Good morning and welcome to the South State Corporation Quarterly Earnings Conference Call. Today’s call is being recorded and all participants will be in listen-only mode for the first part of the call. Later, we will open the line for questions with the research analyst community. I will now turn the call over to Jim Mabry, South State Corporation’s Executive Vice President, in charge of Investor Relations and M&A.

Thank you for calling in today to the South State Corporation earnings conference call. Before beginning, I want to remind listeners that the discussion contains forward-looking statements regarding our financial condition and results. Please refer to Slide number two for cautions regarding forward-looking statements and discussion regarding the use of non-GAAP measures. I would now like to introduce Robert Hill, our Chief Executive Officer, who will begin the call.

Good morning. I’ll begin the call today with a few summary comments about the third quarter of 2016, provide an update of the pending merger with Southeastern Bank Financial Corporation and offer additional insight into our performance and focus. Our performance metrics continued to be strong this quarter, as they have been throughout 2016.Net income in the third quarter totaled $28.1 million or $1.16 per diluted share, which represents a return on assets and a return on tangible equity of 1.28% and 15.86% respectively. Adjusting for merger and branch consolidation expenses, earnings totaled $28.6 million or $1.18 per diluted share. This represents an adjusted return on average assets and tangible equity of 1.3% and 16.11% respectively. I am very pleased with our team’s performance this quarter as we have made significant progress in many areas this year. We’ve also been working with the Southeastern team and our regulators to prepare for our 2017 merger. This merger is significant as it elevates us pass the $10 billion threshold. We have received all necessary regulatory and shareholder approvals in conjunction with the pending merger and we still anticipate the transaction closing in early January and conversion of our operating systems in mid-February. One of our core values is the relationship-driven approach we take in delivering service to our customers. We share this value with the team of Southeastern and as we move forward, it becomes more evident that our two companies have similar cultures. This philosophical approach helps attracts from bankers to South State and generates customer loyalty. During 2016, we have made significant progress on preparing for the changes that result from crossing $10 billion in assets. Investments in people and systems are positioning us for additional growth. The nature of these investments reflect our goal of building for the long-term,…

Thank you, Robert. We experienced solid net loan growth in the third quarter of 7% annualized as non-acquired loan growth outpaced acquired loan runoff by $109 million. While this growth was not at the 16% pace of the second quarter, we feel very good about the current pipeline and the prospects for continued growth. Virtually, every asset quality metric improved this quarter with net charge-offs on our non-acquired loan portfolio totaling less than $400,000 or three basis points. Our provision expense on the non-acquired portfolio was down $1.7 million linked quarter and maybe relatively modest going forward absent any unexpected deteriorations in asset quality indicators. On Slide number 5, you can see a relatively stable net interest income number over the past four quarters since the Bank of America branch acquisition. On a linked quarter basis, net interest income declined by $154,000 as interest income decreased by $98,000 and interest expense increased by $56,000. The small decrease in interest income was mostly due to a decline in the investment income from lower balances and lower yields. Loan interest income was up $157,000 linked quarter, as increases in the non-acquired interest income more than offset declines in the acquired interest income. Our net interest margin decreased by 9 basis points linked quarter to 4.18% as the yield on earning assets declined 9 basis points and the cost of interest-bearing liabilities remained flat. The yield on the non-acquired and acquired loan portfolios declined 5 basis points and 28 basis points respectively. About half of the decline in the acquired loan portfolio yield is the result of cash received on a zero carrying value pool in the second quarter and the other half is the result of extensions of the weighted average lives of certain pools due to the renewals in the third…

Thank you, John. Lastly, I want to update you on the impact of Hurricane Matthew. The storm affected large portions of our footprint. Fortunately, our bank facilities were not damaged and our people were safe. The markets we serve however are still recovering. Hundreds of our employees were forced to evacuate their homes and despite this, our team rallied to open branches and our call center on the Monday morning immediately following the storm, which also happened to be a bank holiday. In many of the impacted markets, we were the only bank opened and this is a great testament to our team and their focus on our customers. That concludes our prepared remarks. And so, I would ask the operator to open the call for questions.

