UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended

December 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report . . . . . . . . . . . . . . . . . . .

For the transition period from ___________________________ to ___________________________

Commission file number: 001-37877

The Bank of N.T. Butterfield & Son Limited

(Exact name of Registrant as specified in its charter)

Bermuda

(Jurisdiction of incorporation or organization)

65 Front Street, Hamilton, HM 12 Bermuda

(Address of principal executive offices)

Shaun Morris, 65 Front Street, Hamilton, HM 12 Bermuda

Telephone: (441) 295-1111; Fax: (441) 292-4365

E-mail: Shaun.Morris@Butterfieldgroup.com

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Voting ordinary shares of par value BM$ 0.01 each	NTB	New York Stock Exchange
Voting ordinary shares of par value BM$ 0.01 each	NTB.BH	Bermuda Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the

period covered by the annual report.

As at December 31, 2020, there were 50,010,948 shares of the registrant's common stock outstanding.

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

xYes oNo

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

oYes xNo

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

xYes oNo

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

xYes oNo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer,"accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.:

Large accelerated filerx Accelerated filero Non-accelerated filero Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.                      o

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.                  ☒

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAPx

International Financial Reporting Standards as issued by the International Accounting Standards Boardo

Othero

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the

registrant has elected to follow.

oItem 17 oItem 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the

Exchange Act).

☐Yes xNo

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TABLE OF CONTENTS

		Page
	Explanatory Note	1
	Cautionary Note Regarding Forward-Looking Statements	2
	Implications of Being a Foreign Private Issuer	2
	Enforcement of Civil Liabilities	2
Part I
Item 1	Identity of Directors, Senior Management and Advisers	3
Item 2	Offer Statistics and Expected Timetable	3
Item 3	Key Information	3
	A. Selected Financial Data	3
	B. Capitalization and Indebtedness	9
	C. Reasons for the Offer and Use of Proceeds	9
	D. Risk Factors	10
Item 4	Information on the Company	24
	A. History and Development of the Company	24
	B. Business Overview	24
	C. Organizational Structure	44
	D. Property, Plants and Equipment	44
	E. Selected Statistical Data	45
Item 4A	Unresolved Staff Comments	50
Item 5	Operating and Financial Review and Prospects	51
	A. Operating Results	51
	B. Liquidity and Capital Resources	89
	C. Research and Development, Patents and Licenses, etc.	92
	D. Trend Information	92
	E. Off Balance Sheet Arrangements	92
	F. Tabular Disclosure of Contractual Obligations	92
	G. Safe Harbor	93
Item 6	Directors, Senior Management and Employees	94
	A. Directors and Senior Management	94
	B. Compensation	97
	C. Board Practices	97
	D. Employees	100
	E. Share Ownership	100
Item 7	Major Shareholders and Related Party Transactions	101
	A. Major Shareholders	101
	B. Related Party Transactions	102
	C. Interests of Experts and Counsel	102
Item 8	Financial Information	103
	A. Consolidated Statements of Other Financial Information	103
	B. Significant Changes	103
Item 9	The Offer and Listing	104
	A. Offering and Listing Details	104
	B. Plan of Distribution	104
	C. Markets	104
	D. Selling Shareholders	104
	E. Dilution	104
	F. Expenses of the Issue	104
Item 10	Additional Information	105
	A. Share capital	105
	B. Memorandum and Articles of Incorporation	105
	C. Material Contracts	105
	D. Exchange Controls	105

