricted cash: purchases	(479,294	)	(179,615	)
Available-for-sale investments: proceeds from sale	—		972
Available-for-sale investments: proceeds from maturities and pay downs	91,972		60,062
Available-for-sale investments: purchases	(235,744	)	(55,814	)
Held-to-maturity investments: proceeds from maturities and pay downs	94,240		42,931
Held-to-maturity investments: purchases	(18,183	)	(165,300	)
Net (increase) decrease in loans	5,408		78,949
Additions to premises, equipment and computer software	(5,698	)	(2,528	)
Proceeds from sale of other real estate owned	—		787
Cash provided by (used in) investing activities	(27,779	)	(241,447	)
Cash flows from financing activities
Net increase (decrease) in deposits	(415,976	)	810,154
Common shares repurchased	(35,886	)	(41,178	)
Proceeds from stock option exercises	30		8
Cash dividends paid on common shares	(22,941	)	(23,618	)
Cash provided by (used in) financing activities	(474,773	)	745,366
Net effect of exchange rates on cash, cash equivalents and restricted cash	(83,733	)	9,277
Net increase (decrease) in cash, cash equivalents and restricted cash	(587,441	)	553,104
Cash, cash equivalents and restricted cash: beginning of period	2,578,902		2,070,120
Cash, cash equivalents and restricted cash: end of period	1,991,461		2,623,224
Components of cash, cash equivalents and restricted cash at end of period
Cash due from banks	1,978,226		2,601,269
Restricted cash included in short-term investments on the consolidated balance sheets	13,235		21,955
Total cash, cash equivalents and restricted cash at end of period	1,991,461		2,623,224
Supplemental disclosure of non-cash items
Transfer to (out of) other real estate owned	314		—
Initial recognition of right-of-use assets and operating lease liabilities	—		22,370
Reduction in net loans due to initial adoption of a current expected credit loss model	7,841		—

The accompanying notes are an integral part of these consolidated financial statements.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited)

(In thousands of US dollars, unless otherwise stated)

Note 1: Nature of business

The Bank of N.T. Butterfield & Son Limited (“Butterfield”, the “Bank” or the “Company”) is incorporated under the laws of Bermuda and has a banking license under the Banks and Deposit Companies Act, 1999 (“the Act”). Butterfield is regulated by the Bermuda Monetary Authority (“BMA”), which operates in accordance with Basel principles.

Butterfield is a full service bank and wealth manager headquartered in Hamilton, Bermuda. The Bank operates its business through three geographic segments: Bermuda, the Cayman Islands, and the Channel Islands and the United Kingdom ("UK"), where its principal banking operations are located and where it offers specialized financial services. Butterfield offers banking services, comprised of retail and corporate banking, and wealth management, which consists of trust, private banking, and asset management. In the Bermuda and Cayman Islands segments, Butterfield offers both banking and wealth management. In the Channel Islands and the UK segment, the Bank offers wealth management and residential property lending. Butterfield also has operations in the jurisdictions of The Bahamas, Canada, Mauritius, Singapore and Switzerland, which are included in our Other segment.

The Bank's common shares trade on the New York Stock Exchange under the symbol "NTB" and on the Bermuda Stock Exchange ("BSX") under the symbol "NTB.BH".

Note 2: Significant accounting policies

The accompanying unaudited interim consolidated financial statements of the Bank have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and should be read in conjunction with the Bank’s audited financial statements for the year ended December 31, 2019.

In the opinion of Management, these unaudited interim consolidated financial statements reflect all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair statement of the Bank’s financial position and results of operations as at the end of and for the periods presented. The Bank’s results for interim periods are not necessarily indicative of results for the full year.

The preparation of financial statements in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting period, and actual results could differ from those estimates. Management believes that the most critical accounting policies upon which the financial condition depends and which involve the most complex or subjective decisions or assessments, are as follows:

• Allowance for credit losses

• Fair value and impairment of financial instruments

• Impairment of long-lived assets

• Impairment of goodwill

• Employee benefit plans

• Share-based payments

• Business combinations

New Accounting Standards

Accounting for Financial instruments - Credit losses

Starting on January 1, 2020 the Bank adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (Topic 326). Accordingly, from the date of adoption, the Bank uses a current expected credit loss model ("CECL") which is based on expected losses. The model used by the Bank up to December 31, 2019 to estimate credit losses was based on incurred losses. The CECL model is applied by the Bank to the measurement of credit losses on financial instruments at amortized cost, including loan receivables and held-to-maturity ("HTM") debt securities. The Bank also applies the CECL model to certain off-balance sheet credit exposures such as undrawn loan commitments, standby letters of credit, financial guarantees, and other similar instruments. In line with Topic 326, the Bank will present credit losses on available-for-sale ("AFS") securities as a valuation allowance rather than as a direct write-down. Changes in expected credit losses are recorded through the respective credit loss allowances on the consolidated balance sheets as well as in the provision for credit losses (or recoveries) in the consolidated statements of operations.

The Bank's purchased credit-impaired (“PCI”) loans outstanding as at January 1, 2020 are now classified as purchased credit deteriorated (“PCD”) loans and both the amortized cost and an allowance for expected credit losses are disclosed and included with other non-PCD loans' figures. The Bank will continue to recognize the amortization of the noncredit discount, if any, as interest income based on the yield of such assets.

The Bank has not restated comparative information previously accounted for under the incurred loss and the PCI models. The total adjustment resulting from the adoption of this methodology on the opening balance of the Bank’s accumulated deficit as at January 1, 2020 was a negative adjustment of $7.8 million relating to the Bank's loan portfolio.

Under the CECL model, the Bank collects and maintains attributes as they relate to its financial instruments that are within scope of CECL including fair value of collateral, expected performance over the lifetime of the instruments and reasonable and supportable assumptions about future economic conditions. The Bank's measurement of expected losses takes into account historical loss information and is primarily based on the product of: the respective instrument’s probability of default (“PD”), loss given default (“LGD”) and exposure at default (“EAD”). For AFS securities, any allowance for credit losses is based on an impairment assessment.

The Bank made the accounting policy election to write off accrued interest receivable on loans that are placed on non-accrual status by reversing the then accrued interest balance against interest income revenue.

Allowance for Current Expected Credit Losses

The Bank maintains allowances for credit losses, which in management’s opinion is adequate to absorb all estimated credit-related losses that are expected in its lending and off-balance sheet credit-related arrangements at the balance sheet date.

Management measures expected credit losses on held-to-maturity and available-for-sale debt securities on a collective basis by major security type when similar risk characteristics exist, or failing that, on an individual basis.

For available-for-sale debt securities in an unrealized loss position, the Bank first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Bank evaluates whether the decline in fair value has resulted

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

The allowance for credit losses on loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in the current-loan specific risk characteristics such as differences in underwriting practices, vintage, portfolio mix, delinquency level, term as well as changes in environmental conditions, such as changes in macroeconomic factors and collateral values for periods beyond the reasonable and supportable forecast period.

The allowance for credit losses is measured on a collective pool basis when similar risk characteristics exist. The Bank has identified the following portfolio segments: Residential mortgages, Consumers loans (including overdrafts), Commercial loans, Commercial overdrafts, Commercial real estate loans and Credit cards.

For Loans and overdrafts, Management uses a probability of default and loss-given-default model to estimate the allowance for credit losses and a loss-rate. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. For Credit cards, Management uses a loss rate to estimate expected credit losses.

Expected credit losses are estimated over the contractual term of the loans. The contractual term excludes potential extensions, renewals and modifications unless management has a reasonable expectation at the reporting date that the extension or renewal options included in the original contract will occur or that a troubled debt restructuring will be executed. Credit card receivables do not have stated maturities, therefore establishing a contractual term is performed by using analytical approximation behavior.

New Accounting Pronouncements

The following accounting developments were issued during the three months ended March 31, 2020 or are accounting standards pending adoption:

In January 2020, the Financial Accounting Standards Board (“FASB”) published ASU 2020-01-Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force). For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted, including early adoption in an interim period for public business entities for periods for which financial statements have not yet been issued. The Bank does not anticipate this ASU to have a material impact on the Bank.

In February 2020, the FASB published ASU 2020-02- Financial Instrument - Credit Losses (Topic 326) and Leases (Topic 842). Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update). The amendments are effective immediately. The Bank does not anticipate this ASU to have a material impact on the Bank.

In March 2020, the FASB published ASU 2020-03-Codification Improvements to Financial Instruments. Issue 1: Fair value option Disclosures. The amendments clarify that all entities are required to provide the fair value option disclosures in par 825-10-50-24 through 50-32. Issue 2: Applicability of Portfolio Exception in Topic 820 to Nonfinancial Items. Paragraph 820-10-35-2(g) and 820-10-35-18L are amended to include the phrase nonfinancial items accounted for as derivatives under Topic 815 to be consistent with the previous amendments to Section 820-10-35 that were made by Accounting Standards Update No. 2018-09, Codification Improvements. Issue 3: Disclosures for Depository and Lending Institutions. The amendments clarify that the disclosure requirements in Topic 320 apply to the disclosure requirements in Topic 942 for depository and lending institutions. Issue 4: Cross-reference to Line-of-credit or revolving-Debt arrangements Guidance in Subtopic 470-50. The amendments improve the understandability of the guidance. Issue 5: Cross-reference to Net Asset Value Practical Expedient in Subtopic 820-10. The amendments improve the understandability of the guidance. Issue 6: Interaction of Topic 842 and Topic 326. The amendments clarify that the contractual term of a net investment in a lease determined in accordance with Topic 842 should be the contractual term used to measure expected credit losses under Topic 326.Issue 7: Interaction of Topic 326 and Subtopic 860-20 .The amendments to Subtopic 860-20, Transfers and Servicing - Sales of Financial Assets, clarify that when an entity regains control of financial assets sold, an allowance for credit losses should be recorded in accordance with Topic 326. The amendments related to Issue 1, Issue 2, Issue 4, and Issue 5 are conforming amendments. For public business entities, the amendments are effective upon issuance of this final Update. The amendment related to Issue 3 is a conforming amendment that affects the guidance in the amendments in Accounting Standards Update 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. That guidance relates to the amendments in 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The effective date of Update 2019-04 for the amendments to Update 2016-01 is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For amendments to Issues 6 and 7, for entities that have adopted the guidance in Update 2016-13, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The amendments should be applied on a modified-retrospective basis by means of a cumulative-effect adjustment to opening retained earnings in the statement of financial position as of the date that an entity adopted the amendments in Update 2016-13. The Bank does not anticipate this ASU to have a material impact on the Bank.

In March 2020, the FASB published ASU 2020-04-Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this Update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in this Update apply only to contracts, hedging relationships, and other transactions that reference London Inter Bank Offer Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provide by the amendments do not apply to contract modifications made and hedging relationships. The amendments in this Update are effective for all entities upon issuance (March 12, 2020) through December 31, 2022. The Bank does not anticipate this ASU to have a material impact on the Bank.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Note 3: Cash due from banks

	March 31, 2020	December 31, 2019
Non-interest bearing
Cash and demand deposits with banks	116,241	88,031
Interest bearing¹
Demand deposits with banks	824,451	839,320
Cash equivalents	1,037,534	1,622,719
Sub-total - Interest bearing	1,861,985	2,462,039
Total cash due from banks	1,978,226	2,550,070

¹ Interest bearing cash due from banks includes certain demand deposits with banks as at March 31, 2020 in the amount of $398.7 million (December 31, 2019: $439.5 million) that are earning interest at a negligible rate.

Note 4: Short-term investments

	March 31, 2020	December 31, 2019
Unrestricted
Maturing within three months	701,023	594,749
Maturing between three to six months	331,838	591,212
Maturing between six to twelve months	1,532	2,584
Total unrestricted short-term investments	1,034,393	1,188,545
Affected by drawing restrictions related to minimum reserve and derivative margin requirements
Non-interest earning demand deposits	—	2,270
Interest earning demand and term deposits	13,235	27,565
Total restricted short-term investments	13,235	29,835
Total short-term investments	1,047,628	1,218,380

Note 5: Investment in securities

Amortized Cost, Carrying Amount and Fair Value

On the consolidated balance sheets, equity securities and available-for-sale ("AFS") investments are carried at fair value and held-to-maturity ("HTM") investments are carried at amortized cost.

	March 31, 2020					December 31, 2019
	Amortized<br> cost	Gross<br> unrealized<br> gains	Gross<br> unrealized<br> losses		Fair value	Amortized<br> cost	Gross<br> unrealized<br> gains	Gross<br> unrealized<br> losses		Fair value
Equity securities
Mutual funds	5,724	1,544	(502	)	6,766	5,724	2,142	(447	)	7,419
Total equity securities	5,724	1,544	(502	)	6,766	5,724	2,142	(447	)	7,419
Available-for-sale
US government and federal agencies	2,192,206	59,130	(6,687	)	2,244,649	2,040,171	18,617	(6,342	)	2,052,446
Non-US governments debt securities	26,126	—	(720	)	25,406	26,118	82	(524	)	25,676
Asset-backed securities - Student loans	13,290	—	(665	)	12,625	13,290	—	(399	)	12,891
Residential mortgage-backed securities	117,836	259	(964	)	117,131	128,952	654	(278	)	129,328
Total available-for-sale	2,349,458	59,389	(9,036	)	2,399,811	2,208,531	19,353	(7,543	)	2,220,341
Held-to-maturity¹
US government and federal agencies	2,131,084	103,589	—		2,234,673	2,208,663	47,814	(490	)	2,255,987
Total held-to-maturity	2,131,084	103,589	—		2,234,673	2,208,663	47,814	(490	)	2,255,987

¹ For the three months ended March 31, 2020, and the three months ended March 31, 2019, impairments recognized in other comprehensive loss for HTM investments were nil.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Investments with Unrealized Loss Positions

The Bank does not believe that the AFS and HTM investment securities that were in an unrealized loss position as of March 31, 2020 (and December 31, 2019), which were composed of 52 securities representing 28% of the AFS and HTM portfolios' carrying value (December 31, 2019: 68 and 23%, respectively), represent an other-than-temporary impairment ("OTTI"). Total gross unrealized losses were 1.7% of the fair value of affected securities (December 31, 2019: 0.8%). Management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery. Unrealized losses were attributable primarily to changes in market interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The issuers continue to make timely principal and interest payments on the securities. The following describes the processes for identifying credit impairment in security types with the most significant unrealized losses as shown in the preceding tables.

Management believes that all the US government and federal agencies securities do not have any credit losses, given the explicit and implicit guarantees provided by the US federal government.

Management believes that all the Non-US governments debt securities do not have any credit losses, given the explicit guarantee provided by the issuing government.

Investments in Asset-backed securities - Student loans are composed primarily of securities collateralized by Federal Family Education Loan Program loans (“FFELP loans”). FFELP loans benefit from a US federal government guarantee of at least 97% of defaulted principal and accrued interest, with additional credit support provided in the form of over-collateralization, subordination and excess spread, which collectively total in excess of 100%. Accordingly, the vast majority of FFELP loan-backed securities are not exposed to traditional consumer credit risk.

Investments in Residential mortgage-backed securities relate to 13 securities (December 31, 2019: 7) which are rated AAA and possess similar significant credit enhancement as described above. No credit losses were recognized on these securities as the weighted average credit support and the weighted average loan-to-value ratios range from 6% - 24% and 52% - 62%, respectively. Current credit support is significantly greater than any delinquencies experienced on the underlying mortgages.

In the following tables, debt securities with unrealized losses that are not deemed to be OTTI are categorized as being in a loss position for "less than 12 months" or "12 months or more" based on the point in time that the fair value most recently declined below the amortized cost basis.

	Less than 12 months			12 months or more
March 31, 2020	Fair<br><br>value	Gross<br> unrealized<br> losses		Fair<br><br>value	Gross<br>unrealized<br>losses		Total<br><br>fair value	Total gross<br>unrealized<br>losses
Available-for-sale securities with unrealized losses
US government and federal agencies	115,974	(1,406	)	285,910	(5,281	)	401,884	(6,687	)
Non-US governments debt securities	3,159	(193	)	22,246	(527	)	25,405	(720	)
Asset-backed securities - Student loans	—	—		12,625	(665	)	12,625	(665	)
Residential mortgage-backed securities	78,695	(698	)	13,912	(266	)	92,607	(964	)
Total available-for-sale securities with unrealized losses	197,828	(2,297	)	334,693	(6,739	)	532,521	(9,036	)
Held-to-maturity securities with unrealized losses
US government and federal agencies	—	—		—	—		—	—
	Less than 12 months			12 months or more
December 31, 2019	Fair<br><br>value	Gross<br> unrealized<br> losses		Fair<br><br>value	Gross<br>unrealized<br>losses		Total<br><br>fair value	Total gross<br>unrealized<br>losses
Available-for-sale securities with unrealized losses
US government and federal agencies	376,262	(1,786	)	435,999	(4,556	)	812,261	(6,342	)
Non-US governments debt securities	202	(1	)	22,246	(523	)	22,448	(524	)
Asset-backed securities - Student loans	—	—		12,891	(399	)	12,891	(399	)
Residential mortgage-backed securities	6,038	(30	)	50,254	(248	)	56,292	(278	)
Total available-for-sale securities with unrealized losses	382,502	(1,817	)	521,390	(5,726	)	903,892	(7,543	)
Held-to-maturity securities with unrealized losses
US government and federal agencies	47,038	(214	)	46,411	(276	)	93,449	(490	)

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Investment Maturities

The following table presents the remaining term to contractual maturity of the Bank’s securities. The actual maturities may differ as certain securities offer prepayment options to the borrowers.

