Good morning. My name is Dovan, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 2024 earnings call for the Bank of N.T. Butterfield & Son Limited. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one, on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the call over to Noah Fields, Butterfield's head of investor relations. Thank you. Good morning, everyone, and thank you for joining us. Today, we will be reviewing Butterfield's Q1 2024 financial results. On the call, I'm joined by Michael Collins, Butterfield's Chairman and Chief Executive Officer, Craig Bridgewater, Group Chief Financial Officer, and Michael Schrum, President and Group Chief Risk Officer. Following their prepared remarks, we will open the call up for a Q&A session. Yesterday afternoon, we issued a press release announcing our Q1 2024 results. The press release and financial statements, along with a slide presentation that we will refer to during our remarks on this call, are available on the investor relations section of our website at www.butterfieldgroup.com. Before I turn the call over to Michael Collins, I would like to remind everyone that today's discussions will refer to certain non-GAAP measures, which we believe are important in evaluating the company's performance. For a reconciliation of these measures to US GAAP, please refer to the earnings press release and slide presentation. Today's call and associated materials may also contain certain forward-looking statements, which are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those contemplated by these statements. Additional information regarding these risks can be found in our SEC filings. I will now turn the call over to Michael Collins. Thank you, Noah, and thanks to everyone joining the call today. Butterfield's Q1 2024 results continue to benefit from our leading market positions in highly regarded international financial centers. As a reminder, we operate well-established banking wealth management franchises in Bermuda, the Cayman Islands, and the Channel Islands. We also offer specialized financial services in the Bahamas, Switzerland, Singapore, and the UK, where we provide mortgages to high-net-worth clients with properties in prime central London. I will now turn to the Q1 highlights on page four. Butterfield reported strong financial results in the Q1, with net income of $53.4 million and core net income of $55 million. We reported core earnings per share of $1.17, with a core return on average tangible common equity of 24.5% for the Q1 of 2024. The net interest margin was 2.68% in the Q1, a decrease of five basis points from the prior quarter, with the cost of deposits rising to 178 basis points from 172 basis points in the prior quarter. The increase in deposit cost was primarily the result of continued mix shift from demand deposits to term products, as well as term deposit rollovers. The board has again approved a quarterly cash dividend of $0.44 per share. We also continued to repurchase shares during the quarter, totaling 1.2 million shares at an average price of $30.40 per share. Before I turn the call over to Craig, I would like to welcome Butterfield's new General Counsel and Group Chief Legal Officer, Simon Des-Etages. Simon joins us following the planned retirement of Shaun Morris. Simon has over 30 years of legal experience in London, New York, and Bermuda, with a majority of that time spent in the banking sector. I am confident Butterfield will benefit from his extensive experience advising banks on legal and regulatory matters. I will now turn the call over to Craig for details on the Q1. Thank you, Michael, and good morning. On slide 6, we provide a summary of net interest income and net interest margin. In the Q1, we reported net interest income before provision for credit losses of $87.1 million, a small increase versus the prior quarter. The net interest income benefited from an increase in average interest-earning assets but was muted by lower NIM and one less day than the Q4. Average interest-earning assets in the Q1 of 2024 of $13 billion was 3.2% higher than the prior quarter, driven by an increase in average deposit levels. The yield on the interest-earning assets was flat at 4.39%. The yield on treasury assets during the quarter was comparable to the prior quarter at 4.71%, and the investment portfolio yielded 2.23%, which was seven basis points higher than the prior quarter, reflecting the runoff of lower-yield securities and increased yields on more recent purchases. Throughout the Q1, the bank reinvested maturities, paydowns, and some excess liquidity into a mix of U.S. agency MBS securities and medium-term U.S. treasuries. The yield on loan balances decreased by 10 basis points to 6.58%, principally attributed to net paydowns and higher-yielding loans. Average investment balances decreased by $86.3 million, or 0.07%, to $5.2 million compared to the prior quarter, mainly due to maturities and changes in the fair value of the securities held. Slide seven provides a summary of non-interest income, which totaled $55.1 million, down 8.1% versus the prior quarter, primarily due to seasonally higher card services fees included in banking revenue in the Q4 of the year. Trust