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Northrim Banp(NRIM) - 2020 Q1 - Quarterly Report
NRIMNorthrim Banp(NRIM)2020-05-05 20:43

Financial Performance - The Company reported net income of 1.0millionanddilutedearningspershareof1.0 million and diluted earnings per share of 0.16 for Q1 2020, a decrease from 4.3millionand4.3 million and 0.62 in Q1 2019, primarily due to increased provision for loan losses and operating expenses [149]. - Total revenue for Q1 2020 decreased by 5% to 22.1millionfrom22.1 million from 23.3 million in Q1 2019, primarily due to a 1.4milliondecreaseingain(loss)onmarketableequitysecurities[151].−NetincomeforQ12020decreasedby1.4 million decrease in gain (loss) on marketable equity securities [151]. - Net income for Q1 2020 decreased by 3.3 million, or 76%, to 1.0millioncomparedto1.0 million compared to 4.3 million in Q1 2019, mainly due to an increase in the provision for loan losses [157]. - Net interest income for Q1 2020 decreased slightly by 79,000,orlessthan179,000, or less than 1%, to 15.7 million compared to 15.8millioninQ12019[158].−Otheroperatingincomedecreasedby15.8 million in Q1 2019 [158]. - Other operating income decreased by 1.1 million, or 15%, to 6.4millioninQ12020comparedto6.4 million in Q1 2020 compared to 7.5 million in Q1 2019, primarily due to a decrease in gains on marketable equity securities [165]. Loan Loss Provisions - The Company increased its loan loss reserves by 2.1millionforQ12020,comparedtoa2.1 million for Q1 2020, compared to a 750,000 provision for loan losses in Q1 2019 [151]. - Provision for loan losses increased to 2.1millioninQ12020from2.1 million in Q1 2020 from 750,000 in Q1 2019, reflecting increased risks due to COVID-19 and oil price reductions [163]. - The Company’s allowance for loan losses increased to 21.017millionasofMarch31,2020,from21.017 million as of March 31, 2020, from 20.209 million as of March 31, 2019 [181]. - The provision for loan losses was 2.060millionforthethreemonthsendedMarch31,2020,comparedto2.060 million for the three months ended March 31, 2020, compared to 750,000 for the same period in 2019 [181]. Economic Conditions - The COVID-19 pandemic is expected to negatively impact the previously positive economic growth trends in Alaska, with significant declines in tourism and oil prices anticipated [142]. - The Alaska economy showed positive job growth with an increase of 1,300 jobs (0.4%) in February 2020 compared to February 2019, marking 14 consecutive months of year-over-year job increases prior to COVID-19 [137]. - Alaska's personal income grew by 3.7% in 2019, increasing from 43.8billionin2018to43.8 billion in 2018 to 45.4 billion in 2019, driven mainly by wage improvements [141]. - The Federal Open Market Committee cut the target federal funds rate by 150 basis points to a range of 0-0.25% in March 2020, aiming to stabilize the economy [146]. Asset and Loan Management - Total portfolio investments decreased by 3%, or 7.5million,to7.5 million, to 276.6 million as of March 31, 2020, from 284.1millionatDecember31,2019[168].−Portfolioloansincreasedby284.1 million at December 31, 2019 [168]. - Portfolio loans increased by 38.5 million, or 4%, to 1.082billionatMarch31,2020,drivenbygrowthincommercialandrealestateloans[171].−Totalloansamountedto1.082 billion at March 31, 2020, driven by growth in commercial and real estate loans [171]. - Total loans amounted to 1.081 billion as of March 31, 2020, compared to 1.043billionatDecember31,2019[172].−TheCompanyhad1.043 billion at December 31, 2019 [172]. - The Company had 63.7 million, or 6% of portfolio loans, in the tourism sector as of March 31, 2020 [174]. Capital and Funding - The Company met all applicable capital adequacy requirements for a "well-capitalized" institution as of March 31, 2020, with total risk-based capital at 14.50% [196]. - The Company had 793.4millionavailableforborrowingunderexistinglinesofcreditasofMarch31,2020[193].−TheCompanyhadoutstandingadvancesof793.4 million available for borrowing under existing lines of credit as of March 31, 2020 [193]. - The Company had outstanding advances of 8.9 million as of March 31, 2020, with fixed interest rates ranging from 2.61% to 3.25% [185]. - Total unfunded commitments to fund loans and letters of credit at March 31, 2020 were 321.2million[191].DividendandStockActivity−TheCompanypaidcashdividendsof321.2 million [191]. Dividend and Stock Activity - The Company paid cash dividends of 0.34 per common share in Q1 2020, up 13% from 0.30inQ12019[152].−TheCompanysuspendeditspreviouslyannouncedstockrepurchasingactivityasofMarch31,2020,whilemaintainingcapitalratioswellinexcessofregulatoryrequirements[151].−TheCompanyrepurchased192,709sharesofitscommonstockinthefirstthreemonthsof2020[195].NonperformingAssets−Nonperformingassetsdecreasedby0.30 in Q1 2019 [152]. - The Company suspended its previously announced stock repurchasing activity as of March 31, 2020, while maintaining capital ratios well in excess of regulatory requirements [151]. - The Company repurchased 192,709 shares of its common stock in the first three months of 2020 [195]. Nonperforming Assets - Nonperforming assets decreased by 386,000, or 2%, to 19.6millionasofMarch31,2020,comparedto19.6 million as of March 31, 2020, compared to 19.9 million at December 31, 2019 [153]. - Potential problem loans decreased to 4.5millionasofMarch31,2020,from4.5 million as of March 31, 2020, from 9.0 million at December 31, 2019 [153].