Good morning, everyone and welcome to the Pinnacle Financial Partners' First Quarter 2017 Earnings Conference Call. Hosting the call today from Pinnacle Financial Partners is Mr. Terry Turner, Chief Executive Officer; and Mr. Harold Carpenter, Chief Financial Officer. Please note, Pinnacle's earnings release and this morning's presentation are available on the Investor Relations page of their website at www.pnfp.com. Today's call is being recorded and will be available for replay on Pinnacle's website for the next 90 days. At this time, all participants have been placed in a listen-only mode. The floor will open for your questions following the presentation [Operator Instructions]. Before we begin, Pinnacle does not provide earnings guidance or forecasts. During this presentation, we may make comments, which may constitute forward-looking statements. All forward-looking statements are subject to risks, uncertainties and other facts that may cause the actual results, performance, or achievements of Pinnacle Financial to differ materially from any results expressed or implied by such forward-looking statements. Many of such factors are beyond Pinnacle Financial's ability to control or predict and listeners are cautioned not to put undue reliance on such forward-looking statements. A more detailed description of these and other risk factors are contained in Pinnacle Financial's most recent Annual Report on Form 10-K. Pinnacle Financial disclaims any obligation to update or revise any forward-looking statements contained in this presentation, whether as a result of new information, future events or otherwise. In addition, these remarks may include certain non-GAAP financial measures as defined by SEC Regulation G. A presentation of the most directly comparable GAAP financial measures and a reconciliation of the non-GAAP measures to the comparable GAAP measures will be available on Pinnacle Financial's website at www.pnfp.com. With that, I’m now going to turn the presentation over to Mr. Terry Turner, Pinnacle's President and CEO.

Thank you operator. Good morning. We appreciate you being on the call with us this morning. We always try to begin our quarterly earnings call with this dashboard, that’s laid to quickly assess how we are performing on all the critical financial metrics. This particular slide is focused on the GAAP measures, so for the first quarter we continue to grow the revenue and earnings capacity of the firm. We continue to grow the balance sheet, which we believe is predictive of future revenue and earnings growth. And our asset quality is in great shape. Frankly, at least for me given all the transition and the merger integration going on in the Company I believe the non-GAAP measures actually provide greater insight into the core run-rates on these important metrics. So we will move to those now. For viewing these performance metrics [a number] [ph] of which are non-GAAP, I think overarching conclusion remains that the balance sheet and earnings momentum continue to be strong and the asset quality is pristine. Beginning at the top left of this slide, our topline revenue growth continues to be excellent. In the first quarter revenues excluding security gains and losses were up 19.4% year-over-year, they declined a tick on a linked quarter basis largely due to 2 less days in the second quarter and the impact of purchase accounting, which Harold will review in greater detail little later. Bottom line our fully diluted EPS and the merger related charges was $0.83 up 16.9% year-over-year. And excluding merger related charges the ROTCE was 14.89% relatively high versus peer but down from 16.34% last quarter and from 15.64% in the same quarter last year, largely owing to the follow-on offering completed in January. Of course it is our intent to leverage that up over the…

Thanks, Terry. We anticipated revenues in the first quarter were impacted by reduced loan discount accretion as well as there have been two fewer days in the first quarter compared to the fourth quarter of last year. We've got a lot going on in this quarter. We talked about some we are going to move past the volatility call it by the calendar, which likely cost us around $2 million in the first quarter. Where they get into net interest income, in a little more detail and its management fees and expenses as always. Total spread income was down $646,000 during the fourth and first quarter. It's a dark green line on the chart. Then those revenues per share, impacting our revenue per share in the first quarter with a capital raise, which we believe diluted our revenue per share by $0.12. As the blue bar, we anticipated the loan discount accretion that would be less than the first quarter and actually ended up being around $3 million less in the first when compared to the fourth. So call our core net interest income is up around $2 million to $2.5 million between the first and the fourth excluding purchase accounting. As we look forward to the same quarter, purchase accounting related to CapitalMark and Magna, an avenue should continue to decrease and have left in to us our margins as we're estimating our loan discount accretion in the second quarter will be 10 to 20 basis points of our margins before we consider any impact of Bank of North Carolina, should that transaction close in the second quarter. As many of you know, Bank of North Carolina, reported last night based on our review their information, the first quarter revenues were $74.4 million compared to $71 million in the…

