Good day, and welcome to the Southern Missouri Bancorp Inc. First Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Matt Funke, please go ahead.

Thank you, Brandon. Good afternoon everyone. This is Matt Funke, CFO, with Southern Missouri Bancorp. The purpose of our call today is to review the information and data presented in our quarterly earnings releasedated Monday, October 22, 2018, and to take your questions. We may make certain forward-looking statements during today's call, we refer you to our cautionary statement regarding forward-looking statements contained in the press release. So, thanks again for joining us today. I'll start by reviewing the preliminary results highlighted in the quarterly earnings release and as a reminder, this September quarter is the first quarter of our 2019 fiscal year. We earned $0.76 diluted in the September quarter, that figure is up $0.13 from the linked June quarter and it is up $0.20 from the $0.56 diluted that we earned in the September quarter a year ago. We reported a larger amount of discount accretion from acquired loan portfolios in the current period as we work through some relationships we've identified as impaired from the Capaha and Peoples acquisitions. We had a modest amount of M&A expenses in the current period, in the linked period, and in the year ago period, so really not much of a difference maker in that regard. And finally, this quarter is also the first in which we realize the full impact of the lower corporate tax rate enacted in December 2017 and we saw a decrease in the effective rate compared to where it ran in the second half of the fiscal year ended June 30, 2018. This was the second full quarter following our acquisition of Southern Missouri Bank of Marshfieldand the impact of discount appreciation on their loans and time deposit, improved net interest income by 92,000 in the current quarter that's up a little bit from the 79,000…

Thank you, Matt. I'm going to head a little bit about loans and deposits and then some things on M&A today. We got a loan growth for the September quarter, the first quarter of our fiscal year, totaled a record $61 million or 3.9%. This level of growth did exceed our prior expectations as well as exceeding our loan growth of 52 million in the same quarter of the prior year. The September quarter is typically our strongest quarter for growth and will likely be so again this year. Growth was spread over several loan types with the largest changes being 23 million in nonresidential non-owner-occupied real estate, 17 million in commercial business type loans, and 10 million in advances on agricultural lines of credit. In addition, our net growth was aided by reduced prepayments in our commercial loan portfolios as we experienced fewer owners selling their properties as well as less refinancing within our portfolio from other lending institutions when compared to recent quarters.But this growth and changes in our loan portfolio, our CRE concentrations move from 245% of capital at 6/30/2018 to 257% at September 30, but this is still below our CRE levels of 272% that were in place at September 30, 2017. Loan growth was centered primarily in our East region and totaled approximately $44 million. Our East region includes our recently acquired markets in the Cape Girardeau area and then as well as our Poplar Bluff market and our agricultural centers in Sikeston and Dexter. We also had growth in our West Region totaling $11 million which includes the Springfield market area. We're pleased with the volume of our originations over the quarter which totaled a 177 million which is up from 137 million in the same period of the prior year and 127 in…

Well, thank you, Greg. At this time Brendan, we’d like to take any questions that our participants may have, so if you can remind folks how they may queue for questions, we’ll do that at this time.

[Operation Instructions] Our first question comes from Andrew Lieschwith Sandler O'Neill, please go ahead.

I’m just wondering if you can provide some thoughts on your outlook on core margin. It sounds like deposit competition is getting tougher and you may need to fund it with some brokered sources, maybe some higher cost there, but also, your loan growth and prospects there seem pretty good. So I'm just kind of curious, if you roll those things to the balance sheet, where you think the core margin can go from here?

Well, we want to be optimistic. Greg mentioned that the loan pricing outlook was maybe a little relief here in the most recent quarter. I know other companies are experiencing funding pressure just like us, so maybe we'll have a little more rational pricing on that side. But you're right to think about cost of funds to and whether we can keep pace on the asset side. We're going to be hopefulto maintain but don’t have any real specific guidance for you.

And then just in the expense side, did you say that there were some merger charges this quarter or in your first fiscal quarter.

Yes, that’s correct.

Then presumably those loans -- and then what do you anticipate recording here in your second quarter?

M&A charges?

Yeah, yeah.

I don't have a number for you on that.We’ve been-- I remember in the numbers here, we've been between 150 and 225 a quarter in each of thesenumbers that we’re comparing between the year ago period, the linked period to the current period, it’s probably not going to be a huge number. I can't think of anything outsized with the pending acquisition that should hang up on it.

[Operator Instructions] Our next question comes from Kelly Motta with KBW. Please go ahead.

So, with the provision this quarter of being a bit lower with the aforementioned pay downs of purchased credit impaired loans. About how much of the impact did that have on the provision and also with kind of the workout of these impaired loans, is there more that could maybe come understanding that there is some volatility and lumpiness with this that could perhaps impact accretion and your provision levels or was this kind of it here.

One thing is I like it, I would say ifyou went back to our loan footnote at the last fiscal year-end, I think we had about 700,000 set aside on that specific relationship where we were able to release that. This was a very big quarter for growth obviously and so that weight on the other side and won’t necessarily expect those -- can’t fund that many quarter over quarter. But in general, it’s somewhat offsetting I would say between the growth and relief on that one relationship.

So a provision at this kind of level or maybe last quarter blended average is kind of what we should expect sort of going forward knowing that growth is obviously very strong at between the 17 basis points to 26 basis points type of thing from the prior two quarters.

That's been fairly consistent over the last several years as we've had limited charge offs and fairly consistent loan growth over the years.

If we don’t see any change in our credit portfolio metrics and we see loan production back off a little bit, I would anticipate that the loss provision would be no more than what it was this quarter.

And then, with Gideon, I know -- I think you have the shareholder vote coming out very soon. Do you still have -- you have the Fed approval; do you still have state approvals to get vis-a-vis how soon after that can you close the deal in the quarter and should we expect sort of an impact to next quarter’s earnings from that or is that more of a 3Q ‘19-- isthat more of a following quarters income statement impact?

We're hoping to close sometime middle, at probably middle like quarter, it probably will be a two-step closure with ownership coming before the bank merger. So I don't thing it will be a huge item within the second quarter numbers,but it should be positive and then we pick up a full quarter benefit in the March quarter.

Typically, the state of Missouri facetheir approval for right prior to the actual acquisition, they have a very brief time period of when they issue their approval. So we anticipate no issues with that basically it’s more of a formality at this point.

If I could sneak in one more, you had talked about some deposit gathering initiatives in your prepared remarks. I was hoping you can comment a little bit further on that and whether you’ve been running CD promotions that we've been seeing at a lot of other banks.

We don't do a lot of external promotions, so to speak. Our primary mode of advertising is digital, but we have done a lot more of giving our lending staff focused on the need for deposits and then we have several training things where we have started training - where we call it queue up training for ourselves but basically it's several procedures that we're putting in place to get people to be listening more to customers’needs and to be asking questions in a conversational basis and we're getting better at doing the ask for additional business and we do plan to see several of those things generate some additional deposit growth.

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

Okay thanks again Brandon and thanks everyone for your interest and we will look forward to speaking again in three months.

The conference is now concluded. Thank you for attending today's presentation, you may now disconnect.