Good day and welcome to the Southern Missouri Bancorp Quarterly Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.I would like to now turn the conference over to Matt Funke. Please go ahead.

Thank you, Ben, and 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 release dated Monday, July 22, 2019, 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.So, thank you to all for joining us today. I want to start by reviewing the preliminary results highlighted in the quarterly earnings release. The quarter ended June 30, 2019 -- I'm sorry June 30, 2019 is the fourth quarter of our 2019 fiscal year.So we earned $0.81 diluted in the June quarter that is up $0.05 from the linked March quarter, and it's up $0.18 from the $0.63 diluted that we earned in the June 2018 quarter. For the full fiscal year, these preliminary earnings show $3.15 per diluted share that is up $0.76 from the $2.39 in the prior fiscal year.Our net interest margin in the fourth quarter was 3.77% and that number includes about 12 basis points of contribution from fair value discount accretion on acquired loan portfolios and premium amortization on the same deposits or about $615,000 in dollar terms. In the year ago period, our margin was 3.72, of which 8 basis points resulted from fair value discount accretion or $358,000.And the reason for the increase year-over-year is primarily the First Commercial or Gideon Bancshares acquisition. So on what we see as a core base it's been, our margin was up by about 1 basis point compare into June 2019 quarter to the June 2018 quarter. Our core asset yield was up 43 basis points, roughly equal for the increase in our core cost of deposit,…

Thank you, Matt. For the quarter we're please with long growth for both the fiscal year and the quarter as exceeded our initial expectations. Exclusive of the Gideon acquisition, organic loan growth for the fiscal year totaled a $141 million or nearly 9%, with growth at $23 million in the June quarter. We originally projected organic loan growth for the year to come in at 6% to 8%. The revised for essence 8% to 10% last quarter.Our organic growth continues to be led by increases in our commercial loan portfolios. This growth along with the Gideon acquisition has changed the composition of our loan portfolio, with an increase of $81 million in non-residential, non-owner occupied real estate, $61 million commercial loans, $33 million in multi-family, $32 million in owner occupied non-residential real estate, $22 million in ag real estate and $11,000 in one to four family.With this growth and changes in our loan portfolio, our CRE concentration at the holding company level move from 233% percentage a June 30, ’18 to 260% at 3-31-19 and remained slightly below 260% as of June 30. Our organic loan growth continues to be centered primarily in our east and west regions, which grew by $67 million and $76 million respectively from the year. We're also pleased with the volume of origination was totaled $124 million during the quarter and $606 million for fiscal year, which is up from $550 million in the prior year.Now, I'd like to provide an agricultural upstate. Agricultural real estate balances remains flat over the quarter, while agricultural production loans grew $11 million for the fiscal year. Ag real estate balances and production balances grew by $22 million and $14 million respectively, primarily due to the Gideon acquisition.Our Agricultural customers 2019 crop years started slowly due to wet and…

Okay, Ben, at this time, we like to take any questions. So if you would remind our listeners how to two questions.

Okay, thank you. [Operator Instructions] Okay, our first question comes from Andrew Liesch of Sandler O'Neill. Please go ahead.

Can you just give a little outlook on how you think the margins going to perform from here with the expectation of the fed cutting rates next week?

Andrew, we’re, we know that we’ll have loans that we can identify re-price. We don't know what that is what will happen on the funding side. We’ve already seen some reduction and competition for time deposit. So, we still have time deposits that are rolling over about literally a year or more older and would originally then priced the fair amount lower.Also to achieve some of our deposit growth over the last six months, we've made some short, rather short-term commitments on rate, but that will take a little bit of time to roll through as well before we can make any adjustments on that pricing. So realistically, we would expect it to provide some pressures on the margin over the medium term, but probably not that significant, you know, six months or so.

Okay, so it sounds like the deposit cost might, might peak here and you're going to be late this quarter or some points in October?

Yes, that's probably little bit we get.

