Tim Sloan – Chief Executive Officer
Loan losses are the lowest I’ve seen in my career
“As I mentioned, our loan losses in the second quarter were 27 basis points, it is the lowest that I have seen in my 30-year career in the company. If you take apart the various parts of our portfolio, the residential first mortgage portfolio is continuously performing incredibly well. As I mentioned, we had net recoveries in the second quarter, similarly the home equity portfolio, the second portfolio, I think the losses in the second quarter are 21 basis points, so it is again the lowest that we have seen that I can remember.
On the auto side because of the changes that we made in our auto business, we experience a slight decline in auto losses. I would caveat the expectations for the third and the fourth quarter in that, there are a lot of cars right now that are underwater in Texas and in Florida, and so there may be some issues there. We do not have a sizing of that right now, I don’t think anybody does. The credit card business continues, the losses have ticked up across the industry and up slightly for us, but it’s not something that we’re overly concerned about.
On the commercial and C&I and CRE side of the house again, some of the lowest in history and we really don’t see anything on the horizon that’s going to drive higher losses in that portfolio. There will be some impact I’m sure from the hurricanes, but we don’t believe at this point that it’s going to be significant. So overall, we’re in a very benign credit environment, I think you got to be careful when you are in a benign credit environment like this that you believe because you do want to believe that it’s going to continue forever, but geez while it lasts, it’s absolutely terrific. And I think it reflects not only a slow but steady growth in the economy, but also some good credit decisions that have been made by my colleagues over the last few years.”