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Bridge Bancorp Inc (BDGE)
Q4Â 2019 Earnings Call
Jan 30, 2020, 10:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good day, and welcome to the Bridge Bancorp Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions]
I would like to turn the conference over to Kevin O'Connor, President and CEO. Please go ahead.
Kevin M. O'Connor -- President And Chief Executive Officer
Good morning and thank you for joining us today. I will be discussing our quarterly and full year performance as well and as well as sharing some insights about the bank strategic initiatives. I'm joined on our goal by our CFO john McCaffrey, and together we will take your questions regarding results in general market conditions. I am pleased to report the net income historical Hydras quarter 14.2 million, with ups of 71 cents per share, or full year income was 51.7 million to 259 a share. These results reflect the impact of growth earning assets, aggressive management of funding costs and the continued evolution of the mix and geography of our loan portfolio. I'm especially proud of the fact that over the last two years, despite two changes in Fed direction, we've maintained a consistent NIM of 3.3%. We've done this by staying true to our strategy of nurturing and growing core deposits and taking a thoughtful approach to balance sheet management.
Our continued commitment to our core markets and the addition of some key producers in our Western markets, a lot of strong long growth and strong growth in originations and fueled increases in most loan types. These new loans helped offset some sizable pay downs we experienced at several are a long term customers successfully exited their businesses. The net of the activity resulted in a 12% lift in the overall loan portfolio to 3.7 billion. And considering our composite performance, given to the kinetic decisions to de emphasize some higher rate deposit products, and the impact of large deposit flows related to the aforementioned business sales, it's best to assess this on an average basis.
Fourth quarter IPC deposits grew by $212 million or 7% versus Q4 2018 and the year-over-year growth was 12%, with DDA of $1.5 billion, representing 40% of total deposits. We've also been very aggressive in managing the cost of these deposits and over the past two quarters, the cost of interest-bearing deposits is down 33 basis points. This positive momentum in loans was partially offset by declines in other earning assets and resulted in average asset growth of 5% versus last year, and we ended 2019 with total assets of $4.9 billion. From a strategic perspective, we continue to stay on course and are focused on making smart investments in people and technology by hiring more bankers who partnered with branch teams, this strategy continued to bear fruit.
This year, our Western markets contribute a significant portion, or 82% of annual net loan growth. And we experienced enough taking deposits in those markets have over 19%. In addition, the launch of new products expanded our offerings and it's helping to drive market share in new segments as well as deeper relationships with existing customers. Earlier this year, we became one of the few banks in New York to offer banking services to companies with permits to grow process and extract industrial hemp in CBD. This should expand our traditional customer reach. We recently launched functionality that allowed businesses to print official cashier checks on site. This is considerable value from many of our existing customers and acts as a differentiator versus other competitors.
And finally, with significant technical and credit development work in 2019, we are planning to launch a small business loan decisioning engine to significantly reduce the time line associated with small loan originations, freeing up internal resources and reducing customer friction.
I'll now turn this over to John to discuss in greater detail specifics on the margin and other income and expenses.
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Thank you, Kevin. Thank you all for joining us this morning. And for those meeting the transcript, I will do my best to be intelligible. Let me get to the margin right after that. The quarter-over-quarter NIM compressed by 14 basis points. I will walk you through the big moving parts of that decline. First and foremost, increased prepayment activity in the bond portfolio resulted in higher premium amortization, thus depressing yields. Secondarily, another phenomenon has to do with the timing of the changes in rates on our loans and deposits. During the third quarter, as we manage our deposit rates lower, several accounts were moved more than the fed move and we effectively lowered some rates before the Fed move.
Therefore, impact to our deposits was larger and quicker than our loans. Additionally, our floating rate loans and geographical we price immediately, some can take up to a month retexe prevailing rates for the Deputy Prime or live war, therefore, quarter visibility of the fourth quarter with the loans catching up to the deposits and adjusting to falling rates. Lastly, the third quarter usually has about three or four basis points of line of credit renewal fees that do not occur in the fourth quarter. At this point, our floating rate loans have adjusted to the new rate levels and we continue to manage our deposit cost lower by increasing DDA and enhancing the mix of interest-bearing deposits. You will notice that ITP deposits are down quarter-over-quarter as we decline to compete for high cost 1031 money replacing with lower rate broker deposits. Most of the loan growth came late in the quarter, so we will see the full effect of those loans in Q1. Going forward, we can keep our hands on all levers to support our net interest margin. These are impacted by loan swaps, drove our noninterest income higher.