[Operator Instructions] The first question comes from Jennifer Demba at SunTrust.

Thank you. Good morning.

Good morning, Jennifer.

Good morning, Jennifer.

Could you just give us some color around the slower loan growth this quarter and kind of talk about what your expectations are over the next few quarters?

Sure, Jennifer, this is Robert. If you look period end-to-period end for Q3, it was 7%. We were coming off of a big quarter in Q2. Don’t really see a lot of it was just timing. If you look at the average loan growth for Q3, the average loan growth was 12% if you look Q2 to Q3 and year-over-year, we were north of, right at 11% in year-to-date a little above 11%. So, obviously loan growth is not perfectly linear and feel really good about our pipeline, really good about the relationships we are bringing over and feel – even though the numbers are different, still just as good about in the third quarter as we did in the second.

Are you seeing any slowdown in your pipeline from maybe Presidential Election uncertainty, things like that? Are now noticing any difference in your customers’ attitudes there?

No, I don’t think so. The – obviously the pipeline in the second quarter, we just had – we had a lot closed in the second quarter, but the pipeline began to refill. It’s just as strong now as it really was back at that point. Don’t really see any seasonality, any external events impacting it. It’s also been really diverse this quarter, 20% of our growth this quarter was in under occupied commercial properties. So, that feels really good. And one that I can get a lot of mention, it’s not as huge a dollars, but we put in a consumer loan platform in Q1 and we’ve really automated our consumer lending platform. As you know, we have a big retail presence in our company and the consumer loan growth year-over-year is up about 10%. So, really, in all categories, we are feeling pretty good. In the mortgage area, not a lot of mortgage loan growth on balance sheet, but really significant volume and that’s really just a rate issue is, we are refinancing some of that volume. We had big refinance in the third quarter, about 40% of our total volume compared to 30% in the second quarter. And so we refinance in a little bit of the own balance sheet consumer mortgage piece, but really feel very good about where we are run wise really across the board.

Jennifer, this is John. Just to remind, we don’t really do any wholesale loans. So, we are not doing purchased loans, it’s pure organic growth really in our markets.

And Jennifer, one other, obviously, one other piece to the growth equation. It’s just the reduction in the acquired book. So, if you look back in Q3 of 2014, 30% of our interest earning assets were the acquired book and now it’s 20%. So it’s come down real meaningfully and as it gets low we are obviously, there is just less churn, there is less runoff and you are starting to see our ability to outrun that at a nicer clip. So, that impacts the growth level as well.

Thanks so much.

The next question is from Jefferson Harralson at KBW.

Hi, thanks. Like to ask a question on expenses. You had mentioned that the employee benefits were higher and the OREO was higher this quarter. Is that kind of suggests that the runrate of expenses should be lower?

Jefferson, this is John. I’ll take both of those. On the employee expense side, I think one of the things to think about, we got two things ahead of us. One, going across $10 billion and obviously the Southeastern merger. So, when you think about our employee benefits, one of the things is we’ve added some FTEs, I mean, we had a net reduction, that was clearly gone ahead and added some FTEs for $10 billion and we are trying to get ourselves ready for the conversion of Southeastern. We are going close and convert that in the first quarter. As we have done in the past, really with all of our mergers is, we’ve tried to get our operational staff up train and running. So we can run that system. That’s clearly had an impact in that number. Our healthcare cost were some this quarter, that clearly had an impact, but I think when you think about us from an FTE side, is to get a real feel for that. We got to kind of get passed of Southeastern get the expense saves in which we are going to get 75% of the $17 million on next year. That was the 35% cost saves on that. I think you’ll really be able to get a handle where we are on the expense side. On the OREO side, one of the main reasons that is up linked quarter, if you look at our balance sheet, we have about $22 million in OREO today. And we have actually 40% of that under contract that we plan to close in the fourth quarter. So we took some write-downs on those. We clearly had some gains on some of the OREO properties that we are selling, but obviously I can’t run that through the financial statement. You’ll see that in the fourth quarter. So all things being equal, we would hope that our OREO expense would come down in the fourth quarter.

