This is the final blog for veteran bank analyst Nancy Bush, and we wish her all the best as she heads into retirement. The following does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence.

Well, here we go, folks. My final SNL blog (yes, I still call it SNL) after so much time that I can't remember how long it has been. Fifteen years? Twenty? At least since I became an independent analyst in 2002, back in the ancient pre-crisis days when we all thought the banking industry just couldn't change much more. It's hard to believe that this industry has come as far as it has — and has landed on its feet yet again — and that I have somehow managed to discipline myself to sit down and write about it during both boring times and during times when I was scared out of my wits by what I saw happening in the capital markets and to the banks.

My long-suffering and patient editors have asked me to devote my final blog to a look at what is to come for the banking industry in 2020, and when they gave me that task, little did I realize how difficult it would be. I hesitate to use some grave, overly oracular phrase, like: "The American banking industry is at a crossroads," or: "The year 2020 will be a critical one for American banks." But the truth is that next year will be an important one in determining the direction of the industry. Whether it is the impact of politics, or interest rates, or advances in technology, or banks' ability to merge, I don't think anybody will be writing about banking at the end of 2020 bemoaning the lack of news in the year.

The American political scene will be the subject of supreme interest to the world next year, and the banks will no doubt be impacted by the ebbs and flows of public sentiment ahead of the Presidential election. And rightly so — there are two diametrically opposing views of the value and scope of American banks at play here. One side would like to tear apart the nation's largest lenders and have much more control over the ability of all banks to grow bigger. And while Donald Trump has largely taken a laissez-faire approach to the financial sector, allowing federal bank regulators to adopt a more relaxed approach and dismantle sections of the Dodd-Frank Act, his attitude toward the Federal Reserve is likely to grow more erratic and distrustful as we approach the election, and banks will likely get caught in the crossfire of the Trumpian tweet-stream.

Fed Chairman Jerome Powell has just told us all we need to know about where interest rates are headed, which is apparently nowhere. But my own gut feeling is that there will be more inflation than Powell envisions, and I believe that he will be reexamining his do-nothing stance by mid-year. It's unthinkable to me that the present situation in the labor markets will not at some point result in higher-than-expected wage growth and constrictions in the labor supply, and my belief is also that the Saudis will do everything they can to produce higher oil prices in 2020 in support of the ARAMCO valuation.

A little inflation would be good for the banks, and the yield curve will acknowledge modestly higher inflation long before the Fed is able to raise rates on the short end, especially in the face of a looming election and a rattled Trump. Bank stocks should react positively to the prospect of rates coming off the mat — even if the initial result is a market hiccup — particularly if that rise is accompanied by continued decent economic growth. But there would be a question looming over the banks in that scenario: Given that we are admittedly way long into the business cycle and competition for loans continues to intensify, would any steepening of the yield curve simply get traded away in even more aggressive loan and deposit pricing?

I have said for many years now that we had to be nearing some inflection point in credit quality, so at this juncture I'm just going to concede defeat and stop doing that. But even as continued low rates make it less likely that credit quality will soon show any material deterioration, "lower for longer" makes it more likely that the credit excesses are piling up behind the scenes and that the eventual revelations may be uglier as a result. We're all beginning to hear that credit card delinquencies are rising — 2.58% in the third quarter versus 2.50% a year earlier according to the Fed — and that likely reflects the fact that banks are pushing cards out the door at a frantic pace. But the dominance of commercial and industrial lending in quarterly results for many consecutive periods means that this asset class bears the most scrutiny and the most poking and probing by analysts next year, even as the transition to the CECL accounting standard clouds the reality of the underlying trends.

What does all this add up to? It should be a decent year for bank stocks in 2020, although likely not the spectacular performance that we have seen this year as the industry recovered from the rate scare and market drubbing that came in December 2018. As of mid-December 2019, the KBW Bank Index was up 26.5% over the last 12 months, versus a 19.6% increase for the S&P 500 over that same period — a degree of bank stock outperformance that is seldom seen at this late stage of the economic cycle. So that means either that this year's bank stock gains were a one-off, or that we are likely at the beginning of another up-cycle in the economy. Curious times, for sure, and I have accepted the fact that in the America of today, anything can happen.

I have said enough about banks here, and I now want to say something about bankers. From CEOs and CFOs to tellers, relationship managers and back office personnel, I have met thousands of people who work for banks over the nearly 38 years of my career. Yes, there have been a few bad apples at the top who have wrought untold damage on their companies and still managed to walk away with millions of dollars in the process. But 99.9% of the bank employees I have encountered have been incredibly hard-working, proud of their relationships with their customers and mindful of what they contribute to the American economy.

Banking is the lifeblood of America, and no politician should believe otherwise. It always amazes me when politicians excoriate "the banks" without acknowledging that banking is also an incredibly important source of employment in America, and that banks are major employers in their regions and often provide the entry-level jobs that send college graduates forward in their careers. They also help their customers navigate the intricacies of American finance — the purchase or sale of a home, or in my case, handling the financial affairs of an elderly parent. So all you bankers out there, you have my admiration and my respect, and don't ever let anybody anywhere tell you that your job is not important.

My greatest thanks to my editors — who have learned to live with my overuse of ellipses and my habit of using all the tenses in one sentence — and who have kept me out of trouble when I occasionally veered too far into the political arena. And thanks to all of you for the many kind wishes that I have received since announcing my retirement; they have been incredibly touching and have reminded me of the great privilege that I have enjoyed in being able to write in a personal style.

That's it. That's all I have to say. Thanks for your attention, and my greatest wishes for your continued success.