Question-and-Answer Session
Operator
Your first question comes from Brett Rabatin - FTN Midwest.
Brett Rabatin - FTN Midwest
I wanted to ask you a few questions. I’ve actually got a ton, but I’ll just ask you a few here. First, I want to make sure I was clear: the $25 to $29 million in guidance, is that in credit loss or was that in provisioning?
Daniel G. Byrne
That’s in provisioning.
Brett Rabatin - FTN Midwest
And, Dan, can you walk us through the California exposure; how much of that is residential? And then how much in total is Southern California, and how much of that is residential? Because I thought I understood that most of the California exposure was commercial from the Sonoma acquisition, and so I’m a little surprised to hear this sort of language about South California, so to speak.
Daniel G. Byrne
With respect to the Southern California, we do have loan officers here in Spokane that have had long standing relationships in a prior life with the borrowers in Southern California. But we effectively have two borrowers in the Southern California that are in the nonperforming, and that’s what we identified in the press release and on the conference call.
Harold B. Gilkey
What’s our total commitment to California, Dan?
Daniel G. Byrne
Total commitment to California is about $250 million. On a commitment basis, it would be split about $140 million in Southern California and $105 million in Northern California.
Harold B. Gilkey
And over 50% of that would be commercial real estate?
Daniel G. Byrne
Those were just the residential construction portion of the loan over there.
Harold B. Gilkey
Okay.
Brett Rabatin - FTN Midwest
The classified assets, obviously were about stable and so you had movement into non-accruals and some replenishment of the classifieds. With the provisioning level that you are assuming in ?08, I was hoping to get some clarity on what gives you the confidence that the loss content in the NPAs in the classified assets is that restrained?
–I’d hate to open Pandora’s box, but can you tell us how much of that classified asset base is special mention versus substandard, or give us some idea of why any potential write-downs on the collateral of these loans that you have might be minimal?
Daniel G. Byrne
First-off Brett, I didn’t understand the first part of your statement.
Brett Rabatin - FTN Midwest
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