	Remaining term to maturity
March 31, 2020	Within<br><br>3 months	3 to 12<br><br>months	1 to 5<br><br>years	5 to 10<br><br>years	No specific or single<br><br>maturity	Carrying<br><br>amount
Equity securities
Mutual funds	—	—	—	—	6,766	6,766
Available-for-sale
US government and federal agencies	—	—	—	—	2,244,649	2,244,649
Non-US governments debt securities	—	197	22,247	2,962	—	25,406
Asset-backed securities - Student loans	—	—	—	—	12,625	12,625
Residential mortgage-backed securities	—	—	—	—	117,131	117,131
Total available-for-sale	—	197	22,247	2,962	2,374,405	2,399,811
Held-to-maturity
US government and federal agencies	—	—	—	—	2,131,084	2,131,084
Total investments	—	197	22,247	2,962	4,512,255	4,537,661
Total by currency
US dollars	—	197	22,247	2,962	4,512,034	4,537,440
Other	—	—	—	—	221	221
Total investments	—	197	22,247	2,962	4,512,255	4,537,661

Pledged Investments

The Bank pledges certain US government and federal agencies investment securities to further secure the Bank's issued customer deposit products. The secured party does not have the right to sell or repledge the collateral.

	March 31, 2020		December 31, 2019
Pledged Investments	Amortized<br> cost	Fair<br><br>value	Amortized<br> cost	Fair<br><br>value
Available-for-sale	4,435	4,478	3,848	3,912
Held-to-maturity	4,921	5,204	5,449	5,552
Sale Proceeds and Realized Gains and Losses of AFS Securities	Three months ended			Three months ended
---	---	---	---	---	---	---
	March 31, 2020			March 31, 2019
	Sale<br><br>proceeds	Gross realized<br> gains	Gross realized<br>(losses)	Sale <br>proceeds	Gross realized<br> gains	Gross realized<br>(losses)
Pass-through note	—	—	—	972	972	—

Taxability of Interest Income

None of the investments' interest income have received a specific preferential income tax treatment in any of the jurisdictions in which the Bank owns investments.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Note 6: Loans

The principal means of securing residential mortgages, personal, credit card and business loans are entitlements over assets and guarantees. Mortgage loans are generally repayable over periods of up to thirty years and personal and business loans are generally repayable over terms not exceeding five years. Government loans are repayable over a variety of terms which are individually negotiated. Amounts owing on credit cards are revolving and typically a minimum amount is due within 30 days from billing. The effective yield on total loans as at March 31, 2020 is 4.47% (December 31, 2019: 4.73%). The interest receivable on total loans as at March 31, 2020 is $9.2 million (December 31, 2019: $9.2 million). The interest receivable is included in Accrued interest and other assets on the balance sheet and is excluded from all loan amounts disclosed in the present note to the financial statements.

Loans' Credit Quality

The four credit quality classifications set out in the following tables are defined below and describe the credit quality of the Bank's lending portfolio. These classifications each encompass a range of more granular internal credit rating grades. Loans' internal credit ratings are assigned by the Bank's customer relationship managers as well as members of the Bank's jurisdictional and group Credit Committees. The borrowers' financial condition is documented at loan origination and maintained periodically thereafter at a frequency which can be up to monthly for certain loans. The loans' performing status, as well as current economic trends, are continuously monitored. The Bank's jurisdictional and group Credit Committees meet on a monthly basis. The Bank also has a Group Provisions and Impairments Committee which is responsible for approving significant provisions and other impairment charges.

A pass loan shall mean a loan that is expected to be repaid as agreed. A loan is classified as pass where the Bank is not expected to face repayment difficulties because the present and projected cash flows are sufficient to repay the debt and the repayment schedule as established by the agreement is being followed. Loans in this category are reviewed by the Bank’s management on at least an annual basis.

A special mention loan shall mean a loan under close monitoring by the Bank’s management on at least a quarterly basis. Loans in this category are currently protected and still performing (current with respect to interest and principal payments), but are potentially weak and present an undue credit risk exposure, but not to the point of justifying a classification of substandard.

A substandard loan shall mean a loan whose evident unreliability makes repayment doubtful and there is a threat of loss to the Bank unless the unreliability is averted. Loans in this category are under close monitoring by the Bank’s management on at least a quarterly basis.

A non-accrual loan shall mean either management is of the opinion full payment of principal or interest is in doubt or when principal or interest is 90 days past due and for residential mortgage loans which are not well secured and in the process of collection. Loans in this category are under close monitoring by the Bank’s management on at least a quarterly basis.

The amortized cost of loans by credit quality classifications and allowance for expected credit losses by class of loans is as follows:

March 31, 2020	Pass	Special<br> mention	Substandard	Non-accrual	Total amortized cost	Allowance for expected credit losses		Total net loans
Commercial loans
Government	368,786	—	—	—	368,786	(1,754	)	367,032
Commercial and industrial	423,366	44,048	1,107	7,512	476,033	(13,232	)	462,801
Commercial overdrafts	34,571	7,543	479	—	42,593	(548	)	42,045
Total commercial loans	826,723	51,591	1,586	7,512	887,412	(15,534	)	871,878
Commercial real estate loans
Commercial mortgage	604,224	81,847	2,904	3,851	692,826	(1,240	)	691,586
Construction	58,943	—	—	—	58,943	(1,311	)	57,632
Total commercial real estate loans	663,167	81,847	2,904	3,851	751,769	(2,551	)	749,218
Consumer loans
Automobile financing	21,492	68	—	184	21,744	(81	)	21,663
Credit card	75,509	—	346	—	75,855	(2,912	)	72,943
Overdrafts	3,472	623	50	2	4,147	(194	)	3,953
Other consumer^1^	124,910	3,334	—	1,147	129,391	(1,443	)	127,948
Total consumer loans	225,383	4,025	396	1,333	231,137	(4,630	)	226,507
Residential mortgage loans	2,989,085	56,330	81,008	40,444	3,166,867	(13,502	)	3,153,365
Total	4,704,358	193,793	85,894	53,140	5,037,185	(36,217	)	5,000,968

^1^ Other consumer loans’ amortized cost comprises $65 million of cash and portfolio secured lending and $46 million of lending secured by buildings in construction or other collateral.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

									Evaluation of gross loans for impairment
December 31, 2019	Pass	Special<br> mention	Substandard	Non-accrual	Total amortized<br> cost	General and specific allowances		Total net loans	Individually<br> evaluated	Collectively<br> evaluated
Commercial loans
Government	370,753	—	—	—	370,753	—		370,753	—	370,753
Commercial and industrial	469,591	57,438	1,119	7,567	535,715	(7,195	)	528,520	48,386	487,329
Commercial overdrafts	23,529	4,565	451	2	28,547	(86	)	28,461	2	28,545
Total commercial loans	863,873	62,003	1,570	7,569	935,015	(7,281	)	927,734	48,388	886,627
Commercial real estate loans
Commercial mortgage	581,450	71,638	2,955	3,250	659,293	(1,496	)	657,797	9,871	649,422
Construction	91,812	—	3,128	—	94,940	—		94,940	3,128	91,812
Total commercial real estate loans	673,262	71,638	6,083	3,250	754,233	(1,496	)	752,737	12,999	741,234
Consumer loans
Automobile financing	21,229	78	—	155	21,462	(102	)	21,360	155	21,307
Credit card	87,250	—	424	—	87,674	(445	)	87,229	—	87,674
Overdrafts	5,270	2,504	50	34	7,858	(28	)	7,830	34	7,824
Other consumer^1^	135,534	3,550	—	1,063	140,147	(926	)	139,221	1,070	139,077
Total consumer loans	249,283	6,132	474	1,252	257,141	(1,501	)	255,640	1,259	255,882
Residential mortgage loans	3,019,105	80,135	82,251	38,330	3,219,821	(13,310	)	3,206,511	115,535	3,104,285
Total	4,805,523	219,908	90,378	50,401	5,166,210	(23,588	)	5,142,622	178,181	4,988,028

^1^ Other consumer loans’ amortized cost comprises $74 million of cash and portfolio secured lending and $48 million of lending secured by buildings in construction or other collateral.

Based on the most recent analysis performed, the amortized cost of loans by year of origination and credit quality indicator is as follows:

March 31, 2020	Pass	Special<br> mention	Substandard	Non-accrual	Total amortized cost
Loans by origination year
2020	224,095	101	—	—	224,196
2019	1,313,117	31,407	181	6	1,344,711
2018	767,172	39,439	4,925	935	812,471
2017	579,138	41,930	3,200	959	625,227
2016	339,354	11,016	3,825	3,915	358,110
Prior	1,363,498	60,823	72,888	45,579	1,542,788
Overdrafts and credit cards	117,984	9,077	875	1,746	129,682
Total amortized cost	4,704,358	193,793	85,894	53,140	5,037,185

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Age Analysis of Past Due Loans (Including Non-Accrual Loans)

The following tables summarize the past due status of the loans. The aging of past due amounts are determined based on the contractual delinquency status of payments under the loan and this aging may be affected by the timing of the last business day at period end. Loans less than 30 days past due are included in current loans.

March 31, 2020	30 - 59 <br>days	60 - 89 <br>days	More than 90 days	Total past<br> due loans	Total <br>current	Total <br>amortized cost
Commercial loans
Government	—	—	—	—	368,786	368,786
Commercial and industrial	266	—	7,484	7,750	468,283	476,033
Commercial overdrafts	—	—	—	—	42,593	42,593
Total commercial loans	266	—	7,484	7,750	879,662	887,412
Commercial real estate loans
Commercial mortgage	1,124	—	3,851	4,975	687,851	692,826
Construction	—	—	—	—	58,943	58,943
Total commercial real estate loans	1,124	—	3,851	4,975	746,794	751,769
Consumer loans
Automobile financing	16	33	163	212	21,532	21,744
Credit card	635	369	346	1,350	74,505	75,855
Overdrafts	—	—	2	2	4,145	4,147
Other consumer	105	103	1,136	1,344	128,047	129,391
Total consumer loans	756	505	1,647	2,908	228,229	231,137
Residential mortgage loans	21,214	10,336	46,213	77,763	3,089,104	3,166,867
Total amortized cost	23,360	10,841	59,195	93,396	4,943,789	5,037,185
December 31, 2019	30 - 59 <br>days	60 - 89 <br>days	More than 90 days	Total past<br> due loans	Total <br>current	Total <br>amortized cost
Commercial loans
Government	—	—	—	—	370,753	370,753
Commercial and industrial	276	—	7,487	7,763	527,952	535,715
Commercial overdrafts	—	—	2	2	28,545	28,547
Total commercial loans	276	—	7,489	7,765	927,250	935,015
Commercial real estate loans
Commercial mortgage	445	—	3,250	3,695	655,598	659,293
Construction	—	—	3,128	3,128	91,812	94,940
Total commercial real estate loans	445	—	6,378	6,823	747,410	754,233
Consumer loans
Automobile financing	53	58	135	246	21,216	21,462
Credit card	630	221	424	1,275	86,399	87,674
Overdrafts	—	—	34	34	7,824	7,858
Other consumer	994	139	1,028	2,161	137,986	140,147
Total consumer loans	1,677	418	1,621	3,716	253,425	257,141
Residential mortgage loans	31,931	9,487	47,132	88,550	3,131,271	3,219,821
Total amortized cost	34,329	9,905	62,620	106,854	5,059,356	5,166,210

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Changes in Allowances For Credit Losses

The increase in the provision for credit losses during the three months ended March 31, 2020 was primarily attributable to changes in macroeconomic factors, such as GDP forecasts, and changes in the credit ratings of some commercial customers. As per the Bank’s accounting policy, as disclosed in Note 2, the Bank continuously collects and maintains attributes related to financial instruments within the scope of CECL, including current conditions, and reasonable and supportable assumptions about future economic conditions.

	Three months ended March 31, 2020
	Commercial		Commercial<br> real estate		Consumer		Residential<br> mortgage		Total
Balance at the beginning of period, before change in accounting policy	7,281		1,496		1,502		13,309		23,588
Cumulative effect from change in accounting policy (Note 2)	4,109		1,026		2,506		200		7,841
Provision increase (decrease)	4,204		30		702		62		4,998
Recoveries of previous charge-offs	4		—		258		172		434
Charge-offs	(16	)	—		(325	)	(353	)	(694	)
Other	(48	)	(1	)	(13	)	112		50
Allowances for expected credit losses at end of period	15,534		2,551		4,630		13,502		36,217		Three months ended March 31, 2019
---	---	---	---	---	---	---	---	---	---	---
	Commercial		Commercial<br> real estate		Consumer		Residential<br> mortgage		Total
Balance at beginning of period	6,913		4,092		802		13,295		25,102
Provision increase (decrease)	(646	)	(112	)	156		563		(39	)
Recoveries of previous charge-offs	10		1		277		56		344
Charge-offs	—		—		(421	)	(18	)	(439	)
Other	—		1		—		42		43
General and specific allowances at end of period	6,277		3,982		814		13,938		25,011
Allowances at end of period: individually evaluated for impairment	(4,447	)	(600	)	(274	)	(10,588	)	(15,909	)
Allowances at end of period: collectively evaluated for impairment	(1,830	)	(3,382	)	(540	)	(3,350	)	(9,102	)

Collateral-dependent loans

Management identified that the repayment of certain commercial and consumer mortgage loans is expected to be provided substantially through the operation or the sale of the collateral pledged to the Bank ("collateral-dependent loans"). The Bank believes that for the vast majority of loans identified as collateral-dependent , the sale of the collateral will be sufficient to fully reimburse the loan's carrying amount.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Non-Performing Loans

During the three months ended March 31, 2020, no interest was recognized on non-accrual loans. Non-performing loans at March 31, 2020 include PCD loans, which have all been on non-accrual status since their acquisition. The balances at December 31, 2019 have not been restated to include the $1.8 million amortized cost of PCD loans as at that date. No credit deteriorated loans were purchased during the period.

	March 31, 2020				December 31, 2019
	Non-accrual loans with an allowance	Non-accrual loans without an allowance	Past<br> due more than 90 days and accruing	Total non-<br>performing<br> loans	Non-accrual loans with an allowance	Non-accrual loans without an allowance	Past<br> due more than 90 days and accruing	Total non-<br>performing<br> loans
Commercial loans
Commercial and industrial	7,512	—	—	7,512	7,487	80	—	7,567
Commercial overdrafts	—	—	—	—	—	2	—	2
Total commercial loans	7,512	—	—	7,512	7,487	82	—	7,569
Commercial real estate loans
Commercial mortgage	986	2,865	—	3,851	1,019	2,231	—	3,250
Construction	—	—	—	—	—	—	3,128	3,128
Total commercial real estate loans	986	2,865	—	3,851	1,019	2,231	3,128	6,378
Consumer loans
Automobile financing	141	43	—	184	—	155	—	155
Credit card	—	—	346	346	—	—	424	424
Overdrafts	—	2	—	2	—	34	—	34
Other consumer	851	296	—	1,147	676	387	—	1,063
Total consumer loans	992	341	346	1,679	676	576	424	1,676
Residential mortgage loans	30,202	10,242	10,494	50,938	29,016	9,314	12,008	50,338
Total non-performing loans	39,692	13,448	10,840	63,980	38,198	12,203	15,560	65,961

Loans modified in a TDR

As at March 31, 2020 and December 31, 2019, the Bank had no loans that were modified in a TDR during the preceding 12 months that subsequently defaulted (i.e. 90 days or more past due following a modification). at December 31, 2019, the Bank had no loans which were formerly residential mortgages that were modified in a TDR during the preceding 12 months that subsequently defaulted. with a combined recorded carrying value of $0.0 million.

