Charlotte M. Rasche - General Counsel David Zalman - Chairman, Chief Executive Officer, President, Senior Chairman of The Board of Prosperity Bank, Chief Executive Officer of Prosperity Bank and President of Prosperity Bank David Hollaway - Chief Financial Officer, Principal Accounting Officer, Chief Financial Officer of Prosperity Bank and Executive Vice President of Prosperity Bank H. E. Timanus - Vice Chairman, Chairman of Prosperity Bank and Chief Operating Officer of Prosperity Bank

Ken A. Zerbe - Morgan Stanley, Research Division David Rochester - Deutsche Bank AG, Research Division Rahul Patil - Evercore Partners Inc., Research Division Jon G. Arfstrom - RBC Capital Markets, LLC, Research Division Scott Valentin - FBR Capital Markets & Co., Research Division Gary P. Tenner - D.A. Davidson & Co., Research Division Jennifer H. Demba - SunTrust Robinson Humphrey, Inc., Research Division Bryce W. Rowe - Robert W. Baird & Co. Incorporated, Research Division David J. Bishop - Stifel, Nicolaus & Co., Inc., Research Division Christopher W. Marinac - FIG Partners, LLC, Research Division Michael Rose - Raymond James & Associates, Inc., Research Division Jefferson Harralson - Keefe, Bruyette, & Woods, Inc., Research Division John V. Moran - Macquarie Research

Good day, everyone, and welcome to today's program. [Operator Instructions] Please note this call is being recorded. It is now my pleasure to turn the call over to Charlotte Rasche. Please go ahead.

Thank you. Good morning, ladies and gentlemen, and welcome to Prosperity Bancshares Fourth Quarter 2012 Earnings Conference Call. This call is being broadcast live over the Internet at www.prosperitybanktx.com and will be available for replay at the same location for the next few weeks. I'm Charlotte Rasche, Executive Vice President and General Counsel of Prosperity Bancshares, and here with me today is David Zalman, Chairman and Chief Executive Officer; H.E. "Tim" Timanus Junior, Vice Chairman; and David Hollaway, our Chief Financial Officer. David Zalman will lead off with a review of the highlights for the recent quarter and an update of our recently announced merger and acquisition activity. He will be followed by David Hollaway, who will spend a few minutes reviewing some of our recent financial statistics, and Tim Timanus will discuss our lending activities, including asset quality. Finally, we will open the call for questions. During the call, interested parties may participate live by following the instructions that will be provided by our call moderator, Toya, or you may e-mail questions to investor.relations@prosperitybanktx.com. I assume you have all received a copy of the earnings announcement we released earlier this morning. If not, please call Tracy Elkowitz at (281) 269-7221 and she will fax a copy to you. Before we begin, let me make the usual disclaimers. Certain of the matters discussed in this presentation may constitute forward-looking statements for the purposes of the federal securities laws, and as such, may involve known and unknown risk, uncertainties and other factors, which may cause the actual results, performance or achievements of Prosperity Bancshares to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Additional information concerning factors that could cause actual results to be materially different than those in the forward-looking statements can be found in Prosperity Bancshares' filings with the Securities and Exchange Commission, including Forms 10-Q and 10-K and other reports and statements we have filed with the SEC. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. Now let me turn the call over to David Zalman.

Thank you, Charlotte. I would like to welcome and thank everyone for listening to our year end 2012 conference call. We experienced many successes during 2012. We were rated by Forbes Magazine as the Best Bank in America. Our assets grew 49% from $9,823,000,000 on December 31, 2011, to $14,584,000,000 on December 31, 2012. We announced our first merger outside of Texas into Oklahoma City and surrounding areas. We reported our highest levels of net income and earnings per share with $167.9 million in net income in 2012 compared to $141.7 million in 2011, an 18.4% increase. We posted diluted earnings per share of $3.23 in 2012, compared to $3.01 for 2011, an increase of 7.3%. We saw deposits increase $3,582,000,000, or 44.4%, in 2012. And we saw loans increase $1,414,000,000, or 37.6%, in 2012. In addition to our large increase in deposits and loan growth overall, we realized an organic growth rate on deposits of 10.1% and an organic loan growth rate of 6.2% from December 31, 2011 to December 31, 2012. We are very fortunate to be located in the area of the United States that we are. Our market areas continue to experience low unemployment rates, population growth and increasing sales for homes and other products. Further, our market areas are experiencing growth in many industries, especially the oil and gas, chemical, manufacturing, medical and technology areas. Some of our successes in the fourth quarter and for the full year 2012 include an increase in net earnings to $48.3 million in the fourth quarter of 2012 compared to $36.4 million for the same period in the prior year, an increase of $11.9 million or 32.6%. Our diluted earnings per share were $0.85 for the fourth quarter 2012 compared to $0.77 for the same period in the prior…

