Northrim Banp(NRIM) - 2025 Q4 - Annual Results

Financial Performance - Northrim BanCorp reported net income of $12.4 million, or $0.55 per diluted share, in Q4 2025, a decrease from $27.1 million, or $1.20 per diluted share, in Q3 2025[2]. - For the full year 2025, net income increased 75% to $64.6 million, or $2.87 per diluted share, compared to $37.0 million, or $1.66 per diluted share, in 2024[3]. - The net income for the Home Mortgage Lending segment in Q4 2025 was $213,000, a decrease from $1.86 million in Q3 2025 and $1.98 million in Q4 2024[41]. - The Specialty Finance segment reported a net income of $3.47 million in Q4 2025, up from $2.95 million in Q3 2025 and significantly higher than $135,000 in Q4 2024[47]. - Adjusted net income for the three months ended December 31, 2025, was $12,231 thousand, compared to $16,195 thousand for the previous quarter, a decrease of 24.3%[89]. Income and Revenue - Net interest income reached a record $35.4 million in Q4 2025, up from $30.8 million in Q4 2024, contributing to a 21% annual increase in net interest income[8]. - Other operating income was $16.3 million, accounting for 32% of total revenues in Q4 2025, down from 47% in Q3 2025[26]. - Total other operating income for the year was $77.2 million, significantly up from $42.0 million in the previous year[69]. - Year-to-date net interest income for 2025 was $135,609 thousand, an increase of 19.8% from $113,183 thousand in 2024[81]. Assets and Loans - Total portfolio loans were $2.30 billion at December 31, 2025, reflecting an 8% increase year-over-year and a 3% increase from the previous quarter[8]. - Northrim's total assets reached $3.29 billion at December 31, 2025, reflecting a 1% increase from the previous quarter and an 8% increase year-over-year[49]. - Average interest-earning assets were $2.99 billion in Q4 2025, up 3% from $2.91 billion in Q3 2025 and up 7% from $2.79 billion in Q4 2024[51]. - Total mortgage loans funded in Q4 2025 amounted to $231.2 million, slightly down from $234.0 million in Q3 2025, but significantly up from $185.9 million in Q4 2024[41]. - Portfolio loans increased to $2,295,499 as of December 31, 2025, compared to $2,218,970 as of September 30, 2025, and $2,129,263 as of December 31, 2024[71]. Deposits and Funding - Total deposits amounted to $2.81 billion at December 31, 2025, down 3% from the preceding quarter but up 5% from $2.68 billion a year ago[8]. - Demand deposits represented 26% of total deposits as of December 31, 2025, down from 30% as of September 30, 2025[72]. - Average interest-bearing deposits increased by 4% to $2.10 billion, with an average cost of 1.91% in Q4 2025[57]. - The cost of funds decreased to 1.46% for the quarter ended December 31, 2025, down from 1.59% in the same quarter of 2024, indicating improved funding efficiency[78]. Efficiency and Ratios - The efficiency ratio for Q4 2025 was 64.70%, compared to 45.51% in Q3 2025[7]. - The efficiency ratio improved to 58.45% for the year-to-date period ending December 31, 2025, compared to 67.60% in 2024, indicating enhanced operational efficiency[78]. - Return on average assets (ROAA) was 1.50% and return on average shareholders' equity (ROAE) was 15.16% for Q4 2025[8]. - The tangible common equity ratio improved to 8.51% as of December 31, 2025, up from 7.23% a year earlier, indicating enhanced capital efficiency[85]. Credit Quality - Provision for credit losses was $1.6 million in Q4 2025, compared to $1.7 million in Q3 2025 and $1.2 million in Q4 2024[24]. - Nonperforming loans remained at $11.3 million in Q4 2025, up from $7.5 million in Q4 2024[25]. - The allowance for credit losses for loans was 1.03% of portfolio loans as of December 31, 2025, consistent with 1.03% as of December 31, 2024[74]. - The percentage of nonperforming loans, net of government guarantees, to portfolio loans was 0.49% as of December 31, 2025, slightly down from 0.51% as of September 30, 2025[74]. Capital and Shareholder Equity - Shareholders' equity rose to $326.5 million, with a book value per share of $14.77, up from $315.7 million and $14.29 per share in the previous quarter[58]. - Common Equity Tier 1 Capital to Risk Adjusted Assets ratio improved to 10.31% as of December 31, 2025, compared to 9.36% a year earlier, indicating stronger capital adequacy[77]. - Total shareholders' equity increased to $326,544 thousand as of December 31, 2025, up from $267,116 thousand a year earlier, representing a growth of 22.2%[85].