Operator: Good morning and welcome to the First Defiance Second Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Tera Murphy with First Defiance Financial Corporation. Please go ahead.

Tera Murphy: Thank you. Good morning, everyone and thank you for joining us for today’s 2017 second quarter earnings conference call. This call is also being webcast and the audio replay will be available at the First Defiance website at fdef.com. Providing commentary this morning will be Don Hileman, President and CEO of First Defiance and Kevin Thompson, Executive Vice President and Chief Financial Officer. Following their prepared comments on the company’s strategy and performance, they will be available to take your questions. Before we begin, I would like to remind you that during the conference call today, including during the question-and-answer period, you may hear forward-looking statements related to future financial results and business operations for First Defiance Financial Corp. Actual results may differ materially from current management forecast and projections as a result of factors over which the company has no control. Information on these risk factors and additional information on forward-looking statements are included in the news release and in the company’s reports on file with the Securities and Exchange Commission. And now, I will turn the call over to Mr. Hileman for his comments.

Don Hileman: Thank you and good morning and welcome to the First Defiance Financial Corp’s second quarter conference call. Last night, we issued our 2017 second quarter earnings release. And now I’d like to discuss the second quarter results and give you an outlook for the remainder of ‘17. Joining me on the call this morning to give more detail on the financial performance for the quarter is our CFO, Kevin Thompson. At the conclusion of our remarks, we will answer any questions you might have. Overall, we continue to be pleased with the sustained momentum toward our strategic goals. The second quarter represented the first full quarter of combined results from the Commercial Bancshares transaction and also included the operating results of Corporate One Benefits, a full service employee benefits consulting organization acquired in April. Net income for the second quarter of ‘17 on a GAAP basis was $8.3 million or $0.82 per diluted common share compared with $7.3 million and $0.80 per diluted common share in the second quarter of ‘16. Our second quarter financial results clearly reflect the expected operating performance enhancements from our recent acquisitions as revenues were up 24.3% over the second quarter last year. The efficiency ratio improved to 59% from 61.5% and pre-tax pre-provisions earning improved by 33.75% over the same period last year. While higher charge-offs for credit losses partially offset these improvements in the second quarter, we expect the benefits from our mergers to continue elevating our ongoing performance. Our overall core performance this quarter helped drive a solid return on average assets of 1.15%. We experienced year-over-year and linked quarter annualized core loan – net loan growth of 24% and 2.8% respectively. Second quarter loan growth was impacted by a large pay-off in the $20 million range related to an apartment project. We continue to focus our ability to grow our loan portfolio with a balanced approach. The lending environment is very competitive, with rate and structure pressures relating to terms and conditions in the uncertain economic environment. We continue to be disciplined in our pricing approach and purposely pass on lending relationships that would force us what we consider overly aggressive pricing in term concessions. We did not see any material movement in local market rates either leading up to the Fed hike or subsequently to it, with contributions from across our entire footprint and a solid pipeline at the end of the second quarter up from the first quarter end. We are optimistic as we are on track to achieve our annual growth goal in the upper single-digits. Loan originations for the quarter were the highest since the fourth quarter of ‘15 and loan yields was about 20 basis points higher in aggregate than the first quarter. This coupled with stronger confidence from segments of our clients concerning economic stability in the economic environment leads us to believe we have positioned ourselves for continued discipline loan growth during the remainder of ‘17. We are also very pleased with our margin improvement this quarter over the second quarter of ‘16 and on a linked quarter basis. The growth in both our net interest income and our core non-interest income revenues on a quarterly basis is a result of contributions from our core business strategies. Kevin will provide more color on the detail in a few minutes. We saw a slight increase in mortgage banking revenues year-over-year despite a decrease on a linked quarter basis. Total non-interest expense decreased from the first quarter of ‘17 primarily due to merger and conversion-related costs in the first quarter. The efficiency ratio of 59% in the second quarter reflected some of the benefit of the first quarter’s ESB acquisition in the overall expense control. The credit quality metrics showed moderate regression this quarter from the second quarter of 2016 on a linked quarter basis. Non-performing assets increased to 1.38% from 0.94% in the second quarter of ‘16. Non-performing loans increased approximately $14 million. Approximately 85% of the non-performing loans continued to make payments. We also had a slight increase in restructuring loans this quarter. The level of 30 to 90 day delinquencies were 0.26% of loans for the second quarter of ‘17 compared with 0.3% at the second quarter of ‘16 and 0.19% March of ‘17. While we are disappointed in the uptick in non-performing loans and associated charge-offs, we do not believe it indicates an overall trend, but more relates to a couple of specific credits believed to be contained. We expect to work hard to see stable to improving asset quality trends across the board in the near-term. In regards to our capital management plans, we are also pleased to announce a 2017 second quarter dividend of $0.25 per share, representing a 14% increase over a prior year and an annual dividend yield of approximately 1.9%. I will now ask Kevin Thompson to provide additional financial details for the quarter before I conclude.