As referenced in the press release, the flat yield curve and the overall low level of rate make these transactions attractive to borrowers who want low long-term financing. In the fourth quarter, we swapped over $180 million in loans giving us only 13 basis points versus the fixed pricing. These factors are still in effect and we continue to close loan slots in Q1. Expenses were up on a linked quarter basis, mostly due to cash accrual for incentive payments. Our strong fourth quarter income and loan growth pushed our expected incentive payouts higher. We have instituted several programs to control expenses going forward. We are in the final testing phases of our CECL process. At this time, we are guiding a coverage ratio of 87 to 97 basis points. This includes specific reserves, which add about nine basis points to the ratio at this time. This is not significantly far from where our ratio has been historically. We still have an authorized stock buyback and are committed to using it to support our stock as we did last year during the second and third quarter. We are estimating a tax rate of 22.5% for 2020.
Kevin will now make some closing remarks.
Kevin M. O'Connor -- President And Chief Executive Officer
As john indicated this quarter's margin contraction is relative several factors. However, we believe our ability to manage funding costs and deliver non interest income in multiple ways, coupled with a focused approach to aggressively manage expenses and capital will allow us to achieve on performance targets. The ability our team was tested in 2019, and they delivered and I'm competent to continue to build and make the prudent decisions including those related accounts. management to achieve positive results for the company and you, our shareholders.
I will now turn this over to the operator to take questions.
Questions and Answers:
Operator
[Operator Instructions] The first question comes from Will Curtiss from the Hovde Group. Please go ahead.
Will Curtiss -- The Hovde Group -- Analyst
Hey, good morning everyone.
Kevin M. O'Connor -- President And Chief Executive Officer
Morning, Will.
Will Curtiss -- The Hovde Group -- Analyst
Obviously, a strong quarter on the swap fees. So I'm just curious now as we look to the first quarter your expectations. Or how should we think about the first quarter? And then maybe more broadly, how we should think about fee income growth for this year?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Sure. So -- I mean, we do have -- we closed several swap -- loan swaps in January already. We have some in the pipeline. So again, as long as this rate environment is here will keep booking those fees. Q4 was pretty strong coming up to Q3, but again, I think it still follows the rate environment. And I think that the reason some of these borrowers want to go long-term as we have multifamily borrowers in New York City given the new rent regulations are wanting to lock in lower to longer since they feel they're not going to be able to raise rents as quickly as they have in the past. So I think those factors together are what are going to keep that going into the quarter. And again, for the year, we can keep this momentum going. Some of those swap fees are generated from actually refinances of existing loans. So as much as we have loans that are out there that people want to come in and refinance as they got from renewals, that can also be a benefit there.
Will Curtiss -- The Hovde Group -- Analyst
Okay. And then I wanted to ask, I know you mentioned hires as part of the strategy for last year. And I'm just curious do you have the number of producers that you all brought on board this past year? And then maybe how you're thinking about additional opportunities going forward?
Kevin M. O'Connor -- President And Chief Executive Officer
I guess we had a net increase of five on the producer side and we're having conversations with half dozen people set it, and not say we're going to bring them many people on. But this is the time of the year when bankers to begin the dance between each other as to they're going to get their bonus throughout [Phonetic] out where they want to earn it next year.
Will Curtiss -- The Hovde Group -- Analyst
Understood. Okay. And then just the last one from me. Do you have the accretion number for the fourth quarter by any chance?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
The accretion number?
Will Curtiss -- The Hovde Group -- Analyst
Yes.
Kevin M. O'Connor -- President And Chief Executive Officer
The premium amortization piece...
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Premium amortization.
Will Curtiss -- The Hovde Group -- Analyst
I think last quarter, it was four to five basis points, I believe.
Kevin M. O'Connor -- President And Chief Executive Officer
The impact of purchase accounting.
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
So purchase accounting. Purchase accounting is minimal. It's one to two basis points of that. There's only a couple million dollars left in the whole bank. Last quarter -- I think the second quarter was higher than usual but last quarter and this quarter is that -- tracking about the same.
Will Curtiss -- The Hovde Group -- Analyst
Understood. Thank you.
Operator
The next question comes from David Bishop from D.A. Davidson. Please go ahead.
David Bishop -- D.A. Davidson -- Analyst
Hey, guys. Good morning.
