Welcome to the Valley National Bancorporation Third Quarter Earnings Teleconference Call. At this time, all participants lines are in a listen-only mode. Later, we’ll conduct the question-and-answer session with instructions being given at that time. (Operator Instructions) And as a reminder, today’s call will be recorded. I would now like to turn the conference over to one of your co-hosts and your facilitator, Ms. Dianne Grenz. Please go ahead, ma'am.

Good morning. Welcome to Valley’s third quarter 2014 earnings conference call. If you have not read the third quarter 2014 earnings release that we issued early this morning, you may access it from our website at www.valleynationalbank.com. Comments made during this call may contain forward-looking statements relating to Valley National Bancorp and the banking industry. Valley encourages participants to refer to our SEC filings including those found on forms 8-K, 10-Q and 10-K for complete discussion of forward-looking statements. And now, I’d like to turn the call over to Valley’s Chairman, President and CEO, Gerald Lipkin.

Thank you, Dianne. Good morning and welcome to our third quarter earnings conference call. For the quarter Valley generated net income of $27.7 million, the equivalent of $0.14 per diluted common share. For the year-to-date, net income was $91 million or $0.45 per diluted common share. Non-covered loan growth for both the quarter and year-to-date continues to provide the catalyst for improved earnings momentum. For the quarter, Valley generated over 800 million in loans, albeit the majority of the activity was skewed to the latter part of the quarter. For the year, the number is even more gratifying as new loan originations have nearly eclipsed $2.1 billion, which are on an annualized basis with amounts over 20% of the Bank’s entire loan portfolio. Of the total 2014 originations, commercial lending volume comprised nearly $1.5 billion or 70% of all originations. The commercial activity is almost evenly split between traditional, C&I and commercial real estate. Within the C&I portfolio, approximately two-thirds of the current quarter originations were derived from Valley’s New York based commercial lenders. To facilitate further growth within this market, during the quarter Valley hired a new commercial lending team to service the Bronx. Activity within the New York market remains brisk, yet extremely competitive. The average yield on new C&I loans originated during the quarter was approximately 3.7% with a weighted average re-pricing period of less than 36 months. Commercial line usage during the quarter remained consistent with the prior quarter as outstandings were equal to approximately 39% of total committed lines. For certain New York customers, September represents the low point in their line usage and we anticipate a slight increase in outstandings during the fourth quarter as a result of the aforementioned seasonality. Commercial real estate closings during the quarter were strong as organic loan originations…

Thank you, Gerry. Net interest income in the third quarter totaled 114.7 million, a decrease of approximately 2.8 million from the second quarter. The linked quarter decline is both the result of a contraction in total interest income and an increase in interest expense. The decline in sequential quarter interest income is attributable to increased premium amortization within the taxable investment portfolio, a slight increase in liquidity, the impact of lower yields on new loan originations and the linked quarter decline in recovery and prepayment income. As Gerry mentioned earlier, the Bank originated over $800 million of new loans during the quarter and point in time non-covered loans increased over $360 million. However, average loans outstanding only increased by 136 million as many of the new originations closed in the latter half of the quarter. Due to the disparity in loan closings throughout the quarter, the linked quarter increase in interest income attributable to expanded volume was mitigated largely due to continued interest rate pressure from declining yields on new and refinanced loans. During the quarter, the average rate on new loan originations was approximately 3.5%, an increase from the prior quarter, yet considerably less than the average loan yield of 4.54% for the third quarter of 2014. We anticipate continued pressure on the loan portfolio's average rate. However, if loan volumes continue to expand, we expect total interest income to escalate in the coming periods. In addition to the aforementioned, increased premium amortization within the Bank’s taxable investment portfolio negatively impacted both total interest income and the average rate on taxable securities. Principal cash flows within the Bank’s mortgage backed securities portfolio expanded by nearly 15% from the prior quarter. As a result of the uptick in amortization, coupled with the blended new rate on purchased investments during the…