Kevin Thompson: Thank you, Don and good morning to everybody. As Don stated, net income for the second quarter was $8.3 million or $0.82 per diluted share and these results reflect the first full quarter of operating results inclusive of both our Commercial Savings Bank or CSB merger and our Corporate One Benefits Agency or Corporate One merger. The quarter also included $0.02 per diluted share impact from merger and conversion expenses primarily for the Corporate One acquisition, which was essentially offset by securities gains of $0.02 per diluted share. The quarterly results compared to prior year’s second quarter results of $7.3 million or $0.80 per diluted share. As Don also indicated, while disappointed in the higher non-performing assets and credit costs this quarter, we are much more satisfied by our performance in all other areas of our financial results. Even with our higher credit costs, our return on assets for the quarter was a very respectable 1.15%. Now, turning to the details and starting with the balance sheet. The second quarter total loan growth was $16.4 million, which was net of a large $20 million payoff right before the end of the quarter. Average loan balances grew $212 million on a linked quarter basis mostly due to the full quarter impact of our CSB merger. On the other hand, total deposits reflected a decrease of $47 million from March 31 to June 30. The decline resulted from a run-up in deposits of nearly $70 million right at the end of the first quarter and those deposits exited the bank by the end of the second quarter. The growth in average deposits of $237 million on a linked quarter basis was again mostly due to the full quarter impact from the CSB merger. Compared to June 30 a year ago, organic growth excluding the CSB merger shows loans have grown about $107 million or 5.9% and deposits up about $98 million or 5.1%. We would expect to maintain these growth rates at a minimum as well as our strong earning asset mix low cost deposit funding and profitable margin going forward which leads us to the income statement. Our net interest income was $24.6 million for the second quarter of 2017, up from $21.6 million in the linked quarter and up $5.2 million or 27% from the $19.4 million in the second quarter last year. The increase over the prior year includes the addition of CSB for the full quarter as well as some benefit from recovered interest of prepayment penalties collected which totaled $307,000 in the second quarter 2017 versus only $119,000 in the same period last year. All-in, our margin this quarter was 3.89% up 9 basis points from last quarter and up 80 basis points from 3.71% in the second quarter last year. On a linked quarter basis, our yield on earning assets was up 11 basis points as our loan portfolio yield rose to 4.55% boosted about 5 basis points to 6 basis points by the recovered interest and prepayment fees. Our cost of interest bearing liabilities was up 2 basis points on a linked quarter basis impacted by both rate and mix. As we grow our balance sheet, we are very pleased with the strength and stability of our margin and our interest rate risk position which remains basically neutral and well balanced for our expectation of continued action by the fed. Total non-interest income was $10.1 million in the second quarter of 2017, down from $10.5 million in the linked quarter, which included $1.5 million enhancement gain on a fully purchased as well as seasonal contingent insurance commission, but it was up from $8.6 million in the second quarter of 2016. The second quarter 2017 did include $267,000 of securities gains, while the second quarter last year included $227,000 of securities gains. Excluding the securities gains quarterly non-interest income up year-over-year about $1.5 million or 18.3%. Other than the gains on sale of non-mortgage loans, we had increases in all categories of fee income which were predominantly due to the contributions from the CSB and Corporate One mergers. Regarding mortgage banking, revenues for the second quarter were 20 – up in the second quarter of 2017 were $1.8 million, up only $92,000 from the linked quarter and up $66,000 from the second quarter of 2016. The second quarter mortgage banking originations were $64.2 million compared to $48.9 million last quarter and $75.9 million in the second quarter 2016. Gain on sale income was $1.3 