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Speaker 1: Broadcasting live to New York, Bloomberg eleventh, RYO to Washington,

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Speaker 1: d C. Bloomberg to Boston, Bloomberg twelve hundred to San Francisco,

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Speaker 1: Bloomberg nine to the countries, Exam Channel one and around

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Speaker 1: the globe the Bloomberg Radio plus aapp and Bloomberg dot Com.

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Speaker 1: This is taking stock. I'm caffeine. He's along with Pim Fox,

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Speaker 1: Volkswagen is making a shift to electric cars and robot

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Speaker 1: robotaxis is a big strategy overhaul to try to move

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Speaker 1: away from all the issues and emerged during their diesel

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Speaker 1: cheating scandal. PIM. Yes, the company wants to launch thirty

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Speaker 1: all electric models. They're trying to reposition themselves as a

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Speaker 1: leader in green transport. We're gonna give you more details,

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Speaker 1: but right now, let's go to Charlie Colder in the

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Speaker 1: Bloomberg newsroom for details on business news. And I think

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Speaker 1: it very much, PIM. Thank you Kathleen Green on the screen.

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Speaker 1: At least for the down now up nine points to

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Speaker 1: seventeen thousand, six hundred ninety. That is a gain of

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Speaker 1: three tents of one percent. SMP five hundred index has

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Speaker 1: been fluctuating after we're erasing most of the day's losses

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Speaker 1: amid shifting views on whether Britain will remain in the

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Speaker 1: European Union, while lingering global growth concerns remain a drag

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Speaker 1: on sentiment. The SMP five hundred index down half a

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Speaker 1: point now, neztack down eleven, a drop of two tents

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Speaker 1: of one percent, the tenure up one thirty second, with

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Speaker 1: the yield of one point five six percent, Gold up

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Speaker 1: to forty bence to twelve ninety one, a gain of

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Speaker 1: two tenths of one percent, and crude is down a

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Speaker 1: dollar seventy barrel forty six thirty right now, a drop

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Speaker 1: there of three and a half percent. So the June

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Speaker 1: FED meeting is behind us. Where does that leave the

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Speaker 1: Federal Reserve now? Dean Mackie is chief economist at point

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Speaker 1: seventy two Asset Management. Certainly their tone may shift again.

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Speaker 1: We saw that just in the last three months. For example,

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Speaker 1: the Fed wanted to get those rate hike expectations up.

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Speaker 1: They talked hawkishly for a while, and then abruptly that shifted.

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Speaker 1: So certainly we couldn't go through one of those many

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Speaker 1: cycles again, I think. To get there, though, we'd need

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Speaker 1: the data to turn firmer on the labor market. American

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Speaker 1: Airlines Group tumbling to its lowest in more than a

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Speaker 1: year after an analyst cut its stock rating and trimmed

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Speaker 1: earnings estimates for the industry, citing recent terrorist attacks, higher

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Speaker 1: fuel prices, and the coming UK vote on leaving the

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Speaker 1: European Union. Shares of American Airlines Group trading LAURA now

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Speaker 1: by four pot two percent, down a dollar twenty seven

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Speaker 1: to twenty nine dollars and twenty two cents again, recapping

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Speaker 1: SMP LAURA by two tenths of one percent. Now, let's

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Speaker 1: take a look at some of the other stories making

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Speaker 1: news from around the world on Bloomberg Radio. Thank you

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Speaker 1: Charlie from the Bloomberg News Room. I'm rainy in a

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Speaker 1: cent cio. This news update is brought to you by

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Speaker 1: Jaguar Manhattan. Visit Jaguar Manhattan today, where New York goes

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Speaker 1: and online at Jaguar Manhattan dot com. Aguar Manhattan is

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Speaker 1: at your service. A British lawmaker has been shot and

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Speaker 1: killed today in her district in Northern England. Temporary Chief

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Speaker 1: Constable West Yorkshire police d Collins says a suspect is

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Speaker 1: in custody. A man was arrested nearby by local uniform

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Speaker 1: police officers. Weapons including a firearm, have also been recovered.

