• Northrim BanCorp Earns $8.8 Million, or $1.57 Per Diluted Share, in Third Quarter 2024

    Источник: Nasdaq GlobeNewswire / 23 окт 2024 18:11:12   America/Chicago

    ANCHORAGE, Alaska, Oct. 23, 2024 (GLOBE NEWSWIRE) -- Northrim BanCorp, Inc. (NASDAQ:NRIM) (“Northrim” or the “Company”) today reported net income of $8.8 million, or $1.57 per diluted share, in the third quarter of 2024, compared to $9.0 million, or $1.62 per diluted share, in the second quarter of 2024, and $8.4 million, or $1.48 per diluted share, in the third quarter a year ago. The increase in third quarter 2024 profitability as compared to the third quarter a year ago was primarily the result of an increase in mortgage banking income and higher net interest income, which was only partially offset by higher other operating expenses and a higher provision for credit losses.

    Dividends per share in the third quarter of 2024 increased to $0.62 per share as compared to $0.61 per share in the second quarter of 2024 and $0.60 per share in the third quarter of 2023.

    “We had strong deposit-funded loan growth in the third quarter,” said Mike Huston, Northrim’s President and Chief Executive Officer. “Deposits and loans both increased 7% from the end of the second quarter. Our deposit market share increased by 4% in the past year and by 42% in the past five years as our investments in people, expanded branch network, and differentiated service continue to attract new customers and strengthen existing relationships.”

    Third Quarter 2024 Highlights:

    • Net interest income in the third quarter of 2024 increased 7% to $28.8 million compared to $27.1 million in the second quarter of 2024 and increased 9% compared to $26.4 million in the third quarter of 2023.
    • Net interest margin on a tax equivalent basis (“NIMTE”)* was 4.35% for the third quarter of 2024, up 5-basis points from the second quarter of 2024 and up 14-basis points from the third quarter a year ago.
    • Return on average assets (“ROAA”) was 1.22% and return on average equity (“ROAE”) was 13.69% for the third quarter of 2024.
    • Portfolio loans were $2.01 billion at September 30, 2024, up 7% from the preceding quarter and up 17% from a year ago, primarily due to new customer relationships, expanding market share, and to retaining certain mortgages originated by Residential Mortgage, a subsidiary of Northrim Bank (the “Bank”), in the loan portfolio.
    • Total deposits were $2.63 billion at September 30, 2024, up 7% from the preceding quarter, and up 8% from $2.43 billion a year ago. Non-interest bearing demand deposits increased 8% from the preceding quarter and decreased slightly year-over-year to $763.6 million at September 30, 2024 and represent 29% of total deposits.
    • The average cost of interest-bearing deposits was 2.24% at September 30, 2024, up from 2.21% at June 30, 2024 and 1.75% at September 30, 2023.
    • Mortgage loan originations increased to $248.0 million in the third quarter of 2024, up from $181.5 million in the second quarter of 2024 and $153.4 million in the third quarter a year ago. Mortgage loans funded for sale were $210.0 million in the third quarter of 2024, compared to $152.3 million in the second quarter of 2024 and $131.9 million in the third quarter of 2023.


    Financial Highlights  Three Months Ended 
    (Dollars in thousands, except per share data)September 30,
    2024    		June 30, 2024March 31, 2024December 31,
    2023    		September 30,
    2023
    Total assets$2,963,392 $2,821,668$2,759,560 $2,807,497 $2,790,189 
    Total portfolio loans$2,007,565 $1,875,907$1,811,135 $1,789,497 $1,720,091 
    Total deposits$2,625,567 $2,463,806$2,434,083 $2,485,055 $2,427,930 
    Total shareholders’ equity$260,050 $247,200$239,327 $234,718 $225,259 
    Net income$8,825 $9,020$8,199 $6,613 $8,374 
    Diluted earnings per share$1.57 $1.62$1.48 $1.19 $1.48 
    Return on average assets 1.22% 1.31% 1.19% 0.93% 1.22%
    Return on average shareholders’ equity 13.69% 14.84% 13.84% 11.36% 14.67%
    NIM 4.29% 4.24% 4.16% 4.06% 4.15%
    NIMTE* 4.35% 4.30% 4.22% 4.12% 4.21%
    Efficiency ratio 66.11% 68.78% 68.93% 72.21% 66.64%
    Total shareholders’ equity/total assets 8.78% 8.76% 8.67% 8.36% 8.07%
    Tangible common equity/tangible assets* 8.28% 8.24% 8.14% 7.84% 7.54%
    Book value per share$47.27 $44.93 $43.52 $42.57 $40.60 
    Tangible book value per share*$44.36 $42.03 $40.61 $39.68 $37.72 
    Dividends per share$0.62 $0.61 $0.61 $0.60 $0.60 
    Common stock outstanding 5,501,943  5,501,562  5,499,578  5,513,459  5,548,436 


    *     References to NIMTE, tangible book value per share, and tangible common equity to tangible common assets, (all of which exclude intangible assets) represent non-GAAP financial measures. Management has presented these non-GAAP measurements in this earnings release, because it believes these measures are useful to investors. See the end of this release for reconciliations of these non-GAAP financial measures to GAAP financial measures.

    Alaska Economic Update
    (Note: sources for information included in this section are included on page 12.)

    The Alaska Department of Labor (“DOL”) has reported Alaska’s seasonally adjusted unemployment rate in August of 2024 was 4.6% compared to the U.S. rate of 4.2%. The total number of payroll jobs in Alaska, not including uniformed military, increased 1.8% or 6,400 jobs between August of 2023 and August of 2024.