fees declined as a result of lower activity-based fee income, while fees from asset management increased as a result of higher assets under management. Non-interest income continues to be a stable and capital-efficient source of revenue through the cycle, with a fee-income ratio of 38.6%. On slide eight, we present core non-interest expenses. Total core non-interest expenses were $86.9 million, a 3.8% decrease compared to $90.4 million in the prior quarter. The decline in core non-interest expenses is primarily attributable to lower salary and benefit costs as performance-based incentive accruals decreased from the prior quarter. Expenses in the Q1 also benefited from incurring less technology and communications costs. We continue to expect a quarterly run rate for expenses to settle around $88 million per quarter in the second half of 2024. As discussed previously, this contemplates the increased expenses resulting from the amortization of our new cloud-based IT investments and core banking system and branch upgrades, as well as costs for our new team servicing the acquired book of trust clients, all while taking into consideration the expected benefit of a group-wide restructure announced in the Q3 of 2023. I will now turn the call over to Michael Schrum to review the balance sheet. Thank you, Craig. Slide 9 shows that Butterfield's balance sheet remains liquid and conservatively managed. Period-end deposit balances increased to $12.1 billion from $12 billion at the prior quarter end, indicative of a stabilization in the deposit base. We continue to expect a medium-term deposit level range between $11.5 billion and $12 billion, with the understanding that deposit flows can be cyclical due to the nature of some of the trust and larger institutional depositors. Butterfield's low-risk density of 34.4% continues to reflect the regulatory capital efficiency of the balance sheet, with the lower-risk-rated residential mortgages now representing 69% of our total loan assets. On slide 10, we show that Butterfield continues to have strong asset quality with low credit risk in the investment portfolio, which is now 100% comprised of at least AA-rated U.S. government-guaranteed agency securities. Loan asset quality also continues to be excellent, with non-accrual loans remaining at 1.3% of gross loans and net charge-off of 1 basis point, and our allowance for credit losses coverage ratio is consistent with prior quarter at 0.5%. In terms of credit trends, we have additional disclosures in note 6 to the financial statements. I would just point out that our past-due and accruing facilities are expected to continue to be somewhat elevated over the next few quarters due to a sizable legacy hospitality facility in Bermuda working through a receivership and sale process, which we expect to conclude later this year. We remain well-secured and continue to expect full recovery on all past-due and accruing loan assets. On slide 11, we present the average cash and securities balance sheet with a summary interest rate sensitivity. Asset sensitivity increased in the Q1 of 2024 due to a lower asset duration with higher levels of cash and cash equivalents, along with durations of investments and fixed-rate loans trending lower. Unrealized losses in the AFS portfolio, included in OCI, was $178.2 million at the end of the Q1, an unfavorable movement of $14.3 million or 9% from $163.9 million at December 31, 2023 due to an increase in long-term market interest rates. At current forward rates, AFS OCI is expected to improve by $52 million or 29% in the next 12 months and $83 million or 47% in the next 24 months, allowing for reinvestment in high-yielding assets and tangible book value growth. Slide 12 summarizes regulatory and leverage capital levels. Butterfield's capital levels continue to be conservatively above regulatory requirements. While not strictly a regulatory ratio, our TCE to TA ratio of 6.7% remains above our targeted range of 6%-6.5%, and it is indicative of the health of our overall capital levels. I will now turn the call back to Michael Collins. Thank you, Michael. The outlook for tourism in Bermuda and Cayman is very positive, with improved airlifts and a good pipeline of cruise ships scheduled to visit the island. Bermuda continues to maintain its status as a world-class jurisdiction to host high-profile international events. Early next month, SailGP, an offshoot of the America's Cup sailing race, will be hosting televised races in Bermuda. Butterfield is a proud supporter of the event as we were with the America's Cup. In November, the PGA will once again hold the Butterfield Bermuda Championship in Bermuda at the Port Royal Golf Course, where the event has been held since 2019 and is televised internationally. In Cayman, the peak season for tourism is winding down as we head toward summer after a great season. Available visitor statistics show air arrivals heading back towards records, with bed capacity continuing to increase. In addition to Bermuda and Cayman, the Channel Islands also benefit from strong economic contributions from international business. At the end of 2023, the Bermuda government tabled legislation on moving to a corporate income tax from 