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DATE

Wednesday, April 29, 2026 at 10 a.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer — Michael Collins
  • President and Chief Financial Officer — Michael L. Schrum
  • Managing Director, Bermuda — Jody Feldman

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TAKEAWAYS

  • Net Income -- $62.6 million reported for the quarter, reflecting stable earnings.
  • Core Net Income -- $63.2 million, demonstrating consistency in recurring profitability.
  • Core EPS -- $1.55, associated with a core return on average common equity of 24.1%.
  • Net Interest Margin -- 2.75%, up 6 basis points sequentially due to lower deposit costs and improved investment yields.
  • Cost of Deposits -- Declined by 13 basis points to 1.24% compared to the prior quarter.
  • Non-Interest Income -- $62.6 million, down $3.7 million sequentially, attributed to expected seasonal lower banking fees and a decline in time-based trust fees.
  • Fee Income Ratio -- 40.6%, compared to 41.7% in the prior quarter.
  • Share Repurchases -- 800,000 shares bought back at a cost of $42.4 million.
  • Quarterly Dividend -- $0.50 per share declared for shareholders.
  • Core Non-Interest Expenses -- Down sequentially, owing to reduced professional services and technology costs, partly offset by higher payroll tax from share-based compensation vesting.
  • Net Interest Income -- $93.3 million before provisions, up $700 thousand sequentially from the prior quarter.
  • Average Loan Balances -- Overall stable, with increases in Jersey and Cayman masked by foreign exchange translation effects.
  • Assets Under Administration -- $146 billion, boosted by the closing of the Rollinson & Hunter Guernsey acquisition.
  • Trust Acquisition Addition -- The Rollinson & Hunter Guernsey deal added 71 client groups, 50 staff, and approximately $9 billion in assets under trusteeship.
  • Loan Portfolio Quality -- Non-accrual loans at 2% and allowance for credit losses at 0.6% of total loans, underpinned by 71% full recourse and nearly 80% loan-to-value below 70%.
  • Investment Portfolio Risk -- Entirely AA or higher-rated U.S. Treasuries and agency securities, with $99.7 million net unrealized losses in the AFS portfolio, up $10.3 million sequentially.
  • Deposit Balances -- Period-end balances slightly elevated versus the prior quarter; management expects normalization in the $12 billion to $12.5 billion range.
  • Tangible Book Value -- Increased 0.6% sequentially to close the quarter at $26.56 per share.
  • TCE/TA Ratio -- Maintained above the internal target range of 6%-6.5%.
  • Loan Yield Origination -- New residential mortgages originated at approximately 7% in Bermuda, 6% in Cayman, and 5% in the Channel Islands.
  • Expectation on NIM -- Management expects net interest margin to remain broadly stable with "a slight positive bias" for the rest of the year.
  • Rollinson & Hunter Fee Impact -- Expected to add £8 million to £10 million of annualized fee income, beginning in the following quarter.
  • Efficiency Ratio Target -- Core non-interest expense guided to $90 million to $92 million per quarter, excluding deal integration costs.
  • Acquisition Discipline -- Management reaffirms a target private trust acquisition valuation of up to 8x EBITDA and a required IRR of 12%-15% or higher.

SUMMARY

The Bank of N.T. Butterfield & Son Limited (NTB 2.66%) finalized the acquisition of Rollinson & Hunter Guernsey, enhancing its private trust business scale and adding $9 billion in client assets. The average investment yield improved to 2.78%, while nearly $1 billion in securities is positioned to reset at a 1% tailwind over the coming year. Management cited ongoing headwinds in the Central London mortgage book and shifts in segment loan demand, noting independent market dynamics across regions. Guidance for deposit normalization incorporates potential variability due to lumpy corporate and trust inflows or outflows, with specific mention of corporate deposits held up in legal proceedings. Management stated, "Every one of these acquisitions adds a couple of percent onto that fee income ratio," underscoring the deliberate focus on fee growth through targeted M&A.

  • Management indicated that the integration of the Rollinson & Hunter platform is "incremental in terms of fee income" and described the deal as "very low risk" with seamless onboarding expected.
  • The investment portfolio experienced higher net unrealized losses in other comprehensive income, but management expects this to "with additional burn down over the next 12 to 24 months."
  • The company does not plan to compete by selling asset management services into new private trust relationships acquired, preserving client alignment and independent fiduciary positioning.
  • Executives cited their ongoing strategy to pursue acquisitions in Island Banking and Trust, with a preference for founder-owned and big onshore bank–owned offshore trust businesses rather than private equity–owned fee administrators.

