Good afternoon. Welcome to the Southern Missouri Bancorp Quarterly Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Matt Funke, Chief Financial Officer. Please go ahead.

Thank you, Anita. Good afternoon, everyone. This is Matt Funke, CFO at Southern Missouri Bancorp. The purpose of this call is to review the information and data presented in our quarterly earnings release dated Monday, January 23, 2017, and to take your questions. We may make certain forward-looking statements during today's call, and we refer you to our cautionary statement regarding forward-looking statements contained in the press release. To start out, we want to review the preliminary results highlighted in the quarterly earnings release. The December quarter is the second quarter of our 2017 fiscal year. We earned $0.56, diluted, in the December quarter. That's unchanged from the same quarter a year ago, and it is up $0.06 from the $0.50, diluted, that we earned in the September quarter. The year-ago period included a significant amount of non-recurring benefits, which we'll touch on when we get to non-interest income below. Asset growth slowed during the December quarter following a strong September quarter, with just $22.5 million in asset growth after averaging growth of more than $60 million during the September and June quarters, so that highlights the seasonality in our balance sheet. Gross loans were up $6.6 million for the quarter, but they're up $132 million compared to December 31, 2015. That's an increase of just over 12%. The investment portfolio was also up almost $8 million for the quarter, but it's grown very little over the last 12 months. Deposits were up more than $44 million in the December quarter, with a strong contribution from seasonal public unit deposits. This followed the September quarter, when a $38 million increase in brokered funding accounted for a majority of nearly $47 million in deposit growth. Compared to December of last year, December of 2015, total deposits are up almost $95 million,…

Thank you, Matt. So far, I'm going to start with some discussion on lending. We're pleased with our year to date loan growth of $74 million, or a little over 6.5%. Our annual target remains to grow between 8% and 10%, and we hope to be at the top end of that range for this fiscal year ending June 30. Growth for our calendar quarter was muted compared to the first quarter, as Matt indicated, at a little over $6 million, with our growth coming across a variety of lending types, including multifamily, nonresidential, commercial, and land loans, offset by some declines in our ag balances of nearly $19 million and construction balances of $10 million. When we look at the year to date with our first six months of our year with our growth of over $74 million, we're looking at growth primarily in multifamily, nonresidential, commercial, and land loans, offset by the declines in ag, nonresidential, and construction loans. If we look at the geography to where our growth has occurred this year, our growth in the southeast Missouri region has been $7 million, while our Arkansas region was $24 million, and our southwest Missouri region was $38 million, as the southwest Missouri market is continuing to lead our production. Southeast Missouri was limited primarily due to our seasonality in our ag portfolio, as the agricultural harvest has proceeded and we are receiving pay downs as farmers are taking their crops to market. Again, our harvest is completed, and our balances in our ag portfolio have declined to approximately $65 million, and compared to $59 million last year at this time. We had forecast that we were going to have pay-downs of $15 million this quarter, where our actual pay-downs were $19 million. So we were fairly close…

Anita, if you would, remind folks how they can queue for questions, and let us know if we have any out there.

[Operator Instructions] Our first call is from Andrew Liesch from Sandler O'Neill. Please go ahead.

Just a follow up question on the fee income side. It sounds like there were a lot of different line items that were up this quarter that drove the strength there. Is this $2.7 million a good run rate? It sounds like maybe mortgage banking, or gain on sale, will decline a little bit. But this $2.7 million seems a little high to use as a run rate, but I'm curious what your thoughts are.

Well, as Greg mentioned, we're expecting that might struggle a little bit, going forward, with rates having moved up like they are. Also, our March quarter, we always seem to do a little worse on NSF income, some other general, just slower activity.

Got you. And then Greg mentioned M&A ideal targets have, could help you on the loan-to-deposit ratio. Are there any markets in Missouri or Arkansas that you find particularly appealing that you'd like to expand to?

We really don't want to limit ourselves to one particular spot or another. We really want to take an opportunistic viewpoint and look at what opportunities come up and whether it hits our pricing targets and our earn-back periods and let that drive part of where we want to go. The Cape Girardeau market was a market that we had been interested in for a number of years, and it finally bore fruit this year.

Got you. And then, [indiscernible] mentioned our earn-back targets and things like that for deals? Can you just refresh us what your acquisition criteria are?

We generally want from a tangible book value. We just have not wanted to extend beyond three years. What was your other question?

Oh, like just metrics along those lines, like IRR metrics, things you look for in a deal, and as well as pricing.

Everything's going to vary a little bit based on how good of a strategic opportunity it is. With this Capaha deal being almost 8% accretive in our second fiscal year, we think that's a great return based on the number of shares we're issuing in the deal. Tangible book value earn-back, we're very comfortable with. Greg, anything else you want to…?

Andrew, each transaction brings different things to the table. If somebody is bringing a lot more deposits to the table, you're going to be looking in one arena. If they're bring more earnings, each transaction's different based upon pricing. And to just say, hey, it has to have this numerical return, I think you have to weigh everything in with their balance sheet, and then also the growth opportunities in what you're acquiring, as well as the cost-saving opportunities.

Got you. Very helpful. Thanks much.

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Matt Funke for any closing remarks.

All right. Thank you again, Anita, and thank you, everyone, for your interest. We'll look forward to visiting with you again in April.

Thank you all, and have a good day.

This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.