TDRs entered into during the period

	Three months ended March 31, 2020
	Number of<br> contracts	Pre-<br>modification<br> recorded <br>loans	Modification: <br>interest<br> capitalization	Post-<br>modification<br> recorded<br> loans
Residential mortgage loans	1	352	—	352	Three months ended March 31, 2019
---	---	---	---	---
	Number of<br> contracts	Pre-<br>modification<br> recorded loans	Modification: <br>interest<br> capitalization	Post-<br>modification<br> recorded<br>loans
Residential mortgage loans	1	364	—	364

TDRs Outstanding

	March 31, 2020		December 31, 2019
	Accrual	Non-accrual	Accrual	Non-accrual
Commercial loans	926	—	939	—
Commercial real estate loans	2,904	1,303	2,954	1,315
Residential mortgage loans	64,079	10,491	65,275	9,576
Total TDRs outstanding	67,909	11,794	69,168	10,891

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Note 7: Credit risk concentrations

Concentrations of credit risk in the lending and off-balance sheet credit-related arrangements portfolios arise when a number of customers are engaged in similar business activities, are in the same geographic region, or when they have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. The Bank regularly monitors various segments of its credit risk portfolio to assess potential concentrations of risks and to obtain collateral when deemed necessary. In the Bank's commercial portfolio, risk concentrations are evaluated primarily by industry and by geographic region of loan origination. In the consumer portfolio, concentrations are evaluated primarily by products. Credit exposures include loans, guarantees and acceptances, letters of credit and commitments for undrawn lines of credit. Unconditionally cancellable credit cards and overdraft lines of credit are excluded from the tables below.

The following tables summarize the credit exposure of the Bank by business sector and by geographic region. The exposures amounts disclosed below do not include accrued interest and are gross of specific allowances for credit losses and collateral held.

	March 31, 2020			December 31, 2019
Business sector	Loans	Off-balance<br><br>sheet	Total credit<br><br>exposure	Loans	Off-balance<br><br>sheet	Total credit<br><br>exposure
Banks and financial services	776,537	353,471	1,130,008	767,684	324,388	1,092,072
Commercial and merchandising	529,641	197,986	727,627	563,494	189,060	752,554
Governments	371,105	6,307	377,412	372,544	8,807	381,351
Individuals	2,476,640	126,699	2,603,339	2,483,334	148,519	2,631,853
Primary industry and manufacturing	296,659	188,201	484,860	383,395	110,947	494,342
Real estate	381,827	3,725	385,552	371,758	6,312	378,070
Hospitality industry	199,018	73	199,091	200,603	73	200,676
Transport and communication	5,758	75	5,833	5,720	75	5,795
Total gross exposure	5,037,185	876,537	5,913,722	5,148,532	788,181	5,936,713
	March 31, 2020				December 31, 2019
---	---	---	---	---	---	---	---	---
Geographic region	Cash due from<br> banks, resell agreements and<br> short-term<br> investments	Loans	Off-balance<br><br>sheet	Total credit<br><br>exposure	Cash due from<br> banks, resell agreements and<br> short-term<br> investments	Loans	Off-balance<br><br>sheet	Total credit<br><br>exposure
Australia	9,897	—	—	9,897	170,956	—	—	170,956
Barbados	—	—	—	—	784	—	—	784
Belgium	4,395	—	—	4,395	3,554	—	—	3,554
Bermuda	46,720	2,283,867	317,854	2,648,441	38,059	2,237,372	347,802	2,623,233
Canada	222,926	—	—	222,926	553,941	—	—	553,941
Cayman	105,013	929,916	194,538	1,229,467	55,360	931,254	208,404	1,195,018
Guernsey	2	713,043	218,315	931,360	4	855,553	123,376	978,933
Japan	16,482	—	—	16,482	16,183	—	—	16,183
Jersey	—	8,120	—	8,120	—	7,219	—	7,219
Netherlands	227,904	—	—	227,904	410,461	—	—	410,461
New Zealand	1,401	—	—	1,401	6,174	—	—	6,174
Norway	1,179	—	—	1,179	1,204	—	—	1,204
Saint Lucia	—	29,325	—	29,325	—	29,400	—	29,400
Switzerland	8,400	—	—	8,400	8,015	—	—	8,015
The Bahamas	1,532	12,533		14,065	1,607	12,859	—	14,466
United Kingdom	1,794,208	1,060,381	145,830	3,000,419	1,742,676	1,074,875	108,599	2,926,150
United States	775,817	—	—	775,817	898,262	—	—	898,262
Other	2,274	—	—	2,274	3,493	—	—	3,493
Total gross exposure	3,218,150	5,037,185	876,537	9,131,872	3,910,733	5,148,532	788,181	9,847,446

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Note 8: Customer deposits and deposits from banks

By Maturity
	Demand		Total <br>demand <br>deposits	Term				Total <br>term <br>deposits
March 31, 2020	Non-interest<br> bearing	Interest <br>bearing		Within 3<br> months	3 to 6<br> months	6 to 12<br> months	After 12 months		Total <br>deposits
Demand or less than $100k¹	2,136,503	6,756,739	8,893,242	26,805	9,318	15,606	16,404	68,133	8,961,375
Term - $100k or more	N/A	N/A	—	2,119,127	287,977	295,187	89,181	2,791,472	2,791,472
Total deposits	2,136,503	6,756,739	8,893,242	2,145,932	297,295	310,793	105,585	2,859,605	11,752,847
	Demand		Total <br>demand <br>deposits	Term				Total <br>term <br>deposits
December 31, 2019	Non-interest<br> bearing	Interest <br>bearing		Within 3<br> months	3 to 6<br> months	6 to 12<br> months	After 12 months		Total <br>deposits
Demand or less than $100k¹	2,238,256	7,152,063	9,390,319	31,666	9,355	13,497	16,478	70,996	9,461,315
Term - $100k or more	N/A	N/A	—	2,402,619	224,945	291,020	61,726	2,980,310	2,980,310
Total deposits	2,238,256	7,152,063	9,390,319	2,434,285	234,300	304,517	78,204	3,051,306	12,441,625

¹ The weighted-average interest rate on interest-bearing demand deposits as at March 31, 2020 is (0.03)% (December 31, 2019: 0.20%).

By Type and Segment	March 31, 2020			December 31, 2019
	Payable <br>on demand	Payable on a<br>fixed date	Total	Payable <br>on demand	Payable on a<br>fixed date	Total
Bermuda	3,188,481	1,217,043	4,405,524	3,145,859	1,265,679	4,411,538
Cayman	2,747,740	491,618	3,239,358	2,995,119	479,848	3,474,967
Channel Islands and the UK	2,957,021	1,150,944	4,107,965	3,249,341	1,305,779	4,555,120
Total deposits	8,893,242	2,859,605	11,752,847	9,390,319	3,051,306	12,441,625

Note 9: Employee benefit plans

The Bank maintains trusteed pension plans including non-contributory defined benefit plans and a number of defined contribution plans, and provides post-retirement medical benefits to its qualifying retirees. The defined benefit provisions under the pension plans are generally based upon years of service and average salary during the relevant years of employment. The defined benefit and post-retirement medical plans are not open to new participants and are non-contributory and the funding required is provided by the Bank, based upon the advice of independent actuaries. The defined benefit pension plans are in the Bermuda, Guernsey and United Kingdom jurisdictions and the defined benefit post-retirement medical plan is in Bermuda.

The Bank includes an estimate of the 2020 Bank contribution and estimated benefit payments for the next ten years under the pension and post-retirement plans in its financial statements for the year-ended December 31, 2019. During the three months ended March 31, 2020, there have been no material revisions to these estimates.

		Three months ended
	Line item in the consolidated statements of operations	March 31, 2020		March 31, 2019
Defined benefit pension expense (income)
Interest cost	Non-service employee benefits expense	986		1,271
Expected return on plan assets	Non-service employee benefits expense	(1,881	)	(1,909	)
Amortization of net actuarial (gains) losses	Non-service employee benefits expense	602		614
Amortization of prior service (credit) cost	Non-service employee benefits expense	5		5
Total defined benefit pension expense (income)		(288	)	(19	)
Post-retirement medical benefit expense (income)
Service cost	Salaries and other employee benefits	16		15
Interest cost	Non-service employee benefits expense	818		1,185
Amortization of net actuarial (gains) losses	Non-service employee benefits expense	—		68
Amortization of prior service (credit) cost	Non-service employee benefits expense	131		94
Total post-retirement medical benefit expense (income)		965		1,362		The components of defined benefit pension expense (income) and post-retirement benefit expense (income) other than the service cost component are included in the line item non-service employee benefits expense in the consolidated statements of income.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Note 10: Credit related arrangements, repurchase agreements and commitments

Commitments

The Bank enters into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Substantially all of the Bank's commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of loan funding. Management assesses the credit risk associated with certain commitments to extend credit in determining the level of the allowance for expected credit losses.

The Bank has a facility with one of its custodians, whereby the Bank may offer up to US$200 million of standby letters of credit to its customers on a fully secured basis. Under the standard terms of the facility, the custodian has the right to set-off against securities held of 110% of the utilized facility. At March 31, 2020, $141.7 million (December 31, 2019: $143.6 million) of standby letters of credit were issued under this facility.

Outstanding unfunded commitments to extend credit	March 31, 2020		December 31, 2019
Commitments to extend credit	643,207		549,049
Documentary and commercial letters of credit	1,850		355
Total unfunded commitments to extend credit	645,057		549,404
Allowance for credit losses	(179	)	—

Credit-Related Arrangements

Standby letters of credit and letters of guarantee are issued at the request of a Bank customer in order to secure the customer’s payment or performance obligations to a third party. These guarantees represent an irrevocable obligation of the Bank to pay the third party beneficiary upon presentation of the guarantee and satisfaction of the documentary requirements stipulated therein, without investigation as to the validity of the beneficiary’s claim against the customer. Generally, the term of the standby letters of credit does not exceed one year, while the term of the letters of guarantee does not exceed four years. The types and amounts of collateral security held by the Bank for these standby letters of credit and letters of guarantee is generally represented by deposits with the Bank or a charge over assets held in mutual funds.

The Bank considers the fees collected in connection with the issuance of standby letters of credit and letters of guarantee to be representative of the fair value of its obligation undertaken in issuing the guarantee. In accordance with applicable accounting standards related to guarantees, the Bank defers fees collected in connection with the issuance of standby letters of credit and letters of guarantee. The fees are then recognized in income proportionately over the life of the credit agreements. The following table presents the outstanding financial guarantees. Collateral is shown at estimated market value less selling cost. Where the collateral is cash, it is shown gross including accrued income.

	March 31, 2020			December 31, 2019
Outstanding financial guarantees	Gross	Collateral	Net	Gross	Collateral	Net
Standby letters of credit	228,846	221,586	7,260	230,971	223,711	7,260
Letters of guarantee	2,634	2,598	36	7,806	7,672	134
Total	231,480	224,184	7,296	238,777	231,383	7,394

Repurchase agreements

The Bank utilizes repurchase agreements and resell agreements (reverse repurchase agreements) to manage liquidity. The risks of these transactions include changes in the fair value in the securities posted or received as collateral and other credit related events. The Bank manages these risks by ensuring that the collateral involved are appropriate and by monitoring the value of the securities posted or received as collateral on a daily basis.

As at March 31, 2020, the Bank had 9 open positions (December 31, 2019: 13) in resell agreements with a remaining maturity of less than 30 days involving pools of mortgages issued by US federal agencies. The amortized cost of these resell agreements is $192.3 million (December 31, 2019: $142.3 million) and are included in securities purchased under agreement to resell on the consolidated balance sheets. As at March 31, 2020, there were no positions (December 31, 2019: no positions) which were offset on the balance sheet to arrive at the carrying value, and there was no collateral amount which was available to offset against the future settlement amount.

Legal Proceedings

There are actions and legal proceedings pending against the Bank and its subsidiaries which arose in the normal course of its business. Management, after reviewing all actions and proceedings pending against or involving the Bank and its subsidiaries, considers that the resolution of these matters would in the aggregate not be material to the consolidated financial position of the Bank, except as noted in the following paragraphs.

As publicly announced, in November 2013, the US Attorney’s Office for the Southern District of New York applied for and secured the issuance of so-called John Doe Summonses to six US financial institutions with which the Bank had correspondent bank relationships. The Bank has been fully cooperating with the US authorities in their ongoing investigation. Specifically, the Bank has conducted an extensive review and account remediation exercise to determine the US tax compliance status of US person account holders. The review process and results have been shared with the US authorities.

Management believes that as at March 31, 2020, a provision of $5.5 million (December 31, 2019: $5.5 million), which has been recorded, is appropriate. As the investigation remains ongoing at this time, the timing and terms of the final resolution, including any fines or penalties, remain uncertain and the financial impact to the Bank could exceed the amount of the provision. In this regard, we note that the US authorities have not approved or commented on the adequacy or reasonableness of the estimate. The provision is included on the consolidated balance sheets under other liabilities.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Note 11: Leases

The Bank enters into operating lease agreements either as the lessee or the lessor, mostly for office and parking spaces as well as for small office equipment. The terms of the existing leases, including renewal options that are reasonably certain to be exercised, extend up to the year 2035. Certain lease payments will be adjusted during the related lease's term based on movements in the relevant consumer price index.

	Three months ended
	March 31, 2020		March 31, 2019
Lease costs
Operating lease costs	2,005		1,226
Short-term lease costs	332		196
Sublease income	(284	)	(5	)
Total net lease cost	2,053		1,417
Operating lease income	274		307
Other information for the period
Right-of-use assets related to new operating lease liabilities	—		338
Operating cash flows from operating leases	2,054		1,349
Other information at end of period	March 31, 2020		December 31, 2019
Operating leases right-of-use assets (included in other assets on the balance sheets)	47,682		47,947
Operating lease liabilities (included in other liabilities on the balance sheets)	46,488		48,334
Weighted average remaining lease term for operating leases (in years)	10.18		10.37
Weighted average discount rate for operating leases	5.25%		5.25%
The following table summarizes the maturity analysis of the Bank's commitments for long-term leases as at December 31, 2019:
Year ending December 31			Operating Leases
2020			8,570
2021			8,312
2022			7,923
2023			7,004
2024			4,324
2025 & thereafter			27,194
Total commitments			63,327
Less: effect of discounting cash flows to their present value			(14,993	)
Operating lease liabilities			48,334

Note 12: Segmented information

The Bank is managed by the Chairman and Chief Executive Officer (“CEO”) on a geographic basis. The Bank presents four reportable segments, three geographical and one other: Bermuda, Cayman, Channel Islands and the UK, and Other. The Other segment is composed of several non-reportable operating segments that have been aggregated in accordance with GAAP. Each reportable segment has a managing director who reports to the Chairman and CEO. The Chairman and CEO and the segment managing director have final authority over resource allocation decisions and performance assessment.

The geographic segments reflect this management structure and the manner in which financial information is currently evaluated by the Chairman and CEO. Segment results are determined based on the Bank's management reporting system, which assigns balance sheet and income statement items to each of the geographic segments. The process is designed around the Bank's organizational and management structure and, accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions. A description of each reportable segment and table of financial results is presented below.

Accounting policies of the reportable segments are the same as those described in Note 2 of the Bank's audited financial statements for the year ended December 31, 2019. Transactions between segments are accounted for on an accrual basis and are all eliminated upon consolidation. The Bank generally does not allocate assets, revenues and expenses among its business segments, with the exception of certain corporate overhead expenses and loan participation revenue and expense. Loan participation revenue and expenses are allocated pro-rata based upon the percentage of the total loan funded by each jurisdiction participating in the loan.

The Bermuda segment provides a full range of retail, commercial and private banking services. Retail services are offered to individuals and small to medium-sized businesses through three branch locations and through internet banking, mobile banking, automated teller machines (“ATMs”) and debit cards. Retail services include deposit services, consumer and mortgage lending, credit cards and personal insurance products. Commercial banking includes commercial lending and mortgages, cash management, payroll services, remote banking and letters of credit. Treasury services include money market and foreign exchange activities. Bermuda’s wealth management offering consists of Butterfield Asset Management Limited, which provides investment management, advisory and brokerage services and Butterfield Trust (Bermuda) Limited, which provides trust,

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

estate, company management and custody services. Bermuda is also the location of the Bank's head offices and accordingly, retains the unallocated corporate overhead expenses.

The Cayman segment provides a comprehensive range of retail, commercial and private banking services. Retail services are offered to individuals and small to medium-sized businesses through three branch locations and through internet banking, mobile banking, ATMs and debit cards. Retail services include deposit services, consumer and mortgage lending, credit cards and property/auto insurance. Commercial banking includes commercial lending and mortgages, cash management, payroll services, remote banking and letters of credit. Treasury services include money market and foreign exchange activities. Cayman’s wealth management offering comprises investment management, advisory and brokerage services and Butterfield Trust (Cayman) Limited, which provides trust, estate and company management.

