Asylbek Osmonov: Yeah, if you look at – I would say, for the fourth quarter, we have probably moderate increase as we – based on what we look at our balance sheet, we see third quarter, we believe is bottomed on the NIM perspective. So now we’re going to – as we continue optimize our balance sheet from the standpoint, we’re using our bond portfolio cash flow to pay off higher borrowing. As you saw, we paid off $550 million right now in the third quarter. So we’ll continue to do that optimization and balance sheet that will be NIM accretive for us. And as we continue to grow the loans that will reprice over time, that should help us from that standpoint. So I would say moderate increase in the fourth quarter with all what I described right now with balance sheet optimization.
Dave Rochester: Yes. And then 4Q is normally a pretty good quarter for deposit growth, right? I mean, you normally see some seasonal strength there that should help pay down some more of those borrowings, potentially.
Asylbek Osmonov: It will. So we usually see the public fund growing in the fourth quarter, because of the tax payment. It’s usually end of the fourth quarter, like in the end of December and January. But I think more the impact we’ll see in the first quarter and what we’re also seeing that public funds, they’re not – probably not keep their deposit as longer they used to be, because they’re moving to some tax pool or other areas. But we’ll see the benefit of it in the fourth quarter. But I don’t know how much of a significance we’ll see, but we usually see about $400 million to $500 million deposit increase due to tax collections from the public funds.
David Zalman: But again, just cautionary, they left that money with us a lot of times, but now that they can get 5% and 6%, they may move it quicker, too.
Asylbek Osmonov: I agree. I think the timing of the keeping is probably very short. Once they collect it, they’ll be moving out to the higher yielding export.
Dave Rochester: That expansion you’re talking about at 4Q isn’t dependent on that kind of growth, it sounds like. That’s more from the asset repricing and stabilization of the core deposit side.
Asylbek Osmonov: That’s correct. Especially, what we said on bond portfolio, we have $2.1 billion cash flow with paying off our – and if you look at our loan portfolio, we have about $5 billion of cash flow from the loan portfolio that’s going to reprice. But you have to keep in mind on the loan portfolio that out of $5 billion, about 65% is fixed to variable loans. That probably at 5% and 5.5% yielding. So they’re going to replace to 8% and 8.5% right now, but the 35 already floating, so we’re not going to get a benefit out of that. But yes, based on what we see, and we see modest increase in the fourth quarter.
Dave Rochester: Great. You’re saying new loan yields are still in that 8% to 8.5% range.
Asylbek Osmonov: That’s what we’re seeing. It is.
Dave Rochester: Great. Maybe just one more on capital. You’re just about back to 50% Q1 right now. Was wondering what your thoughts were on the buyback here with the stock near 50%, seems like you’ve got a lot of excess capital here that you could deploy. I know some of that will go to the deal closing coming up, but 15% gives you a lot of flexibility there. So I just want to get your updated thoughts.
Asylbek Osmonov: We do have a lot of capital. I know a lot of people is questioning why we’re not doing more. At the same time, there’s a lot going on. I think that, again, I’ve always said that we like to use our capital for primarily mergers and acquisitions and also increasing dividends. At the same time, we truly are building capital. You can see that even not one of our best years, we still retain quite a bit, even after dividends and share repurchases. But one thing that we’re looking at right now is with the regulatory agencies looking on what their new requirements are, we’ve been hesitant. I mean, right now would be, like you mentioned, you couldn’t be a better time to be buying our stock, at least in my opinion.
This is one of the cheapest things I’ve ever seen, trading under ten times next year’s earnings. So it would be a time. I think right now we’re really trying to see from a regulatory standpoint what their new requirements are going to be, how they’re going to consider losses in the bond portfolio. They consider that part of your capital, not part of your capital. However, ours is an HTM right now. It doesn’t seem like it’s on the block for any change on that. It does look like if you have your bonds available for sale, that is going to be part of your capital calculation. At least right now, things could change, but we’re just waiting to see that. And we do think there’s going to be a number of opportunities out there right now with everything happening.
So having excess funds is not a bad place to be. It’s a high class problem right now.
Dave Rochester: Great, agree. Thanks, guys.
Operator: The next question comes from Michael Rose with Raymond James. Please go ahead.
Michael Rose: Hey, thanks for taking my questions. A lot have been asked and answered, but Kevin, while I have you on here, could you just comment on the warehouse? Your guidance last quarter was pretty much spot on and just wanted to see how your crystal ball is looking as we think about that business over the next couple of quarters.
Kevin Hanigan: I think 90 days ago, we said we’d probably average about 950 we did just a shade better than that. Michael, through last night, the average is down from that $972 million for the quarter, it’s down to $816 million, so it’s dropped off pretty significantly. We closed yesterday at $740 million almost exactly out in the warehouse. So I think for the quarter, not too unlike last year’s fourth and first quarter, we’re probably looking more in the neighborhood of $725 million on average. So any kind of shortfall we would have gotten out of the public funds in terms of excess liquidity coming in the fourth quarter, we’re going to have a couple of hundred million here come off the warehouse that we’ll use. If there’s loan production, it’ll go to loan production. If there’s not, it’ll go to pay down the Federal Home Loan Bank borrowings. So it’ll be down. We’ve got some uses for it.