INDUSTRY GLOSSARY

  • AFS Portfolio: "Available-for-sale" securities held on balance sheet and marked for fair value changes impacting other comprehensive income (OCI) but not earnings unless sold.
  • TCE/TA: Ratio of tangible common equity to tangible assets, a regulatory measure of capital strength.

Full Conference Call Transcript

Michael Collins, The Bank of N.T. Butterfield & Son Limited’s Chairman and Chief Executive Officer; Michael L. Schrum, President and Chief Financial Officer; and Jody Feldman, Managing Director of Bermuda. Following their prepared remarks, we will open the call up for a question and answer session. Yesterday afternoon, we issued a press release announcing our first quarter 2026 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 site at www.butterfieldgroup.com.

Before I turn the call over to Michael Collins, I would like to remind everyone that today’s discussion 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 U.S. 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.

Michael Collins: Thank you, Noah, and thanks to everyone joining the call today. 2026 represents a strong start to the year, with solid financial performance and continued execution of our disciplined growth strategy. We were pleased to announce the agreement to acquire Rollinson & Hunter in Guernsey, reinforcing our commitment to build scale in key markets. Demand across our core businesses of banking, wealth management, and trust remained robust, reflecting the strength of our client relationships and the resilience of our franchise. Net interest income benefited from lower costs, while deposit volumes remained stable across all jurisdictions. At the same time, we improved non-interest expenses, demonstrating our ability to manage costs effectively in a low-rate, more volatile environment.

I am also pleased to report that following our announcement in February, the acquisition of Rollinson & Hunter Guernsey has now closed. This is a strategically important transaction that enhances the scale and capability of our private trust business in Guernsey and furthers our position as a leading international provider of trust services, with group assets under administration of $146 billion. Looking ahead, acquisitions remain a key driver of our growth. We will continue to pursue high-quality opportunities in Island Banking and Trust that align with our strategy and deliver long-term value for our stakeholders. The Bank of N.T.

Butterfield & Son Limited is a leading offshore bank and wealth manager, with strong leading market positions in Bermuda and the Cayman Islands, and an expanding retail presence in the Channel Islands. Across markets, we deliver a broad range of services, including trust, private banking, asset management, and custody, which are designed around the needs of our clients. We also support international private trust clients in The Bahamas, Switzerland, and Singapore and originate high-net-worth residential mortgages for prime London properties through our London office. I will now turn to the first quarter highlights on Page 5. The Bank of N.T. Butterfield & Son Limited reported net income of $62.6 million and core net income of $63.2 million.

We reported core earnings per share of $1.55 with a core return on average common equity of 24.1% in the first quarter. The net interest margin was 2.75% in the first quarter, an increase of 6 basis points from the prior quarter, with the cost of deposits falling 13 basis points to 124 basis points from the prior quarter. We again are announcing a quarterly cash dividend of $0.50 per share. During the first quarter, we continued to repurchase shares, with a total of 800 thousand shares at a cost of $42.4 million. We continue our active capital management and plan to continue to return excess capital that we do not require to support the business and growth initiatives.

I will now turn the call over to Jody Feldman for an update on Bermuda and Cayman markets and businesses.

Jody Feldman: Thank you, Michael. Starting with Bermuda, the economic outlook remains constructive, underpinned by steady growth and a thriving international business sector anchored by reinsurance. Real GDP growth is estimated at 3% for 2025, reflecting continued economic momentum. Bermuda’s fiscal position has improved markedly, with the government projecting a record surplus of $472 million for the 2027 fiscal year, largely driven by revenues from the new corporate income tax. While economic growth is positive, Bermuda continues to navigate structural challenges, including a high cost of living and doing business, an aging population, and limited availability of affordable housing. These factors remain important considerations as the island plans for sustainable long-term growth.

The hospitality sector is benefiting from renewed investment, with $182 million of capital spend for infrastructure and tourism revitalization. The partial reopening of the Fairmont Southampton in late 2026 followed by a full reopening in 2027 is expected to bring hotel room inventory above pre-pandemic levels. We are also encouraged by plans for the redevelopment of Elbow Beach Resort, which is expected to commence later this year. Finally, Bermuda continues to reinforce its global profile as a premier destination for international sporting events, including the PGA Tour Butterfield Bermuda Championship, the Newport to Bermuda Sailing Race, and Sail GP.