Ladies and gentlemen, we’ll begin the question-and-answer session. (Operator Instructions) Our first question will come from the line of Ken Zerbe of Morgan Stanley. Please go ahead. Ken Zerbe – Morgan Stanley: I guess first of all in terms of the margin, obviously you guys sound fairly negative on the outlook from the run-off on the loan yields just given your new origination yields versus your profile yields. Can you just talk a little more broadly about how you see the loan yields declining? But at the same time I think you have a lot high cost liabilities that re-price or that mature over the next couple of years. At what point do those maturities on funding cost actually start offsetting the decline in loan yield so you actually may end up with more of a stable NIM?

The borrowings begin coming off the middle of next year of '15. So, we have about 100 million coming off in the – around July of '15 and then we have another 300 million coming off in the fourth quarter of '15. We also have in addition to that some derivatives on the books that we’ve disclosed and that’s about $100 million in the second quarter that will disappear. So in addition, throughout 2015, we have about 260 odd million dollars of CDs, many, many of which are fairly high cost that we put on years ago at the same time we put the borrowings on in an anticipation of locking in some spreads, protecting ourselves against rising rates. So, they will also begin coming off all throughout 2015. So in total, you’ve got about $600 million to $700 million next year that will be coming off. Ken Zerbe – Morgan Stanley: And does that imply NIM stability assuming the rate hikes by the end of the year or?

I am sorry, repeat that. I apologize. Ken Zerbe – Morgan Stanley: Sure. I guess I am just saying that number that you just mentioned, does that broadly imply NIM stability in your models by the end of 2015 or?

You know what, I don’t think we want to project that yet. We have not decided exactly how those fundings will be replaced. And I think depending on what we do and how we do it will determine how that impacts the NIM. In addition, by the way, one of the things which does not affect that is the FDIC receivable which I mentioned which we’re also writing off. And while that doesn’t have an impact directly on the NIM, it does have an impact on the non-interest income line. Ken Zerbe – Morgan Stanley: And then just the other question I have in terms of the loan growth specifically on the bulk multifamily purchase, can you just go into your rationale, like why did you purchase the loans, do you anticipate to do it again in the future? But also, is this, whatever, $100 million that you closed at the end of the quarter, is that also what you’re referring to when you say you had a lot of loan closings at the end of the quarter?

That was part of it. It's Gerry Lipkin. That was part of what closed very late in the quarter. I think it was opportunistic. Another bank, for whatever their internal reasons were, wanted to sell it. They were offering to us at a good price and they also helped meet some of our community reinvestment needs since they did contain a fair volume of low moderate income apartments. So it worked out very well. We underwrote, as I mentioned in my remarks, the entire portfolio. We were very satisfied. The loan to values were no more than 75%, in some cases they were lower than that. So it was good portfolio. Like I said, it was opportunistic. That opportunity presented itself again, of course we would look at it.

Yeah. I think we’ve done this before. This is not a, what I want to call, a one-off per se. We have done it two years ago. We bought some resi loans as well as some commercial mortgages. So, as Gerry just said, we’re opportunistic. If something comes along, it seems to make sense relative to interest rates, term, et cetera, then we’re going to look at it and maybe take advantage.

Our next question will come from the line of Steven Alexopoulos of JPMorgan. Please go ahead. Steven Alexopoulos – JP Morgan: I want to start maybe drilling through the deposit cost a bit. In terms of the CDs, what was the incremental rate that you paid down CDs in the third quarter? And with rates coming down, are you seeing more customers migrate to longer duration CD products?

Yeah, to some degree, yes. We’re not doing the 30-day, 60-day CDs. We’re primarily looking at year and a half, two years, two and a half year CDs. Steven Alexopoulos – JP Morgan: And I see what the rates are on those, okay. And on this increase in the rates being on savings deposits, is that from a campaign that you guys have been running to attract those or are you just seeing more folks put money in the higher balance products where you pay a higher rate?

