Richard Davis at BAML Conference Notes

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Richard Davis – Chairman, President and Chief Executive Officer

Our customers don’t have any direct impact from the recent geopolitical tragedies

“the recent tragedies, and geopolitical issues have not and I think you can even see in the stock market either on stock market it didn’t show any major reaction to that. It’s for two reasons one is, because most of our customers don’t see a direct impact to that. And I think number two even maybe more importantly and probably certainly is they’re kind of immune to some of those concerns, because, it hasn’t really brought anyone down yet to a points that’s caused them to change their behaviors”

It’s important that the Fed pierce the veil

“talking to customers and ask them how they’re feeling. And they still feel better every 90 days and I’m going to further the 90 day before. But they’re also looking for an opportunity the permission to move forward and I think that will be with the movement of interest rates I think as of this morning it was 66% likelihood I just left another hotel having run a panel for three of that Presidents Dudley, Mester, and Lockhart and let’s just say they were on record and seem quite positive about the possibility in December as well, which is just four weeks from now. So I think that’s all going to be quite important whether it’s 25 basis points and it’s another six months till the next 25 is quite a less important than they pierce the veil.”

Customers aren’t going to change their borrowing behavior unless rates are at 250 to 300 bps and we’re a long way from that

“every customer I can and often even at phone call I’ll say hey before we leave what level of interest rate rise needs to occur to have you change your behavior or your appetite for what you’re doing today status quo and it’s 250 to 300 basis points and that’s a long way from now.”

The most pent up demand is in home loan and small business

“Two, one is going to home related, and so new home purchases and home equity, where people actually feel they have value in their home does not just not before now undervalued, but they actually have the confidence they can use it and pay it back. The second one is small business.”

Auto loans should stay strong too

“Cars will stay strong for sometime. I still can’t believe it, they keep telling me that cars are 10.5 years old, the cars on the road. I swear, I can sit at any stoplight, I can’t find anybody over 10.5 years old. But they’re out there and they’re buying cars handsomely.”

Next year is going to be entirely political not economic

“This last year is going to be entirely political not economic. So first of all none of these candidates by definition have any power right now in the White House or to inform policy of the cabinet. So that’s first and foremost to note. There will be politically interesting and they’ll have their opinions and what they’ll do with the budget and the deficit and all, but they’re not going to inform policy.”

Interest rates rising and a change in the White house will probably help the American people feel more confident

“if interest rates start to move in the next 12 months consistent with the view that there will be a change in the White House, because there has to no matter what the change those are both two positive elements of distinction that help the American people feel a little bit more confident.”

The consumer is done deleveraging

“The consumer has delevered they’ve done deleveraging. So where they’re now in the saving cycle and I think they were in the – I want it, but I’m not quite sure I can have it yet. But they now have the means to have it.”

I don’t know that we’ll every be done with this regulatory environment

“I don’t know that we’ll ever be done. I just don’t know where the next idea comes from. And I think all we need is one any size bank to have some slip on the topic that would cause a governor to say, wow, that’s a category we didn’t think off.”