BancorpSouth Management Discusses Q4 2013 Results - Earnings Call Transcript

Jan.23.14 | About: BancorpSouth Inc (BXS)

BancorpSouth (NYSE:BXS)

Q4 2013 Earnings Call

January 23, 2014 11:00 am ET

Executives

Will Fisackerly - Senior Vice President and Director of Corporate Finance

James D. Rollins - Chief Executive Officer, Director, Member of Executive Committee and Chief Executive Officer of BancorpSouth Bank

William Lloyd Prater - Chief Financial Officer, Treasurer, Chief Financial Officer of BancorpSouth Bank and Executive Vice President of BancorpSouth Bank

W. James Threadgill - Executive Vice President and Vice Chairman of BancorpSouth Bank

Gordon R. Lewis - Executive Vice President, Vice Chairman of Bancorpsouth Bank and Director of Bancorpsouth Bank

James Ronald Hodges - Vice Chairman and Chief Lending Officer

Analysts

Jennifer H. Demba - SunTrust Robinson Humphrey, Inc., Research Division

Steven A. Alexopoulos - JP Morgan Chase & Co, Research Division

Catherine Mealor - Keefe, Bruyette, & Woods, Inc., Research Division

Kevin Fitzsimmons - Sandler O'Neill + Partners, L.P., Research Division

Kevin B. Reynolds - Wunderlich Securities Inc., Research Division

Michael Rose - Raymond James & Associates, Inc., Research Division

Emlen B. Harmon - Jefferies LLC, Research Division

Matt Olney - Stephens Inc., Research Division

Andrew W. Stapp - Merion Capital Group

John Lawrence Rodis - FIG Partners, LLC, Research Division

Peyton N. Green - Sterne Agee & Leach Inc., Research Division

Jon G. Arfstrom - RBC Capital Markets, LLC, Research Division

Blair C. Brantley - BB&T Capital Markets, Research Division

Operator

Good morning, and welcome to the BancorpSouth Fourth Quarter 2013 Conference Call. [Operator Instructions] Please note this event is being recorded.

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

Will Fisackerly

Good morning, and thank you for being with us. I will begin by introducing the members of our senior management team participating today. We have CEO, Dan Rollins; Jim Kelley, President and Chief Operating Officer; Bill Prater, Executive Vice President and Chief Financial Officer; Ron Hodges, the Executive Vice President and Chief Lending Officer; James Threadgill, Executive Vice President and Head of the Financial Services Division; and Gordon Lewis, Executive Vice President responsible for our General Bank.

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 each of these factors can be found in BancorpSouth's 2012 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 Q4 '13 earnings release. Our speakers will also be referring to prepared slides during the discussion. You can find the 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 it to Dan Rollins for his comments on the quarter.

James D. Rollins

Thank you, Will, and good morning. Welcome to BancorpSouth's conference call for the fourth quarter of 2013, and thank you for joining us today.

Exciting times for our company. I know many of you saw yesterday's announcement regarding our planned market expansion into central Texas, as well as our announcement a couple of weeks back regarding our plans to further enhance our presence along the I-20 corridor in Louisiana. We are extremely excited about each of these transactions and I will discuss them in further detail in a few minutes.

But first, let's review the fourth quarter results. I will provide a few brief comments regarding the highlights of the quarter, and then Bill will discuss the financial results in more detail. James will provide some color on our lines of business, including mortgage and insurance. Gordon will provide some insight on the successes of our lending team. And finally, Ron will discuss highlights regarding credit quality. After we conclude our prepared comments, our executive management team will be happy to address any questions you have.

Now let's turn to slide presentation. Slide 2 contains our customary Safe Harbor statement with respect to certain forward-looking information in the presentation.

The next slide begins our review of the fourth quarter. I would like to focus on some of the key highlights for the quarter. Net income for the fourth quarter increased 63.1% to $27.7 million from $17.0 million in the same quarter in 2012, and 11.4% compared to the prior quarter. Our earnings per share increased 61.1% to $0.29 per share from $0.18 per share in the fourth quarter of 2012, and 11.5% compared to the prior quarter. Bill will discuss the components of net income in more detail shortly.

In December, we announced and closed the acquisition of GEM Insurance Agency, a Houston, Texas-based insurance agency with approximately $9 million in annual revenue. We are excited about continuing to grow our insurance business in the vibrant Houston economy. I will let James discuss more detail regarding our plans for GEM in a moment.

We reported net loan growth of $184.9 million, or 8.4% on an annualized basis. I've repeatedly talked about the efforts of our lending team and the quality of deals they are bringing into the pipeline. As the headwind produced by problem asset runoff continues to subside, these efforts are becoming much more visible. This daily focus by our loan team contributed to growth in net interest income, and our net interest margin, which improved 7 basis points during the quarter to 3.52%. Bill will provide additional details regarding the margin movement.

We've made a lot of progress last year in improving our cost structure. We've talked throughout the year about several items that we consider to be either non-operating or non-routine in nature. These items have adversely impacted noninterest expense by just over $20 million on a pre-tax basis. If you exclude these items, total noninterest expense for 2013 declined by approximately $35 million relative to 2012. We reduced our staffing levels during the year by almost 6% from 4,249 full-time equivalent employees to 4,005 at year end, despite the addition of approximately 50 GEM employees late in the fourth quarter.

Our efficiency ratio improved from 82% in the fourth quarter of 2012 to 75% for the fourth quarter of 2013. While we are pleased with the significant improvements we have made, let me be clear, our current efficiency ratio is unmistakably outside the range of what's acceptable and we have a great deal of work left to be done in this area. We are all pleased with our continued improvement in overall credit quality. Ron will discuss this in detail in a few minutes.

Finally, as I alluded to earlier, we are very excited about the 2 recently announced merger transactions. I will spend a few more minutes discussing these momentarily.

I'll now turn our call over to Bill for his comments on our financial performance during the quarter.

William Lloyd Prater

Thanks, Dan. If you'll turn to Slide 4, you'll see our summary income statement presented on a sequential and a comparable quarter basis. Net income was $27.7 million, or 29% -- $0.29 per diluted share for the fourth quarter, compared to $17 million or $0.18 per share -- per diluted share for the fourth quarter of last year, and $24.9 million or $0.26 per share for the third quarter of this year.