Yeah. A lot of that is really the money markets that we've talked about. So we have been looking at some broker deposits. But the broker deposits to a large extent, I would say half of what we've put on, we've locked in for longer terms, three, four and five years. While the cost is not what we consider to be high, it may be higher than the cost that what we have on the books at the moment. So it has a negative impact on the overall cost of the deposit structure. But we think that it helps protect the bank, a lot of it is floating rate instruments. Steve Alexopoulos – JP Morgan: So Alan, putting this together, do you expect the cost of deposits to continue to trend upward here?

I think it’s a slight trend upward. I didn’t see that as a huge set of numbers. Remember, built into that or the derivatives I talked about and over the next couple of years beginning next year, we have in total about $400 million built into our interest expense line that is hurting us at the moment where we anticipated rates rising. Beginning next year, as I said before, we have 100 million coming due which is going to help to bring down that cost of deposits. Again, if short term rates do not rise, and I don’t know think we see that happening really at the moment, we should be fine with this. You may see a basis point here or there, but I don’t see any major upticks. Steve Alexopoulos – JP Morgan: And on the auto portfolio, what’s the yield of the auto loan book? And what’s the yield you’re adding new loans? I am looking at the website, looks you’re offering yields at 2.40% and 3%.

That’s approximately what they’re coming on at. Steve Alexopoulos – JP Morgan: So mid 2s?

They were in the low to mid 2s. One of the things again, Steve, which I think we’ve talked about is that we like the shorter duration of those. There's huge cash flow that comes out of that portfolio. We’ve always liked it. We’ve always been in it for that reason. So kind of helping us to offset some of the longer term assets we've put on are auto loans which are much shorter in duration. And while the interest rates are low right now, we know that we have the ability, as rates hopefully whenever rates should increase, to see higher yields on that portfolio.

Yeah. I didn’t include it in my remarks about the portfolio, but I know there is a lot of talk about auto lending today and how crazy it’s becoming as far as terms and conditions are concerned. We limit the loan pretty much to 100% of the invoice, not the list price on the car. We see competition lending 150% of the list price on the car, which is crazy. And we’re running an average cycle probably in the 760s. So the quality of what we’re putting on is very strong. It has an average duration of under three years. So it is a liquid instrument. As rates rise, the cash flow that comes out of it is phenomenal. So we would be able to redeploy those funds at higher numbers. It has always been a great source of liquidity at our Bank and we’re really pleased with what we’re seeing coming in. Steve Alexopoulos – JP Morgan: Gerry, maybe just final question. C&I loans growth, I would call it relatively sluggish. Can you talk about the production you’re getting out of the State Bancorp platform that you acquired? Thanks.

Well, it’s coming out of New York as a whole. We don’t break out between what came out of the state farm, what came out of merchants, what came out of the new branches we opened. It’s generally all coming out of that New York market. We’re quite pleased with it. I think I won't quite call it sluggish. I think considering all things being equal, I think we’re doing quite well in that marketplace.

Steve, just as an aside on that, we are seeing some reduction in some of the original loans. That doesn’t mean we’re not seeing a lot of new loans coming on the book. I think as Gerry talked about, there has been a lot of new C&I lending going on throughout New York, Long Island, et cetera. However, some of the original loans that we had, they tend to disappear overtime. It’s a couple of years in. Yeah, Park and Liberty as well. So you’re seeing a reduction in Park and Liberty, a reduction in some of the original state loans. Remember, those were PCI and covered loans that we keep in a separate bucket. As new loans go on, they’re not going into that bucket anymore. They’re going into the new total portfolio of Valley. So while the net may look a little sluggish, we’re putting on still a lot of volume of loans.

The Park and Liberty is something that you really have to focus on, because that was a portfolio of loans that almost entirely we did not want to keep on the books. They were of a quality that didn’t meet up to our standards. They had a guarantee from the FDIC which made them attractive at that time.

