Question-and-Answer Session
Operator
[Operator Instructions] We’ll go first to Steven [Alexopoulis], JP Morgan.
Steven [Alexopoulis] – JP Morgan
You commented that with the dividend cut the payout ratio should be in the 40% to 50% range, what time frame are you thinking there? Is that in ’08 assumption or next quarter?
Jerry Baker
That’s our assumption for ’08, we believe that we should progress and be at that level as we move through the year.
Steven [Alexopoulis] – JP Morgan
Could you touch on how you are thinking about the Mortgage banking segment here? You’ve had headcount reductions and a lot of moving pieces. When do you expect that segment to actually become profitable again?
Bryan Jordan
That’s a good question; the disruptions in the market seem to continue to persist. You see improvement for a couple of months and then the spreads widen out like they did towards the end of the year especially in December. We expect as we sit here today to continue to see a difficult operating environment for the Mortgage business for the foreseeable future, we don’t expect significant recovery over 2008 and probably will persist into 2009.
Our hope is that we can reduce the, if you pulled out a number of the one time items in the business and look just at the operating results you probably would have had in the neighborhood of $40 million pre-tax operating loss in the business. That pulls out the goodwill, the MSR valuations [inaudible]. We’re trying to drive that much closer to break even over the next couple of quarters. As Jerry said in his comments and as I’ve said a couple different ways in my comments that that’s a business we are going to continue to address as aggressively as we can to reduce exposure to the volatility of the business and to reduce the cost structure and the capital allocated in a way that we drive greater profitability of the business.
Operator
We’ll go next to Paul Miller, FBR Capital Markets.
Paul Miller – FBR Capital Markets
You talked about having provision of roughly $200 million on a $50 million run rate if I’m correct throughout the year. You had $50 million roughly charge off in the fourth quarter alone. Are you planning, going forward, to provision what you expect to charge off? In saying that do you expect charge offs to be roughed in that $200 million range?
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