Will Fisackerly - Senior Vice President and Director of Corporate Finance Dan Rollins - Chairman and CEO John Copeland - SVP, Treasurer and CFO Chris Bagley - President and CEO.

Emlen Harmon - JMP Securities Catherine Mealor - KBW David Feaster - Raymond James John Rodis - FIG Partners.

Good morning, and welcome to the BancorpSouth Fourth Quarter 2017 Webcast and Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Mr. Will Fisackerly, Senior Vice President and Director of Corporate Finance. Please go ahead..

Good morning and thank you for being with us. I will begin by introducing the members of the senior management team participating today. We have Chairman and Chief Executive Officer, Dan Rollins; President and Chief Operating Officer, Chris Bagley and Senior Executive Vice President and Chief Financial Officer, John Copeland.

Before the discussion begins I’ll remind you of certain forward-looking statements that may be made regarding the company’s future results or future financial performance. Actual results could differ materially from those indicated in these forward-looking statements due to a variety of factors and/or risks.

Information concerning certain of these factors can be found in BancorpSouth’s 2016 Annual Report on Form 10-K. Also during the call, certain non-GAAP financial measures may be discussed regarding the company’s performance. If so, you can find a reconciliation of these measures in the company’s fourth quarter 2017 earnings release.

Our speakers will be referring to prepared slides during the discussion. You can find these slides by going to bancorpsouth.com and clicking on our Investor Relations page, where you’ll find them on the link to our webcast or you can view them at the exhibit to the 8-K that we filed earlier this morning.

And now, I’ll turn to Dan Rollins for his comments on our financial results..

Thank you, Will. Good morning. Thank you for joining us today for BancorpSouth’s fourth quarter 2017 conference call. I will begin by making a few brief comments regarding the highlights for both the year and the fourth quarter. John will discuss the financial results. Chris will provide more color on our business development activities.

After we conclude our prepared comments, our executive management team will be happy to answer questions. Let’s turn to the slide presentation. Slide two contains our customary Safe Harbor statement with respect to certain forward-looking information in the presentation.

Slide three covers the annual highlights for the year, which reflects continued improvement in profitability. Before we get into the financial results I’d like to go ahead and touch on our recent merger closings. We are all happy and pleased to finally have Wichita Independent Bank and FirstState Bank Central Texas as a part of our team.

These transactions are closed effective January 15, 2018. The transaction closings are the result of the lot of hard work and progress by our teammates as well as unwavering support and commitment from the management team, employees, directors and shareholders of our two partners. We believe these bankers led by Cloud White and Kevin Co.

in Louisiana and Don Gabalski, Eric Gambell, Randy Ramsey and Richard Procter in Texas would be able to support our plan and growth in 2018 and beyond. Looking ahead we expect to complete the operational integration of OIB during the first quarter of this year and first state bank during the second quarter of this year.

It's been a long path to the closing of this deals we are excited about the value this two great banks add to our company more importantly we are pleased to be able to finally execute on our strategic plan.

As we look at the financial results for the year we reported record annual net income for our company of the 153 million or $1.67 per diluted share which represents an increase of $0.26 per share or 18% compared to 2016. We continue to harvest cost savings in order to pay for other investments including technology and people.

Our operating expense declined by 7.4 million for 2017 compared to 2016, this decline combined with revenue growth resulted in a 200-basis point decline in our operating efficiency ratio excluding MSR from 69.8% to 67.8%, while this level is still unacceptable to our team we are obviously on the glad path toward more peer like efficiency and we expect 2018 to reflect the continued improvement.

Our net interest margin continues to benefit from the reprising of our loan and securities portfolios combined with very stable funding cost. The net interest margin increased from 3.52% for 2016 to 3.54% for 2017. The next two bullets cover annual loan and deposit growth for the year.