    According to the DOL, the Construction sector had the largest growth in new jobs through August compared to the prior year. The Construction sector added 2,600 positions for a year over year growth rate of 12.9% between August of 2023 and 2024. The larger Health Care sector grew by 2,000 jobs for an annual growth rate of 4.9% over the same period. The Oil & Gas sector increased by 6.5% or 500 new direct jobs. Professional and Business Services added 1,000 jobs year over year through August of 2024, up 3.4%. The Government sector grew by 700 jobs for 0.9% growth, adding 500 Federal jobs and 200 Local government positions in Alaska. The only sectors to decline between August 2023 and August 2024 were Manufacturing (primarily seafood processing) shrinking 1,300 positions and Information, down 200 jobs.

    Alaska’s Gross State Product (“GSP”) in the second quarter of 2024, was estimated to be $69.8 billion in current dollars, according to the Federal Bureau of Economic Analysis ("BEA"). Alaska’s inflation adjusted “real” GSP increased 6.5% in 2023, placing Alaska fifth best of all 50 states. However, in the second quarter of 2024 Alaska decreased at an annualized rate of 1.1%, compared to the average U.S. growth rate of 3%. Alaska’s real GSP decline in the second quarter of 2024 was primarily caused by a slowdown in the Mining, Oil & Gas; and Transportation and Warehousing sectors.

    The BEA also calculated Alaska’s seasonally adjusted personal income at $55.4 billion in the second quarter of 2024. This was an annualized improvement of 4% for Alaska, compared to the national average of 5.3%.

    The monthly average price of Alaska North Slope (“ANS”) crude oil was at an annual high of $89.05 in April of 2024 and averaged $74.06 in September of this year. The Alaska Department of Revenue (“DOR”) calculated ANS crude oil production was 479 thousand barrels per day (“bpd”) in Alaska’s fiscal year ending June 30, 2023 and declined to 461 thousand bpd in Alaska’s fiscal year 2024. Starting in fiscal year 2025 it is projected to grow to 477 thousand bpd. The DOR projects the number to grow rapidly and reach 640 thousand bpd by fiscal year 2033. This is primarily a result of new production coming on-line in and around the NPR-A region west of Prudhoe Bay.

    According to the Alaska Multiple Listing Services, the average sales price of a single family home in Anchorage rose 5.2% in 2023 to $480,207, following a 7.6% increase in 2022. This was the sixth consecutive year of price increases.   In the first nine months of 2024 the average price continues to increase 6.8% to an average sale of
    $512,815.

    The average sales price for single family homes in the Matanuska Susitna Borough rose 4% in 2023 to $397,589, after increasing 9.9% in 2022. This continues a trend of average price increases for more than a decade in the region. In the first nine months of 2024 the average sales price increased 4.6% in the Matanuska Susitna Borough to $415,709. These two markets represent where the vast majority of the Bank’s residential lending activity occurs.

    The Alaska Multiple Listing Services reported a 1.2% decrease in the number of units sold in Anchorage when comparing January to September of 2023 and 2024. There were 5.4% less homes sold in the Matanuska Susitna Borough for the same nine month time period in 2024 compared to the prior year.

    Northrim Bank sponsors the Alaskanomics blog to provide news, analysis, and commentary on Alaska’s economy. Join the conversation at Alaskanomics.com, or for more information on the Alaska economy, visit: www.northrim.com and click on the “Business Banking” link and then click “Learn.” Information from our website is not incorporated into, and does not form, a part of this earnings release.

    Review of Income Statement

    Consolidated Income Statement

    In the third quarter of 2024, Northrim generated a ROAA of 1.22% and a ROAE of 13.69%, compared to 1.31% and 14.84%, respectively, in the second quarter of 2024 and 1.22% and 14.67%, respectively, in the third quarter a year ago.

    Net Interest Income/Net Interest Margin

    Net interest income increased 7% to $28.8 million in the third quarter of 2024 compared to $27.1 million in the second quarter of 2024 and increased 9% compared to $26.4 million in the third quarter of 2023. Interest expense on deposits increased to $10.1 million in the third quarter of 2024 compared to $9.5 million in the second quarter and $7.1 million in the third quarter of 2023.

    NIMTE* was 4.35% in the third quarter of 2024 up from 4.30% in the preceding quarter and 4.21% in the third quarter a year ago. NIMTE* increased 14 basis points in the third quarter of 2024 compared to the third quarter of 2023 primarily due to a favorable change in the mix of earning-assets towards higher loan balances as a percentage of total earning-assets, higher earning-assets, and higher yields on those assets which were only partially offset by an increase in costs on interest-bearing deposits. The weighted average interest rate for new loans booked in the third quarter of 2024 was 7.24% compared to 7.90% in the second quarter of 2024 and 7.44% in the third quarter a year ago. The yield on the investment portfolio in the third quarter of 2024 decreased slightly to 2.80% from 2.82% in the second quarter of 2024 and increased from 2.43% in the third quarter of 2023. “We continue to see the benefit of new loan volume and repricing outweigh the modest increase in deposit costs in the third quarter of 2024,” said Jed Ballard, Chief Financial Officer. Northrim’s NIMTE* continues to remain above the peer average of 3.13% posted by the S&P U.S. Small Cap Bank Index with total market capitalization between $250 million and $1 billion as of June 30, 2024.