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Speaker 1: The attack on Joe Cox has prompted both sides to

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Speaker 1: suspend campaigning today in the battle over whether Britain should

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Speaker 1: end its membership in the European Union. It's an important

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Speaker 1: find in the crash of an egypt airplane. Bloomberg's Michael

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Speaker 1: Barr has more. The cockpit voice recorder of an Egypt

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Speaker 1: airplane that crashed last month has been found and pulled

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Speaker 1: out of the Mediterranean Sea. Egypt air Flight eight oh

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Speaker 1: four was heading from Paris to Cairo when it plunged

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Speaker 1: into the sea. All sixty six people on board were killed.

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Speaker 1: The data recorder could provide the tails as to what

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Speaker 1: brought down the airbs Are Egypt Investigation Committee says the

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Speaker 1: soul called black box, has been damaged, but the memory unit,

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Speaker 1: which is the most important in the recorder, is intact.

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Speaker 1: Michael Barr Bloomberg Radio and Police Commissioner Bill Bratton says

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Speaker 1: there have been a number of threats made against gay

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Speaker 1: bars and nightclubs in the city, but none appears to

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Speaker 1: be credible. Bratton says, whoever made the threats in the

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Speaker 1: wake of the Orlando nightclub shootings are quote cowards. Global

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Speaker 1: News twenty four hours a day, powered by our journalists

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Speaker 1: in more than one under fifty news bureaus around the world.

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Speaker 1: From the Bloomberg News Room, I'm Rainey in essentio Charlie,

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Speaker 1: and we thank you and again recapping gold is trading

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Speaker 1: higher at twelve ninety Papa dollar raighty now a gain

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Speaker 1: of point one percent, the taw A forty six a

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Speaker 1: gain of three tenths of one percent, SMP fluctuating. It

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Speaker 1: is now down by half a point. I'm Charlie pelletton.

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Speaker 1: That's a Bloomberg business flash. This is taking stock with

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Speaker 1: Kathleen Hayes and Pim Fox on Bloomberg Radio. According to

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Speaker 1: the Federal Deposit Insurance Corporation, there are more than sixt

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Speaker 1: at f d I c ensured commercial banks in the

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Speaker 1: United States, but not all banks are created equal. Here

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Speaker 1: to tell us more about the banking industry and about

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Speaker 1: Home Street Bank in particular, is the chairman, the president,

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Speaker 1: and the chief executive of Home Street Bank. Mark Masony

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Speaker 1: joins us from Seattle. Mark, thank you very much for

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Speaker 1: being with us. Thank you for having me today. Now

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Speaker 1: I understand, of course that you are based on Union

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Speaker 1: Street in Seattle, but you've got an expansion story to tell.

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Speaker 1: Give people a little detail about the bank and about

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Speaker 1: your strategy. Well thanks, it's uh. It is an old

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Speaker 1: institution where our nineties six year this year, and I've

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Speaker 1: been with the bank almost seven years. When I got here,

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Speaker 1: we were operating in thirty locations, twenty of which were

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Speaker 1: typical bank branches. Today we have over a hundred and

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Speaker 1: twenty locations and almost fifty depository locations. We've grown a

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Speaker 1: whole bunch since our I p O in early two

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Speaker 1: thousand and twelve. Well Mark, in interest of full disclosure,

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Speaker 1: I grew up Olympia, Washington, so um, I always love

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Speaker 1: to hear about a Seattle business and a Seattle bank.

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Speaker 1: How is business for you right now? What are the

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Speaker 1: forces that are that are helping you grow and expand?

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Speaker 1: Is it? Is it all regionals? It's just finding the

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Speaker 1: right markets. Do these big picture questions and issues like

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Speaker 1: oh my gosh, I guess the Fed's gonna barely raise

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Speaker 1: interest rates, so not no big increase easily for interest

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Speaker 1: margins for the bank. Do you worry about Brexit? How

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Speaker 1: does it how does it all come together for you? Well,

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Speaker 1: we're fortunate in that we operate in some of the

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Speaker 1: best markets in the United States today. We have a

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Speaker 1: traditional region here in the Pacific Northwest and in the

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Speaker 1: Hawaiian Islands, and recently we've expanded down through southern, Northern

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Speaker 1: and southern California. So these markets today are characterized by

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Speaker 1: much higher levels of employment growth, house housing appreciation, and

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Speaker 1: lowering levels of unemployment. So we are operating in a

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Speaker 1: better environment than generally the rest of the nation. The

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Speaker 1: big issues though, of interest rates and um worries about

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Speaker 1: the health of the economy affect all of us, and

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Speaker 1: interest rate changes today have generally not been favorable for banks.

