Brett Rabatin: Okay. And then any thoughts on municipal deposits and how those trend from here?
David Zalman : Generally, the municipal deposits really increase at year-end. Again, when we compare this year’s municipal deposits to last year, we’re down about $500 million. It’s just — they’re taking it and putting it in higher a tax pool or something like that. So we didn’t get as much in public funds this — this quarter at the end of year-end as we did in the previous and I think that was expected.
Asylbek Osmonov: Yes. And on the public funds note, I would say, I think we are down to almost to their operating accounts because all the excess they could earn, they probably moved out to tax pools. So we’re kind of maintaining their operating accounts.
David Zalman: Maybe a little bit higher right now, people are still paying tax dollars. But again, most of the money that we do is their operating accounts, it’s not their investment loans.
Asylbek Osmonov: I mean big picture, correct.
Brett Rabatin : Okay. That’s helpful. If I could sneak in one last one, just around the Lone Star transaction. Any update there? I know that Justice Department, it’s reviewing that one, so it’s taking longer, but have you guys heard anything or any update on from a time line perspective when that might close?
David Zalman: We were really hoping to be able to say something at this meeting. Unfortunately, we’re not. But we’re still very hopeful that we’re going to get the deal done. And hopefully, we’ll hear about it soon.
Kevin Hanigan: Yes. And you mentioned Justice Department, we’re out of the Justice Department.
David Zalman: Right. Rather than just…
Kevin Hanigan : They’ve cleared us.
Brett Rabatin: Great. Thanks for all the color.
David Zalman: Still at the FDIC, and they take off most of Christmas for December, so…
Operator: The next question comes from Michael Rose with Raymond James.
Michael Rose : I wanted to start on some of the proposals that are out there as it relates to interchange and overdraft. And I know these won’t hit until later this year or next year for that matter. But have you guys looked at those? And what could the potential impact be for Prosperity?
David Zalman: You’ve hit one of my hot buttons, Michael. I hope you don’t start…
Michael Rose : Sorry.
David Zalman: Yes, if it goes through, it goes through — really, I think it’s in the latter part of 2025. I’m hoping maybe there will be a new administration that can stop it because it’s really a misguided thing to think that to bring the overdraft charges to $0 or $3 or $17, I mean, really, it’s a behavior, I think, that you don’t want to promote. I mean think about it on the other end that — that it’s like telling your kids, something is wrong, but you’re going to reward them for continuing to do it. And I think on the other end, where the person who’s given a check is buying a good to the merchant or the retailer, and that person on the other end, they’re not getting their money. I mean they’ve lost some money on the deal where the bank in a lot of times pays that overdraft, you won’t see that overdraft.
We might not be paying them in the future. So the bottom line, I think it’s — I’m hoping that Rohit Chopra will reconsider this deal. I’m hoping he will, I hope we can get to talk to him. And more so than that, if banks have to continue, they need the service charge income. I mean the regulatory burden is just unbelievable right now. And so banks would have to go to really, a different type of service chart where we’re offering free checking accounts right now to really people on the lower end with lower amounts of deposits. I think in the future, if we — if this deal does go through, I think the banks will have to say, okay, your minimum balance now may have to be $2,000 or $3,000, you’re going to get a service charge, and that would eliminate a lot of the lower-end checking accounts that we — that the regulators and the Fed has really wanted us to get those people to have accounts.
So I don’t think it’s completely over yet, but if it does, there’s no question it would be impactful to us. The impact would either be whether it’s at — are they going to let you charge $17, they’re going to let you charge $3? So if that’s the case, it could be — if it’s $17 and you get to charge $17 or $15, it’s probably $10 million or $11 million before tax. If it’s $3 and it’s more like, again, I think probably more like $16 or $17 before tax, something in that category. The — on the other hand, we would have to find ways to increase service charges in other areas to cover and compensate for that. I don’t know that you would cover and compensate for the entire makeup, but you would have to come up with some other charges in some other places.
Michael Rose : Got it. Okay.
David Zalman: I give you too much information, Michael?
Michael Rose: No, that’s great. And sorry to hit a hot button topic. Maybe just as a follow-up, you guys announced a new share repurchase program the other day, and you guys haven’t been very active, but capital levels are — are really high. I don’t think you’re expecting a ton in terms of balance sheet or loan growth this year. Any sort of thoughts around increased usage of the buyback as we move through the year, assuming credit remains relatively benign?
