Mr. Stapp: Regulatory issues certainly remain an uncertainty. I think one thing everybody knows is that capital requirements are going to go up; it is just a question as to how much. However, I think there other items in addition to regulatory issues that are impacting banks. For example, residential construction and development loans are continuing to be a thorn in the side of banks, especially smaller banks. Commercial construction loans are also impacting some banks, especially retail projects in projected growth areas where the population growth did not meet expectations. However, as far as the overall sector is concerned, residential construction and development has been far more problematic than commercial.
TWST: So there are a couple of things hanging out there that investors are still focusing on?
Mr. Stapp: Yes, in particular most banks have been unable to gain traction growing their balance sheets. In fact, a lot of balance sheets are shrinking. It's hard to get earnings momentum with shrinking balance sheets, especially if you are a spread lender.
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