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	E. Taxation	105
	F. Dividends and Paying Agents	108
	G. Statements by Experts	108
	H. Documents on Display	108
	I. Subsidiary Information	108
Item 11	Quantitative and Qualitative Disclosures about Market Risk	108
Item 12	Description of Securities other than Equity Securities	108
Part II
Item 13	Defaults, Dividend Arrearages and Delinquencies	109
Item 14	Material Modifications to the Rights of Security Holders and Use of Proceeds	109
Item 15	Controls and Procedures	109
Item 16	Reserved	109
Item 16A	Audit Committee Financial Expert	109
Item 16B	Code of Ethics	109
Item 16C	Principal Accountant Fees and Services	109
Item 16D	Exemption from the Listing Standards for Audit Committees	110
Item 16E	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	110
Item 16F	Changes in Registrant's Certifying Accountant	110
Item 16G	Corporate Governance	110
Item 16H	Mine Safety Disclosure	111
Part III
Item 17	Financial Statements	F-1
Item 18	Financial Statements - Prepared Using a Basis of Accounting Other than IFRS	i
Item 19	Exhibits	ii
	Glossary	iv

EXPLANATORY NOTE

In this report, unless the context indicates otherwise, the term:

•"Bank" or "Butterfield" refers to:

◦The Bank of N.T. Butterfield & Son Limited;

•"BMA" refers to:

◦The Bermuda Monetary Authority;

•"Board" refers to:

◦The Board of Directors of the Bank;

•"common shares" refers to:

◦the voting ordinary shares of par value BM$ 0.01 each in the Bank; and

•"we", "our", "us", "the Company" and "the Group" refer to:

◦the Bank and its consolidated subsidiaries.

Refer also to the Glossary at the end of this document for additional terms.

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

In this report, references to “BMD”, “BM$”, or “Bermuda Dollars” are to the lawful currency of Bermuda, and “USD”, “US$”, “$” and “US Dollars” are to the lawful currency of the United States of America. The Bermuda Dollar is pegged to the US Dollar on a one‑to‑one basis and therefore, for all periods presented, BM$1.00 = US$1.00.

Certain monetary amounts, percentages and other figures included in this report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

Our consolidated financial statements as at December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and 2018 have been audited, as stated in the report appearing herein, by PricewaterhouseCoopers Ltd., Bermuda, and are included in this report and are referred to as our audited consolidated financial statements. We have prepared these financial statements in accordance with GAAP.

We believe that the non‑GAAP measures included in this report provide valuable information to readers because they enable the reader to identify the financial measures we use to track the performance of our business and guide management. Furthermore, these measures provide readers with valuable information regarding our core activities, which allows for a more meaningful evaluation of relevant trends when considered in conjunction with measures calculated in accordance with GAAP. Non‑GAAP measures used in this report are not a substitute for GAAP measures and readers should consider the GAAP measures as well. For more information on non‑GAAP measures, including a reconciliation to the most directly comparable GAAP financial measures, see Item 3.A.“Selected Financial Data — Reconciliation of Non‑GAAP Financial Measures”.

INDUSTRY AND MARKET DATA

Some of the discussion contained in this report relies on certain market and industry data obtained from third‑party sources that we believe to be reliable. Market estimates are calculated by using independent industry publications and third‑party forecasts in conjunction with our assumptions about our markets. While we believe the industry and market data to be reliable as of the date of this report, this information is subject to change based on various factors, including those discussed under the headings “Cautionary Note Regarding Forward‑Looking Statements” and “Risk Factors” in this report.

TRADEMARKS AND SERVICE MARKS

We own or have rights to trademarks and service marks for use in connection with the operation of our business. All other trademarks or service marks appearing in this report that are not identified as marks owned by us are the property of their respective owners. Solely for convenience, the trademarks, service marks and trade names referred to in this report are listed without the ®, (TM) and (sm) symbols, but we will assert, to the fullest extent under applicable law, our applicable rights in these trademarks, service marks and trade names.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations or assumptions regarding the future of our business, future plans and strategies, our operational results and other future conditions. Forward-looking statements can be identified by words such as "anticipate," "assume," "believe," "estimate," "expect," "indicate," "intend," "may," "plan," "point to," "predict," "project," "seek," "target," "potential," "will," "would," "could," "should," "continue," "contemplate" and other similar expressions, although not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this annual report and include statements regarding our intentions, beliefs or current expectation concerning, among other things, our results of operations, financial condition, capital and liquidity requirements, prospects, growth, strategies and the industry in which we operate.

