Cuộc họp công bố kết quả kinh doanh Quý 3/2026 của Butterfield (NTB): NIM cải thiện, thương vụ CIBC Caribbean đi đúng kế hoạch

Điểm tin chính

• Butterfield báo cáo lợi nhuận ròng quý 3 năm 2026 đạt 61,0 triệu USD, tương đương 1,50 USD cho mỗi cổ phiếu. Lợi nhuận ròng cốt lõi đạt 64,2 triệu USD, tương đương 1,58 USD cho mỗi cổ phiếu.
• Thu nhập lãi thuần tăng lên 97,2 triệu USD, tăng 1,6 triệu USD so với quý trước và tăng 4,4 triệu USD so với cùng kỳ năm ngoái. Biên lãi thuần tăng 2 điểm cơ bản so với quý trước lên 2,76%.
• Thu nhập ngoài lãi tăng lên 64,8 triệu USD, nhờ khối lượng giao dịch thẻ cao hơn, hoạt động kinh doanh ngoại hối tăng trưởng tốt hơn và khoản phí gia hạn hợp đồng không thường xuyên. Doanh thu từ phí chiếm 40% tổng doanh thu.
• Khoảng 500 triệu USD tiền gửi giải thể doanh nghiệp và ủy thác dự kiến sẽ rời khỏi bảng cân đối kế toán, đưa tổng tiền gửi về gần mức ước tính trước đó của ban lãnh đạo là 12,0 tỷ USD đến 12,5 tỷ USD.
• Nợ không sinh lời tăng lên 119,6 triệu USD, tương đương 2,7% tổng dư nợ cho vay, chủ yếu do rủi ro tín dụng từ bất động sản cư trú tại Quần đảo Channel và Anh. Ban lãnh đạo cho biết các khoản cấp tín dụng vẫn được bảo đảm tốt và không kỳ vọng xảy ra tổn thất tín dụng.
• Thương vụ thâu tóm CIBC Caribbean vẫn diễn ra đúng tiến độ, dự kiến hoàn tất trong nửa đầu năm 2027, tùy thuộc vào phê duyệt của cơ quan quản lý và các yêu cầu giao dịch khác.

Dữ liệu tài chính quan trọng

Hiệu quả hoạt động và kinh doanh

Việc tái đầu tư vào các chứng khoán có lợi suất cao hơn và lợi nhuận tốt hơn từ danh mục đầu tư nguồn vốn đã hỗ trợ thu nhập lãi thuần. Những lợi ích này bị bù trừ một phần bởi lợi suất cho vay thấp hơn và chi phí vốn tăng nhẹ. Dư nợ cho vay bình quân tăng khiêm tốn, trong khi số dư đầu tư bình quân về cơ bản không đổi.

Thu nhập ngoài lãi hưởng lợi từ doanh thu ngân hàng và ngoại hối cao hơn. Doanh thu ngân hàng phản ánh hoạt động thẻ gia tăng và khoản phí gia hạn hợp đồng không thường xuyên ở mức khiêm tốn, trong khi doanh thu ngoại hối được hỗ trợ bởi khối lượng giao dịch của khách hàng tăng.

Chi phí ngoài lãi cốt lõi tăng 3,5% so với quý trước. Mức tăng này phản ánh toàn bộ chi phí trong một quý từ vụ thâu tóm R&H Guernsey, so với việc chỉ ghi nhận một phần quý trong quý 2, cùng với chi phí nghỉ việc của nhân viên và chi phí hoạt động khác tăng.

Danh mục cho vay của Butterfield tiếp tục tập trung vào các khoản thế chấp bất động sản cư trú có quyền đòi nợ toàn bộ. Trong số các khoản thế chấp đó, 78% có tỷ lệ cho vay trên giá trị tài sản (LTV) dưới 70%. Danh mục Trái phiếu Chính phủ Mỹ và cơ quan chính phủ trị giá 5,6 tỷ USD của ngân hàng đều đạt xếp hạng từ AA trở lên.

Lỗ chưa thực hiện của danh mục tài sản sẵn sàng để bán đã tăng lên 187,3 triệu USD từ mức 106,7 triệu USD trong quý 2 do lãi suất dài hạn tăng. Thời lượng của danh mục đầu tư tăng lên 4,9 năm do dự báo tốc độ trả nợ trước hạn chậm lại và đường cong lợi suất Trái phiếu Chính phủ Mỹ dốc hơn.

