Bank of Marin Bancorp (NASDAQ:BMRC) Q3 2019 Earnings Conference Call - Final Transcript

Oct 21, 2019 • 11:30 am ET

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Bank of Marin Bancorp (NASDAQ:BMRC) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Analyst
Jacquelynne Bohlen

at the bank, but were there any temporary balances in there or is it all just normal seasonal fluctuations?

Executive
Russell A. Colombo

Is there any what?

Executive
Tani Girton

Temporary balances.

Executive
Russell A. Colombo

I guess operating accounts are always temporary right, because we have -- we have a number of large client -- a large deposit clients who -- their normal business that they have inflows of cash and outflows of cash, and I'll give an example of the type of business. We have a number of large contractors that do a lot of municipal state kind of work building roads and so they'll bid on -- bid on project. If they win the project, they get funded, the money comes in, sit there and as they do the construction, it kind of filters out. And so you have kind of money coming in and out at the same time, from new projects that you really can't project or predict, the reliability of those deposits when they come in. That's just one example. And we have a lot of them like that. So, sometimes you have these big upswing, sometimes you have downswings, but if you look over history the deposit levels continue to grow pretty consistently over time.

Analyst
Jacquelynne Bohlen

Okay, so nothing -- it's all very usual course of business. Nothing that you would anticipate a specific outflow going forward, just business as it goes?

Executive
Russell A. Colombo

Nothing unusual. There will be outflows, but there also will be inflows as we go.

Analyst
Jacquelynne Bohlen

Yes. Yes. Understood. And in terms of pricing, now that we have some of the rate cuts, I know that your deposit prices have been stable and have obviously performed very, very well as rates have increased, but just wondering if you've seen any sort of a change with the rate cuts than what you would anticipate going forward in terms of pricing on those.

Executive
Russell A. Colombo

Are you asking on the deposit side?

Analyst
Jacquelynne Bohlen

Yes.

Executive
Russell A. Colombo

Are you talking about the deposit side or the loans side? The deposit side?

Analyst
Jacquelynne Bohlen

The deposit side.

Executive
Russell A. Colombo

Okay. I assumed the deposit side. Actually, we still see certain banks who we maybe don't have strong of a deposit base as us, offering pretty high interest rates, kind of counter to the drop in rates because still having to fund the portfolio. So we haven't seen that much of kind of backing off, it's just kind of the usual suspects who were providing the high interest rates. We were pretty flush those. So we don't have to compete. We try to -- we, like we always say we try to be fair to our good clients and we'll pay competitive interest rates to good clients, but we don't chase deposits with rates. On the other side of the ledger, if you were going to follow through to that, on the loan side, there is incredible pressure from all sides on the interest rates on particularly in longer-term financings, you've seen rates under 4% for 10 years, pretty consistently across the board from many, many Bank. So