2025. The legislation will implement minimum corporate income tax of 15% on multinational enterprises with total global revenues in excess of EUR 750 million in at least two of the previous four accounting periods and will fall within the scope of the Pillar Two global minimum tax rules. During the Q4 of 2023 reporting cycle, we saw a number of Bermuda reinsurers announce deferred tax assets in preparation for the expected implementation of a first-ever corporate income tax in Bermuda. We do not expect the tax to impact Butterfield directly in the near future, but we will be monitoring the progress closely. At this point, reinsurers are mostly planning to accept the changes and maintain their significant and economically important operations in Bermuda. In Cayman, the government has taken a less active approach legislatively with a wait-and-see position. Butterfield continues to benefit from capital efficient and recurring non-interest income, disciplined expense management, and net interest earnings. The bank has consistently maintained top quartile returns relative to U.S. regional banks, with operating returns on tangible equity in the range of 16%-28% over the most recent economic cycle. Our strong returns require active capital management, which we deliver through regular quarterly cash dividends and share repurchases. Additionally, capital is utilized to support organic growth and contemplates potential M&A activity. We remain committed to exploring growth opportunities through acquisitions and are regularly in contact with targets to assess potential prospects. We continue to look for accretive deals, primarily in private trusts, while also building organically from previous acquisitions and will remain disciplined to ensure M&A is consistent with our strategic and financial objectives. Thank you, and with that, we would be happy to take your questions. Operator? Thank you. We will now begin the Q&A session. To ask a question, you may press star and one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Tim Switzer with KBW. Please go ahead. Hey, good morning. Thanks for my question. Good morning. Could you guys talk about the level of non-interest income in Q1? It was a little bit above the run rate you guys talked about last quarter, and a lot of it was the FX revenue, which there might be some one-timers in there. Could you talk about what drove the upside and what your expectations are going forward? Yeah, this is Craig, and I can speak to that. So you're right. So we did see increases in FX revenue, and it's really due to just a handful of significant transactions that took place in our Channel Islands segment. The bulk of the FX revenue on a quarter-to-quarter basis is really kind of from the pegged currencies in Cayman Islands versus U.S. dollar, as well as Bermuda dollars versus U.S. dollar. And that accounts for somewhere around 70% of that FX revenue on a quarter-to-quarter basis. And then just depending on client volumes and client transactions, the FX would tend to kind of vary from quarter to quarter. So this quarter, we had, again, a handful of large transactions in our Channel Islands segment. The other piece is that we've also seen some positive results coming through on our asset management fees. We are seeing more inflows into our money market fund, as an example. I think as rates stay higher for longer, obviously, customers continue to seek higher yields on their investments or any excess cash. We have seen some favorable flows into our money market funds, as well as just increases in the fair value of those portfolios that are managed by asset management. That's largely driving the Q1 non-interest income. Okay. What are your going forward expectations? Is some of that sustainable that can repeat in the coming quarters? I think, again, as long as we see rates higher for longer, I think we'll still continue to see pretty good levels in our money market fund. So that's the next bit. So we're earning fees on those, so that's going to be positive. Depending on how equity markets perform, again, that's going to likely support assets under management. And perhaps we'll see those levels continue to be where they are or increase slightly, again, depending on market conditions. And then, I guess, other than that, you'll probably see cyclical increases as we have seen in the past. So in Bermuda, as the tourism season comes in, we'll see more kind of credit card volumes, and that's going to drive banking fees. And then, obviously, in Q4, we have seasonally high fees on the banking side as well. Okay. That's helpful. And my other question is, I know you guys like to hold a lot of liquidity on the balance sheet, but cash increased a little bit, around 24% of earning assets. Can you remind us what your target liquidity level is and if there's any opportunity for you to deploy cash into either loan opportunities or higher-yielding securities? Yeah, thanks, Tim. So it's Michael Schrum. I'll kick off, and maybe Craig can pitch in as well. Yeah, you're absolutely right. As we see the maturities in the investment portfolio kind of coming back, we've been sort of building the cash position a little bit here. Just one, it's not adding any OCI risk