Northrim Banp(US:NRIM)2025-04-28 21:12Financial Performance - The Company reported net income of $13.3 million and earnings per diluted share of $2.38 for Q1 2025, compared to $8.2 million and $1.48 for Q1 2024, reflecting a significant increase in purchased receivable income and net interest income [130]. - Net income for Q1 2025 increased by $5.1 million to $13.3 million compared to $8.2 million in Q1 2024, driven by higher purchased receivable income and net interest income [135]. - Other operating income surged by $6.4 million, or 81%, to $14.2 million in Q1 2025, primarily due to a $4.8 million increase in purchased receivable income [147]. - Northrim's effective tax rate increased to 24.19% in Q1 2025 from 21.94% in Q1 2024, with income tax expense rising to $4.3 million [149]. Interest Income and Loans - Net interest income increased by 18% to $31.3 million in Q1 2025 from $26.4 million in Q1 2024, with a net interest margin of 4.55%, up 31 basis points year-over-year [132]. - Net interest income rose 18% or $4.9 million to $31.3 million in Q1 2025, up from $26.4 million in Q1 2024, with a net interest margin increase of 31 basis points to 4.55% [137]. - The average yield on loans increased to 6.89% in Q1 2025 from 6.75% in Q1 2024, while the average yield on interest-earning assets rose to 6.03% [141]. - Total loans slightly decreased by $4.9 million to $2.124 billion as of March 31, 2025, from $2.129 billion at December 31, 2024, mainly due to the reclassification of $100.4 million in residential properties [152]. Deposits and Funding - Total deposits reached $2.78 billion at March 31, 2025, a 4% increase from December 31, 2024, with demand deposits representing 27% of total deposits [132]. - Total deposits increased by $97.8 million, or 4%, to $2.78 billion as of March 31, 2025, compared to $2.68 billion at December 31, 2024 [161]. - Uninsured deposits totaled approximately $1.04 billion, or 37% of total deposits, as of March 31, 2025, down from $1.1 billion, or 40%, at December 31, 2024 [163]. - The company's mix of deposits contributed to a low cost of funds, with transaction accounts representing 86% of total deposits as of March 31, 2025 [161]. Asset Quality - Nonperforming loans increased by 6% to $8.0 million as of March 31, 2025, primarily due to the addition of four loans in the first three months of 2025 [133]. - Potential problem loans identified by management increased significantly to $12.5 million at March 31, 2025, up from $1.6 million at December 31, 2024 [134]. - Nonperforming loans increased to $8.068 million as of March 31, 2025, from $7.533 million at December 31, 2024 [156]. - The allowance for credit losses (ACL) for loans held for investment decreased by $1.1 million from December 31, 2024, primarily due to the reclassification of loans [160]. Investments and Securities - Investment securities decreased by 3% to $508.5 million as of March 31, 2025, from $524.1 million at December 31, 2024, primarily due to maturities and calls [150]. - The fair value of marketable equity securities increased by $364,000 in Q1 2025 compared to the same quarter in 2024 [147]. - The average estimated duration of the investment portfolio was approximately 2.4 years as of March 31, 2025, with $319.4 million or 11% of earning assets scheduled to mature in the next 24 months [151]. - The Company’s accumulated unrealized losses on available for sale securities were $5.5 million as of March 31, 2025 [170]. Capital and Borrowing - The Company met all applicable capital adequacy requirements for a "well-capitalized" institution, with total risk-based capital at 10.62% and Tier 1 risk-based capital at 9.76% as of March 31, 2025 [176]. - The Company had cash and cash equivalents of $65.5 million, representing 2% of total assets, an increase from $62.7 million at December 31, 2024 [170]. - The Company had total unfunded commitments to fund loans and letters of credit of $523.2 million as of March 31, 2025 [170]. - As of March 31, 2025, the Company's maximum borrowing line from the FHLB is $374.8 million, which is approximately 45% of the Bank's assets [164]. Employment and Economic Indicators - The unemployment rate in Alaska was reported at 4.7% in February 2025, compared to the U.S. rate of 4.1%, with a total payroll job increase of 1.6% year-over-year [118]. - Alaska's Gross State Product (GSP) reached $70 billion in 2024, with a real GSP increase of 1.5% for the year, outperforming the national average [121]. - The average sales price of single-family homes in Anchorage rose by 6.2% in 2024 to $510,109, marking the seventh consecutive year of price increases [126]. Shareholder Information - The Company has 10.0 million authorized shares of common stock, with approximately 5.5 million issued and outstanding, leaving 4.5 million shares available for issuance [168]. - The Company had no long-term borrowings outstanding other than the FHLB advances as of March 31, 2025 [167]. - The Company had no short-term borrowings exceeding 30% of shareholders' equity as of March 31, 2025 [166].