Định hướng của Ban lãnh đạo

Ban lãnh đạo dự kiến biên lãi thuần và thu nhập lãi thuần sẽ đi ngang tương đối trong ngắn hạn. Dòng tiền gửi rút ra dự kiến sẽ được bù trừ bằng việc tái định giá tài sản trong các khoản đầu tư và tiền mặt ngắn hạn, cùng với mức tăng khiêm tốn của chi phí tiền gửi. Ban lãnh đạo nhận thấy xu hướng tích cực trong trung hạn nhờ lãi suất cao hơn và khả năng tái định giá tiếp theo vào năm 2027.

Chi phí ngoài lãi cốt lõi hàng quý dự kiến sẽ duy trì trong khoảng 93 triệu USD đến 95 triệu USD cho đến khi thương vụ CIBC Caribbean hoàn tất. Ban lãnh đạo cho biết lợi ích từ việc chuyển dịch các vị trí công việc sang Halifax đang trở nên ít đáng kể hơn, mặc dù vẫn còn những cơ hội tối ưu hiệu quả nhỏ hơn.

Dựa trên lãi suất kỳ hạn hàm ý, ban lãnh đạo dự kiến khoản lỗ trong thu nhập toàn diện tích lũy khác liên quan đến danh mục tài sản sẵn sàng để bán sẽ cải thiện khoảng 21% trong vòng 12 tháng và 42% trong vòng 24 tháng.

Giao dịch CIBC Caribbean dự kiến sẽ hoàn tất trong nửa đầu năm 2027. Các hồ sơ xin phép cơ quan quản lý đã được nộp, các đội ngũ tích hợp đang hoạt động và Butterfield đang chuẩn bị phát hành nợ để hỗ trợ thương vụ thâu tóm.

Trên cơ sở dự phóng (pro forma), ban lãnh đạo cho biết ngân hàng hợp nhất sẽ có khoảng 29 tỷ USD tài sản, 25 tỷ USD tiền gửi, 1,7 tỷ USD vốn cổ phần phổ thông hữu hình và hơn 400 triệu USD lợi nhuận duy trì hàng năm.

Rủi ro và các điểm cần theo dõi

Khoảng 500 triệu USD tiền gửi ủy thác tư nhân và giải thể doanh nghiệp dự kiến sẽ rút ra trong vòng vài tuần sau khi kết thúc quý. Ban lãnh đạo dự kiến dòng tiền rút ra này sẽ làm giảm quy mô bảng cân đối kế toán, nhưng cho biết ban đầu khoản này sẽ được tài trợ từ 3,8 tỷ USD tiền mặt và chứng khoán ngắn hạn.

Nợ không sinh lời tăng chủ yếu do rủi ro tín dụng từ bất động sản cư trú tại Quần đảo Channel và Anh. Ban lãnh đạo đề cập đến áp lực thanh khoản và sự không chắc chắn về kinh tế vĩ mô đối với danh mục đầu tư tại London, cũng như sự không chắc chắn liên quan đến những thay đổi về thuế và quy định pháp lý tại Anh.

Thương vụ thâu tóm yêu cầu sự phê duyệt từ cơ quan quản lý tại nhiều thị trường. Butterfield cũng đang xem xét mức độ tiếp xúc với chứng khoán chính phủ của CIBC Caribbean tại Bahamas và Barbados, bao gồm khả năng thanh khoản và các cam kết với chính quyền địa phương.