Thank you, David. Net interest income for the 3 months ended December 31, 2012, was $108.3 million compared with $80.1 million for the 3 months ended December 31, 2011, an increase of $28.2 million or 35.2%. On a linked-quarter basis, net interest income increased $1.4 million or 1.3%. For the full year 2012, net interest income was $380.7 million compared with $326.7 million for the same period in 2011, an increase of $54 million or 16.5%. These increases were primarily due to an increase in average earning assets. The net interest margin on a tax equivalent basis was 3.53% for the 3 months ended December 31, 2012, compared to 3.82% for the same period in 2011 and 3.52% for the 3 months ended September 30, 2012. For the full year 2012, the net interest margin on a tax equivalent basis was also 3.53% compared to 3.98% for the same period in 2011. Noninterest income increased $10 million or 71.4% to $24.1 million for the 3 months ended December 31, 2012, compared to $14.1 million for the 3 months ended December 31, 2011. For the full year 2012, noninterest income increased $19.5 million or 34.8% to $75.5 million, compared to $56 million for the same period in 2011. The increase was primarily due to the American State Bank transaction. Noninterest expense for the 3 months ended December 31, 2012, was $57 million compared to $38.4 million for the 3 months ended December 31, 2011, an increase of $18.6 million or 48.4%. For the full year 2012, noninterest expense was $198.5 million compared with $163.7 million for the same period in 2011, an increase of $34.7 million or 21.2%. Again, the numbers were impacted by the American State Bank transaction. The efficiency ratio was 42.9% for the 3 months ended December 31, 2012, compared to 40.8% for the same period last year and 46.1% for the 3 months ended September 30, 2012. The efficiency ratio for the full year 2012 was 43.5% compared to 42.8% for the same period last year. Bond portfolio metrics at year end 12/31 showed a weighted average life of 2.97 years, effective duration of 2.99 and projected annual cash flows of approximately $2 billion. With that, let me turn over the presentation to Tim Timanus for some detail on loans and asset quality. Tim?

Thank you, Dave. The bank's nonperforming assets at year end December 31, 2012, totaled $13,015,000 which is 25 basis points of loans and other real estate. This is compared to $14,051,000 or 28 basis points at the end of the third quarter of 2012 and $12,052,000 or 32 basis points at the end of 2011. This represents a decrease of 7% from the end of the third quarter 2012 and an increase of 8% from the end of 2011. The December 31, 2012, nonperforming asset total was made up of $5,713,000 in loans, $68,000 in repossessed assets and $7,234,000 in other real estate. As of today, $2,400,000 or 18% of the December 31, 2012, nonperforming assets are under contract for sale. But as we always say, there can be no assurance that any of these contracts will close. Net charge-offs for the 3 months ended December 31, 2012, were $1,913,000 compared to net charge-offs of $1,255,000 for the 3 months ended September 30, 2012. Net charge-offs for the year ended December 31, 2012, were $5,130,000 compared to $5,190,000 for the year ended December 31, 2011. So net charge-offs were basically flat from year to year. $3,555,000 was added to the allowance for credit losses during the quarter ended December 31, 2012, compared to $1,800,000 for the third quarter of 2012. $6,100,000 was added during the year 2012 compared to $5,200,000 for 2011. The average monthly new loan production for the fourth quarter of 2012 was $187 million compared to $134 million for the third quarter ended September 30, 2012. This represents a 40% increase. The average monthly new loan production for the year ended December 31, 2012, was $138,000 compared to $104,000 for 2011. This represents a 33% increase. Loans outstanding at December 31, 2012, were $5,180,000,000 compared to $5,079,000,000 at the end of the third quarter 2012 and $3,766,000,000 at the end of 2011. The December 31, 2012, loan total is made up of 46% fixed rate loans, 33% floating rate and 21% variable rate. I will now turn it over to Charlotte Rasche, who will coordinate any questions.

Thank you, Tim. At this time, we are prepared to answer your questions. Victoria, can you assist us with questions?