Thanks, Harold. Before wrapping up I want to reiterate our long-term strategy. We currently operate in all four of Tennessee’s urban markets. The model that we built and perfected in Nashville going back to the year 2000 has been successfully exported to the other three urban markets in Tennessee. We've now been successful with both de novo starts and marketing extending acquisition. And so we believe our current platform should produce a $15 billion asset bank in these four markets by 2020, that's an updated number. We see similar growth opportunities in other high-growth Southeastern markets. They are a number of attractive high-growth markets scattered around the Southeast that are dominated by the same cash regional banks with whom we compete in Tennessee. And so, in addition to building a $15 billion asset bank in Tennessee by 2020, our three-year strategic plan contemplated our exploration of opportunities in some of the most attractive Southeastern markets, including Atlanta, Charlotte, Raleigh and Charleston and Richmond and that has led to our proposed merger with BNCN. I mentioned earlier at the beginning of the presentation that I talk in greater detail about the traction that we're getting in Memphis and Chattanooga, our 2 newest markets, as you look at the right most column on this slide, you see the 1Q 2017 linked-quarter percentage increase in loans, core deposits and revenue producers. And for all of 3 line items: Loans; deposits and revenue producers. You can see that the growth has been apparent from the very beginning, since we do not acquire and integrated with these banks until the mid to late 2015. So we believe that these market expanding acquisitions have demonstrated that the approach we perfected in Nashville, one, focusing on businesses in affluent consumers, two, hiring and retaining a cadre of…

Thank you. Mr. Turner. The floor is now open for your questions following the presentation. [Operator Instructions] Our first question is from Catherine Mealor with KBW. Your line is now open.

Thanks. Good morning, everyone.

Hi, Catherine.

First question let me start on the margin. Your core loan yields moved up about 3 basis points in the quarter as you mentioned, Harold. Can you give a little bit more color on loan pricing, how your contract and your [indiscernible] credits are trending and your outlook for how quickly you think we're going to see an increase in loan yields as you move throughout the rest of the year?

Yes, Catherine. We're seeing our strength hold on all of our index price – index based pricing products. And so we think we're getting a full benefit out of a 25 basis points increase. We think that we're going to – we're still projecting one in September. Our customer margins were up. I think we missed like 8 basis points in the first quarter. So that's about a third of 25 basis point move. So that seems to be reasonable to us. So we believe it's about $1.8 million additional net interest income tailwind for us that will help offset the discount accretion that will likely come out this quarter.

Okay. And then as a follow-up just thinking big picture on the margin figure. In your strategic target slide, you showed that you're at the top end of your NIM target. Now some of that is accretable yield, of course, but is there an opportunity for that target to move higher with rates moving higher and then as we fold BNC in or is that still the range in what you think you're comfortable operating?

We'll look at when we get the full effect back in North Carolina, but we think it actually could, it just depends on what it looks like on the day that the accounts are merged in and what the discount accretion is got to be.

Catherine, I might just add to Harold's comments. You've been around and seeing these numbers a long time. We started with a longer ROA target, we've raised it twice. When we moved it with – we have moved some of those subsidiary targets, in other words, the margin, the fees to assets, expenses to assets, net charge-off, we've moved those more rapidly than we have the ROA target. So when we go through the [indiscernible] ideas, we're going to figure out how to hit the ROA target and we'll move those other components as we need to based on what the market offers us. So again, just to say simply what Harold says, there is perhaps an opportunity to increase the margin target.

Okay. All right. Thanks for the color. Appreciate it.

Our next question is from Michael Rose with Raymond James. Your line is now open.

Hey, good morning, guys. How are you?

Good. How are you?

