Bank Of N.T. Butterfield & Son Underfollowed And Undervalued, Perhaps Capped On Growth

Stephen Simpson profile picture
Stephen Simpson
18.37K Followers

Summary

  • Bank of N.T. Butterfield & Son posted healthy spread income growth and modestly beat expectations in the third quarter, with better opex leverage driving the upside.
  • NTB's balance sheet shrinkage was unusual for the quarter compared to other banks, and lending growth prospects may be more limited in the short term.
  • Conservative management cuts both ways, as it limits underwriting risk, but also leads to less upside from lending growth and profitable capital deployment.
  • NTB shares look undervalued, but the shares are under-followed and may fall between the cracks for both growth and value investors.

Aerial view of coastline of Grand Cayman, Cayman Islands

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Despite rising rates, healthy results, uncertainty around the U.S. banking sector, Bank of N.T. Butterfield & Son (NYSE:NTB) (“Butterfield”) really hasn’t been able to catch investor attention. Down about 13% over the past year, underperforming U.S. regional banks, Butterfield’s

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Stephen Simpson profile picture
18.37K Followers
Stephen Simpson is a freelance financial writer and investor. Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds); now a semi-retired raccoon rancher. That last part isn't entirely true. Probably.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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