[Operator Instructions] And we'll go first to the side of Ken Zerbe with Morgan Stanley.

Two questions, I guess. The first one, just on the premium amortization, I saw it ticked up again this quarter. Obviously, a huge component of your net interest income. How should we be thinking about the dynamics there? I mean, given a steady-state interest rate environment, I mean, should that stay in sort of that mid-ish $20 million range or, I mean, does that naturally slow down over time or just decline over time?

Ken, Dave Hollaway. Couple of points to that. One, yes, as you noted, it went up a little bit, but also keep in mind that the bond portfolio itself was much larger quarter over quarter. So if you kind of level out on a percentage basis, it did not speed up. I mean, it kind of, as you kind of noted, it kind of held steady, so that would be the answer to question one. And two, yes, absolutely, if the pre-payment cash flow speeds slow down, all this refinancing with cash we're getting back, that amortization would obviously begin to slow down, which would help us both from a margin and bottom-line perspective.

Yes. Ken, this is David Zalman. I think that a lot it depends, really, on the interest rates. I mean, today, we are looking at the 10-year, up to 1. 9-something percent, and yield's going up. That naturally will slow down the premium amortization, extending the portfolio a little bit, too, at the same time. And on vice versa, if interest rates go down, it would do the opposite. But having said that, I think a lot of it's really dependent on the interest rates themselves, and so what we're seeing today, it is a possibility that the premium amortization could slow down unless interest rates go back the other way.

And also a function of the volume of the portfolio.

Right, that's a big, big part of it.

All right, that helps. And then, the other question I had, just on the reserve, your total reserves. Looks like right now, the ratio is about 1%. How, should we be thinking about this, just given all the acquisitions you've made? I mean, I don't mean to try to dumb it down to make it into a simple thing that we could just plug into our models, but do the regulators look at it? Is -- okay, here's your core portfolio, here's all the acquisitions, you have those marked, so -- I guess I'm just trying to ask, could we -- could it, should it continue to trend lower or, just given the increase in provision we saw this quarter, the 3.6, are you trying to hold that steady at, say, 1% on a combined basis? How should we think about that?

Ken, I'll give a try at that first. This is Tim Timanus. We have a methodology that we have a comfort level in, and the auditors have comfort in it, and so do the examiners. And it takes into consideration numerous factors, one of which is growth in loans. So as you've said, we've grown loans organically and by acquisition. So that would indicate a possible increase in the reserve. But that's only one of many factors that we look at. I have no reason to believe right now that there's going to be any significant change in the 1% level for the coming year. But that's nothing but a guess on my part. It depends on changes in these factors, and they're numerous. There are 10 to 20 factors that we look at, if that makes sense to you.

No, it does. So basically, barring any additional acquisitions, maybe keep a 1% reserve ratio, obviously, with provisions driven by growth, instead having come down. I mean, that's kind of, I guess, where we come out. I just wanted to make sure that was -- we were thinking about it the right way.

Well, we don't -- we obviously don't have any target that we shoot for. It is what it is. But 1% is adequate at this time, based on the methodology that we have confidence in, and when I try to look forward at the various factors that we rely on in arriving at the provision, I just don't see anything on the horizon that's an obvious major change.

We'll go next to the side of David Rochester with Deutsche Bank.

Just switching back to the margin for a minute. Do you happen to have the purchase accounting that related to the securities amortization in 4Q? I think the figure from 3Q was around $3.5 million or so.

Yes, I can jump in. This is Dave Hollaway. That number we showed in the last quarter for the acquisitions around $3.5 million, and it's basically the same for this fourth quarter.

Okay, great. And how much loan discount accretion are you expecting in 1Q? Should we see about the same level, $14 million? Should that go down from here?

Dave, that's the million-dollar question, isn't it? It's not a linear equation, because that accretion comes back to us based on the cash flows of the loans it's attached to. And the reality is that the price would be kind of lumpy as we go forward, not so linear. So when you ask the question, will it be $14 million in the first quarter, that's a good question. I think that the way I would answer this question is, it should trend down. You should -- if you think about it in kind of a logical way, some [indiscernible] loans maybe are being touched early on and we're getting a little bit more accretion upfront, but as we go over time and these loans continue to pay down, that accretion will come down. So I think this is a long answer to say I don't know that we can give you a specific number, but we think it will start trending down as we continue to go forward in time. I mean, does anybody else want to comment on that?

I concur completely.

I agree.

