DEC 5, 2008 2:00am ET

Year in Quotes

The Industry in Its Own Words

"We want to spend this year building our capital and making sure our infrastructure is strong, so that when the market does what it has proven it will do, we can be ready to do what we do best, and this is integrating a large book of business into ours."

Ronald Logue, State Street Corp.'s president and chief executive officer Jan. 16

"In terms of either buying assets or buying companies, we're very open-minded. And if we think we can do the right kind of due diligence and understand the values, and that we're giving the value that we're getting, we would be very happy to do it. This environment doesn't change that at all. It just may make it more likely."

James Dimon, JPMorgan Chase & Co.'s chairman and CEO. Jan. 17

"You had too many banks wanting to get established and get a foothold in the market, and that made all of us, me included, too aggressive in our lending."

John Hampton, the chairman and CEO of First Western Bank in Booneville, Ark. Jan. 18

"We have to do better," but "I want all of you to know that we are not done."

Kerry Killinger, then the CEO of Washington Mutual Inc. Jan. 18

"I think our risk management has been very good. We are optimistic about Wachovia. Frankly, it's just hard for me to understand the impact that our stock price has taken over the last three months, because I look at how we compare to others, and I feel very good about where Wachovia is."

G. Kennedy Thompson, then the CEO of Wachovia Corp. Jan. 23

"Very few banks that have put up results thus far have put up results that they are proud of. They all were underachieving results, and in some cases they were an absolute disaster."

Gerard Cassidy, an analyst at Royal Bank of Canada's RBC Capital Markets, on earnings for the fourth quarter of 2007. Jan. 29

"You've almost got a refinance boom as we speak."

Kenneth Lewis, the chairman, president, and CEO of Bank of America Corp., explaining its bullishness on its deal to buy Countrywide Financial Corp. Jan. 31

"With all the population growth around Atlanta, you've got to be crazy to want to get out of this business."

H.B. "Rocky" Lipham 3rd, the CEO of WGNB Corp. in Carrollton, Ga., on its plan to return to residential construction lending when the housing market recovers. Feb. 6

"If you look at the market in California, there are homes in Newport Beach owned by doctors and lawyers that are in default. It's not necessarily a subprime problem, but a housing leverage problem."

Sarbashis Ghosh, a senior director in Merrill Lynch & Co. Inc.'s global securities research and economics department. Feb. 7

"It may regain some value, but we don't know that. In the meantime, I now have $50 stock that is trading at $28 a share."

Frank Paden, the president and secretary of Farmers National Banc Corp. in Canfield, Ohio, on other-than-temporary impairment charges on Fannie Mae and Freddie Mac stock. Feb. 8

"He says one thing and does another."

Sen. Richard Shelby of Alabama, the top Republican member of the Senate Banking Committee, about Treasury Secretary Henry Paulson. Feb. 8

"Some people look at banks as the bad guys, and that we're just in it for the profit. But profit is not a dirty word — it is the means by which we can grow more opportunities in our communities, and profits enable us to donate to worthy causes."

Dale Gunther, vice chairman of Bank of American Fork in Utah. Feb. 22

"The short answer is yes, we want to expand globally, and I think a lot of work is going to be done on that in the next couple of years as we add international products and look for new distribution opportunities abroad."

F. William McNabb 3rd, the CEO of Vanguard Group Inc. Feb. 25

"It's clear that we underestimated the complexity of taking DI's offering to the level where we want it to be."

Brad Smith, the president and CEO of Intuit Inc., on why the online banking product designed to incorporate capabilities acquired in its 2007 purchase of Digital Insight Corp. was more than a year behind schedule. Feb. 25

"We don't support legislation that will reward lenders … that will bail out lenders."

President Bush. Feb. 29

"Greater level of government intervention is something we should be thinking about."

Federal Deposit Insurance Corp. Chairman Sheila Bair. March 5

"Most of the proposals I've seen would do more harm than good. I'm not interested in bailing out investors, lenders, and speculators. Our focus in this administration and my focus is on targeting struggling home-owners who want to keep their homes."

