Northrim Banp(US:NRIM)2025-03-10 20:55Financial Performance - Net income increased 46% to $37.0 million or $6.62 per diluted share for the year ended December 31, 2024, compared to $25.4 million or $4.49 per diluted share for the year ended December 31, 2023[219]. - Total revenue for 2024 was $155,224,000, compared to $129,631,000 in 2023, representing a 20% growth[230]. - Net income for 2024 was $37.0 million, an increase of 45.5% from $25.4 million in 2023, with diluted earnings per share rising from $4.49 to $6.62[232]. - Return on average equity increased to 14.70% in 2024 from 11.17% in 2023, reflecting an 8% growth rate[225]. - Cash dividends paid increased 1% to $13.8 million in 2024, with cash dividends per share rising to $2.46 from $2.40 in 2023[224]. Segment Performance - Net income in the Community Banking segment increased 19% or $4.9 million to $30.3 million in 2024, driven by a 7% increase in net interest income[221]. - Net income in the Home Mortgage Lending segment increased 292% or $7.3 million to $4.8 million in 2024 from a loss of $2.5 million in 2023, with production volume sold rising to $609.2 million in 2024 from $376.2 million in 2023[221]. Asset and Loan Growth - Loans increased 19% to $2.13 billion at December 31, 2024, compared to $1.79 billion at December 31, 2023, while deposits increased 8% to $2.68 billion[221]. - Total assets increased to $3,041,869,000 in 2024 from $2,807,497,000 in 2023, reflecting an 8% growth[228]. - The company's loans have grown significantly, attributed to the "Land and Expand" program aimed at attracting new customers and converting them into full banking relationships[256]. - Total loans increased to $2,129,263, representing a 15% growth rate over the past five years[257]. Interest Income and Margin - The net interest margin increased to 4.28% in 2024 from 4.14% in 2023, primarily due to higher average yields on interest-earning assets[221]. - Net interest income increased to $113.2 million in 2024 from $103.3 million in 2023, driven by a $26.1 million rise in interest income on loans[234]. - Total interest income increased by $21.968 million in 2024, with $14.792 million attributed to volume changes and $7.176 million to rate changes[237]. Credit Quality and Allowance for Losses - Nonperforming loans increased to $7.5 million at the end of 2024 from $5.0 million at the end of 2023[221]. - The Allowance for Credit Losses totaled 1.03% of total portfolio loans at December 31, 2024, compared to 0.97% at December 31, 2023[221]. - The allowance for credit losses (ACL) was $22,020, representing 1.03% of total portfolio loans[266]. Operational Efficiency - Efficiency ratio improved to 67.60% in 2024 from 72.64% in 2023, showing a 5% enhancement in operational efficiency[230]. - Total other operating expenses increased by 11% to $104,937,000 in 2024, with salaries and other personnel expenses rising by $6,106,000, largely due to increased mortgage production[246][247]. Investment and Securities - Investment securities decreased by 24% to $524,100,000 as of December 31, 2024, down from $687,800,000 in 2023, due to investment maturities and calls used to fund loan growth[251]. - The average maturity of the investment portfolio was approximately 2.4 years as of December 31, 2024, compared to 2.8 years in 2023[251]. Dividends and Share Repurchase - The Company repurchased 15,034 common shares at a weighted average price of $52.46 in 2024, compared to 208,673 shares at $43.34 in 2023[286]. Interest Rate Risk Management - The Asset and Liability Committee manages interest rate and price risks, establishing policies and tolerance ranges for interest rate sensitivity to achieve financial objectives[318]. - Interest rate risk is assessed using income simulations, with key assumptions including loan and deposit volumes, prepayment speeds, and cash flows, highlighting the complexity of interest rate management[319]. - The company uses derivatives in its Home Mortgage Lending segment to hedge interest rate risk, indicating a strategic approach to managing financial exposure[322]. Future Outlook - The Company plans to maintain capital ratios exceeding FDIC requirements for the "well-capitalized" classification in 2025[289]. - The Company expects to continue receiving dividends from the Bank during 2025, as it meets all applicable capital adequacy requirements[280].