Okay, then just on the -- just on the provision here. It seems like you guys are trying to get a handle on credit and working out some of the loans acquired from Gideon, but if loan growth going to be a little bit slower -- shouldn’t and with working out some non-performers. So the provisions also be, maybe lower than you've historically provided kind of something similar that you did here in the fourth quarter?

So thinking through that we, if we see loan growth come in lower than what it otherwise would, yes, we would expect provision to be less everything else equal. We do have dollars that have been acquired, and are still subject for value accounting, that has those dollars kind are replaced by organic production even renewals or something customers, we have to go ahead and make it allows for revision at that point on those dollars. So, we don't want to we don't want to give you a number to guide forward on it. But assuming charge-offs remain low we would expect that, the provision would be relatively consistently low.

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

Hi, Greg and Matt. Thanks for the question. Hey, so you've referenced Greg in your prepared remarks about the drop in loan demand. I was wondering if you could give us an overview maybe if there's any certain categories that may be driving it, and why you think that is?

We're saying a lot --we're having a lot less inquiries, particularly in the commercial real estate space, where we're just not having the levels of interest that we had before. We have less loans that are in the CRE pipelines. Our residential activity is actually been an increasing, but more where we will learn dollars in more of the commercial real estate commercial arena. And we're just not having the level of demand that we had in prior period.

Okay. And then with the outlook for loan growth slowing and I know you mentioned that you established a 10b5-1 plan this quarter. Is it fair to assume that if that remains the case that you may be more active with the repurchases like you had started this last quarter?

In the prior two quarters, when we had a stock repurchase plan, we hadn't repurchased any shares. We're started repurchasing shares this quarter. And, we're going to continue to evaluate the best uses of our capital. And our capital ratios have been growing, and we're definitely going to be running our evaluations on where and what level of stock repurchases may be appropriate.

Okay, thanks. And then I was hoping I really appreciated the overview on ag that you gave in the prepared remarks. I was hoping, do you have where your ag portfolio is now at 630. And I had read about -- and I think you alluded to it in your prepared remarks maybe some increased flooding in Missouri area it would be interested to see. How if that's directly been impacting your customers, and I think you referenced 90% had been planted, if the expectation is for the harvest to kind of lower. I know, you had said there's less priority this quarter, but any color would be really helpful.

We really have not had too much problem with flooding for most of our market area. We did have some areas where that 90% figure I referenced, that 10% is largely some ground in the Mississippi river bottom that never was planted to begin with, and never got dry enough to plant it, so just wasn't planted.So really as far as flooding, we've had very little of any of that, there's areas where yields might have been hampered by water being over a very short period of time, that really flooding, yes, had been there severe in our area as a lot of other parts of the state of Missouri.Does that answer enough for what you're looking for?

Yes. No, that's helpful. And do you the dollar amount of ag loans as 6/30? I think you had referenced how much it was up, but I don't have the quarter-over-quarter in front of me.

I think, Greg had referenced the -- probably the growth for the year.

Okay. Yes.

But the growth for the quarter would have been probably in the $10 million range.

Yes. It is $10 million or $11 million.

So where the loan balances -- ag loan balances stand?

Including the real estate portion of it, probably 270-ish.

All right, that's helpful. Thank you. And...

Ag real estate was 182 and ag operating lines is $96 million.

Thank you so much. Maybe last one you referenced that there is a $200,000 of non-core fees this quarter, what was that?

The non-core purchase mortgage servicing.

Okay.

So for the prior quarter, is that what you're asking?

Okay. Maybe I misunderstood. I thought you had said $200,000 this quarter, but perhaps it was higher quarter.

If I did, I misspoke. It was in the prior quarter.

Got you. Okay. Thanks.

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

Okay. Thank you, Ben, and thank you to everyone for participating. We appreciate your interest. And we'll speak again in a quarter. Have a good day.

Thank you, all.

Conference is now concluded. Thank you for attending today's presentation. You may now disconnect.