Mr. Paulson. March 12

"What we are trying to do, in addition to providing assistance to the homeowner, is to create a floor, so that we bring this thing to a halt. … Capital will not move until we have some sense of where the floor is."

Senate Banking Committee Chairman Chris Dodd. March 14

"What's needed here is a paradigm shift in terms of the regulatory environment and the economic policies of this country. Without it, we risk a slide into second-class economic status."

Eugene Ludwig, the CEO of Promontory Financial Group LLC. March 17

"Regulation is fractured and based on a financial system that doesn't work any longer. There should be some combination of regulators, or they should at least act in greater harmony."

Sen. Charles Schumer, D-N.Y. March 18

"I do think that a reality that we all have to face is too aggressively pursuing a goal of getting everyone in the United States [into homeownership], … people that really can't afford to be homeowners rather than renters, is perverse. … It is not good public policy to have mission goals that encourage the GSEs to put people in homes that they end up losing."

Richard Syron, Freddie's CEO. March 20

"In a sense, we were like a white knight. It wasn't like we came in here to do a hostile breakup of that other deal."

Gerald H. Lipkin, the chairman, president, and CEO of Valley National Bancorp of Wayne, N.J., on making an offer for Greater Community Bancorp. March 24

"I am absolutely convinced that mobile [payments] will take off outside the U.S. before it will happen inside the U.S."

Scott Thompson, the president of PayPal Inc. March 25

"There was never a problem with the student loan asset class. The problem was somewhere else. If you have good underwriting criteria, the student loan is one of the safest unsecured assets out there."

Chirag Chaman, the founder of Fynanz Inc., which operates a peer-to-peer student lending Web. April 8

"I believe there is a line we should not cross. That line is represented by a taxpayer-funded bailout of investors or homeowners that freely and willingly entered into mortgages that they could have known or should have known they could not afford."

Sen. Shelby. April 11

"I could continue to do more of the same, but I am principally stepping down because I can."

William A. Donius, the president and CEO of Pulaski Financial Corp. in St. Louis, on his retirement at the age of 49. April 17

"Right now too many community bankers are having too hard a time coming to grips with the problems that have emerged in their commercial real estate portfolios. These bankers are reluctant to charge off obviously troubled loans or even to flag problems to their examiners."

Comptroller of the Currency John C. Dugan. April 21

"You see an appraisal for land in a given area in September at X, and in January it's X divided by two."

Thomas T. Hawker, who retired this year as the president and CEO of Capital Corp. of the West. April 21

"The entire industry has to get back up to speed on good old-fashioned FHA."

Cara Heiden, co-president of Wells Fargo & Co.'s home mortgage unit. April 24

"We've gone to bare-bones Basics of Banking 101."

Rett Walker, the president and CEO of Security Bank Corp. in Macon, Ga., on cost cuts after a $24.2 million first-quarter loss. May 1

"The link between lender and borrower in the current residential mortgage industry is a multilayered, tightly — if not hopelessly — entangled 'assembly line,' the purpose of which seems to be the avoidance of responsibility."

Judge Joel B. Rosenthal of the U.S. Bankruptcy Court for Massachusetts, in a decision in which he fined Wells Fargo $250,000 for failing, in its role as a securitization trustee, to correct misrepresentations made by a lender. May 1

"Clearly, there are scenarios in this environment where we could not be well capitalized and end up being" classified as merely "'adequately capitalized' for a short period of time."

Michael Perry, IndyMac Bancorp's CEO, two months before it failed. May 14

"If you don't like the city of Cleveland, you don't go 15 miles up Lake Erie and build a new city and have everybody move there in five years. You're going to rebuild the city while you live in it."

Joseph T. McCartin, the chief information officer of National City Corp., explaining why it had no plans to replace its core banking system. May 20

"This mortgage stuff will fade away, one way or another. … Now we've got important work to do to rebuild the bank, to rebuild earnings. It's not going to be superfast, but we can see the road forward from here."

Peter Raskind, Nat City's president and CEO. May 21

"Finance can't compete in the fun category. You can't compete with Scrabulous."