Kevin M. O'Connor -- President And Chief Executive Officer
Good morning, David.
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Good morning, David.
David Bishop -- D.A. Davidson -- Analyst
A question, obviously noted the pressure on the margin in the fourth quarter. This sounds like there were some elevation there in the third quarter. Just curious, do you think most of the pressure on the asset yields has been sales. And it sounds like you had some room on the deposit side to bring costs down. Do you think you can stabilize it here? Or do you expect we'll see a little bit more pressure here before we see some stabilization in the second half of the year?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
I think the most part the loan pressure is off as far as repricings go. And I do think we have room in deposit, I think we can offset those things. If you look second quarter to fourth quarter, the third quarter kind of being the surge deposit benefit. We kind of track across kind of on the same level. So we think that that's kind of where we can be going forward.
David Bishop -- D.A. Davidson -- Analyst
Is EME the delta between the second and the fourth, I am sorry?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Right. The second quarter and the fourth -- the second quarter was $330 million and the fourth quarter was $326 million. There's also a little bit to go in those back and forth, but we think that range should be able to be sustained given the move in deposits and loans over that period of time, kind of, for us the rate cut cycle.
Kevin M. O'Connor -- President And Chief Executive Officer
And I would think that we were early on moving rates in really early in the third quarter and continued in the fourth. And as I've reviewed many of the releases of our competitors that has occurred more in the fourth quarter. So I think you will see continued repricing down of liabilities.
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
And we have some recent customers who kind of walked in when we told them we were cutting rates. They actually go over to some bank can get a better rate, then they kind of came back to do that rate is not there anymore either. So I think everyone is kind of getting on board with the cutting rates on deposit again.
David Bishop -- D.A. Davidson -- Analyst
Got it. And then in terms of new loan yields coming on board. Just curious how that compares relative to the third quarter, in maybe be it six weeks or so, how are the new market yields coming?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
So the yields on new loans in the fourth quarter were about 4%. That was because we had a lot of multifamily loans come along in the fourth quarter. And there were -- then there were swaps. So that takes again, that 13, 15 basis points off the rate. But -- and I don't -- and no one's expecting rates to go up anytime soon. We feel having the floating rate assets, especially on some of this longer term fee or multifamily money is better for us. So -- but the focus this year in some of the new producers we brought on are going to be more focused on C&I. The C&I business during Q4 came on at 5.5%. And the commercial mortgages and sales growth was a little over 4%. So we're hoping by changing the mix up we're going to get better loan yields.
David Bishop -- D.A. Davidson -- Analyst
Got it. And then maybe just a commentary, obviously the fourth quarter, it sounded like some of the -- the multifamily growth was driven by some of the rent control and the desire to lock in lower rates for longer. As you look out into 2020 in the pipelines, any sort of comments in terms of your expectations for loan growth?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
We're -- I guess, our expectation for loan growth for the entire bank is slightly less than it was last year in 2019 point-to-point. And we are certainly targeting more of a mix of commercial loans and less multifamily for the year. I think the -- again as we sit with this yield curve environment and we are getting paid less for each of the -- each margin piece is we put on, we're not looking to grow it as high as rates we have in the past. But still pretty strong and pretty close to where we were. I think high single digits.
David Bishop -- D.A. Davidson -- Analyst
Got it. Then one final question. John, it wasn't clear, the tax rate outlook for this year?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
We're saying 22.5%.
David Bishop -- D.A. Davidson -- Analyst
22.5%?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Yes.
David Bishop -- D.A. Davidson -- Analyst
Got it. Thank you.
Operator
[Operator Instructions] The next question comes from Erik Zwick from Boenning and Scattergood. Please go ahead.
Erik Zwick -- Boenning And Scattergood -- Analyst
Good morning, guys.
Kevin M. O'Connor -- President And Chief Executive Officer
Good morning, Erik.
Erik Zwick -- Boenning And Scattergood -- Analyst
Just looking at that change in deposit balances year-over-year while total balances were down, I guess, about 2%, demand deposits were up 9% and your IPC deposits now represent 80% of total deposits up from 76% a year ago. Can you just talk about what factors contributed to the success in remixing the deposit base and what your expectations for deposit growth in 2020 are now that loan deposit ratio is at 96%?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Right. So we have a few moving parts in the deposits year-over-year. Remember while we did have -- if you remember last year, in the first quarter, we kind of were talking about this large one deposit that we had from a customer that Kevin referenced, we sold the business. That -- he had kind of moved that money out and he sold this business, gave us the deposit and then he was investing in other things. So that was about $90 million in money market account and one account. The 1031 money that we also -- when rates starting to go down, we were paying them just about 2% and they were still getting 2% from other people.
