- \n
- Net income of $46.9 million, or $1.16 per share<\/b><\/li>\n
- Core net income1 <\/sup>of $63.9 million, or $1.58 per share<\/b><\/li>\n
- Return on average common equity of 16.6% and core return on average tangible common equity1<\/sup> of 25.0%<\/b><\/li>\n
- Net interest margin of 2.74%, cost of deposits of 1.25%<\/b><\/li>\n
- Quarterly cash dividend of $0.50 per share for the quarter ended June 30, 2026<\/b><\/li>\n
- Repurchases of 0.3 million shares at a total cost of $16.1 million<\/b><\/li>\n
- Closed acquisition of R&H Guernsey with integration activities underway<\/b><\/li>\n
- Entered into an agreement to acquire CIBC Caribbean with expected close in the first half of 2027<\/b><\/li>\n<\/ul>\n
HAMILTON, Bermuda–(BUSINESS WIRE<\/a>)–
\nThe Bank of N.T. Butterfield & Son Limited (“Butterfield” or the “Bank”) (BSX: NTB.BH; NYSE: NTB) today announced financial results for the quarter ended June 30, 2026.<\/p>\n\nNet income for the second quarter of 2026 was $46.9 million, or $1.16 per diluted common share, compared to net income of $62.6 million, or $1.53 per diluted common share, for the previous quarter and $53.3 million, or $1.25 per diluted common share, for the second quarter of 2025. Core net income1<\/sup> for the second quarter of 2026 was $63.9 million, or $1.58 per diluted common share, compared to $63.2 million, or $1.55 per diluted common share, for the previous quarter and $53.7 million, or $1.26 per diluted common share, for the second quarter of 2025.<\/p>\n
\nThe return on average common equity for the second quarter of 2026 was 16.6% compared to 22.1% for the previous quarter and 20.3% for the second quarter of 2025. The core return on average tangible common equity1<\/sup> for the second quarter of 2026 was 25.0%, compared to 24.1% for the previous quarter and 22.3% for the second quarter of 2025. The efficiency ratio for the second quarter of 2026 was 67.6%, compared to 56.8% for the previous quarter and 61.3% for the second quarter of 2025. The core efficiency ratio1<\/sup> for the second quarter of 2026 was 57.0% compared with 56.4% in the previous quarter and 61.1% for the second quarter of 2025.<\/p>\n
\n
\n \n (1)<\/sup><\/p>\n<\/td>\n
\n \nSee table “Reconciliation of US GAAP Results to Core Earnings” below for reconciliation of US GAAP results to non-GAAP measures.<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
\nMichael Collins, Butterfield’s Chairman and Chief Executive Officer, commented, \u201cOur second quarter results reflect the continued strength of our core banking franchise. Core net income improved from the first quarter, supported by higher net interest income and the initial contribution of trust fees from our acquisition of Rawlinson & Hunter Guernsey. The net interest margin remained stable, while deposit costs were well managed despite the competitive operating environment.<\/p>\n
\n“During the quarter, we announced the acquisition of CIBC Caribbean, a compelling opportunity that we expect will double our size and strengthen Butterfield’s position as a leading independent financial services provider across the Caribbean and international financial centers. We have already completed our initial regulatory filings across the relevant jurisdictions and continue to expect closing to occur in the first half of 2027, adding scale and new growth opportunities for Butterfield. We look forward to serving our new island communities with the same commitment we have brought to clients across Bermuda, Cayman, Guernsey, and Jersey, building on a heritage that began with our founding in Bermuda in 1858.<\/p>\n
\n“I am pleased with the strong underlying core performance of our business. We remain focused on serving our clients, maintaining our disciplined approach to risk management and capital allocation, and executing on the opportunities before us. The combination of resilient core earnings, a strong balance sheet, and the addition of the R&H Guernsey business positions us well to create long-term value for our shareholders.\u201d<\/p>\n
\nThe reported net income for the second quarter of 2026 included $16.9 million of non-core, deal-related expenses, primarily associated with the acquisition of CIBC Caribbean and, to a lesser extent, integration-related costs for the R&H Guernsey business. Core net income1<\/sup> was up in the second quarter of 2026 compared to the prior quarter due to higher net interest income (\u201cNII\u201d), new trust income from R&H Guernsey and other gains from the sale of collateral, partially offset by higher core non-interest expenses.<\/p>\n
\nNII for the second quarter of 2026 was $95.6 million, an increase compared to $93.3 million in the previous quarter and $6.2 million higher than $89.4 million in the second quarter of 2025. NII increased during the second quarter of 2026 compared to the prior quarter due to higher day count and growth in interest-earning asset volumes, partially offset by higher deposit costs associated with increased funding volumes. NII was higher during the second quarter of 2026 compared to the second quarter of 2025 due to lower cost of deposits following a reduction in market interest rates, increased investment yields with assets deployed into higher yielding available-for-sale investment securities and the redemption of subordinated debt in the second quarter of 2025, partially offset by lower loan and treasury yields.<\/p>\n
\nNet interest margin (\u201cNIM\u201d) for the second quarter of 2026 was 2.74%, a decrease of 1 basis point from the previous quarter and compared favorably to 2.64% in the second quarter of 2025. NIM in the second quarter of 2026 remained relatively stable compared with the prior quarter. NIM in the second quarter of 2026 increased compared to the second quarter of 2025 due to lower cost of deposits and higher investment yields, partially offset by lower treasury and loan yields as central banks decreased market interest rates.<\/p>\n
\nNon-interest income for the second quarter of 2026 was $63.4 million, an increase of $0.7 million from $62.6 million in the previous quarter and $6.3 million higher than the $57.0 million in the second quarter of 2025. The increase in the second quarter of 2026 compared to the prior quarter resulted from new trust revenue from the R&H Guernsey acquisition, partially offset by lower foreign exchange revenue due to decreased volume and lower banking fees. Non-interest income in the second quarter of 2026 was higher than the second quarter of 2025 due to higher trust revenue from the new R&H Guernsey business, higher foreign exchange revenue due to increased volume, higher banking fees due to credit card volume and timing of the incentive program, higher asset management fees from increased valuations and higher custody fees from additional business.<\/p>\n