Both were approximately 2% for the year which is not the level we would have like to have seen. We believe the economy in 2018 will allow us to grow and expect mid-to-high-single-digit growth in the loans and deposits. Chris will cover our business development efforts more in a moment. Non-operating items were not material during 2017.

Additionally, the positive MSR valuation adjustment net of tax was approximately 1 million for the year. Accordingly, net operating income excluding the MSR change was 152 million or $1.66 per diluted share which represents an increase of 0.16 per share or 11% compared to 2016.

Finally, we continue our efforts to manage and deploy capital in the best interest of our shareholders. We repurchased almost 3.7 million shares of our company stock during 2017 at a weighted average price of $29.94. Importantly, we were able to repurchase these shares with very minimal impact to our regulatory capital ratios year-over-year.

Our board has authorized us to repurchase up to 6 million shares over the next two years and I would expect our team to execute this program opportunistically. Slide 4, provides a view of our summary financial results over the past 5 years. Both on a gap basis and operating basis.

These results further reflect the trends I mentioned on the previous slide. We have driven consistent profitability improvement through growing net interest revenue, stable credit quality and continued declines in our operating expenses.

These results reflect a compound operating EPS growth of 12% over the past four years culminating with the record annual net income for our company in 2017. Moving to slide five, I’d like to touch briefly on our fourth quarter financial highlights. Net income for the quarter was 37.5 million or $0.41 per diluted share.

Earnings benefited from a positive mortgage servicing writes valuation adjustment of 2.4 million. Additionally, we had two other items impact in the fourth quarter results that we considered to be non-operating. First, we have heard merger expenses for around $700,000.

And second, we reported additional income tax expense of approximately $600,000 to revalue our net deferred tax assets. This adjustment was the result of the corporate tax rate changes enacted by the Tax Cuts and Jobs Act of 2017.

We made several strategic tax planning decisions during the fourth quarter including the pension contribution, which allowed us to minimize the impact of this adjustment. Well, this legislation resulted in a small negative impact for the quarter, it’s a huge win for our shareholders and our company going forward.

John will cover the impact of the effective tax rate in a moment. I would like to reiterate our announcement from earlier this month. The first investment we made as a result of this legislation was in our teammates. Our board and management believe the key to the success of our company as our people.

Earlier this month, we announce the plan to share of portion of the tax savings for the large percentage of our teammates through salary increases and one-time bonuses. After adjusting for the items I’ve mentioned, fourth quarter net operating income excluding MSR was 36.8 million or $0.41 per diluted share.

This represents an increase of $0.08 per share or 24% compared to the fourth quarter of 2016. Moving on to the other highlights. Deposit growth for the quarter was 139 million, almost 140 million or 4.7% annualize. Well, total deposit growth for the year was less than we desire. As I mentioned earlier, this growth represented a nice finish to the year.

Chris will provide additional color including geographical highlights in a moment. Finally, non-interest expense decline compared to both the third quarter of ’17 and the fourth quarter of ’16. As I mentioned earlier, we continue to be very disciplined and challenging our team on where we are spending money.

I will now turn to John and allow him to discuss our financial results and more detail. John. .

Thanks, Dan and good morning all. If you will turn to slide six, you will see our summary income statement. Net income as Dan has already alluded was 37.5 million or $0.41 per diluted share for the fourth quarter.

And while there weren’t large items, Dan did mention two non-operating items, we had during the quarter, which were 700,000 in merger related expenses and 600,000 in net additional tax expense related to strategic tax planning and the deferred tax asset valuation adjustments.

There were no material non-operating items and results of either of the other two quarters presented here. Additionally, we had a positive MSR valuation adjustment for the fourth quarter of 2.4 million.

Accordingly, we reported net operating income excluding MSR of 36.8 million for the quarter or $0.41 per diluted share compared to 39.6 million or $0.43 per diluted share for the third quarter of 2017 and 30.7 million or $0.33 per diluted share for the fourth quarter of 2016.