    Provision for Credit Losses

    Northrim recorded a provision for credit losses of $2.1 million in the third quarter of 2024, which was comprised of of a $325,000 provision for credit losses on unfunded commitments and a provision for credit losses on loans of $1.7 million. The provision for unfunded commitments was primarily due to an increase in unfunded commitments, as well as an increase in estimated loss rates due to changes in mix and management's assessment of economic conditions. The increase to the provision for credit losses on loans was primarily a result of loan growth, as well as an increase in the provision for loans individually evaluated and an increase in estimated loss rates. This compares to a benefit to the provision for credit losses of $120,000 in the second quarter of 2024, and provision for credit losses of $1.2 million in the third quarter a year ago.

    Nonperforming loans, net of government guarantees, increased slightly during the quarter to $5.0 million at September 30, 2024, compared to $4.8 million at June 30, 2024, and decreased from $5.1 million at September 30, 2023.

    The allowance for credit losses on loans was 394% of nonperforming loans, net of government guarantees, at the end of the third quarter of 2024, compared to 365% three months earlier and 326% a year ago.

    Other Operating Income

    In addition to home mortgage lending, Northrim has interests in other businesses that complement its core community banking activities, including purchased receivables financing and wealth management. Other operating income contributed $11.6 million, or 29% of total third quarter 2024 revenues, as compared to $9.6 million, or 26% of revenues in the second quarter of 2024, and $8.0 million, or 23% of revenues in the third quarter of 2023. The increase in other operating income in the third quarter of 2024 as compared to the preceding quarter and the third quarter of 2023 was primarily the result of an increase in mortgage banking income due to a higher volume of mortgage activity. See further discussion regarding mortgage activity during the second quarter contained under “Home Mortgage Lending” below. The fair market value of marketable equity securities increased $576,000 in the third quarter of 2024 compared to a decrease of $60,000 in the prior quarter and an increase of $12,000 in the third quarter of 2023. The increase in other operating income in the third quarter of 2024 as compared to the third quarter a year ago was due primarily to an increase in mortgage banking income as a result of higher volume of mortgage activity due to our expansion in Arizona, Colorado, and the Pacific Northwest markets, as well as an increase in fair value of marketable equity securities.

    Other Operating Expenses

    Operating expenses were $26.7 million in the third quarter of 2024, compared to $25.2 million in the second quarter of 2024, and $22.9 million in the third quarter of 2023. The increase in other operating expenses in the third quarter of 2024 compared to the second quarter of 2024 was primarily due to an increase in salaries and other personnel expense, including $653,000 in mortgage commissions expense due to higher mortgage volume and a $979,000 increase in profit share expense, which was partially offset by a $836,000 decrease in medical claims expense. The increase in other operating expenses in the third quarter of 2024 compared to a year ago was primarily due to an increase in salaries and other personnel expense, as well as an increase in OREO expense due to a gain on sale recorded in the third quarter of 2023 for proceeds received related to a government guarantee on an OREO property sold in December 2022.

    Income Tax Provision

    In the third quarter of 2024, Northrim recorded $2.8 million in state and federal income tax expense for an effective tax rate of 24.2%, compared to $2.5 million, or 21.9% in the second quarter of 2024 and $1.9 million, or 18.4% in the third quarter a year ago. The increase in the tax rate in the third quarter of 2024 as compared to the third quarter of 2023 is primarily the result of a decrease in tax credits and tax exempt interest income as a percentage of pre-tax income in 2024 as compared to 2023.

    Community Banking

    In the most recent deposit market share data from the FDIC, Northrim’s deposit market share in Alaska increased to 15.66% of Alaska's total deposits as of June 30, 2024 compared to 15.04% of Alaska's total deposits as of June 30, 2023. This represents 62 basis points of growth in market share percentage for Northrim during that period while, according to the FDIC, the total deposits in Alaska were up 2.3% during the same period. Northrim opened a branch in Kodiak in the first quarter of 2023, a loan production office in Homer in the second quarter of 2023, a permanent branch in Nome in the third quarter of 2023, and a branch in Homer in the first quarter of 2024. See below for further discussion regarding the Company's deposit movement for the quarter.

    Northrim is committed to meeting the needs of the diverse communities in which it operates. As a testament to that support, the Bank has branches in four regions of Alaska identified by the Federal Reserve as 'distressed or underserved non-metropolitan middle-income geographies'.

    Net interest income in the Community Banking segment totaled $25.9 million in the third quarter of 2024, compared to $24.3 million in the second quarter of 2024 and $24.1 million in the third quarter of 2023. Net interest income increased 7% in the third quarter of 2024 as compared to the second quarter of 2024 mostly due to higher interest income on loans. This increase was only partially offset by higher interest expense on deposits and borrowings and lower interest income on portfolio investments.

    Other operating expenses in the Community Banking segment totaled $19.1 million in the third quarter of 2024, up $588,000 or 3% from $18.5 million in the second quarter of 2024, and up $2.1 million or 13% from $16.9 million in the third quarter a year ago. The increase in the third quarter of 2024 as compared to the prior quarter was mostly due to an increases in salaries and other personnel expense, marketing expense, and professional fees. The increase in the third quarter of 2024 as compared to the third quarter a year ago was primarily due to an increase in OREO expense due to a gain on sale recorded in the third quarter of 2023 for proceeds received related to a government guarantee on an OREO property sold in December 2022, as well as increases in salaries and other personnel expense and marketing expense.

