Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Andrea Jao of Barclays Capital.
Andrea Jao - Barclays Capital
Good morning everyone.
Dick Evans
Good morning
Andrea Jao - Barclays Capital
I was hoping you’d share with us your interest rate outlook or the assumptions that you have for the remainder of the year and perhaps the first half of '09. Then given those assumptions, how will the drivers that you already spoke about regarding the margin change, i.e. do you think you can still get improving loan spreads? How will funding pricing be?
Phil Green
Andrea, in our outlook we did not have another prime cut factored in. For example, we have the Fed standing pad-on rates through the end of this year. But I believe we have a prime cut near the very end of the year or very early next year.
As far as the impact on our outlook, I don't think it really affects us that much, particularly another say, 50 basis point cut, if that's what the Fed chose to do because the prime swap that we have in place has really rendered us to be more neutral in our position, as opposed to so highly asset sensitive that we used to be.
So I think our comfort with the guidance we gave is agnostic with regard to what the Fed does within a reasonable, I guess, no telling what they could possibly do, let us say within 50 basis points, we are sure we would feel pretty good about.
Andrea Jao - Barclays Capital
What are your thoughts regarding participation with TAR? And if everyone participates, what kind of exit plan would you have in place?
Dick Evans
Well, first of all, we are just studying exactly what it is. As you know, to my knowledge they want a final document early this week. And so we are still in the analysis stages to see exactly what would be good for us. As I've stated, you heard how strong our capital is and we are pleased to be going into this with a good capital position, but we will look for the right answer for our shareholders.
Andrea Jao - Barclays Capital
Thank you so much.
Operator
Your next question comes from the line of John Pancari of JPMorgan.
John Pancari - JPMorgan
Good morning.
Dick Evans
Good morning.
John Pancari - JPMorgan
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