Điểm nổi bật trong phần Q&A với chuyên gia phân tích

• Dòng tiền gửi rút ra và thu nhập lãi thuần: Ban lãnh đạo dự kiến dòng tiền rút ra 500 triệu USD chủ yếu đến từ tiền mặt. Mặc dù quy mô bảng cân đối kế toán nhỏ hơn, ngân hàng dự kiến thu nhập lãi thuần trong ngắn hạn về cơ bản vẫn đi ngang nhờ việc tái định giá tài sản và lãi suất cao hơn.
• Chiến lược bảng cân đối kế toán của CIBC Caribbean: Butterfield đang xem xét danh mục đầu tư nhận thâu tóm, vốn chủ yếu bao gồm Trái phiếu Chính phủ Mỹ có thời lượng tương đối ngắn. Bất kỳ quyết định tái cơ cấu nào cũng sẽ được đưa ra khi gần đến thời điểm hoàn tất giao dịch.
• Cơ hội tăng trưởng sau thâu tóm: Ban lãnh đạo nhận thấy tiềm năng mở rộng dịch vụ ngân hàng bán lẻ, cho vay thế chấp bất động sản cư trú, cho vay thế chấp bằng tài sản đảm bảo và dịch vụ chấp nhận thanh toán thẻ (merchant acquiring) trong trung và dài hạn. Ngân hàng cũng thấy dư địa tăng thị phần tại các khu vực pháp lý được thâu tóm có tốc độ tăng trưởng nhanh hơn, đồng thời áp dụng phương pháp tiếp cận thận trọng.
• Nhu cầu vay thế chấp và mức độ tiếp xúc tại Anh: Ban lãnh đạo mô tả môi trường cho vay là có tính cạnh tranh và không dự kiến có sự tái định giá tăng trên diện rộng đối với các khoản vay. Ngân hàng tiếp tục theo dõi áp lực thanh khoản và sự không chắc chắn trong danh mục thế chấp tại London.
• Quản lý chi phí: Butterfield vẫn tự tin đạt mức chi phí cốt lõi hàng quý từ 93 triệu USD đến 95 triệu USD, đồng thời định lượng riêng các hiệu quả cộng hưởng tiềm năng từ giao dịch.

Bản ghi đầy đủ cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good morning. My name is Drew, and I will be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter 2026 Earnings Call for The Bank of N.T. Butterfield & Son Limited. [Operator Instructions] Please note this event is being recorded. I would now like to turn the call over to Noah Fields, Butterfield's Head of Investor Relations. Please go ahead.

Noah Fields

Thank you. Good morning, everyone, and thank you for joining us. Today, we will be reviewing Butterfield's third quarter 2026 financial results. On the call, I'm joined by Michael Collins, Butterfield's Chairman and Chief Executive Officer; Michael Schrum, President and Chief Financial Officer; and Bri Hidalgo, Chief Risk Officer. 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 third 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 website at butterfieldgroup.com. Before I turn the call over to Michael Collins, I would like to remind everyone that today's discussions 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. Our third quarter performance reflects the strength and resilience of Butterfield, the depth of our client relationships and the disciplined execution of our strategy, all of which position us well for continued long-term growth. Butterfield is a leading offshore bank and wealth manager with strong market positions in Bermuda and the Cayman Islands, complemented by a growing retail banking presence in the Channel Islands.

We also provide wealth management services to high-net-worth individuals, families and institutions through offices in the Bahamas, Switzerland, Singapore and the U.K. In the U.K., we originate residential mortgages for high-net-worth clients for properties in Prime Central London. I will now turn to highlights from the quarter on Page 6.

Third quarter results reflected continued strength across the franchise with net income of $61 million or $1.50 per share and core net income of $64.2 million or $1.58 per share. Profitability remained strong with a return on average common equity of 21.3% and core return on average tangible common equity of 25%. Net interest margin improved by 2 basis points to 2.76% despite a 2-basis point increase in deposit costs to 1.27%.

We also continued to return capital to shareholders through our quarterly cash dividend of $0.50 per share. Finally, we continue to make progress on the acquisition of CIBC Caribbean with closing expected in the first half of 2027. We will provide some additional details about the progress later in the call. I will now turn the call over to Michael Schrum for more details on the third quarter.

Michael Schrum

Thank you, Michael, and good morning. On Slide 7, we provide a summary of net interest income and net interest margin. In the third quarter, we reported net interest income before provision for credit losses of $97.2 million, an increase of $1.6 million from the prior quarter or an increase of $4.4 million from the third quarter in 2025. The net interest margin of 2.76% was 2 basis points higher than the prior quarter and 3 basis points higher than the third quarter of 2025.

Net interest income and margin benefited from continued reinvestment into higher-yielding securities and stronger treasury portfolio returns, although these gains were partly offset by lower loan yields and slightly higher funding costs. Balance sheet volumes remained stable during the quarter with average investment balances largely unchanged and average loan balances increasing modestly compared to the second quarter.

Slide 8 provides a summary of noninterest income, which continued to trend favorably, increasing $1.4 million to $64.8 million in the third quarter of 2026. Compared with the third quarter of 2025, noninterest income increased $3.6 million. The quarter's improvement was due primarily to higher banking revenues and stronger foreign exchange activity.