There are important factors that could cause actual results to differ materially from those contemplated by such forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We believe that these risks and uncertainties include, but are not limited to, those described in the section captioned "Risk Factors" that appear in Item 3. D. "Risk Factors" of this annual report. These factors should not be construed as exhaustive and should be read with the other cautionary statements in this annual report.

Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this report. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this report, those results or developments may not be indicative of results or developments in subsequent periods.

Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this report speaks only as of the date of such statement. Except to the extent required by applicable law, we undertake no obligation to update any forward-looking statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

IMPLICATIONS OF BEING A FOREIGN PRIVATE ISSUER

We are a foreign private issuer, and so long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to US domestic public companies, including:

•the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

•the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time;

•the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10‑Q containing unaudited financial and other specified information, or current reports on Form 8‑K, upon the occurrence of specified significant events; and

•Regulation FD, which regulates selective disclosures of material information by issuers.

We are, however, required to file an annual report on Form 20‑F within four months of the end of each fiscal year. In addition, we have published and intend to continue to publish our results on a quarterly basis through press releases, distributed pursuant to the rules and regulations of the New York Stock Exchange. Press releases related to financial results and material events have been and will continue to be furnished to the SEC on Form 6‑K. However, the information we are required to file with or furnish to the SEC is less extensive and less timely compared to that required to be filed with the SEC by US domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a US domestic issuer.

ENFORCEMENT OF CIVIL LIABILITIES

The Bank is incorporated under the laws of Bermuda. As a result, the rights of holders of the Bank’s common shares will be governed by Bermuda law, the Butterfield Act and the Bank’s bye-laws. The rights of shareholders under Bermuda law may differ from the rights of shareholders of companies incorporated in other jurisdictions. Some of our directors and some of the named experts referred to in this annual report are not residents of the United States, and a substantial portion of our assets are located outside the United States. As a result, it may be difficult for investors to effect service of process on those persons in the United States or to enforce in the United States judgments obtained in US courts against us or those persons based on the civil liability provisions of the US federal securities laws. However, we may be served with process in the United States with respect to actions against us arising out of or in connection with violations of US federal securities laws relating to offers and sales of common shares made hereby by serving C T Corporation System, 28 Liberty Street, New York, NY 10005, our US agent irrevocably appointed for that purpose.

It is doubtful whether courts in Bermuda will enforce judgments obtained in other jurisdictions, including the United States, against us or our directors or officers under the securities laws of those jurisdictions, or entertain actions in Bermuda against us or our directors or officers under the securities laws of other jurisdictions.

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PART 1

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable

ITEM 3. KEY INFORMATION

A.Selected Financial Data

Consolidated Financial Information

The following tables present our selected consolidated financial information as at and for the years ended December 31, 2020, 2019, and 2018.

Our historical results for any prior period do not necessarily indicate our results to be expected for any future period. The following data should be read in conjunction with Item 5.A "Operating Results".

The selected consolidated financial information presented as at December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and 2018 have been derived from the audited consolidated financial statements of The Bank of N.T. Butterfield & Son Limited included elsewhere in this report.

Statement of Operations Data

	For the year ended December 31,
(in millions of $, unless indicated otherwise)	2020	2019	2018
Total interest income	352.0	405.1	367.6
Total interest expense	34.4	59.4	24.6
Net interest income before provisions for credit losses	317.6	345.7	343.0
Provision for credit recoveries (losses)	(8.5)	0.2	7.0
Net interest income after provisions for credit losses	309.1	345.9	350.0
Total non-interest income	183.9	184.0	168.7
Total other gains (losses)	1.2	2.8	(0.9)
Total net revenue	494.2	532.6	517.8
Total non-interest expense	344.6	356.9	321.3
Net income before income taxes	149.6	175.7	196.5
Income tax benefit (expense)	(2.4)	1.4	(1.3)
Net income	147.2	177.1	195.2
Net income to common shareholders	147.2	177.1	195.2
Earnings per common share from continuing operations (in US$)
Basic	2.91	3.33	3.55
Diluted(1)	2.90	3.30	3.50
Cash Dividends declared per common share (in BM$)	1.76	1.76	1.52

______________________________

(1)Reflects only "in the money" options and certain unvested share awards, which have a dilutive effect.

