Is The Bank of N.T. Butterfield & Son Ltd. overvalued or undervalued?

As of 22 August 2025, the valuation grade for The Bank of N.T. Butterfield & Son Ltd. moved from fair to attractive, indicating a positive shift in its perceived value. The company appears undervalued, with a P/E ratio of 8, significantly lower than peers such as Renasant Corp. with a P/E of 21.73 and WesBanco, Inc. at 17.59. Additionally, the price-to-book value stands at 1.72, and the ROE is a strong 20.48%, suggesting effective management and profitability relative to equity.
In terms of peer comparison, The Bank of N.T. Butterfield & Son Ltd. has a more favorable valuation than BankUnited, Inc., which has a P/E of 11.46, and is positioned well against other regional banks. Despite a recent underperformance against the S&P 500 over the 3-year and 5-year periods, where it returned 38.83% and 86.96% respectively compared to 70.41% and 96.61% for the index, the current valuation metrics suggest that the stock is attractively priced given its strong dividend yield of 361.69% and potential for growth.