Banking revenues benefited from increased card transaction volumes as well as a modest nonrecurring contract fee renewal, while foreign exchange revenue reflected higher client volumes. Fee-based revenue represented 40% of total revenues during the quarter, comparing favorably to historical peer averages and highlighting the quality and stability of our overall earnings.

On Slide 9, we present core noninterest expenses. Core non-interest expenses increased 3.5% from the prior quarter, reflecting the full quarter of operating expenses from R&H Guernsey acquisition compared with the partial quarter in the second quarter. Excluding acquisition-related costs, expenses were also impacted by higher salaries and benefits, primarily due to staff departure costs as well as increased other operating expenses.

Our core efficiency ratio was 57.8%, remaining below our through-cycle target of 60% and highlighting our continued focus on expense management. We continue to expect quarterly core noninterest expenses to be in the range of $93 million to $95 million until we close the CIBC Caribbean transaction.

Slide 10 shows that Butterfield's balance sheet remains strong and highly liquid with total assets increasing to $14.3 billion from $14.1 billion at year-end 2025. Growth was driven primarily by higher deposit balances, while loan and investment balances remained relatively stable. Deposits increased to $12.9 billion and average deposits rose to $13.1 billion from $12.6 billion at the prior year-end, reflecting continued client confidence.

Deposits remained elevated at the quarter end, but we have received notice prior to quarter end that approximately $500 million worth of deposits would exit within weeks. This represents a handful of private trust and corporate liquidation fund deposits in a mix of demand and interest-bearing accounts. This would bring the deposit levels to our previously estimated range of $12 billion to $12.5 billion, where we expect for it to remain.

Loans ended the quarter at $4.4 billion and investments at $5.6 billion, both largely unchanged from the prior quarter, highlighting the stability of our balance sheet. We also maintain a conservative risk profile with risk-weighted assets representing just 27.3% of total assets, reflecting low risk density on our balance sheet.

On Slide 11, we show that Butterfield's asset quality remained acceptable in the third quarter of 2026, reflecting the continued strength of our conservative loan portfolio and high-quality investment holdings. Our $4.4 billion loan portfolio remains heavily weighted towards full recourse residential mortgages with 78% of those mortgages carrying loan-to-value ratios below 70%. This reflects the conservative underwriting standards and low risk profile of our loan book.

Our $5.6 billion U.S. Treasury and agency investment portfolio also maintained its exceptional credit quality with 100% of holdings rated AA or better, demonstrating the strength and liquidity of the investment portfolio.

Credit performance remained solid despite the increase in nonaccrual loans to $119.6 million or 2.7% of gross loans, up from 2.2% in the prior quarter, driven primarily by residential real estate exposures in the Channel Islands and U.K. segment. Importantly, these facilities remain well secured, and we do not expect any credit losses. The allowance for credit losses improved modestly to $27 million, representing 0.6% of total loans, while the net charge-off ratio was low at 0.02%.

On Slide 12, we present the average cash and securities balances with a summary of interest rate sensitivity. Our investment portfolio remained conservatively positioned during the quarter with duration increasing to 4.9 years, reflecting slower expected prepayments on fixed rate investments and a steeper U.S. treasury yield curve. Our balance sheet continues to be asset sensitive, although interest rate sensitivity has moderated from the prior quarter due to lower treasury interbank placements used to manage short-term deposit flows.

Our asset sensitivity continues to be above that of the U.S. peer group. As expected, the increase in longer-term interest rates resulted in higher unrealized losses within the available-for-sale portfolio, which increased to $187.3 million at the quarter end from $106.7 million in the second quarter. Based on current implied forward rates, we expect the unrealized losses within accumulated other comprehensive income related to the AFS portfolio to improve by approximately 21% over the next 12 months and 42% over the next 24 months.

Slide 13 summarizes regulatory and leverage capital levels. The Board of Directors has once again approved a quarterly dividend of $0.50 per share. TCE to TA continues to be conservatively above our targeted range of 6% to 6.5%. I will now turn the call over to Bri Hidalgo to provide an update on the CIBC Caribbean transaction. Bri?