The Channel Islands and the UK segment includes the jurisdictions of Guernsey and Jersey (Channel Islands), and the UK. In the Channel Islands, a broad range of services are provided to private clients and financial intermediaries including private banking and treasury services, internet banking, wealth management and fiduciary services. The UK jurisdiction provides mortgage services for high-value residential properties.

The Other segment includes the jurisdictions of The Bahamas, Canada, Mauritius, Singapore and Switzerland. These operating segments individually and collectively do not meet the quantitative threshold for segmented reporting and are therefore aggregated as non-reportable operating segments.

Total Assets by Segment	March 31, 2020		December 31, 2019
Bermuda	5,261,066		5,220,016
Cayman	3,710,683		3,839,074
Channel Islands and the UK	4,618,271		5,108,357
Other	36,691		35,148
Total assets before inter-segment eliminations	13,626,711		14,202,595
Less: inter-segment eliminations	(429,324	)	(281,020	)
Total	13,197,387		13,921,575
	Net interest income			Provision for<br> credit recoveries (losses)		Non-interest<br> income		Net revenue<br> before gains<br> and losses		Gains and<br> losses		Total net revenue		Total<br>expenses		Net income
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Three months ended <br>March 31, 2020	Customer	Inter- segment
Bermuda	43,510	213		(4,822	)	21,866		60,767		(582	)	60,185		50,522		9,663
Cayman	27,146	253		(186	)	13,311		40,524		2		40,526		15,567		24,959
Channel Islands and the UK	16,928	(466	)	(169	)	10,247		26,540		—		26,540		20,678		5,862
Other	7	—				3,835		3,842		—		3,842		4,049		(207	)
Total before eliminations	87,591	—		(5,177	)	49,259		131,673		(580	)	131,093		90,816		40,277
Inter-segment eliminations	—	—		—		(1,689	)	(1,689	)	—		(1,689	)	(1,689	)	—
Total	87,591	—		(5,177	)	47,570		129,984		(580	)	129,404		89,127		40,277
	Net interest income			Provision for<br> credit recoveries (losses)		Non-interest<br><br>income		Net revenue<br> before gains<br> and losses		Gains and<br><br>losses	Total net revenue		Total<br><br>expenses		Net income
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Three months ended <br>March 31, 2019	Customer	Inter- segment
Bermuda	47,422	486		153		21,655		69,716		1,746	71,462		47,803		23,659
Cayman	30,551	159		(27	)	13,062		43,745		5	43,750		14,644		29,106
Channel Islands and the UK	9,993	(645	)	(87	)	6,663		15,924		—	15,924		15,660		264
Other	12	—		—		5,117		5,129		—	5,129		6,051		(922	)
Total before eliminations	87,978	—		39		46,497		134,514		1,751	136,265		84,158		52,107
Inter-segment eliminations	—	—		—		(3,117	)	(3,117	)	—	(3,117	)	(3,117	)	—
Total	87,978	—		39		43,380		131,397		1,751	133,148		81,041		52,107

Note 13: Derivative instruments and risk management

The Bank uses derivatives for risk management purposes and to meet the needs of its customers. The Bank’s derivative contracts principally involve over-the-counter (“OTC”) transactions that are negotiated privately between the Bank and the counterparty to the contract and include interest rate contracts and foreign exchange contracts.

The Bank may pursue opportunities to reduce its exposure to credit losses on derivatives by entering into International Swaps and Derivatives Association master agreements (“ISDAs”). Depending on the nature of the derivative transaction, bilateral collateral arrangements may be used as well. When the Bank is engaged in more than one outstanding derivative transaction with the same counterparty, and also has a legally enforceable master netting agreement with that counterparty, the net marked to market exposure represents the netting of the positive and negative exposures with that counterparty. When there is a net negative exposure, the Bank regards its credit exposure to the counterparty as being zero. The net marked to market position with a particular counterparty represents a reasonable measure of credit risk when there is a legally enforceable master netting agreement between the Bank and that counterparty.

Certain of these agreements contain credit risk-related contingent features in which the counterparty has the option to accelerate cash settlement of the Bank's net derivative liabilities with the counterparty in the event the Bank's credit rating falls below specified levels or the liabilities reach certain levels.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

All derivative financial instruments, whether designated as hedges or not, are recorded on the consolidated balance sheets at fair value within other assets or other liabilities. These amounts include the effect of netting. The accounting for changes in the fair value of a derivative in the consolidated statements of operations depends on whether the contract has been designated as a hedge and qualifies for hedge accounting.

Notional Amounts

The notional amounts are not recorded as assets or liabilities on the consolidated balance sheets as they represent the face amount of the contract to which a rate or price is applied to determine the amount of cash flows to be exchanged. Notional amounts represent the volume of outstanding transactions and do not represent the potential gain or loss associated with market risk or credit risk of such instruments. Credit risk is limited to the positive fair value of the derivative instrument, which is significantly less than the notional amount.

Fair Value

Derivative instruments, in the absence of any compensating up-front cash payments, generally have no market value at inception. They obtain value, positive or negative, as relevant interest rates, exchange rates, equity or commodity prices or indices change. The potential for derivatives to increase or decrease in value as a result of the foregoing factors is generally referred to as market risk. Market risk is managed within clearly defined parameters as prescribed by senior management of the Bank. The fair value is defined as the profit or loss associated with replacing the derivative contracts at prevailing market prices.

Risk Management Derivatives

The Bank enters into interest derivative contracts as part of its overall interest rate risk management strategy to minimize significant unplanned fluctuations in earnings that are caused by interest rate volatility. The Bank’s goal is to manage interest rate sensitivity by modifying the repricing or maturity characteristics of certain consolidated balance sheet assets and liabilities so that movements in interest rates do not adversely affect the net interest margin. Derivative instruments that are used as part of the Bank’s risk management strategy include interest rate swap contracts that have indices related to the pricing of specific consolidated balance sheet assets and liabilities. Interest rate swaps generally involve the exchange of fixed and variable-rate interest payments between two parties, based on a common notional principal amount and maturity date. The Bank uses foreign currency derivative instruments to hedge its exposure to foreign currency risk. Certain hedging relationships are formally designated and qualify for hedge accounting as fair value or net investment hedges. Risk management derivatives comprise fair value hedges, net investment hedges and derivatives not formally designated as hedges as described below.

Fair value hedges consist of designated interest rate swaps and are used to minimize the Bank's exposure to changes in the fair value of assets and liabilities due to movements in interest rates. The Bank previously entered into interest rate swaps to convert its fixed-rate long-term loans to floating-rate loans, and convert fixed-rate deposits to floating-rate deposits. During the year ended December 31, 2011, the Bank canceled its interest rate swaps designated as fair value hedges of loans receivable and therefore discontinued hedge accounting for these financial instruments. The fair value attributable to the hedged loans are accounted for prospectively and are being amortized to net income over the remaining life of each individual loan, which could extend to year 2029, using the effective interest method.

Net investment hedges includes designated currency swaps and qualifying non-derivative instruments and are used to minimize the Bank’s exposure to variability in the foreign currency translation of net investments in foreign operations. The effective portion of changes in the fair value of the hedging instrument is recognized in AOCL consistent with the related translation gains and losses of the hedged net investment. For net investment hedges, all critical terms of the hedged item and the hedging instrument are matched at inception and on an ongoing basis to minimize the risk of hedge ineffectiveness.

For derivatives designated as net investment hedges, the Bank follows the method based on changes in spot exchange rates. Accordingly:

The change in the fair value of the derivative instrument that is reported in AOCL (i.e., the effective portion) is determined by the changes in spot exchange rates.
The change in the fair value of the derivative instrument attributable to changes in the difference between the forward rate and spot rate are excluded from the measure

of the hedge ineffectiveness and that difference is reported directly in the consolidated statements of operations under foreign exchange revenue.

Amounts recorded in AOCL are reclassified to earnings only upon the sale or substantial liquidation of an investment in a foreign subsidiary.

For foreign-currency-denominated debt instruments that are designated as hedges of net investments in foreign operations, the translation gain or loss that is recorded in AOCL is based on the spot exchange rate between the reporting currency of the Bank and the functional currency of the respective subsidiary. See Note 20: Accumulated other comprehensive loss for details on the amount recognized into AOCL during the current period from translation gain or loss.

Derivatives not formally designated as hedges are entered into to manage the interest rate risk of fixed rate deposits and foreign exchange risk of the Bank's exposure. Changes in the fair value of derivative instruments not formally designated as hedges are recognized in foreign exchange income.

Client service derivatives

The Bank enters into foreign exchange contracts and interest rate caps primarily to meet the foreign exchange needs of its customers. Foreign exchange contracts are agreements to exchange specific amounts of currencies at a future date at a specified rate of exchange. Changes in the fair value of client services derivative instruments are recognized in foreign exchange income.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

The following table shows the aggregate notional amounts of derivative contracts outstanding listed by type and respective gross positive or negative fair values and classified by those used for risk management (sub-classified as hedging and those that do not qualify for hedge accounting), client services and credit derivatives. Fair value of derivatives is recorded in the consolidated balance sheets in other assets and other liabilities. Gross positive fair values are recorded in other assets and gross negative fair values are recorded in other liabilities, subject to netting when master netting agreements are in place.

March 31, 2020	Derivative instrument	Number of contracts	Notional<br><br>amounts	Gross<br><br>positive<br><br>fair value	Gross<br><br>negative<br><br>fair value		Net<br><br>fair value
Risk management derivatives
Net investment hedges	Currency swaps	1	8,989	388	—		388
Derivatives not formally designated as hedging instruments	Currency swaps	4	140,901	1,188	(1,115	)	73
Subtotal risk management derivatives			149,890	1,576	(1,115	)	461
Client services derivatives	Spot and forward foreign exchange	469	2,712,537	34,799	(15,108	)	19,691
Total derivative instruments			2,862,427	36,375	(16,223	)	20,152
December 31, 2019	Derivative instrument	Number of contracts	Notional<br><br>amounts	Gross<br><br>positive<br><br>fair value	Gross<br><br>negative<br><br>fair value		Net<br><br>fair value
Risk management derivatives
Net investment hedges	Currency swaps	1	9,502	—	(118	)	(118	)
Derivatives not formally designated as hedging instruments	Currency swaps	9	207,032	1,632	(1,339	)	293
Subtotal risk management derivatives			216,534	1,632	(1,457	)	175
Client services derivatives	Spot and forward foreign exchange	352	3,280,636	31,060	(30,602	)	458
Total derivative instruments			3,497,170	32,692	(32,059	)	633

In addition to the above, as at March 31, 2020 foreign denominated deposits of £251.4 million (December 31, 2019: £251.4 million) and CHF 0.4 million (December 31, 2019: CHF 0.4 million) were designated as a hedge of foreign exchange risk associated with the net investment in foreign operations.

We manage derivative exposure by monitoring the credit risk associated with each counterparty using counterparty specific credit risk limits, using master netting arrangements where appropriate and obtaining collateral. The Bank elected to offset in the consolidated balance sheets certain gross derivative assets and liabilities subject to netting agreements.

The Bank also elected not to offset certain derivative assets or liabilities and all collateral received or paid that the Bank or the counterparties could legally offset in the event of default. In the tables below, these positions are deducted from the net fair value presented in the consolidated balance sheets in order to present the net exposures. The collateral values presented in the following table are limited to the related net derivative asset or liability balance and, accordingly, do not include excess collateral received or paid.

	Gross fair<br> value<br> recognized	Less: offset<br><br>applied<br><br>under master<br><br>netting<br><br>agreements		Net fair value<br><br>presented in the<br><br>consolidated<br><br>balance sheets	Less: positions not offset in the consolidated balance sheets
March 31, 2020					Gross fair value of derivatives		Cash collateral<br><br>received / paid		Net exposures
Derivative assets
Spot and forward foreign exchange and currency swaps	36,375	(3,137	)	33,238	(15	)	(3,612	)	29,611
Derivative liabilities
Spot and forward foreign exchange and currency swaps	16,223	(3,137	)	13,086	(15	)	(471	)	12,600
Net positive fair value				20,152
	Gross fair<br> value<br> recognized	Less: offset<br><br>applied<br><br>under master<br><br>netting<br><br>agreements		Net fair value<br><br>presented in the<br><br>consolidated<br><br>balance sheets	Less: positions not offset in the consolidated balance sheets
December 31, 2019					Gross fair value of derivatives		Cash collateral<br><br>received / paid		Net exposures
Derivative assets
Spot and forward foreign exchange and currency swaps	32,692	(2,233	)	30,459	—		(3,224	)	27,235
Derivative liabilities
Spot and forward foreign exchange and currency swaps	32,059	(2,233	)	29,826	—		(997	)	28,829
Net positive fair value				633

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

The following tables show the location and amount of gains (losses) recorded in either the consolidated statements of operations or consolidated statements of comprehensive income on derivative instruments outstanding.

		Three months ended
Derivative instrument	Consolidated statements of operations line item	March 31, 2020		March 31, 2019
Spot and forward foreign exchange	Foreign exchange revenue	19,234		(110	)
Currency swaps, not designated as hedge	Foreign exchange revenue	(220	)	3,005
Total net gains (losses) recognized in net income		19,014		2,895
Derivative instrument	Consolidated statements of comprehensive income line item	March 31, 2020		March 31, 2019
Currency swaps - net investment hedge	Net change in unrealized gains and (losses) on translation of net investment in foreign operations	505		—
Total net gains (losses) recognized in comprehensive income		505		—

Note 14: Fair value measurements

The following table presents the financial assets and liabilities that are measured at fair value on a recurring basis. Management classifies these items based on the type of inputs used in their respective fair value determination as described in Note 2 of the Bank's audited financial statements for the year ended December 31, 2019.

Management reviews the price of each security monthly, comparing market values to expectations and to the prior month’s price. Management's expectations are based upon knowledge of prevailing market conditions and developments relating to specific issuers and/or asset classes held in the investment portfolio. Where there are unusual or significant price movements, or where a certain asset class has performed out-of-line with expectations, the matter is reviewed by management.

Financial instruments in Level 1 include actively traded redeemable mutual funds.

Financial instruments in Level 2 include government debt securities, corporate debt securities, mortgage-backed securities and other asset-backed securities, forward foreign exchange contracts and mutual funds not actively traded.

Financial instruments in Level 3 include asset-backed securities for which the market is relatively illiquid and for which information about actual trading prices is not readily available.

There were no transfers between Level 1 and Level 2 or Level 2 and Level 3 during the three months ended March 31, 2020 and the year ended December 31, 2019.

	March 31, 2020				December 31, 2019
	Fair value			Total carrying<br><br>amount /<br><br>fair value	Fair value			Total carrying<br><br>amount /<br><br>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	6,544	222	—	6,766	7,141	278	—	7,419
Total equity securities	6,544	222	—	6,766	7,141	278	—	7,419
Available-for-sale investments
US government and federal agencies	—	2,244,649	—	2,244,649	—	2,052,446	—	2,052,446
Non-US governments debt securities	—	25,406	—	25,406	—	25,676	—	25,676
Asset-backed securities - Student loans	—	—	12,625	12,625	—	—	12,891	12,891
Residential mortgage-backed securities	—	117,131	—	117,131	—	129,328	—	129,328
Total available-for-sale	—	2,387,186	12,625	2,399,811	—	2,207,450	12,891	2,220,341
Other assets - Derivatives	—	33,238	—	33,238	—	30,459	—	30,459
Financial liabilities
Other liabilities - Derivatives	—	13,086	—	13,086	—	29,826	—	29,826

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Level 3 Reconciliation

The Level 3 financial instruments, shown as Asset-backed securities - Student loans in the above table, is a federal family education loan program guaranteed student loan security and is valued using a non-binding broker quote. The fair value provided by the broker is based on the last trading price of similar securities but as the market for the security is illiquid, a Level 2 classification is not supported.

The table below summarizes realized and unrealized gains and losses for Level 3 assets still held at the reporting date.

