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

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 underperformance seems unusual other than perhaps in the context of limited sell-side support and perceptions that the bank’s growth could be capped by its conservative management approach and very limited geographic footprint in the tax havens of Bermuda, Cayman Islands, and Channel Islands.

It's been quite a while since I last covered Butterfield, and since that last article the shares have more or less performed in line with the regional bank index. Low-to-mid single-digit core earnings growth should be enough to support a fair value above $40 today, but growth investors may regard this bank as too limited in its growth prospects to merit interest and more conservative value-oriented investors may be put off by the perception of elevated operating and regulatory risk, putting it in a sort-of investment twilight zone.

 

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