Jefferson, this is Robert. Just to add on, if you look at total expenses obviously, close to flat year-over-year. We consolidated a number of branches this year. We are almost through that project. It will move over into Q1 of 2017 just with one additional branch, but the majority of that behind us, and we say when we are going to do that, the majority of that would go into kind of the preparation on the $10 billion hurdle and we’ve been able to do that. So we’ve been able to get the cost saves and the efficiencies. We’ve been able to grow even in spite of that pretty nicely both on the – we opened about 10,000 new retail accounts and had good loan growth. So, we’ve been able to count on or pay for to a large part really the significant investments we’ve made in the RM and compliance and cyber and IT and project management. And so where we are today in terms of the readiness of the $10 billion spectrum of where we were a year ago is significantly further down the path. And so, we are - obviously this is a big move with Southeastern to take us – taking this over we’ve received regulatory approval in four months. So, I think all those pieces are all coming together and you see that in the expense equation.

Right and shouldn’t this occupancy piece going down or is that being replaced elsewhere because of the branch closures – or maybe as goes down in the future there are – as we get all these closures and the numbers?

Jefferson, this is John. Let me give you a little color on that. As there is a few pieces there, higher expense saves when we announced the branch close and a lot of that had to do on the FTE side and as you can imagine, especially when you look at the map we had to take a lot of our offices and make them bigger. So, we expanded the size of a lot of offices that we had. We also were able in Charlotte to pick up a lot more space kind of in our headquarters. And so, now we have our name actually on that building. We picked up another four and that clearly drove that up some. So, you might see a little bit more come down there, but we’ve kind of redeployed some of that and then the third piece, as you can imagine, getting ready for $10 billion, we got to have in place to put all these support people. So, we’ve retrofitted a few places to try to efficiently put them into our operation. But a good question on why it didn’t come down more but a lot of it’s just related to the FTE side on that $4.5 million in saves.

Okay, all right. I’ll let someone else ask questions. Thanks guys.

The next question is from Nancy Bush at NAB Research.

Good morning gentlemen.

Good morning, Nancy.

On the wealth management, you manage to keep wealth management revenues flat in spite of what was a pretty lousy quarter for the market. Can you just tell us a little bit about the underlying developments there? Just give us a little color on that ability to keep it stable?

The wealth management area has been very good for us. It really composes a few parts. I’d say the two most meaningful parts from a revenue perspective are just the wealth management, the money management piece we do and then our investment services group. So, they are very different. One is a pure money management and traditional trust type area in financial planning, the other is more a retail investment. The wealth management part – the financial planning, the trust part has been really good. It’s continued to grow at a nice pace, it’s ahead of plan. We were also little bit has been in the investment services group, just the retail area and that’s really just been, because last year we had a few fairly significant sales in there in the third quarter that we didn’t have this year. So we were just kind of down a little bit in one area and we are up in the other area and so together it’s been able to keep us flat. But in the – in both areas though, we continue to feel good about how we are growing the quality – the people we are recruiting on the team and the quality of the customer, we continue to see us other wealth management areas continue to move the bar up in terms of assets that they are willing to take in and manage. There is a nice niche for us in our market and that’s really was driving the growth in the wealth side.

So you are basically saying you are going to remain a wealth manager for the smaller accounts basically, you are not going to buck, you are not going to go along with the industry-wide trend?

Yes, what you are seeing is, from our client base, it’s – let me just touch on the wealth management side. The retail is a little bit different, but on the wealth management side, what we are seeing is, and our customer base are mostly an older group who have sold a company or had some kind of liquidity event and – I mean their goal is to preserve wealth, not just create and not just have an income stream. So, we work very closely with those clients in terms of a financial plan of an investment process for other assets and then also a wealth preservation and trust plan. So it’s not just us versus a mutual fund, it’s a much different approach than that and that basis has served us quite well.