at the moment. We've had some deposit stabilization and some volatility prior to that, obviously, after the regional bank sort of volatility last year. And so we've just been kind of building the cash position a little bit. I think in a stable environment, 15%-20% of our deposits typically would be what we call working capital or cash positions, which is, again, because we don't have a central bank or lender of last resort, we don't have a Fed window, so we have to manage our treasury effectively. Because we offer pervasive multi-currency accounts across a number of different markets, that ends up with liquidity flows kind of being sort of a little bit higher than you might otherwise normally see. So I think there are definitely opportunities for us to think about laddering out. Just as a reminder, cash and short-term securities are up to one year. So there's a little bit of some repricing lag on that, but there's not substantial duration. So that, again, would just like to continue to see the investment portfolio run down a little bit. And then as that happens, then we'll roll into higher-yielding securities. But I'll let Craig add anything. Yeah, I guess the main thing I'll add is that what we did see during the quarter was, I guess, you saw an increase in deposits. So again, that was a contributor to the increased levels of liquidity that we have. So in addition to kind of managing the investment portfolio and the reinvestments there, we did have deposits increase. And obviously, we kind of have to see how those deposits are going to behave before we invest those into longer-term assets. Okay. Great. Thank you, guys. Thank you. The next question comes from Alex Twerdahl with Piper Sandler. Please go ahead. Good morning. Good morning, Alex. Michael, your comments about expected medium-term deposit range being $11.5 billion-$12 billion implies maybe a little bit of expected outflow over the next couple of quarters, which I know is not atypical for sort of the middle of the year. But do you, in fact, have line of sight on some deposits that are flowing out or expected to flow out in the near term? And then would those deposits be non-interest-bearing, or would they have some costs associated with them that we can take into consideration when our modeling? Yeah, good question, Alex. So yes is the answer. I think we do have a number of depositors that are sitting on the balance sheet, but the company itself is in liquidation, is going through the courts, and it's just very difficult to predict how they're going to flow out. And as we've seen, we also have somewhat what we're expecting some of that to be in the sort of near- to medium-term. It just depends on when exactly the court process is completed and the liquidation proceeds. Those would typically be non-interest-bearing. So there's a couple of those. And then I think we're also sitting with some reasonably expensive deposits, and we continue to see some mix shift. So I think the normalization period is probably still ongoing. We're seeing some inflows, and we're seeing some money fund inflows at the moment. But I think there's still a little bit of a ways a couple, maybe three quarters to go just to kind of make sure that we feel that this is completely stabilized. We came out of post-COVID, and financial assistance, monetary policy pretty ramped up, and then going into a much higher interest rate environment. So I think it's a normal sort of stabilization period here. And yes, we do have some line of sight to some depositors, and then there's a normal kind of volatility. Okay. And then you guys have made a pretty considerate effort to reduce the asset sensitivity in the loan portfolio over the last couple of years. Is that process and that effort kind of done at this point? I mean, is the sort of the mix between the fixed and the variable, is that kind of what it's going to be at this point? Yeah, I would say so. I think you never know what's happening with interest rates. One day, it's 2 cuts, and the next day, it's longer-term increases. But I think if we kind of think that the Fed's kind of done hiking here, and we're kind of most customers would be looking probably to come into floating rate, more sophisticated customers, I think. And so we'd probably not expect for people to kind of go three to five year fixed here at this point. It's going to be, obviously, different for each market. But I would suspect that we're probably sitting at the 50% for the medium term. Those are repricing from here to 2027, right? So there's not a particular lumpy tranches in those repricing. But as they come up, I think we should probably see that fixed percentage of total kind of either stable or declining. Okay. And then in terms of the M&A, Michael, your comments on still looking for a private trust business or continue to be acquisitive. Just given the change in the geographies and sort of the spread of that business over the last with the Credit Suisse transaction, are there any geographies that make more sense today than they did a couple of years ago, either from just sort of a synergistic standpoint or another standpoint? And then just remind us overall what the criteria is of if that's a change at all