\nNon-interest expenses were $109.8 million in the second quarter of 2026, compared to $90.5 million in the previous quarter and $91.8 million in the second quarter of 2025, primarily attributable to acquisition-related, non-core expenses associated with CIBC Caribbean and R&H Guernsey. Core non-interest expenses1<\/sup> of $92.9 million in the second quarter of 2026 were higher compared to the $89.9 million incurred in the previous quarter and the $91.4 million in the second quarter of 2025. Excluding the additional expenses associated with the R&H Guernsey business, core non-interest expenses1<\/sup> in the second quarter of 2026 increased compared with the prior quarter, primarily driven by higher salaries and benefits, as well as technology and communications costs. Relative to the second quarter of 2025, core non-interest expenses1<\/sup>, excluding the incremental costs of the R&H Guernsey business, were lower, mainly reflecting reduced property-related expenses. Approximately $1.9 million of the quarter-over-quarter increase in core expenses during the quarter was attributable to the integration of the R&H Guernsey business.<\/p>\n
\nPeriod end deposit balances were higher at $12.9 billion compared to December 31, 2025. Average deposits were $13.1 billion in the quarter ended June 30, 2026, an increase from the prior quarter.<\/p>\n
\nTangible book value per share1<\/sup> at the end of the second quarter of 2026 was $26.19 per share, slightly lower than $26.56 per share at the end of the prior quarter. The tangible book value per share1<\/sup> decreased this quarter due to the recognition of goodwill and intangibles associated with the R&H Guernsey business.<\/p>\n
\nThe Board declared a quarterly cash dividend of $0.50 per common share to be paid on August 26, 2026 to shareholders of record on August 12, 2026. During the second quarter of 2026, Butterfield repurchased 0.3 million common shares under the Bank’s existing share repurchase program. The program was paused following the May 28, 2026 announcement of Butterfield’s agreement to buy CIBC Caribbean from CIBC.<\/p>\n
\nThe current total regulatory capital ratio as at June 30, 2026 was 27.5%, compared to 27.8% as at December 31, 2025. Both of these ratios remain conservatively above the minimum regulatory requirements applicable to the Bank.<\/p>\n
\n
\n \u00a0<\/td>\n<\/tr>\n \n \u00a0<\/td>\n<\/tr>\n \n \n ANALYSIS AND DISCUSSION OF SECOND QUARTER RESULTS<\/b>\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \u00a0<\/td>\n<\/tr>\n \n \n Income statement<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n Three months ended (Unaudited)<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n (in $ millions)<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n June 30, 2026<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n March 31, 2026<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n June 30, 2025<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-interest income<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n63.4<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n62.6<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n57.0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet interest income before provision for credit losses<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n95.6<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n93.3<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n89.4<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Total net revenue before provision for credit losses and other gains (losses)<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n159.0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n155.9<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n146.4<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nProvision for credit (losses) recoveries<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(1.6<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(1.4<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(0.2<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal other gains (losses)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1.0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.1<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Total net revenue<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n158.3<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n154.5<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n146.3<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-interest expenses<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(109.8<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(90.5<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(91.8<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n Total net income before taxes<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n48.5<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n64.0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n54.5<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nIncome tax benefit (expense)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(1.6<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(1.4<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(1.2<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n Net income<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n46.9<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n62.6<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n53.3<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Net earnings per share<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nBasic<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1.19<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1.57<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1.28<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDiluted<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1.16<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1.53<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1.25<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nPer diluted share impact of other non-core items 1<\/sup><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.42<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.02<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.01<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Core earnings per share on a fully diluted basis 1<\/sup><\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n 1.58<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n 