Mr. Alonso: I am one of the regional bank analysts at Macquarie. My coverage is the Northeast/Mid-Atlantic and Texas. So it's kind of an odd group, but that's just the way it broke down. In the Northeast, some of the larger names, like Hudson City (HCBK), First Niagara (FNFG), New York Community; in Texas that's just five banks, larger names such as Cullen/Frost (CFR), Prosperity (PRSP), Texas Capital.
TWST: To the extent that you can generalize for your group, how strong is credit quality?
Mr. Alonso: By luck, I guess, my coverage has tended to be, while not perfect and certainly weaker than it has been in the past relative to some of the most stressed markets, I would say credit quality has been considerably better. There are a couple of one-offs in there where they've gotten tripped up, but in aggregate for my guys credit has probably been better than the industry. I think some of that is driven by, one, sort of as far as the Texas guys go, their experience with the last downturn. When Texas was under a great deal of pressure, they had kind of a runaway real estate market. I think a lot of the bankers that are down there now lived through that and sort of right along, we are a bit more cautious going into this.
I think you could probably say the same for the Northeast guys to a certain extent. The prior cycle of the early 1990s, they were under a bit more pressure. A lot of these people have lived through that and didn't want to go through it again. The only thing I will say about the Northeast is you don't have the same kind of dynamics that you have in some of the more stressed markets. You really can't yield as much around here as you could around Atlanta, and Florida and the Southwest, where there is open space to build on. So I think they are somewhat the beneficiaries of a more constrained construction market.
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