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Speaker 1: Banks have largely been expecting rates to rise over the

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Speaker 1: last several years. They have not occurred, and the most

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Speaker 1: recent changes have really hurt bank margins as the the

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Speaker 1: yield curve is actually flattened, and that hurts bank margins.

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Speaker 1: It increases short term costs of deposits and and wholesale funding,

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Speaker 1: and yet we don't get much additional yield. In our case,

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Speaker 1: as a very large mortgage lender and a large consumer

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Speaker 1: bank as well as a commercial bank. It's ironically good

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Speaker 1: for us. The ten year treasury is at least as

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Speaker 1: of yesterday, back below one point six percent. That's very

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Speaker 1: good for home um values and horm of home affordability

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Speaker 1: and home refinancing, and so we expect this year to

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Speaker 1: maybe be the largest mortgage origination year since two thousand

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Speaker 1: and twelve. Mark Wayson, I was looking at your website

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Speaker 1: and there's a twenty four month bump rate certificate of

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Speaker 1: deposit paying one point three the thirty year fixed rate mortgage.

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Speaker 1: How I understand this is an average, so it may

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Speaker 1: not apply specifically to your audience in the Pacific Northwest

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Speaker 1: is about three point six. It's awful difficult to pay

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Speaker 1: employees on that two point three percent margin. And that

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Speaker 1: would be true if we held most of our mortgages.

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Speaker 1: But we are mostly a conventional, conforming in government mortgage originator,

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Speaker 1: and we sell the lion's share of our mortgages to

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Speaker 1: the agency's Fannie May, Freddie Mack and Jenny May for

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Speaker 1: f h A n v A loans, and we retain

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Speaker 1: the servicing and we retain our customers, and so most

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Speaker 1: of the loans on our balance sheet are consumer loans

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Speaker 1: of home equity, lines of credit, and other consumer loans,

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Speaker 1: and the rest are mostly commercial loans with better heels.

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Speaker 1: So what is your growth prospect? I mean, are you

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Speaker 1: how how far can you take this? And? Uh, do

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Speaker 1: you see the what are the forces that will drive that?

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Speaker 1: Is it financing remaining cheap? Is that you getting better

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Speaker 1: the competition? Would you like to be acquired by a

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Speaker 1: banker institution? Well, at this point we've been the acquirer

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Speaker 1: or um since two thousand and thirteen. We've acquired four

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Speaker 1: smaller financial institutions too, up in Washington and two in

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Speaker 1: southern California. And we're growing organically at a very fast pace,

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Speaker 1: somewhere between four and six percent per quarter. So along

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Speaker 1: with selective acquisitions, we've been growing assets almost thirty percent

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Speaker 1: a year of the past three years, and we intend

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Speaker 1: to do that for the foreseeable future as we expand

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Speaker 1: not only in our existing traditional market here in the

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Speaker 1: Pacific Northwest, but to a greater extent in California and

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Speaker 1: in the major markets in the other Western states. And

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Speaker 1: so we think that our strategy has a long way

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Speaker 1: to run. Um. I think it's true though that you know,

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Speaker 1: we never know in today's world how long will remain

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Speaker 1: independent because, as you mentioned earlier, there's only banks in

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Speaker 1: the United States today, that's down from ten thousand only

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Speaker 1: ten years ago, and the course of bank consolidation is

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Speaker 1: going to continue for a while. In our case, we

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Speaker 1: will probably be independent for some period of time as

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Speaker 1: we execute on our growth strategy. Well, good luck with that,

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Speaker 1: Mark Mason. You're in a very hot market now. Seattle

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Speaker 1: is on fire. Just a real estate prices in King County.

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Speaker 1: Mark Mason, Chairman, President and CEO of Home Street Bank

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Speaker 1: based in Seattle, Washington, making a major expansion across the

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Speaker 1: entire Western United States. I'm Kathleen Hayes along with Pim Fox.

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Speaker 1: We're going to be taking a look at so many

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Speaker 1: things today in the show, the Fed, the Brexit, the

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Speaker 1: US economy, and so much more. Taking Stock on Bloomberg Radio.

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Speaker 1: Coming up on taking Stock, Doctor Philip Frosty is the

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Speaker 1: chairman and the chief executive of Opgo Health. Find out

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Speaker 1: about medical diagnostics, pharmaceuticals, and biotechnology. That's next