There were no items in the fourth quarter results that we consider to be nonoperating. As a reminder, for comparative purposes, we described 3 such items during the third quarter: a pre-tax charge of $2.9 million associated with the TruPS redemption, legal expense of $1.8 million related to matters that we consider to be outside the normal course of business and a tax benefit of $1.3 million related to the resolution of certain -- of uncertain tax positions.

You'll also notice on this slide the improvement in our net interest revenue quarter-over-quarter. As Dan mentioned, our net interest margin increased to 3.52% from 3.45% in third quarter of this year. Several factors contributed to the improvement in the net interest margin. About half of this increase is attributable to the TruPS redemption, which occurred during the third quarter.

If you remember, that redemption occurred in mid-August, which resulted in only about half of the quarter's benefit being realized in the third quarter. Second, loan growth continues to improve our earning asset mix. Finally, our cost of deposits declined slightly. Approximately $15 million of the $150 million of 5-year CD product that we discussed previously rolled off during the quarter. The remainder of that product were rolled off through the remainder of 2014.

Turning to Slide 5, shows the detail of noninterest lines of business. Total noninterest revenue was $65.2 (sic) [$65.1] million for the quarter, compared to $65.1 (sic) [$62.5] million in the third quarter of this year and $70.9 million for the fourth quarter of last year. The comparable quarter change is driven solely by declines in mortgage volume. The sequential quarter increase was driven by improvement in the mortgage margin partially offset by seasonality in the insurance business.

If you turn to Slide 6, James will spend a few minutes discussing the mortgage and insurance lines of business in more detail.

W. James Threadgill

Thank you, Bill. The tables on Slide 6 provide a 5-quarter look at both mortgage and insurance. Our mortgage lending operation produced origination volume for the quarter, totaling $222.3 million. Mortgage lending revenue totaled $9.6 million for the quarter, which included a positive MSR valuation adjustment of $2.9 million, compared to revenue of $5.1 million during the third quarter of this year, which included a negative MSR valuation adjustment of $200,000.

As a reminder, we discussed in last quarter's call several drivers that resulted in an abnormally low margin on production. We are pleased that the margin for the fourth quarter increased towards a more normalized level. We continue to rightsize our production staff, support staff through normal attrition and hiring good, proven originators.

Our focus on growing our purchase volume in 2013, by hiring seasoned and experienced originators, should carry over into 2014. While the mortgage industry as a whole reported 49% and 47% purchase business for the last 2 quarters of 2013, our total purchase business was 67% for the third quarter, and 72% for the fourth quarter. For the year, our purchase volume was $774 million, which is a 9% increase over 2012 and an all-time high for our company. We expect that trend to continue, which would help soften our production decline.

Moving on to insurance, total commission revenue for the quarter was $21.4 million, compared to $23.8 million for the third quarter and $20.5 million for the fourth quarter of last year. The sequential quarter decline is driven by seasonality in our book of business, as the fourth quarter of each year is seasonally low in regards to renewals.

I'll allot most of my time this morning discussing the acquisition of the GEM agency in Houston. The transaction closed in mid-December, therefore the impact on fourth quarter results is minimal. With that said, we are excited about what Ed Schreiber and his team will add to our operation.

GEM is a very respected operation that produces $9 million of revenues annually. Houston is a very attractive high-growth market. This transaction will give us a solid platform to continue to expand in that market. We are working through the details now to combine our current Houston office into the GEM office. Not only does this transaction give us more exposure in a high-growth market, it also provides us with an opportunity to expand market share in the property-casualty lines of business and bring our employee benefit offerings to GEM customers.

GEM's specialties include commercial real estate, manufacturing, distribution and service companies with a focus on complex products and professional liability exposures, oil & gas operations, not-for-profits and health care organizations. GEM has a very large executive personal line operation as well. Again, we're excited about what this relationship will do for our company and our customers.

Now I'll turn it over to Gordon, who will spend a few minutes discussing the efforts of our lenders.

Gordon R. Lewis

Thanks, James. Slide 7 provides highlights of our loan portfolio. Our bankers had another successful quarter by several measures, including growing loans, $185 million. This marks the third consecutive quarter we've reported loan growth, and the portfolio has increased by almost $400 million during that time. The annualized growth rate of 8.4% in the fourth quarter represents a nice improvement over the 4.3% recorded for the third quarter and 3.7% for the full year. We're pleased by the growth across the major categories of loans we report to you on this slide. Increases in the 4 largest categories range from 6.7% to 14.3% during the quarter, and from 3.6% to 10.5% for the year.

Of our 4 banking regions, 2 reported sizable year-over-year growth, while the other 2 remained relatively flat. Our Southeast and Southwest regions increased their loans outstanding by $122 million and $99 million, respectively, during 2013. Additionally, our corporate banking group, which handles large relationships across our footprint, reported growth of $70 million for the year and about $40 million for the quarter.

During the fourth quarter, 3 of our 4 banking regions increased loans with only the Northeast region remaining flat, as declines in their non-performing loans offset production. All these indicators, in combination with what we hear from our on-the-scene bankers, give us reason to believe future growth is available to us. We're confident that we have teams of experienced and capable bankers in place to continue to develop new and existing customer relationships, support our local communities and grow our bank. We're excited about what lies ahead.

Now I'm going to turn it over to Ron to discuss credit quality.

James Ronald Hodges

Thanks, Gordon. Slide 8 presents some highlights of credit quality for the fourth quarter. There was no provision for credit losses for the fourth quarter, compared to $0.5 million for the third quarter 2013 and $6.0 million for the third (sic) [fourth] quarter of 2012. A provision was not necessary due to continued reduction in net charge-offs and improvement in the quality of the loan portfolio.

Total nonperforming loans declined by $23.9 million or 17% during the quarter and total nonperforming assets declined $31.4 million or 14%. Other real estate owned decreased $7.5 million, or 10%, from $76.9 million at September 30, 2013 to $69.3 million at December 31, 2013.

Total dispositions for the fourth quarter were $14.3 million resulting in a net loss from the sale of $900,000. We continue to be pleased with the pace at which we're moving these properties, as well as the prices that we have been able to negotiate relative to the carrying values.

Foreclosures and write-downs were $7.9 million and $1.1 million, respectively. The percentage of non-accrual loans paying as agreed continues to remain relatively stable, representing 52% of non-accrual loans at the end of the fourth quarter. Cash payments of non-accrual loans continue to be the largest single contributor to the reduction in total NPLs. We received cash payments of $25.3 million of non-accrual loans during the fourth quarter, compared with $27.7 million during the third quarter of this year.

