Tim Coffey

Tim Coffey (Janney Montgomery Scott) asked about Bank of Marin Bancorp's visibility into Q4 deposit balance growth to counteract seasonal effects and whether seasonal deposit outflows due to tax payments are expected to be larger than in previous years.

Answer

President and CEO Tim Myers stated that forecasting Q4 deposit balance growth is challenging due to large fluctuations from existing depositors, despite consistent new account additions. He also noted that active client discussions have not indicated any abnormally large seasonal deposit outflows for tax payments compared to prior years.

Tim Coffey asked if Bank of Marin Bancorp had a clear line of sight to deposit balance growth in the fourth quarter that could offset typical seasonal outflows. He also inquired whether the company anticipated seasonal deposit outflows due to tax payments in Q4 2025 to be larger than in previous years.

Answer

President and CEO Tim Myers stated that forecasting deposit balance growth is challenging due to large fluctuations from existing customers, despite consistent new account acquisition. He noted that the bank has not received any indications from clients of abnormally large outflows for tax payments or other reasons in Q4, though he acknowledged the difficulty in predicting such events.

Tim Coffey from Janney Montgomery Scott inquired about any improvements in the lease-up time for construction projects on existing buildings (property improvements, rehabilitation) within the commercial real estate portfolio, recalling that some of these loans had previously moved to non-accrual status.

Answer

Chief Credit Officer Derek Steward clarified that very few such loans made it to non-accrual. He noted that while lease-up times for multifamily and industrial properties have been longer than hoped due to supply in 2021-2022, buildings are still filling up, sometimes with concessions, and he expects continued improvement in criticized and classified credit over the next year.

Tim Coffey inquired about the commercial real estate portfolio, specifically construction loans for property improvements and rehabilitation, asking if there has been an improvement in the time required for lease-up once projects are complete, and referencing previous non-accrual issues.

Answer

Chief Credit Officer Derek Steward clarified that not many of these loans made it to non-accrual. He noted that while lease-up times for multifamily and industrial properties have been longer than hoped due to supply in 2021-2022, buildings are still filling up, sometimes with concessions. He expects continued improvement in criticized and classified credit over the next year.