Good day and welcome to the Southern Missouri Bancorp Incorporated Quarterly Earnings Conference Call. [Operator Instructions]. Please note, this conference is being recorded. I would now like to turn the conference over to Mr. Matt Funke, Chief Financial Officer. Sir, the floor is yours.

Thank you, Mike. Good afternoon everyone, this is Matt Funke, CFO, Southern Missouri Bancorp. The purpose of this call is to review the information and data presented in our quarterly earnings release dated Monday, July 27, 2015, and to take your question. We may make certain forward-looking statements here in today's call when we refer you to our cautionary statement regarding forward-looking statements contained in the press release. As most of you are aware, the June quarter is the fourth quarter of our fiscal year. I'll start by touching on some of the highlights from the quarter and the year. We are in $0.47 diluted in the quarter, that's up $0.03 on a split adjusted basis from the third quarter of fiscal 2015, the linked quarter, and it's up $0.08 from the $0.39 diluted that we earned on a split adjusted basis in the prior year's fourth quarter. For the fiscal we earned a $1.79 diluted, up from a $1.45 diluted for the prior fiscal year, again with both figures well adjusted. In the current quarter, our amount of net interest income is opened from fair value discount accretion on loans and a smaller amount of fair value premium amortization on time deposits resulting from the First Southern Bank acquisition which was in 2010, that totaled $43,000, it's down from $151,000 in the same period last year for the full fiscal year that acquisitions purchase accounting impact was $288,000, down from $631,000 in the prior year. So we're kind of reaching the tail-end in a material financial impact from the purchase accounting on that acquisition. Also for this quarter and this fiscal year, we've recognized the benefit from accretion of fair value discount on loans and time deposits on Peoples Bank's acquisition, that acquisition closed in August of this most…

Thank you, Matt. First thing I'd like to talk about is our lending activity and our credit quality itself. As that indicated earlier, credit quality continues to be excellent with a very manageable level of non-performing assets. Over this last quarter we did have our regulatory examiners complete their examination in May, they reviewed over 50% of our high risk assets as they defined them and the review went very well. Speaking to the growth of our loan portfolio over the last quarter, we are disappointed with the overall level of growth that we had this quarter and that did fall below our expectations. We did go at loan $3.6 million over the quarter, and $252 million over the year. Included in the loan growth for the year were $190 million of loans that we acquired from Peoples, however, those balances acquired from Peoples is declined from the $190 million to $155 million today. So we've had $35 million in pay down since acquisition, of which $11 million came varying this last quarter. The pay downs that we've received on Peoples Bank portfolio has been due to a variety of factors that primarily rate competition and pricing of rates towards a relative credit risk inherit within the loans as several loans to go ahead and move to other financial institutions. In addition, there has been a change in underwriting standards from what Peoples Bank had compared to what we have, and that has contributed to some of the loan run office. Finally we've also added certain amount of loan office for turnover as the staffing of the lenders in Southwest Missouri has changed. We do believe that with the additions of several new lenders that we've put in place now and their longevity with us that the understanding of our…

Thank you. I'll turn it back over to Mike. Mike, if you will remind callers if they would like to queue for questions and we will take those at this time.

[Operator Instructions] Our first question comes from Andrew Liesch of Sandler O'Neill Partners. Please go ahead.

Hey guys.

Hi, Andrew.

It sounds like competition for loans has increased even further across your footprint. I'm just kind of curious, like how you think that's going to affect the core margin? In my guess, that would be trending lower from here. Just curious what your thoughts are.

Yes, today's competition has primarily been in the Springfield market which has been a significant contributor to our growth. However, when you look at our growth of this last year, a lot of the growth came in our Southeast Missouri area while we've been able to maintain margins. So I think that there will be some pressure on our margins for this upcoming year that has even with their increased competition we think that it will not be as great, maybe it's what you might expect.

And then on the non-interest income section, it's kind of like that the secondary mortgage gains were pretty good this quarter. Just curious what your thoughts are going forward there, maybe decline a little bit than be a little weaker in the winter months, is what I'm thinking.

Historically, the winter months are the weakest months for a secondary market income activity. However, sequentially quarter-over-quarter or year-over-year for the same quarter, we have been seeing some pretty good growth. So we are anticipating secondary market income to be higher in this current fiscal year than what's the prior year. And we're looking at growth in the 10% margin range.

Greg here, Andrew we are approaching that product a little bit differently than we have previously. We're taking servicing on the fair amount of originations now. I think we have fairly brought out to the last year so that's yet over a year now in terms of the movement. So we hope for that as well, and just be certain improvement for us.

Great, those are my questions.

[Operator Instructions] Mr. Funke, Mr. Steffens, it appears that we have no further questions at this time gentlemen.

All right, Mike, we appreciate it, and we appreciate the interest from our callers and we'll talk to you again in three months.