Events not only support tourism and international visibility, but also reinforce Bermuda’s position as a high-quality jurisdiction for business visitors and residents alike. Now turning to the Cayman Islands. GDP forecasts suggest that growth is expected to moderate in 2026 to around 2% for the year, which is a steadier and more stable pace of development following the past few years of 4% to 6% GDP growth. Unlike Bermuda, Cayman has seen significant population increases, which are forecasted to grow to the low 90 thousands over the next couple of years. Tourism and financial services continue to grow; January and February saw record stayover arrivals consisting primarily of U.S. tourists.

Financial services in Cayman continue to grow, with reinsurance a growing industry and the international fund services business remaining a cornerstone. The Cayman government continues to be fiscally disciplined, with 2026–2027 budget expectations of a modest surplus, suggesting Cayman is entering a slower growth phase following rapid expansion. I will now turn the call over to Michael L. Schrum for more detail on the quarter.

Michael L. Schrum: Thank you, Jody, and good morning. On Slide 6, we have a summary of net interest income and net interest margin. In the first quarter, we reported net interest income before provisions for credit losses of $93.3 million, an increase of $700 thousand from the prior quarter. Net interest margin increased 6 basis points to 2.75% compared to 2.69% in the prior quarter. This increase is largely due to lower deposit costs and increased investment yields, partially offset by our treasury and loan yields as central banks cut market interest rates, as well as a lower day count in 2026. We expect NIM to be broadly stable with a slight positive bias for the remainder of this year.

Average investment volumes increased as assets were deployed into high-yielding available-for-sale investment securities, helping to increase the average investment yield by 6 basis points to 2.78%. Average loan balances were stable compared to the prior quarter. Net loan volumes actually increased during the quarter in Jersey and Cayman; however, the impact of foreign exchange translation from the weakening of the pound sterling against the U.S. dollar masked this uptick. During the quarter, the bank continued to pursue its conservative strategy of reinvesting the paydowns and investment maturities into a mix of U.S. Agency MBS securities and medium-term U.S. Treasuries. Slide 7 provides a summary of non-interest income, which totaled $62.6 million, a decrease of $3.7 million over last quarter.

This was due to an expected decrease in seasonally higher comparative fourth-quarter banking fees. Trust fees were also down due to lower time-based and special fees compared to the prior quarter. Foreign exchange fees increased slightly due to higher volumes in the quarter. The fee income ratio decreased overall to 40.6% compared to 41.7% in the prior quarter and continues to compare favorably to historical peer averages. On Slide 8, we present core non-interest expenses.

Core non-interest expenses decreased compared to the prior quarter due to lower costs associated with professional and outside services fees for project work and lower technology and communications expenses, which were offset by higher payroll tax related to the annual vesting of share-based compensation in the first quarter. Slide 9 shows The Bank of N.T. Butterfield & Son Limited’s balance sheet is liquid and conservatively positioned. Period-end deposit balances were slightly elevated compared to the prior quarter. Our low risk density of 28.7% continues to reflect the regulatory capital efficiency of the balance sheet. On Slide 10, we show that asset quality remains strong. The investment portfolio is low risk, consisting entirely of AA or higher rated U.S.

Treasuries and government-guaranteed agency securities. Credit performance was stable this quarter, with negligible net charge-offs, non-accruals at 2%, and allowance for credit losses at 0.6% of total loans. Our loan book is anchored by high-quality residential mortgages, with 71% full-recourse loans and nearly 80% at loan-to-value below 70%. We continue to apply conservative underwriting across Bermuda, the Cayman Islands, and our U.K. and Channel Islands businesses. On Slide 10, we present the average cash and securities balances with a summary of net interest rate sensitivity. Net unrealized losses in the AFS portfolio included in OCI were $99.7 million at the end of the first quarter, an increase of $10.3 million over the prior quarter.

Interest rate sensitivity has increased slightly against the prior quarter, driven by changes in asset composition and an increase in short-duration assets. We continue to expect improvement in OCI with additional burn down over the next 12 to 24 months [inaudible]. Slide 12 summarizes regulatory and leverage capital levels. The Board of Directors has once again approved a quarterly dividend of $0.50 per share. TCE/TA continues to be conservatively above our targeted range of 6% to 6.5%. Finally, tangible book value continued to increase and closed the quarter at $26.56 per share, an increase of 0.6% over prior quarter-end. I will now turn the call back to Michael Collins for closing remarks.