Chris Larsen, founder and CEO of Prosper Marketplace Inc., explaining why banking applications have not taken off on social networking Web sites like Facebook. June 4

"I don't think this is a management team that needs a fire lit under it, but having a Carl Icahn around is not going to hurt from that perspective."

Brett Rabatin, an analyst with First Horizon National Corp.'s FTN Midwest Securities Corp., on the billionaire corporate raider's investment in Guaranty Financial Group Inc. in Austin. June 10

"If you think there is one single value for every home out there, the next time you're on an airplane, you should ask the five people around you what they paid for their airfare. … You may have to sell [a house] for 5% less today to avoid selling for 20% less tomorrow."

John Burnett, the vice president of default administration and the head of valuations at Wilshire Credit Corp., a mortgage servicing unit of Merrill Lynch. June 12

"Cutting costs is not on my agenda. Companies don't cut their way to success or greatness. We have to be efficient and put our resources in the right places, but our hiring in the investment area speaks to the fact that we are putting money" into the company.

Robert L. Reynolds, president and CEO of Putnam Investments. June 13

"Whenever there is litigation, the aftershock is often legislation."

Kyle O. Sollie, a partner at Reed Smith LLP, on the potential fallout of a court case challenging the way Pennsylvania taxes banks involved in mergers. June 24

"Housing got us into all of this trouble, and housing is eventually going to get us out of this. We have to see this inventory of houses come down and prices decelerate. … Housing will go down in value, but it may take another year to 18 months."

Robert P. Kelly, chairman and CEO of Bank of New York Mellon Corp. June 18

"Probably I would guess that he would then want to go have some fun."

Mr. Lewis of B of A, on what Countrywide CEO Angelo Mozilo would do after its acquisition. June 26

"I am concerned that IndyMac's financial deterioration poses significant risks to both taxpayers and borrowers, and that the regulatory community may not be prepared to take measures that would help prevent the collapse of IndyMac or minimize the damage should such a failure occur."

Sen. Schumer. June 27

"A huge share of this is panic. Markets are moved by information, but in periods like this, they are also moved by fear."

Mr. Syron of Freddie. July 9

"I equate this situation to a cancer patient on chemotherapy with an uncertain prognosis but instead dies of a heart attack. In this case, I believe Sen. Schumer's actions precipitated the equivalent of a heart attack."

Office of Thrift Supervision Director John Reich, blaming Sen. Schumer for the IndyMac collapse. July 11

"The folks out there in these communities need us more than ever."

Derrick D. Cephas, the president and CEO of Amalgamated Bank in New York. July 16

"When I picked up my newspaper yesterday, I thought I woke up in France. But no, it turns out that socialism is here in the United States of America, and it's going very well."

Sen. Jim Bunning, R-Ky., on the Treasury Department's plan to backstop the government-sponsored enterprises. July 21

"They are staggering numbers. … It may be higher because we have all the politicians telling people it is OK not to pay your mortgages."

Mr. Dimon on JPMorgan Chase's prime mortgage portfolio, whose net chargeoff rate jumped to 91 basis points in the second quarter, from 5 basis points a year earlier. July 24

"If you've got a bazooka, and people know you've got it … you're not likely to [have to] take it out."

Mr. Paulson, on requesting new powers for the Treasury to bolster Fannie and Freddie. July 31

"When we communicate with you, our goal is to be realistic, balanced, cautious, and prudently paranoid. We understand our issues and challenges. We are already addressing them, and we will be taking more actions, period."

Robert Steel, then the CEO of Wachovia. July 31

"Anything I say about the future could easily be wrong. It probably will be wrong, with this kind of environment."

John A. Allison, the chairman and CEO of BB&T Corp. July 31

"Transit is the application that brings everybody to the table. The card that brings you to and from work will be the card that's top of wallet."

Stephan Orfei, the senior vice president of advanced payments at MasterCard Inc. Aug. 1

"IAT is an unprecedented transaction. This is not a small-scale rules change. It is a total reworking not only of the international ACH rules, but of ACH rules in general."

Cary Whaley, the associate director of payments policy at the Independent Community Bankers of America, on the impact of the international automated clearing house format due to roll out in September 2009. Aug. 4

"Every day there are concerns about the safety of banks coming from radio or television. It's been sensationalized to a degree, so we decided to attack that head-on."