Near-term delinquencies representing loans 30 to 89 days past due reflect a modest increase of $4.9 million to $33.8 million, or 0.38% of total loans at December 31, 2013. We also had a significant decline in net charge-off from $7.6 million for the third quarter of this year to $0.7 million for the fourth quarter.

Recoveries continue to provide a nice benefit to the net charge-off number. Recoveries of previously charged-off loans total $7.6 million for the fourth quarter. By nature, recoveries are somewhat volatile and we expect that to continue to be the case as we move forward and work through the remaining problem assets.

Now moving to Slide 9. Let's take a closer look at several of the points that I just discussed. This slide depicts sequential and comparable quarter comparisons of our nonperforming loans by classification. You'll notice that quarter-over-quarter improvement occurred across the board on a relatively consistent basis. The biggest improvement year-over-year was the CAD NPLs, which declined $47.7 million. I'd like to point out that we've now worked the CAD problem loans down to a level that is no longer an outlier relative to the rest of our NPLs. NPLs represented a 1.34% of net loans and leases at December 31, 2013 compared to 1.65% at September 30, 2013, and 2.70% at December 31, 2012.

Slide 10 provides a visual of the significant improvement in NPLs, ORE and total NPAs over the past several quarters. I've already touched on the highlights of each of these metrics, so I won't go through that again. But I would point out that the levels are approaching half of what they were just 1 year ago.

The next slide presents a visual of net charge-offs and annualized net charge-offs both in dollars and as a percentage of average loans for the last several quarters. Again, I've discussed specific numbers for the quarter already regarding charge-offs and recoveries. Accordingly, I won't spend any more time on that, but you can see the trend graphically over the past several quarters.

That concludes my review of the credit and financial results. I will turn it back over to Dan for some comments on our recent transaction announcement, as well as a few closing remarks.

James D. Rollins

Thanks, Ron. I would like to spend a few minutes discussing our recent transaction announcements. If you'll turn to Slide 12, you'll see a map that demonstrates how these transactions impact our footprint. Ouachita Independent Bank, or OIB, operates 12 full service locations, depicted by the green dots along the I-20 corridor in Louisiana. This transaction gives us deeper penetration in the 2 markets that we already serve, Shreveport and Monroe, as well as a presence in Bastrop, a market we do not presently serve -- we did not previously serve.

Yesterday's announcement was in regards to Central Community Corporation, parent company of First State Bank Central Texas. First State Bank is the largest independent bank headquartered in Austin and operates 31 full-service locations depicted by the blue dots up and down the I-35 corridor. We are excited about the opportunity to expand into central Texas and what this transaction will do for the demographics and growth prospects for our company. Austin is at or near the top of almost all of the various publications or statistics regarding economic opportunity and activity. The other markets along the I-35 corridor provide great opportunity as well.

If you'll turn to the next slide, we'll talk in more detail about each transaction. OIB holds roughly $650 million in assets, with $475 million in loans and $550 million in deposits. We believe this transaction is a relatively low-risk play given the similarities in culture, the exceptional credit quality and our footprint overlap. Clyde White has done an impressive job in building this bank from the ground up. I know our people in the local market have tremendous respect for Clyde and the way that OIB operates.

We are also excited for Kevin Koh, OIB's current CEO, to join our team. Kevin will become Division President, with responsibility for our Northeast Louisiana markets. Lee Copeland, our current Division President for North Louisiana will serve as Division President for our Northwest Louisiana markets, while L.J. Holland will continue in his role as market President for Monroe and West Monroe.

Chris Windham, OIB's Chief Lending Officer, will be joining our team as senior lender in Northeast Louisiana. Kevin, Lee, L.J. and Chris have been working diligently for the past several weeks and have done a tremendous job developing plans for integrating our banks. We recently filed our merger application with our bank regulators and are planning to consolidate 6 of the existing OIB offices with 6 of our existing locations. With these consolidations, we are confident we will be able to reach our cost-saving projections of approximately 25% of OIB's noninterest expense base.

First State Bank holds $1.3 billion in assets, with loans of $550 million and deposits of $1.1 billion. As I mentioned earlier, we are excited about expanding into central Texas and, specifically, the Austin market. First State Bank is operated in a structure very similar to ours. We believe it will be a great fit for our company.

As part of the transaction, Don Grobowsky, Chairman and CEO of First State and Central Community Corporation, will join our Board of Directors. We are excited about our relationship with Don and the value that he will add, both as a Director and as a leader in that market. We will also add 3 new divisions as part of the transaction. Gerry Gamble will serve as Austin Division President, Richard Procter will serve as our Hill Country Division President; and Randy Ramsey will serve as the Temple Division President. We're excited to welcome each of them to the team, along with all of their current market presidents.

We believe this transaction provides a solid platform for future growth in this region, both organically and through potential future consolidation opportunities. We expect operational integration of this transaction to follow OIB. Given that there is no footprint overlap, we expect to realize cost saves of approximately 15% in this transaction.

Slide 14 demonstrates what these transactions do for our deposit market share on a pro forma basis. Our market share rank in Louisiana increases from 11th to seventh, based on most recent FDIC data, and Texas will become our second largest state in terms of total deposits.

Turning to Slide 15. I will make a few brief closing remarks. Our company made significant progress during 2013. We produced noteworthy loan growth after a 3-year period of shrinkage, due primarily to regional economic contraction and our focus on problem-asset resolution. While we made meaningful progress in reducing our core expense base, we have more work to do in this area. I discussed some of these specifics earlier. We believe the 2 transactions discussed today will allow us to further leverage our existing operating structure and back office support.

Finally, credit quality continues to improve. That train has been on the track for quite some time and continues to move in the right direction. Going forward, we have the same goals. We have to work, to do more on our expense base and we need to continue to grow.

Our team has proven they're excited about what is going on here at BancorpSouth. Lenders from across our footprint continue daily to bring quality business to the table. Markham McKnight and our insurance team continue to win a new business and grow. Scott Dickey and our mortgage team is attracting and retaining key producers and finding ways to grow -- to continue to grow despite the mortgage industry headwinds we face.

