Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Lewis Feldman – Wells Capital Management.
Lewis Feldman – Wells Capital Management
Really two general questions, Hadley touched on this a little bit more but in terms of your C&I portfolio, what are you seeing in terms of the deterioration of providers to the construction industry and the builders, etc? Can you give us a little more color on what you’re seeing? I’m looking specifically at the relationship that Trinity had with Matrix, Legends and a couple of others and if you’re seeing that and if you can talk geographically about that?
Hadley S. Robbins
As you did mention, I touched upon really the kind of high level observation we’re seeing because the housing industry softens those related businesses that support the housing industry, have challenges. And, it’s driven primarily first off all through revenue reductions and so a number of these businesses are having to allocate their resources very efficiently in order to offset the impact in revenue. I think that it rolled through if I kind of go back in time first it hit the services that would be architecture and civil engineers, it went through excavators, then the lumber products in our experience and it then moved on other areas. Sandra pointed out that particularly nurseries involved in shade trees and bare root stock that feed in to the subdivision construction aspects of the housing industry would feel this as well and so they’ve made all the adjustments. I hadn’t see an deterioration that would be pronounced. I’ve seen a steady understanding of the environment changing and businesses adapting to that situation right now.
Lewis Feldman – Wells Capital Management
Are the moving up to classified or substandard categories?
Hadley S. Robbins
We’ve had in our portfolio a risk rating migration that I mentioned. I haven’t seen any significant change as it relates to these types of businesses that they would go in to let’s say classified assets.
Lewis Feldman – Wells Capital Management
Then this is kind of directed to Bob and Xandra. For the last several years you’ve talked about your move away from CRE and yet we suddenly have a decent jump in CRE credits booking. I’m assuming this is not a change in policy but more opportunistic?
Robert D. Sznewajs
I think it’s a combination. Some of that when you’re talking about real estate, some of that is home equity that’s in the residential side. Xandra do you want to comment?
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