Stephen G. Andrews, the president and CEO of NorCal Community Bancorp in Alameda, Calif. Aug. 6

"It will always be ice cream, but there will be many different flavors."

Steven Kietz, a Citigroup Inc. executive, explaining why it offers at least four different mobile banking applications. Aug. 8

"As others are squirreling away from marketing, launching an ambitious, widespread campaign sends a subtle signal of reassurance to consumers."

Steven Reider, the president of the consulting firm Bancography, on a Michigan bank's aggressive ad campaign. Aug. 15

"Just bringing borrowers current is a Band-Aid. What needs to be done in this environment is [that] loan modifications need to be a tool to right-size the borrower."

Rick Seehausen, the president of LenderLive Network Inc., a Denver mortgage originator. Aug. 21

"There is some reception out there against being a non-spendthrift. But really, you ought to be saving your money."

Donald Higdon, the chairman of the recently launched Tightwad Bank in Missouri. Aug. 29

"Am I going to have to moderate my antibank stance? Probably. I can't continue to slam what will be my brethren. Will I occasionally have to wear a jacket? Probably. But I don't anticipate having to wear a tie."

Christopher Hurn, the president and CEO of Mercantile Commercial Capital LLC of Altamonte Springs, Fla., on how things might change at his company, which specializes in making Small Business Administration loans, if regulators approve its application to become a bank. Sept. 4

"I have determined that the companies cannot continue to operate safely and soundly and fulfill their critical public mission. Therefore, in order to restore the balance between safety and soundness and mission, FHFA has placed Fannie Mae and Freddie Mac into conservatorship."

James Lockhart, director of the Federal Housing Finance Agency. Sept. 7

"We had excellent earnings. We had no problems with loan quality. Our bank was a perfect bank, with the exception that we made the mistake of investing in these government-sponsored entities, and we did that because, like thousands of other banks, we felt those were very safe investments."

Charles E. Allen Jr., the chairman and CEO at State of Franklin Bancshares Inc. in Johnson City, Tenn., on why it had to sell itself. Sept. 9

"Like everyone else in this business, Wamu is facing very significant pressures, and I know I need to hit the ground running."

Alan Fishman, then Wamu's CEO. Sept. 9

"I like it again."

Mr. Lewis of B of A, on investment banking. Sept. 15

"We look at this environment from the bank's perspective as being an opportunistic one. There are a lot of clients of other banks not being served well. We can get a lot of market share in a very difficult environment if we're smart about this."

Peter F. Benoist, the president and CEO of Enterprise Financial Services Corp. in Clayton, Mo. Sept. 18

"Oh, boy. Here we go again."

Bill Jenkins, the marketing director at Countybank of Greenwood, S.C., on his first thought after waking up one September morning to news of yet another major merger. Sept. 18

"Given the financial conditions today, I feel like a kid in a candy store."

Richard Kovacevich, Wells' chairman. Sept. 19

"We are in discussion with folks that may be interested in leaving an institution because of some of the unrest that that institution is facing right now, and they might be interested in joining our company.";

Dean McSweeney, a senior vice president at Columbia State Bank of Tacoma, on opportunities to pick up advisers from Wamu. Sept. 22

"I can see Fannie putting companies on probation and asking a lot more questions about their balance-sheet and off-balance-sheet risk."

Dan Cutaia, the president of Fairway Independent Mortgage Corp., on Fannie's new eligibility requirements for loan sellers and servicers. Sept. 25

"Wamu's balance sheet and the payment paid by JPMorgan Chase allowed a transaction in which neither the uninsured depositors nor the insurance fund absorbed any losses."

Ms. Bair of the FDIC. Sept. 26

"You do something like this for 100 years; you don't do something because it's going to be good for the next year financially."

Mr. Dimon of JPMorgan Chase, on its purchase of Wamu's banking operation. Sept. 29

"We've seen a huge amount of inflow in the last few months, quite a bit of it from Wamu. I'm sorry to see Wamu go, and their shareholders and debtholders get hurt. But it's a great opportunity for a community bank like us."

