Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Matthew O’Connor – UBS.
Matthew O’Connor – UBS
It seems like you took a pretty big whack on Franklin here but as we think about the rest of the book I definitely would agree that the credit performance has held up better than most of the other banks out there. Obviously, the economy is very weak so there probably will be more pressure going forward but, how do you think about how meaningful reserves build could be looking in 2009?
Stephen D. Steinour
Matt, this is my first full week here and there are many, many areas I just haven’t had a chance to get the opportunity to dig in to. So, the truthful answer is I don’t know. I don’t have an expectation other than a belief that having intensively reviewed Franklin over the last five days with the various members of the credit team that I was impressed by their knowledge and I certainly before I came here took a lot of comfort in the track record I saw over the first three quarters. Again, I can’t answer the question specifically but I do have some confidence about the organization and the quality of the book.
Matthew O’Connor – UBS
I’m just trying to get a sense of what the organic capital build might be this year and I guess if we looked at what the stock is doing today combined with the capital ratio, the tangible common, it’s a little bit light here and the market is saying that you might need to raise capital or come up with kind of some other plans. You talked about building common capital, you talked about kind of everything being on the table so if you could provide I guess some more color on how this might play out in terms of addressing the capital ratio?
Donald R. Kimble
As far as our capital ratio again, we feel that our tier 1 and total capital ratios are very strong. If you looked at our combined tangible equity ratio it’s still very strong and we believe we have taken action to address the common with our dividend cut that we’ve taken this quarter. And, as Steve said, we’re taking other actions to make sure we can enhance the earnings going forward to make sure we can build that capital in the future as well.
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