Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Andrea Jao - Lehman Brothers.
Andrea Jao – Lehman Brothers
Just wanted to get more detail on how thoroughly you have looked at your entire loan book, beyond the most problematic, slighter to the loan book and I believe, you were working with an outside consultant [inaudible] again hoping to get an update and more detail from that?
Dave Porter
I think we mentioned in the first quarter that we had a targeted loan review that was focused on the both the larger construction credits that we had in our portfolio. In the second quarter, we did a second step to that which was a independent loan review on basically commercial real estate and construction accounts that we did not review in the first quarter. That review resulted in, actually only a few risk rate changes that we had, that we had not already taken into account. So, we were pleased with the outcome of that particular review.
Andrea Jao – Lehman Brothers
Could you please remind us what's your priorities are in terms of the use of capital? Some banks prioritize the dividend, others prioritized growth. Please remind us what’s your priority are, and what you think the call from your capital would be in coming quarters, especially as you face what’s potentially a strong RAL season next year?
George Leis
I think to your last point, the capital position of our bank is geared towards preserving it for use in our RAL season. So that goodness, we had such a strong RAL season and Stephen I think that generated $67 million of capital for our company, so, you know Andrea we are looking at all of the sort of uses of capital, ensuring that we are adequately positioned to launch into our 2009 RAL season.
Andrea Jao - Lehman Brothers
What was the tax rate do you us, for the coming quarter?
Stephen Masterson
Each month, each quarter we true up our annualized effective tax rate and there is lot of things to going into that, but it’s basically as if we are doing a tax return for the company and we look at our reductions. The things that we have flowing through, in this case the allowance for loan losses any losses we have etcetera and we true up and create what we call the annualized effective tax rate. In the first quarter you’ll recall that was 37.65%.
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