Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Brian Foran – Goldman Sachs
Brian Foran – Goldman Sachs
The earnings are worse then I would have thought but the reserves are a lot higher, the capital is higher, and there’s some signs of deceleration and inflows, so do you think about this quarter accelerating the process of getting ahead of things and so as a result the turnaround time is kind of the same as you would have thought three months ago, or are things just worse and the timeline is the same or longer because of what’s going on with the economy?
Bryan Jordan
I think you’ve made a pretty accurate assessment in the sense that we think we’re right on track. I think we’re actively and aggressively trying to identify these problems and get them behind us. So I think we’ve been very proactive. I think we, our credit guys and our line bankers have done an outstanding job of trying to identify problems, build adequate reserves, so that we can deal with those on a go forward basis.
An example that Greg mentioned are the one-time close loans where we have we think much greater visibility in that portfolio as it winds down. It was down $300 million this quarter. We expect it wind down over the course of 2010. We’ve built on a simple math basis based on the $40 million of losses we took this quarter six quarters of reserves for that portfolio at $242 million. So I think we’re doing a good job of being proactive and building these reserves.
Our business units, capital markets and bank are right on track. We’re pleased with how they’re performing. I think we’re closer to seeing that turn.
Brian Foran – Goldman Sachs
You’ve talked about $100 to $125 million of pre-provision in the past is that still the outlook or where do you stand relative to that goal?
Bryan Jordan
That’s still the outlook and that’s still where we think we’ll be. The near-term you’re facing some headwinds with higher funding costs. You’re facing some headwinds with increased foreclosure expenses in the banking unit. Market sensitive revenues like trust and wealth were down a little bit this quarter driven by the market, there’s some seasonality in the business so I’m still very comfortable with the $100 to $125. We’ve got some work to do on efficiency, we’ve got some work to do but we’re very comfortable with that outlook for the long-term.
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