Butterfield To Effect Mandatory Redemption

November 10, 2016

The Bank of N.T. Butterfield & Son Limited today [Nov 10] announced that it will effect a mandatory redemption of its 8.00% Non-Cumulative Perpetual Limited Voting Preference Shares par value $0.01 per share on December 15, 2016.

A spokesperson said, “The Board of Directors determined that it is an appropriate time to redeem the Preference Shares given Butterfield’s strong capital position following its IPO and the Bank’s ability to generate excess capital from operations.

“The redemption will result in the discontinuance of annual payments of $16.4 million in Preference Share dividends and Government of Bermuda Guarantee fees, equating to $0.31 per common share based on 53,248,307 common shares outstanding as at 30 September 2016.”

Michael Collins, Butterfield’s Chief Executive Officer said, “Our successful US public offering was an important milestone for Butterfield, marking the Bank’s full recovery from the impact of the global financial crisis and the beginning of a new chapter of growth.

“The redemption of Preference Shares will allow our common shareholders to participate more fully in the Bank’s success going forward.

“I would like to thank the Preference Shareholders who invested in Butterfield at a time when we needed their support. We are pleased to be in a position to retire the entire Preference Share issue with a payment of $215.8 million, comprising principal and current dividends of $186.5 million and a make-whole premium of $29.3 million, representing the present value of future dividends that Preference Shareholders would have received through 22 June 2019.

“I would also like to thank the Government of Bermuda for supporting the Preference Share offering in 2009 with its unconditional guarantee of dividends and principal.”

“Formal notification and complete information regarding the mandatory redemption of Preference Shares will be mailed to Preference Shareholders not later than 14 November 2016. General information about the Make-Whole Redemption Price and the process by which Preference Shares will be redeemed is noted below.

“The Preference Shares, on which the dividends and liquidation preference are fully and unconditionally guaranteed by the Government of Bermuda, are currently listed on the Bermuda Stock Exchange [BSX] and the Euro MTF market of the Luxembourg Stock Exchange [LuxSE]. The ISIN for the Preference Shares issued pursuant to Rule 144A is US064227AA92 and for the Preference Shares issued Pursuant to Regulation S is USG0772RAA70. The BSX ticker symbol is NTBP.BH.

“On 15 December 2016, a make-whole redemption payment of USD$1,180.00 per Preference Share [the “Make-Whole Redemption Price”] will be made to Preference Shareholders of record as at 1 December 2016. The Make-Whole Redemption Price comprises the sum of the dividend per Preference Share for the current quarter, the $1,000 liquidation preference of each Preference Share, discounted for present value, and the present value of future dividend payments that would have been paid through 22 June 2019 [the 10th anniversary of the Preference Shares and the expiration of the Government of Bermuda’s guarantee of the Preference Shares].

“The Make-Whole Redemption Price was determined in accordance with the terms and conditions of the Certificate of Designation in respect of the Preference Shares.

“Upon the Bank’s payment of the Make-Whole Redemption Price, all issued and outstanding Preference Shares, totalling 182,863 Preference Shares, will be redeemed, cancelled and shall revert to authorised but unissued preference shares of the Bank, and the Preference Shares will be delisted from both the BSX and the LuxSE.

“Persons who hold their Preference Shares in certificated form should ensure that their share certificate[s] and/or other document[s] of title in respect of such Preference Shares are surrendered by post or by hand between the hours of 9:00 a.m. and 5:00 p.m. AST on any business day to MUFG Fund Services [Bermuda] Limited, the Bank’s transfer agent and registrar, at 69 Pitt’s Bay Road, Hamilton, HM 08 Bermuda no later than 9:00 a.m. AST on 15 December 2016.

“Preference Shareholders may contact Butterfield on (441) 279-5621 should they have questions about the redemption.”

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