Michael Collins: Thank you, Michael. The Bank of N.T. Butterfield & Son Limited’s geographic footprint includes some of the world’s key global financial jurisdictions, which position us well for sustained expansion supported by both targeted acquisitions and internally driven growth initiatives. We continue to seek overlapping and complementary bank and private trust acquisitions—acquisitions that best utilize our management team’s extensive experience and further our ambition as a leading independent bank and wealth management group operating across strategic financial centers and island economies with favorable profiles and potential for growth. Our capital-light, fee-driven businesses continue to offer distinctive solutions tailored to evolving client needs, reinforcing our strong competitive position.

Looking ahead, we are committed to further improving operational effectiveness while maintaining disciplined cost management. The Bank of N.T. Butterfield & Son Limited’s capital management remains central to our approach. Strong earnings generation enables us to strike the appropriate balance by delivering consistent shareholder returns through dividends, investing in organic growth, pursuing strategic and value-enhancing acquisitions, and executing share repurchases as appropriate. Our balance sheet remains strong, with a conservative liquidity profile that is closely aligned with our operating model and regulatory oversight. The bank is well positioned to deliver service and value to all stakeholders. Thank you. And with that, we would be happy to take your questions.

Michael L. Schrum: Operator?

Operator: We will now open the call for questions. We will now begin the question and answer session. We will pause momentarily while we assemble our roster. Our first question comes from Evan Kwiatkowski with Raymond James. Please go ahead.

Analyst: Hey. This is Evan on for David Feaster. Good morning, everybody.

Michael Collins: Morning.

Analyst: I know it is early innings still, but just curious how things are progressing and what you are hearing from both the team and customers broadly. And then maybe on the financial impacts, I am just curious what your updated fee income growth expectations are, and then any additional one-time costs that are expected from the transaction. Thanks.

Michael Collins: Hi, it is Michael Collins. The client base is very similar to ours. We have been in the private trust business for 70 years, and this was a founder-owned trust company that we have looked at for years in Guernsey, so we know it quite well. The client base, I think, will be very comfortable with our approach—very similar to their approach. We do not compete in terms of trying to sell asset management into our private trust relationships, and clients appreciate that. It is 50 really highly qualified staff in Guernsey, 71 client groups, and about $9 billion assets under trusteeship. That takes us up to about $146 billion assets under administration or trusteeship.

It is not huge, and as we have said in the past, we are very disciplined in terms of how we price these acquisitions. So it is, sort of, eight times up to $50 million in terms of private trust acquisitions—8x EBITDA, 12% to 15% IRR or higher—and has to be at least two-thirds private trust. We know the business well. It is incremental in terms of fee income. It helps quite a bit, but it gets us 70 new client groups which are very high quality. We are very happy with it. It is closed. We are working on integration. It should be seamless, very low risk.

Michael L. Schrum: Yes, Evan, it is Michael L. Schrum. Just on the question in terms of updated fee, we are expecting this to add about £8 million to £10 million annualized. So, obviously, we will start to put that into the next quarter. With that comes the integration costs and also the cost line will increase due to onboarding of the new colleagues as well. I think it is a really good book of business, and the people we have met have been very pleased with the model that we run, which is the independent trust model. This gives our new colleagues a genuine career path, and the clients really do like The Bank of N.T. Butterfield & Son Limited.

It is a well-known brand in Guernsey, and I think, again, they will be comforted by the credit rating of the bank and, obviously, the balance sheet that sits behind their new fiduciary provider. We just closed it. We are in the process of looking at the integration and potential synergies, etc. We will come back once we finalize the PPA work next quarter and give some more detail on how it is going.

Analyst: That is really helpful. Thank you. And then next, I thought I would touch on the NIM. I noticed you called out you managed the duration of the portfolio to be a bit shorter, increasing rate sensitivity. I am just curious how you view the NIM trajectory from here given current central bank expectations.

Michael L. Schrum: Yes, great question. Obviously, maybe better than it was a month ago. We view the flat, higher-for-longer rate environment as constructive for the balance sheet. I think I said last quarter NIM should be broadly flat. We have some tailwinds and headwinds in that. The exit NIM for March month was at the 2.70% level. So it was a little bit lower, but again, plus/minus 5 basis points depending on the deposit composition. What really drove this quarter was the lowering of deposit costs overtaking the downward trajectory in treasury and short cash repricing.

