Huntington Bancshares(NASDAQ:HBAN) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
Structure & Pricing
Scott Siefers – Sandler O’Neill: Steve, I was hoping you could just expand upon some of the comments you made both in the text of the outlook and then just toward the end of your prepared remarks there about some of the deterioration in structure and just not only pricing that you’re seeing just in the market as a whole?
Stephen D. Steinour – Chairman, President and CEO: I’ll ask Dan Neumeyer to start and I’ll add to it. Dan, why don’t you go ahead?
Daniel J. Neumeyer – SEVP and Chief Credit Officer: Sure. Well, as we’ve said for a number of quarters, obviously, pricing has been under pressure for some time. I think in the last quarter we actually saw more instances of structural give-ups, and so, there were probably more instances where we have actually had to walk away from deals because of structure and that could be a reduction in the amount of recourse on some of the commercial real estate loans, higher cash flow multiples, looser covenants, et cetera; all senior deals being done where we may have seen a strip of mezzanine in the past or deals where we would ply an SBA guarantee that are getting done on a conventional basis. So, those are some of things that probably increased a bit more in the last quarter.
Stephen D. Steinour – Chairman, President and CEO: Scott, I’ll add to that. Auto pricing is a bit sharper, and these are normal recovery competitive dynamics would play and probably even further accentuated by this artificial rate environment…
Scott Siefers – Sandler O’Neill: Okay, yeah, definitely makes sense. And then, I was just hoping to ask a question on auto specifically; if you guys have any thoughts on that recent CFPB guidance and anything it’ll do either to kind of profitability of the business, the way you look at it, et cetera?
Stephen D. Steinour – Chairman, President and CEO: Well, we, of course are following it. There’s a lot still to evolve. We started with the view of this business consistent with our Fair Play overall, so we don’t have any intended changes at this point and we like the business that we are able to produce today and we watch this every week. So, no change at this point, but obviously focused on what the CFPB is intending to do by way of new regulation.
Ken Zerbe – Morgan Stanley: My question on auto. What exactly prompted the change in your thought process in terms of the securitization and I ask because, I think the answer Steve you gave in your prepared remarks, you probably could have given that same answer last quarter, two or three quarters ago. What change in the mix you want to retain more and I guess also should we now assume that the balance because I know you’ve got plenty of room before you get to your 20%, but should we assume it steps over $4 billion to $5 billion number we average something much higher?
Donald R. Kimble – SEVP and CFO: Ken, this is Don. As far as the thought process behind that you hit on some of the key points with making sure that we keep below the we are well below the 20% limitation there and so we do have a lot of additional room to move up. And part of it too was that part of the benefit is really the capital efficiency associated with this transaction and with our current capital actions we felt that there was capacity to go ahead and keep some of those on balance sheet. Another component that we are focusing on a lot more is just this is a very liquid asset for us and that it is a substitute for certain other investments that we choose to make and those other investments in our portfolio would result in potential OCI risk to us. So, that step is another benefit that we are pursuing as far as the securitization transaction decision.
Stephen D. Steinour – Chairman, President and CEO: There’s much more discussion about that policy and when does it end, how does it end and timing, Ken, and that’s caused us to relook at OCI risk and frankly, other balance sheet related risks.
Ken Zerbe – Morgan Stanley: And just a quick follow-up. The sale of your tax credit investments or a portion, does that have an impact on your effective tax rate going forward?
Donald R. Kimble – SEVP and CFO: It will have a slight increase to the tax-rate as a result of that and it’s not too material.