Net interest revenue increased 5.2% compared to the fourth quarter of ’16 and $0.07 as a percent compared to the third quarter of 2017. I like to spend just a moment on the dynamics of our net interest margin which was flat at 358 compared to the third quarter of 2017 and up from 3.46% for the fourth quarter of '16.

We continue to see pick-up in our margin from increasing loan yields and relatively stable funding costs. Loan yields increased to 4.36% compared to 4.33% for the third quarter while our cost to deposits increased only 1 basis point over the same time period from 26.26% to 0.27%.

We also saw some pick-up in the yield of our securities portfolio during the fourth quarter.

From a margin perspective the net benefit that I have described was somewhat offset by a balance sheet decision to add incremental borrowings and prefund additional securities purchases that we anticipate using to restructured the securities portfolios that were acquired with the two mergers that closed earlier this month.

This strategy did result in a positive spread that provided a slight benefit to net interest income but it did hurt our net interest margin for the quarter by approximately 3 basis points. In other words, a slight dilution of that margin and this action also pushed our year-end assets over 15 billion.

Before we move on to noninterest avenue and expense slide I'd like to touch briefly on tax as just we look forward. Our combined effective tax rate for 2017 was around 34% to 35% with the new federal statutory rate of 21% we expect our combined effective tax rate for '18 to be between 23% and 25%.

If you'll turn to Slide 7, you'll see detail of our noninterest revenue. Total noninterest revenue was $63.1 million for the quarter compared to $66 million for the third quarter of 2017 and $73 million for the fourth quarter of 2016. We experienced and expected seasonal declines in our mortgage and insurance businesses.

We have a more detailed slide dedicated to these product offerings that Chris will discuss in a moment. The other line items on this slide are relatively stable quarter-over-quarter. Slide 8 presents a detail of noninterest expense.

Total noninterest expense for the fourth quarter was $125.9 million compared to $126.9 million for the third quarter of 2017 and $130.5 million for the fourth quarter of 2016. As I mentioned earlier, the only non-operating items that impacted noninterest expense was the 700,000 of merger related expenses.

We continue to have disciplined expense control of the cost virtually in all categories. We saw and did see a decline in salaries and employee benefits in the fourth quarter compared to the third quarter.

This decline was driven by a number of factors including reaching cycle limits as well as seasonally lower commissions related to some of our non-interest product offerings. That concludes our review of the financials. Chris will now provide some color on our business development activities.

Chris?.

Thank you, John. Slide 9 reflects our funding mix at year-end compared to both the third quarter of 2017 and the fourth quarter of 2016. Total deposits and customer repos increased to $136 million compared to September 30, 2017, and increased a $191 million compared to December 31, 2016.

The trends reflected in our fourth quarter results were similar to what we've reported for some time now. Disciplined pricing of our time deposits has provided a headwind to our overall deposit growth efforts we continue to be pleased with the growth in our lower costs accounts.

As Dan mentioned, this strategy has helped us hold our total cost of deposits in a very tight range. Additionally, the addition of First State Bank will help up from a liquidity perspective as their loan to deposit ratio at year-end is approximately 60%. As we look at geographical performance relating to deposits.

We have 5 community bank divisions stand up this quarter for deposit growth. West Tennessee, Northeast Arkansas, West South Arkansas, Mid-Mississippi and North Central Alabama divisions all recorded excellent results this quarter. Looking forward, we will continue to focus on growing our core relationship deposits across our entire footprint.

Moving to slide 10, you will see our loan portfolio as of December 31st compared to the third quarter of 2017 and the fourth quarter of 2016. And our loan portfolio is flat compared to September 30, 2017, loans are up 244 million or 2.3% compared to December 31, 2016.

We believe the hurricane season especially Harvey in some uncertainty around the tax changes at the end of the year. May have been pick at our last, impacted our last half growth for pipelines indicate, we are competing for deals all across the footprint and we remain confident and our ability to grow loans.

