Northrim Banp(US:NRIM)2024-10-30 19:11Financial Performance - The Company reported net income of $8.8 million and earnings per diluted share of $1.57 for Q3 2024, compared to $8.4 million and $1.48 for Q3 2023, reflecting a year-over-year increase in net income of 4.8%[146] - Net income for Q3 2024 increased by $451,000 to $8.8 million compared to $8.4 million in Q3 2023, driven by a $2.6 million increase in mortgage banking income and a $2.5 million increase in net interest income[150] - For the first nine months of 2024, net income rose by $7.3 million to $26.0 million from $18.8 million in the same period of 2023, primarily due to a $6.6 million increase in mortgage banking income and a $5.8 million increase in net interest income[151] Net Interest Income - Net interest income increased by 9% to $28.8 million in Q3 2024, up from $26.4 million in Q3 2023, and increased by 8% to $82.3 million for the first nine months of 2024 compared to $76.5 million in the same period of 2023[147] - Net interest income for Q3 2024 increased by 9% or $2.5 million to $28.8 million compared to $26.4 million in Q3 2023, with a net interest margin increase of 14 basis points to 4.29%[152] - The net interest margin for the first nine months of 2024 increased by 6 basis points to 4.23% compared to 4.17% in the same period of 2023[152] Loans and Deposits - Loans totaled $2.01 billion as of September 30, 2024, representing a 12% increase from December 31, 2023[147] - Total deposits reached $2.63 billion at September 30, 2024, a 6% increase from December 31, 2023[147] - Total loans increased by $218.1 million, or 12%, to $2.008 billion as of September 30, 2024, from $1.789 billion at December 31, 2023[181] Asset Quality - Nonperforming assets, net of government guarantees, decreased to $5.3 million as of September 30, 2024, from $5.8 million at December 31, 2023[148] - The provision for credit losses increased by $873,000 in Q3 2024, reflecting a cautious approach to potential future losses[150] - Potential problem loans decreased to $1.5 million as of September 30, 2024, down from $1.9 million at December 31, 2023[149] Operating Expenses - The company reported a $557,000 increase in data processing expenses for the first nine months of 2024 compared to the same period in 2023[151] - Other operating expenses for the nine-month period ended September 30, 2024, increased by 8% to $75.6 million, mainly due to a $3.3 million rise in salaries and personnel expenses[176] Capital and Liquidity - The company’s total risk-based capital ratio was 12.50% as of September 30, 2024, exceeding the minimum required ratio of 8.00%[212] - The company had cash and cash equivalents of $102.9 million, or 3% of total assets, down from $118.5 million or 4% at the end of 2023[205] - The company’s liquidity sources include $1.07 billion in liquid assets and $641.7 million available for borrowing under existing lines of credit as of September 30, 2024[206] Deposit Composition - The Company’s mix of deposits contributed to a low cost of funds, with transaction accounts representing 83% of total deposits as of September 30, 2024[193] - Uninsured deposits reached approximately $1.12 billion, representing 43% of total deposits, an increase from $1.0 billion or 41% as of December 31, 2023[196] - The company had approximately 34,000 deposit customers with an average balance of $48,000, and 22 customers held balances over $10 million, accounting for $978.4 million or 38% of total deposits[195] Investment Securities - Investment securities decreased by 14% to $594.9 million from $687.8 million at December 31, 2023, primarily due to maturities and calls of available for sale securities[178] - The average estimated duration of the investment portfolio at September 30, 2024, was approximately 2.3 years[179] Credit Losses and Sensitivity Analysis - The provision for credit losses was $1.738 million for the three months ended September 30, 2024[189] - As of September 30, 2024, if the four-quarter U.S. unemployment rate forecast had been approximately 8% higher, the Allowance for Credit Losses (ACL) for loans would have increased by $1.1 million, or 6%[219] - Management performs quarterly sensitivity analysis to understand the impact of changes in key inputs on the ACL[219]