1.55<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n 1.26<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdjusted weighted average number of participating shares on a fully diluted basis(in thousands of shares)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n40,447<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n40,881<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n42,653<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Key financial ratios<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nReturn on common equity<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n16.6<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n22.1<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n20.3<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCore return on average tangible common equity 1<\/sup><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n25.0<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n24.1<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n22.3<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nReturn on average assets<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1.3<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1.8<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1.5<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet interest margin<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n2.74<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n2.75<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n2.64<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCore efficiency ratio 1<\/sup><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n57.0<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n56.4<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n61.1<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
\n
\n \n (1)<\/sup><\/p>\n<\/td>\n
\n \nSee table “Reconciliation of US GAAP Results to Core Earnings” below for reconciliation of US GAAP results to non-GAAP measures.<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
\n
\n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n Balance Sheet<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n As at<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n (in $ millions)<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n June 30, 2026<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n December 31, 2025<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \nCash and cash equivalents<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,441<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,709<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nSecurities purchased under agreements to resell<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,427<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,096<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nShort-term investments<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n864<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n757<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nInvestments in securities<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n5,666<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n5,688<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLoans, net of allowance for credit losses<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n4,403<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n4,382<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nPremises, equipment and computer software, net<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n161<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n159<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGoodwill and intangibles, net<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n119<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n87<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAccrued interest and other assets<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n266<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n217<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Total assets<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n14,346<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n14,095<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal deposits<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n12,911<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n12,698<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAccrued interest and other liabilities<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n287<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n255<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Total liabilities<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n13,198<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n12,953<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCommon shareholders\u2019 equity<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,149<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,142<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Total shareholders’ equity<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,149<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,142<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Total liabilities and shareholders’ equity<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n14,346<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n14,095<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Key Balance Sheet Ratios:<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n June 30, 2026<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n December 31, 2025<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \nCommon equity tier 1 capital ratio<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n27.4<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n27.6<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTier 1 capital ratio<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n27.4<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n27.6<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal capital ratio<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n27.5<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n27.8<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLeverage ratio<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n7.4<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n7.6<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nRisk-Weighted Assets (in $ millions)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n3,996<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n3,991<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nRisk-Weighted