	Three months ended<br>March 31, 2020		Year ended December 31, 2019
	Available-<br><br>for-sale investments		Available-<br><br>for-sale investments
Carrying amount at beginning of period	12,891		12,626
Realized and unrealized gains (losses) recognized in other comprehensive income	(266	)	265
Carrying amount at end of period	12,625		12,891
Items Other Than Those Recognized at Fair Value on a Recurring Basis:
---	---	---	---	---	---	---	---	---	---
		March 31, 2020				December 31, 2019
	Level	Carrying<br><br>amount	Fair<br><br>value	Appreciation /<br><br>(depreciation)		Carrying<br><br>amount	Fair<br><br>value	Appreciation /<br><br>(depreciation)
Financial assets
Cash due from banks	Level 1	1,978,226	1,978,226	—		2,550,070	2,550,070	—
Securities purchased under agreements to resell	Level 2	192,296	192,296	—		142,283	142,283	—
Short-term investments	Level 1	1,047,628	1,047,628	—		1,218,380	1,218,380	—
Investments held-to-maturity	Level 2	2,131,084	2,234,673	103,589		2,208,663	2,255,987	47,324
Loans, net of allowance for credit losses	Level 2	5,000,968	5,044,658	43,690		5,142,622	5,161,257	18,635
Other real estate owned¹	Level 2	4,227	4,227	—		3,842	3,842	—
Financial liabilities
Term deposits	Level 2	2,859,605	2,868,661	(9,056	)	3,051,306	3,054,813	(3,507	)
Long-term debt	Level 2	143,545	146,250	(2,705	)	143,500	147,574	(4,074	)

¹ The current carrying value of OREO is adjusted to fair value only when there is devaluation below carrying value.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Note 15: Interest rate risk

The following tables set out the assets, liabilities and shareholders' equity on the date of the earlier of contractual maturity, expected maturity or repricing date. Use of these tables to derive information about the Bank’s interest rate risk position is limited by the fact that customers may choose to terminate their financial instruments at a date earlier than the contractual maturity or repricing date. Examples of this include fixed-rate mortgages, which are shown at contractual maturity but which may pre-pay earlier, and certain term deposits, which are shown at contractual maturity but which may be withdrawn before their contractual maturity subject to prepayment penalties. Investments are shown based on remaining contractual maturities. The remaining contractual principal maturities for mortgage-backed securities (primarily US government agencies) do not consider prepayments. Remaining expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations before the underlying mortgages mature.

March 31, 2020	Earlier of contractual maturity or repricing date
(in $ millions)	Within 3<br><br>months		3 to 6<br><br>months		6 to 12<br><br>months		1 to 5<br><br>years		After<br><br>5 years	Non-interest<br><br>bearing funds		Total
Assets
Cash due from banks	1,862		—		—		—		—	116		1,978
Securities purchased under agreement to resell	192		—		—		—		—	—		192
Short-term investments	714		332		2		—		—	—		1,048
Investments	403		2		22		123		3,981	7		4,538
Loans	3,752		140		123		292		666	28		5,001
Other assets	—		—		—		—		—	440		440
Total assets	6,923		474		147		415		4,647	591		13,197
Liabilities and shareholders' equity
Shareholders’ equity	—		—		—		—		—	981		981
Demand deposits	6,757		—		—		—		—	2,136		8,893
Term deposits	2,146		297		311		106		—	—		2,860
Other liabilities	—		—		—		—		—	320		320
Long-term debt	69		—		—		74		—	—		143
Total liabilities and shareholders' equity	8,972		297		311		180		—	3,437		13,197
Interest rate sensitivity gap	(2,049	)	177		(164	)	235		4,647	(2,846	)	—
Cumulative interest rate sensitivity gap	(2,049	)	(1,872	)	(2,036	)	(1,801	)	2,846	—		—
December 31, 2019	Earlier of contractual maturity or repricing date
(in $ millions)	Within 3<br><br>months		3 to 6<br><br>months		6 to 12<br><br>months		1 to 5<br><br>years		After<br><br>5 years	Non-interest<br><br>bearing funds		Total
Assets
Cash due from banks	2,462		—		—		—		—	88		2,550
Securities purchased under agreement to resell	142		—		—		—		—	—		142
Short-term investments	622		591		3		—		—	2		1,218
Investments	415		23		11		102		3,878	7		4,436
Loans	4,025		16		148		292		648	14		5,143
Other assets	—		—		—		—		—	433		433
Total assets	7,666		630		162		394		4,526	544		13,922
Liabilities and shareholders' equity
Shareholders’ equity	—		—		—		—		—	964		964
Demand deposits	7,151		—		—		—		—	2,239		9,390
Term deposits	2,435		234		305		78		—	—		3,052
Other liabilities	—		—		—		—		—	373		373
Long-term debt	70		—		—		73		—	—		143
Total liabilities and shareholders' equity	9,656		234		305		151		—	3,576		13,922
Interest rate sensitivity gap	(1,990	)	396		(143	)	243		4,526	(3,032	)	—
Cumulative interest rate sensitivity gap	(1,990	)	(1,594	)	(1,737	)	(1,494	)	3,032	—		—

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Note 16: Long-term debt

On June 27, 2005, the Bank issued US $150 million of Subordinated Lower Tier II capital notes. The notes were issued at par in two tranches, namely US $90 million in Series A notes due 2015, which were redeemed at face value in January 2014, and US $60 million in Series B notes due 2020. The issuance was by way of private placement with US institutional investors. The notes are listed on the BSX in the specialist debt securities category. The Series B notes paid a fixed coupon of 5.11% until July 2, 2015 when they became redeemable in whole at the Bank’s option. The Series B notes were priced at a spread of 1.10% over the 10-year US Treasury yield. During September 2011, the Bank repurchased a portion of the outstanding 5.11% 2005 Series B Subordinated notes (“the Note”). The face value of the portion of the Note repurchased was $15 million and the purchase price paid for the repurchase was $13.875 million, which realized a gain of $1.125 million.

On May 27, 2008, the Bank issued US $78 million of Subordinated Lower Tier II capital notes. The notes were issued at par and in two tranches, namely US $53 million in Series A notes due 2018, which were redeemed at face value in May 2013, and US $25 million in Series B notes due 2023. The issuance was by way of private placement with US institutional investors. The notes are listed on the BSX in the specialist debt securities category. The proceeds of the issue were used to repay the entire amount of the US $78 million outstanding subordinated notes redeemed in May 2008. The Series B notes pay a fixed coupon of 8.44% until May 27, 2018 when they became redeemable in whole at the Bank’s option. The Series B notes were priced at a spread of 4.51% over the 10-year US Treasury yield.

On May 24, 2018, the Bank issued US $75 million of Subordinated Lower Tier II capital notes. The notes were issued at par and due on June 1, 2028. The issuance was by way of a registered offering with US institutional investors. The notes are listed on the Bermuda Stock Exchange (BSX) in the specialist debt securities category. The proceeds of the issue were used, among other, to repay the entire amount of the US $47 million outstanding subordinated notes series 2003-B. The notes issued pay a fixed coupon of 5.25% until June 1, 2023 when they become redeemable in whole at the option of the Bank. The notes were priced at a spread of 2.27% over the 10-year US Treasury yield. The Bank incurred $1.8 million of costs directly related to the issuance of these capital notes. These costs have been capitalized directly against the carrying value of these notes on the balance sheet, and will be amortized over the life of the notes.

No interest was capitalized during the three months ended March 31, 2020 and the year ended December 31, 2019.

In the event the Bank would be in a position to redeem long-term debt, priority would go to the redemption of the higher interest-bearing Series, subject to availability relative to the earliest date the Series is redeemable at the Bank's option.

The following table presents the contractual maturity and interest payments for long-term debt issued by the Bank as at March 31, 2020. The interest payments are calculated until contractual maturity using the current London Inter-bank Offered Rate ("LIBOR") rates.

								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<br><br>1 year	1 to 5<br><br>years	After<br><br>5 years
Bermuda
2005 issuance - Series B	July 2, 2015	July 2, 2020	5.11	%	3 months US$ LIBOR + 1.695%	45,000		716	—	—
2008 issuance - Series B	May 27, 2018	May 27, 2023	8.44	%	3 months US$ LIBOR + 4.929%	25,000		1,621	3,628	—
2018 issuance	June 1, 2023	June 1, 2028	5.25	%	3 months US$ LIBOR + 2.255%	75,000		3,938	14,777	9,171
Total						145,000		6,275	18,405	9,171
Unamortized debt issuance costs						(1,455	)
Long-term debt less unamortized debt issuance costs						143,545

Note 17: Earnings per share

Earnings per share have been calculated using the weighted average number of common shares outstanding during the period after deduction of the shares held as treasury stock. The dilutive effect of share-based compensation plans was calculated using the treasury stock method, whereby the proceeds received from the exercise of share-based awards are assumed to be used to repurchase outstanding shares, using the average market price of the Bank’s shares for the period. Numbers of shares are expressed in thousands.

During the three months ended March 31, 2020, options to purchase an average of 0.2 million (March 31, 2019: 0.2 million) common shares were outstanding. During the three months ended March 31, 2020, the average number of outstanding awards of unvested common shares was 0.8 million (March 31, 2019: 1.0 million). Only awards for which the sum of 1) the expense that will be recognized in the future (i.e., the unrecognized expense) and 2) its exercise price, if any, was lower than the average market price of the Bank‘s common shares were considered dilutive and, therefore, included in the computation of diluted earnings per share. An award's unrecognized expense is also considered to be the proceeds the employees would need to pay to purchase accelerated vesting of the awards. For purposes of calculating dilution, such proceeds are assumed to be used by the Bank to buy back common shares at the average market price. The weighted-average number of outstanding awards, net of the assumed weighted-average number of common shares bought back, is included in the number of diluted participating shares.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

	Three months ended
	March 31, 2020		March 31, 2019
Net income	40,277		52,107
Basic Earnings Per Share
Weighted average number of common shares issued	52,592		55,343
Weighted average number of common shares held as treasury stock	(619	)	(1,647	)
Weighted average number of common shares (in thousands)	51,973		53,696
Basic Earnings Per Share	0.77		0.97
Diluted Earnings Per Share
Weighted average number of common shares	51,973		53,696
Net dilution impact related to options to purchase common shares	99		127
Net dilution impact related to awards of unvested common shares	333		406
Weighted average number of diluted common shares (in thousands)	52,405		54,229
Diluted Earnings Per Share	0.77		0.96

Note 18: Share-based payments

The common shares transferred to employees under all share-based payments are either taken from the Bank's common treasury shares or from newly issued shares. All share-based payments are settled by the ultimate parent company which, pursuant to Bermuda law, is not taxed on income. There are no income tax benefits in relation to the issue of such shares as a form of compensation.

In conjunction with the 2010 capital raise, the Board of Directors approved the 2010 Omnibus Plan (the "2010 Plan"). Under the 2010 Plan, 5% of the Bank’s fully diluted common shares, equal to approximately 2.95 million shares, were initially available for grant to certain officers in the form of stock options or unvested shares awards. Both types of awards are detailed below. In 2012 and 2016, the Board of Directors approved an increase to the equivalent number of shares allowed to be granted under the 2010 Plan to 5.0 million and 7.5 million shares, respectively.

Stock Option Awards

1997 Stock Option Plan

Prior to the capital raise on March 2, 2010, the Bank granted stock options to employees and Directors of the Bank that entitle the holder to purchase one common share at a subscription price equal to the market price on the effective date of the grant. Generally, the options granted vest 25 percent at the end of each year for four years, however

as a result of the 2010 capital raise, the options granted under the Bank's 1997 Stock Option Plan to employees became fully vested and options awarded to certain executives were surrendered.

2010 Plan

Under the 2010 Plan, options are awarded to Bank employees and executive management, based on predetermined vesting conditions that entitle the holder to purchase one common share at a subscription price usually equal to the price of the most recently traded common share when granted and have a term of 10 years. The subscription price is reduced for all special dividends declared by the Bank. Stock option awards granted under the 2010 Plan vest based on two specific types of vesting conditions i.e., time and performance conditions, as detailed below:

Time vesting condition

50% of each option award was granted in the form of time vested options and vested 25% on each of the second, third, fourth and fifth anniversaries of the effective grant date.

In addition to the time vesting conditions noted above, the options will generally vest immediately:

• by reason of the employee’s death or disability,

• upon termination, by the Bank, of the holder’s employment, unless if in relation with the holder’s misconduct, or

• in limited circumstances and specifically approved by the Board, as stipulated in the holder’s employment contract.

In the event of the employee’s resignation, any unvested portion of the awards shall generally be forfeited and any vested portion of the options shall generally remain exercisable during the 90-day period following the termination date or, if earlier, until the expiration date, and any vested portion of the options not exercised as of the expiration of such period shall be forfeited without any consideration therefore.

Performance vesting condition

50% of each option award was granted in the form of performance options and would vest (partially or fully) on a “valuation event” date (the date that any of the March 2, 2010 new investors transfers at least 5% of the total number of common shares or the date that there is a change in control and any of the new investors realize a predetermined multiple of invested capital (“MOIC”)). On September 21, 2016, it was determined that a valuation event occurred during which a new investor realized a MOIC of more than 200% of the original invested capital of $12.09 per share and accordingly, all outstanding unvested performance options vested.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Changes in Outstanding Stock Option Plans
	Number of shares transferable upon exercise (thousands)						Weighted average exercise price ()		Weighted average<br><br>remaining life (years)		Aggregate<br><br>intrinsic value<br><br>($ thousands)
Three months ended March 31, 2020	1997 Stock<br><br>Option Plan		2010 Stock Option Plan		Total		1997 Stock Option Plan		1997 Stock<br> Option Plan	2010 Stock Option Plan
Outstanding at beginning of period	—		159		159		—		—	—	—
Exercised	—		(3	)	(3	)	—	)	—	—	17
Outstanding at end of period	—		156		156		—		—	0.49	773
Vested and exercisable at end of period	—		156		156		—		—	0.49	—
	Number of shares transferable upon exercise (thousands)						Weighted average exercise price ()		Weighted average<br><br>remaining life (years)		Aggregate<br><br>intrinsic value<br><br>($ thousands)
Three months ended March 31, 2019	1997 Stock<br><br>Option Plan		2010 Stock<br><br>Option Plan		Total		1997 Stock Option Plan		1997 Stock<br><br>Option Plan	2010 Stock<br><br>Option Plan
Outstanding at beginning of period	25		189		214		64.51		—	—	—
Exercised	—		(1	)	(1	)	—		—	—	19
Expiration at end of plan life	(25	)	—		(25	)	64.51		—	—	—
Outstanding at end of period	—		188		188		—		—	1.42	4,469
Vested and exercisable at end of period	—		188		188		—		—	1.42	—

All values are in US Dollars.

Share Based Plans

Recipients of unvested share awards are entitled to the related common shares at no cost, at the time the award vests. Recipients of unvested shares may be entitled to receive additional unvested shares having a value equal to the cash dividends that would have been paid had the unvested shares been issued and vested. Such additional unvested shares granted as dividend equivalents are subject to the same vesting schedule and conditions as the underlying unvested shares.

Unvested shares subject only to the time vesting condition generally vest upon retirement, death, disability or upon termination, by the Bank, of the holder’s employment unless if in connection with the holder’s misconduct. Unvested shares subject to both time vesting and performance vesting conditions remain outstanding and unvested upon retirement and will vest only if the performance conditions are met. Unvested shares can also vest in limited circumstances and if specifically approved by the Board, as stipulated in the holder’s employment contract. In all other circumstances, unvested shares are generally forfeited when employment ends.

The grant date weighted average fair value of unvested share awards granted in the three months ended March 31, 2020 was $34.51 (December 31, 2019: $35.96). The Bank expects to settle these awards by issuing new shares.

Employee Deferred Incentive Plan (“EDIP”)

Under the Bank’s EDIP Plan, shares are awarded to Bank employees and executive management based on the time vesting condition, which states that the shares will vest equally over a three-year period from the effective grant date.

Executive Long-Term Incentive Share Plan (“ELTIP”) - Years 2013 - 2020

The 2020 ELTIP was approved on February 12, 2020. Under the Bank’s ELTIP plans for the years 2013 through 2020, performance shares as well as time-vested shares were awarded to executive management. The performance shares will generally vest upon the achievement of certain performance targets in the three-year period from the effective grant date. The time-vested shares will generally vest over the three-year period from the effective grant date.

Changes in Outstanding ELTIP and EDIP awards (in thousands of shares transferable upon vesting)
	Three months ended
	March 31, 2020				March 31, 2019
	EDIP		ELTIP		EDIP		ELTIP
Outstanding at beginning of period	251		618		234		697
Granted	181		174		156		272
Vested (fair value in 2020: $9.4 million, 2019: $12.9 million)	(120	)	(162	)	(115	)	(242	)
Outstanding at end of period	312		630		275		727		Share-based Compensation Cost Recognized in Net Income
---	---	---	---	---	---	---
	Three months ended
	March 31, 2020			March 31, 2019
	Stock option<br><br>plans	EDIP and<br><br>ELTIP	Total	Stock option<br> plans	EDIP and<br> ELTIP	Total
Cost recognized in net income	—	4,077	4,077	—	3,911	3,911

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Unrecognized Share-based Compensation Cost
	March 31, 2020		December 31, 2019
	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	9,121	2.25	4,744	1.71
ELTIP
Time vesting shares	238	1.74	121	0.48
Performance vesting shares	13,513	2.11	9,765	1.80
Total unrecognized expense	22,872		14,630

Note 19: Share buy-back plans

The Bank initially introduced two share buy-back programs on May 1, 2012 as a means to improve shareholder liquidity and facilitate growth in share value. Each program was approved by the Board of Directors for a period of 12 months, in accordance with the regulations of the BSX. The BSX must be advised monthly of shares purchased pursuant to each program.