Kevin J. Lynch, the chairman, president, and CEO of Oritani Financial Corp. in Washington Township, N.J. Sept. 29

"Unfortunately, when you get news of the largest thrift failure in the nation's history, it tends to undermine consumer confidence in a general way. So in that respect, it's bad for all of us. I think it's bad for community banks, and I think it's bad for the nation as a whole."

Bradley Rock, the president and CEO of Smithtown Bancorp in New York. Sept. 29

"We are boringly stable, and I think customers are looking to be bored by their financial institution."

Ken Martin, the president and CEO of Cashmere Valley Bank in Washington. Sept. 29

"In business, there are many high-return opportunities. Many of the high-return opportunities also come with high risk. There are very few that are high-return with contained or manageable risk. This is one of those very few."

Vikram Pandit, Citi's CEO, after announcing its deal for Wachovia's banking operation, which collapsed days later. Sept. 30

"The general feeling about 2009 is that it will be slower-growth, but I think it will be positive for us. It is not a question of profitability. It is a question of how much profitability."

Mr. Logue of State Street. Oct. 16

"Everybody's money should be good enough in this type of capital-strapped banking environment. The alternative is far worse: a taxpayer bailout."

V. Gerard Comizio, a partner at Paul, Hastings, Janofsky & Walker LLP, on why bankers should be able to sell stakes to nontraditional financiers, such as corporations. Oct. 16

"If you can't reprice certain loans, you are not going to make certain types of loans. If you have to have people pay off teaser-rate loans last on a series of loans, we're not going to make teaser-rate loans. Honestly, some of the fees or outstandings we were going to pull back on weren't that profitable anyway, so we're going to run the business for profit. If outstandings go down $10 billion, so be it."

Mr. Dimon of JPMorgan Chase, on the possibility of tighter credit card regulations. Oct. 20

"As we look at becoming … a retail bank, we think there are other things that go with that, that concern us. … If an acquisition will accelerate our progress and improve our business model, we are open to it, but I think the important thing about the focus on retail deposits is it also comes with a lot of other stuff."

Ken Chenault, the chairman and chief executive of American Express Co. explaining his reluctance to buy a bank. Amex converted to a bank holding company structure in November. Oct. 22

"Our brand as an industry is absolutely damaged."

Edward J. Hill, the senior vice president for government relations at B of A. Oct. 23

"We've been pleased by sales in '08 and a little surprised by how strong they've been. If we put down the newspaper and shut CNN off, we'd be pretty upbeat."

Michael D. Hayford, the chief operating officer at Metavante Technologies Inc. Oct. 30

"What you do before a downturn matters a lot more, and matters quicker, than what you do during a downturn."

Roger C. Hochschild, the president and chief operating officer of Discover Financial Services. Nov. 4

"A foreclosure moratorium would make a correction take much longer and have unintended consequences on servicers who already have liquidity constraints."

Dennis Stowe, the president of Residential Credit Solutions, a buyer and servicer of distressed mortgages. Nov. 5

"There is a significant risk that the bank will not be able to raise sufficient additional capital to ensure compliance with the capital requirements...[Regulators could place] the bank into receivership."

Downey Financial Corp., the Newport Beach., Calif., mortgage lender in an SEC filing. Nov. 10.

"As a former banker raised believing in the fundamental five C's of credit and fully documented loan files, the notion of low- and no-doc loans has been abhorrent to me. I regret that I and my colleagues did not act to change these practices … It's what I have the most personal regret about."

Mr. Reich of the OTS, announcing his resignation. Nov. 11

"If you're a mortgage banker, and you sell a loan to a GSE-sponsored company … the number one thing you have to be worried about is that at some point, that loan is going to have to be repurchased due to a fraud claim by the GSE."

Scott Stern, the CEO of Lenders One, a cooperative of mortgage banks based in St. Louis. Nov. 12

"Over these past weeks we have continued to examine the relative benefits of purchasing illiquid mortgage-related assets. Our assessment at this time is, that is not the most effective way to use Tarp funds."

Mr. Paulson. Nov. 13.