Northrim Banp(NRIM) - 2024 Q1 - Quarterly Report

Financial Performance - Net income for the first quarter of 2024 was $8.2 million, an increase of 71% from $4.8 million in the same period of 2023[122] - Earnings per diluted share rose to $1.48 in Q1 2024, compared to $0.84 in Q1 2023, reflecting strong performance[122] - Return on average assets improved to 1.19% in Q1 2024, compared to 0.76% in Q1 2023[123] - Return on average shareholders' equity increased to 13.84% in Q1 2024, up from 8.73% in Q1 2023[123] Income and Revenue - Net interest income increased by 6% to $26.4 million in Q1 2024, up from $25.0 million in Q1 2023[122] - Total interest income increased by $6,013,000, or 20%, driven by a $6,546,000 increase in loans[134] - Other operating income rose by $2,900,000, or 60%, to $7,800,000, primarily due to a $2,000,000 increase in mortgage banking income[137] Loans and Deposits - Total loans reached $1.81 billion as of March 31, 2024, a 1% increase from December 31, 2023, driven by growth in commercial real estate and consumer mortgage loans[126] - Total deposits were $2.43 billion at March 31, 2024, a decrease of 2% from December 31, 2023, with demand deposits down 5%[126] - Total loans increased by $21.6 million, or 1%, to $1.811 billion as of March 31, 2024, from $1.789 billion at December 31, 2023, primarily due to increased commercial real estate and consumer mortgage loans[142] Asset Quality - Nonperforming assets decreased to $5.4 million as of March 31, 2024, down from $5.8 million at December 31, 2023[123] - Nonperforming loans decreased to $5.260 million as of March 31, 2024, from $6.069 million as of December 31, 2023[146] - The provision for credit losses decreased to $149,000 in Q1 2024 from $360,000 in Q1 2023, reflecting improved estimated loss rates[136] Deposits and Funding - The average cost of interest-bearing deposits rose to 2.13% in Q1 2024, up from 1.20% in Q1 2023[126] - Non-interest bearing demand deposits decreased by $50,954,000, or 7%, to $705,134,000 compared to the previous year[136] - Total interest-bearing deposits increased by $188,486,000, or 12%, to $1,731,923,000[136] Capital and Shareholder Information - The Company maintained a total risk-based capital ratio of 12.47% and a Tier 1 risk-based capital ratio of 11.55% as of March 31, 2024, exceeding the minimum requirements[166] - The Company has 10.0 million authorized shares of common stock, with 5.5 million issued and outstanding, leaving 4.5 million shares available for issuance[157] - The Company repurchased 15,034 shares of common stock in the first three months of 2024, with 110,000 shares remaining under the repurchase program[163] Tax and Expenses - The effective tax rate for Q1 2024 was 21.94%, up from 20.44% in Q1 2023, with income tax expense recorded at $2,300,000[139] Investment Portfolio - Total investment securities decreased by 7% to $642,696,000 from $687,839,000 at the end of 2023, mainly due to maturities and calls[140] - The average estimated duration of the investment portfolio was approximately 2.7 years as of March 31, 2024[141] - The weighted average maturity of available for sale securities was 2.7 years as of March 31, 2024, down from 2.8 years at December 31, 2023[159] Cash and Liquidity - As of March 31, 2024, the Company had cash and cash equivalents of $80.4 million, representing 3% of total assets, down from $118.5 million or 4% at December 31, 2023[159] - Liquid assets, including investments and loans maturing within a year, totaled $515.6 million as of March 31, 2024[160] - The Company reported net cash used by operating activities of $5.5 million for the first three months of 2024, primarily due to cash used in loan origination[161] Other Information - Direct exposure to the oil and gas industry decreased to $88.0 million, or approximately 5% of loans as of March 31, 2024, down from $96.1 million, or approximately 5% of loans as of December 31, 2023[143] - The Company's allowance for credit losses (ACL) increased to $17.533 million as of March 31, 2024, from $14.157 million as of March 31, 2023[148] - Uninsured deposits totaled approximately $989.5 million, or 41% of total deposits, as of March 31, 2024, unchanged from December 31, 2023[152] - The Company had outstanding advances of $13.6 million from the Federal Home Loan Bank as of March 31, 2024, for low-income housing projects[153] - Total unfunded commitments to fund loans and letters of credit were $483.0 million as of March 31, 2024, with expectations that not all loans will be fully drawn at once[159] - The accumulated unrealized losses on available for sale securities were $17.2 million as of March 31, 2024[159] - The Company expects to continue receiving dividends from the Bank throughout 2024, as it meets all applicable capital adequacy requirements[157]