Ashar Khan: So, can I just assume that like if I am right, right, the NIM went down by about 10 basis points assumption between the two quarters. So, the 10 basis points is equivalent to $0.14. Is that the right sensitivity?
Paul Ito: Yes. So, in terms of – so I am thinking about total funding costs, right. There are different – sometimes banks talk about their core funding costs. We generally refer to our total funding costs and our total funding costs for the quarter was a 17 basis point change. In terms of the full year, we haven’t, I guess given the guidance of what that change will be. But I think you can maybe take it from our NIM guidance in the first quarter versus our new guidance. So, essentially moving down from 280 to 290, down to 270 to 280. But I mean that would be the – in terms of the drivers is really the NIM. So, if your question is whether you can assume that I mean I think what you have to do is look at our earning assets and then take the change in the NIM, and that would be sort of what you could expect.
Ashar Khan: Okay. Fair enough. Yes. I am just trying to see if there is further NIM pressure, what would be the impact on earnings and whether this 10 basis points equals to 14 basis points is a good benchmark to use for the – if one is to go up or down as things play out this year or next year.
Paul Ito: Again, I think you – go ahead.
Scott Seu: Go ahead Ashar.
Ashar Khan: And my final question is, so I see your cash flow slides have not changed. So, can I ask you – so we are losing about $14 million or $15 million in earnings after tax. So, where is that – how is that being absorbed as the cash flow is exactly the same as in quarter one. So, what is coming in to replace that lost earnings in your cash flow projections for the year?
Paul Ito: Yes. Ashar, I assume you are talking about the cash flow dividends from the bank to the holding company. Yes, the way we size the dividend to the holding company is based on the bank’s Tier 1 leverage ratio and the Tier 1 leverage ratio is affected by earnings to some extent, but also balance sheet size growth or contraction of the balance sheet also has an impact. So, based on our outlook, even though earnings have come down, but based on our outlook for Tier 1 leverage, we are still able to manage the dividend that we set earlier in the year.
Ashar Khan: Okay. So, can I just follow-up to that is what is the maximum that you can dividend out of the bank to manage that Tier 1? What is – can I just have that information? What is at the tar that you are, what is the maximum dividend that you can get out from the bank?
Paul Ito: So, we manage our Tier 1 leverage ratio to be between 7.5% to 8%. In terms of the maximum dividend, I don’t have that exact number in front of me. I think in our 10-K, we sort of touch on the amount of dividends that our subsidiaries are restricted from not able to be dividend up to the holding company. But at the end of the quarter, we were at 7.79% for our Tier 1 leverage ratio.
Ashar Khan: Okay. And you can go down to 7.5%. You said the range was to 7.5% to 8%, correct, am I right?