Okay, my second question would be this, one of your regional peers who has also recently blown through or is blowing through the $10 billion mark. Talked about a couple of days ago, seeing the sort of optimal size now has having moved up to the range of $15 billion to $25 billion. Any reflections on that? I mean, do you see some scale advantage, et cetera in moving to sort of the next tier of asset size?

One thing if you look back, $10 billion kind of a size. If you look back at the last 20 plus years, just in building our company, there were a lot of years where we were going in markets and we were kind of low market share guy and we were 8 or 10 in market share or worse and so, a lot of infrastructure not a high returns and it’s just an expensive way to kind of grow your bank. But that was really what laid the platform in place for us. Then we were able to leverage it up partially through M&A. Well, today, we are able to leverage it to the next level through really organic growth without significant needs and investments in that space. So, said differently we can just through operating leverage and growing organically have a meaningful impact on the performance of the company. So, I think $10 billion aside that that is – it’s just how the math will work for us and kind of where our out lies because today we are number one or two in many of our markets and top five in almost all of our markets. So, our reputation, our position in the market had leans us to a place where we’ll be able to just produce more organic growth with less investment in those markets. So that feels good overall. Now then you throw in the $10 billion equation. The overhead associated with that, the Durban impact of that and all of that, clearly you’ve got to have scale and to be able to support that. And just getting barely over $10 billion is a very difficult way to kind of support all that overhead. We have been able to do it through reducing expenses to pay for it. So like that will continue to be the path and we’ll be able to continue to execute on that. So I feel good about that, but also we are building obviously a platform to build a larger company and when that next step comes or what that next opportunity is, I don’t know, I don’t know that anybody really knows what an optical – optimal asset size is to support it. But it’s clearly not 10.5.

Right, right.

So, is it 13, is it 15, is it 17, I am not sure. I think our next move will not be driven purely on size, as you know it’s going to be driven of the quality of the bank, where it’s located, the management team, the trust level we have there, the cultural fit. So all those dynamics will come into play, but clearly we are not making these investments to stay just over 10.

If I could just ask as an add-on to that, has there – and I am sure you guys will discuss that at the meeting coming up, but any difference in the markets that you want to be in? I mean, do you see any, you talk about not wanting to be small in the market. So that implies to me that you don’t want to go into Atlanta. You’ve never wanted to go into Atlanta and I don’t see that changing. Any difference there?

Well, there are always markets that we are not in today that are on our radar screen. It’s – how do you get there? Do you have the right team? Do you do a team carve out? Is there an acquisition opportunity? So we certainly have a number of markets that we are not in today that we would like to be in if the right opportunity presents itself to go there. On the other hand, if that does not happens, we feel great about where we are. I mean, I was in Charlotte last week and I had dinner with about 80 of our customers and the opportunity there, the opportunity in Greenville, in Charleston with our position and if you look at banks in our marketplace between $10 billion and $100 billion there are only a few others.

Right.

And that’s a wide – I mean, from $10 billion to $100 billion, that’s a wide gap with just a few players in that space. So we really like where we are. We really like how we are positioned in those markets and I think regardless of new markets, that will be our primary focus.

Thank you.

Nancy, this is John. Just to remember too on the size, you got to remember, we are throwing off an ROA that’s almost 130 and so our profitability is pretty high on that when you look at ROA and obviously our return on tangible is right there at 16. So, we just – the returns and the ROA that we are producing clearly doesn’t mean we got a scale up like some of the folks were going to have to.

All right, thanks.

We just continue to hear in the marketplace, if where we are, we just continue to hear your bankers are better and you can compete head-to-head with the large banks which have and the reason I mention them is because they have the bulk of the market share. So, between the quality of our teams the size of the company and the markets we are in, we feel really good about how we are positioned.