    The following tables provide highlights of the Community Banking segment of Northrim:


     Three Months Ended
     September March 31,DecemberSeptember
    (Dollars in thousands, except per share data)30, 2024June 30, 2024 2024 31, 2023 30, 2023
    Net interest income$25,901$24,278$24,215$24,456$24,050
    (Benefit) provision for credit losses1,492(184) 197 885 1,190
    Other operating income4,5403,693 3,813 4,048 3,597
    Other operating expense19,08518,497 17,552 18,516 16,946
    Income before provision for income taxes9,8649,658 10,279 9,103 9,511
    Provision for income taxes2,3162,004 2,242 1,941 1,709
    Net income$7,548$7,654$8,037$7,162$7,802
    Weighted average shares outstanding, diluted5,583,0555,558,580 5,554,930 5,578,491 5,624,906
    Diluted earnings per share$1.34$1.37$1.45$1.29$1.39


     Year-to-date
    (Dollars in thousands, except per share data)September
    30, 2024    		September
    30, 2023
    Net interest income$74,394$71,502
    Provision for credit losses 1,505 2,957
    Other operating income 12,046 9,564
    Other operating expense 55,134 52,168
    Income before provision for income taxes 29,801 25,941
    Provision for income taxes 6,562 5,216
    Net income Community Banking segment$23,239$20,725
    Weighted average shares outstanding, diluted 5,574,135 5,688,687
    Diluted earnings per share$4.16$3.64


    Home Mortgage Lending

    During the third quarter of 2024, mortgage loans funded for sale increased to $210.0 million, compared to $152.3 million in the second quarter of 2024, and $131.9 million in the third quarter of 2023.

    During the third quarter of 2024, the Bank purchased Residential Mortgage-originated loans of $38.1 million of which roughly two-thirds were jumbos and one-third were mortgages for second homes, with a weighted average interest rate of 6.59%, up from $29.2 million and 6.82% in the second quarter of 2024, and up from $21.6 million and 6.60% in the third quarter of 2023. The increase in mortgage loans funded for investment has increased net interest income in the Home Mortgage Lending segment. Net interest income contributed $2.9 million to total revenue in the third quarter of 2024, up from $2.8 million in the prior quarter, and up from $2.3 million in the third quarter a year ago.

    The Arizona, Colorado, and the Pacific Northwest mortgage expansion markets were responsible for 20% of Residential Mortgage's $248 million total production in the third quarter of 2024, 22% of $182 million total production in the second quarter of 2024, and 8% of $153 million total production in the third quarter of 2023.

    The net change in fair value of mortgage servicing rights decreased mortgage banking income by $968,000 during the third quarter of 2024 compared to a decrease of $81,000 for the second quarter of 2024 and a decrease of $310,000 for the third quarter of 2023. Mortgage servicing revenue increased to $2.6 million in the third quarter of 2024 from $2.2 million in the prior quarter and from $2.4 million in the third quarter of 2023 due to an increase in production of Alaska Housing Finance Corporation (AHFC) mortgages, which contribute to servicing revenues at origination. In the third quarter of 2024, the Company's servicing portfolio increased $64.8 million, which included $87.3 million in new mortgage loans, net of amortization and payoffs of $22.5 million as compared to a net increase of $41.8 million in the second quarter of 2024 and $58.2 million in the third quarter of 2023.

    As of September 30, 2024, Northrim serviced 4,187 loans in its $1.17 billion home-mortgage-servicing portfolio, a 6% increase compared to the $1.10 billion serviced as of the end of the second quarter of 2024, and a 19% increase from the $982.1 million serviced a year ago.

    The following tables provide highlights of the Home Mortgage Lending segment of Northrim:

     Three Months Ended 
      September   March 31,  December  September 
    (Dollars in thousands, except per share data) 30, 2024 June 30, 2024 2024  31, 2023  30, 2023 
    Mortgage commitments$77,591 $88,006 $56,208 $22,926 $50,128 
    Mortgage loans funded for sale$209,960 $152,339 $84,324 $79,742 $131,863 
    Mortgage loans funded for investment 38,087  29,175  17,403  27,114  21,585 
    Total mortgage loans funded$248,047 $181,514 $101,727 $106,856 $153,448 
    Mortgage loan refinances to total fundings 6% 6% 4% 4% 5%
    Mortgage loans serviced for others$1,166,585 $1,101,800 $1,060,007 $1,044,516 $982,098 
    Net realized gains on mortgage loans sold$5,079 $3,188 $1,980 $1,462 $2,491 
    Change in fair value of mortgage loan commitments, net 60  391  386  (296) (289)
    Total production revenue 5,139  3,579  2,366  1,166  2,202 
    Mortgage servicing revenue 2,583  2,164  1,561  2,180  2,396 
    Change in fair value of mortgage servicing rights:               
    Due to changes in model inputs of assumptions1 (566) 239  289  (707) — 
    Other2 (402) (320) (314) (301) (310)
    Total mortgage servicing revenue, net 1,615  2,083  1,536  1,172  2,086 
    Other mortgage banking revenue 293  222  129  99  117 
    Total mortgage banking income$7,047 $5,884 $4,031 $2,437 $4,405 
          
    Net interest income$2,941 $2,775 $2,232 $2,276 $2,300 
    Provision (benefit) for credit losses 571  64  (48) —  — 
    Mortgage banking income 7,047  5,884  4,031  2,437  4,405 
    Other operating expense 7,643  6,697  6,086  5,477  5,951 
    Income (loss) before provision for income taxes 1,774  1,898  225  (764) 754 
    Provision (benefit) for income taxes 497  532  63  (215) 182 
    Net income (loss)$1,277 $1,366 $162  ($549)$572 
    Weighted average shares outstanding, diluted 5,583,055  5,558,580  5,554,930  5,578,491  5,624,906 
    Diluted earnings per share$0.23 $0.25 $0.03  ($0.10)$0.09 

    1Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates.
    2Represents changes due to collection/realization of expected cash flows over time.