Good. Hey, sorry, if I missed this, I've been hopping around some calls this morning. Harold, can you talk about the increase and the interest-bearing deposit yield look like that was up about 10 bps quarter-to-quarter. Was there any sort of promotional items in there? And then if you can maybe split versus what the increase is more on the retail side or on the commercials side? Just any color would be helpful. Thanks.

Yes. I think it's all going to be on the commercial side, Michael. We – the total – our beta in the aggregate are really low. We do have some large client depositors that pay more attention to what the [debt] [ph] fund rates are, and we do have quite a few of them that are tied to debt fund. So I think in that product category, we've got some of those deposits in that particular product category.

Okay. So given the positive mix shift change this quarter and obviously, we’ve got the rate hike this quarter, which you mentioned, we probably shouldn’t expect to see this type of magnitude of deposit yield cost increases in the next couple of quarters, assuming our rate hike is correct?

Assuming no rate hikes. Yes. That’s correct.

Okay, that’s helpful. And then maybe for Terry, I just wanted to circle back on some of the comments you’d made around BNCN and hiring of commercial lenders. As I look at BNCN, they tend to be more of a CRE-focused bank. What are the expectations for hiring commercial lenders in the BNCN franchise? And how does that translate or triangulate to kind of the accretion guidance you’ve given? Thanks.

Yes, thanks. Let me start with the accretion guidance that we’ve given. And that, we were seeing no revenue synergy– so in other words, we built the synergy case on cost take outs exclusively. So hiring additional C&I, building out a C&I platform would be outside and beyond the accretion guidance that we have given. I think in terms of expectation, you would expect us to build that out – build those markets out in a format similar to what we described there for Chattanooga and Memphis. And I think in the case of Chattanooga, [indiscernible] was a C&I-dominated platform. But if you’ll recall back and it was a CRE-dominated platform. And so what we’ve done is hire a number of C&I and private banking type FAs in Memphis and again, you can see the traction that we’re getting, the volume of hiring that we’re doing in that market. And the growth that we’re giving in that market on both loans and deposits. I think really being driven in some market [indiscernible] addition of the C&I platform. And so I would expect that same thing to happen to markets that have the greatest billboard that will shoot [ph] most quickly on the commercial front would be markets like Charlotte, markets like Raleigh, markets like Charleston, markets like Greenville. And so again, I think those core markets [indiscernible]. And Rick Callicutt has already begun his recruiting efforts I think was successful on one great hire and has a number in pipeline and he is pursuing on the C&I front. So I guess, long way to answer to say we expect it to impact those big markets in North Carolina, the same that has market extensions that we’ve done here. And we expect that to be over and above the accretion guidance that we given.

Okay. Maybe just one final follow-up, Terry, to that response. Teams like the competition, potentially for lenders and the Carolinas, might be a little bit more intense because there are couple of banks that are similar sized to you guys, whereas in the markets in Tennessee, you guys clearly stand out as kind of a premier bank in the state. Can you talk about acquisition cost of lenders and if you’re not able to attract the lenders that you think you are, what would be the backup plan as we move forward? Thanks.

I think, I guess, relative to a backup plan again, I just would remind you that we don’t need any of that, it’s a synergy case. So again, the build out that program is incremental, not like you can’t get the synergy, can’t hit the creation targets without doing it. So I’m just, so our player. I think on the incremental side, Michael, you know this. I can’t even predict the future. I don’t know what’s going to happen in every market, I don’t know what the client response is going to be in every market. But I will say this, that’s the same question I ask when we started here in Nashville. It’s the same thing to ask when we went to Knoxville. It’s the same thing that was asked when we went to Memphis and Chattanooga. And so in each of those markets, we found our way to hire great bankers in the markets, and have them leverage book of business over here. I think one of the things that – the reason that it has worked that way in the markets that we’ve been in is because the – cost, primarily because of a difficult experience for lenders in these large regional banks. In other words, again, I don’t want to rattle too long about it little bit. For the experience for a middle-market lender in a large regional company it is difficult to lend lots of your options [indiscernible], difficult to get approvals done long length of time, frankly the disappointed clients, being talked to by credit officers try to clearly all those sorts of things. And so that’s what we don’t do, and that’s the advantage that we have over large regional banks. And I believe is that it will work in those markets for…

Hey, Terry. Appreciate the color. If anybody got – thank you for doing it. [Indiscernible] you guys. So appreciate the context, thanks.