Yes, I think we are just are looking right now, I mean, now that there are number of you that are breaching that $10 billion mark. It’s kind of how does the industry go from there, because we haven’t been here before. As you say, there are only a couple of banks that are in that sort of – I don’t even know which call it’s smaller than mid-size, bigger than small size and clearly the industry, the community banking industry is headed that way, it’s going to be of a bit of a question mark I think over the next couple of years.

So, I think, so much of that work goes in before you get there and so, it’s not like you cross it and then you got to figure it out. As you got to figure it out, I mean we are 8.7 or so today. I mean, you have to figure that out way before you get there, that you willing to got to commit to it and then you got to figure out a strategic plan of how to get there. And that’s what we’ve been working on very, very hard the last 18 months. We didn’t know when Southeastern would come or if it would come or who the next partner would be or when we would go over $10 billion. So, I think you’ve got to be willing to commit to both financially and from a focus perspective and strategic perspective. Really much, much further ahead than $10 billion. I think, once you get past $10 billion, then it comes to really more of an capital allocation, all right, how are we going to look the best way that we can allocate the capital. As John said, we are throwing off high returns, we are building capital at a fast rate. So it was the best way to leverage up the infrastructure that we had in to invest in and what the best way to deploy that capital. And that’s kind of where we are now. We are not to the end of that preparation for the $10 billion but we are certainly on the backside of it.

Well, I look forward to hearing more about it on the second. I am sure you guys will discuss this at length. Thank you.

Thank you, Nancy.

Thank you, Nancy.

The next question is from Peyton Green at Piper Jaffray.

Yes, good morning. John, I was wondering if you could maybe provide a little update on what you expect the roll down and accretion income to do over the next quarter or next year?

Sure, I’ll give you some color on that, Peyton. I think when you think about our acquired loans, it kind of I think, slide number 5 in our package is a really good place to start. It’s our net interest margin slide. You can see in our last quarter, we had about little over $81 million in net interest income. And that’s really what our focus is, it’s really on the net interest income side. It’s not necessarily the – what the margin number shows. And so, the thing that we’ve been working real hard at, Peyton, is to grow loan interest income and we were able to do that $200,000 this quarter. If you look linked quarter, obviously, our net interest income is down and that has to do with the investment portfolio. And so, obviously investment portfolio yields are coming down. We clearly have the Southeastern transaction coming on. They have an investment portfolio. It’s a little over $650 million. So from an investment portfolio side, obviously we will have a pick up there. When I look big picture at the kind of the accretable yield piece of it, Robert talked about this earlier, but, if you go back and look at earning assets, it used to be, if you got back third quarter of 2014, over a 30% of our earning assets were acquired loans and now we are down to about 20%. So, I think that’s a really nice decrease and we’ve been able to drive our income. I think when you think about how the accretion is going to do, look at really the runoff, right. How fast are the acquired loans going to runoff? And so if you go back to September of 2015, our acquired loan runoff was almost $120 million and now when you get to this quarter, it’s right at $83 million. So here is what’s happening inside that acquired loan portfolio. That acquired credit impaired piece, as you know, Peyton, if you are looking our regulatory filings and many of those loans are paying today. We’ve had a lot of those loans for an extremely long, long period of time and so, the weighted average lives are getting extended out. That’s obviously driving the yield down, but, hey, we get to keep the asset and earned interest income off of it. So I think, as you look at it, last year, I think we kind of guided, we were on that kind of $90 million pace on acquired loan runoff. Now we are down in the low 80s. We’ll have to see the next quarter or two how that holds. Obviously, a lot of our acquired loans are on the mortgage side from the first federal side. I think that’s why you are seeing some of the increases that we have on the mortgage fee side. So I think if I’m in your shoes, it’s really kind of the pace of how those acquired loans are going to runoff.

Okay. And then, maybe, I apologize if I missed this, but as you are bringing on new volume, what kind of blended yield are you getting? And as that, at the margin are you seeing more competitive pressure push that down or is it starting to stabilize?