And I guess the only offset to a reduction would be just adding new deals, right? As you close those and you're amortizing more discounts, that could potentially add to it.

I'd say it will add to it. I mean, we -- again, we announced the deal in Tyler, so you'll have a mark there, a 91 mark and an 03 mark. And then Coppermark will be -- they have over $800 million in loans, so you'll have a mark, a 91 mark and an 03 mark on Coppermark as well. So that will add to it.

Good. And on the expense side, can you just talk about the trend heading into 1Q? I know you've got some new expense from the deal closing, but could we see further cost saves from ASBC keep that number flat versus 4Q?

Yes. Again, I come at it a different way. First, absolutely, you'll see some lumpiness. Not so much from the Tyler deal, but we get further into the year, and Coppermark being a larger deal, we'll see some lumpiness there. But yes, I mean, to get to the heart of the question, the expense, the total net -- the total noninterest expense you see in that fourth quarter, that's probably a good run rate, absent the noise that comes from acquisitions. Somewhere that number, flattish, a little up, a little down, that would be a good range.

We'll move next to the side of John Pancari with Evercore Partners.

This is Rahul Patil on behalf of John. Could you just discuss the recent trends in loan demand? Were there any big changes in 4Q following the tax law changes, and what do you expect? Where does the pipeline stand at the end of the year?

I'm sorry, but I didn't catch your name and we couldn't hear you very well, either. Could you try to...

I heard him. I heard what he asked, I think. I think my answer is that we did not see, in the fourth quarter, in my opinion, anything that was specific -- from a loan demand perspective that was specific to the changes in the tax law. I suspect that, that's going to change and that people are going to alter their behavior based on the tax law going forward. While we don't have a hard and fast answer for why loan demand went up so significantly during the quarter, we are obviously thankful that it did. And we don't see anything on the horizon that necessarily creates a big change from that, going forward. The Texas economy is still very good, certainly compared to many other parts of the nation. And absent some unforeseen upheaval in the oil and gas industry, we don't see a change in that. So while there's a lot of, always, uncertainty about what's going to happen with loan demand, I just don't see anything that's out there that changes it significantly at this point in time.

Okay. All right. That's helpful. And then, on the -- are you still seeing still-elevated paydown activity? I know last quarter you mentioned that the average paydowns you were seeing were around $135 million. What was it in 4Q?

Well, I don't have a hard number on that, but the answer is we are still experiencing an elevated paydown. We're still able to add to the loan portfolio on an organic basis. But the answer is yes, paydowns continue to be elevated. If the recent uptick in the 10 year means anything and we start to see rates increase, and I'm not sure that we will, but if we do, then that paydown activity will lessen. So I think that's something we've lived with now for -- every year it's increased a bit for the last 2 or 3 years. So I -- that's something we've lived with and will continue to live with.

We'll go next to the side of Jon Arfstrom with RBC Capital Markets.

Just a follow-up on the loan growth story. Is there anything, Tim, that's unique about it? Is it larger deals, smaller deals, geographies, or anything? Any other color you can add?

I'll jump in, and Tim probably can. I don't think -- I think it's probably the size of our bank, where we're at. I think that we're seeing more deals. I think we're becoming more known throughout the state of Texas. If anything, I would say there has been a lot more activity in the Permian Basin area. The Midland/Odessa area is on fire with the oil and gas industry, and so we're probably seeing increased demand from West Texas to the Permian Basin area. Of course, Austin is a very good growth area and Houston is a very good growth area. So, I mean, we're -- overall in Texas, and I think Tim mentioned this, I mean, we are seeing unemployment rates lower, much lower in some cases, than the rest of United States. We're seeing population growth, people coming in, and we're seeing job growth. Again, these aren't exact numbers, but we have probably in the Houston area 70,000, 80,000 new jobs created; probably in Dallas, Fort Worth this next year, 70,000 to 80,000 new jobs. These aren't exact numbers. 20,000 in Austin. The unemployment rate in Midland is around a little over 5%. So I think there's just a lot of activity and so there's just a lot happening right now.

Maybe it's all those radio commercials driving it?

Maybe so.

Another question on American State, just maybe following up on your comments, but where do you expect that loan portfolio to bottom and what's the good way for us to gauge what's really happening there? Because you do have, obviously, some of the paydowns or runoffs, and that's probably helping some of your purchase accounting accretion. But I guess, what I'm trying to get to is how do we gauge what's really happening in those markets?