All right.

Our next question is from Tyler Stafford with Stephens Inc. Your line is now open.

Hey, good morning guys.

Good morning, Tyler.

Maybe first just a follow-up on Catherine’s earlier question, just about the long-term operating targets. So when you guys announced the BNCN deal, you did increase the ROA target at the time, but you left all the other operating targets the same. But BNC was operating roughly 65 bps of fee income to average assets. And then with Durbin it seems difficult to get back to that long-term fee income target of that 1.10%, 1.30% but then conversely with all the cost savings that you’re going to get with the deal, it implies a fairly significant expense ramp to get back within those long-term expense targets. So, I’m just wondering if BNC and its size changes the long-term operating profile of Pinnacle, there is something there that I’m missing.

.:

Okay. And maybe just part B to that, just a clarity question on the long-term expense target. Is it currently right now that the 2.1% to 2.3% that’s stated in earnings release or the 2.0% to 2.2% that’s in the presentation?

The 2.0% to 2.2% I think.

Okay, the release that 2.1% to 2.3% but – you think it’s the 2.0% to 2.2%.

I think so, yes.

Okay, okay. And then just going back to Terry’s comment on the Durbin impacts, the $1.5 million I believe you said of negative impacts from Durbin. Does that include BNC or that just standalone Pinnacle?

That’s standalone Pinnacle. I think BNC is about $0.5 million to $1 million.

Okay. And then maybe just last one from me, a bigger picture BHG question. What do you think that the longer term, I guess, impacts would be from higher rates to BHG’s business? Is that getting higher rates as a hindrance there? Does it make it more profitable? What are the impacts that the BHG with rates?

Yes, we’ve had a lot of conversations about that with them. I think it’s kind of like the way we look at data factors. Right now, we’re not experiencing any kind of uptick in our deposit calls, they’re not seeing any slowdown and there is a spread between the bar rates and the contract rates with borrowing. So they think that will continue at least in the short-term but there is probably at some point that rate gets higher and higher that there maybe some I guess reduction in those spreads on those bar rates. But right now, it doesn’t look like there is anything slowing them down.

Okay. Thanks, Harold. Nice quarter guys. I will hop out.

Our next question is from Stephen Scouten with Sandler O’Neill. Your line is now open.

Hey, guys good morning. How you’re doing?

Good.

Good, good. Question for you on the loan growth trend, obviously you guys had a pretty strong quarter of growth given what’s normally little seasonally slower. But obviously still below the kind of below double-digit targets you traditionally given. You also seem to mention more fixed-rate loan competition, so maybe some competitive pressures that could be of some mild concerns. So can you talk to what your expectations are moving forward? And if there’s any change to those expectations, maybe specifically by asset class?

We’ll take last part of that Stephen.

Maybe even specifically like buy asset class or buy by loan component type, if there is any areas where you are seeing concern or weakness or more competition that’s maybe irrational, that sort of thing.

Yes. I think Harold’s comments on fixed-rate is, we see that as a – I guess, smart thing our sales weapons are the number of banks. I think you would see it across the number of asset classes, you would see it used frequently for small business lending. You see 10 to 15 year fix rate with a free handle on it from time to time, it’s a small business asset class. We see it to some extent on owner occupied real estate. And may be to a lesser extent in CRE bucket, it generally fits the thereby smaller banks, I think the larger banks tend to be more rational in terms of pricing that particular asset. So I think in terms of – if your question, when we talk about the strength of the various asset classes, I’m interpreting that to the strength in terms of marketing momentum, as opposed to asset quality…

Correct, correct.

