Timur Braziler: Okay. And just the amount cash flowing quarterly.
Michael Schrum: Say again? Sorry,
Timur Braziler: The amount of that cash flowing off of the bond book quarterly.
Michael Collins: It’s about $30 million.
Timur Braziler: $30 million a quarter. Okay.
Michael Collins: $30 million a month. Sorry.
Craig Bridgewater: Month. Yes.
Michael Collins: Right. $30 million a month.
Timur Braziler: $30 million. Okay, got it.
Michael Schrum: Yes. So, Timur, I would say – sorry, it’s Michael Schrum. I would say we’re still staying sort of short medium here. Obviously, there’s still some discussion about when the Fed is going to cut so – and what the terminal rate is in particular is quite important to us. And again, we’re not a mark-to-market shop, so we just got to kind of keep the duration, sort of matching some of the behavioralized deposits on – to sort of balance the interest rate risk profile. But obviously, you know – so at the moment, we’re laddering in, but we’re kind of staying in the medium term with a mix of MBS 15 years, I think, and some shorter dated treasuries.
Timur Braziler: Got it. And then circling back to term deposits, and I apologize if you addressed this during David’s question. But just term deposits repricing, where are they rolling off from? What levels? Where are you repricing those? And I guess just generally speaking, in the next couple of quarters, assuming no Fed activity, how should we be thinking about additional deposit cost creep?
Michael Collins: So I guess on term deposits, we’re kind of in the 4% range, and there’s basically kind of being renewed at a similar level. Obviously, kind of this bespoke pricing as necessary so that’s I would say 4% on average, but it’s a bespoke pricing kind of that may take us above that on specific deposits. But that’s kind of a good guide around the term deposits. And again, the kind of three-month average maturity on the term deposit book at the moment.
Timur Braziler: Got it, okay. And then maybe just more broadly on deposits. I think in quarters past, you talked an $11.5 billion, $12 billion as more or less a floor. They seem to have stabilized here at least, the near-term strategy is going to be to renew some of the term deposits. Is there anything may be idiosyncratic in 4Q that’s seasonal in nature? Or are we really at a floor here and you’re seeing signs of real stability in the deposit book?
Michael Schrum: Yes. I mean, – sorry, Timur. It’s Michael Schrum. I think we are seeing the stability in the deposit book. There is some seasonality. As we talked about before, a lot of our clients are captive insurance clients, and they have premium flows and claims flows. So typically pre quarter ends, we see premium inflows and then post-quarter ends we see claims settlements to the extent that those insurance companies have claims to settle. And that’s also – that seasonality is also prevalent. So typically that in Bermuda would be renewal dates of Jan 1, July 1, and then in Cayman, typically in the third quarter we see some outflows, and then in the fourth quarter we see – and we’re talking $0.5 billion-ish, right? So we – and in the fourth quarter, we typically see some inflows from funds building up, – hedge funds building up our cash positions, and then first quarter we see some outflows there.
So there’s a little bit of seasonality. I think $11.5 billion to $12 billion is a good number. We came in obviously at the top of the range. It was nice to see that core deposit franchises are stable, and it really is a question, I think, of trading off the cost of deposits versus the size of the balance sheet over time, right, as we always do.
Craig Bridgewater: Yes. And it was really interesting during the whole year to see how deposits behave. Bermuda was actually flat to up because there’s obviously, a very few banks here. Cayman was a little bit more competitive. We think we’ve washed out sort of the fund money that was being invested. And then, as we know, in the Channel Islands, we bought corporate banks so much more competitive. As Michael said, we’re kind of a price follower as opposed to, et cetera. But we’ve got a good plan there to go into retail and we’ve got well over GBP300 million in deposits and GBP250 million in mortgages. So we actually have a retail book at this point, and obviously, the retail pricing will be much more attractive going forward.
But they all act a little bit differently and disproportionately to competition. So we understand it pretty well at this point. But we think most of the hot money has been whether it’s huge trust deposits or funds in Cayman, most of that’s been washed out and it does feel pretty stable right now.
Timur Braziler: Thank you. I appreciate the color.
Operator: Thank you. This concludes our question-and-answer session. I would now like to turn the conference back over to Noah for any closing remarks.
Noah Fields: Thank you, 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.