Bri Hidalgo

Thank you, Michael. Turning to the acquisition of CIBC Caribbean. The transaction remains on track with regulatory approvals, financing activities and integration planning progressing as expected. During the quarter, we received shareholder approval for the acquisition and submitted the required regulatory applications. We have continued our engagement with employees, clients, governments and our regulators across our markets, including employee town halls and advancing stakeholder outreach efforts.

In parallel, dedicated integration teams have been established and are actively planning for a successful transition and realization of the strategic benefits of the transaction. We are also preparing for a debt issuance to support the acquisition. Overall, we remain on schedule for regulatory approvals and anticipate closing in the first half of 2027. I will now turn the call back to Michael Collins.

Michael Collins

Thank you, Bri. We remain enthusiastic and optimistic about the acquisition of CIBC Caribbean. We believe the combination will result in a stronger regional banking franchise with enhanced capabilities across corporate banking, personal banking and wealth management, creating the leading independent bank in the Atlantic and English-speaking Caribbean. Together, we will be better positioned to meet the evolving needs of our clients while delivering benefits to all stakeholders.

With approximately $29 billion in assets, $25 billion in deposits, $1.7 billion in tangible common equity and more than $400 million in run rate earnings on a pro forma basis, the combined bank will have the scale, financial strength and earnings power to compete effectively and drive sustainable earnings and growth. September marked 10 years since Butterfield's New York Stock Exchange listing.

And during that time, we have delivered a consistent record of performance, generating returns on equity of approximately 15% to 25% while growing profits and earnings per share. Over that period, we have demonstrated the durability of our business model across varying economic and interest rate environments. Our success has been built on a high-quality business model with fee income contributing approximately 40% of revenues and a disciplined approach to risk and expense management that has allowed us to generate strong returns without relying on elevated credit or investment risk.

Combined with thoughtful capital deployment, strategic acquisitions and significant shareholder returns through dividends and share repurchases, this has enabled us to create meaningful long-term value. We see the acquisition of CIBC Caribbean as the next step in that journey, enhancing our scale, capabilities and market position. We look forward to welcoming our new colleagues and clients to Butterfield. Thank you. And with that, we would be happy to take your questions. Operator?

Operator

[Operator Instructions] The first question comes from Tim Switzer with KBW.

Phần hỏi đáp

Timothy Switzer

First one I have is just a little bit more of commentary on the NIM outlook. Can you maybe talk about what impact you've seen so far from rate hikes across U.S. and your other jurisdictions that are impacted? And then what your expectations would be on the impact going forward?

Michael Schrum

Yes. Tim, it's Michael Schrum. Yes, I mean, obviously, things are bouncing around a little bit with us finally landing on deposit levels that we've sort of foreshadowed over the last sort of year or so. And then obviously, NIM is pulling through broadly with somewhat of a lag at a 50% overall beta. So in the short term, we expect NIM to be relatively flat. So it will be deposit outflows offset by asset repricing effectively in the investment and the short-term cash bucket and some modest uptick in cost of deposits.

So generally speaking, on a core basis, we would expect NIM to be flat in the short term with a sort of modest tailwind into the next year coming from the previously announced Fed rate increases and then possibly depending on what happens with some further upward adjustment. So good news overall, there's a bit of fluctuation in deposit levels. But I think broadly speaking, loans have been flat. And obviously, we've sort of held on the repricing of Bermuda base rate affecting mortgage holders for the last hike. And so that would probably give us some further opportunities into '27.

Timothy Switzer

Got it. That was very helpful. And you touched on this, but can you help us get an idea of the NII impact of the deposits that are moving off balance sheet? Like if I -- it sounds like the NIM is staying flat with the move. Do I just take, say, $400-plus million of deposits and use your normalized NIM, that's $11 million or so annually?

Michael Schrum

Yes. I mean it's -- we expect NII again to be relatively flat. Obviously, there's a little bit of seasonality on the balance sheet as well. So typically, Cayman deposits, we get more inflows in the fourth quarter. So seasonal variations obviously can impact a little bit. But I think, generally speaking, we should expect NII to be flat in the short term with a positive bias in the medium term. So exactly as you said, there's multiple moving parts there, but it should be a net positive that rates are going up over time.

Operator

The next question comes from Evan Kwiatkowski with Raymond James.