over the last couple of years in terms of the appetite for the revenues they seek out, the size of the businesses, etc. Yeah, hi. It's Michael Collins. So geography-wise, that hasn't changed. So whether on the banking side in terms of Bermuda, Cayman, Guernsey, Jersey, or on the trust side, if you add in Geneva and Singapore and Bahamas, that hasn't changed. So the offshore world's very small, and there's some very good jurisdictions, and there's some jurisdictions that aren't quite as good. So we know what they are, and we're in the right places. Singapore, obviously, is a particular growth area. We're top five or six private trust companies in Singapore now. We would never imagine that we could sort of compete in the banking world there. So we know exactly where we want to be, which is fee income. So geographies are exactly the same. And when you look at private trust companies, the good ones are pretty much across those geographies. So that's going to stick. In terms of criteria, it's still going to be private trust. There's obviously other fee income businesses that private equity likes, company administration, fund administration, which is very technology-intensive. We don't want to be in those businesses. We want to stay in private trust, which we've been in for 70 years. So we're going to stick to that. The only thing I'd say is in terms of our price appetite, so basically 8x EBITDA, maybe a little bit more, 10x EBITDA if it's a bigger acquisition opportunity. And the two ways we can do it is a small trust company or a larger trust company. If we acquire a larger trust company and it's from a reputable seller, then we can acquire it as a legal entity. If it's a little more difficult, we would just do sort of an asset purchase and choose each trust one by one. So essentially, nothing's changed. I would say if it's the right opportunity, we might consider paying a bit more. But in terms of geography and what we would be buying, it's consistent. Okay. Appreciate you taking my questions. Thanks, Alex. Thank you. Again, ladies and gentlemen, if you have a question, please press star, then one. The next question comes from Eric Spector with Raymond James. Please go ahead. Hey, good morning. It's Eric on the line for David Feaster. Congrats on a good quarter, and appreciate you taking the questions. Just wanted to start on NII and NIM. Kind of mentioned rate sensitivity is up a little bit, quarter-over-quarter. Just curious kind of how you think about NIM in a higher-for-a-longer environment and if you're considering any actions to manage rate sensitivity here going forward. Yeah, hi, Eric. It's Craig. I guess on NIM, we had previously kind of spoke about NIM troughing kind of in Q1, Q2. We think that that is the same. I think probably towards the end of Q2, we'll start to see some improvement in overall NIM. This is obviously kind of dependent on really the cost of funds, so the deposit pricing. You're actively watching deposit pricing, and average duration of long-term deposits is around three months. So as those actually roll off and reprice, I'm really taking a keen eye to kind of what we are repricing those at. But in a higher-for-a-longer rate environment, we expect that we'll probably still have continual pricing pressures on deposits. So we're thinking carefully about that. So that's going to probably kind of mute any increases in NIM at this point based on the current market environment. On the positive side, as you will see, we're starting to ladder back out into your portfolio, and you would have seen an increase in the yield on our investment portfolio. We stood at 2.23% for Q1. And as we continue to ladder back into the portfolio and invest at higher rates, then we're going to see some positive contributions in NIM from there. But yeah, I think it's the cost of deposits and the cost of funding that's probably going to keep it more or less stable to trending up at this point. Yeah. And Eric, so it's Michael Schrum. I think if you look at OCI, right, and the investment portfolio, it's pretty large compared to the size of the balance sheet. And so having gone through this sort of whole increase in rates and building relatively large negative positions in HDM, although totally unrealized, I think we're also just kind of fine seeing that OCI burn down and sort of being cautious about laddering in and just sitting on a bit of cash, right, which I think we're not sort of a mark-to-market shop. We just kind of need to manage through the different parts of the cycle. And as you can see, earnings are coming through. So I think it's kind of steady. When we say higher-for-a-longer, I mean, some people are talking about increases in rates, right? I think we also want to be mindful of the risk positions that we have there and make sure that we're not adding to those risk positions as we go through. Got it. That's helpful. And then just curious, I mean, we talked a little bit about M&A, but just kind of curious about capital return more broadly. We've obviously been pretty active repurchasing stock the last few quarters. In TCEs, now above that 6%-6.5% level in regular capital, very strong. Just curious how you think about capital priorities and your