Yeah. And the other thing you should be aware of which is affecting the C&I portfolio, we had the aircraft portfolio which we still have, but we made a decision a couple of year ago to get out of that portfolio. As you get out of it and there is no new loans coming on, there is run-off of those loans. So we have a lot of -- a lot of it is running in place to get ahead, if you will, and we’re getting ahead. Sometimes it may not seem as much. But again, because of some of the old portfolios that we have, some of that run-off happens and it’s huge cash flow that has to be reinvested.

We have a question from the line of [Joe Finnick]. Please state your company name followed by your question.

A question for Alan or Ira, I guess. Covered loans just being such a small percentage of the overall balance of loans at this point, guys, would you say impact to the margin, either positive or negative, is likely to be pretty minimal from here because there will still be some distortion even at the small balance level?

Yeah, it's very small because the portfolio itself is pretty small, so it doesn’t have a lot of impact anymore.

And then for Gerry on M&A. Gerry, we just saw the acquisition the other day in Florida, a pretty healthy multiple for a small bank. Has the landscape changed at all in terms of M&A pricing in Florida just even in the last few months where the bar is now set even higher for the franchises of value that are left? I mean just how would you characterize your overall M&A landscape in the market so you want to be bigger in Florida?

It's very difficult. That’s a situation by situation answer. I don’t know. Rudy is on the call with us, would be more familiar with the Florida marketplace. Rudy?

Yeah, a couple of comments there. I think that to some extent it's a net seller state. I think there is opportunity for opportunistic buyers. Do you think it's true that the better performers particularly in the billion dollar or more category whether for sale deliberately are not yet are looking in the range of say price to tangible book of 170 to 185. They might dream about expectations higher than that, Joe, but I think that is a range that they talk about. The state as you know is -- or likely comprised of institutions that are in the sub-billion dollar category and there is a lot of – I believe there is a lot of net selling interest there to some extent. And I think those shops are -- you saw a transaction in Tampa that I think was more like 126 to tangible book. I think that was priced appropriate. So, I think it's a broad range, as Gerry said, depending on the individual case, their qualities, their market power and so on.

So as you guys think about acquisitions going forward, just given what you just laid out, Rudy, would you say you have relatively more interest than you had before maybe in the sub-billion dollar category just because of the pricing advantage there?

Gerry, if you want my – my view on that is of course we would love to just focus on the billion dollar plus institutions, but there are certain markets where the more likely candidate would be sub-billion dollars and also the worthy candidate. So, I think it's just fair to say that when we kick off the effort, we'll be taking what good institutions that do in fact range sub-billion to billion plus.

And then relative to when you guys first laid out your assumptions for the 1st United deal, any fine-tuning you would like to do here in terms of your initial, relative to your initial assumptions as you are about to close the deal with market conditions evolving in Florida? Anything you think is better than you initially expected or on the flip side, it's been tougher than you initially thought?

I was excited – Gerry Lipkin -- I was excited when we got into the transaction, twice as excited today as then. Everything we’ve seen today has been as good if not better than we had anticipated in all areas.

And then last one for me, I guess. Alan, setting aside the impact of 1st United, can you talk a little bit more about your expectations for expenses from here for the legacy company taking into account obviously the cost and the expected benefit for some of your initiatives you talked about in your prepared remarks?

Yeah. I don’t see where our operating expenses are going to go down dramatically. So I don’t think you should be building in any kind of major cost applying there. I think when you review and look at those expense lines, I think what I indicated in my comments about the installation of some new equipment at the branches that’s been helping us with the saving people. So overall, I mean I think we’re at a good place and we’ll continue to monitor it closely.

Our next question will come from the line of Frank Schiraldi of Sandler O'Neill. Please go ahead.

A couple of quick questions actually. On multifamily, on the purchase portfolio, is that all five-year fixed term or is it anything longer than that?