Many of our other lines of business continue to produce as well. [indiscernible] and our trust and wealth management teams are doing a great job on expanding our customer base. And last but not least, our operations and support areas are excited about the opportunities in front of them with the integration of these 2 banks, along with our ongoing systems enhancements. Our Board of Directors, our management team and our entire organization is excited about opportunities in front of us. We are all pleased to be back in the game of building shareholder value.

With that, I will conclude the prepared remarks. Operator, we are now happy to answer any questions you may have.

Question-and-Answer Session

Operator

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

Jennifer H. Demba - SunTrust Robinson Humphrey, Inc., Research Division

Two questions. One, Dan, with the 2 acquisitions you just announced, will you be on the sidelines for a while the rest of 2014, or do you feel like there are more deals you could announce this year?

James D. Rollins

That's a good question, Jenny. And I think it all plays into what our team has the appetite to take care of, what our regulatory structure environment is and how, frankly, the stress test modeling and our capital management plan that we work through and that we're very close to submitting for the first time. I think as I look at all of that, I don't think there's any financial reasons that we would need to be on the sideline and not want to participate.

I can tell you, we're not having current conversations with anything else in any close time frame to where we are today. But frankly, I don't know that there's a reason why we couldn't do more later in this year. Now remember, it takes time for all these transactions to take place. We started talking to Clyde White and his team in Louisiana way back in April of last year. We were talking with Don and his team starting in May and June of last year, it's coincidental that they both come to the finish line in a 2-week time period. But it takes some time when you're visiting with folks and trying to build structure and get to know each other and make sure that it's a right fit for everybody. I see no reason why we could not be and should not be in the market and looking for opportunities in 2014.

Jennifer H. Demba - SunTrust Robinson Humphrey, Inc., Research Division

Okay. And another question, if I can, on your corporate banking loans. Should we assume that or shared national credits you're participating in or...

James D. Rollins

That's a good question. Ron?

James Ronald Hodges

Those are not shared national credits, those are originated in our market and with customers within our footprint.

James D. Rollins

I don't think we added any shared national credits in the quarter.

James Ronald Hodges

We did not.

Jennifer H. Demba - SunTrust Robinson Humphrey, Inc., Research Division

Okay. And can you just tell us about kind of what your size tolerance is around loans like that?

James D. Rollins

When you talk -- Gordon can drop in here, too. When we talk about our corporate banking team -- Tommy Darnell leads that effort for us. And really, that's -- $10 million and up is what they're looking at. I think what we're seeing is $10 million, $15 million, $20 million, $25 million opportunities. And I think they're doing a great job across our footprint of trying to build relationships with our community bankers and make sure that the larger opportunities in those markets are not overlooked. Gordon, you want to add anything to that?

Gordon R. Lewis

I think that's exactly right. And our community bankers have been a great referral source for our corporate banking group. They have a number of customers that are in their markets that might operate in multiple locations across several states. And we haven't been able to handle those on the local level. But with our corporate banking group, we have greater experience to handle some of those larger deals, and that's how we've grown.

Operator

Our next question comes from Steven Alexopoulos of JP Morgan.

Steven A. Alexopoulos - JP Morgan Chase & Co, Research Division

Dan, you clearly made a lot of progress on the efficiency front in '13, moving from 82% to 75%. Just a follow-up on your comments that there's still more to do. What I was hoping was, maybe you could share with us the expected pace of improvements, and basically, do you expect to see a similar pace through 2014 that you saw in 2013?

James D. Rollins

I wish my crystal ball would give us that kind of color for it. I think, what I've said all along, Steven, this is not a linear path that we're on. This is lumpy. There's going to be ups and there's going to be downs, and we're going to have quarters where we look really good and there's going to be quarters where we don't look as good.

I wish it was as simple as you want to ask. The facts are, we've got an expense structure today that is very complex, and making changes in our structure, we need to make smart decisions and we need to challenge every nickel and every dime we're doing. And so, I don't have a road map today that tells you that we're going to drop another 7 points.

I can tell you we need to, but I don't know that that's the answer that's going to happen in the next 12 months. I think the goal for us is to stay very focused on what we're doing and not lose sight of where we need to be and recognize that, while you're right, the 7-point improvement we made from 82% to 75% is nice and we can pat ourselves on the back. 75% is in the unacceptable category, we've got a long way to go.

Steven A. Alexopoulos - JP Morgan Chase & Co, Research Division

Okay, that's fair. And maybe on the First State deal, it looks like a good banking market. But one thing that caught my eye was the relatively small average loan size. Can you talk about what the lending opportunity is for you guys in that market?

James D. Rollins

Yes. I think that's a great question for us. The relatively small loans that's coincidentally, Steven, is almost identical to our average loan size. I don't know if you were aware of that. But when you look at our portfolio at BancorpSouth, our average loan size is virtually the same as theirs. The difference is, I think, is they've been unwilling to look upmarket into some of the bigger transactions. So coming back to the corporate banking group that we're talking about, coincidentally we share a customer.

There is a large customer in central Texas that does business over in our footprint in Louisiana and Mississippi. And they banked them, but they had outgrown them. And we actually have been banking them now for several years on our corporate banking group through some relationships that we have developed over here.

I think there's lots of opportunities just like that for Don and his team where they're looking at the $1 million, $2 million, $3 million, $4 million, $5 million credits on a regular basis, and they're not looking for and they don't have anybody to help them with the $5 million, the $10 million, the $15 million credits. The Austin market is really doing well. You don't have to look too far in any publication to see that Austin is a great market from a demographic standpoint and from an economic standpoint, and the opportunity that we have to grow over there will be very strong.

Steven A. Alexopoulos - JP Morgan Chase & Co, Research Division

That's helpful. If you don't mind, if I ask one follow-up just on this -- the GEM transaction. You said $9 million of revenues. Did you say what the expense add was going to be this year from that?

James D. Rollins

We did not. We really haven't -- that's relatively small, it's about 10% of our -- less than 10% of total revenue in the interim's agency. We didn't really put out a whole lot of detail behind that. James gave you the numbers in the fourth quarter. It was basically neutral to our fourth quarter numbers because it closed so late in the year. But that revenue will help us. And frankly, the consolidation of our 2 Houston markets will help us grow over there. And the growth prospects of that market are exceptional, James.

W. James Threadgill

I agree. The Houston market is a great market and one that we're excited about. We were in that market already and doing about $2 million to $2.5 million in revenue. We will be consolidating our Houston office into the GEM office, and hopefully, continue to expand and grow in that market.