As we look at our fourth quarter lending efforts from a geographical perspective. We had several divisions produce winning [ph] for loan growth. Stand-up divisions for the quarter were our Dallas, Texas, Houston Texas, Missouri and Pineville divisions. Slide 11 contains credit quality highlights. I’d like to touch briefly on a couple of these bullets.

Our credit quality metrics remains strong across the board. We had a provision for credit losses of 500,000 for the fourth quarter compared with a provision of 500,000 for the third quarter of 2017 and provision of 1 million for the fourth quarter of 2016. Our provision was 3 million for the full year of 2017.

We continue to experience low levels of net charge-offs, which were less than 10 basis points for both the fourth quarter annualizing for the full year. Finally, we continue to see smart fluctuations quarter-to-quarter. Total NPLs to net loans and leases have declined to [0.71% from 0.94%] a year ago.

And while NPA to net loans and leases have decline from just over 1% to 0.76% over the same time period. And today our other real estate is already as its average $6 million is very low and we’re proud of that. Moving on to for the mortgage and insurance the tables on slide 12 provide a five [ph] quarter look at our results for each product offering.

Our mortgage banking operation produced origination volume for the quarter totaling 308 million. Home purchase money volume was 219 million or 71% of our total volume for the quarter. Deliveries in the quarter were 267 million, compared to 314 million in the third quarter of 2017 and 380 million in the fourth quarter of 2016.

Production and servicing revenue, which excludes the MSR adjustment totaled 4.9 million for the quarter compared to 7 million for the third quarter of 2017 and 5.6 million for the fourth quarter of 2016. Our margin was 1.06% for the quarter representing a decrease from 1.53% for the third quarter of 2017.

This margin decrease is attributable to decline in our mortgage loan pipeline as we are currently and seasonally slower time of the year for the home sales. Our pipeline was 194 million at December 31st compared to 233 million at September 30 2017. As limit into the spring selling season.

We would expect to see these trends reverse as we typically do in the first and second quarter of each year. Finally, as Dan mentioned earlier, the MSR valuation adjustment during quarter was 2.4 million.

Moving to insurance, total commission revenue for the quarter was 25.8 million compared to 28.6 million for the third quarter of 2017 and 25.7 million for the fourth quarter of 2016.

I would remind you again that fourth quarter is always our lowest quarter for commission revenue as a result of the seasonality and timing of renewals and insurance book of business. A message related to our insurance business is really no difficult [ph] interest of time, our insurance teammates continue to report a very soft premium market.

We have to grow our team and grow our customer base in order to generate revenue growth. I'm confident in the leadership of our insurance team and the actions they've taken already to help us achieve these goals. Now I'll turn it back over to Dan for his concluding remarks..

Thanks Chris. It is an exciting time for our company.

our ability to continue to reduce our operating expenses, maintain strong credit quality and grow our balance sheet resulted in record earnings for our company in 2017, which is the same simple story that we’ve been sharing for several years now but it continues to result and improve performance year-after-year.

We started 2018 strong by closing the first two bank transactions our company has completed and over 10 years these transactions will further enhance our ability to continue to improve our operating metrics. More importantly as I mentioned earlier we are happy to be able to execute our strategic plan in an effort to grow our company.

Our Board and management team couldn’t be more pleased with the direction of our company. Coming off of record earnings these two transactions, the tax bill and the rising rate environment position our company for continued success. Again, it's an exciting time to be a part of BancorpSouth team. With that operator I'd be happy to answer any questions..

[Operator Instructions] The first question comes from Emlen Harmon with JMP Securities. Please go ahead..

On the new tax rate aside from the comp changes does the tax reform change your strategy at all in terms of other investments you would like to make or just capital planning?.

Well, clearly, it’s going to show significant change to the bottom line for us because we were paying an effective tax rate as the top end of the bracket and so there is a huge win for us, we clearly wanted to share some of that with our team mates and we've done that.

