Mark Sander – Senior Executive Vice President & Chief Operating Officer
I would say the short answer to your question is yes, we think 2015 is the year that we get to normalized charge-offs. We think 2015, we will be more in-line with our peers at a normalized level. As we think about long term sustainable levels for various credit quality metrics, we think we’re going to be there in ’15. We think we are there with NPAs and adverse performing and even though we think we are going to see further improvement, those are at normalized levels. Charge-offs for our peer group generally range in that 25 to 40 basis points over the long haul. We think the industry will normalize there in ’15 and we think we will be in the lower half of that range.
Emlen Harmon – Jefferies
Got it. Thank you very much, I appreciate it.
Operator
The next question comes from Michael Perito of KBW. Please go ahead.
Michael Perito – KBW
Good morning everyone. Mike, I had a quick question on capital. The total capital ratio is hovering around 11% today and when I look back over the last few years, it’s a little lower than where it’s been. Obviously it was a little, probably too high a few years back, but how are you guys thinking about your total capital ratio in the context especially of eventually crossing over $10 billion and having a larger balance sheet? And maybe more specifically would you consider debt or preferred offerings? Just maybe any thoughts on how you are thinking about capital would be helpful?
Mike Scudder – President & Chief Executive Officer
Yes, we have a very strong what I will call Tier 1 common level of capital today given both the profitability of the company and the ability to fund that is creating a quick recovery particularly as it relates to the acquisitions of our capital position. We think we will certainly not be right back to where we were before the Popular acquisition but we will be significantly progressed back to being at the same levels by the end of ’15 which gives us some flexibility as to how we manage that balance sheet mix.
We have and continue to look at what our mix is given as you look out into ’16 and late ’16 that we have both our senior notes coming due and then we also have some sub debt that is coming due out of it. So we’re going to continue to evaluate that, but I think there is room for our mix to shift to what I’ll call more debt, more Tier 2 certainly as we look to grow and expand.
Michael Perito – KBW
Alright, thanks. That was helpful. And just a quick question on loan yields. Appreciate that the color of Great Lakes was accretive to your loan yields, but maybe just where are new originations kind of coming on average versus where your loan yields are today?
Mike Scudder – President & Chief Executive Officer
New and renewed spreads in the quarter were down slightly from the third quarter, but I would stress slightly. We had stabilization in Q2 and Q3 and we saw a slight decline in Q4, a few basis points in our new and renewed spreads. So nothing, I guess I would say we are maintaining strong discipline in pricing, but that remains a constant battle frankly. Everybody wants to blame the other guy. We have lost some opportunities based on price. I will just say that we rarely miss our hurdle rate which we think is a conservative hurdle rate and when we do, it’s because we see upside elsewhere in the relationship. So again as much as we saw a little bit of slippage this quarter, it wasn’t a couple of basis points and we’re still getting our pricing hurdles on our new and reneweds.
Michael Perito – KBW
Just what’s the gap I guess, though, if the new yields are flattening but versus or relative to the 4.45 loan yield, the yield on the total portfolio today. I guess what’s the, is there still a gap there or?