Evan Kwiatkowski

I just wanted to touch on the deal first. Could you update us on any intention to pursue balance sheet optimization opportunities with the deal, whether it be repositioning anything on the loans for securities side? And then just curious if there's any businesses or portfolios on the CIBC Caribbean side, you're looking to grow further or conversely run off?

Michael Schrum

Yes. Maybe I'll just kick off just on the optimization. Obviously, the CIBC Caribbean entities still report to CIBC in Toronto. And so we started to take a look at, obviously, their investment portfolios and had some good conversations around liquidity contingency and starting to sort of talk about what types of investments they have. I mean most of that is going to be U.S. treasuries relatively short duration. So not as big of a rate impact on the fair market valuation of that.

They do have some sovereign securities in both Bahamas and Barbados that we're taking a look at in terms of either marketability or commitments that we've made to those governments. And so there will probably be some further work we'll do before closing to just familiarize ourselves. And I think at closing, we'll obviously take a look and see if we need to restructure a little bit.

As you know, moving to our model is mainly -- we don't have any credit risk in the investment portfolio. So we want to kind of make sure we're not doubling down on sovereign risk as well, but obviously subject to sensitivities in those individual jurisdictions. So I think good conversations so far, nothing really untoward in there and some liquidity in some securities, but good to see that it's mainly U.S. treasury based.

Michael Collins

Yes. And I think we're very happy with the footprint. So each of these jurisdictions have very sticky deposits. They have a lot of similarities, but they are very different, which gives us great diversification across the deposit base. We've got all of our regulatory applications in.

We've gotten a very warm welcome from all the governments and central banks, spent a lot of time down there and spent a lot of time with our new CIBC Caribbean colleagues. It's a great cultural fit, really good rapport. And it's a really, really good bank. I mean it's really well run and great systems, great people. So we're very excited about it. But currently, we're very happy with the entire footprint.

Bri Hidalgo

Yes. And recall, we previously mentioned the extensive due diligence that we performed on both the investment portfolio and credit book. And it's a well-performing book. It largely aligns with our underwriting standards and risk expectations.

Michael Schrum

I think -- yes, I mean, if you look over the sort of longer term, we are sort of more of a retail bank than more of a corporate bank. And so we're sort of seeing what are the opportunities in the retail space, whether it's residential mortgage-backed lending, collateral-backed lending and then obviously, trying to see if there's any other additional things that maybe we could pick up such as merchant acquiring and noncompetitive services as well. So pretty positive overall, but this would sort of be a transition over the medium to longer term.

Evan Kwiatkowski

That's really helpful. And then maybe just switching to the loan side. It seemed like mortgage was pretty stable quarter-over-quarter. I'm just curious how you think about growth in the single-family resi portfolio in general against a higher rate backdrop and whether you expect any significant changes in demand if we get further rate hikes?

Michael Schrum

Yes. I mean, obviously, that sort of is the intent of the rate hikes we're reviewing. We don't really see any credit pressures, maybe with the exception a little bit in our London book, but those nonperformers are really coming through liquidity pressures in that book and uncertainty about the macroeconomic environment. You probably saw the U.K. budget was announced this morning.

No surprises there from a housing perspective, but there are some longer-term uncertainty in that market surrounding the regulatory changes that they've made to -- particularly to resident non-dom regime and some of the tax changes they've made some additional friction costs in the form of stamp duty, et cetera. So stability is better, obviously, for that book. I think people are sort of nervous when there's new prime ministers coming in with a greater degree of frequency.

But we're seeing some good traction in terms of obviously other areas that kind of facing uncertainty primarily in the Middle East. So we're seeing people coming back and maybe renting into Central London. So that's sort of supporting some of the liquidity aspects. But we've done a pretty detailed look at the London book, and I think we're pretty happy with that being temporary, but the question is how long is temporary? It's been going on for a little bit.

Evan Kwiatkowski

Got it. And then if I could sneak one more in. If I could round it off on the expense side. Just curious if this high $90 million per quarter range is a reasonable core run rate. I know you've mentioned before some opportunities for expense savings, relocating people to Halifax. Just curious if you still see that as an opportunity or if there's anything else you're looking at in terms of optimizing the expense base.

Michael Schrum

Yes, good question. Obviously, expenses were a little high this quarter, a number of sort of non-recurring things impacting that. So we still believe -- are confident that we can get to $93 million to $95 million. That should be the run rate going forward. I think we've kind of gotten to the less meaningful impact of the Halifax move. We almost have 300 people up there, and we want to retain client faces in our jurisdictions.