million in the second quarter compared to $1.1 million on a linked quarter basis of $1.4 million in the second quarter last year. In addition, the second quarter included a positive valuation adjustment to mortgage servicing rights of $16,000 compared to a positive adjustment of $33,000 last quarter and a negative adjustment of $104,000 in the second quarter of 2016. At June 30, 2017, First Defiance had $1.3 billion of loan service for others and the mortgage servicing rights associated with those loans had a fair value of $9.7 million or 72 basis points of the outstanding loan balances serviced. Total impairment reserves which were available for recapture in future periods totaled $474,000 at quarter end. As for non-interest expense, second quarter expenses totaled $20.6 million, down from $23.1 million in the linked quarter which included $3.6 million of merger and conversion expenses, but up from $17.3 million in the second quarter of 2016. While the second quarter 2017 did include about $310,000 of acquisition costs for CSB and Corporate One, the bulk of the increase was attributable to the additional operating costs from those mergers. We were very pleased to see the improvement in our efficiency ratio with this quarter, cost synergies were the key driver in the CSB merger and our efficiency ratio of 58.96% in the second quarter of 2017 versus 61.51% in the second quarter last year reflects this benefit. Regarding asset quality, provision expense in the second quarter of 2017 totaled $2.1 million compared to a provision of $55,000 last quarter and $53,000 in the second quarter last year. Provision expense increased or the increase resulted from the downgrade of two larger credits in the quarter and net charge-offs recorded totaling just under $2 million or 35 basis points annualized. This compared to net loan charge-offs of 4 basis points in last quarter and net recoveries of 5 basis points in the second quarter a year ago. Our allowance for loan loss at June 30, 2017 was $25.9 million, up $166,000 versus March 31 and basically even with a year ago. Allowance to loan ratio at June 30, 2017 remained at 1.15%, the same as last quarter, but down from 1.39% last year. The decline in the ratio from last year was primarily due to the addition of the acquired CSB loans which were discounted and recorded at fair value with no allowance. The CSB acquired loans are currently carried at a discount of $5 million or 1.7% of balances. As for the asset quality numbers with the two large downgrades totaling $13.6 million. Non-performing loans increased this quarter to $30.4 million from $15.1 million on a linked quarter basis and from $16.4 million at June 30, 2016. Our OREO balance remained low this quarter at $672,000 compared to $705,000 last quarter and $1.1 million in the second quarter last year. Overall, non-performing assets ended the quarter at $31 million or 1.07% of total assets, up from $17.5 million or 0.73% of total assets at June 30, 2016. Our troubled debt restructured loans this quarter were $10.5 million, up from $9.8 million last quarter and $9.6 million a year ago. As a result of the increase in NPAs at quarter end, the allowance coverage of non-performing assets was 84% compared to 148% at June 30 a year ago. While the numbers are impacted by the two downgrades on which the losses were taken, we are confident that the quality of the remainder of the portfolio continues to reflect strengthened asset quality from a year ago. Looking at our capital position, total period end stockholders equity finished the quarter at $361.4 million, up from $293 million at June 30, 2016, reflecting the acquisition of Commercial Bancshares unless our capital position remains strong. The quarter end shareholders equity to assets of 12.51%, up from 11.79% last year, the banks total risk based capital ratio is approximately 12.3% at June 30, 2017. Our healthy capital position continues to support our growth and shareholder value enhancement strategies. So in summary our balance sheet remains solid, the acquisitions of CSB and Corporate One are delivering the expected benefits. Our core operating profitability is strong. We believe the credit events this quarter are uncharacteristic of our asset quality and thus our outlook remains clearly positive. That completes my financial review. And I will turn the call back over to Don.

