Tuesday Topic: 2Q Results and Beyond

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Original Message:
Sent: 7/20/2020 3:04:00 PM
From: Barb Rehm
Subject: Tuesday Topic: 2Q Results and Beyond

Dreams of a deep, but short-lived economic downturn have evaporated for the largest bank CEOs. Last week as executives unveiled second-quarter results, many warned that the worst of the coronavirus recession has yet to come. "I don't think anybody should leave any bank earnings call this quarter simply feeling like the worst is absolutely behind us and it's a rosy path ahead," said Citigroup CEO Michael Corbat. "I don't want to be pessimistic…I want to be a realist." According to PNC CEO Bill Demchak, "Everybody is, bluntly, struggling. The generic corporate client we talk to, who's otherwise open and doing business, is almost without exception down from what they would have expected going into the year and down from where they were last year." JPMorgan Chase CEO Jamie Dimon said the bank charted five potential paths, from best- to worst-case economic scenarios. "If you look at the base case, an adverse case, an extremely adverse case, they're all possible and we're just guessing at the probabilities of those things; that's all we're doing," Dimon said. "You're going to have a much murkier economic environment going forward than you had in May and June, and you have to be prepared for that." Unemployment peaks 23% under JPM's most dire scenario. "Our view of the length and severity of the economic downturn has deteriorated considerably," Wells Fargo CEO Charles Scharf said. Bank of America's forecasts aren't any more optimistic. Its model forecasts a "recessionary environment into 2022, deep into 2022," CEO Brian Moynihan said.

How do these comments square with what you're seeing in your markets? Are you any more optimistic about the economy than the large-bank CEOs?

And one more thing… I'm curious if any of you are paying a premium for coins? Fast Company reports Community State Bank in Wisconsin has launched a Coin Buyback Program that pays people – customers and non-customers alike – a 5% premium for their change. The bank said it launched the program to help supply local businesses with the quarters, dimes and nickels needed to make change for their customers. 

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Barb Rehm
Senior Managing Director
Promontory Interfinancial Network, LLC
Arlington VA
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