The majority is five-year, most of it's balloons. There may be a few seven-year, but the majority of it is in the five-year category.

And it seemed like there wasn’t a lot other than that given comments in the release. But in terms of the CRE originated in the quarter, about what percentage of that outside of the loans purchased was multifamily?

I don’t think a lot.

Very little? Okay. And then just another question on expenses on as we think about this branch modernization program. I mean is there a benchmark to think about costs saved per branch or is it more – or gains more revenue related at this point with that program?

I think when we originally went into this, we told everybody this was going to be kind of neutral, if you will. So we’re going to have some additional depreciation or new equipment coming on, we’re going to save FTEs and I think you’re kind of starting to see that now. Our FTEs are down, our salary expense has come down. A lot of that is relative to the changes we've made in the branches. I don’t think we’re making major reductions in expense as a result of this. I mean it’s coming down, but it’s not going to be dramatic.

We’ve also seen some occupancy savings, because we’ve been able to move some of our branches next door, so to speak, or across the street from their current location to a smaller location. That’s been and I think will become material. We own a lot of our branches, so we can downsize a branch, rent out half of the branch, move next door. Most of the branches have been on the books for many-many years, so their cost is relatively low. So we move out, we actually end up sometimes with a gain.

Yeah. And I think we’ve talked before about rightsizing the branches and we continue to look that and determine what is the right size for each location. And I think as Gerry just pointed out, it’s possible we have a lease, we have to wait for that, maybe we own the building, we sell the building, whatever it is, we’re going to take advantage and do what we have to do. And I think as we also pointed out, we have not been taking any charges relative to this. So this is an ongoing project and it continues help us as we move forward in changing some of the structure.

And I guess just finally on 1st United, given when it’s closing, I wondered if you could just remind us of realizing cost saves, how that gets timed in over the next couple of quarters?

You’re not going to see anything obviously in this. In the fourth quarter you’re probably going to see very little if anything in the first quarter. Because remember, as Gerry said, we’re not going to do a conversion until the middle of the first quarter. So until the conversion is done, it’s very difficult to come up with major savings. There will be some savings right away. But that being said, there are not going to be some of the major ones we’re going to see when you get it. When computer systems disappear, when maybe some staffing gets reduced, et cetera, that will start to really occur I would say in the second quarter of next year.

Our next question comes from the line of Collyn Gilbert of KBW. Please go ahead.

So you guys have said a lot. And if we think about all the moving pieces here, what should we be assuming for loan growth? It sounds like you feel optimistic certainly in your legacy New York market, Florida market. How should we be thinking about loan growth projections for '15?

I would say in the 6% to 8% range, that’s what the numbers seem to be. Now I am not sure that’s going to take into account fully what could happen in Florida. I mean we may see more. But again, that portfolio is relatively small to the total portfolio, so it’s going to have incremental increase. I just don’t know if I can give you the percentage at the moment how it’s going to increase.

I think they themselves have been showing nice loan growth on their own. They’re going to be able to make larger loans than they had in the past. So that will help broaden the market they go after, and as a result that should help us. The consumer area should be significant. We do plan to go down there and try to introduce our 499 refi program. The residential market in Florida went down more than it did in this part of the country. And it made refinancing up until now more difficult. But that market is starting to rebound and the price of homes have come up. I just saw a number in Miami, they were up 9%. As that market improves itself, a lot of people will have an interest in refi. If it’s anything like we had up here in New Jersey and in New York, it should be substantial. Rudy has been instrumental in introducing Al Engel who heads up our Consumer area to a number of car dealers in that area and they’re excited about the fact that that’s a product that they can offer, the staff down there. So I would anticipate that in the not that distant future we would sign up some auto dealers, start to buy paper down there. So none of that has been factored in in the numbers that we released today or in our projections when we bought the company. We always factor that in [indiscernible]. And we are optimistic at least at this point that that should be beneficial to the Bank.