Operator

The next question comes from Catherine Mealor at KBW.

Catherine Mealor - Keefe, Bruyette, & Woods, Inc., Research Division

The loan yields handled nicely this quarter, only down about 3 bps, linked quarter despite the higher growth. Would you say that loan pricing is perhaps not as irrational as it once was, given the recent pick up in rates?

James D. Rollins

You're cutting in and out on us. Loan yield?

Catherine Mealor - Keefe, Bruyette, & Woods, Inc., Research Division

Yes. So your loan yields only were -- were only down 3 bps. But you had your nice 8% growth. So would you say that the loan pricing competition has maybe subsided a little bit, just given the uptick in rates?

James D. Rollins

Ron?

Gordon R. Lewis

Cath, this is Ron. It -- I wouldn't say it subsided a whole lot. It's -- I think that's a reflection of -- we've been able to move a number of our nonperformings, which were dragging our yields down and non-accruals out of the bank. The competition is still out there for these loans. But it hasn't subsided very much.

James D. Rollins

I think that, if you look at what was out there in prior quarters, prior to rates kind of ticking up, there were maybe some folks that were willing to go longer-term at fixed rates, then some of that competition, maybe has gone away. But the competition as a whole, we're in a dogfight in every market we're in. It doesn't matter where you want to talk about. There are banks out there that want to compete with us.

Catherine Mealor - Keefe, Bruyette, & Woods, Inc., Research Division

That's helpful. And then on the deals, the cost save numbers you gave, Dan, were helpful, so thank you for that. Any insight into your expectations for your -- for the timeline for your tangible book value earn back for those 2 deals?

James D. Rollins

Yes, we're going to let you model that. You guys have been able to model for us much different ways. We see that the earnback period is very reasonable for us. I think part of the issue on deal valuation is the market wants to look at the deal, the day it's announced. The facts are, as you heard me say, we've been working with these guys for quite some time. Deals were cut at a much lower stock price for us, because the market has moved up late in 2013, and that benefits everybody. But at the end of the day, I think what we're looking for is the ability to continue to grow, the earnings accretion and the reasonable earn back period that you're talking about. As far as putting any out any specific numbers on anything, we're not into that game.

Operator

Our next question comes from Kevin Fitzsimmons at Sandler O'Neill.

Kevin Fitzsimmons - Sandler O'Neill + Partners, L.P., Research Division

Dan, I'm going to attempt to ask that question, that same question, a little bit different way. Just trying to get a gauge of what you all do view as acceptable for tangible book earn back. Based on the pro forma tangible book or Tangible Common Equity you gave for the 2 deals, it looks like it's about $0.70 dilutive. And you say it's meaningfully accretive, both of the deals. I'm initially coming up with about $0.13 annualized combined. That's about 5.5 years of an earn back that implies. And I just want to get, without you confirming that number, because I understand that the knowledge you're not in -- don't want to put that out there. I just want to get a feel for what you view as acceptable, because it can be a wide range depending on the assumptions people use.

James D. Rollins

I think you're right. I think there's lots of different assumptions that can go into those models. Your numbers are different than several others that are out there. I don't have an easy answer for you that says, X is going to work and Y is not going to work. I think again, when you look at where we are today, and what's happening out there, we're above the ceiling level on the OIB transactions. So at today's prices, if we close today, we would be putting out less shares than the announcement called for, because of the floor and the ceiling that are in that transaction.

You can extrapolate back if you want to, and you can see at kind of what the multiples were and what the deal value was when we were looking at the transaction. And you can see that from a tangible book value dilution off of that price, it would've been different than the tangible book value dilution off of the day that you're running your numbers. And frankly, that's going to be different than the tangible book value dilution that we actually book on the day that we close the transaction.

So I think all this has to get looked at with a reasonable -- through your glasses and say, what's reasonable, and what should we be looking for, and how should we be doing it. And everybody's going to have their own opinion from that side. I don't get all filed up too much on whether one number is 0.6 more or 0.6 less than somebody else's. I think we want to look at the entire opportunities in front of us. And we believe that both of these transactions are very attractive transactions for us.

Kevin Fitzsimmons - Sandler O'Neill + Partners, L.P., Research Division

Okay, that's a fair point. And just as a follow-up. I mean, when I look at the pro forma Tangible Common Equity that you guys had in the first deal's slide deck, and then look at the one on this deal for both combined. It looks like that pro forma only really went up $40 million on a target Tangible Common Equity of almost $118 million that's coming in. And I recognize that there's dispositions that ticks that down, and there's a net credit mark. But it seems like there's more aggressive, or not necessary aggressive, but needed fair value march elsewhere on the balance sheet. And just wondering if you can give us a little color on what is -- what else is being or having to be marked down on central, that is kind of minimizing that addition to tangible common from this last deal?

William Lloyd Prater

Well, Kevin, this is Bill. We did a -- they have about $100 million of federal home loan bank advances outstanding that are fairly long-term in nature, and we are anticipating a mark on that. They have a sizable securities book. Their -- if you look at their loan-to-deposit ratio, it's relatively low in comparison to our company. And their -- we also have included some remarks on that. There will be additional marks on real estate and things like that at this point in time, we couldn't say which direction that's actually going to go. But in a -- I wouldn't expect it to be a big negative to the tangible book, as a lot of their branches are well-established branches, have been in place for a considerable period of time, and real estate values have...Dan knows more about it than I do. But they've risen pretty dramatically in Texas.

James D. Rollins

I think -- the 2 items that Bill just mentioned, if rates go up between that and closing, well, that benefits us from the mark on the borrowing number because of the rate, the cost to mark that to market will be less, and it would damage us on the mark-to-market on the bond portfolio, because the mark-to-market would be higher. So again, I think our number is all around what the entire process and what the entire entity brings to us.

Operator

The next question comes from Kevin Reynolds at Wunderlich Securities.

Kevin B. Reynolds - Wunderlich Securities Inc., Research Division

I have a question. A little bit different than the details of the math, and more bigger picture. What -- you've been winning market deals here with higher levels of cost saves, according to the comments you made earlier, and then one, that's a market expansion that Dan, I assume was very comfortable for you, even though it's a little bit outside of what legacy BancorpSouth, what -- the markets it was operating in.

