David Zalman: Yes. I mean I don’t think that we would have ever issued a repurchase agreement if it wasn’t our intention to use it. I think we did use it last year. I think how many shares did we purchase last year?
Asylbek Osmonov: About 1.2 million shares.
David Zalman : 1.2 million. Again, not a lot, but we still did. I think that we were very cautious with — look, last year was a year that we wish would have never happened starting in March with the Silicon Valley Bank and then Signature Bank. And so — and then you have — people are still being very critical of what kind of bond portfolios you have and what kind of losses there. So we took all that into consideration. The regulators were a little bit antsy about everything too. You have liquidity in that. So we were more cautious. I think we all feel much better right now. And I think that if we don’t use it in another way, our perspective is that we always like to increase dividends, of course, that’s kind of our deal. But if we don’t — we wouldn’t use it all there, we would probably look at — and we don’t get an M&A deal, then we will look at purchasing stock. If the stock is not appropriately priced.
Michael Rose : Makes sense. And then last for me, Kevin, can we just get an update on the warehouse since you guys came in a little bit higher than what you had talked about last quarter?
Kevin Hanigan : Yes, Michael, as you know, I always talk in average balances for the quarter, and we did come in a little higher. I think my high-side estimate was maybe $750 million, and we ended up at $770 million as an average for the quarter. The first quarter is typically the weakest quarter. That hasn’t always showed up that way over the last 10 years because we had so many refinance booms, some re-refinanced booms and everything else. But the first quarter is generally pretty weak. January of this year has started off a lot like January of last year, weak. The average, Michael, through last night has come down from that $770 million for the fourth quarter down to $704 million. And last night’s balance was maybe $610 million.
So we’re hitting a low point. I expect it to drift a little lower and get under $600 million here for a few days before it begins to rebound. So January and February are generally going to be pretty weak. March picks back up. My best guesstimate for the average for the quarter, I’m going to say $650 million, but could be as low as $625 million. But if I had to pick a number, I’d go $650 million.
Michael Rose : Sounds good.
Operator: The next question comes from Brandon King with Truist Securities.
Brandon King: So I had a question on deposits, and we’re looking at potential rate cuts this year. So how are you thinking about the ability to maybe reprice some of your core deposits given that you’re already quite low compared to some of your competitors?
Asylbek Osmonov: So if you just look at cost of funding, let’s say, let’s start with the borrowing that we have with the Fed, the term bank funding program. We have $3.7 billion paying around 5%. So any cut we have is going to be direct impact to that. So we’re going to get direct benefit from that standpoint. As the rate — the second part, I would say probably the special CD, we’re offering at 5% right now. So if the rate would cut down, we would cut those down probably a little linger a little bit, but within seven months, we should be able to reprice that — that CD as well, lower rate. On other ones, I agree, probably we’ll not be able to cut a lot on some money market because we don’t offer high rates for our customers. So there might be a little bit of delay on that compared to if you had over 5% money market, probably it could cut right away when the rate goes down with us, probably it takes time with that. So I think that’s overall composition of deposits.
David Zalman: I would say also — I’d add to that, Brandon, is that if rates go down dramatically, which I don’t think that they will, quite frankly. But if they do go down, I think that will take the strain off of the noninterest-bearing deposits leaving buying more people. Unless they can get a lot of big interest rates somewhere else, they’ll start leaving more money in their checking accounts. And so I think that will help also.
Brandon King: Got it. Very helpful. And then could you give us kind of the puts and takes on how you’re thinking about loan growth this year? And then within that, also kind of talk about what you’re seeing in regards to prepayment activity?
Kevin Hanigan: Yes, Brandon, this is Kevin. I think as we look at the year, our thoughts as we sit here today, is kind of 3% to 5% loan growth. I would have said more back-end loaded, but I — we have had a few nice deals approved and loan committed that’s yet to fund this quarter. So I think a couple of those are going to fund here towards the end of the month and early into February, and we’re talking about some fairly meaningful funding. So I think Q1 might be pretty good for us. In addition to that, we started off Q3 with a lot of payoffs in July, just a ton of payoffs in July. And we have started off Q1 here with very few payoffs. So — and I meant Q4 on that previous statement, I’m sorry. We’re actually slightly up for loan growth.
It’s nominal, but we are slightly positive year-to-date. And again, we got a couple of big fundings coming up. So I think we’re comfortable with the 3% to 5% kind of number, to the extent that the economy rebounds and GDP is higher than anticipated, that number could go up in the latter part of the year if, in fact, there are rate cuts. As David said, we’re probably less enthusiastic on our thoughts about rate cuts than many. And to the extent there are any, we think they’ll be later in the year. And I don’t mean to speak for David, but I think we’re — around this table, we’re not as charged up about the prospects as many.
David Zalman: I’d also comment, Brandon, that I think that our customers, I’m not saying other banks [indiscernible] customer at the quality of ours. But we do have a real high-quality customer. And a lot of our customers really are borrowing what interest rates where they take less money in their checking accounts. So the interest rates — what we saw as interest rates started increasing on their loans, they took money out of their checking accounts and really apply those more to the loan. So I think that’s probably mitigated and stabilized also.
