Northrim Banp(NRIM) - 2019 Q2 - Quarterly Report

Financial Performance - The Company reported net income of $4.3 million and diluted earnings per share of$0.62 for Q2 2019, down from $5.8 million and$0.84 in Q2 2018, reflecting a year-over-year decline primarily due to increased employee benefits and expenses from new branches [132]. - Net income for Q2 2019 decreased by $1.6 million, or 27$4.3 million compared to $5.8 million in Q2 2018 [140]. - The provision for loan losses contributed to the decrease in net income for both periods [140]. - Net cash used by operating activities was$17.8 million for the first half of 2019 [181]. Revenue and Income - Total revenue for Q2 2019 increased by 10% to $25.5 million compared to$23.3 million in Q2 2018, driven by a 6% increase in net interest income [133]. - The Company experienced a year-over-year increase in net interest income of 9% for the first half of 2019 compared to the same period in 2018 [133]. - Net interest income for Q2 2019 increased by $968,000, or 6$16.0 million compared to $15.0 million in Q2 2018 [141]. - Net interest income for the first half of 2019 increased by$2.5 million, or 8%, to $31.7 million compared to$29.3 million in the first half of 2018 [141]. - Other operating income for the first half of 2019 increased by $1.3 million, or 8$17.1 million, driven by gains on marketable equity securities and interest rate swap income [153]. Asset Quality - Nonperforming assets increased by $1.3 million, or 6$23.9 million as of June 30, 2019, compared to $22.6 million at December 31, 2018 [135]. - The Company identified potential problem loans of$10.1 million as of June 30, 2019, down from $17.1 million at December 31, 2018, indicating improved credit quality [137]. - Nonaccrual loans averaged$18.5 million in Q2 2019 compared to $17.5 million in Q2 2018 [144]. - The allowance for loan losses was$20.518 million at the end of the period on June 30, 2019, compared to $20.108 million at the end of the same period in 2018 [170]. Loans and Deposits - Total loans increased by$31.4 million, or 3%, to $1.016 billion at June 30, 2019, primarily due to increased commercial loans [160]. - Total loans increased to$1.015 billion as of June 30, 2019, up from $984 million as of December 31, 2018, representing a growth of approximately 3.2$60.1 million, or 5%, to $1.288 billion as of June 30, 2019, compared to$1.228 billion as of December 31, 2018 [171]. - Demand deposits accounted for 34% of total deposits at both June 30, 2019, and December 31, 2018, while interest-bearing demand deposits increased to 22% from 20% [171]. Capital and Commitments - The Company met all applicable capital adequacy requirements for a "well-capitalized" institution, with total risk-based capital at 16.28% as of June 30, 2019 [185][187]. - The Company had commitments to extend credit and provide letters of credit amounting to $249.8 million as of June 30, 2019 [188]. - The Company had commitments to originate loans held for sale of$107.3 million as of June 30, 2019 [188]. - Funds available for borrowing under existing lines of credit were $760.4 million as of June 30, 2019 [182]. Stock Repurchase - The Company repurchased 149,373 shares of common stock in Q2 2019 at an average price of$34.79, with 192,193 shares remaining under the repurchase authorization [133]. - The Company repurchased 155,483 shares of its common stock under the repurchase program in the first six months of 2019 [184]. Economic Indicators - Alaska's per capita income rose by 4.4% to $59,687 in 2018, with total income increasing to$44 billion from $42.3 billion in 2017 [130]. - The seasonally adjusted unemployment rate in Alaska was reported at 6.4$54.9 billion in Q4 2018, showing a recovery with growth rates of 1.7%, 2.9%, and 4.9% in the second, third, and fourth quarters respectively [129].