Bank of N.T Butterfield & Son Ltd

The Bank of N.T. Butterfield & Son (NTB) owns deposit and wealth management franchises in the Caribbean financial centers of Cayman and Bermuda. In our view, the bank generates an attractive return on equity despite maintaining a conservatively invested balance sheet. On May 28, Butterfield announced an agreement to acquire CIBC's Caribbean franchises, approximately doubling the size of the business, at roughly 1.1x book value and 9x earnings. While the acquisition introduces some operational and balance sheet risk, we believe it can enhance the company's growth prospects and further strengthen its position in these markets. We expect Butterfield to remain a well-run banking franchise and were able to accumulate shares at less than 10x earnings.

The Bank of N.T. Butterfield and Sons (NTB) owns attractive deposit and wealth management franchises in the Caribbean financial centers of Cayman and Bermuda. The bank has a very attractive return on equity despite investing in low risk assets. On May 28, Butterfield announced a deal to acquire CIBC’s Caribbean franchises for 1.1x book and 9x earnings, roughly doubling the size of the business. The deal will provide some growth and further consolidate Butterfield’s attractive Caribbean markets but adds some operational and balance sheet risk. Still, Butterfield remains a well-run banking franchise and were pleased to be able to accumulate shares at less than 10x earnings.

In March we purchased additional shares of Bank of Butterfield (NTB) in those accounts that were underweighted in those positions. This decision reflects our confidence in the bank's potential for growth and value creation in the current market environment. The addition to our position indicates our belief that Bank of Butterfield is well-positioned to capitalize on upcoming opportunities, especially given the recent market fluctuations.