We continue -- we've been investment for the last several years in technology so I don’t know that we change our focus on that probably we are already there.

From a capital management perspective, I mean clearly, we are going to have more income and I think as we roll through the year and see the results of some of that we're going to be looking at the stock buyback program that I talked about and we are going to be looking at our dividend rate..

You mentioned kind -- in your prepared remarks you made some of the positive economic impacts, potential positive economic impacts from tax reform.

Are you starting to see that materialize at all in just non-production, loan demand?.

Again John you may want to back up on the tax impact from our side too, but Chris on the loan side, I don’t think we are seeing a whole lot of measurable change today or something that we could put our hat on and say this has caused by the tax return but there is a lot of optimism out there today and people are talking about what they want to do in 2018 and it feels different than it did a year ago..

Or even several months ago, there was just some uncertainty I think there was uncertainty in the fourth quarter a lot of people were feeling that it's gone away and like Dan suggest I think there is some energy and that certainty helps people planned or forward but people are probably still digesting the tax and how it impacts their individual situation but given what we're seeing I would hope it would generate activity in the number of places in our footprint..

And a last quick one for me.

With the deals closed now, would you be willing to provide us with the expectation on the earnings accretion from those two transactions?.

What you’re talking about is what we see coming forward from the two tractions, how that impacts us?.

Just impact EPS, correct..

Yes. We have put out any EPS numbers off of the two transactions from a cost savings perspective we continue to believe, we’re in the same range, which is combined cost save between the two at 20% plus. One of them again is new territory for us or we’re going to see less opportunity for cost savings in one market over the other.

We’ve got some branch overlap and some consolidation and some operational teams that we can consolidate. So, we’re still shooting in the 20% range. .

The next question comes from Catherine Mealor with KBW. Please go ahead..

Just one question on the deal.

Do you have any sense as to whether these two deals will have any large impacts on your margin here? From the deal standpoint or the core margins?.

At this point, I don’t know that we have anything that we already to put out in a concrete matter, our teams are continuing to measure through, we’ve done a lot of measurement. We’ve been working with the road folks that we engage to value the loan portfolios that will go [indiscernible].

I think it’s too pretty mature for us to tell you how that’s going to impact margin from a basis points spread. I think when you look at our core margin, John can talk about that further but we continue to see upward pressure on our core margin excluding the acceptable yield from the purchase side..

Yes. That’s right Cath.

We do expect to continue to see although as we’ve talked about, it was, the effect of recent rate increases on re-pricing variable rate loans was somewhat muted, because of the balance sheet actions that we do continue to see, some benefit from re-pricing as we go through time and of course that excluded the impact of the two acquisitions and the accretion there..

Okay. And then on the buyback how price sensitive are you to the buyback? I mean your stack is now about 20% or so higher than where you bought it back last year. But you are making more money and you’re creating more capital.

So how do you kind of balance where the stack price is versus using that capital in further M&A or dividend?.

I think clearly price is a factor that gets built into that model and we’re looking at what we want do on that front. I think as you said, there is lots of positives behind the valuation and the earnings that are coming through behind. Price will play in, so again I want to use the word that I used earlier.

I think we want to opportunistic with our buyback and everyone be prepared to play. And so, as we see opportunities we’re going to jump in the market. .

The next question comes from David Feaster with Raymond James. Please go ahead..

Congratulations on getting those deals closed, glad that's behind you. I just have one quick question on the 10 million of incremental employee expenses.

Could you maybe break that out between how much is salaries versus the one-time bonus? And just to confirm the bonus would occur in the first quarter and basically that expenses should come back down towards the more normalized run rates inclusive of the higher comp?.

Yes. I think that’s factually correct with what you said. Let me try that a different John you can jump in here. So, when we look at the onetime bonus numbers that's going to run in the $1 million-dollar range for the first quarter and the $10 million run-up in compensation costs for the year would be all inclusive for our entire year program.