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Balance Sheet Data

	As at December 31,
(in millions of $)	2020	2019
Assets
Cash due from banks	3,289.6	2,550.1
Of which cash and demand deposits with banks — non-interest bearing	133.4	88.0
Of which demand deposits with banks — interest bearing	433.5	839.3
Of which cash equivalents — interest bearing	2,722.7	1,622.7
Securities purchased under agreements to resell	197.0	142.3
Short-term investments	823.0	1,218.4
Investment in securities	4,862.8	4,436.4
Of which equity securities at fair value	7.3	7.4
Of which available-for-sale (1)	2,661.1	2,220.3
Of which held-to-maturity(2)	2,194.4	2,208.7
Loans, net of allowance for credit losses	5,160.8	5,142.6
Premises, equipment and computer software, net of accumulated depreciation	150.8	158.2
Goodwill	25.6	24.8
Other intangible assets, net	67.2	71.7
Equity method investments	12.9	14.5
Other real estate owned, net	4.1	3.8
Accrued interest and other assets	144.8	158.7
Total assets	14,738.6	13,921.6
Liabilities
Total deposits	13,250.1	12,441.6
Of which — non-interest bearing	3,012.4	2,238.3
Of which — interest bearing	10,237.7	10,203.4
Employee benefit plans	131.3	110.3
Accrued interest and other liabilities	203.9	262.4
Long-term debt	171.5	143.5
Total liabilities	13,756.7	12,957.8
Total shareholders' equity(3)(4)	981.9	963.7
Of which common share capital(4)	0.5	0.5
Total liabilities and shareholders' equity	14,738.6	13,921.6
Common shares outstanding (number)(4)	50.0	53.0

______________________________

(1)Amortized cost of AFS debt securities was $2,588.3 million as at December 31, 2020 and $2,208.5 million as at December 31, 2019.

(2)Fair value of HTM debt securities was $2,304.8 million as at December 31, 2020 and $2,256.0 million as at December 31, 2019.

(3)As at December 31, 2020, the number of outstanding awards of unvested common shares was 0.9 million (December 31, 2019: 0.9 million). Only awards for which the sum of 1) the expense that will be recognized in the future (i.e., the unrecognized expense) and 2) its exercise price, if any, was lower than the average market price of the Bank's common shares were considered dilutive and, therefore, included in the computation of diluted earnings per share.

(4)Figures reflect the retirement of 3.5 million shares during the year ended December 31, 2020 (December 31, 2019: 2.9 million).

Financial Ratios and Other Performance Indicators

We use a number of financial measures to track the performance of our business and guide our management. Some of these measures are defined by, and calculated in compliance with, applicable banking regulations, but such regulations often provide for certain discretion in defining and calculating the measures. These measures allow management to review our core activities, enabling us and our investors to evaluate relevant trends meaningfully when considered in conjunction with (but not in lieu of) measures that are calculated in accordance with GAAP. Non-GAAP measures used in this report are not a substitute for GAAP measures and readers should consider the GAAP measures as well.

The following table shows certain of our key financial measures for the periods indicated. Because of the discretion that we and other banks and companies have in defining and calculating these measures, care should be taken in comparing such measures used by us with similarly titled measures of other banks and companies, as such measures may not be directly comparable.

Many of these measures are non-GAAP financial measures. We believe that each of these measures is useful for investors in understanding trends in our business that may not otherwise be apparent when relying solely on our GAAP-calculated results. For more information on the non-GAAP financial measures presented below, including a reconciliation to the most directly comparable GAAP financial measures, see Item 3.A. "Selected Financial Data - Reconciliation of Non-GAAP Financial Measures".