I'll start off with it, John. This is David. I think that we have seen some paydowns over there. Again, whenever you merge with a bank, there are certain loans that you like or don't like and make debt or not debt, so that's always something. But I'd say for the most part that West Texas should be bottoming out, should stabilize. In fact, I think we should see growth. When you see the loan growth, I think a lot of growth will come from the Midland/Odessa-Permian Basin area, basically. I mean, I'd say, if loan committee is any kind of indication, then yesterday, I think that we saw more from their area than we did some of the other areas.

We'll move next to the side of Scott Valentin with FBR. Scott Valentin - FBR Capital Markets & Co., Research Division: Just with regard to M&A. In terms of -- you guys have been a pretty fast pace of M&A. Are there any infrastructural limitations you have in terms of -- was it -- is it IT? Is it infrastructure? Is it people?

Well, I think that -- I'm glad you asked that question, because nobody else asked, but everybody does know that we're -- from our beginnings, we've always done a lot of M&A. But I think everybody has to realize that we've grown 40 -- over 40-something percent in 1 year from around 9-point-something billion to 14.5 billion, not even including the Coppermark deal and some others. So I think that we spent a lot of time at the end of last year with the operational integration of West Texas which is over $3 billion. A very big deal. Although we did the operational integration, when you're doing something that large, you still want to make sure it's done right. We're still fine-tuning that, probably moreso with the lending officers getting them used to the closings and the clerical part that we'd have to close loans. We just got through doing the operational integration in December of the bank here in town which wasn't that big, it's not $100-something million, $160 million in size. So we did the operational integration, then we're getting ready to do the operational integration for the Tyler this quarter. And we're getting ready to do the operational integration in the second quarter for Coppermark. So, all of that is I think that it -- no matter what anybody says, growing that size does put stress on your infrastructure. But having said that, I think for the most part, everybody's feeling good. But again, we're very cognizant of the fact, I know people want us to grow at rapid speeds. But again, we also recognize and realize that probably our operational integration of what we have already is our first and foremost, and we're centered on that. That doesn't mean that we won't look at new deals, but that we do take into consideration and make sure that what we have, we're getting it right before we move on to the next. I hope that helps. Or not? Scott Valentin - FBR Capital Markets & Co., Research Division: No, it does. It does. And just as a follow-up question kind of the same -- down the same path. But you mentioned the regulatory pressures, tough operating environment. So it seems like more and more banks are realizing it's going to be not so fun to be a bank of a small size. But you mentioned the pace of deals and the integration challenges. Does that push your average deal size up then? Are you still interested in the $300 million, $400 million, $500 million bank, or now does it have to be -- call it $1 billion or $3 billion?

I always like bigger deals. I always have. Having said that, it probably -- what it limits for us, maybe not the $500 million in size, that's still a pretty decent-sized bank for us, especially if it's in a market that we're currently in. Probably it is probably diminishing some of the real smaller banks that are $100 million to $200 million in size. I mean, that's really making it harder on them and harder for us to jump in. Having said that, if it -- again, if it's next door and it's something that we can consolidate, we would certainly consider that. But what -- your general thesis is right. As the regulatory burden is getting bigger and bigger, it does make more sense for us to do larger deals sometimes.

We'll go next to the side of Patrick O'Brien [ph] with Fox Asset.

Guys, question. What were organic revenues year to year? Quarter to quarter and year to year?

Organic revenues, you mean outside of the ASB transaction?

Yes. Yes, so I'm obviously asking a question related to organic loan growth and diminishing NIM.

Yes. I don't know that we can give you -- we don't have that specific numbers to what ASB is generating for a specific net income number. But I think you could probably back into it if you just look at -- we do break out the loans and deposits.

I mean, that's a hard question. I mean, for us, it's not hard. I mean, I think the answer is obvious. With interest rates going down and down organically, even though you have loan growth, the revenues are going to go down. Now, having said that, and Dave may have a better feel for this, you may have -- that may be different for service charges, and we've taken on other new income with regard to trust income with American State Bank in West Texas. We've taken on -- have a mortgage company, service charges were a little bit better than ours. So from the fee income standpoint, you probably are experiencing revenue growth. I'd say from the loan side, there's a lot of pressure, just simply because of -- even if you grow there could be because of the net interest margin.

But I mean the point could be made that they do bring a lot to the bottom line. I mean, it was 30% of our size. So...

Right.

Again, a lot of it gets intertwined. So to try and identify a specific net income number for them is a little difficult.