So, 1 million of that is our first quarter event and the rest of that would be spread over the years' time. And when you look at us on a go forward basis we picked up 400 new people 10 days ago and so the first quarter is going to be muddy and hard to see on some of that probably but that's our current budgeting process.

John?.

As Dan said that is really-really muddy and it is muddy when we work that through our budget as well.

The impact in that first quarter of the [Indiscernible] and then there were increases that will effect later periods as well and that $1 million that Dan eluted to and you throw in the new employees that ORB and FSB coming on board it all gets some loss and a big total but we would have had normal salary increases beginning in June and July anyway without the actions that we took resulting from the tax reform and sharing some of that with our employees so we would had roughly half of that anyway relative to salary increases through the year.

.

And I guess and maybe as a follow-on could you remind us how much of FICA and payroll taxes that you expect in the first quarter?.

I don’t know that we have a number for that..

I don’t have a number today David I'm sorry..

I think you can look back over the last couple of years and look at compensation stand from one quarter to the next and model up of that.

The other variable part of compensation for us is again our insurance producers that Chris talked about they are commission based and 1Q is always way high on production from the industry outside that's a seasonality and the insurance book which drops the commission comp in the first quarter way high also so first quarter compensation is going to be high always has been I would refer you to look at the history because it also look very similar to what it way slipped in the past for us as the standalone entity..

Okay and one more from me you talked about the need for hiring in insurance and you've been fairly aggressive in hiring on the mortgage originators over the past year. Can you just maybe talk about your hiring expectations both on the mortgage and insurance side as well as new bankers. .

Yes, Chris can jump in here with me. I think our answer is we are constantly searching for people that can produce business for us in any business line. I would add to the tree that you mentioned were actively looking for equipment finance relationship builders were actively looking for wealth management relationship builders.

Clearly on the mortgage side that drops to the bottom line there is production there, the insurance side, Marco [Indiscernible] runs our insurance team and does a fantastic job there he is a good leader and I know he is out actively looking for people on the insurance side..

To echo Dan's comments producers are we are constantly requiring and looking for additional producers, any insurance world just little color there that takes little longer lead time to get up one from a production perspective because most of the insurance producers are some type of non-solicitation and non-compete with the existing firm so it takes a little bit longer to get them productive when we say a vendor..

Unless you are growing your own and they still take multiple years so yes insurance is a little bit longer lead..

The next question comes from Matt Olney with Stephens, Inc..

Hey, this is Matt Finley [ph] on for Onley.

I appreciate your commentary on the buyback outlook, wanted or may not be opportunistic here but what your thoughts on additional M&A now that you have got the deals close?.

Yes. I think that game is open for us also. I think we feel like, we’ve been working hard for the last several years to accomplish all the things that needed to happen to get us to the finish line with our friends in Texas and Louisiana. I think the door is open for us to continue to look for other opportunities.

And as we look into 2018, we’re hopeful that we’ll be able to talk to some people that may want to join our team. On a timing perspective of that, I don’t know that’s this month or next month or this quarter or next quarter but we want to continue to be opportunistic on that front also.

So, I’ve said for some time that the buyer doesn’t get to set the timeline for bank mergers, the sellers does and so we want to be prepared and ready when opportunities are presented to us..

And you mentioned combined cost savings is 20%. But I’m assuming we have seen some attrition of [indiscernible] in First State.

Have any of these cost savings already been realized today?.

Yes. You got to go all the way back to four years ago, when we made the announcement. Remember these deals were started, we were dancing and talking with these teams all the way back in the follow of 2013 they were both announced in January of 14th.

And certainly, since that time, many things we’ve been done on their side to assist us and growing earnings and being more efficient.

When you look at both of those banks on a standalone basis, you’ve got to give a lot of credit to Kevin [indiscernible] and his management of the and Louisiana, the bank was larger, more efficient, more profitable, healthier in almost any measure you want to look at from, when we closed in January of 18th then it was in January of 14th and the exact same thing that can be said about our friends in Texas Don, Gary, Andy, Richard the team in Texas the bank was stronger, bigger more profitable, more efficient.

