Wine at Wholesale Shores Up the Bank of Marin Loan Portfolio During the Global Pandemic

May 11, 2020

Russell A. Colombo is President and Chief Executive Officer of Bank of Marin Bancorp. He is a lifelong resident of Marin County in the San Francisco Bay Area. He received a Bachelor of Science degree in agricultural economics and business management from the University of California, Davis and his Master of Business Administration in banking and finance from Golden Gate University. Mr. Colombo joined Bank of Marin in 2004 as Executive Vice President and Branch Administrator after 29 years in banking at Comerica Bank, Security Pacific and Union Bank in San Francisco.

In this 1,474 word interview, exclusively with the Wall Street Transcript, Mr. Colombo builds on his 3,326 word February 4th interview of this year for an interesting update.

Operationally, the Bank of Marin has swiftly adapted to the new situation:

“As an essential business, we’re still conducting our day-to-day operations and haven’t laid a single person off. Approximately 80 to 100 of our 300 employees are working from home, including me.

Those who are working at one of our 21 branches are practicing social distancing, and we don’t allow more than two customers at a time in a branch.

At our headquarters, within our operations group, we have separated the people who have equivalent jobs. In other words, if there are two people in wire transfers, one is working at our disaster recovery location, which is off-site, and one is in our headquarters.

This practice ensures that if anybody gets sick, we still have a backup person. We’ve done that in many essential jobs just to make sure that if we have an outbreak, we can continue to service our clients. We’re fortunate in that respect.”

The CEO states that his loan portfolio has been weathering the COVID 19 storm:

“We also do a lot of commercial real estate where we are providing loans to investors to purchase commercial real estate. That’s a mixed bag in this pandemic environment, depending on what type of commercial real estate you’re financing.

We don’t have a lot of hospitality; we have a few hotels, and frankly, all of them are empty right now. But in most cases, we have guarantors with liquidity.

Wine business is suffering certainly because people aren’t visiting wineries, but they are selling a lot of wine wholesale, in the grocery stores.  Overall, the loan portfolio is in solid shape…”

The PPP Loans are also a bright spot for this community bank:

“It’s only 1% interest. Now, we anticipate it’s only going to be seven or eight weeks that they have this money, and then the SBA would forgive the loans, so we should get paid out at the end of two months.

So it’s not a big problem in terms of returns. We also get a 5% fee up to $350,000, $350,000 to a million is 3%, and over a million is 1%. Our average is running about $215,000 request for loans.

We are all learning as we go because nobody knew exactly how this program was going to work, including the Treasury.”

The CEO declares that he dividend is safe for his investors:

“It’s definitely safe. We have been pretty consistent about that. The way we’ve operated historically is we define our bank three ways: We’re relationship bankers, we have a commitment to the communities we serve, and we are disciplined. And the discipline really shows itself in difficult times.”

Get the complete picture by reading the entire 1,474 word update, exclusively in the Wall Street Transcript.