     Year-to-date
    (Dollars in thousands, except per share data)September
    30, 2024    		September
    30, 2023
    Mortgage loans funded for sale$446,623 $296,412 
    Mortgage loans funded for investment 84,665  119,144 
    Total mortgage loans funded$531,288 $415,556 
    Mortgage loan refinances to total fundings 6% 5%
         
    Net realized gains on mortgage loans sold$10,247 $6,366 
    Change in fair value of mortgage loan commitments, net 837  194 
    Total production revenue 11,084  6,560 
    Mortgage servicing revenue 6,308  5,188 
    Change in fair value of mortgage servicing rights:      
    Due to changes in model inputs of assumptions1 (38) (215)
    Other2 (1,036) (1,464)
    Total mortgage servicing revenue, net 5,234  3,509 
    Other mortgage banking revenue 644  257 
    Total mortgage banking income$16,962 $10,326 
    Net interest income$7,948 $5,022 
    Provision for credit losses 587  — 
    Mortgage banking income 16,962  10,326 
    Other operating expense 20,426  18,020 
    Income before provision for income taxes 3,897  (2,672)
    Provision for income taxes 1,092  (728)
    Net (loss) income Home Mortgage Lending segment$2,805  ($1,944)
    Weighted average shares outstanding, diluted 5,574,135  5,688,687 
    Diluted (loss) earnings per share$0.51  ($0.34)


    1    Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates.
    2Represents changes due to collection/realization of expected cash flows over time.

    Balance Sheet Review

    Northrim’s total assets were $2.96 billion at September 30, 2024, up 5% from the preceding quarter and up 6% from a year ago. Northrim’s loan-to-deposit ratio was 76% at September 30, 2024, consistent with 76% at June 30, 2024,
    and up from 71% at September 30, 2023.

    At September 30, 2024, our liquid assets, investments, and loans maturing within one year were $1.07 billion and our funds available for borrowing under our existing lines of credit were $641.7 million. Given these sources of liquidity and our expectations for customer demands for cash and for our operating cash needs, we believe our sources of liquidity to be sufficient for the foreseeable future.

    Average interest-earning assets were $2.67 billion in the third quarter of 2024, up 4% from $2.57 billion in the second quarter of 2024 and up 6% from $2.52 billion in the third quarter a year ago. The average yield on interest- earning assets was 5.92% in the third quarter of 2024, up from 5.83% in the preceding quarter and 5.48% in the third quarter a year ago.

    Average investment securities decreased to $619.0 million in the third quarter of 2024, compared to $640.0 million in the second quarter of 2024 and $715.8 million in the third quarter a year ago. The average net tax equivalent yield on the securities portfolio was 2.80% for the third quarter of 2024, down from 2.82% in the preceding quarter

    and up from 2.43% in the year ago quarter. The average estimated duration of the investment portfolio at September 30, 2024, was approximately 2.3 years compared to approximately 2.8 years at September 30, 2023. As of September 30, 2024, $105.1 million of available for sale securities with a weighted average yield of 0.61% are scheduled to mature in the next six months, $73.0 million with a weighted average yield of 2.48% are scheduled to mature in six months to one year, and $177.8 million with a weighted average yield of 1.31% are scheduled to mature in the following year, representing a total of $355.9 million or 13% of earning assets that are scheduled to mature in the next 24 months.

    Total unrealized losses, net of tax, on available for sale securities decreased by $7.6 million in the third quarter of 2024 resulting in total unrealized loss, net of tax, of $7.6 million compared to $15.2 million at June 30, 2024, and $26.5 million a year ago. The average maturity of the available for sale securities with the majority of the unrealized loss is 1.3 years. Total unrealized losses on held to maturity securities were $2.1 million at September 30, 2024, compared to $3.0 million at June 30, 2024, and $4.5 million a year ago.

    Average interest bearing deposits in other banks increased to $28.4 million in the third quarter of 2024 from $17.4 million in the second quarter of 2024 and decreased from $42.3 million in the third quarter of 2023, as deposit balances increased and cash was used to fund the loan growth and provide liquidity.

    Portfolio loans were $2.01 billion at September 30, 2024, up 7% from the preceding quarter and up 17% from a year ago. Portfolio loans, excluding consumer mortgage loans, were $1.76 billion at September 30, 2024, up $105.2 million or 6% from the preceding quarter and up 14% from a year ago. This increase was diversified throughout the loan portfolio including commercial real estate nonowner-occupied and multi-family loans increasing by $33.2 million, construction loans increasing by $31.4 million, and commercial real estate owner-occupied loans increasing $29.0 million from the preceding quarter. Average portfolio loans in the third quarter of 2024 were $1.93 billion, which was up 5% from the preceding quarter and up 14% from a year ago. Yields on average portfolio loans in the third quarter of 2024 increased to 6.91% from 6.87% in the second quarter and from 6.61% in the third quarter of 2023. The increase in the yield on portfolio loans in the third quarter of 2024 compared to the second quarter of 2024 and the third quarter a year ago is primarily due to loan repricing due to the increases in interest rates and new loans booked at higher rates due to changes in the interest rate environment. The yield on new portfolio loans, excluding consumer mortgage loans, was 7.43% in the third quarter of 2024 as compared to 8.26% in the second quarter of 2024 and 7.75% in the third quarter of 2023. The drop in yields on new loan production was largely related to the large volume of new commercial real estate versus commercial loans, as noted above, as well as slightly better credit quality of the loans originated in the third quarter of 2024.