We'll go next to the side of Gary Tenner with D.A. Davidson. Gary P. Tenner - D.A. Davidson & Co., Research Division: Just had a question regarding the loan discount accretion this quarter of $14 million and change. I think it was $11 million and change in the third quarter, and you suggested have expectation somewhere in the $6 million to $8 million range for the fourth quarter. So I'm curious, are you seeing more of those acquired loans being refi-ed away from Prosperity as you've gone through the first couple of quarters following that acquisition just to a greater degree than you had expected?

Two-part question. The first part, again, I just want to say it can be lumpy. It could have gone up and down in the fourth quarter, so just for that part of it. But then to the specific question, where it was inferred that these loans are being touched, and I think your specific question, so you're seeing them re-fied out of the bank, or is there something else going on, and I don't know if somebody else would want to jump in on the loan side instead of...

When I think it is 2-part, Dave, and Tim may want to jump in, too. But probably -- as you said, the loans are being touched as they migrate from the portfolio of American State Bank to the portfolio of ours. If we touch them, that makes a transaction and again, that's going to increase. It doesn't necessarily mean that we've lost the loan or it's gone somewhere else. It's just whenever you do touch it, whether you renew it or something else, again, that changes the...

Within certain parameters.

Within certain parameters. Right. Gary P. Tenner - D.A. Davidson & Co., Research Division: Okay. So there's some element of those loans that stayed within the system but just maybe were rewritten or re-fied in terms of...

Absolutely.

I think that's the case. That's the majority of it. Gary P. Tenner - D.A. Davidson & Co., Research Division: All right. That's helpful. And then just a question on the service charge line item. It was higher in the third quarter, came back down in the fourth quarter. Any kind of waivers or anything, any change in how you're kind of managing that line item post-deal?

Yes. I think the one specific thing that I could comment -- provide color on, I think there's one line item that says service charges, deposit account, or something like that, and you see it change from quarter to -- from third quarter to fourth quarter. And it's interesting, because we can get down in the weeds a little bit on this, but on all these transactions that we do, when we do the data processing conversion, if you were to step back and think about it, one day the customers are on one system and it's calculating their monthly service charges based on average balances, whatever it is. And then the next day, it's on a new system, and it's calculating again. So what happens here is when you -- when we do these data processing conversions mid-month and in this case, not only mid-month, end of quarter, and it's a sizeable transaction, what happens is kind of how we do it is we look at this and we see where customers are being affected by a bank's data processing conversion. They didn't convert the bank. The banks are -- they're selling and buying. And what happens is they're getting double-dipped. They get 2 -- in a lot of cases, they may get a second charge on their account. And so just as a customer service thing, we've done this for 20 years, we'll go back in and we'll see the impact of some of this and we go back and reverse those charges that first time out, and that's exactly what happened here. The reason that we can see it is it's at the end of the quarter, it's a sizable transaction, and that number, if you were looking at that specific line item, I would draw you guys's attention to it, that was about $180,000 of duplicate, what we would call double charges to the customer. And as a service, we always go back and reverse those. Because we came over the quarter, there's about $180,000 extra charge in the third quarter that came back out in the fourth quarter. So if you're looking at that one specific line item, what I can tell you specifically, that should -- that run rate on that line item should be about $3 million.

We'll go next to the side of Jennifer Demba with SunTrust Robinson and Humphrey.

I apologize if this has been -- may have been asked or covered already. I had to jump on the call late. There's a lot of overlapping calls. David, could you just talk about how you reallocated Dan Rollins's duties since he departed in December?

Well, Dan -- let me say first that everybody here at the bank likes and respected Dan, and we miss him, again. But again, a big part of what Dan did, he did -- a big portion of it is he dealt with the investment bankers and the analysts and stuff like that. So David Hollaway and I are taking probably a lot of the calls from you guys and dealing with the analysts. Charlotte has really jumped in a lot really on some of the acquisitions. We have Tim Timanus and Chris Bagley, and he's our Chief Credit Officer, and also Randy Hester. So we've had a lot of people jumped in and really help, even -- we've even seen, on the Coppermark deal, for example, one of Dan's big deals that he helped us with was when we did a transaction, he would be kind of the warm and fuzzy guy between us and the people we're merging with. And Mike Epps at West Texas, who did a great job with their own bank and putting our 2 banks together, has really helped us a lot on the Coppermark deal. So I can go on and on, but we've had a -- we have a very deep bench and a lot of people here that are really -- that jumped in, really.