Don Hileman: Thank you, Kevin. To achieve our goal of being consistently high performing community bank, we have recognized that it involves more than numbers on the balance sheet. It takes balancing high performance with strong values. Earlier this year we introduced our new mission/vision and value statements that evolved from employee and customer feedback. Our mission statement now states as a high performing community bank are engaged in value employees, provide smart solutions to our clients and communities. This key statement explains what we do and why we are here, which above all else is to provide our clients and community with solutions that fit their needs and add value to their lives and goals. By delivering these smart solutions, we help achieve our vision of remaining a high performing community organization. With our new mission/vision and value statements, we believe we have reenergized our teams and now more than ever have a synergy when working to accomplish our goals. As a result we have made significant progress on our initiatives to retain and attract top talent, grow our customer base, build an environment that fosters innovative solutions for internal process, enhanced client experience. Our steady performance, client focused values and our engaged employees blend together to deliver exceptional results to our shareholders. First Defiance leverages these principles to keep us moving forward as we look to expand our branch and agency networks through mergers and acquisitions and to deeper relationships within our footprints, especially in our metal markets. We continue to pursue organic growth in Fort Wayne, Indiana and Toledo and Columbus, Ohio. And we are seeing increased activity in these areas. We still have confidence that a high single-digit growth rate is achievable for the remainder of the year despite the previously noted competitive lending environment. Loan growth and an overall – and an increase in loan yields will be fueled by our model building relationships and relationship pricing not just performing transactions. When we did see an improvement in the metro market loan growth rate this quarter, we understand we will be challenged to grow loans and maintain yield management where the asset yields continue to outpace liability costs year-over-year. However, we believe our delivery and service model was effective and contributing to a solid margin growth performance. Growth in our insurance and wealth management revenues will continue to be a focal point in our overall strategic plan. This was evidenced by our recent insurance acquisition of Corporate One Benefits and its contribution to revenue growth this quarter. We believe these revenue sources help in our ability to grow non-interest revenues in an environment without any pressures on NSF fees and other deposit related fees. We are also pleased with the steady increase in wealth management and trust revenues. Our teams have made significant progress in enhancing our client experience. Within the next quarter, we look forward to adding convenience the way our clients bank with us, by offering people pay a digital payment solution, use smart ATMs at selected locations and improved online mortgage experience with First Insurance Group a new app that allows clients to handle multiple aspects of their insurance relationship. These advancements give our customers additional flexibility and net value as they look to bank beyond our branch stores. To continue this progression we have dedicated resources working to expand operational capabilities and enhance the organization’s overall efficiency, stability and productivity. We are introducing new data management software that will allow us to deepen our understanding of our customers banking relationships and behaviors to deliver more personalized banking solution. As the banking behaviors of our clients change, we will focus on adapting our service and sales models for a mere convenience or more convenience, better client banking experience for all our customers. These strategic initiatives lead our focus and commitment to improving our results relative to our peer group. We are very pleased by recent financial performance and looked at both financial performance driven and people focused as we have looked to obtain our goal of being consistently high performing community bank. We remain strongly committed to our customers and shareholders and we appreciate the confidence you have placed in us, do work to make First Defiance a company known for providing smart solutions to our customers and communities. Thank you for your interest in First Defiance. And we thank you for joining us this morning. We will now be glad to take your questions.

