Randy Hester: Yes, that’s exactly, that’s…
David Zalman: Our bank historically, we never – I guess if you go back, we – it’s not uncommon to see as $1 billion or $2 billion, but we don’t like being $4 billion and $5 billion.
Brody Preston: Got it. Understood. I appreciate that. And so at what point, I guess from the securities roll off perspective, would you think about maybe reinvesting some of those cash flows? Is it kind of once borrowings gets back down close to zero? I’m just trying to think about when the yield on that portfolio could start to pick up again.
David Zalman: Right now I see all the payments being going to reduce our debt. So I don’t see, ask me in a couple of quarters maybe. I think with the money is probably spoken for a while here, I think instead of reinvesting.
H. E. Tim Timanus, Jr.: Yes, I think we’re going to continue just paying down the borrowing at this moment.
Asylbek Osmonov: And loan demand is going to be a factor in that.
David Zalman: That’s true. Yes, that’s true. I mean, the loan demand, even though we’ve tried to moderate it, we’ve tried to cut it down, we may decide if things the pricing does get good and we’re finally getting terms and conditions that we like, we may want to increase that. So that’s a good point, Tim.
Brody Preston: Got it. Okay. And sorry to stay kind of in the weeds here, but any thought given to when you do decide to start reinvesting, maybe putting some of those securities on as AFS just to give you more flexibility in the future than the HTM book gives you?
David Zalman: No.
Brody Preston: Got it. Thank you. And I did also just want to ask, I noticed that there was some strength from First Capital on the deposit side when I was looking at the press release. Anything specific that drove that?
Randy Hester: I think right at quarter end they had a customer that sold his business and was pretty good size chunk of money. Most of that money has subsequently moved off the balance sheet.
Brody Preston: Got it. And then this is my last one. I just wanted to try the buyback question a little bit differently, David. I just pulled up the price to tangible book chart on SNL and hit max just to get a long-term view. And this is at least per SNL’s history, the cheapest your stock has ever been on price to tangible book value. And so if you do get the clarity that you’re looking for in terms of whether or not HTM is going to be included in capital and as you noted, it doesn’t feel like the winds are blowing that way right now. How aggressive would you be on the buyback? I think you’ve got 3.4 million shares left in the existing authorization that expires in January. I assume you’d re-up that, but you just got a lot of capital. The stock is very cheap. And so once we get that clarity, would you look to be more aggressive than even perhaps you’ve typically been in the past?
David Zalman: I mentioned earlier, I think this is the best price and that we’ve ever had that anybody could buy in right now into our stock. So I think we would be interested in purchasing more. On the other hand, a lot of it depends on possible mergers and acquisitions at the same time too. So we have to keep both of those into consideration I think. Do we really think, is it better to buy our stock back or can we make more money by buying or acquiring another bank? And so I know that’s hard. It’s not giving you what you need. But those are really truthfully. Both of those go hand in hand of how much stock we can buyback and how much we – I really don’t think that we’re going to be impacted by the HTM number. I don’t think, I mean the Fed themselves have $1 trillion, $200 million loss on their balance sheet.
So it’d be hard to spank somebody else when we got such a – when the Fed’s got such a big loss. But – and they know that time will work that out. So I don’t think that’s going to be an issue. So I think once we do find out really where regulatory is going to be, we would be more interested in buying our stock, especially at these prices. But again, we still – we’re constantly in talks with other banks at the same time too, and that would impact that.
Randy Hester: It’d be a fair statement to say that when we look at buying another bank, particularly any bank of size, we look at tangible book value earned back on that transaction versus a buyback.
Brody Preston: Right.
Randy Hester: And we do realize there’s not much integration risk on doing a buyback, so it’s a safer bet. So you’d be willing to suffer more dilution on your own deal than you would on buying another bank.
David Zalman: And what’s different this time, I think in M&A than it’s ever been before. When you’re looking at acquiring or merging with a bank, banks have losses in their portfolio. So instead of being net capital positive, just what somebody recommended at the beginning of the call, why don’t you take some of your capital and redo your bond portfolio, we’re not willing to do that. But in a merger – in acquisition, you got to market to market, so you’re going to mark their capital down, which would bring the overall capital down, although we will get that money back really quickly. So those are just the considerations.
Brody Preston: Yes, I would just think that just given the experience with Lone Star for a relatively simple deal, and it’s been extended due to factors that are outside of your control and may not be warranted, it just seems like the buyback, which is something that I know your shareholders would like, would be the safest and easiest route. So you’re not kind of tied up with a merger but I appreciate…
David Zalman: If there’s nothing else, we’ll buyback our stock. Let me say that.
Brody Preston: Got it. Thanks, guys.
Operator: The next question comes from Matt Olney with Stephens. Please go ahead.
Matt Olney: Hey, thanks, guys. Just following-up on the time deposits. Asylbek, do you have any color on those time deposits being rolled over here in the near-term just the dollar amounts and the prices the yields come off that.
Asylbek Osmonov: Yes. I mean we introduced our seven-month special CD program seven months ago. So we see those rolling over and we see a good level of renewal on that one. And I mean but from the growth, we don’t see as much of an increase in the growth what we saw in the first two months of it from dollar wise Matt, I think I need to get back with you. I don’t have specifics on the…
