Northrim Banp(NRIM) - 2025 Q3 - Quarterly Results

Executive Summary & Company Overview Northrim BanCorp reported strong Q3 2025 financial performance, driven by asset sales, increased net interest income, and strategic acquisitions, while executing a stock split to boost liquidity Third Quarter 2025 Financial Performance Northrim BanCorp reported a significant increase in net income and diluted EPS for Q3 2025, primarily driven by a $14.2 million gain from asset sales, increased net interest income, and higher purchased receivable income, alongside a 4-for-1 forward stock split | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :----------------------- | :-------- | :-------- | :-------- | | Net Income | $27.1M | $11.8M | $8.8M | | Diluted EPS | $1.20 | $0.52 | $0.39 | - The increase in Q3 2025 profitability YoY was primarily due to a $14.2 million gain from the sale of certain assets by Pacific Wealth Advisors, an increase in net interest income, and higher purchased receivable income[1] - Northrim BanCorp's Board of Directors approved a 4-for-1 forward stock split, effective September 22, 2025, to enhance stock liquidity, make shares more accessible to retail investors, and support increased trading activity[2] | Metric | Q3 2025 | Q1/Q2 2025 | Q3 2024 | | :--------------- | :-------- | :--------- | :-------- | | Dividends per share | $0.16 | $0.16 | $0.155 | Strategic Initiatives & Market Position The company achieved record core earnings with increasing loan yields and decreasing deposit costs, significantly growing its Alaskan deposit market share and benefiting from the Sallyport Commercial Finance acquisition - Northrim's Alaskan deposit market share increased by 187 basis points to 17.5% in 2025 and by 531 basis points over the past five years[4] - The acquisition of Sallyport Commercial Finance, LLC, completed on October 31, 2024, significantly increased purchased receivable income, contributing to overall profitability[1] Key Financial Highlights (Q3 2025 vs. Prior Periods) Key financial highlights for Q3 2025 show substantial growth in net income, diluted EPS, and returns on assets and equity compared to prior periods, with improved net interest income and margin, and a decreased efficiency ratio | Financial Highlights (USD, except per share data) | Sep 30, 2025 (USD) | Jun 30, 2025 (USD) | Sep 30, 2024 (USD) | | :------------------------------------------------- | :----------------- | :----------------- | :----------------- | | Total assets | $3.31B | $3.24B | $2.96B | | Total portfolio loans | $2.22B | $2.20B | $2.01B | | Total deposits | $2.91B | $2.81B | $2.63B | | Net income | $27.1M | $11.8M | $8.8M | | Diluted earnings per share | $1.20 | $0.52 | $0.39 | | Return on average assets | 3.32 % | 1.48 % | 1.22 % | | Return on average shareholders' equity | 35.66 % | 16.37 % | 13.69 % | | NIMTE | 4.88 % | 4.72 % | 4.35 % | | Efficiency ratio | 45.51 % | 64.68 % | 66.11 % | - Net interest income in Q3 2025 increased 5% QoQ to $35.3 million and 23% YoY to $28.8 million[5] - Net interest margin on a tax equivalent basis (NIMTE) was 4.88% for Q3 2025, up 16-basis points QoQ and 53-basis points YoY[5] Alaska Economic Update Alaska's economy shows mixed trends with stable employment growth, strong personal income, increasing GSP, and moderate inflation, while the oil and gas sector and Permanent Fund remain significant contributors Employment and Income Trends Alaska's unemployment rate in August 2025 was 4.7%, slightly higher than the U.S. rate, with payroll jobs growing 0.8% year-over-year, and personal income showing strong annualized improvements | Metric | Alaska (Aug 2025) | U.S. (Aug 2025) | | :-------------------- | :---------------- | :-------------- | | Seasonally Adjusted Unemployment Rate | 4.7% | 4.3% | | Payroll Jobs YoY Growth | 0.8% | 0.8% | - Key sectors with job growth include Oil and Gas (+6%), Construction (+4.8%), Manufacturing (+5.7%), and Health Care (+2.1%)[9] | Metric | Q1 2025 (Annualized) | Q2 2025 (Annualized) | 2024 (Annual) | | :-------------------- | :------------------- | :------------------- | :------------ | | Alaska Personal Income Improvement | 9.7% | 5.0% | 5.8% | | U.S. Personal Income Improvement | 6.4% | 5.5% | 5.6% | | Alaska Per Capita Personal Income (Estimated) | $80,208 | - | - | Economic Output and Trade Alaska's Gross State Product reached $74.2 billion in Q2 2025, with real GSP increasing by 2%, led by key sectors, and exports totaling $5.9 billion in 2024, primarily to China | Metric | Q2 2025 | Q1 2025 (Annualized) | 2024 (Annual) | | :-------------------- | :-------- | :------------------- | :------------ | | Alaska GSP | $74.2B | - | - | | Alaska Real GSP Growth | 2.0% | 1.8% | 1.5% | | U.S. GDP Growth | 3.8% | -0.6% | 2.8% | | 2024 Exports | Value ($B) | | :-------------------- | :--------- | | Total Goods Exported | $5.9 | | Largest Importer | China ($1.5B) | | Top Products | Fish ($2.1B), Minerals & Ores ($2B), Primary Metals ($992M) | Inflation and Housing Market Inflation in Alaska was lower than the U.S. average at 2.4% YoY through August 2025, with housing costs as a significant contributor, while the housing market in Anchorage and Matanuska Susitna Borough saw price and sales growth | Metric | Alaska (Aug 2024-Aug 2025) | U.S. (Aug 2024-Aug 2025) | | :-------------------- | :------------------------- | :----------------------- | | CPI Increase | 2.4% | 2.9% | | Largest Increases | Apparel (+6.9%), Food and beverage (+3.9%), Housing (+3.8%) | - | | Housing Market (Single-Family Home Average Sales Price) | 2024 YoY Increase | 2025 YTD Increase (through Sep) | | :------------------------------------------------------ | :---------------- | :------------------------------ | | Anchorage | 6.2% | 3.7% | | Matanuska Susitna Borough | 3.8% | 6.7% | | Housing Market (Units Sold) | 2024 YoY Change | 2025 YTD Change (through Sep) | | :-------------------------- | :-------------- | :---------------------------- | | Anchorage | +3.4% | +4.7% | | Matanuska Susitna Borough | -0.2% | +11.1% | Oil & Gas Sector and Permanent Fund Alaska North Slope crude oil prices averaged $69.29 in August 2025, with production projected to grow significantly due to new field developments, and the Alaska Permanent Fund reaching $83.26 billion | Metric | FY 2024 | FY 2025 | FY 2034 (Projected) | | :-------------------- | :------ | :------ | :------------------ | | ANS Crude Oil Production (thousand bpd) | 461 | 469 | 663 (+41%) | - The projected growth in oil production is primarily due to new production from the Pikka and Willow fields, along with several smaller new fields in Alaska's North Slope[15] | Metric | As of Aug 31, 2025 | | :-------------------- | :----------------- | | Alaska Permanent Fund Value | $83.26 billion | | FY 2025 Contribution to General Fund | $3.7 billion | | Annual Dividend to Alaskan Residents | $1,000 (