David Zalman: Again, these are questions that are — it’s — we think it has definitely become more stable. There’s no question. I mean, your assets depend on your deposits, your liabilities that you have in. Again, I don’t — I think it’s a tougher deal right now. Over time, just like as assets grew dramatically, they came down pretty good over the last year or so. Things will stabilize again. And even though I would think that we’ll probably still grow. We’ll still grow the assets, just because as mentioned, said…
Kevin Hanigan: As I think about it, loan growth, that is true. But Brady, I think about it this way. We know we have cash flows coming off the bond book of $2.1 billion, $2.2 billion. And our intention today is to let that bond book drift lower. Right? And take the money and pay off the float, right? We’re picking up 300 basis points. It’s margin-enhancing. It’s good in all kinds of ways for us. It’s NII-enhancing. And you take 5% loan growth on — we don’t have $20 billion, but call it $20 billion, that would tell you, you’d have about $1 billion worth of total asset shrinkage in the absence of long-term rates being high and is — a thing to be back into the buying of the bond book, right, would be one alternative or loans growing faster. But outside of that, I think just the math would be — we could actually shrink the balance sheet $1 billion in that scenario that I’ve just described, which is what we’ve guided to here today and before, but grow NII.
David Zalman: Yes. I mean I think that’s the real story, Brady. I think growth in loans and all that’s really important. But our real story is the growth in the net income on the bottom line. I mean, again, our models are right we just fell this should be a dramatic opportunity for somebody to come in. I mean you’re looking at the income that we’re making today compared to where we’ll be making in — it won’t change dramatically and real big in 12 months and 24 months, it’s a dramatic change, and I think that’s the real story really. And that’s where we all need to be focusing on, not just trying to go and build a bunch of broker deposits into the bank that focus on what we have are good core deposits, make good loans, have some growth in there and really increase the earnings to what we think they will be.
Asylbek Osmonov: I agree. And if you just take the pure math, assuming — I know it takes time to pay down borrowings. But if you take a pure math, a $2 billion spread of 3% you’re going to get from paying down the borrowings, that’s $60 million annualized. And if you have that fixed loans that we principal pay down and reprice that, we have about, what, $2.5 billion, I’m sorry, that is a 3% spread, that’s another $75 million. I mean, if you look at that, that’s why we very strongly believe that our margin is going to improve and our NII is going to improve. As we said, maybe first half is going to be a little bit slower, but the second half and beyond in ’25, it looks very strong.
Kevin Hanigan: It’s coming.
Brady Gailey : Okay. All right. That’s good color. And then on M&A, assuming loan targets approved here near term and you start to look at new M&A opportunities. David, what do you think will be the primary focus? You did kind of two smaller deals here recently with Lone Star, FirstCapital. Before that, you did a bigger deal with Legacy Texas and Kevin. But are you looking for bigger in size opportunities or smaller or [indiscernible]?
David Zalman: I would say we’re looking for banks like we are with good core deposits, good people that run them that can help us build our bank into the future, whether that’s a $2 billion bank or a $30 billion bank. I know that’s a big wide range, but a lot of it, to me, really, it’s really trying to find banks that are like us that can really help us to have a good core deposit base like we do or that can help us get there if they’re not right now, making sure of that direction. I just think that’s the way to go. And really, management is very important that they can help us grow at the same time, too. But I think we’re going to stick to what we’ve always stuck to. I think we really need to know the other bank or the other people.
You need to have the relationship. We’ve developed these relationships over the years. Right now, I think that they’re out there. If you look at the regulatory burden, I’ve said this before in this room, it’s just unbelievable. Right now, we probably have over 200 people in this bank that really work from a regulatory standpoint, not for us, but BSA, fair lending compliance, that kind of stuff. And most banking and technology is — you don’t even need to go there. The expense for technology, what everybody is having to go through is unbelievable. And then they’re talking about cutting income from overdrafts and stuff like that. So there’s going to be a tremendous amount of opportunity. And I think that we have a — we do have a large amount of capital.
We haven’t just gone and spent it. And I think that we have that opportunity, and I think we have a reputation that people will want to join us.
Kevin Hanigan: Yes. Brady, this — again, I’ve said this several times, but I can speak as a seller to David. And as you know, because you’ve said in many conferences with me, I said for three or four years, I would never sell to David until the day I thought about selling. And I made one phone call and only one phone call, I call David. Because I wanted his currency, not somebody else’s. And I truly made one 6:30 in the morning phone call. I didn’t know David was such a late riser than I was.
David Zalman: I work later, though.
Kevin Hanigan : He works a whole lot later than I do, but…
David Zalman: My happy hour doesn’t start ’til 8.
Kevin Hanigan : That’s right. I start happy hour sooner. But I made 1 phone call and it was to David. And even at that — and we know each other forever — it took us two years of really getting to know each other. I mean, opening up the books and thinking about how you put this together and how it works afterwards. And I don’t need to tell you because you’ve seen it for years. Prosperity, it’s a machine on the M&A side. There’s no surprises.
David Zalman: And I would say we still have those opportunities right now. It’s just a question of getting the FDIC on board and the regulatory people on board. And I think we’re getting there.
Brady Gailey: Yes. All right. That’s helpful. And then finally for me, just a real quick one. I’m guessing the unrealized loss and the held-to-maturity bond book improved at year-end versus linked quarter. What would that number, the unrealized loss?
Asylbek Osmonov: So unrealized loss at end of December was $1.1 billion net of tax. So, it came down from $1.6 billion to $1.1 billion. Or around $1.5 billion from. So we decreased by $400 million to $500 million.
Operator: The next question comes from Ben Gerlinger with Citi.
Ben Gerlinger: I know we’ve kind of beat the margin horse dead here. But David, I just had one quick question. You said 296, six months from now, you’re applying basically 20 basis points of upside on the NIM over the next six months?