But if you look at those as in-market and market expansion, and then you look across your pro forma footprint, understanding that not every market can be #1 like the Austin market, what is your preference when you go forward from here, if you have one? Would you rather do in-market deals where you can squeeze out the cost? You think you're going to get more bang for your buck there? Or do you find more opportunities to enhance the growth profile of the company by expanding into a little bit hotter markets, if you will, than what the legacy footprint currently gives you?

James D. Rollins

I think there's benefit on both sides of that, Kevin. I think my natural reaction will be to say, we want to grow in-market, and you've heard me say that for the last year. Our targets are in-market, in-footprint, being able to consolidate further, and expand where we already have a presence. It's clearly a big desire of ours.

And we have been working hard to accomplish some of that. And with our partners, with Clyde and Kevin over in the North Louisiana markets, I think we've found a wonderful partner. Their style of thinking, the way they take care of customers, the way they take care of their own people, is very, very similar to us. I think the cultural fit will make that work very well, even though there is some overlap, and you heard me say we'll be able to consolidate 6 of our offices over there. That clearly can be a real win for us, when we can find opportunities like that. It lowers the risk of the opportunity, it lowers the timeline to make it all happen. So there's real benefit in that.

The next part of your question though, is about when you look at, at where we are, we've got a great footprint across the 8 states that we have locations in. But when you talk about where growth has been for us for the last several years, our growth has come in the Louisiana and East Texas markets, and the growth opportunities within Texas are very strong. So the ability to expand over a little further west into Austin, we already have 20 some-odd locations in Texas, with a little under $1 billion in deposits there today. And probably more than that in loans in Texas today. I think the opportunity for us to expand further into that, those markets and the opportunities that the, this Austin transaction provides us to expand further within their markets and some back towards our East Texas presence, is a real opportunity for us going forward.

Kevin B. Reynolds - Wunderlich Securities Inc., Research Division

Okay. And then another question ...

James D. Rollins

Let me add to that, though. That doesn't necessarily mean that we exclude the other states within our footprint. There could be just as good consolidation opportunities in any of the markets that we serve, as opposed to just Texas and Louisiana. We are not only focused on one state or another state. We've got a footprint and we're doing very well in most of the states that we're in, and if an opportunity were to present itself from a consolidation perspective, in one of those other states, let me tell you, the Nashville market it's pretty dadgum hot right now. We're not very big there, in Nashville, in a similar way to Austin, as lots of banks that are there. And most of the banks in Nashville also have presences outside of Nashville and other markets, many of which we also are in. So that's just one example that pops into my head, where we could do very well if there are opportunities in that market, also.

Kevin B. Reynolds - Wunderlich Securities Inc., Research Division

Okay. And then I wanted to sort of, I guess, maybe follow-up on that, as we talk about the different kinds of markets, and I think you guys described your loan growth by region. If you could -- I missed some of that. If you could go back through some of the growth that you had during the fourth quarter by region. And then maybe, I'm trying to sort of tie it all together. You're in Texas, but most of your Texas presence, as an example, wouldn't be considered major metro. I mean, Austin's a major market, but you're not big in Houston, big in Dallas, more to East Texas, has a different sort of growth profile than those markets. Over time, could we see you, as some other banks have done out there, some of your competitors go after a presence, a physical presence in those major metro markets like a Houston or a Dallas, or do you think you'll just sort of stay on the outskirts and then sort of jump in as you find opportunities on a case-by-case basis, with your lending customers?

James D. Rollins

Yes. I think that -- let's be fair. Texas has 4 of the top 10 or top 15 largest cities in the United States. We don't have any markets like that anywhere in our footprint. So I'm not sure that's a fair comparison. We certainly have some very nice, vibrant, wonderful markets that we serve across our footprint. But to be in the third or fourth largest metropolitan areas in the United States, no, we are not in those markets today. And so, that -- the growth opportunities that, that presents comes back to the demographics that Austin brings us. Austin becomes the largest market that we will serve. There's great opportunity for us on that front.

Your questions are around, where do we go from here. I think there's 600 some-odd banks over in the Texas market that, I still believe there's going to be consolidation opportunities, whether or not we're going to go to Houston tomorrow or next day, or Dallas next week or the week after. I think we're looking for opportunities across our footprint where we believe we can grow, and where we believe we can make a difference. I think you'll continue to see us do that.

Kevin B. Reynolds - Wunderlich Securities Inc., Research Division

Okay. And then, and on the growth by region. Could you run back through that, one more time?

James D. Rollins

Yes. Gordon was giving me those numbers. We have 4 operating regions within the bank. And we have 2 of them that were growing pretty significantly. Gordon, you can answer that one.

Gordon R. Lewis

Right. In the fourth quarter, as I said, the Northeast region was relatively flat, and the other 3 regions grew from $30 million to $45 million, maybe $50 million each, and our corporate banking group was right in that same area of about $40 million.

James D. Rollins

And the corporate group, we don't put a region to that, so that $40 million could've been in Mississippi, could've been in Alabama, could've been in Tennessee, Texas, Louisiana, could've been anywhere in our footprint, because that corporate group is spread out across our entire operation.

Operator

Our next question comes from Michael Rose at Raymond James.

Michael Rose - Raymond James & Associates, Inc., Research Division

Any additional thoughts on acquisitions outside of the bank space, similar to the GEM acquisition? Or any other thoughts on where you want to dedicate resources outside of the core bank acquisitions?

James D. Rollins

Yes. That's a good question. I think that -- I think we're looking for all opportunities to build shareholder value. So when you look at what's happening with Markham and our insurance team, we've got a large number for bank owned insurance agencies, top 30 insurance agencies in the United States, the insurance agency is a sub of the bank here for us. The insurance agency has its own retained earnings, and frankly, the money that they're using the grow and buy the GEM agency was their own funds, they took no funds from the bank. We were not able -- we did not need to invest new capital into that. We took the retained earnings that they have, and they still have retained earnings and cash that would allow them to continue to grow.

I see that all of the opportunities, all of our fee-based opportunities are on the table for us. And I mentioned them all a few minutes go. While the mortgage market and the refinance market is contracting, there's real opportunities for companies our size and for companies that have a platform like we have, from a production platform, to be able to grow our production and our new money. James is leaning up and I'm going to let James jump in here a minute.

At the same time, our trust and wealth management teams, Terry Mobley runs that for us across entire footprint. We saw some very nice expansion in our assets under management and our customer profile and our trust and wealth management team. I think any of those items could be on the table today if the right opportunity presents itself.