Yes. I think clearly there is plenty of loan demand for CRE. I think the C&I loan demand is less strong I think, Stephen, we’ve had this conversation number of times, you had the Euphoria following the Trump election and size and optimism among the business owner. But the truth is, until somebody tells him what the tax rate is and when expected and what calls to help get her in and some of those kinds of things, it doesn’t translate into loan demand. And so I think the C&I loan demand is not that strong. Which again, for us, and one thing I try to help people get it, we’re a market share banker. Our growth is not so dependent on loan demand it is more dependent on our ability to take share from large regionals banks. Harold mentioned that our pipeline is extraordinarily high around pipeline is extraordinarily high going into the second quarter. And if you look at the core deposit growth that we achieved in the first quarter, those two things are related. I mean, that’s just sort of main line client movement from large regional banks to us. That’s really what is the largest thing driving that growth. So again, I hope, I’m sure clarify a lots of loan demand on CRE categories, softer demand in the C&I category and so our ability to grow loan is primarily been and upon our ability to take-off.

Yes. That’s perfect, that’s really helpful. And maybe thinking about the NIM a little bit here, I notice that there were some – obviously some increases in the securities investments some of that being the equity raise, being deployed a little bit into investments but it looks like some extended duration as well. Can you talk a little more about the ideology there and if that something that will continue given the rate environment and the trends we’re expecting.

Yes. Actually, what happened is – the proceeds from the offering did get deployed until late in the quarter, but we’re not expecting any kind of big ramp up in the securities book from here all now Stephen.

Okay. Perfect, perfect. And then thinking about the loan loss reserve maybe a little bit. Obviously no real credit issues, credit still looks fantastic. But obviously that’s been declining as a percentage of loans. And I’m wondering if you guys have gotten any more clarity on the preliminary work around Stifel and the impact there. I know, in the K it was kind of noted that those numbers maybe weren’t available yet. But just wondering if you have any clarity or insights to where that number may trend over time relative to where it’s been trend in the last few quarters.

Yes, I mean, whenever Stifel comes into play with the [indiscernible] is that reserves will go up, but right now I can’t give you any kind of ideas to how much that will be.

Okay. And then in the near term, would you expect this kind of 68 bps of reserve to loan to be more flattish? Or with this recent trend down, could that continue as well?

Yes, I think we've got only a small amount of credit leverage left in the Pinnacle book. With Bank of North Carolina, you'll see a meaningful reduction in the actual calculated reserve. So because all of that reserve will get embedded into the loan book, so the actual ratio will go down but just like with Pinnacle, we got $30 million in discount still left from Avenue, Magna and Capital Mark, all that money was just in the loan account then.

Perfect. Thanks guys, really appreciate the color. Congrats on another great quarter.

Thanks, Steve.

Our next question comes from Jennifer Demba with SunTrust. Your line is now open.

Thank you, good morning. Question on loan growth, can you kind of give us an idea of geographically, where – how the loan growth was dispersed in the first quarter? And how the music businesses have gone since acquiring the Avenue?

Let me – I guess, I'll comment on the music business first and then comment on the geographic dispersion next. I think on the music business, Jennifer, you know Andy and most of the team, I don't have access all the numbers in the past. But I'm told about Andy that the fourth quarter was a record quarter for the music and entertainment team in turns net loan outstanding growth. There are breakdowns, there are good number of lands with continued funding the data current in the first quarter and we expect to continue funding under some commitments in this second quarter as well. And a good pipeline, as we go into second quarter. So I think Andy would say, in terms of the loan growth, he's traveling faster than he travel under that big brand. And Jennifer, as you know I mean, they didn't get an advantage with a higher house lending and those kinds of things. So they're able to do deals for both existing clients and new clients as they previously probably could not – not yet done. So again, our belief is that the momentum in terms of loans and deposits and music industry is just very strong. I guess, just comment on the geographic dispersion. I think, I would say that we had – well, let me go at it, we've showed you, I think, a slide where we've given you the Memphis and Chattanooga number. So you can they were meaningful, both contributors on both loans and deposits. Jennifer, you'd see the growth during the 2016 year as well as in the first quarter of 2017 there. So again, great growth from Chattanooga and Memphis. I would say good growth in Nashville. In Nashville, we have a number of large real estate paid downs that occurred payoffs, that occurred in the first quarter, which math in there number, the gross loan growth was obviously much higher than the net loan growth and really, a pretty good number, but had some pretty large pay downs in there debuted growth in Nashville. And Knoxville's case, Knoxville has some clients that have very elevated fundings in the fourth quarter that payout in the first quarter. And so their growth was not so strong in first quarter. But again, there their pipeline would indicate the lever record quarter in the second quarter. So it's pretty well diversified, slightly different story in each market. But again, nice growth momentum in each of the 4 markets.

