I mean we still see a trickle of hey, somebody wants to build a strip center every now and then, and they’ve got it pre-leased, and we’re doing a little bit of it, but not as much as we were.
David Zalman: In general, too, I think banks may say they want to have a lot of loan growth, but most of the majority of the banks have a pretty high loan-to-deposit ratio right now. And with the emphasis on liquidity and from the regulatory agencies, I think all banks are going to have to monitor how much growth they really do want to have in loans and have liquidity, unless the dynamics change where we start having organic growth in deposits. But those are all going to have to be taken into consideration, and that is really determined the — a lot of the turf right there, basically. I don’t know if I’m being very clear on that.
Manan Gosalia: That’s helpful. And I was surprised by the stress and focus on liquidity even for a bank of your size? So maybe if I can just follow up on the liquidity point. Is it — do you have to keep a certain level of cash on your books? Or eventually, can you move that out to other sources of HQLA like treasuries or Ginnies [ph]?
David Zalman: I think basically, they want — it’s crazy because in a bank like ours, we have $16 billion in available funds as we can pick up the phone and call those lines are at the Federal Home Loan Bank and also at the Federal Reserve. And so we’ve always borrowed money because we’ve always had that position. But the regulators are — they are becoming more insistent and I think that they’re really going to really want you to keep that cash overnight on hand. So it’s crazy, but it is what it is.
Manan Gosalia: Great. Thank you.
Operator: The next question comes from Jared Shaw with Barclays. Please go ahead.
Jared Shaw : Hey, good morning. Thanks. I think most of mine were hit, but maybe just a little more detail on energy lending. You had good growth there. What’s the appetite for that to continue to grow and maybe grow as a concentration as well?
Kevin Hanigan: I don’t see it growing to a much larger percentage of our total loan book than it is now. The growth in the quarter was one particular transaction it was large. It was to a customer that keeps, I think, $150 million on deposit with the banks.
David Zalman: It is next borrow on deposits that you can borrow.
Kevin Hanigan: It’s much more on deposits with us than they borrow. They were making an acquisition and gave us the opportunity to own some money. It was a pretty large deal and accounted for all of the growth in the energy book.
Tim Timanus: Yes. I think it’s safe to say that we’re not afraid of energy, but we’re trying to be particular.
Kevin Hanigan: Particular — we remain particularly, right.
Jared Shaw: Okay. That’s good color. Thanks. And then going back to the question on DDAs. If we look at average versus end of period, it feels like you had some good growth in DDAs going into March. Was there anything unique about that? Or is that the type of pace do you think that potentially we could start seeing resume?
Kevin Hanigan: Yes, I was going to say earlier in that overall discussion, but I kept my mouth shut for a change pretty odd. We did see a pickup in DDA and deposits in March. It continued through tax day. And then like every year, tax day, it takes a pretty good sized dip. So we were feeling great right up to the 16th — and then we woke up to a whole lot of money flowing out of DDA at the bank to make tax payments. And we were looking back at it this morning. It’s not abnormal as to what it has been in other April in other periods of time, and we — when we looked, we excluded the COVID period because everything was still wonky then. So we look back over a bunch of years to say is that typical of April or not, and it’s been pretty typical. We’ll see whether returns the way it has typically returned in May or not. But we’re a little bit excited, I guess, relieved to see the uptick towards the end of March and into April.
David Zalman: Yes. Historically, we — it does recover. Usually, but again, it happens in the — primarily in the last quarter of the year in that write offs most of it. We have a really good first quarter usually than we kind of the second quarter kind of middle and the third quarter is a tough quarter with us, the fourth quarter is when we historically have always shown our growth in deposits basically overall for the year. So…
Jared Shaw: Okay. And then just finally for me. As we look at your deposit funding, it’s been great. Any expectation for where peak cumulative deposit betas will top out?
Asylbek Osmonov: Yes. I mean we do see a little bit lag, but what we see that the increase in the rate is decelerating. So this is very positive. But as we mentioned, that we still see some customers moving their non-interest-bearing deposits to interest-bearing deposit, which is driving up the cost. I think there will be still a lag effect, but it’s a smaller pace.
David Zalman: What we’re at 37, 38.
Asylbek Osmonov: So Q1 was a cost of deposits to 137…
David Zalman: I mean beta.
Asylbek Osmonov: Beta is 37 basis points, yes. 1,200 [ph] up. So we do expect a little bit increase, but it’s at a slower pace.
Operator: The next question comes from Jon Arfstrom with RBC Capital Markets. Please go ahead.
Jon Arfstrom: Thanks, good morning. We haven’t touched on fee income, I guess. So it looks like a pretty typical quarter to me, but anything you would note on fee income trends and expectations from here?
Asylbek Osmonov: I think fee income is, I would say, normal. We saw a good uptick in a little bit of trust income. We had one good fees on the trust income, I would say, it wouldn’t be probably non-recurring related to some old services we did. But overall, fees, I would say, is normal. I mean that’s what we expected, nothing unusual.