Operator: We will now begin the question and answer session. [Operator Instructions] The first question comes from Matthew Forgotson of Sandler O’Neill & Partners. Please go ahead.

Matthew Forgotson: Hi, good morning gentlemen.

Don Hileman: Good morning.

Kevin Thompson: Good morning Matt.

Matthew Forgotson: Just I am wondering looking for a little bit more color here on the two large credits that moved on to the non-accrual, can you give us a little color about the loan type whether or not they are not paying as agreed, where they are marked. And then I guess just lastly any additional credit outstanding to these borrowers?

Don Hileman: The credit that we took the large charge-off was in the C&I portfolio. We have entered into for balance agreement with that particular borrower and they will be continuing to make payments on that particular credit, so we think we have got it appropriately marked with the charge-offs that we have took this quarter on that. And the other is in the commercial real estate portfolio and we believe that’s the timing issue on that credit.

Matthew Forgotson: Okay. So it sounds like you are clearly positioning these as one-off events and it sounds like we should expect a remediation i.e. lower level of non-performing loans in the not too distant future, is that a reasonable expectation?

Don Hileman: That’s our expectation that we want to work to that. Now these two credits they are not going to cure themselves next quarter. But we do not anticipate an increase, higher level of non-performings going forward. We looked at this similar circumstance as we looked at some larger credits, deep dive to get ourselves comfortable that this isn’t a trend that these are like you said categorized more as a one-off and that’s what we really believe at this point.

Matthew Forgotson: Okay. Just out of curiosity were they ag credits or small manufacturers or which industry were they?

Don Hileman: They were not ag, one is in healthcare facilities and the other is more of a smaller operating units that provides services to utilities industry.

Matthew Forgotson: Okay, great. I guess and can you just zoom out one of your teams coming out of the credit cycle, was the commitment to managing proactively and with that approach we sense that you have got a pretty good pulse on the credit market and so forth, as you think through your portfolio, are there any areas where you are paying more attention just in light of what we have seen in auto for example or some incremental softening in ag, how are you feeling about those two books and any other pressure points?

Don Hileman: We clearly are spending a little bit more focus on ag. We have seen some early indications of some stress especially with the smaller ag credits. And we are looking at the most recent wet Midwest here we have had and that impact on our client. We don’t see any material losses in that portfolio at this point of time, but we are – spend a little more attention to the ag portfolio. Related to the other general question about other concentrations, I think we will continue to focus on some of the markets the potential overbuilding of multifamily and how that relates to our portfolio and where we stand with that. Feel comfortable at this point, but I think that will be some possibly constraining of growth opportunities in that in certain markets as we go forward. The auto industry we are not very correlated with that as far as our direct relationships, we have several very indirect auto relationships that are providing a small part in the overall process, but generally we are not really dependent on how the auto industry goes other than from the employment standpoint. But don’t really see any other sectors that we are overly concerned with now individually for us.

Matthew Forgotson: Great, okay. I guess last for me and then I will hop out, but average loan growth was strong end of the period loan growth just a little bit sluggish in large measure due to the repayment you have made – you cited, however year-to-date organic loans are up only about 3% on an annualized basis by my math and I guess to get the upper single-digit implies a pretty steep ramp from here in the back half of the year, so when you say upper single-digit, are you thinking call it 7%, 8%, 9% and is it really reasonable to get there?

Kevin Thompson: When I look at the numbers Matt and I know that pay off, it happens so you can’t totally ignore it. But organic growth in the first quarter was about $13 million, second quarter we are showing $16.4 million, but it is just that $16.4 million by the 20 [ph], it would be $36.4 million which would be 6.4% with the size of our current pipeline which is at like an all-time high over the last 3 years. We are feeling pretty confident about being able to deliver in that mid upper single-digit growth over the remainder of the year.

Don Hileman: We have realized that we have to execute on that front. Our indications are targeting our loan people and our market area presidents and that they are feeling – that is not just Don and Kevin think of we can do it. They are the ones driving our decision and our communications.

Kevin Thompson: But our momentum has certainly been building. As Don indicated, our loan originations were way up in the second quarter, so our outlook is that that is a very doable number for us.

Matthew Forgotson: Thank you very much.

Kevin Thompson: Sure.

Operator: The next question comes from Damon DelMonte of KBW. Please go ahead.

Damon DelMonte: Hey, good morning, guys. How is it going today?

Don Hileman: Good. How are you doing?