    Alaskans continue to account for substantially all of Northrim’s deposit base. Total deposits were $2.63 billion at September 30, 2024, up 7% from $2.46 billion at June 30, 2024, and up 8% from $2.43 billion a year ago. “The increase in deposits in the third quarter of 2024 were consistent with our customers' business cycles and a result of continued acquisition of new relationships,” said Ballard. At September 30, 2024, 73% of total deposits were held in business accounts and 27% of deposit balances were held in consumer accounts. Northrim had approximately 34,000 deposit customers with an average balance of $48,000 as of September 30, 2024. Northrim had 22 customers with balances over $10 million as of September 30, 2024, which accounted for $978.4 million, or 38%, of total deposits. Demand deposits increased by 8% from the prior quarter and decreased slightly year-over-year to
    $763.6 million at September 30, 2024. Demand deposits remained consistent at 29% of total deposits at both September 30, 2024 and June 30, 2024 down from 31% of total deposits at September 30, 2023. Average interest- bearing deposits were up 4% to $1.80 billion with an average cost of 2.24% in the third quarter of 2024, compared to $1.73 billion and an average cost of 2.21% in the second quarter of 2024, and up 11% compared to $1.62 billion and an average cost of 1.75% in the third quarter of 2023. Uninsured deposits totaled $1.12 billion or 43% of total deposits as of September 30, 2024 compared to $1.1 billion or 46% of total deposits as of December 31, 2022. Since interest rates began increasing in 2022, Northrim has taken a proactive, targeted approach to increase deposit rates.

    Shareholders’ equity was $260.1 million, or $47.27 book value per share, at September 30, 2024, compared to $247.2 million, or $44.93 book value per share, at June 30, 2024 and $225.3 million, or $40.60 book value per share, a year ago. Tangible book value per share* was $44.36 at September 30, 2024, compared to $42.03 at June

    30, 2024, and $37.72 per share a year ago. The increase in shareholders’ equity in the third quarter of 2024 as compared to the second quarter of 2024 was largely the result of earnings of $8.8 million and an increase in the fair value of the available for sale securities portfolio, which increased $7.6 million, net of tax, which were only partially offset by dividends paid of $3.4 million. The Company did not repurchase any shares of common stock in the third quarter of 2024 and has 110,000 shares remaining under the current share repurchase program as of September 30, 2024. Tangible common equity to tangible assets* was 8.28% as of September 30, 2024, compared to 8.24% as of June 30, 2024 and 7.54% as of September 30, 2023. Northrim continues to maintain capital levels in excess of the requirements to be categorized as “well-capitalized” with Tier 1 Capital to Risk Adjusted Assets of 11.53% at September 30, 2024, compared to 11.68% at June 30, 2024, and 11.67% at September 30, 2023.

    Asset Quality

    Northrim believes it has a consistent lending approach throughout economic cycles, which emphasizes appropriate loan-to-value ratios, adequate debt coverage ratios, and competent management.

    Nonperforming assets (“NPAs”) net of government guarantees were $5.3 million at September 30, 2024, up from $5.1 million at June 30, 2024 and $5.2 million a year ago. Of the NPAs at September 30, 2024, $3.0 million, or 61%, are nonaccrual loans related to three commercial relationships.

    Net adversely classified loans were $6.5 million at September 30, 2024, as compared to $7.1 million at June 30, 2024, and $7.3 million a year ago. Adversely classified loans are loans that Northrim has classified as substandard, doubtful, and loss, net of government guarantees. Net loan recoveries were $96,000 in the third quarter of 2024, compared to net loan recoveries of $26,000 in the second quarter of 2024, and net loan recoveries of $96,000 in the third quarter of 2023. Additionally, Northrim had 11 loan modifications to borrowers experiencing financial difficulty totaling $3.1 million, net of government guarantees in the third quarter of 2024.

    Northrim had $127.4 million, or 6% of portfolio loans, in the Healthcare sector, $110.4 million, or 5% of portfolio loans, in the Tourism sector, $96.6 million, or 5% of portfolio loans, in the Accommodations sector, $83.6 million, or 4% of portfolio loans, in the Fishing sector, $70.6 million, or 3% of portfolio loans, in the Aviation (non-tourism) sector, $67.7 million, or 3% of portfolio loans, in the Retail sector, and $53.1 million, or 3% in the Restaurants and Breweries sector as of September 30, 2024.

    Northrim estimates that $82.0 million, or approximately 4% of portfolio loans, had direct exposure to the oil and gas industry in Alaska, as of September 30, 2024, and $1.6 million of these loans are adversely classified. As of September 30, 2024, Northrim has an additional $29.7 million in unfunded commitments to companies with direct exposure to the oil and gas industry in Alaska, and no unfunded commitments on adversely classified loans. Northrim defines direct exposure to the oil and gas sector as loans to borrowers that provide oilfield services and other companies that have been identified as significantly reliant upon activity in Alaska related to the oil and gas industry, such as lodging, equipment rental, transportation and other logistics services specific to this industry.