Yes, it’s been pretty steady kind of in that 360 to 370 range on the yield side, on the new things that we are bringing on, so I’d say it’s been pretty steady over the last few quarters.

Okay. All right.

I mean, ultimately, it’s about growth, right, so if you look over the last several years, first, we could not outpace the acquired loan runoff. Then the goal was lets breakeven, then I think as we mentioned this year, let’s get to 5% and we felt like if we could get to 10% net loan growth at the end of this year, we’d be doing well. Obviously, we’ve been able to do that over the last few quarters. So, we got to grow that book. We see plenty of opportunities. If you look at our construction and land development to total risk-based capital, our CRE to total risk-based capital, we are way below any of the thresholds and we do believe those are thresholds that you need to pay attention to. We did not pull any triggers on any wholesale loans as I mentioned earlier. So it’s – what we are trying to do is not – we are trying to get good correlationships. We think it’s a jump ball in the industry today that really moved some really meaningful relationships.

Okay, great. And then, one follow-up. In terms of the liquidity, I know it’s come down from about $640 million on average in the third quarter of 2015 to roughly $470 million in the second quarter down to $354 million on average in the third. How much would you expect – what’s the right level to run your bank? I mean, that’s still a little over 5% or right at 5% earning assets which is high. Will you bring that down?

We can bring it down. Obviously, it’s getting ready to go back up. When we bring Southeastern on, 35% of their assets were in their investments portfolio and then I think the other thing to remember is, we don’t have any FHLB advances. We don’t have any brokerage CDs. So you can look at people’s liquidity on balance sheet. We almost have a big nine in secondary sources of liquidity from FHLB advance as you name it. So, Peyton, from a liquidity side, we are in really, really good shape today.

And Southeastern’s loan to deposit ratio…

65%.

65%.

It’s going to kind of refill the gas tank as we get into next year. We are excited about what they are doing and our teams are really gelling together and so, we are just excited to get this deal close get through conversion and they are going to be another nice growth engine for us.

Sure, no, no, I guess, my point, or my question is, just on the fed funds piece, they are very short overnight.

A couple of $100 million. $200 million, if you want a number, but my point is, you can look at somebody’s balance sheet and they might have $400 million but if they’ve got $1 billion in brokerage CDs or $500 million in advances, I think we have to think through that part over that. What I was trying to say is you can see how core really our funding base is and really our whole debt side of our company.

Sure, no, no, I just – it seems to me like there is still a little earning asset mix improvement there. So that’s all. Thank you very much.

The next question is from Tyler Stafford at Stephens Inc.

Hey, good morning guys.

Good morning, Tyler.

Good morning, Tyler.

Very nice quarter. I guess, most of my questions have been answered. I’ve got a couple left. First on the loan growth. I am trying to get a handle on how much net growth you could see next year with the runoff of the acquired? How much of that acquired book are you able to keep and retain and refinance into the non-acquired portfolio?

It’s really not a lot. When we look at every loans that’s of any size, so and you really got two pieces of that. So the acquired credit impaired, those are going to stay in the pools and so, I think when you think about that number, looking at our regulatory disclosures of how many of the loans of those are passed? What the grade is? You can see that acquired credit impaired, a lot of those ones are in really, really good shape. So when you say, keep in –I think to look at that disclosure, it helps a lot. And then on the acquired non-credit impaired, the big piece of that, really a lot of it’s mortgage. And so, I think what you are seeing there is you are seeing a lot of refinance is out as you – at the rates have been so, so low. And what we are excited about on that side is there might be refinancing now, but we are building our mortgage servicing asset. In fact, this last quarter, if you just look at the loans that we’re servicing, it almost went up $40 million in terms of loan balances that we’re servicing. So, remember, that non-credit impaired bucket, those do churn out, but there is not significant movement over from into the non-acquired bucket.