From time to time the Bank's associates, insiders and insiders' associates as defined by the BSX regulations may sell shares which may result in such shares being repurchased pursuant to each program, provided no more than any such person's pro-rata share of the listed securities is repurchased. Pursuant to the BSX regulations, all repurchases made by any issuer pursuant to a securities repurchase program must be made: (1) in the open market and not by private agreement; and (2) for a price not higher than the last independent trade for a round lot of the relevant class of securities.

Common Share Buy-Back Program

On February 15, 2018, the Board approved, with effect on April 1, 2018, the 2018 common share buy-back program, authorizing the purchase for treasury of up to 1.0 million common shares.

On December 6, 2018, the Board approved, with effect from December 10, 2018 to February 29, 2020, a common share buy-back program, authorizing the purchase for treasury of up to 2.5 million common shares.

On December 2, 2019, the Board approved a new $125 million common share repurchase program, authorizing the purchase for treasury of up to 3.5 million common shares through to February 28, 2021. The new program came into effect on December 20, 2019 following the completion of the previous program.

In the three months ended March 31, 2020, the Bank repurchased and retired 1,295,000 shares.

	Three months ended	Year ended December 31
Common share buy-backs	March 31, 2020	2019	2018	Total
Acquired number of shares (to the nearest 1)	1,295,000	2,293,788	1,254,212	4,843,000
Average cost per common share	27.71	35.55	38.62	34.25
Total cost (in US dollars)	35,886,518	81,534,076	48,442,768	165,863,362

Note 20: Accumulated other comprehensive loss

	Unrealized (losses)<br> on translation of<br> net investment in<br> foreign<br> operations		HTM<br><br>investments		Unrealized<br> gains (losses)<br> on AFS<br> investments		Employee benefit plans
Three months ended March 31, 2020							Pension		Post-retirement<br><br>healthcare		Subtotal -<br><br>employee<br><br>benefits plans		Total AOCL
Balance at beginning of period	(20,818	)	(725	)	11,808		(66,312	)	(11,050	)	(77,362	)	(87,097	)
Other comprehensive income (loss), net of taxes	(1,225	)	44		38,543		1,556		131		1,687		39,049
Balance at end of period	(22,043	)	(681	)	50,351		(64,756	)	(10,919	)	(75,675	)	(48,048	)
	Unrealized (losses)<br> on translation of<br> net investment in<br> foreign<br> operations		HTM<br><br>investments		Unrealized<br> gains (losses)<br> on AFS<br> investments		Employee benefit plans
Three months ended March 31, 2019							Pension		Post- retirement<br><br>healthcare		Subtotal -<br><br>employee<br><br>benefits plans		Total AOCL
Balance at beginning of period	(19,866	)	(796	)	(43,630	)	(64,892	)	(19,343	)	(84,235	)	(148,527	)
Other comprehensive income (loss), net of taxes	814		7		21,284		342		162		504		22,609
Balance at end of period	(19,052	)	(789	)	(22,346	)	(64,550	)	(19,181	)	(83,731	)	(125,918	)

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

Net Change of AOCL Components		Three months ended
	Line item in the consolidated<br>statements of operations, if any	March 31, 2020		March 31, 2019
Net unrealized gains (losses) on translation of net investment in foreign operations adjustments
Foreign currency translation adjustments	N/A	(21,970	)	3,994
Gains (loss) on net investment hedge	N/A	20,745		(3,180	)
Net change		(1,225	)	814
Held-to-maturity investment adjustments
Amortization of net gains (losses) to net income	Interest income on investments	44		7
Net change		44		7
Available-for-sale investment adjustments
Gross unrealized gains (losses)	N/A	38,543		22,256
Transfer of realized (gains) losses to net income	Net realized gains (losses) on AFS investments	—		(972	)
Net change		38,543		21,284
Employee benefit plans adjustments
Defined benefit pension plan
Amortization of net actuarial (gains) losses	Non-service employee benefits expense	602		614
Amortization of prior service (credit) cost	Non-service employee benefits expense	5		5
Foreign currency translation adjustments of related balances	N/A	949		(277	)
Net change		1,556		342
Post-retirement healthcare plan
Amortization of net actuarial (gains) losses	Non-service employee benefits expense	—		68
Amortization of prior service (credit) cost	Non-service employee benefits expense	131		94
Net change		131		162
Other comprehensive income (loss), net of taxes		39,049		22,609

Note 21: Capital structure

Authorized Capital

On September 16, 2016, the Bank began trading on the New York Stock Exchange under the ticker symbol "NTB". The offering of 12,234,042 common shares consisted of 5,957,447 newly issued common shares sold by Butterfield and 6,276,595 common shares sold by certain selling shareholders, including 1,595,744 common shares sold by certain of the selling shareholders pursuant to the underwriters’ option to purchase additional shares, which was exercised in full prior to the closing.

The par value of each issued common share and each authorized but unissued common share is BM$0.01 and the authorized share capital of the Bank comprises 2,000,000,000 common shares of par value BM$0.01 each, 6,000,000,000 non‑voting ordinary shares of par value BM$0.01 each, 110,200,001 preference shares of par value US$0.01 each and 50,000,000 preference shares of par value £0.01 each.

Dividends Declared

During the three months ended March 31, 2020, the Bank paid cash dividends of $0.44 (March 31, 2019: $0.44) for each common share as of the related record dates. On April 30, 2020, the Board of Directors declared an interim dividend of $0.44 per common share to be paid on May 28, 2020 to shareholders of record on May 14, 2020.

The Bank is required to comply with Section 54 of the Companies Act 1981 issued by the Government of Bermuda (the “Companies Act”) each time a dividend is declared or paid by the Bank and also obtain a letter of no objection from the BMA pursuant to the Banks and Deposit Companies Act 1999 for any dividends declared. The Bank has complied with Section 54 and has obtained the BMA's letter of no objection for all dividends declared during the periods presented.

Regulatory Capital

The Bank’s regulatory capital is determined in accordance with current Basel III guidelines as issued by the BMA. Basel III adopts Common Equity Tier 1 ("CET1") as the predominant form of regulatory capital with the CET1 ratio as a new metric. Basel III also adopts the new Leverage Ratio regime, which is calculated by dividing Tier 1 capital by an exposure measure. The Leverage Ratio Exposure Measure consists of total assets (excluding items deducted from Tier 1 capital) and certain off-balance sheet items converted into credit exposure equivalents as well as adjustments for derivatives to reflect credit risk and other risks.

The Bank is fully compliant with all regulatory capital requirements to which it is subject, and it maintains capital ratios in excess of regulatory minimums as at March 31, 2020 and December 31, 2019. The following table sets forth the Bank's capital adequacy in accordance with the Basel III framework:

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

	March 31, 2020				December 31, 2019
	Actual		Regulatory minimum		Actual		Regulatory minimum
Capital
CET 1 capital	837,255		N/A		848,821		N/A
Tier 1 capital	837,255		N/A		848,821		N/A
Tier 2 capital	110,693		N/A		103,243		N/A
Total capital	947,948		N/A		952,064		N/A
Risk Weighted Assets	4,781,899		N/A		4,897,851		N/A
Leverage Ratio Exposure Measure	13,699,131		N/A		14,377,474		N/A
Capital Ratios (%)
CET 1 capital	17.5	%	10.0	%	17.3	%	10.0	%
Tier 1 capital	17.5	%	11.5	%	17.3	%	11.5	%
Total capital	19.8	%	16.3	%	19.4	%	16.3	%
Leverage ratio	6.1	%	5.0	%	5.9	%	5.0	%

Note 22: Business combinations

ABN AMRO (Channel Islands) Limited Acquisition

On April 25, 2019, the Bank announced that it entered into an agreement to acquire all the outstanding shares of ABN AMRO (Channel Islands) Limited (“ABN AMRO Channel Islands”), the Channel Islands-based banking subsidiary of ABN AMRO Bank N.V. via one of the Bank's subsidiaries, Butterfield Bank (Guernsey) Limited. ABN AMRO Channel Islands offers banking, investment management and custody products to three distinct client groups, including trusts, private clients, and funds.

This agreement is part of the Bank's strategy to grow through acquisitions in offshore markets where the Bank already has scale and expertise in order to create an organization with a widened and diversified offering.

On July 15, 2019, the transaction completed as planned and the aggregate purchase price of £160.7 million ($201.1 million) was paid in cash. During 2020, it is expected that ABN AMRO Channel Islands' business and employees will be integrated with the existing Butterfield Guernsey operations and operate under the Butterfield name. In addition to the figures noted below, on July 15, 2019, ABN AMRO Channel Islands had estimated clients' assets under management and custody of $4.7 billion.

The fair value of the net assets acquired and allocation of purchase price is summarized as follows:

	As at July 15, 2019
Total consideration transferred	201,107
Assets acquired
Cash due from banks	3,016,859
Loans	654,503
Intangible assets - Customer relationships	24,371
Other assets	31,674
Total assets acquired	3,727,407
Liabilities assumed
Deposits	(3,493,239	)
Other liabilities	(33,061	)
Total liabilities assumed	(3,526,300	)
Excess purchase price (Goodwill)	—

The acquired customer relationships intangible assets have an estimated finite useful life of 15 years.

The Bank incurred legal and professional transaction expenses related to this acquisition in the amount of $5.4 million all of which were incurred and expensed during the year ended December 31, 2019.

For the period beginning on July 15, 2019 (i.e. acquisition date) to December 31, 2019, the amount of revenues and earnings relating to the acquired ABN AMRO Channel Islands operations that were not inextricably merged into the Bank’s operations were $13.7 million and a net income of $1.5 million respectively.

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

The following selected unaudited pro forma financial information has been provided to present a summary of the combined results of the Bank and the acquired ABN AMRO Channel Islands operations, assuming the transaction had been effected on January 1, 2018. The unaudited pro forma data is for informational purposes only and does not necessarily represent results that would have occurred if the transaction had taken place on the basis assumed above. The pro forma financial information has been prepared based on the actual results realized by ABN AMRO Channel Islands from January 1, 2019 to July 15, 2019, and results estimated at the time of the acquisition.

	Three months ended
Unaudited pro forma financial information	March 31, 2019
Total net revenue	143,631
Total non-interest operating (expense)	(88,999	)
Pro forma net income post business combination	54,632

Note 23: Related party transactions

Financing Transactions

Certain directors and executives of the Bank, companies in which they are principal owners and/or members of the board, and trusts in which they are involved, have loans and deposits with the Bank. Loans to directors were made in the ordinary course of business at normal credit terms, including interest rate and collateral requirements. Loans to executives may be eligible for preferential rates. All of these loans were considered performing loans as at March 31, 2020 and March 31, 2019. Loan balances with directors and executives of the Bank, companies in which they are principal owners and/or members of the board, and trusts in which they are involved were as follows:

Balance at December 31, 2018	97,195
Loans issued during the year	45,602
Loan repayments and the effect of changes in the composition of related parties	(104,156	)
Balance at December 31, 2019	38,641
Loans issued during the period	5,645
Loan repayments and the effect of changes in the composition of related parties	(1,848	)
Balance at March 31, 2020	42,438
Consolidated balance sheets	March 31, 2020	December 31, 2019
---	---	---
Deposits	17,100	12,838
	Three months ended
Consolidated statement of operations	March 31, 2020	March 31, 2019
Interest and fees on loans	1,181	1,396

Certain affiliates of the Bank have loans and deposits with the Bank which were made and are maintained in the ordinary course of business on normal commercial terms. Balances with these parties were as follows:

Consolidated balance sheets	March 31, 2020	December 31, 2019
Loans	11,244	9,888
Deposits	315	342
	Three months ended
Consolidated statement of operations	March 31, 2020	March 31, 2019
Interest and fees on loans	173	169
Total non-interest expense	394	433

Investments

The Bank holds seed investments in several Butterfield mutual funds, which are managed by a wholly-owned subsidiary of the Bank. These investments are included in equity securities at their fair value and are as follows:

Consolidated balance sheets	March 31, 2020	December 31, 2019
Equity securities
Fair value	6,544	7,142
Unrealized gain	1,544	2,142

The Bank of N.T. Butterfield & Son Limited

Notes to the Consolidated Financial Statements (unaudited) (continued)

(In thousands of US dollars, unless otherwise stated)

As at March 31, 2020, several Butterfield mutual funds which are managed by a wholly owned subsidiary of the Bank, had loan balances and deposit balances held with the Bank. The Bank also earned asset management revenue and custody and other administration services revenue from funds managed by a wholly-owned subsidiary of the Bank and from directors and executives, companies in which they are principal owners and/or members of the board and trusts in which they are involved, as well as other income from other related parties.

Consolidated balance sheets	March 31, 2020	December 31, 2019
Loans	38	16
Deposits	21,262	3,492
	Three months ended
Consolidated statement of operations	March 31, 2020	March 31, 2019
Asset management	2,547	2,740
Custody and other administration services	356	339
Other non-interest income	486	243

Note 24: Subsequent events

On April 30, 2020, the Board of Directors declared an interim dividend of $0.44 per common share to be paid on May 28, 2020 to shareholders of record on May 14, 2020.

currentearningsdeckr7145

First Quarter Earnings Presentation The Bank of N.T. Butterfield & Son Limited May 1, 2020

Forward-Looking Statements Forward-Looking Statements: Certain of the statements made in this release are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “could,” “intend,” “target” and other similar words and expressions of the future. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Bank to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements due to a variety of factors, including the impact of the COVID-19 pandemic, the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, worldwide economic conditions and fluctuations of interest rates, the successful completion and integration of acquisitions or the realization of the anticipated benefits of such acquisitions in the expected time-frames or at all, success in business retention and obtaining new business and other factors. All statements other than statements of historical fact are statements that could be forward-looking statements. All forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our Securities and Exchange Commission (“SEC”) reports and filings. Such reports are available upon request from the Bank, or from the SEC, including through the SEC’s website at https://www.sec.gov. Except otherwise required by law, Butterfield assumes no obligation and does not undertake to review, update, revise or correct any of the forward-looking statements included herein, whether as a result of new information, future events or other developments. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. About Non-GAAP Financial Measures: This presentation contains non-GAAP financial measures including “core” net income and other financial measures presented on a “core” basis. We believe such measures provide useful information to investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, our non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. Reconciliations of these non-GAAP measures to corresponding GAAP financial measures are provided in the Appendix of this presentation. 2 All information in $millions and as of December 31, 2017 unless otherwise indicated . Conversion rate: 1 BMD$ = 1 US$.