Okay, and a separate question. In terms of a expanding to new markets in the Southeast via de novo effort, Terry. Do you have any sort of priority list outside of the Carolinas? I mean, we've -- you've already given us the target market, I mean is it land are the number of priority or not? Can you give us some thoughts there?

Yes. Let me clarify the question first. I think you started with a comment about the de novo growth, and so are you asking about the priorities that relates to de novo growth?

Yes.

Yes, I think easily if we were going on de novo basis, Atlanta was the most attractive market if we left out of this.

Thanks so much.

Our next question is from Andy Stapp with Hilliard Lyons. Your line is now open.

Good morning. Your earnings release indicates that the March Fed hike would -- could boost net interest income by $1.8 million. Last quarter, you’ve indicated that the December rate hike would provide a $9.5 million from play out. I'm just trying to understand what caused the increase I thought maybe higher payers and the flatting of the yield curve might have constrained a lift?

Yes, and that's just on I think in the short hand of the curve, we just got bigger analysis. And so that caused most of the increase in.

Okay. I may have missed this but could you talk about how much cost saves should be realized in the first phase of this systems' conversion versus the second?

I don’t think it's going to be too terribly different than what we talked about on the merger call. We anticipated about 25% of the 70k to get realized in 2017. So we still believe that's going to be the case. And primarily the steps prepares we won't really get into any kind of synergies until later on in the year. And then we're looking at the rest of it being towards, call it for the second quarter of next year of the full synergy technically in the fourth.

Okay. And just trying to make sure I understand your guidance expression, the earnings release regarding the effective tax rate for the year. Are you expecting an effective tax rate of 33%, including the impact of the accounting change?

That's exclusive of the accounting change shows on – it stated right should be a list of the 43%.

Okay. All right, got it. Thanks.

Our next question is from Kevin Fitzsimmons with Hovde Group. Your line is now open.

Hey guys, most of my question has been answered. Just one quick follow-on, on the systems conversion. So is that purely or mostly due to this effort to produce the risk? I heard your point, Terry, about the BNCN customers have been doing a lot of these. Or is it a decision based on the system that Jack Henry's system is just a better system at the end of the day, and that's what you want to end up with?

Well, that's a great question. I think there are several factors in there. And I would say, honestly, for me, personally, the most compelling has to do with the de-risking of the conversion. But I wouldn't do it if Jack Henry was a less good system, we think it's a equal system at minimum and perhaps, slightly better. And what we really like about the Jack Henry as a vendor is their ability to provide support both during the system conversion and integration that we have to be substantial and important, and review their support on an ongoing basis that substantial as well. And so all those things that have rolled together in there. But we are, we believe, despite the derisking, despite the convergence for all those kinds of things, we do believe that we're slightly better off on the Jack Henry system as we continue to grow the pipeline.

Great. Okay, thanks Terry that’s all I had.

Our next question comes from Peyton Green with Piper Jaffray. Your line is now open.

Yes, good morning. Just wanted to get one thing clarified, I missed it earlier, but I think, Harold, you alluded to the size of the pipeline, turning into the second quarter, relative to the size coming into the first quarter and just thinking about loan growth of about 9% annualized in the first quarter of 2017 organically versus 7% a year ago, not organically, it would seem like if you like the overall productive capacity of the firm is probably better today than it was 6 to 9 months ago?