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	For the year ended December 31,
(in %, unless otherwise indicated)	2020	2019	2018
Return on average common shareholders' equity(1)	15.0	19.1	23.1
Core return on average tangible common equity(2)	17.3	23.4	25.6
Return on average assets(3)	1.1	1.4	1.8
Core return on average tangible assets(4)	1.1	1.6	1.8
Net interest margin(5)	2.42	2.86	3.25
Efficiency margin(6)	67.6	66.4	61.8
Core efficiency ratio(7)	66.0	62.2	61.5
Fee income ratio(8)	37.3	34.7	32.5
Common equity Tier 1 capital ratio(9)(10)	16.1	17.3	19.6
Tier 1 capital ratio(9)	16.1	17.3	19.6
Total capital ratio(9)	19.8	19.4	22.4
Leverage ratio(9)(10)	5.3	5.9	7.6
Tangible common equity/tangible assets(10)	6.1	6.3	7.5
Tangible total equity/tangible assets(11)	6.1	6.3	7.5
Non-performing assets ratio(12)	0.6	0.4	0.4
Non-accrual ratio(13)	1.4	1.0	1.2
Non-performing loan ratio(14)	1.8	1.3	1.4
Net charge-off (recoveries) ratio(15)	0.1	—	0.1
Core net income attributable to common shareholders(16)(17) (in $ million)	154.5	197.9	197.0
Core net income per common share fully diluted(18)(20) (in $)	3.04	3.69	3.53
Common equity per share(19) (in $)	19.88	18.40	15.94

______________________________

(1)ROE measures profitability revealing how much profit is generated with the money invested by common shareholders. ROE represents the amount of net income to common shareholders as a percentage of average common equity and calculated as net income to common shareholders / average common equity. Net income to common shareholders is net income for the full fiscal year, before dividends paid to common shareholders but after dividends to preference shareholders. Average common equity does not include the preference shareholders' equity.

(2)Core ROATCE is a non-GAAP financial measure. Core ROATCE measures core profitability as a percentage of average tangible common equity. Core ROATCE is the amount of core income to common shareholders as a percentage of average tangible common equity and is calculated as core earnings to common shareholders / average tangible common equity. Core earnings to common shareholders is net earnings to common shareholders for the full fiscal year (before dividends paid to common shareholders but after dividends to preference shareholders) adjusted to exclude certain items that are included in the financial results presented in accordance with GAAP. Average tangible common equity does not include the preference shareholders' equity or goodwill and intangible assets. For more information on the non-GAAP financial measures, see Item 3.A."Selected Financial Data - Reconciliation of Non-GAAP Financial Measures".

(3)ROA is an indicator of profitability relative to average total assets and is intended to demonstrate how efficient management is at using the assets to generate earnings. The ROA ratio is calculated as net income / average total assets.

(4)Core ROATA is a non-GAAP financial measure. Core ROATA is an indicator used to assess the core profitability of average tangible assets and is intended to demonstrate how efficiently management is utilizing its tangible assets to generate core net income. Core ROATA is calculated by taking the core income as a percentage of average tangible assets and is calculated as core net income / average tangible assets. Core net income is the net income adjusted to exclude certain items that are included in the financial results presented in accordance with GAAP. For more information on the non-GAAP financial measures, see Item 3.A."Selected Financial Data - Reconciliation of Non-GAAP Financial Measures".

(5)NIM is a performance metric that examines how successful the Bank's investment decisions are compared to its cost of funding assets and is expressed as net interest income as a percentage of average interest-earning assets. NIM is calculated as net interest income before provision for credit losses / average interest-earning assets. Net interest income is the interest earned on cash due from banks, investments, loans and other interest earning assets minus the interest paid for deposits, short-term borrowings and long-term debt. The average interest-earning assets is calculated using daily average balances of interest-earning assets.