We'll go next to the side of Bryce Rowe with Robert W. Baird. Bryce W. Rowe - Robert W. Baird & Co. Incorporated, Research Division: My questions were actually asked and answered, but thanks for the opportunity.

We'll go next to the side of David Bishop with Stifel, Nicolaus. David J. Bishop - Stifel, Nicolaus & Co., Inc., Research Division: Like Jenny, I apologize if this question was asked before. So bear with me. David, question for you. I've talked to some of our management teams and they've sort of been stunned at the deterioration in structure and terms and underwriting there this early into the recovery, so to speak, of the commercial real estate cycle. Are you seeing any instances of that or glimmers of that, especially given how heated the Texas market is?

You were stunned at what? The deterioration in what? David J. Bishop - Stifel, Nicolaus & Co., Inc., Research Division: And just in terms and structure on the underwriting side.

It's not stunning to me. I've seen it before. I mean, it's a -- it looks like when everything becomes extremely competitive, people just pull their pants down sometimes. I mean, it's just one of those things. I don't think it's abnormal, it's just -- it's -- at this part of the cycle, when everybody's being extremely competitive, you're seeing some banks that are just going out and again, terms and conditions and rates, all of that, they're doing that work. It does put pressure on the other banks that are trying to hold those positions. But at the same time, I would say that you have to be cognizant of it but, again, we're not [indiscernible] jumping. We're not changing the way we do things. Do you see it any different?

I don't. It is extremely competitive, but I would say, my personal opinion is, I've seen it much worse many times before. So this is not a new game. I mean, it cycles in, it cycles out.

I don't think it's as bad as it's ever been.

It's not anywhere as bad as it has been and probably will get to be in the future at some point in time. Do we believe that there's some lending institutions that are making mistakes? The answer is yes. We believe that. Is it across the board and rampant? I don't see it quite that way yet.

I would just say just making a general overall comment, from what you've seen in loan committee, I see that the banks have been around, that are publicly traded, that do have to respond to shareholders in the street, I think for the most part, they're trying to do things in the right manner. I think if we're seeing pressure sometimes, it's really a little bit more from mom-and-pop shop banks that are so desperate for the loans, they're almost willing to go down to any type of rate to get up. Again, those are probably smaller loans, $1 million and less, I would say.

I agree with that, yes.

We'll move next to the side of Christopher Marinac with FIG Partners.

David, you were mentioning a couple of callers ago about the deal size and how small deals may not fit. If you look at Oklahoma, do have to depart from that just because a lot of remaining banks there are smaller? Is there a scenario where you do nothing other than Coppermark to keep in this market?

No. Chris, we would never have gone into Oklahoma if we thought that we were just going to do the Coppermark deal. We do intend to grow there. There are several banks in Oklahoma that are $1 billion-plus that are opportunities, perhaps. But there's also -- again, if there's stuff -- Coppermark really is primarily located in Oklahoma City. It's got 4, 5 locations there. And then we've got in -- they've got a location in Edmond and 1 in Norman. So whenever we can improve our position, we probably would, and we'd probably go down to a smaller size if it were filling in, in a nick, in a situation like that.

Okay. Very good. And do you expect pricing to be any different than it has been in terms of the deals you've looked that, even the ones you haven't done? Is that changing at all this year?

I would say pricing is all over the board, depending on who you're dealing with. There's some people that are completely unrealistic. And then the deal that we enter into, the people are reasonable, and those are the kind of deals that we are entering into. There still -- I guess in every type of market, you'll find this, but there's some that are just -- they're living somewhere in the past, and it's unreasonable what their expectations are. And so -- but then on the other hand, I would tell you there's a lot of banks that are reasonable, and it's probably a good time to grow a bank and put a deal together like this.

Great. And then last question, just more mechanical. As you look at new loans that are going on the books, how different is the new loan yield compared to what the average loan yield is on the -- this last quarter?

Tim, can you....

Well, of course if you look at the total yield, there's some accretion in there. So if you back that out, I would say that the average yield is stressed a little bit right now, but not significantly. It's not materially different, if that answers your question.

And I would say, I would go a step further and say even the loans that we have on the books, if they were higher than what the market is, they've already repriced or ask us to reprice them to begin with.

We'll go next to the side of Michael Rose with Raymond James. Michael Rose - Raymond James & Associates, Inc., Research Division: Actually, Chris just actually asked 2 of my questions. So, thanks.