appetite for repurchases. Do you expect a similar pace that we've seen in the last couple of quarters? And just kind of any color of that would be helpful. Yeah, thanks, Eric. Yeah, it's Michael Schrum. So yeah, we're actually calling in from Cayman at the moment. We're down here just for our board meetings. And the board is very supportive at these levels, very attractive, reasonably attractive valuations. Obviously, half an eye to what's the M&A pipeline, organic growth opportunities. And there's certainly quite a bit of opportunity here on the lending side in Cayman. The economy's booming. There's tower cranes everywhere. So that's a positive in terms of, obviously, capital consumption and at least replacing the amortization that we're seeing in the loan book at the moment. But yeah, very supportive in terms of the current strategy, which is obviously first priority is the dividend. And we kept that at $0.44 a share. Secondly, obviously, supporting our core markets in terms of organic growth and/or any credit deterioration, which we're not really seeing. We've seen a little bit of migration. Again, a few lumpy loans there and some legacy positions, but very confident about the underpinning valuations there. So it shouldn't attract a lot more risk-weighted assets. And then thirdly, obviously, M&A and/or buybacks. And I think we spoke about the pipeline for M&A, which we are kind of sitting on a lot of capital. And so we want to return that capital to shareholders. And so we've been pretty active, and I would expect us, subject to market conditions, to continue. And if we need to re-up later in the year, we'll do that. Got it. That's helpful. And then just one last one from me. Curious if you could provide just an update. I mean, given that the core banking system upgrade was completed this quarter, just curious how that went. And then maybe just some color on the Credit Suisse acquisition, this first full quarter since the final tranche closed. Just curious if you could provide some colors on just trends broadly there and how the team brought on has been doing. Right. So yeah, maybe I'll kick off, and Craig can pitch in as well. Core banking system upgrades, I mean, are always difficult, right? So it's not something that's necessarily positive unless you're rolling out a bunch of new functionalities. So what we did was a like-for-like conversion. It's a fairly major upgrade. It was a move into a cloud infrastructure. As you can see, the expenses and the capital pictures changed slightly in terms of software as a service rather than the capital depreciation and those lines. I think, generally speaking, it went well. There was no write-offs. There's obviously a few client-impacting things, and we apologize to clients, but they're all still with us. And I think what we're excited about is the opportunity to roll out additional functionality now. And we have a pretty good, steady platform. It It seems to be operating. It's a lot faster for clients. So there's not a lot of noise. Our call centers, broadly, were able to deal with the elevated volumes. Most of the volumes from the implementation came from the OTP functionality, so one-time password functionality, inability to log in, new splash screens, etc. So it was really kind of user-guided walkthroughs on that side. Internally, it went very well. All our stuff with the training program was very good. We ended up, as I said, not having any real reconciliation issues at the back end or process issues. So I think at this point, I think everybody's feeling like that was probably more of the operational risk moment when we went live. That's kind of in the rearview mirror. Now we can add new functionality. In terms of Credit Suisse, Craig can just talk a little bit about that. Yeah. Yeah. And just adding on the IT piece, like I said, it's kind of gone according to plan. It's working. We're trying to amortize the expenses related to that as well as the hosting fees. And really, one of the important things in the IT upgrade was to kind of get on a current version and remain current. So I guess a positive thing is that we're now looking to apply. We're planning for the application of kind of a new patch set. So kind of getting that into kind of the regular routine when it comes to maintaining that system. So that's a positive. On the Credit Suisse side, again, that's going well. The assets came over. Those client relationships have come over. The people have come over, and they're all settled into the teams. Our head of trust has been very active kind of getting around to see those teams, having town halls, and just making sure everybody's settled in. So that's going well. And really, it's just a matter of making sure we service those clients well, get to know them, and then see how we can leverage those relationships. Yeah, that's helpful. Thanks for taking the questions. You're welcome. Thank you. Thank you. This concludes our Q&A session. I would like to turn the conference back over to Noah Fields for any closing remarks. Thank you, Dovan, and thanks to everyone for dialing in today. We look forward to speaking to you again next quarter. Have a great day. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.