For the remainder of the year, we remain cautiously optimistic that we can fight those headwinds with the asset repricing model that is in there, both on the loan book and the investment securities. At the moment, the average investment security yield for the quarter was 3.96%. When you have close to $1 billion resetting over the next year with a tailwind of 1%, that should be a positive bias. Central banks are weighing their options at the moment, and anytime we see a higher-for-longer environment, that is going to be better for us because we get the whole repricing coming through.

Analyst: That is helpful color. Thank you. And then, lastly for me, you already kind of alluded to it, but keeping in mind your through-cycle efficiency ratio target of 60%, is it fair to see core expense tick back into that $90 million to $92 million range per quarter for the rest of the year? Any updated expectations there, especially with the deal? Any seasonality trends would also be helpful.

Michael L. Schrum: Yes, great question. It is Michael L. Schrum again. The first quarter is always a little bit seasonally low. There tends to be a lot of expense drive up to the end of the year, but it is not enough to really call it out. In terms of the deal, I think $90 million to $92 million without the additional new colleagues that we are onboarding and system conversion, etc. There is a little bit of non-core cost this quarter related to the drafting of the SPA and that type of thing. We are expecting this to be accretive overall.

If you think about the fees that are getting added to the top line, we would expect that to generate some cost increase as well from salaries as we onboard the new folks. They are going to be brought onto our platforms. It is a little bit early to talk about forward guidance on cost, but without the deal, I would say $90 million to $92 million is a good number.

Analyst: Perfect. Thank you for taking my questions. I will step back.

Operator: Our next question comes from Emily Lee with KBW. Please go ahead.

Emily Lee: Hi, everyone. This is Emily Lee stepping in for Timothy Switzer. Thanks for taking my question, and congrats on the quarter.

Michael Collins: Sure. Thanks.

Emily Lee: So just on credit, NPLs and provision took a step up this quarter. Could you provide any color on the drivers there and what we should expect on both metrics going forward?

Michael L. Schrum: Yes. We are starting from a very low base. It is Michael L. Schrum again. When you look at Note 6 to the financials, you will see some past due migration. Really, it is something that we have seen in a few cases over the last couple of years. These are primarily related to residential mortgages in our prime Central London loan book, and they dropped into the short-term past due account this quarter. As a reminder, these are three- to five-year mortgages underwritten at 60%–65% LTV, so really well secured, and there is a lot of equity in these loans.

We continue to believe that they will resolve themselves over the medium term, as liquidity in the London prime and super prime markets is relatively thin at the moment. There have been a number of policy changes in that market. We are patient lenders, and we continue to work with borrowers facing temporary liquidity issues. Bottom line, it is a little bit elevated right now, but we expect that to normalize either through refinancing or through repayment when the property is sold. These are similar to what we have seen before in prime Central London mortgages.

Emily Lee: Got it. Thank you. And then, how is the current loan pipeline looking? What are you hearing from borrowers on demand? Are there any particular industries or jurisdictions that are seeing strength or that you are leaning into over others right now?

Michael L. Schrum: Yes, I will start and Jody, who is closer to the clients, can add color. Markets are all different. Prime and super prime in London is facing some uncertainty around governmental policy changes, including changes to the non-dom regime and some additional property taxes that need to filter through the market in terms of valuation changes. There are a lot of buyers on the sidelines at the moment in that market. On the flip side, with the Middle Eastern situation, there are a lot of people moving back and renting, which is a temporary fix, particularly from Dubai into Central London now. Cayman is looking pretty good.

We obviously want residential mortgages because our model is a return-on-risk-weighted-asset model—35% risk weight and now potentially even lower at LTV bands under Basel IV in Cayman. We strongly prefer residential mortgages. The Cayman loan book actually is looking decent. In Bermuda and Cayman, we have fully amortizing mortgages underwritten at a maximum 80% LTV, with appropriate exception underwriting in place. For the first time in a couple of years, the Cayman residential mortgage book originations overtook amortization rundown as we improved the LTV profile overall. Jody, do you want to talk about Bermuda?

Jody Feldman: Yes, thanks, Michael. I will just highlight we are not a loan growth story, but as Michael pointed out, we have a good pipeline, particularly here in Cayman with some of the high-end residential towers that are popping up. We are participating prominently in a lot of those, which is great to see. In Bermuda, there are some pretty acute supply-demand imbalances in housing, but we have a good position within the retail and private banking lending space. We are a bit constrained on the corporate side in Bermuda due to a lack of significant projects coming online. Overall, we are seeing a decent pipeline across all markets combined—subdued in Bermuda but with good pockets of opportunity in Cayman.