We'll go next to Jefferson Harralson with KBW. Jefferson Harralson - Keefe, Bruyette, & Woods, Inc., Research Division: With the $11.5 million of -- we got loan accretion happening last quarter and the $14.5 million this quarter, how much does that leave for loan accretion to come through over time?

Yes. I mean, again, that's -- we've got that in the press release, but again, if you look on the press release, there's about $55 million of what we've called as -- we use the old terminology, FAS 91 accretion related to these deals. So you take that number and you can kind of back into it.

And that doesn't include the 03 marks, does it?

It does not. The 03 do not generally make that huge accretion that you can see on the FAS.

Unless you collect more than you anticipated.

That's right. So the answer to your question is if you go back and look, it's $55 million and you can go from there. Michael Rose - Raymond James & Associates, Inc., Research Division: Okay. And the -- on the securities amortization, that should be about $3.5 million negative going forward, roughly?

Again, trying to predict going forward -- that amortization on that part of the business is going to be a reflection of the cash flows coming back to us. But I guess what we can tell you is $3.5 million last quarter, roughly $3.5 million this quarter. So I mean, your call is as good as ours as to what number you'd want to use going forward.

I think you'd have to consider what the rates are doing. If the tenure continues to increase, I think you will see it slow down. I really do.

You should.

Like how long it takes, I don't know.

We'll go next to the side of John Moran with Macquarie capital.

So 2 quick ones. First, deposit flows have been real strong. Wondering if you guys saw any benefit from, or if you perceive any benefit, from TAG expiration? And then the flip side of that is did anything flow out kind of early in the year?

I'd start. I was concerned the first time when I read the article in the Wall Street Journal where they said, I forgot, how many billion left the first month with the TAG disappearing. But we didn't find that to be the case over here at our company. I mean, we looked at it, but we did not see an outflow of deposits. If anything, we had an inflow of deposits.

Yes, I mean, specific to that, the TAG program, I mean, we've had a few customers. But it's not been, as of today, we have not yet really got to see any kind of material movement on that. And what David said was right. We've actually seen inflow of some deposits rather than an outflow. But I would think there'll be some of that as we move forward.

That's helpful. And the second one that I had for you is just for the year. If we look over '12, you guys averaged over $10 billion in assets. Any kind of impact on, and forgive me if you guys already disclosed this before and I just maybe missed it, but maybe you could just remind us if there's anything that we ought to be thinking about either on the fee side or maybe some additional OpEx to kind of deal with any additional sort of regulatory burden? If there's anything like that, that would be helpful.

Yes. I think, kind of -- yes, we have talked about this before, but -- this is Dave Holloway. A couple of points in there to address. But again, just the reminder on the fee income side again, we will be under the Durbin Amendment or law, whatever that's called, that's effective July 1. And as we've said in the past, on an annualized basis, that's about $9 million of lost fee income for us. Of course, this will be a half year on that. So before tax, call it somewhere in the $4.5 million range impact to us. And this is also probably another -- a good to point out, again, and repeat, with the ASB transaction, brought a lot of these other fee income potential possibilities for us, and one of them being credit cards, which we're not significantly in as of today. But if we can take the credit card program that they have and introduce that to our customer base, we believe that, that will be one of the most significant ways to offset some of this lost income from Durbin. You had a second point, David might want to jump in on this. But the regulatory -- all the new regulatory rules and the cost that, that's adding to us, you might want to...

I've got to be nice. There's too many listening on the other line. There's no question as you get to this size, the regulatory burden is -- we have probably have regulators here full-time. We have FDIC, State, Federal Reserve, now, Consumer Federal Protection Bureau, our [indiscernible] have their own offices. I can go on and on if you want. So we've had to really increase staff in there. Right now, one of the big pushes for -- from the regulatory side is BSA, Bank Secrecy Act, and asset money laundering, and that in itself, I mean, we've really beefed up this last year to probably add 12 people in that one little department. So I think it will continue. I don't think it's going to get any better. It's just -- that's just one of the mantras that's coming down from Washington, actually. And I think at the size that we're at, they probably watch us -- I noticed, when we went over $10 billion in size, they seemed to pay a lot more attention to us.

I'm showing no further questions in queue at this time.

Okay. Thank you. Thanks, everyone, for joining us.

This concludes this conference. You may disconnect at this time, and enjoy the rest of your day.