Damon DelMonte: Good. Thanks. Good, good. Just to kind of tack on to the loan growth question. The loans that you guys have been putting on that you are seeing in your pipeline, are these all self-originated loans? Or are you guys participating in many shared national credits?

Don Hileman: No, no new originations and shared national credit.

Kevin Thompson: Right. All originated by us.

Don Hileman: By us. We just have one shared national credit that we are involved in.

Damon DelMonte: Okay. Is that a local loan, or is that a loan lender that is outside the market?

Kevin Thompson: Yes. No, the loan and the business is inside our market footprint.

Damon DelMonte: Okay, great. Okay. And then with regards to the margin, I think we are in a roughly 5 basis points of a benefit from the interest recoveries. So if you look at like, call it, a 838-or-so as your core margin for this quarter, Kevin, how do we kind of frame that going forward just given the two recent rate hikes and kind of what you're seeing on loan pricing?

Kevin Thompson: Right. I do not see anything pushing it down at this point. As the rate increases have been coming through, that’s generally had a slight benefit to us. As loans have re-priced in the portfolio, the pressure on the funding side has not been felt to-date. We are not sensing that there is anything imminent that’s going to change that either at this point. So we think the margin should remain strong as we finish out the year.

Damon DelMonte: So no change in the pricing dynamics, like larger banks are changes the rates at all, which is putting pressure on the smaller guys?

Kevin Thompson: Yes, not anything that is affecting our business.

Damon DelMonte: Okay. And then, I guess, just lastly. With the Insurance Agency acquisition, is first quarter still your seasonally high quarter for insurance? I think, can we -- we can expect something in the 3 to 3.2-ish, 3.3 range for the next couple of quarters as, like, your normal run rate?

Kevin Thompson: Correct.

Damon DelMonte: Okay. Okay, great. That’s all that I had. Thanks a lot.

Don Hileman: Alright. Thank you.

Operator: The next question comes from Daniel Cardenas of Raymond James. Please go ahead.

Daniel Cardenas: Good morning, guys.

Don Hileman: Good morning, Dan.

Daniel Cardenas: Just a couple of quick questions here. Going back to the two non-performers that were added on this quarter, were those kind of from the legacy portfolio, or were those from some of the recent acquisitions that you guys have completed?

Don Hileman: No, they were our origination, not related to the acquisition at all. One was – one of them I would categorize as a fairly new credit to us that had issues and that’s the one we took to charge-off, but that was we originated those.

Kevin Thompson: Not part of the acquisition at all.

Daniel Cardenas: Okay, perfect. And then with People Pay, could you maybe give us a little bit of color as to what impact, if any, that's going to have on operating expenses going forward?

Don Hileman: It is in very minimal operating expenses. It is just another service in our mobile and our electronic banking suite to allow customers more of a flexibility to pay individuals and other payments outside of electronic banking. So they do not necessarily have to have an account with us to receive a payment now, which is we think is a very – what we’re seeing in the industry and then something that was very convenient for our customers and they've kind of asked for, but the additional incremental expense is going to be very minimal.

Daniel Cardenas: Okay. And then the – kind of the core operating expense number that we saw this quarter, is that a good run rate to build off of for the second half of the year?

Kevin Thompson: I would say, yes, absolutely. We did have about $300,000 of one-time cost for the merger. But as we finish out the year and continue to grow, so I would expect that number very similar to what we had this quarter as we go forward.

Don Hileman: Yes, we do have some additional facilities adds for expansion, but that is going to be later in the fourth quarter, so it really won’t affect our run rate here. I think we mentioned we are going expand the facilities in Toledo.

Daniel Cardenas: Okay, great. And then just kind of last question, I know you guys just completed the commercial, but maybe what's your appetite for additional acquisitions? And then what's the market like right now in your footprint? Is there a lot of activity, lot of noise or is it fairly quiet?