Okay, that’s helpful. Thank you. And then, with Southeastern coming on in 1Q, should their margins firm up the margin pressure that you are seeing? Just optically and I hear you on focusing more on NII, but just from an optics perspective, will that firm up your margin compression or will that – I guess, what is the margin impacts from that?

Well, their margin today is about 315. So, clearly that’s not going to help. We have not gotten through all the fair values of that. Clearly they have a very large investment portfolio. Obviously, you won’t see us run our investment portfolio at 35% of assets. So if I got some work to do there, I think ultimately Tower is going to kind take of the end of the first quarter get all our fair values done and then you’ll see where we are. But on the surface, their margin today is about 315.

Okay, and then, do you have the recognized PCI accretion this quarter?

The recognized PCI portion, I think, the way we’ve explained it is, you got to just look at the acquired loan yield and if you want to back out some amount of that, the 766 is you could really back some of that out if you like. We’ll have a disclosure in the Q that will show what the accretion buckets are. But that’s kind of how we’ve disclosed it.

Okay, okay. Thanks guys.

The next question is from Christopher Marinac at FIG Partners.

Thanks, good morning. John or Robert, I want to go back to the comments you’re making earlier on the big picture, back to Nancy’s question. When we think of Charlotte how big is your lending team there? And where do you think that will be in one or two years? Just want to get a kind of gauge or kind of where that directionally is going?

Well, it’s been our fastest growth market. We have really an extraordinary team in that market. We just – a large CPA firm moved out of our headquarter building in Charlotte. We took down all of that space, which gave us, I don’t remember exactly, how many additional square feet. But..

More than double.

Yes, it doubled our square footage. So I think that probably gives you a good idea of kind of where we are headed. It’s a market, obviously, that’s dominated by the large banks and it’s been a market where we’ve been able to really bring on some really nice talent and the middle market space there and private banking space has been exceptionally strong. So, it’s a market that we will continue to invest and we are – if you look all in, we are not – in terms of the loan portfolio, it’s not quite at the billion dollar level yet in the Charlotte MSA. But it’s getting there. And we would like to see that – I think we’d like to see that double.

Is the capacity there it is simply due that organically, given the connections and obviously the space you now have and so the momentum you have been building for several years there?

Sure, we have done it. We’ve done it basically all organically thus far and it’s certainly a whole lot easier to build – take $1 billion to $2 billion than it is that go from zero to $1 billion. So, we’ve got the infrastructure. The culture, the focus, I think Charlotte for us today is operating as well as it ever has. We are competing very nicely in the treasury management space. We’ve brought on additional talent there. We are competing very nicely in the mortgage space. And that’s one of the things that’s important to us in a market, I thought, Nancy’s question was a very good one. Talking about Atlanta, well, it’s really hard for us to compete in all the most – all lines of business that we offer in an Atlanta type market. And in Charlotte, there are pieces of retail that will be more challenging to compete and although there are parts of it where we have really a strong retail base. But I think we will be able to compete pretty effectively in all four lines of our business and what we see when can do that, is we just see higher returns. So, lower efficiency ratios, low – higher ROAs in those markets. So Charlotte will be and it has been, but it will continue to be a major focus and an allocation of both resources and capital.

So, Robert, does your continued evolution in Charlotte, just as an example allow you to kind of continue to push north, geographically up, high 77, 85 again doing that without acquisitions?

It does, I think it all goes back to people. That’s how we’ve really build our company. I know we’ve been kind of through this M&A wave kind of since the financial crisis. But, and if you look back, that’s how we did it. That’s how we did it in almost every market that we are in and I think that, you look at our lines of business then well, then mortgage and commercial today is a platform that’s scalable and easily moved into new markets with the right people.

Great, Robert. Thanks very much for reinforcing these points.

Thanks, Chris.

There are no further questions. I will now turn the call back over to John Pollok.

Thanks everyone for your time today. We will be participating in the Sandler O'Neill Conference in Naples Florida beginning on the 16th of November. We look forward to reporting to you again soon.

The conference is now concluded. Thank you for attending. You may now disconnect.