Question-and-Answer Session
Operator
(Operator’s instructions) Our first question comes from Jared Shaw - KBW.
Jared Shaw - KBW
I do have a few questions for you. I guess first, just following up on what you just said with the expenses. When you say ?expenses to be flattened away? is that on a full-year dollar amount basis or is that on an expense-to-asset ratio basis or is that annualizing fourth quarter? I guess how should we be looking at that?
Donald T. Chaffee
Full-year dollar amount, Jared.
Jared Shaw - KBW
And then, at this point you have been able to deploy some capital? Do you have any more long-range goals in terms of how you’re looking at profitability for the franchise and what you think you can be able to get out of it, in terms of profitability, whether that’s on an ROA basis or an ROE basis, once you have more of a normal equity base?
Peyton R. Patterson
I think what I would comment is, I’m not in a position to give specific ROE and ROA targets. However, they are front and center in terms of our business planning.
I think one of the key levers that we have, particularly in ?08, with all the aggressive rate cuts that the Fed has done either expected or not expected, is bringing our deposit cost down. We’ve already implemented a fairly aggressive set of rate cuts. In that vein, we feel that is a big pressure point.
And I think focusing in on the margin is going to be key as we migrate through here and we are already starting to see some opportunities. Our mortgage originations, particularly as it relates to refi’s, are way up year-over-year. So, I think you will see, as we go into first quarter, some opportunities that we have to improve, hopefully, on the revenue side.
Jared Shaw - KBW
And then, I guess we’ve already seen, obviously a 175 basis point cut, then potentially having another larger cut today. Have you been able to pass that through basically to the deposits you’re starting to see? Are you bringing them down 75 basis points at the last cut? Or you’re going to have to bleed it into the market?
Peyton R. Patterson
Well, we already have initiated rate cuts, could be as high as 100 basis points. And we are already starting to see the market come down in some areas. And that was to factor in, really, leading up to that 75 basis point cut. We are continuing to refine pricing.
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