Northrim Banp(NRIM) - 2020 Q3 - Quarterly Report

Economic Impact of COVID-19 - Northrim BanCorp reported a total of $120.4 million in loan modifications due to COVID-19 as of September 30, 2020, with 75 modifications made [131]. - The company experienced a significant increase in personal income for Alaska, rising by$2.6 billion or 24% in Q2 2020 compared to Q1 2020, largely due to government transfer payments [125]. - The total direct aid to Alaska from government spending due to COVID-19 reached approximately $5.6 billion, equivalent to 12$45.6 billion [124]. - The company identified exposure to various industries affected by COVID-19, including Tourism (6%), Oil and Gas (6%), and Healthcare (7%) as of September 30, 2020 [133]. - Alaska's unemployment rate peaked at 13.5% in April 2020, but improved to 7.4% by August 2020 [122]. Financial Performance - The Company reported net income of $11.9 million and diluted earnings per share of$1.84 for Q3 2020, a 57% increase from $7.5 million and$1.11 in Q3 2019 [135]. - Total revenue for Q3 2020 increased by 49% to $39.9 million, up from$26.8 million in Q3 2019, primarily driven by a $10.4 million increase in mortgage banking income [137]. - Nonperforming assets decreased by$2.1 million, or 10%, to $17.9 million as of September 30, 2020, compared to$19.9 million at December 31, 2019 [139]. - Cash dividends paid were $0.35 per common share in Q3 2020, a 6$0.33 in Q3 2019 [137]. - Other operating income for the first nine months of 2020 increased by $18.0 million, or 65$45.6 million, primarily due to a $20.0 million increase in mortgage banking income [155]. Loan and Credit Metrics - The provision for loan losses rose to$567,000 for Q3 2020, compared to a benefit of $2.1 million in Q3 2019, reflecting management's assessment of risks associated with the COVID-19 pandemic [137]. - The delinquency rate for mortgage loans in Alaska rose from 3.23$7.6 million as of September 30, 2020, down from $9.0 million at December 31, 2019 [141]. - The Allowance for Loan Losses increased to$21.683 million at the end of the period, up from $19.137 million at the end of the previous year [174]. - The provision for loan losses was$567,000 for the three months ended September 30, 2020, compared to a negative provision of $2.075 million for the same period in 2019 [174]. Asset and Deposit Growth - Total deposits increased by$433.8 million, or 32%, to $1.806 billion as of September 30, 2020, compared to$1.372 billion as of December 31, 2019 [175]. - Total interest-bearing deposits increased by 24% to $1,077.2 million in Q3 2020 from$870.4 million in Q3 2019 [147]. - Demand deposits rose to $697.4 million, representing 38$361.2 million as of September 30, 2020 [184]. - The Company had $261.1 million in PPP loans eligible to be pledged for the PPPLF program as of September 30, 2020 [186]. Market and Industry Exposure - Direct exposure to the oil and gas industry decreased to$66.0 million, or approximately 4% of loans, as of September 30, 2020, down from $79.2 million, or approximately 8$62.6 million, or 4% of portfolio loans, in the tourism sector, and $54.2 million, or 4$63.6 million as of September 30, 2020, compared to $31.1 million at December 31, 2019 [166]. Capital and Regulatory Compliance - The Company met all applicable capital adequacy requirements for a "well-capitalized" institution, with total risk-based capital at 15.36$937.3 million, approximately 45% of the Bank's assets, as of September 30, 2020 [177].