Dale Gibbons, Chief Financial Officer, Western Alliance Bancorporation
Yes, so next year on September 1, we have $58 million of senior debt at the parent that has a cost of 10.4% on it. And then we have the other remaining —
Robert Sarver, Chairman and CEO, Western Alliance Bancorporation
I thought we have must been desperate back then.
Dale Gibbons, Chief Financial Officer, Western Alliance Bancorporation
5 years, 5 years ago.
Robert Sarver, Chairman and CEO, Western Alliance Bancorporation
Oh God!
Dale Gibbons, Chief Financial Officer, Western Alliance Bancorporation
Then we have the remaining $70.5 million of SBLF funds that will, unless it is paid off, will rise in March of 2016 to 9% and it currently pays one. So what I am looking to do is that we will probably do a subordinated debt offering sometime, maybe out of Western Alliance Bank and that would take care of both of those items and probably be neutral to EPS. That is, we are eliminating 10.4%, $58 million and then 1%, $70 million. So the numbers where rates I think are today, I think we can do that, that is basically EPS neutral. And sustain our capital levels really kind of where they are, maybe take them a little bit higher since only the $70 million qualifies as capital — all the subordinated debt we would do would qualify. Regarding the tax rate, yes, it came up a little bit. We had a true-up on that as well. We are looking for the tax rate to fade slightly in 2015. But it will be a little bit higher than it was in 2014, somewhere around 25.5%.
John Moran, Macquarie
Perfect. Thank you very much guys.
Operator
And the next question is from Brian Klock of Keefe, Bruyette & Woods
Brian Klock , Keefe, Bruyette Woods
Hey good morning guys. I am just thinking about the year and the good growth. You guys have done a really good job though on the expense side. So ex the one-time items in the quarter, there are real gains in the two other expenses I am just talking about. Should we be thinking about $55 million as the sort of first quarter run rate for that expense base?
Dale Gibbons, Chief Financial Officer, Western Alliance Bancorporation
Yes we should give back, we should give back at least a couple of million dollars that we identified. I think maybe by half of the increase, from the third quarter to the fourth, we should pick up good in it, coming in to 2015.
Brian Klock, Keefe, Bruyette & Woods
Okay and then —
Robert Sarver, Chairman and CEO, Western Alliance Bancorporation
You want us to write you our whole projection or pro forma Brian or…
Brian Klock, Keefe, Bruyette & Woods
Well maybe just part of it, thanks. And the margin too I guess maybe try to get a little finer point on the first quarter you had. You know taking out the prepayment penalty would put your fourth quarter NIM at somewhere around 4.33%. So I guess thinking about that as–
Robert Sarver, Chairman and CEO, Western Alliance Bancorporation
You know what, I was talking to Dale about this last night. You know some of the things we get only happen like once, and some of the things we get happen more than once but you do not know when is that going to happen. And so we have prepayment penalties somewhere between the third half of our loans. And a number of the type of business we are doing more now has more prepayment teeth in them. And so, maybe we will average $500,000 a quarter of prepayment penalties, maybe it will start to go up a little bit, I do not know. But I would not take the whole $1.8 million out.