    About Northrim BanCorp

    Northrim BanCorp, Inc. is the parent company of Northrim Bank, an Alaska-based community bank with 20 branches in Anchorage, Eagle River, the Matanuska Valley, the Kenai Peninsula, Juneau, Fairbanks, Nome, Kodiak, Ketchikan, and Sitka, serving 90% of Alaska’s population; and an asset-based lending division in Washington; and a wholly-owned mortgage brokerage company, Residential Mortgage Holding Company, LLC. The Bank differentiates itself with its detailed knowledge of Alaska’s economy and its “Customer First Service” philosophy. Pacific Wealth Advisors, LLC is an affiliated company of Northrim BanCorp.

    www.northrim.com

    Forward-Looking Statement

    This release may contain “forward-looking statements” as that term is defined for purposes of Section 21E of the Securities Exchange Act of 1934, as amended. These statements are, in effect, management’s attempt to predict future events, and thus are subject to various risks and uncertainties. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. All statements, other than statements of historical fact, regarding our financial position, business strategy, management’s plans and objectives for future operations are forward-looking statements. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” and “intend” and words or phrases of similar meaning, as they relate to Northrim and its management are intended to help identify forward-looking statements. Although we believe that management’s expectations as reflected in forward-looking statements are reasonable, we cannot assure readers that those expectations will prove to be correct. Forward-looking statements, are subject to various risks and uncertainties that may cause our actual results to differ materially and adversely from our expectations as indicated in the forward-looking statements. These risks and uncertainties include: potential further increases in interest rates; the value of securities held in our investment portfolio; the impact of the results of government initiatives on the regulatory landscape, natural resource extraction industries, and capital markets; the impact of declines in the value of commercial and residential real estate markets, high unemployment rates, inflationary pressures and slowdowns in economic growth; changes in banking regulation or actions by bank regulators; inflation, supply-chain constraints, and potential geopolitical instability, including the wars in Ukraine and the Middle East; financial stress on borrowers (consumers and businesses) as a result of higher rates or an uncertain economic environment; the general condition of, and changes in, the Alaska economy; our ability to maintain or expand our market share or net interest margin; the sufficiency of our provision for credit losses and the accuracy of the assumptions or estimates used in preparing our financial statements, including those related to current expected credit losses accounting guidance; our ability to maintain asset quality; our ability to implement our marketing and growth strategies; our ability to identify and address cyber-security risks, including security breaches, “denial of service attacks,” “hacking,” and identity theft; disease outbreaks; and our ability to execute our business plan. Further, actual results may be affected by competition on price and other factors with other financial institutions; customer acceptance of new products and services; the regulatory environment in which we operate; and general trends in the local, regional and national banking industry and economy. In addition, there are risks inherent in the banking industry relating to collectability of loans and changes in interest rates. Many of these risks, as well as other risks that may have a material adverse impact on our operations and business, are identified in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and from time to time are disclosed in our other filings with the Securities and Exchange Commission. However, you should be aware that these factors are not an exhaustive list, and you should not assume these are the only factors that may cause our actual results to differ from our expectations. These forward- looking statements are made only as of the date of this release, and Northrim does not undertake any obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this release.

    References:

    https://www.bea.gov/

    http://almis.labor.state.ak.us/

    http://www.tax.alaska.gov/programs/oil/prevailing/ans.aspx
    http://www.tax.state.ak.us/

    www.mba.org
    https://www.alaskarealestate.com/MLSMember/RealEstateStatistics.aspx

    https://www.capitaliq.spglobal.com/web/client?auth=inherit&overridecdc=1&#markets/indexFinancials


    Income     Statement

    (Dollars in thousands, except per share data)Three Months EndedYear-to-date
    (Unaudited)September 30,June 30,September 30,September 30,September 30,
      2024 2024  2023  2024  2023 
    Interest Income:         
    Interest and fees on loans$34,863$32,367 $29,097 $97,680 $79,104 
    Interest on portfolio investments 4,164 4,310  4,727  12,994  14,018 
    Interest on deposits in banks 389 232  584  1,459  2,901 
    Total interest income 39,416 36,909  34,408  112,133  96,023 
    Interest Expense:              
    Interest expense on deposits 10,123 9,476  7,138  28,779  17,835 
    Interest expense on borrowings 451 380  920  1,012  1,664 
    Total interest expense 10,574 9,856  8,058  29,791  19,499 
    Net interest income 28,842 27,053  26,350  82,342  76,524 
    (Benefit) provision for credit losses 2,063 (120) 1,190  2,092  2,957 
    Net interest income after provision for credit losses 26,779 27,173  25,160  80,250  73,567 
    Other Operating Income:               
    Mortgage banking income 7,047 5,884  4,405  16,962  10,326 
    Bankcard fees 1,196 1,105  1,022  3,218  2,916 
    Purchased receivable income 1,033 1,242  1,180  3,620  3,175 
    Service charges on deposit accounts 605 572  550  1,726  1,512 
    Unrealized gain (loss) on marketable equity securities 576 (60) 12  830  (445)
    Other income 1,130 834  833  2,652  2,406 
    Total other operating income 11,587 9,577  8,002  29,008  19,890 
    Other Operating Expense:              
    Salaries and other personnel expense 17,549 16,627  15,657  49,593  46,324 
    Data processing expense 2,618 2,601  2,589  7,878  7,321 
    Occupancy expense 1,911 1,843  1,857  5,716  5,611 
    Professional and outside services 903 726  803  2,384  2,326 
    Marketing expense 860 690  499  2,063  1,996 
    Insurance expense 596 692  640  2,067  1,844 
    OREO expense, net rental income and gains on sale 2 2  (784) (387) (766)
    Intangible asset amortization expense — —  4  —  11 
    Other operating expense 2,289 2,013  1,631  6,246  5,521 
    Total other operating expense 26,728 25,194  22,896  75,560  70,188 
                   