Agenda and Overview Presenters Agenda Butterfield Overview Michael Collins • Overview • Leading Bank in Attractive Markets Chairman and Chief Executive Officer • First Quarter 2020 Highlights • Strong Capital Generation and Return • COVID-19 Update Michael Schrum • Efficient, Conservative Balance Sheet • Financials Chief Financial Officer • Visible Earnings • Q&A Ten International Locations Awards 3

First Quarter 2020 Highlights • Net income of $40.3 million, or $0.77 per share (In US$ millions) vs. Q4 2019 vs. Q1 2019 • Core Net Income** of $40.8 million, or $0.78 per share Q1 2020 $ % $ % • Return on average common equity of 16.6%; core return on average Net Interest Income $ 87.6 $ 1.4 $ (0.4) 14.2 % tangible common equity** of 18.6% Non-Interest Income 47.6 (2.1) 4.2 5.4 % • Net Interest Margin of 2.63%, cost of deposits of 0.42% Prov. for Credit Losses (5.2) (4.8) (5.2) (315.3)% • CECL adoption 1Q 2020 reserve build of $5.2 million added to the Non-Interest Expenses* (89.1) 2.9 (8.1) (4.8)% transition adjustment of $7.8 million as of January 1, 2020 Other Gains (Losses) (0.6) (0.9) (2.3) 181.3 % • Cash dividend of $0.44 per common share and active share Net Income $ 40.3 $ (3.6) (8.2)% $ (11.8) (22.7)% repurchases Non-Core Items** 0.5 1.8 0.9 (104.5)% • COVID-19 initial assessment and mitigation completed - monitoring Core Net Income** $ 40.8 $ (5.4) (11.8)% $ (11.0) (21.2)% and planning underway to meet challenges under various scenarios Core Return on Average Tangible Common Equity** Core Net Income** (In US$ millions) 25.6% 24.6% $51.7 $51.1 22.5% $48.8 21.1% $46.2 18.6% $40.8 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2019 2020 2019 2020 * Includes income taxes 4 ** See the Appendix for a reconciliation of the non-GAAP measure

COVID-19 Update Initial Assessment/Community Actions Short-term Implications Medium/Long-term Implications • Business continuity/social distancing/remote • Tourism credit and revenue streams being • Sustained, ultra low interest rates would working implemented for staff closely monitored alter earnings profile of Bank • Three month deferral on residential and ◦ Bermuda (~17% GDP) ◦ Greater prominence of fee businesses personal mortgage payments – corporate ◦ Cayman (~25% GDP) ◦ Enhanced focus on operating efficiency clients offered needs-based assistance • Impact of lower interest rates on NIM – ◦ Capital management emphasis on • Providing essential banking services cash/short-term securities and variable rate supporting dividends throughout health crisis loans • Possible M&A opportunities as larger • Delayed previously announced card related • Card services fees impacted by lower banks review less strategic jurisdictions fee increases tourism and weakened economic activity and businesses • Providing urgent community support across • Likelihood of increased pre-payment all jurisdictions speeds on MBS book • First quarter 2020 saw less than 1% of non-accrual loans in the Direct Hotel and Restaurant Lending Exposure Limited hotel sector and zero non-accrual loans in restaurant sectors $ millions % • Hotel construction financing consists of well known and highly Hotel Operators $ 182.5 11.2% experienced borrowers, with well structured and secured Hotel Construction 24.8 1.5% transactions Restaurants 6.8 0.4% • Hotel and restaurant exposure is primarily in Bermuda (<1% outside Other Commercial and CRE Loans 1,412.4 86.8% of Bermuda) Total Commercial and CRE Loans $ 1,626.5 100.0% • Residential lending will continue to be monitored, particularly borrowers employed in hospitality or who have tourism accommodations 5 • Total hospitality related undrawn committed loans is $35 million

Financials

Income Statement Net Interest Income Net Interest Margin & Yields Net Interest Income before Provision for Credit Losses - Trend (In US$ millions) Q1 2020 vs. Q4 2019 (In US$ millions) Avg. Balance Yield Avg. Balance Yield $88.0 $86.2 $87.6 Cash, S/T Inv. & Repos $ 3,681.2 1.03 % $ (110.7) (0.11)% Investments 4,503.2 2.78 % (30.5) 0.01 % Loans (net) 5,159.8 4.80 % 279.2 (0.15)% Interest Earning Assets 13,344.1 3.08 % 137.9 (0.03)% Interest Bearing Liabilities 10,315.7 (0.58)% 119.1 0.09 % Q1 Q2 Q3 Q4 Q1 Net Interest Margin 2.63 % 0.04 % 2019 2020 • Net interest margin (“NIM”) increased 4 bps from the previous quarter due to lower costs of funds that were partially offset by lower asset yields • Loan yields of 4.8% down 15 bps in the first quarter of 2020 as lower market rates partially passed on to customers • Substantially lower rates on roll-over maturities have continued to improve term deposit costs • Average loans increased during the quarter as new government loans in Bermuda and the Cayman Islands were drawn in late 4Q 2019 7

Customer Deposits Deposit Composition By Currency Average Deposit Volume and Cost of Deposits 6.1% 10.2% 8.8% 5,000 (In US$ millions) 14.7% 20.2% 21.4% 1.38% 1.41% 79.2% 4,000 1.21% 69.6% 69.8% 3,000 Q1 Q2 Q3 Q4 Q1 2019 2020 USD / USD Pegged GBP 2,000 Other 0.50% 0.42% 0.38% 1,000 0.25% 0.20% By Type 0.09% 22.5% 24.5% 24.3% 0 56.2% Q1 Q2 Q3 Q4 Q1 57.5% 57.5% 2019 2020 21.3% 18.0% 18.2% Bermuda Demand Deposits Bermuda Term Deposits Q1 Q2 Q3 Q4 Q1 Cayman Demand Deposits Cayman Term Deposits 2019 2020 Channel Islands Demand Deposits Channel Islands Term Deposits Non-interest bearing demand deposits Interest bearing demand deposit cost Term deposit cost Interest bearing demand deposits Overall cost of deposits Term deposits 8

Income Statement Non-Interest Income Non-Interest Income Trend (In US$ millions) (In US$ millions) Q1 2020 vs. Q4 2019 $49.7 $47.6 Asset management $ 7.8 $ 0.1 $43.4 Banking 11.2 (2.8) FX Revenue 10.8 0.9 Trust 12.2 (0.8) Custody and Other 3.6 0.1 Q1 Q2 Q3 Q4 Q1 Other 2.0 0.3 2019 2020 Total Non-Interest Income $ 47.6 $ (2.1) • Non-interest income down 4.3% sequentially and up 9.7% compared to the first quarter of 2019 • Card services fee income (included in Banking non-interest income) was adversely impacted by lower sales volume in March 2020, due to COVID-19 related economic slowdown as well as seasonally lower first quarter card fees • Fee income ratio of 36.6% in the first quarter of 2020 remains higher than the peer average* * Includes US banks identified by management as a peer group. Please see the Appendix for a list of these banks. 9

Income Statement Non-Interest Expenses Core Non-Interest Expense Trend* Core Non-Interest Expenses* vs. Q4 2019 (In US$ millions) $91.6 $87.6 (In US$ millions) Q1 2020 $ % $80.3 Salaries & Benefits** $ 44.1 $ (2.5) (5.4)% 66.3% 60.1% 63.8% Technology & Comm. 16.4 (0.1) (0.6)% Property 7.3 0.3 3.6 % Professional & O/S Services 5.8 (0.7) (11.3)% Indirect Taxes 5.5 0.2 4.2 % Intangible Amortization 1.4 (0.1) (1.0)% Q1 Q2 Q3 Q4 Q1 Marketing 1.6 (1.5) (49.9)% 2019 2020 Other 5.5 0.4 9.8 % Total Core Non-Interest Expenses* $ 87.6 $ (4.0) (4.3)% Core Non-Interest Expenses* Non-Core Expenses* 0.5 (1.8) 79.1 % Core Efficiency Ratio* Non-Interest Expenses $ 88.1 $ (5.8) (6.2)% • Core cost / income ratio* of 63.8% is above through cycle target but lower than the 66.3% in the prior quarter • Quarter core expenses normalized as expected due to: ◦ Completed headcount reductions in Channel Islands ◦ Lower marketing expenses following re-sequencing new brand rollout and reduced travel expenses and client event costs * See the Appendix for a reconciliation of the non-GAAP measure 10 ** Includes Non-Service Employee Benefits Expense

Capital Requirements and Return Regulatory Capital (Basel III) - Total Capital Ratio*** Leverage Capital 9.8% 19.8% 0.6% 8.0% 1.2% 16.3% 14.1% 9.2% 6.8% Butterfield Current BMA 2020 Required US Peer Median * Butterfield - Current US Peer Median * TCE/TA TCE/TA Ex Cash Dividend Payout Ratio** • Capital management balances regulatory requirements and 57.1% shareholder returns 52.9% • TCE/TA ratio of 6.8% conservatively above targeted range of 6.0% to 6.5% 46.4% 42.8% • TBVPS of $17.31 increased 4.6% in the first quarter • Board declared a quarterly qualified cash dividend of $0.44 per common share • Share repurchase program continues subject to market conditions • Dividend rates are established to be sustainable with flexibility for 2017 2018 2019 Q1 2020 share repurchases and potential M&A * Includes US banks identified by management as a peer group. Please see the Appendix for a list 11 *** In accordance with regulatory capital guidance, the Bank has elected to make use of transitional of these banks. arrangements which allow the deferral of the January 1, 2020 CECL impact of $7.8 million on its regulatory capital over a period of 5 years. ** 2020 is based on year-to-date dividend and earnings per share

Balance Sheet Total Assets (In US$ millions) Q1 2020 Q4 2019 (In US$ billions) Cash & Equivalents $ 1,978 $ 2,550 $13.9 S/T Investments 1,048 1,218 $13.2 $11.6 Reverse Repos 192 142 Loans (net) 5,001 5,143 Investments 4,538 4,436 Other Assets 441 432 $4.4 $4.4 $4.5 $ $ Total Assets 13,197 13,922 $5.1 $5.0 $4.0 Int. Bearing Deposits $ 9,616 $ 10,203 Non-Int. Bearing Deposits 2,137 2,238 Q1 Q2 Q3 Q4 Q1 Other Liabilities 464 516 2019 2020 Shareholders Equity 981 964 Total assets Investments Loans Total Liab. & Equity $ 13,197 $ 13,922 Total Deposits • Deposit balances reduced to $11.8 billion from $12.4 billion with the majority of the decline in the Channel Islands, (In US$ billions) $12.4 $11.8 where planned decreases in Euro deposits continued $10.3 • Loan balances decreased by 2.8% from last quarter primarily due to the impact of a weaker UK pound sterling on Channel Islands and UK loan values • Butterfield continues to be positioned with a conservative balance sheet with low risk density Q1 Q2 Q3 Q4 Q1 2019 2020 12

Asset Quality Non-Accrual Loans Investment Portfolio (In US$ millions) Loan Distribution Rating Distribution $53.8 $53.1 $50.4 Gov’t: 7.3% BBB: 0.1% A: 0.5% Other Comm’l: AA: 0.3% 10.1% Res Mtg: 63.1% Comm’l R/E: 15.0% AAA: 99.1% Consumer: 4.5% $5.0 billion $4.5 billion Q1 Q2 Q3 Q4 Q1 2019 2020 • Investment portfolio remains very high quality with 99% AAA Net Charge-Off Ratio 0.10% rated securities, primarily US Government guaranteed securities 0.08% • CECL adoption resulted in a reserve build of $5.2 million in 0.06% 1Q 2020 • Loan book manually underwritten, approximately 75% with 0.04% LTVs below 70%, full recourse residential mortgages in 0.02% 0.02% 0.01% Bermuda, Cayman and UK mortgage markets make up —% 62% of the loan book 0.00% • Limited uncollateralized hotel and hospitality exposure in Q1 Q2 Q3 Q4 Q1 commercial lending book 2019 2020 13

Interest Rate Sensitivity Average Balance - Balance Sheet Interest Rate Sensitivity Average Balances 11.6% (US$Mil) Weighted Average 6.0% 4.9% Q1 2020 vs. Q4 2019 Duration vs. Q4 2019 Life 3.2% 3.5% Cash & Reverse Repos 2,529.6 (243.9) N/A N/A N/A S/T Invest. 1,151.5 133.1 0.2 (0.1) N/A (4.1)% -100bps +100bps +200bps AFS 2,319.8 48.1 2.6 (0.2) 4.2 HTM** 2,181.1 (79.6) 3.1 (0.5) 4.6 NTB US Peer Median * Total 8,182.0 (142.3) • The lower US rate environment across the forward curve has significantly changed the interest rate sensitivity for the Bank • A 100bps reduction in interest rates is expected to increase net interest income by 11.6% as a negative US interest rate environment would ultimately result in negative rates being charged on customer deposits, while fixed rate assets would continue to generate revenue • The weighted average life of AFS and HTM investments have decreased from the prior quarter due to lower interest rates, which has resulted in increased prepayment speeds on the Agency securities book * Includes US banks identified by management as a peer group. Please see the Appendix for a list of these banks. 4Q19 comparative data is used as 1Q20 peer information was not widely available at time of publication. ** The HTM portfolio is comprised of securities with negative convexity which typically exhibit higher prepayment speeds when assuming lower future rates. 14

Appendix

Appendix Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) 2020 2019 2018 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Assets Cash & Equivalents $ 1,978 $ 2,550 $ 3,605 $ 2,011 $ 2,601 $ 2,054 $ 1,259 $ 1,756 $ 1,846 Reverse Repos 192 142 62 166 72 27 72 89 198 S/T Investments 1,048 1,218 793 163 215 52 76 79 100 Investments 4,538 4,436 4,662 4,524 4,393 4,255 4,576 4,727 4,512 Loans, Net 5,001 5,143 4,673 4,000 3,986 4,044 4,092 3,986 3,957 Other Assets 441 432 420 364 374 340 355 367 376 Total Assets $ 13,197 $ 13,922 $ 14,216 $ 11,229 $ 11,643 $ 10,773 $ 10,430 $ 11,002 $ 10,988 Liabilities and Equity Total Deposits $ 11,753 $ 12,442 $ 12,663 $ 9,852 $ 10,294 $ 9,452 $ 9,066 $ 9,718 $ 9,754 Long-Term Debt 144 144 143 143 143 143 143 143 117 Other Liabilities 320 373 446 305 310 295 349 293 293 Total Liabilities $ 12,217 $ 12,958 $ 13,252 $ 10,300 $ 10,747 $ 9,891 $ 9,558 $ 10,154 $ 10,164 Common Equity $ 981 $ 964 $ 965 $ 929 $ 896 $ 882 $ 872 $ 849 $ 824 Total Equity $ 981 $ 964 $ 965 $ 929 $ 896 $ 882 $ 872 $ 849 $ 824 Total Liabilities and Equity $ 13,197 $ 13,922 $ 14,216 $ 11,229 $ 11,643 $ 10,773 $ 10,430 $ 11,002 $ 10,988 Key Metrics TCE / TA 6.8% 6.3% 6.2% 7.7% 7.1% 7.5% 7.7% 7.1% 6.7% CET 1 Ratio 17.5% 17.3% 17.4% 20.1% 19.3% 19.6% 20.2% 19.1% 17.6% Total Tier 1 Capital Ratio 17.5% 17.3% 17.4% 20.1% 19.3% 19.6% 20.2% 19.1% 17.6% Total Capital Ratio 19.8% 19.4% 19.6% 22.7% 22.0% 22.4% 23.3% 22.3% 19.2% Book value per common share 19.09 18.40 18.14 17.53 16.81 16.31 15.75 15.38 14.95 16

Appendix Average Balance Sheet Trends (in millions of US Dollars, unless otherwise indicated) Q1 2020 Q4 2019 Q1 2019 Average Interest Average rate Average Interest Average rate Average Interest Average rate Assets balance ($) ($) (%) balance ($) ($) (%) balance ($) ($) (%) Cash due from banks, reverse repurchase agreements and short-term investments $ 3,681.2 $ 9.4 1.03 % $ 3,791.9 $ 10.9 1.14 % $ 2,441.2 $ 9.9 1.65 % Investment in securities 4,503.2 31.2 2.78 % 4,533.6 31.7 2.77 % 4,295.6 32.5 3.07 % Equity securities at fair value 2.3 — — % 1.2 — — % 1.0 — — % AFS 2,319.8 15.0 2.59 % 2,271.7 14.7 2.57 % 2,180.9 15.5 2.87 % HTM 2,181.1 16.2 2.99 % 2,260.7 17.0 2.98 % 2,113.7 17.0 3.27 % Loans 5,159.8 61.7 4.80 % 4,880.6 60.9 4.95 % 4,055.0 56.7 5.67 % Commercial 1,792.4 23.2 5.19 % 1,600.1 22.2 5.50 % 1,280.2 19.5 6.16 % Consumer 3,367.4 38.5 4.59 % 3,280.5 38.8 4.69 % 2,774.8 37.3 5.45 % Total interest earning assets 13,344.1 102.4 3.08 % 13,206.2 103.5 3.11 % 10,791.8 99.2 3.73 % Other assets 403.5 398.8 348.3 Total assets $ 13,747.6 $ 13,605.0 $ 11,140.1 Liabilities Interest bearing deposits $ 10,172.2 $ (12.9) (0.51)% $ 10,050.5 $ (15.4) (0.61)% $ 7,634.8 $ (9.2) (0.49)% Customer demand deposits 7,075.0 (3.5) (0.20)% 6,989.7 (4.4) (0.25)% 5,389.2 (1.2) (0.09)% Customer term deposits 3,083.9 (9.3) (1.21)% 3,038.7 (10.6) (1.38)% 2,201.4 (7.7) (1.41)% Deposits from banks 13.3 (0.1) (3.93)% 22.1 (0.3) (6.14)% 44.1 (0.3) (2.67)% Securities sold under agreement to repurchase — — — % 2.6 — (2.10)% — — — % Long-term debt 143.5 (1.9) (5.22)% 143.5 (1.9) (5.28)% 143.3 (2.0) (5.71)% Interest bearing liabilities 10,315.7 (14.8) (0.58)% 10,196.6 (17.3) (0.67)% 7,778.1 (11.2) (0.58)% Non-interest bearing customer deposits 2,227.3 2,132.6 2,154.3 Other liabilities 316.6 348.0 274.8 Total liabilities $ 12,859.6 $ 12,677.3 $ 10,207.2 Shareholders’ equity 888.0 927.7 932.9 Total liabilities and shareholders’ equity $ 13,747.6 $ 13,605.0 $ 11,140.1 Non-interest bearing funds net of non-interest earning assets (free balance) $ 3,028.4 $ 3,009.6 $ 3,013.7 Net interest margin $ 87.6 2.63 % $ 86.2 2.59 % $ 88.0 3.31 % 17