And is it safe to assume that that growth would still be skewed more toward consumer versus commercial? I am not talking about Florida, but for the total portfolio.

No, I don’t know why you would do it.

Just from a growth rate perspective. I mean auto and consumer have been kind of some of the – a little...

From a percentage standpoint you’re talking about?

Yes.

Consumer had strong growth.

And then just second question on provision, obviously credit has been pretty strong these last couple of quarters. Are we seeing a bottoming in net charge-offs? I mean, how should we think about kind of further provisioning in net charge-offs from here?

Well, I am not sure net charge-offs can go much lower than zero. We did have a recovery quarter last quarter of a couple of million dollars. We had this quarter where net charge-offs on our regular non-covered portfolio was almost non-existent. So I am not sure how many quarters in a row we can get to zero or in total recoveries, but we’re very comfortable with what we’re seeing right now. We’re not seeing any upticks in credit quality. In fact, if anything, we’re seeing it just get better as we continue to move forward. So it's a little hard to tell you what you’re going to see in provisioning. Obviously, we take into account loan growth. A lot of people say, well, the portfolio is growing and we’re not -- but we are taking that into account. We take into account everything. Gerry talked about if I criticized in all classified loans and all those categories are coming down. So, when you put it all together into a bowl of wax, the model comes out and say that we should be where we’re at and we’re pretty comfortable with that. And I think we did indicate as well that there is included in there almost $700 million of loans that are separately covered by a fair value market.

And then Alan, I know you had said that as you guys think about sort of the borrowings and derivatives and CDs that are re-pricing next year that you haven’t figured out exactly how you’re going to replace those. Can you just tell us a little bit though of kind of what’s going into the discussion or thought process as to what the strategy might be there?

Collyn, this is Gerry. Remember, the borrowing were mostly 10-year borrowings. They were done at a time to offset loans that we were putting on of a longer duration. The large lock of the borrowings in fact were done when we leveraged up our investment portfolio and bought, I don’t know, somewhere in the $600 million range worth of single MainTrust preferred securities which always performed well. well, a lot of them were bought in the mid-90s and those were yielding us 7% , 8%. Well, when Collins Amendment came in, they no longer accounted as capital, the people who issued them paid us off without a penalty and we were stuck with the borrowings. And the borrowings unfortunately, well we bought them in the mid-90s and the mid-2000s is when they renewed the 10-year borrowings and those 10-year borrowings are now reaching the end of their life. We wouldn’t have need to go out and take on 10-year borrowings in the future. So, we could easily replace them with a shorter term borrowing, which will be at a much lower cost to carry the portfolio. So, when we say we anticipate a significant savings, that savings I think will take place almost irrespective of where interest rates are at that time, because we’re not going to run out and do 10-year borrowings again to replace the ones that expired.

Even the loans that have come on are already moving through the cycle, if you will. So if we put on, for argument's sake, a 10-year loan four years ago or five years ago, I don’t have a need to cover it for 10 new years. So, we’re going to look at it a little bit differently going forward. And we did -- we have told everybody, the average cost next year coming due is almost 4%, and that’s average. There is plenty out there that I can tell you that are in the mid-4s and even as high as 5%. So that is going to start to come due and I can tell you we’re not going to pay anywhere near 4.5% or 5% of those borrowings.

Can you just remind us what percent of the portfolio today, the total loan portfolio, is tied to prime or three-month LIBOR?

If it is prime based, I would say, how much -- about 30%. That’s with the commercial. That’s not of everything. I mean [indiscernible] portfolio, we have residential, but we have a lot of again consumer, home equity -- 30% of everything, never mind.

Of everything? Okay. And then just one final question, just a lot of what decisions that you guys need to be making or thinking about obviously -- well although it's your point, Alan, that the rate environment doesn’t affect how you're thinking about these borrowings, but just in general what is your interest rate outlook?