W. James Threadgill

Well then, you're right. Particularly in the insurance area, that's -- when we made the announcement that GEM agency, I think it kind of sent a signal to the market that we're back in the game. I mean, we had not made an insurance acquisition in a long -- number of years. And Markham tells me that we will continue to look around and try to find good partners.

James D. Rollins

I think the bank world heard the same thing when we made a bank acquisition announcement. It's been a long time since we've done acquisitions on any side, and I think the opportunity affected us the excitement that we hear inside the bank. Our folks are excited about getting in the game and building shareholder value.

Michael Rose - Raymond James & Associates, Inc., Research Division

All right, and then just as a follow-up. You guys had a nice sequential decline in both special mention and impaired loans. Anything or any commentary there?

James D. Rollins

Special mention and impaired loans. Ron?

James Ronald Hodges

Not really. There's nothing special going forward. I mean, we're moving loans out of those classifications as we can. But there's really wasn't any special, any particular, unusual activity there.

Operator

Our next question comes from Emlen Harmon of Jefferies.

Emlen B. Harmon - Jefferies LLC, Research Division

I think Bill will probably take this one. But just wanted to talk through a couple of the expense increases in the quarter. I think the kind of comp up quarter-over-quarter, despite the fact, I thought there was maybe a little bit more -- retirement savings can bleed through there. And also, the other expense line looked like it was up a little bit. Bill, I was just hoping you could talk me through those increases?

William Lloyd Prater

I can, a little bit. The salary line is about where we thought it would be. We have had some claims activity, we're self-insured, and fourth quarter claims activity was a little bit up. So we had a true-up there, toward the end of the year that pushed that line item up.

The other line, we have, we're doing a couple of branch relocations. One of which is -- and a couple closures. One of which is at least sold, it had a good, long period of time running on the lease, and not confident that we're going to be able to re-lease that. So there's some accruals there on some of that stuff, that's just normal activity. But you don't have it every quarter. But I wouldn't term it nonoperating, because we are continuing to look at our branch network and what makes the most sense there. That probably added about $1.5 million of expense to the core.

James D. Rollins

What was the number on the insurance?

William Lloyd Prater

On the insurance, it's about $1.5 million, also.

Emlen B. Harmon - Jefferies LLC, Research Division

Okay, got it. And then Dan, it doesn't sound that this is the case, but any kind of -- any contractual or noncompete issues with you moving back into Texas in a significant way? I mean, are you going to be based -- are you going to be, ultimately, are you going to be as -- able to be as fully engaged as you would like personally in that market?

James D. Rollins

You're asking about me, personally?

Emlen B. Harmon - Jefferies LLC, Research Division

Yes. And I just don't know if you had any contractual issues with Prosperity historically that would prevent you from being fully involved there?

James D. Rollins

I have no noncompete contractual obligations at all. 0.

Operator

The next question comes from Matt Olney of Stephens Inc.

Matt Olney - Stephens Inc., Research Division

Dan, can you provide some perspective as to how much of the 4Q loan growth was from increased production versus slower paydowns at some of the problem loans from previous quarters?

James D. Rollins

That's a good question. What he's asking for -- our guys are all of kind of trying to figure that out. I understand the question you're asking, but the question is, and I don't know if we have an answer here. The question is, is did production ramp-up in the fourth quarter, or it did production hold flat and the paydowns slowed that allowed us to hold more dollars on the table? I believe that production ramped it up. But I'm going to let Gordon and Ron jump in on that.

James Ronald Hodges

Matt, this is Ron. I don't have the exact answer on that because, you called me flat-footed, but it's just my natural intuition that we wrapped up in our production. We usually have paydowns in more than usual paydowns in the fourth quarter from our agricultural loans, it's not a large portion of our portfolio. But we would have normal paydowns in -- from the agricultural portfolio. So I truly believe it's just us ramping up our production.

Gordon R. Lewis

I would agree. I think we could, given some time, do some digging on the declines in the nonperformings and things like that, that have impacted us in the past. But just a general sense that we get in our weekly reports from the bankers and the production that we see. A big part of it was new production in fourth quarter.

James D. Rollins

I think my conversations with our team and listening to the conversations across our footprint, this is not a sprint. We were on the sidelines for a long time. Our loan production team was not focused on calling on customers because they were trying to take care of past issues as we got into the game, and we got into the marathon, I think we're picking up speed, and I think our team is getting stronger. And I think that's what you're seeing in the production line here, is we've got our foot in the water in the second quarter, and we got a little deeper in the water in the third quarter. And we're picking up speed and we're getting stronger. So I think that's what you're seeing in the loan growth.

Matt Olney - Stephens Inc., Research Division

Okay, that's good commentary, thanks for that. And then, I guess for James, in the mortgage division. That gain on sale margin improved around $160 million, but still below that 2% level we saw the first part of '13. Was there any noise in that 4Q number? Or should we just expect this gain on sale margin in 2014?

W. James Threadgill

Matt, it's really hard to tell. I would say that we are normalizing that margin. I think that it's probably still a little bit below where we expect it to be, going forward. But just have to see what the market does, going forward in the first quarter.

James D. Rollins

James, you're working and Scott is working, in particular, trying to make sure that we're improving our delivery and to get the most we can out of those sales, and so maybe we can get some benefit there. But I don't notice there's anything, unusual looking back.

W. James Threadgill

No, I don't believe there is.

Operator

The next question comes from Andy Stapp at Merion Capital Group.

Andrew W. Stapp - Merion Capital Group

I actually had unusual call volume from clients, calling into me about your quarter. And so I missed a lot of questions. And I don't want to be redundant, so I'm just going to refer to the transcript.

Operator

Our next question comes from John Rodis of FIG Partners.

John Lawrence Rodis - FIG Partners, LLC, Research Division

Most of my questions were asked and answered, Dan. But maybe just one question on the increase in goodwill during the quarter. Was that mostly from GEM's? It just looked a little bit bigger than I would've expected.

James D. Rollins

It's all GEM. Yes, I think it was 100% GEM.

Operator

Our next question comes from Peyton Green at Sterne Agee.