Emily Lee: That is very helpful. Thank you. And if I could squeeze in one more: you mentioned expectations for asset repricing to help fight pressures on the NIM. How are incremental loan yields looking right now?

Michael L. Schrum: Yes, there are a couple of dynamics. In Bermuda, we underwrite at 80% LTV. We have a lot of fixed-rate loans coming up this year, both in Bermuda and Cayman, which are temporarily fixed or ARM-type structures that are resetting back to their original floating rate, which is still elevated. So there are significant tailwinds from that asset repricing. New loans in Bermuda are around 7%. Cayman is a little more competitive around new originations; there are a number of other participants who are aggressive on price competition, so around 6%-ish. Channel Islands maybe around 5%. Again, these are sterling, Bank of England–linked, fixed and floating rate loans that are three to five years.

If you average that out over new originations, it probably ends up somewhere in the 6% range, which is reasonable for that risk rating. The pipeline really is beyond what we can control; we can be a participant in the market.

Emily Lee: Great. That is all for me. Thanks so much.

Operator: Our next question comes from Robert Ruchow with Wells Fargo. Please go ahead.

Analyst: Hey, good morning. Thanks for taking my question. Question on deposits. Could you give us an update on the outlook for deposits? Any concerns that we should think about in terms of outflows, and do you expect to get any inflows from the RNH deal?

Michael L. Schrum: Yes, it is Michael L. Schrum again. On the RNH deal, initially these clients are trust clients. Occasionally, we can provide banking services to those clients as well. A few of them were already banking clients of ours because RNH was an independent trust company. It is always something that we would like to do for administrative ease—ins and outs—and we can see and understand the client a bit better that way, but we are not competing on asset management for those clients. There could be a little bit of a trickle in, but I would not expect it to be a major uplift to deposit balances overall.

For a while, we have been monitoring a couple of lumpier deposits, typically from our trust business and private client business in Bermuda and some corporate deposits. We were expecting some further outflows and for the balance sheet to normalize at around $12 billion. We are now getting notified of some new income and deposits, so it could be a bit longer, and some of the composition of the deposit base will probably end up changing a little bit over time. At the moment, $12 billion to $12.5 billion is probably a decent number for now.

We will see it when we see it, but some of those corporate deposits are held up in court proceedings and appeals processes and that type of thing. Generally constructive, actually.

Analyst: Okay, great. And if I could follow up with a broader question: as you think about acquisition opportunities, how many competitors might be out there that you would be able or willing to buy? Is there any increase in competitive pressures that might encourage someone to sell—technology requirements or anything else that might spur a little more activity than we have seen over, say, the past five years?

Michael Collins: Yes. There are sort of three types of offshore trust entities that we are interested in. The first is founder-owned, which is what RNH Guernsey was—part of an affiliated network, Rollinson & Hunter, but founder-owned with a really good book of business. It is usually pretty small—not huge—but a great book of business. Then you have the big bank–owned trust companies, whether it is HSBC or RBC. Those are a lot bigger. We still think that a lot of big banks are motivated to sell offshore trust companies due to regulatory pressure and, frankly, scale—it is sometimes not worth having something like that. We still think there could be opportunities there.

The third kind is the big private equity–owned fee businesses offshore, which do private trust company administration and fund administration. We have looked at those. We are hesitant to go into those sorts of businesses because we are really focused on private trust administration. Company administration is very different—it needs a lot of technology and can be tough because you have AML issues sometimes. We are very focused on private trust. Also, as the third buyer from private equity, it is probably not the best price, so we tend to stay away from that. There are a lot of opportunities—founder-owned and also big onshore bank–owned offshore trust companies. We just have to be patient and stick to our guns.

We are not going to pay above eight or nine times EBITDA, and the IRR has to be decent. We are at a 40% fee income ratio, and our goal is to get that higher and become more of a fee company. Every one of these acquisitions adds a couple of percent onto that fee income ratio. We just need to be patient, find the right books, and be very disciplined about pricing.

Analyst: Great. Thank you for taking my questions.

Michael Collins: Thanks.

Operator: This concludes our question and answer session. I would like to turn the call back over to Noah Fields for any closing remarks.

Noah Fields: Thank you, Bailey, and thanks to everyone for dialing in today. We look forward to speaking with you again next quarter. Have a great day.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.