Yes, for sure. I think we've gotten some extra hires out of several places, both here in Nashville, Memphis and Chattanooga, I think we've got some momentum in some of the expended markets. And I think everybody knows…

Okay. And then just a follow-up the relative size of the pipeline coming into the second quarter versus the first quarter?

I think it’s at least 2.5 times.

Okay. Okay. And then in looking at the growth in Memphis and Chattanooga, I think what's really noteworthy was that their core deposit growth was as strong as it was. Is that something that you think will continue on into the second quarter and third quarter?

I think, just a little bit because it's difficult enough to be protecting our own numbers. I don't feel like I'm in a position necessary for Jake, BNCN growth. But I do know is, our first quarter growth was really extraordinary and unusual. And I think it has to do with the hiring momentum that we talked about and market share moment. I think it's in their case, they have built and they've working. As you know, you've seen their core deposit trends. And a lot of that has been dependent upon their branches and some methodologies that they’ve deployed [indiscernible] and Rick Arthur in one of their branches and he’s done a fabulous job in building positive acquisition went to move that footprint. And so I think that explains a large part of the growth and that they've had. And I believe it's likely to continue. But again, I’m better able to predict simple growth than BNC at this moment.

Okay. I’m sorry, I meant Memphis and Chattanooga, your core deposit growth very strong. And I was just wondering if you thought that was going to carry through over the balance of 2017. It seems like traction has really picked up in Chattanooga particularly.

My guess is in Chattanooga, there are 1 or 2 relationships in there that are large and represents the temporary funding again, I think the core growth is strong and outside. But in both Chattanooga and Memphis in the first quarter, they will have a couple of large deposits in there that are likely to be outside deposits. But again, even with the large that they picked up, the core growth is extraordinary. I'm sorry, I thought you're asking about BNCN.

Okay. Great. Thank you very much for taking my questions.

Our next question comes from Brian Martin with FIG Partners. Your line is now open.

Hey guys. Most of my stuff was answered. Just a couple maybe just housekeeping, and that was on the – just going back to the tax question, Harold. The $3.8 million benefit this quarter, you kind of talked into the lease about $1 million remaining. Is that $1 million an aggregate to the next three quarters? Or is it kind of $1 million a quarter you're talking about. Just to clarify

Yes, that will be probably for the rest of the year. And that's if our share price is whole as to where they're at currently. So that, it would not be for first quarter, it will be for the rest of the year.

Okay. And then just two last things. Just on the rebound and mortgage in this quarter, I guess, can you talk about the last portfolio last quarter. I guess just given the performance this quarter, I guess, the expectation, is it might typically first quarter is a season that's the weakest and builds from there. Is that kind of how you look guys look at things today on that – on the performance this quarter?

As far as looking at the quarter, you're telling me that the same quarter, they had a big pipeline coming into the second quarter, and if they can keep that pipeline going into the third quarter, then it will all be a great quarter for them. So we're not anticipating any kind of dramatic decrease in mortgage in the second quarter, but we're not expecting it the same kind of similar increase here either. So is slightly up, somewhere in that range might be fair.

Yes, okay. All right. That's fair. And then just lastly on the comments about the comments about the conversion and kind of the change. I guess the if the stock – and Terry mentioned this maybe a little out of the first quarter, but I guess just the thought that the prior assumption on the conversion that the first clean quarter, inclusive of BNCN on expense might be first quarter and now, its maybe pushed that into the second quarter, so just a little bit of a delay. But I've been curious, it might be around $1 million, but that's what I think about it. The first clean quarter with the full synergies is 2Q versus 1Q.

Yes, that's exactly right, Brian, we've – we're planning on the target environment being established in April of next year.

Okay. All right. That’s all I had guys. Thanks so much.

Thank you, Brian.

I'm showing no further questions. Ladies and gentlemen, thank you for participating in today's conference. You may all disconnect. Everyone, have a great day.