Appendix Income Statement Trends (in millions of US Dollars, unless otherwise indicated) 2020 2019 2018 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Net Interest Income $ 87.6 $ 86.2 $ 86.3 $ 85.2 $ 88.0 $ 87.4 $ 88.3 $ 87.4 $ 79.9 Non-Interest Income 47.6 49.7 46.6 44.2 43.4 45.7 41.3 41.9 39.8 Prov. for Credit Recovery (Losses) (5.2) (0.4) (0.4) 0.9 — 1.7 2.8 0.5 1.9 Non-Interest Expenses* 89.1 92.0 90.6 91.9 81.0 83.7 82.6 78.6 77.8 Other Gains (Losses) (0.6) 0.3 0.5 0.2 1.8 (0.3) 0.7 (1.6) 0.4 Net Income $ 40.3 $ 43.9 $ 42.4 $ 38.6 $ 52.1 $ 50.9 $ 50.4 $ 49.7 $ 44.2 Non-Core Items** $ 0.5 $ 2.3 $ 6.4 $ 12.5 $ (0.4) $ 0.2 $ (1.2) $ 2.0 $ 0.8 Core Net Income** $ 40.8 $ 46.2 $ 48.8 $ 51.1 $ 51.7 $ 51.1 $ 49.1 $ 51.7 $ 45.0 Key Metrics Loan Yield 4.80% 4.95% 5.22% 5.67% 5.67% 5.56% 5.54% 5.44% 5.31% Securities Yield 2.78 2.77 2.82 2.92 3.07 2.87 2.78 2.67 2.54 Cost of Deposits 0.42 0.50 0.54 0.42 0.38 0.27 0.20 0.14 0.12 Net Interest Margin 2.63 2.59 2.52 3.18 3.31 3.38 3.37 3.20 3.05 Core Efficiency Ratio** 63.8 66.3 62.1 60.3 60.1 61.5 63.2 59.0 62.3 Core ROATCE** 18.6 21.1 22.5 24.6 25.6 25.8 24.9 27.6 24.3 Fee Income Ratio 36.6 36.7 35.2 33.9 33.0 33.9 31.2 32.4 32.7 Fully Diluted Share Count (in millions of common shares) 52.4 53.3 53.6 53.5 54.2 55.4 56.0 55.9 55.8 * Includes income taxes ** See the reconciliation of non-GAAP measures on pages 21-22 18

Appendix Non-Interest Income & Expense Trends (in millions of US Dollars, unless otherwise indicated) 2020 2019 2018 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Non-Interest Income Trust $ 12.2 $ 13.0 $ 12.7 $ 13.0 $ 12.6 $ 13.8 $ 13.1 $ 13.2 $ 10.9 Asset Management 7.8 7.8 7.4 6.9 6.7 6.5 6.5 6.2 6.4 Banking 11.2 14.0 12.1 12.1 11.2 12.8 10.6 10.8 10.9 FX Revenue 10.8 9.8 10.0 8.4 8.8 8.6 7.8 8.3 8.2 Custody & Other Admin. 3.6 3.5 3.6 3.1 2.7 2.4 2.2 2.4 2.2 Other 2.0 1.7 0.8 0.9 1.4 1.6 1.0 1.1 1.2 Total Non-Interest Income $ 47.6 $ 49.7 $ 46.6 $ 44.2 $ 43.4 $ 45.7 $ 41.3 $ 41.9 $ 39.8 Non-Interest Expense Salaries & Benefits* $ 44.6 $ 48.8 $ 45.6 $ 52.1 $ 42.8 $ 43.7 $ 43.8 $ 40.9 $ 37.0 Technology & Comm. 16.4 16.5 16.3 15.2 14.6 14.9 15.6 15.1 14.7 Property 7.3 7.0 6.1 5.7 5.4 6.1 5.3 5.3 5.1 Professional & O/S Services 5.8 6.7 9.5 6.2 5.6 6.1 5.1 5.1 9.7 Indirect Taxes 5.5 5.3 5.3 5.3 5.2 4.7 4.8 5.0 4.9 Intangible Amortization 1.4 1.5 1.5 1.2 1.3 1.3 1.4 1.3 1.1 Marketing 1.6 3.1 1.6 1.7 1.7 2.3 1.5 1.4 0.9 Other 5.5 5.0 4.6 4.3 4.3 4.3 4.9 4.1 3.9 Total Non-Interest Expense $ 88.1 $ 93.9 $ 90.4 $ 91.7 $ 80.9 $ 83.5 $ 82.2 $ 78.2 $ 77.4 Income Taxes 1.0 (1.9) 0.2 0.2 0.1 0.2 0.4 0.3 0.4 Total Expense incld. Taxes $ 89.1 $ 92.0 $ 90.6 $ 91.9 $ 81.0 $ 83.7 $ 82.6 $ 78.6 $ 77.8 *Includes non-service employee benefits 19

Appendix Core Non-Interest Expense* Trends (in millions of US Dollars, unless otherwise indicated) 2020 2019 2018 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Salaries & Benefits** $ 44.1 $ 46.6 $ 42.8 $ 41.1 $ 42.8 $ 43.7 $ 43.8 $ 40.9 $ 37.0 Technology & Comm. 16.4 16.5 16.3 15.2 14.6 14.8 15.4 14.9 14.6 Property 7.3 7.0 6.1 5.7 5.4 6.1 5.3 5.3 5.1 Professional & O/S Services 5.8 6.5 5.9 5.0 5.0 6.0 6.3 4.7 8.1 Indirect Taxes 5.5 5.3 5.3 5.0 5.2 4.7 4.8 5.0 4.9 Intangible Amortization 1.4 1.5 1.5 1.2 1.3 1.3 1.4 1.3 1.1 Marketing 1.6 3.1 1.6 1.7 1.7 2.3 1.5 1.4 0.9 Other 5.5 5.1 4.6 4.3 4.3 4.3 4.8 4.1 3.9 Total Core Non-Interest Expense $ 87.6 $ 91.6 $ 84.0 $ 79.2 $ 80.3 $ 83.1 $ 83.3 $ 77.6 $ 75.7 Income Taxes 1.0 (1.9) 0.2 0.2 0.1 0.2 0.4 0.3 0.4 Total Core Expense incld. Taxes $ 88.6 $ 89.7 $ 84.2 $ 79.4 $ 80.5 $ 83.2 $ 83.7 $ 77.9 $ 76.0 * See the reconciliation of non-GAAP measures on pages 21-22 ** Includes non-service employee benefits 20

Appendix Non-GAAP Reconciliation (in millions of US Dollars, unless otherwise indicated) 2020 2019 Q1 Q4 Q3 Q2 Q1 Net income A $ 40.3 $ 43.9 $ 42.4 $ 38.6 $ 52.1 Non-core (gains), losses and expenses Non-core (gains) losses Gain on disposal of a pass-through note investment (formerly a SIV) — — — — (1.0) Total non-core (gains) losses B $ — $ — $ — $ — $ (1.0) Non-core expenses Early retirement program, redundancies and other non-core compensation costs 0.4 2.2 2.8 11.3 — Business acquisition costs 0.1 0.1 3.6 1.2 0.6 Total non-core expenses C $ 0.5 $ 2.3 $ 6.4 $ 12.5 $ 0.6 Total non-core (gains), losses and expenses D=B+C 0.5 2.3 6.4 12.5 (0.4) Core net income to common shareholders E=A+D $ 40.8 $ 46.2 $ 48.8 $ 51.1 $ 51.7 Average shareholders' equity 973.3 964.8 948.4 905.7 893.4 Average common equity F 973.3 964.8 948.4 905.7 893.4 Less: average goodwill and intangible assets (94.2) (95.3) (87.1) (73.0) (74.9) Average tangible common equity G 879.1 869.5 861.3 832.7 818.5 Return on equity A/F 16.6% 18.0% 17.8% 17.1% 23.7% Core return on average tangible common equity E/G 18.6% 21.1% 22.5% 24.6% 25.6% Core earnings per common share fully diluted Adjusted weighted average number of diluted common shares (in thousands) H 52.4 53.3 53.6 53.5 54.2 Earnings per common share fully diluted A/H 0.77 0.82 0.79 0.72 0.96 Non-core items per share D/H 0.01 0.05 0.12 0.23 (0.01) Core earnings per common share fully diluted E/H 0.78 0.87 0.91 0.95 0.95 Core return on average tangible assets Total average assets I $ 13,761.4 $ 13,814.7 $ 13,519.2 $ 11,294.3 $ 11,177.1 Less: average goodwill and intangible assets (94.2) (95.3) (87.1) (73.0) (74.9) Average tangible assets J $ 13,667.2 $ 13,719.4 $ 13,432.1 $ 11,221.3 $ 11,102.2 Return on average assets A/I 1.2% 1.3% 1.2% 1.4% 1.9% Core return on average tangible assets E/J 1.2% 1.3% 1.4% 1.8% 1.9% 21

Appendix Non-GAAP Reconciliation (cont'd) (in millions of US Dollars, unless otherwise indicated) 2020 2019 Q1 Q4 Q3 Q2 Q1 Tangible equity to tangible assets Shareholders' equity K $ 980.5 $ 963.7 $ 964.6 $ 928.7 $ 896.2 Less: goodwill and intangible assets (91.2) (96.5) (93.4) (72.2) (74.1) Tangible common equity L 889.3 867.2 871.2 856.5 822.1 Total assets M 13,197.4 13,921.6 14,216.3 11,229.0 11,643.1 Less: goodwill and intangible assets (91.2) (96.5) (93.4) (72.2) (74.1) Tangible assets N $ 13,106.2 $ 13,825.1 $ 14,122.9 $ 11,156.8 $ 11,569.0 Tangible common equity to tangible assets L/N 6.8% 6.3% 6.2% 7.7% 7.1% Tangible book value per share Basic participating shares outstanding (in millions) O 51.4 52.4 53.2 53.0 53.3 Tangible book value per common share L/O 17.3 16.6 16.4 16.2 15.4 Efficiency ratio Non-interest expenses $ 88.1 $ 93.9 $ 90.4 $ 91.7 $ 80.9 Less: Amortization of intangibles (1.4) (1.5) (1.5) (1.2) (1.3) Non-interest expenses before amortization of intangibles P 86.7 92.4 88.9 90.5 79.6 Non-interest income 47.6 49.7 46.6 44.2 43.4 Net interest income before provision for credit losses 87.6 86.2 86.3 85.2 88.0 Net revenue before provision for credit losses and other gains/losses Q $ 135.2 $ 136.0 $ 133.0 $ 129.4 $ 131.4 Efficiency ratio P/Q 64.1% 68.0% 66.9% 70.0% 60.6% Core efficiency ratio Non-interest expenses $ 88.1 $ 93.9 $ 90.4 $ 91.7 $ 80.9 Less: non-core expenses (C) (0.5) (2.3) (6.4) (12.5) (0.6) Less: amortization of intangibles (1.4) (1.5) (1.5) (1.2) (1.3) Core non-interest expenses before amortization of intangibles R 86.2 90.1 82.5 78.0 79.0 Net revenue before provision for credit losses and other gains/losses S 135.2 136.0 133.0 129.4 131.4 Core efficiency ratio R/S 63.8% 66.3% 62.1% 60.3% 60.1% 22

Appendix Commentary on Factors Influencing COVID-19 Implications The short- and medium/long-term implications of the pandemic on our business, financial condition, liquidity and results of operations will depend on factors such as, but not limited to the following: • The duration and scope of the pandemic and related economic fallout • The pace and magnitude of the economic recovery in the jurisdictions in which we operate • The interest rate environment • The time it takes for tourism in Bermuda and Cayman to recover • Increased unemployment and decreased business in the jurisdictions in which we operate • Ratings downgrades, credit deterioration and defaults in many industries, including the hotel/restaurants/hospitality sector and commercial real estate • A decrease in the rates and yields on US Government guaranteed securities, which may lead to a decrease in the quality of our investment portfolio • Significant draws in credit lines, as customers and clients seek to increase liquidity • Volatility of market conditions and increased demands on capital and liquidity, leading the Bank to cease repurchases of its common shares • A reduction in the value of the assets under administration for the trust and custody businesses, which may affect related fee income and/or demand for these services • Heightened cybersecurity, information security and operational risks as a result of remote working arrangements implemented for staff • Actions that have been, or may be taken in the future, by governmental authorities in response to the pandemic, such as a suspension of mortgage and other loan payments and foreclosures • Heightened risk of litigation and governmental and regulatory scrutiny as a result of the effects of COVID-19 on market and economic conditions and actions governmental authorities take in response to those conditions 23

Appendix Peer Group Our peer group includes the following banks, noted by their ticker symbols: • FRC • SIVB • EWBC • CFR • ASB • WTFC • CBSH • IBKC • UMBF • FHB • BOH • TRMK • IBOC • CBU • BPFH • FFIN • WABC 24

		Exhibit

BUTTERFIELD ANNOUNCES BOARD CHANGES

Hamilton, Bermuda - April 30, 2020: The Bank of N.T. Butterfield & Son Limited (“Butterfield”) (NYSE: NTB | BSX: NTB.BH) today announced that Independent Directors Caroline Foulger and Meroe Park have retired from the Board and will not stand for re-election at the Bank’s upcoming Annual General Meeting. Butterfield also announced that its Group Chief Financial Officer, Michael Schrum, has joined the Board as an Executive Director.

A former Partner at PricewaterhouseCoopers Bermuda, Ms. Foulger joined the Board as an Independent Director in 2013, and most recently served on the Board’s Audit Committee. After seven years on the Board, she has decided to commit her time to other non-executive roles. Ms. Foulger is a Fellow or Member of several professional bodies, including the Institute of Chartered Accountants in England and Wales, Institute of Chartered Professional Accountants of Bermuda, and the Institute of Directors, and holds directorship positions with several listed and private companies.

Ms. Park, who was Executive Director of the United States Central Intelligence Agency prior to joining Butterfield’s Board as an Independent Director in 2017, most recently served on the Board’s Risk Policy & Compliance and Compensation & Human Resources Committees. In December 2019, Ms. Park was appointed to the full time role of Deputy Secretary and Chief Operating Officer of the Smithsonian Institution in Washington DC, a position which does not afford her the opportunity to continue to serve as a Butterfield Director.

Mr. Schrum has served as the Bank’s Group Chief Financial Officer since September 2015. He was previously Chief Financial Officer at HSBC Bank Bermuda. He has more than 20 years of financial services experience in London, New York and Bermuda, mainly in banking, insurance and tax. He joined HSBC in Bermuda in 2001 and held progressively senior positions within the bank’s commercial banking, strategy, and finance divisions. He is a Chartered Financial Analyst and a Fellow of the Institute of Chartered Accountants in England and Wales and also holds a Master’s degree (University of London) in Economics. He is a Director of Ascendant Group Limited, Chairman of the Bermuda Foundation, and serves as Bermuda’s Honorary Consul for Denmark.

Michael Collins, Butterfield’s Chairman and Chief Executive Officer, said “I would like to thank Caroline and Meroe for their many contributions to Butterfield’s Board during their tenure.

“Caroline served on the Board during an important time of change for the Bank, helping oversee the post-financial crisis rebuilding of the balance sheet, and our transition from private equity control to being an independent, widely-held NYSE-listed company. Her insight, dedication and counsel at the Board were invaluable during that transition.

“Meroe joined us following our initial public offering in the US and, with her leadership background and cyber security knowledge, helped us put a renewed focus on many personnel and technology-related aspects of the Bank’s businesses. She provided valuable input and oversight regarding Butterfield’s 2018/19 Deutsche Bank and ABN AMRO acquisitions, which transformed our global trust operations and our banking footprint in the Channel Islands.

“As Group CFO, Michael has worked closely with our Directors over the years, and on their behalf, I welcome him to the Board, where I know our deliberations will be enhanced by his robust experience in banking and thorough knowledge of Butterfield’s operations around the world.”

-ENDS-

Forward-Looking Statements:

About Butterfield:

Investor Relations Contact: Media Relations Contact:

Noah Fields Mark Johnson

Investor Relations Group Head of Communications

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

Phone : (441) 299 3816 Phone: (441) 299 1624

E-mail : [email protected] Cellular: (441) 524 1025

E-mail: [email protected]