We don’t see anything going up right now. I think we’re seeing a deflationary environment. We're seeing a lot of pressure from around the world. And I don't see where the Fed is going to do much to move things for quite some period of time. So, once again, [oil], as Al just mentioned over here, is way down. So all that being said, we think at least on the standpoint of the fundings that are on the books today, that are going to begin maturing in '15, '16 and probably even as far out as '17 are going to be redone at much lower rates.

It's our position, Collyn, at least our belief, that when the Fed does begin to raise rates, it's going to be a very slow and very long process. I don't believe we're going to see a sudden spike up in rates.

Our next question will come from the line of Matthew Kelley of Sterne Agee. Please go ahead. Matthew Kelley – Sterne Agee & Leach, Inc.: Before you start to get some of the benefits of repricing the borrowings and the CDs and with the closing of 1st United, it looks like on a standalone basis that should benefit the margin by 12 basis points to 15 basis points just using a weighted average of their margin and earning assets. Do you think we'll see that run through at that level or will there be more organic compression offsetting that 12 to 15 by the time we get to, call it, the second quarter next year?

Organic has to affect it. But again, they're only 10% of our balance sheet. So that’s going to be a positive, but it’s going to be impacted by our continued origination of loans that are going to be at lower rates. So there has to be some negative impact.

One encouraging thing that I have observed though is they seem to be able to get a little bit higher rates in Florida than we’re able to get here in the metropolitan area. So that could be a benefit to some degree also. Matthew Kelley – Sterne Agee & Leach, Inc.: And then the promotional deposit pricing that you’ve seen out there, maybe just talk about that a little bit more what you’ve seen. Is that a phenomenon just quite recently the last couple of weeks and months or what types of things are you seeing?

We’re seeing CDs in money market pricing which is pretty competitive with the 1% and maybe even a little over 1% range depending on term. Matthew Kelley – Sterne Agee & Leach, Inc.: Any update on your tax rate we should be using for the next year with the…

Not at this point. Matthew Kelley – Sterne Agee & Leach, Inc.: Still around 28.5%? I think it’s the last guidance you provided.

Right around 28.5% to even as high as possibly 29%. As Florida comes on, we may see a slight shift in our effective rate, but it will right around the 28% to 29% range. Matthew Kelley – Sterne Agee & Leach, Inc.: And then the purchased multifamily loans, what was the average yield on those loans? And I guess the second question would be, why not just go directly to Meridian or Eastern yourselves instead of buying them from somebody else who had already done the deal with those brokers?

This was again, I think Gerry pointed out, it’s an opportunistic kind of a situation. The yields in the mid -- it’s above the mid threes and we were comfortable with it. Matthew Kelley – Sterne Agee & Leach, Inc.: And then last question. What’s driving the year-over-year decline in the insurance business and what should we expect there it's down 14% year-over-year?

Well part of it is the title business. So remember, we had last year as well as we had a huge amount of gains on the sale of loans, we had a lot of title business come through that’s included in the insurance. Now our regular insurance business has done reasonably well and continues to increase. However, we don’t always see quarter-over-quarter increases there. But the title business is down as a result of residential refinance business.

Next question will be from the line of Dan Oxman of Jacobs Asset Management. Please go ahead.

My question is on the capital. Your Tier 2 capital ratio fell 11.4%, which while it's well capitalized or considered well capitalized, it's below the what I believe regulators prefer to be 12%. So could we potentially see a sub-debt raise? Looks like you might need between 75 million to 100 million to get you comfortably over that 12%.

We’ll continue to review that as we move into next year and we’ll continue to look at our loan growth and what’s happening there and whether or not we feel we need it.

And our last question in queue at this time will come from the line of Mr. Chris Jackson of Sterne Agee. Please go ahead. Chris Jackson - Sterne Agee & Leach, Inc.: All my questions have been asked and answered. So I'm okay.

Ladies and gentlemen of the panel, there are no further questions in queue at this time. Please continue.

Thank you for joining us on our conference call today. Have a great day.