Don Hileman: Yes, it is some place in the middle. I would not say there is a lot of activity, but there is activity. There is still a lot of questions going on. There is – we are receiving books to look at. I would say, our – the appetite is, we feel good about our ability where we are today of absorbing CSB with anything -- we probably serve our people. Some are readying, and some are saying, “Well, let me digest and finish up some of the things I didn't get done before you want to do another one.” But I think, generally, our organization feels good about what we accomplished with the CSB. We feel really good about the integration process, the management of that integration and the corresponding results. And like Kevin said, we are seeing those integration benefits right now. So we will be receptive to looking at another transaction in the near term to – and if the outright opportunity comes along.

Daniel Cardenas: Okay, great. Perfect. Thanks, guys.

Don Hileman: All right. Thank you.

Operator: The next question is from Christopher Marinac of FIG Partners. Please go ahead.

Christopher Marinac: Just wanted to ask a little bit more on the credit picture that beyond the comments said it earlier. Do you have a sense of kind of directionally what happens with substandard and classifieds when you file the key? Will those be directionally higher, or was a lot of that sort of curtailed by taking the charge-off in the quarter?

Kevin Thompson: No, they’ll be directionally higher. Due to these two adds, they are going – they are both classified and substandard, right?

Christopher Marinac: Okay. And I may have missed earlier in your remarks about were those C&I loans? Or what was the history on those two deals?

Don Hileman: The one we took the charge-off, Chris, was the C&I loan, and the other one is CRE.

Christopher Marinac: Got it. Okay. So one of each. All right.

Don Hileman: One of each, yes, but the charge-offs were related to the C&I portfolio.

Christopher Marinac: And then excluding those two credits, are there other trends that you see that would indicate higher issues or just more downgrades in the future, or again, is these really isolated, as you said?

Don Hileman: I think there is early indications that the potential for more credit stress, and we are not necessarily see in it and I can't say this credit and this credit. But I sit in communities and we sit and talk about things, a lot of that indications when we get the year-end financials coming in, and some of those are a little -- maybe not as strong as you would think in our environment. So that's kind of an indicator that maybe things aren't as strong as what you would hope. So it is things like that, Chris. It is not necessary to say that we are seeing obvious deterioration trends, but I think we are maybe not seeing as much of the improvement with a hope to seeing based on getting in some of the year-end financials for some of our client set I would have hoped at this point in time.

Kevin Thompson: I would agree with that comment, but again, I don’t know if anything that notes. But the only area that might have anything in my mind is the ag. That is – and even there our collateral positions are very strong, and we do not see losses but we do see – the customers have had a little more distress, if you will, over the last couple of years. So that's the only thing that maybe is a little bit of issue in my mind. Otherwise, I do not think the trends are really very different than what we see.

Christopher Marinac: And Kevin, as you mentioned ag, it is not necessarily ag alone, it is within for us to find us more that the customers has potential issues and that impacts other pieces of the portfolio. Is that the fair interpretation?

Kevin Thompson: I suppose, on a broader sense, sure.

Don Hileman: Yes.

Christopher Marinac: Okay, great. And then, I guess, a separate question, a different topic just on the People Pay program. Did you have to pay survey per user or just curious if that ends up being a better economics for you than some of the other sort of and other things that the banks are starting to adopt?

Don Hileman: Well, this is easier one for us at a lower-cost entry point for us to get into this because of our relationship with our core provider, and that made this an easier less costly relationship kind of a way to get into this -- that market of the People Pay, Chris. We do -- I believe we do have a set cost on this program by user, but it is not as dramatic as some of those other ones. That may be have more bells and whistles than our product, but we are excited about at least having a good product that we can offer our customer and will continue to look at that. But you would not necessarily match it up completely from a cost structure with some of those other products.

Christopher Marinac: Sounds great. Thank you for the back on there, guys. Appreciate it.

Don Hileman: All right. Appreciate it. Thank you.

Operator: [Operator Instructions] There are no additional questions at this time. This concludes our question-and-answer session. I would like to turn the conference back over to Tera Murphy for closing remarks.

Tera Murphy: Thank you for joining us today as we discussed our quarterly results. We appreciate your time and interest in the First Defiance Financial Corp. Have a great day.

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