Peyton N. Green - Sterne Agee & Leach Inc., Research Division

Just a question. I mean, back when I met Don and Randy at First State eons ago, that was a much smaller bank that earned $160 million to $180 million ROA, I would say, and had no nonperformings and minimal charge-offs. And I guess, something changed along the way. I mean, maybe, could you give a little color as to -- they've come from about a $300 million asset balance sheet to $1.3 billion, and went from being headquartered in Temple, to being basically being headquartered in Austin. Maybe if you can give a little bit of color as to what you think the optimal size of their balance sheet is compared to maybe, how you all will look at the credit perspective?

James D. Rollins

Well Peyton, I think, again, you may have more history than I do. I've known Don a long time, but I confess that I don't have that kind of history on his balance sheet that you do. Don has been a part of a growing organization in Central Texas for his entire career. I think that when we look at what they've done over the years, they've moved their headquarters into [indiscernible], into Austin, and they've been able to grow in Austin.

As I look at their core deposit funding, their funding cost is lower than ours. They've got great core deposits, they've got a great customer base in the markets that they serve. And I think we believe that's where the real value here is. And I think that -- maybe they're newer, maybe they also got out over their ski tips, and had some problems that lowered their asset quality in the same direction that ours did during the economic downturn. And I think where we are today is our ability to play in that market and our ability to have little bit larger appetite in size of transaction. I would tell you that I think we feel that this is a real great platform for us to grow from.

Peyton N. Green - Sterne Agee & Leach Inc., Research Division

I mean, I guess my question was, just looking at the caller port numbers. I mean NPA is, plus 90s are about 7% of loans in OREO. I know they have a small loan book relative to their asset base, but just curious as to -- if you think there's any kind of issue on the [indiscernible]. Certainly it's a growth market. But is there are any kind of expectation on our end that we should expect some shrinkage before it starts growing again? Or will it happen simultaneously?

James D. Rollins

I think that they've been -- the loan portfolio has contracted for them for last couple of years, just like ours did, up until a couple of quarters ago. I think their team is also focused on growing within the markets. Again, I don't know that I have a specific answer for you. I think if you look at their credit quality, I think you'll see the same picture that you see, frankly from us.

Our credit quality ran up the mountain as we peaked out on credit quality now, 2.5 years ago. And we've been riding down the backside. And as I said earlier, Ron's done a great job and our credit quality today is in line with our peers, or better than many of our peers. I think they may be a little bit behind us on some of that, but I don't see that as a negative, I think that the market over there is a very vibrant market that we will have big opportunities to expand in.

Peyton N. Green - Sterne Agee & Leach Inc., Research Division

Okay. So I mean, it's fair from, I guess, an outsiders perspective I mean, you could almost say that there were, you were 6, 9, 12 months ago. Is it -- is that fair enough?

James D. Rollins

Ask that question again, I'm sorry?

Peyton N. Green - Sterne Agee & Leach Inc., Research Division

It just seems to me like maybe they're only -- they're a year behind you. And so, they really should have bit of a pickup or less deceleration in their asset growth or loan growth compared to what we've seen over the last 2 or 3 years. Is that fair?

James D. Rollins

Yes. I don't know that I can answer that question. I think that we see the ability to grow in that market, I think that, as a part of that transaction, they're going to retain the path or so of the ORE that they've got. I think we expect that they've got a lot of their nonperformers on the hook to move out in the near-term. I think they're making good progress.

Operator

The next question comes from Jon Arfstrom at RBC Capital Markets.

Jon G. Arfstrom - RBC Capital Markets, LLC, Research Division

Most of the questions have been answered. But just a follow-up, and maybe you answered it, Matt Olney's [ph] question. I know you have a different approach over the last few quarters on lending, and I'm just curious if the growth in the last few quarters is all your change in approach or is it environmental as well? In other words, are you seeing a nice improvement in the economies that you're in? Or is this all you, so to speak?

James D. Rollins

Well, I don't know that I would want to take it to the all me side because I don't know that we've changed approach.

Jon G. Arfstrom - RBC Capital Markets, LLC, Research Division

I don't mean not just you, but the entire approach?

James D. Rollins

Yes, no, I'm with you. What we've changed is, we've changed focus. And so as the nonperformers declined, we're able to put more focus and put more effort and put more emphasis onto the loan growth. At the same time, we've stressed across our footprint that we are not interested in growing loans to grow loans. We don't want to repeat the past problems that we've had. So from a credit quality perspective, we have not changed the processes and the improvements that were put into place through the credit cycle.

Ron, you can jump in here if you need to, but when you look forward, I think that the team is very focused. Our group of lenders, they like to make loans, they like to talk with customers, they want to grow their markets. And so I think that, that has been a big plus for us. Your question is just generic economy, that I think, again, any of us could probably jump in on that. My take is, is the economy is improving across our footprint even in the darkest markets that we're in. Things are much better today than they were a year ago. If you look back 12 months, in Memphis, in particular, where we have still significant problems, think the Memphis market is must better today than what it was a year ago. Ron or...?

James Ronald Hodges

I agree. I mean it's -- economy is improving slightly in some areas, better than others. But as indicated, as you indicated about Memphis, but -- and some of other markets we're in. But it's across the board, improving, I think the main catalyst is that we have the ability now to focus on growth more so than we have over in -- over the last 2 to 3 years. And we've got a large part of our problems behind us. And we don't have to spend as much as -- of our human resources on those as we have in the past. And we're able to get out and do some exciting things that are more exciting than what we have been able to do in the last couple of years.

Jon G. Arfstrom - RBC Capital Markets, LLC, Research Division

Good. And then Dan, just on First State. I think you know how we all model these deals. And I guess reading between the lines, I think what you're saying is, there's potentially more revenue synergies there than maybe we see, in the way that we would model a deal because the analysts typically don't include that.

James D. Rollins

We're not including any of that in our numbers either, John. But we see great future prospects within those markets. We model it probably in a similar way, we're taking what's there today. And drilling that down to what we think we can do with that and where it's going to go for us. And we like the picture.

Operator

Our next question comes from Blair Brantley at BB&T Capital Markets.

Blair C. Brantley - BB&T Capital Markets, Research Division

All my questions have been answered.

James D. Rollins

All right.

Operator

This concludes the question-and-answer session. I'd like to turn the conference back over to Mr. Rollins for any closing remarks.

James D. Rollins

Okay. Thank you, all, for joining us today. If you need any additional information or have further questions, please don't hesitate to call us. I will look forward to visiting with you when we're on the road soon. Thank you very much.

Operator

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

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