(6)Efficiency margin is a non-GAAP financial measure. Efficiency margin is an indicator used to assess operating efficiencies and is intended to demonstrate how efficiently management is controlling expenses relative to generating revenues. The efficiency margin is calculated by taking the non-interest expenses as a percentage of total net revenue before total other gains (losses) and provisions for credit losses, and is calculated as (non-interest expense - amortization of intangible assets) / (total non-interest income + net interest income before provision for credit losses). For more information on the non-GAAP financial measures, see Item 3.A."Selected Financial Data - Reconciliation of Non-GAAP Financial Measures".

(7)The core efficiency ratio is a non-GAAP financial measure. The core efficiency ratio is an indicator used to assess operating efficiencies and is intended to demonstrate how efficiently management is controlling expenses relative to generating revenues on our core activities. The core efficiency ratio is calculated by taking the core non-interest expenses as a percentage of total net revenue before provision for credit losses and other gains and losses and is calculated as (core non-interest expenses - amortization of intangible assets) / (core non-interest income + core net interest income before provision for credit losses). Core non-interest expenses exclude certain items that are included in the financial results presented in accordance with GAAP including income taxes and amortization of intangible assets. For more information on the non-GAAP financial measures, see Item 3.A."Selected Financial Data - Reconciliation of Non-GAAP Financial Measures".

(8)The fee income ratio is a measure used to determine the proportion of revenues derived from non-interest income sources. The ratio is calculated as non-interest income / (non-interest income + net interest income after provision for credit losses).

(9)The Bank's regulatory capital is determined in accordance with Basel III guidelines as issued by the BMA. The total capital ratio measures the amount of the Bank's capital in relation to the amount of risk it is taking. All banks must ensure that a reasonable proportion of their risk is covered by permanent capital. Under Basel III, Pillar I, banks must maintain a minimum total capital ratio of 13.5%, inclusive of all capital buffers. In effect, this means that 13.5% of the RWA must be covered by permanent or near permanent capital. The risk weighting process takes into account the relative risk of various types of lending and asset placements. The higher the capital adequacy ratio a

5

bank has, the greater the level of unexpected losses it can absorb before becoming insolvent. The tier 1 capital ratio is the ratio of the Bank's core equity capital to its total RWA. RWA is the total of all assets held by the Bank weighted by credit risk according to a formula determined by the BMA which follows the BCBS guidelines in setting formulas for asset risk weights. The CET1 ratio is equivalent to the tier 1 capital ratio except that it only includes common equity in the numerator and we must maintain a minimum CET1 ratio of 10%. Basel III also adopts the new Leverage Ratio regime, which is calculated by dividing tier 1 capital by an exposure measure, and banks must maintain a minimum Leverage Ratio of 5.0%. The exposure measure consists of total assets (excluding items deducted from tier 1 capital) and certain off balance sheet items converted into credit exposure equivalents as well as adjustments for derivatives to reflect credit and other risks.

(10)The TCE/TA ratio is a non-GAAP financial measure. The TCE/TA ratio is a measure used to determine how significant of an unexpected loss can be incurred by the Bank before other forms of capital, other than common equity, are impacted. The TCE/TA ratio is calculated as (common equity - intangible assets - goodwill) / tangible assets. Tangible common equity does not include the preference shareholders' equity or goodwill and intangible assets. Tangible assets are the Bank's total assets from continuing operations less goodwill and intangibles. For more information on the non-GAAP financial measures, see Item 3.A. "Selected Financial Data - Reconciliation of Non-GAAP Financial Measures".

(11)The TE/TA ratio is a non-GAAP financial measure. The TE/TA ratio is a measure used to determine how much loss the Bank can absorb before subordinated debt capital is impacted. The TE/TA ratio is calculated as (total shareholders' equity - intangible assets - goodwill) / tangible assets. Tangible assets are the Bank's total assets from continuing operations less intangible assets and goodwill. For more information on the non-GAAP financial measures, see Item 3.A. "Selected Financial Data - Reconciliation of Non-GAAP Financial Measures".