Assets \/ total assets<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n27.9<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n28.3<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTangible common equity ratio1<\/sup><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n7.2<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n7.5<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nBook value per common share (in $)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n29.21<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n28.58<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTangible book value per share (in $)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n26.19<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n26.41<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-accrual loans\/gross loans<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n2.2<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n2.1<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-performing assets\/total assets<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1.0<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.8<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAllowance for credit losses\/total loans<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.6<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.6<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
\n
\n \n (1)<\/sup><\/p>\n<\/td>\n
\n \nSee table “Reconciliation of US GAAP Results to Core Earnings” below for reconciliation of US GAAP results to non-GAAP measures.<\/p>\n<\/td>\n<\/tr>\n
\n \n \u00a0<\/td>\n<\/tr>\n \n \n \u00a0<\/td>\n<\/tr>\n<\/table>\n QUARTER ENDED JUNE 30, 2026 COMPARED WITH THE QUARTER ENDED MARCH 31, 2026<\/b><\/p>\n
Net Income<\/b><\/p>\n
\nNet income for the quarter ended June 30, 2026 was $46.9 million, down from $62.6 million in the prior quarter.<\/p>\n
\nThe change in net income during the quarter ended June 30, 2026 compared to the previous quarter is attributable to the following:<\/p>\n
- \n
- \n$2.3 million increase in net interest income driven by a higher day count and growth in interest-earning asset volumes, partially offset by higher deposit costs associated with increased funding volumes;<\/p>\n<\/li>\n
- \n$1.0 million increase in total gains (losses) due to the sale of collateral securing a loan that was carried at a nil value upon acquisition;<\/p>\n<\/li>\n
- \n$0.7 million increase in non-interest income driven by (i) $2.5 million increase in trust revenue attributable to the recent R&H Guernsey acquisition; partially offset by (ii) $1.3 million decrease in foreign exchange fees driven by lower transaction volumes; and (iii) $0.4 million decrease in banking fees; and<\/p>\n<\/li>\n
- \n$19.3 million increase in non-interest expenses mainly due to (i) $16.9 million of business acquisition-related costs; (ii) $2.2 million increase in salaries and benefits driven by headcount growth associated with the R&H Guernsey acquisition and prior quarter adjustments to performance-based incentive accruals; (iii) $0.8 million increase in technology and communication costs; partially offset by (iv) $1.5 million decrease in payroll taxes related to the annual vesting of share compensation recorded in the prior quarter.<\/p>\n<\/li>\n<\/ul>\n
Non-Core Items1<\/sup><\/b><\/p>\n
\nNon-core items resulted in expenses, net of gains, of $16.9 million for the second quarter of 2026. Non-core items for the quarter are comprised principally of acquisition-related expenses.<\/p>\n
\nManagement does not believe that comparative period expenses, gains or losses identified as non-core are indicative of the results of operations of the Bank in the ordinary course of business.<\/p>\n
\n
\n \n (1)<\/sup><\/p>\n<\/td>\n
\n \nSee table “Reconciliation of US GAAP Results to Core Earnings” below for reconciliation of US GAAP results to non-GAAP measures.<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
BALANCE SHEET COMMENTARY AT JUNE 30, 2026 COMPARED WITH DECEMBER 31, 2025<\/b><\/p>\n
Total Assets<\/b><\/p>\n
\nTotal assets of the Bank were $14.3 billion at June 30, 2026, an increase of $0.3 billion from December 31, 2025. The Bank maintained a highly liquid position at June 30, 2026, with $9.4 billion of cash, bank deposits, reverse repurchase agreements and liquid investments representing 65.5% of total assets, compared with 65.6% at December 31, 2025.<\/p>\n
Loans Receivable<\/b><\/p>\n
\nThe loan portfolio totaled $4.4 billion at June 30, 2026, relatively flat compared to December 31, 2025.<\/p>\n
\nThe allowance for credit losses at June 30, 2026 totaled $27.8 million, an increase of $2.3 million compared to $25.4 million at December 31, 2025. The increase was driven by a net increase in provisioned non-accrual loans.<\/p>\n
\nThe loan portfolio represented 30.7% of total assets at June 30, 2026 (December 31, 2025: 31.1%), while loans as a percentage of total deposits was 34.1% at June 30, 2026 (December 31, 2025: 34.5%). Both ratios remain relatively stable at June 30, 2026 compared to December 31, 2025.<\/p>\n
\nAs at June 30, 2026, the Bank had gross non-accrual loans of $96.0 million, representing 2.2% of total gross loans, an increase of $4.7 million from $91.3 million, or 2.1% of total loans, at December 31, 2025. The increase in non-accrual loans was driven by a well-secured residential mortgage facility in the Channel Islands & UK segment, with the impact partially offset by the repayment of a separate facility within the same segment.<\/p>\n
Investment in Securities<\/b><\/p>\n
\nThe investment portfolio was $5.7 billion at June 30, 2026, which remains relatively flat compared to December 31, 2025 balances.<\/p>\n
\nThe investment portfolio is made up of high-quality assets with 100% invested in AA-or-better-rated securities. The investment book yield was 2.78% during the quarter ended June 30, 2026 compared with 2.78% during the previous quarter. Total net unrealized losses on the available-for-sale portfolio increased to $106.7 million, compared with total net unrealized losses of $89.4 million at December 31, 2025, as a result of rising long-term US dollar interest rates.<\/p>\n
Deposits<\/b><\/p>\n
\nAverage total deposit balances were $13.1 billion for the quarter ended June 30, 2026, which is higher compared to the quarter ended December 31, 2025. Period end balances as at June 30, 2026 were $12.9 billion, higher compared to $12.7 billion in December 31, 2025.<\/p>\n
- Core net income1 <\/sup>of $63.9 million, or $1.58 per share<\/b><\/li>\n
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<\/td>\n<\/tr>\n