So we decided to let that money go. That was another $90 million that would be in savings accounts. So there was some flow out of that. The DDA growth is -- that's just boots on the ground for us. So we -- we haven't seen -- we haven't seen a broad-based exhibit of money marketing or savings accounts leave the bank based upon the rate cuts that we get in Q3. There's been more chunky deposits, so people just -- we have transactions, they need to fund. They were pulling the money out for that reason or they were the highest paying customers that we had, that we chose not to match rates they'll be getting other places.
Kevin M. O'Connor -- President And Chief Executive Officer
DDA generation really comes from the commercial bankers on the ground. I mean, we've had a big increase in sort of line exposure. And that really flows from those customers that have joined us. They moved their deposits. We give them lines of credit. Sometimes they draw, sometimes they don't. But that's really the driver of deposit growth.
Erik Zwick -- Boenning And Scattergood -- Analyst
I appreciate the color there. And would you be -- would you expect to -- for deposit growth to match loan growth this year? Or are you comfortable letting the loan-to-deposit ratio drift up a little bit higher?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
I'm comfortable letting it drift up a little bit higher. That's not how I'm forecasting it. I'm certainly expecting deposits to grow commensurate with loans. That's the challenge we put in front of everybody. And I think there's lots of positive momentum going into this year.
Erik Zwick -- Boenning And Scattergood -- Analyst
Great. And then you mentioned several programs on the expense side to kind of manage expenses in 2020. Curious just one from first quarter perspective, in terms of the run rate, is the fourth quarter of '19 level a good place to start? And then how should we think about just kind of growth and expenses throughout the year?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
So I would say then with -- that the first quarter for 2020 should be slightly lower than 2019 Q4. We are -- we came in a little bit higher than 2% on the -- on the expenses to asset ratio. But we want to get back down to two and even drive a little bit lower as the year goes on. We will be -- so we will be looking at our expense budget, prospectively to say, if we're not getting the income or the balance sheet growth, we're going to kind of that drives you back on the expenses. So we'll keep looking at it over the year. The growth and expenses that were related to some manual fraud work that we were doing for the year and then we put a new software system in place and they were run concurrently. So we should be able to-as we had some of those people who were doing a manual fraud review to other things.
We are looking at or we have begun to, in attrition, manage our branch staffing model, make people a little more universal employees in the branches so they can do different tasks in the branches, especially when transactions are a little bit slower -- we are putting in more -- I think the numerated product that Kevin talked about before should free up some people on the origination space and the loans to do other loans or we don't have to replace them. So there's a few things going on as far as expense control go. I think we're also looking at cutting back a little bit on sponsorships this year as we have a new marketing director in place and we're changing our marketing spend in different venues, focusing more on the western markets and by remixing some of our how each dollar that we spend there as well.
David Bishop -- D.A. Davidson -- Analyst
And just finally, given the strong commercial real estate and multifamily growth in the fourth quarter. Do you have an estimate of where your CRE to total capital ended the year? I think you're around 350% at the end of the third quarter. Just curious, I would expect that ticked up a little bit?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
386% at the end of the year.
Erik Zwick -- Boenning And Scattergood -- Analyst
Great, thank you so much for taking my questions.
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
You're welcome.
Operator
The next question comes from Alex Twerdahl from Piper Sandler. Please go ahead.
Alex Twerdahl -- Piper Sandler -- Analyst
Good morning.
Kevin M. O'Connor -- President And Chief Executive Officer
Hey, Alex.
Alex Twerdahl -- Piper Sandler -- Analyst
Just going back to the swap fee income which is obviously a huge quarter for that in the fourth quarter. And now we've seen the momentum growing through the end of 2019. Is that -- the fourth quarter is more kind of like a perfect storm of rates and appetite, et cetera, and is it like a really big quarter? Or do you think that we're going to be as that business has ramped up, you could kind of repeat that at least for the foreseeable future?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
It is -- so again, all of those factors still are in place and we'll still getting increase in close the two loans in January for the same reasons we did in Q4. January I think overall is kind of a slow month for people as they're doing their taxes and getting their financials together. So I think it's going to -- and fourth quarter typically is a more busy quarter for loan originations. So throughout the year if conditions stay in place, then we can do more as the year goes on. So whether it's the first quarter or the second quarter, you can see last year, it kind of ramp up. But it is based upon the flows of the business itself. So we're still seeing them. We think we can come close to last year's number. But may be differences in timing as to when that happens.
