Northrim Banp(NRIM) - 2024 Q4 - Annual Results

Financial Performance - Northrim BanCorp reported net income of $10.9 million, or $1.95 per diluted share, in Q4 2024, a 24% increase from $8.8 million, or $1.57 per diluted share, in Q3 2024[1]. - For the full year 2024, net income increased 46% to $37.0 million, or $6.62 per diluted share, compared to $25.4 million, or $4.49 per diluted share, in 2023[2]. - Northrim BanCorp reported earnings of $10.9 million, or $1.95 per diluted share for 4Q24[61]. - Diluted earnings per share for the year ended December 31, 2024, was $0.86, compared to a loss of $0.44 in 2023[36]. Asset and Deposit Growth - Total assets exceeded $3 billion for the first time, reaching $3,041.9 million at December 31, 2024[6]. - Total deposits increased 2% from the previous quarter to $2.68 billion, and rose 8% from $2.49 billion a year ago[7]. - Northrim's total assets increased to $3.04 billion at December 31, 2024, reflecting a 3% increase from the previous quarter and an 8% increase year-over-year[39]. - Total deposits rose to $2.68 billion, up 2.1% from $2.63 billion in Q3 2024, with interest-bearing demand deposits increasing to $1.11 billion[60]. Loan Portfolio - Portfolio loans were $2.13 billion at December 31, 2024, up 6% from the preceding quarter and up 19% from a year ago[7]. - Portfolio loans reached $2.13 billion, a 6.1% increase from $2.01 billion in Q3 2024, with commercial real estate loans comprising 49% of the total[59]. - The loan-to-deposit ratio was 79% at December 31, 2024, up from 76% at September 30, 2024, and 72% at December 31, 2023[39]. Interest Income and Margin - Net interest income in Q4 2024 rose 7% to $30.8 million from $28.8 million in Q3 2024, and increased 15% from $26.7 million in Q4 2023[7]. - Total interest income for Q4 2024 was $41.8 million, up 16.4% from $35.9 million in Q4 2023, driven by an increase in interest and fees on loans[57]. - Northrim's NIMTE increased to 4.47% in Q4 2024, up from 4.35% in Q3 2024 and 4.12% in Q4 2023, driven by a favorable mix of earning-assets and higher yields[20]. - The net interest margin (NIM) for Q4 2024 improved to 4.41%, up from 4.06% in Q4 2023[68]. Efficiency and Operating Expenses - The efficiency ratio improved to 66.96% in Q4 2024, down from 72.21% in Q4 2023[6]. - Operating expenses increased to $29.4 million in Q4 2024, compared to $26.7 million in Q3 2024 and $24.0 million in Q4 2023, driven by higher salaries and one-time deal costs related to the acquisition of Sallyport[25]. - The bank's efficiency ratio improved to 69.1% in Q4 2024, down from 70.5% in Q3 2024, reflecting better cost management[57]. Nonperforming Loans and Credit Quality - Nonperforming loans rose to $7.5 million at the end of Q4 2024, compared to $5.0 million at the end of Q3 2024 and Q4 2023[22]. - The provision for credit losses was $1.2 million in Q4 2024, a decrease from $2.1 million in Q3 2024 and an increase from $885,000 in Q4 2023, primarily due to higher loan and purchased receivable balances[21]. - The allowance for credit losses on loans was 1.03% of portfolio loans, compared to 0.97% in the previous quarter[61]. Specialty Finance Segment - The acquisition of Sallyport Commercial Finance for approximately $53.9 million is expected to diversify fee income and enhance profitability[7]. - The acquisition of Sallyport Commercial Finance, valued at approximately $53.9 million, was completed on October 31, 2024, establishing a new Specialty Finance segment[37]. - Total revenue for the Specialty Finance segment in Q4 2024 was $3.865 million, significantly up from $1.191 million in Q3 2024[38]. Mortgage Banking - Mortgage loans funded for sale decreased to $162.5 million in Q4 2024, with 89% for home purchases, down from $210.0 million in Q3 2024[30]. - The net change in fair value of mortgage servicing rights increased mortgage banking income by $873,000 in Q4 2024, with the mortgage servicing portfolio valued at $294.1 million[33]. - Northrim serviced 6,378 loans in its $1.46 billion home mortgage servicing portfolio as of December 31, 2024, a 25% increase from Q3 2024 and a 40% increase from a year ago[34]. - The bank's mortgage banking income for the year was $24 million, significantly higher than $12.8 million in the previous year, showcasing growth in this segment[57]. Shareholder Equity - Shareholders' equity increased to $267.1 million, or $48.41 book value per share, compared to $260.1 million in the previous quarter[47]. - Total shareholders' equity rose to $267,116 million in Q4 2024, up from $234,718 million in Q4 2023, marking a growth of 13.8%[70]. - Total shareholders' equity as a percentage of total assets was 8.78%, consistent with the previous quarter[64].