(12)The NPA ratio is an indicator of the credit quality of the Bank's total assets by expressing the non-performing assets as a percentage of total assets. The NPA ratio is calculated as (gross non-accrual loans - specific allowance for credit losses on non-accrual loans + accruing loans past due 90 days + OREO) / total assets.

(13)The NACL ratio is an indicator used to assess the credit performance of the Bank's loan portfolio by calculating the non-accrual loans as a percentage of loans. The NACL ratio is calculated as gross non-accrual loans / gross total loans. Note the reference to gross implies the amounts prior to loan allowances for credit losses.

(14)The NPL ratio is an indicator used to assess the credit performance of the Bank's loan portfolio by calculating the non-performing loans as a percentage of loans. The NPL ratio is calculated as total gross non-performing loans / total gross loans.

(15)The NCO ratio is an indicator used to assess the net credit loss of the Bank's loan portfolio by calculating the net charge-offs as a percentage of average total loans. The NCO ratio is calculated as net charge-off expense / average total loans. Average total loan is calculated as the average of the month-end asset balances during the relevant period.

(16)Core net income is a non-GAAP financial measure. Core net income measures net income on a core basis. Core net income is calculated by adjusting net income for income or expense items which are not representative of the ongoing operations of our business. For a reconciliation of core net income to net income, see Item 3.A. "Selected Financial Data - Reconciliation of Non-GAAP Financial Measures".

(17)CEACS is a non-GAAP financial measure. CEACS measures profitability attributable to common shareholders on a core basis. For a reconciliation of CEACS to net income, see Item 3.A. "Selected Financial Data - Reconciliation of Non-GAAP Financial Measures".

(18)Core net income per common share — fully diluted is a non-GAAP financial measure. Core net income per common share —  fully diluted measures core profitability attributable to common shareholders on a per share basis. For a reconciliation to net income per share, see Item 3.A."Selected Financial Data - Reconciliation of Non-GAAP Financial Measures".

(19)Common equity per share is calculated as total common equity / number of common shares issued and outstanding at period end.

6

Net Interest Income

Net interest income is the amount of interest earned on our interest‑earning assets less interest paid on our interest bearing liabilities. The following table shows our net interest income before provision for credit losses for the periods indicated.

	For the year ended December 31,
	2020				2019				2018
(in millions of $)	Average balance ($)	Interest ($)	Average rate (%)		Average balance ($)	Interest ($)	Average rate (%)		Average balance ($)	Interest ($)	Average rate (%)
Assets
Cash due from banks, securities purchased under agreements to resell, and short‑term investments	3,530.6	12.1	0.34	%	3,233.3	41.6	1.29	%	1,977.3	24.8	1.26	%
Investment in securities	4,514.3	109.2	2.41	%	4,474.9	129.4	2.89	%	4,578.9	124.3	2.71	%
Loans	5,061.7	230.7	4.54	%	4,369.5	234.0	5.36	%	3,995.8	218.5	5.47	%
Interest earning assets	13,106.6	352.0	2.68	%	12,077.6	405.1	3.35	%	10,552.0	367.6	3.48	%
Other assets	393.7				371.5				350.7
Total assets	13,500.3				12,449.1				10,902.7
Liabilities
Deposits	9,710.8	(25.1)	(0.26)	%	8,851.5	(51.5)	(0.58)	%	7,375.8	(17.6)	(0.24)	%
Securities sold under agreements to repurchase	—	—	—	%	0.7	—	(2.12)	%	1.6	—	(2.11)	%
Long-term debt	173.4	(9.3)	(5.35)	%	143.4	(7.9)	(5.49)	%	133.4	(6.9)	(5.21)	%
Interest bearing liabilities	9,884.2	(34.4)	(0.35)	%	8,995.5	(59.4)	(0.66)	%	7,510.8	(24.6)	(0.33)	%
Non-interest bearing current accounts	2,363.9				2,147.2				2,231.8
Other liabilities	280.6				310.4				281.0
Total liabilities	12,528.6				11,453.1