Kevin M. O'Connor -- President And Chief Executive Officer
It would be great if we could control customers' behavior. But at certain points in time we do get chunky growth in the second and fourth quarters.
Alex Twerdahl -- Piper Sandler -- Analyst
Okay. So lot of volatility in that line. The full year maybe it comes in that kind of $6 million to $7 million range if everything goes right?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Correct.
Alex Twerdahl -- Piper Sandler -- Analyst
Okay. And then just given the very strong loan growth and it seems like a lot of it happened kind of late in the quarter. Does that mean that maybe the sort of the pipeline needs to rebuild as you head into the first quarter? Or was the backlog still pretty good for the ability to actually close loans in the first quarter?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
But there's -- first quarter is typically focused because of people's behavior and what's going on. Our pipeline is showing $300 million of new money and almost $500 million in kind of including refinancings. So if you look at...
Kevin M. O'Connor -- President And Chief Executive Officer
I think it's down about $100 million from where we began in the fourth quarter I would say.
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Yes.
Alex Twerdahl -- Piper Sandler -- Analyst
Down about a $100 million. Okay. And then you just have just handy the impact on the margin from the prepays in the fourth quarter?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Yes. We haven't, I'm going to say it's not a lot.
Kevin M. O'Connor -- President And Chief Executive Officer
Are you talking about the prepayment on the MBS portfolio?
Alex Twerdahl -- Piper Sandler -- Analyst
Yes. I'm just trying to get a sense for kind of what the right -- kind of the real driver of the margin. It seems like most of it was driven by the mismatch and the timing of loan yields versus funding costs coming down third quarter to the fourth quarter. But there is anything else that might be coming in nonrecurring that we should be paying attention to?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Yes. So prepayments on loans -- of our loans was about $200,000 in the fourth quarter. The prepayments on the investment portfolio had about, versus the second quarter, probably a five basis point impact. And probably that depends on how you want to measure the increase in the premium amortization on the portfolio.
Alex Twerdahl -- Piper Sandler -- Analyst
Versus the third quarter event, right?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Versus the second quarter.
Alex Twerdahl -- Piper Sandler -- Analyst
Versus second quarter. Okay.
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Versus the third because it ramped up in the third quarter as well and continued going up into the fourth quarter. So versus the third quarter it was probably three basis points.
Alex Twerdahl -- Piper Sandler -- Analyst
Okay. All right, great. Thanks for taking my questions.
Kevin M. O'Connor -- President And Chief Executive Officer
All right.
Operator
[Operator Instructions] The next question comes from Collyn Gilbert from KBW. Please go ahead.
Collyn Gilbert -- KBW -- Analyst
Thanks. Good morning gentlemen.
Kevin M. O'Connor -- President And Chief Executive Officer
Morning, Collyn.
Collyn Gilbert -- KBW -- Analyst
I just want to dig into the loan dynamic a little bit here and just make sure I'm understanding this right. So the multifamily loans that came on this quarter, I know you gave some of the origination yields. But what were the -- what was kind of the blended yield on the multifamily loans that came on this quarter?
Kevin M. O'Connor -- President And Chief Executive Officer
This quarter, 3.56%.
Collyn Gilbert -- KBW -- Analyst
Okay. So I guess, it seems as if the -- and I understand your -- the outlook for the year and mix shift benefit moving for the year. But if we just assume kind of the flow-through of what came on this quarter. I guess, it seems like that loan yield can continue to compress. I don't want to say fairly meaningfully. But if you're looking at a portfolio yield of 4.50% or 4.45%, I guess, it was for the quarter and most of the stuff coming on. And then I'm just trying to reconcile that with -- I know you're talking about lower deposit outlook, but it just seems like you're really now maybe perhaps below even where the market is which I'll ask that question in a second. But just first on the loan yield side, I mean, can you quantify maybe a little bit more as to where you think the compression in the loan yield could go as the year progresses?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
So I guess one reason maybe I'll just jump ahead. Maybe the reason we look for a little bit below market is because if we're doing effectively floating rates multifamily loans and not five or seven or 10-year fixed rate, were giving up about 13 basis points there. So going forward, I mean, maybe rates will go up. But again, it's going to be focused on mix of the loan portfolio away from CRE and multifamily to an extent, I mean, again we still have multifamily loan in portfolio that coming for refinancing and against no smart fees.. But I think it's -- to some extent, it's a seesaw between putting more multifamily than having more swap fees. If they're good loans you could do them, but again, how much we can compress the margin or how much we can compress the loan yields for the year, I mean, is based upon doing more multifamily.