So, all of those things play forward and help us as a combined entity to be more efficient and more profitable. When you look at the ability to harvest synergies out of the mergers, I think we still feel like they’re still opportunity there for us and our 20% number is going to hold today. .

And lastly on expenses looks like your salaries line item was down about 3 million budgets in 4Q. But if I’m hearing you right is more normalized and rebound back-up and you want team as seasonally does.

Is that right?.

That’s correct. You have a couple of moving items in there that impacted us there some of that is benefit costs recurring comparing to 4Q to 4Q. Are you comparing 3Q to 4Q, because they were different moving parts there.

And 4Q ’16, we actually had some increased costs on our healthcare coverage that we did not incur in the year-end true-upping because it goes up. And on the other side, we had a true-up, they saved us or benefit us in 2017 on our incentive plan measurements.

But at the end of day, I think you’re going to see a normalized run rate throughout 2018 just as you did last year..

[Operator Instructions]. The next question comes from John Rodis with FIG Partners. Please go ahead..

Only took four years. .

I know some of the lawyers told us that this is Olympic season and we now hold the gold medal and the silver medal in this category..

I'm happy for you guys that you can finally get behind it.

Just the follow-up on your comment on loan and deposit growth you said mid to high single digits this year I'm sure that excludes the acquisitions, right?.

That's correct we’re talking organic. .

And coming off a year where you grew to 2.3%. What gives you confidence that you want to go out with mid to high single digits is it the tax cuts is -- it I'm assuming that's part of it. .

Yes, I think there is optimism out there I think our teams are playing every day and we can make excuses about what happened in '17 but we've got a lot of confidence in the team we've got out on the field and we're confident that we can play in the market and I think when you look at all of the things that are out there today to benefit from the growing economy, the shrinking unemployment, there is opportunity for us there is growth out there and we believe that our footprint that we can harvest that..

And it is also just pay down slowing going forward to?.

Well certainly that was a headwind and we've talked about that in early '17 first quarter '17 we identified some significant pay down headwinds that we incurred.

I think that continued to play through the year for us but yes as the economy expands there is going to be opportunity I don’t again you probably a lot more than I do but I see a lot folks talking that loan growth late in the year just wasn’t there for the economy as a whole I think were a piece of that we cover eight states across the south and I think we're dealing the same pressures that lots of others are but when you look forward there is economic tailwinds I guess that can help us in 2018..

Okay, that makes sense. One other question for me just on the securities portfolio you guys obviously leverage to deduct some in the quarter how should we think about the securities portfolio with the acquisitions what's the combined level going to be is it looks like the two banks combined at a securities portfolio roughly 700 million. .

Yes, so what we did there we were kind of preplanning so as we came in to the end of the year we were looking at their securities portfolio and our securities portfolio, looking at the type of assets that are coming forward from the two banks that were coming onboard with us and we made the corporate decision to pre-purchase or invest some of what we wanted to invest up of their side.

So what you saw was some levering up at the end of the year where we expanded our investment portfolio and the fastest assets that we want and like to hold and that as we've close the mergers we will begin to divest some of the assets that we are in on their balance sheets so by the end of the first quarter I think you will see us back to really just put the one plus one plus one and take out the extra leverage that we put on it in the end of the year that should be going by the end of the first quarter.

.

Dan by my math if I take the end of period September plus what the two banks have that gets you to like 3.1 billion to 3.2 billion is that sort of the good ballpark?.

I think that's fair so plus or minus a couple of 100,000..

This concludes our question and answer session. I would like to turn the conference back over to Mr. Dan Rollins for any closing remarks..

All right, thank you all very much for joining us today. If you need any additional information or have further questions please don’t hesitate to call us. Otherwise, we look forward to speaking to you out on the road again soon. Thank you very much..

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