So we're kind of looking at the 2s and 3s as opposed to the 10s and 20s. But I think there's still more opportunity in that space. And then we're kind of being also focusing on quantifying the synergies from the deal as they come through. So I think we're sort of thinking, there are some more opportunities, but we're kind of pausing a little bit on that on the BAU side, but still kind of confident that we'll get into that range in the short term.

Operator

The next question comes from Robert Rutschow with Wells Fargo.

Robert Rutschow

Just a housekeeping question on the deposit outflow, I assume most of that will come out of cash? Or do you expect to sort of maintain the size of the balance sheet? And then I was wondering if you could give a little bit more color on the decline in loan yields overall and whether that should bounce back going forward.

Michael Schrum

Yes. Maybe I'll kick off. Certainly, yes, you're right. The balance sheet will be smaller by $0.5 billion. We have a lot of -- $3.8 billion cash and short-term securities. So not really affecting our liquidity position. These were expected outflows and sort of treated as contractual funding, if you will from all of our -- in all of our regulatory submissions. And certainly, our models have already factored that in as at last quarter end.

It was a mixture of liquidation money, and I think we've talked about this before. It's a long-standing fund that was going into voluntary liquidation. The fund was sitting on our balance sheet. We knew it was coming out. So the balance sheet will be smaller by -- will come into a deposit range of $12 billion to $12.5 billion. And I think that's kind of what we said previously. And yes, that will come out of cash in the first instance, so obviously affecting the size of the returns in the NII.

But then behind that is obviously a rising interest rate environment. So that's kind of helpful in that regard. In terms of loan yields, and I think we have this in an appendix, we've seen mainly the ARMs that we have in our book resetting to floating at this point. And so while -- and we've sort of lagged the repricing of the Fed rate increase, particularly in Bermuda.

And as you know, the U.K. BOE rate has recently moved. So we're expecting some repricing there. But generally speaking, I think that loans are stable. It's competitive environment. So I'm not expecting sort of loans to reprice upwards at this point, although the fixed to floating piece is definitely the remixing piece that's impacting the loan yield effectively.

Robert Rutschow

Okay. That's helpful. And then just a question on the deal. I guess some of the acquired islands that you're going into appear to have a little bit faster GDP growth. When you're thinking about synergies with the deal, anything you might do to sort of lean into better growth in those new markets?

Michael Collins

Yes. I mean, as I said, they're all very different jurisdictions, but all recovering from COVID quite well. So Barbados, the IMF came in, they got their debt to GDP way down, growing quite well in Bahamas as well.

Michael Schrum

Yes. So I think -- I mean the thing to look at there is, obviously, we have challenges in our growth trajectories with the islands where we have large market share. So in Bermuda and Cayman, in particular, we have really, really nice market share. Some of these new islands, we have a lower market share.

And when you look at the business mix between the retail and corporate book and particularly lending and deposits, I think there's a real opportunity there to grow some of that in line with GDP, which is, as you said, growing faster than some of the other small islands, but take a little bit of market share as well as part of that and then maybe over time, sort of moderate some of their corporate lending. But again, this will be sort of a long-term project. We're not thinking a big push in retail. We're sort of thinking take our market share initially and just focus a little bit more on that.

Michael Collins

Yes. And I think Barbados, Bahamas, certainly Cayman, Barbados, Bahamas and Turks and Caicos are strong market shares. All the other islands do quite well. So it adds up quite well. I think going forward, we're going to focus a lot on Cayman, Barbados, and there are different economies. So Barbados is tourist economy, but also a big domestic economy, a large population. And if you've been in the Bahamas recently, it's in terms of wealth management and properties and real estate, it's incredibly good at this point.

So everything seems to be growing quite well. The whole region is kind of coming back from COVID. Tourism is up. So we're pretty excited about the opportunities. But yes, we're not projecting a lot of cost synergies. Our focus is to support the governments and communities. There are unions as well. And so we're making commitments to support everyone across the board, and it will be very lucrative over time, but we're going to take our time.

Operator

That concludes our question-and-answer session. I would like to turn the call back to Noah Fields for closing remarks.

Noah Fields

Thank you, Drew, and thanks to everyone for dialing in today. We look forward to speaking with you again next quarter, and have a great day.

Operator

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