Kevin M. O'Connor -- President And Chief Executive Officer
I mean, if I look at the pipeline that's out there today, the weighted average rate on that is in the 470s.Because of the mix of commercial that's part of it. So while the fourth quarter was a ponderance with multifamily which should be going through 2020 upgrade or mix of C&I which carries little bit higher rate. So...
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Based upon our projections our loan yields kind of stay flat for the year. Based upon the mix that we had from our plan going forward.
Collyn Gilbert -- KBW -- Analyst
Okay. Got it. And then just -- then on the deposit side, just curious now where some of the CD rates or your higher rate products, what -- where those are? What the offering rates are on those? And if you're kind of below market on some of those higher rate products?
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
So we don't really have -- I think we have a high rate CD out there, it's 2% for two years. But it's -- we don't really make -- at some of our market, we don't have a lot of customers that come in with other agents looking for rate products.
Kevin M. O'Connor -- President And Chief Executive Officer
We actually -- that attempt at one point in time when rates were rising, those lost money in with CDs in our branches and our customers and we just don't have that sort of consumer base and our customers are not trained, they don't come here looking for higher rates. So I guess, we are -- we've always been below peer on the deposit side. I think the deposit franchise that we've built over the last 100 years are really, quite honestly, the last dozen years reflects our commercial bank and deposit franchise which is geared toward DDA, it's geared toward money market as to your excess liquidity for our customers. So we've been below peer. We were below peer when rates are going up, I think we'll be below peer as rates go down.
A measure of success of our commercial banking officers and our relationship, it is much about the deposits they bring, it isn't about the loss. And so we continue to feel -- I mean, I think the 40% DDA was when this company was $600 million in size and it's 40% DDA and $5 billion in size. So we've kept tied to our mission. So that's the part that we're most proud of and that's the value of this franchise is its deposits and we'll continue to manage that aggressively.
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
As we went through and lowered deposit rates in the third and fourth quarter, we realized that upwards of 80% of our money market accounts were priced individually. We had to go in there and bring those rates down one account at a time, I guess, that's kind of how we do it with our customers. So So I think when you say, we have, we have a record out there, but that's just dangling just to bring people in the door, we don't get deposits that way.
Kevin M. O'Connor -- President And Chief Executive Officer
I think the right way might be three basis points.
Collyn Gilbert -- KBW -- Analyst
Okay. Okay, very good. I think I'll leave it there. Thanks guys.
Kevin M. O'Connor -- President And Chief Executive Officer
Thanks, Collyn.
Operator
This concludes our question-and-answer session. I would like to turn the conference back over to Kevin O'Connor for any closing remarks.
Kevin M. O'Connor -- President And Chief Executive Officer
I guess and I want to thank everybody again. And if you indulge from -- I want to take a moment to acknowledge the passing this week of a loyal customer and a great friend of mine of the bank, Roger Fox. He was one of our first customers a dozen years ago when we opened our branch in Deer Park. And as I look at the businesses we've grown in these new markets that we talk about, much of it connected in some ways to the network of people he has introduced us to. He was a big advocate of the bank. He walked around wearing our pin proudly. He'll be missed by all of us. And I just -- I want to take a moment. So I appreciate that. So again, thank you. We're excited about the prospects for 2020. I think that we've demonstrated to you our ability to sort of manage through different cycle conversations about expenses and capital. So now we'll adjust and make the right decisions as events occur.
So again, thank you, and I look forward to talking to each individual.
Operator
[Operator Closing Remarks]
Duration: 32 minutes
Call participants:
Kevin M. O'Connor -- President And Chief Executive Officer
John McCaffery -- Executive Vice President, Chief Financial Officer And Treasurer
Will Curtiss -- The Hovde Group -- Analyst
David Bishop -- D.A. Davidson -- Analyst
Erik Zwick -- Boenning And Scattergood -- Analyst
Alex Twerdahl -- Piper Sandler -- Analyst
Collyn Gilbert -- KBW -- Analyst
