Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Andrea Jao – Barclays Capital.
Andrea Jao – Barclays Capital
Going straight to the components of guidance, I believe last quarter you’d mentioned that loan loss provision in the back half of ’08 would roughly be equivalent to loan loss provision in the first half of ’08. So is this still valid or – because this implies that loan loss provisioning should start to decline by the fourth quarter?
Russell Goldsmith
I think what we tried to convey to people on last quarter’s call that we had a $35 million provision in the second quarter and we thought we’d have a similar provision in the third and fourth quarter. And while it’s very difficult to predict, I mean, that’s our general thinking right now as to where we’ll be this year.
Andrea Jao – Barclays Capital
So just to make sure I’m not misunderstanding, fourth quarter provisioning relatively steady versus – on the quarterly basis versus the second and the third?
Russell Goldsmith
Correct.
Andrea Jao – Barclays Capital
And my follow-up question is could you share with us your – the underlying assumptions that you’re using in terms of what the operating environment will be?
Russell Goldsmith
Well I’ll just tell you that the two large macro events are that interest rates went down 50 basis points and the forward curve suggests they’re going to go down again. And that rapid of a decline is generally negative of banks with all the core deposits we have, in the short run in particular. The equity markets have also done particularly poorly in October and we’re not able to predict that they’re going to recover. Hopefully they recover somewhat. So we look at that and that turns our viewpoint a little bit negative. Those are the two biggest issues really.
Operator
Your next question comes from David Rochester – Friedman, Billings, Ramsey & Co.
David Rochester – Friedman, Billings, Ramsey & Co.
Just a couple quick ones on the credit side and going through some of the line by line credit data for product type, taking a look at the CNI side of things could you provide a little color as to what you’re seeing in terms of the MPA increase? What that was? What industries that reflects and is that more small business or maybe small middle market?
Russell Goldsmith
Well, I guess we’ll both take a run at that. I think – you know, the nature of our client base you’re going to get some lumpiness in these numbers. And I think there’s not really a particular trend that I would draw out of the fact that MPA’s have gone up. They’re still in good shape, relative to the total portfolio. And our clients tend to, depending on how you want to define small business, they tend not to be as small as you might think.
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