    Income before provision for income taxes 11,638 11,556  10,266  33,698  23,269 
    Provision for income taxes 2,813 2,536  1,892  7,654  4,488 
    Net income$8,825$9,020 $8,374 $26,044 $18,781 
    Basic EPS$1.60$1.64 $1.50 $4.73 $3.34 
    Diluted EPS$1.57$1.62 $1.48 $4.67 $3.30 
    Weighted average shares outstanding, basic 5,501,943 5,500,588  5,569,238  5,500,703  5,630,948 
    Weighted average shares outstanding, diluted 5,583,055 5,558,580  5,624,906  5,574,135  5,688,687 


    Balance Sheet
    (Dollars in thousands)
    (Unaudited)    		September 30,June 30,September 30,
      2024  2024  2023 
    Assets:      
    Cash and due from banks$42,805 $33,364 $31,276 
    Interest bearing deposits in other banks 60,071  21,058  79,952 
    Investment securities available for sale, at fair value 545,210  584,964  652,150 
    Investment securities held to maturity 36,750  36,750  36,750 
    Marketable equity securities, at fair value 12,957  12,381  10,615 
    Investment in Federal Home Loan Bank stock 4,318  4,929  6,334 
    Loans held for sale 97,937  85,926  63,151 
              
    Portfolio loans 2,007,565  1,875,907  1,720,091 
    Allowance for credit losses, loans (19,528) (17,694) (16,491)
    Net portfolio loans 1,988,037  1,858,213  1,703,600 
    Purchased receivables, net 23,564  25,722  34,578 
    Mortgage servicing rights, at fair value 21,570  21,077  19,396 
    Other real estate owned, net —  —  150 
    Premises and equipment, net 39,625  40,393  40,920 
    Lease right of use asset 7,616  8,244  9,673 
    Goodwill and intangible assets 15,967  15,967  15,973 
    Other assets 66,965  72,680  85,671 
    Total assets$2,963,392 $2,821,668 $2,790,189 
    Liabilities:      
    Demand deposits$763,595 $704,471 $764,647 
    Interest-bearing demand 979,238  906,010  875,814 
    Savings deposits 245,043  238,156  265,799 
    Money market deposits 201,821  195,159  230,814 
    Time deposits 435,870  420,010  290,856 
    Total deposits 2,625,567  2,463,806  2,427,930 
    Other borrowings 13,354  43,961  63,781 
    Junior subordinated debentures 10,310  10,310  10,310 
    Lease liability 7,635  8,269  9,673 
    Other liabilities 46,476  48,122  53,236 
    Total liabilities 2,703,342  2,574,468  2,564,930 
    Shareholders’ Equity:         
    Total shareholders’ equity 260,050  247,200  225,259 
    Total liabilities and shareholders’ equity$2,963,392 $2,821,668 $2,790,189 


    Additional Financial Information
    (Dollars in thousands)
    (Unaudited)

    Composition of Portfolio Loans

      September 30,
    2024    		June 30, 2024March 31, 2024December 31,
    2023    		September 30,
    2023
     Balance% of
    total    		Balance% of
    total    		Balance% of
    total    		Balance% of
    total    		Balance% of
    total
    Commercial loans$492,414 24%$495,781 26%$475,220 26%$486,057 27%$492,145 28%
    Commercial real estate:          
    Owner occupied properties 412,827 20% 383,832 20% 372,507 20% 368,357 20% 359,019 21%
    Nonowner occupied and          
    multifamily properties 584,302 31% 551,130 30% 529,904 30% 519,115 30% 509,939 30%
    Residential real estate:          
    1-4 family properties          
    secured by first liens 248,514 12% 222,026 12% 218,552 12% 203,534 11% 180,719 10%
    1-4 family properties          
    secured by junior liens &          
    revolving secured by first liens 45,262 2% 41,258 2% 35,460 2% 33,783 2% 27,342 2%
    1-4 family construction 39,794 2% 29,510 2% 27,751 2% 31,239 2% 32,374 2%
    Construction loans 185,362 9% 154,009 8% 153,537 8% 149,788 8% 120,909 7%
    Consumer loans 7,836 —% 6,679 —% 6,444 —% 6,180 —% 5,930 —%
    Subtotal 2,016,311   1,884,225   1,819,375   1,798,053   1,728,377  
    Unearned loan fees, net (8,746)  (8,318)  (8,240)  (8,556)  (8,286) 
    Total portfolio loans$2,007,565  $1,875,907  $1,811,135  $1,789,497  $1,720,091  


    Composition     of Deposits

     September 30, 2024June 30, 2024March 31, 2024December 31, 2023September 30, 2023
     Balance% of
    total    		Balance% of
    total    		Balance% of
    total    		Balance% of
    total    		Balance% of
    total
    Demand deposits$763,59529%$704,47129%$714,24429%$749,68331%$764,64731%
    Interest-bearing demand 979,23837% 906,01036% 889,58137% 927,29137% 875,81436%
    Savings deposits 245,0439% 238,15610% 246,90210% 255,33810% 265,79911%
    Money market deposits 201,8218% 195,1598% 209,7859% 221,4929% 230,81410%
    Time deposits 435,87017% 420,01017% 373,57115% 331,25113% 290,85612%
    Total deposits$2,625,567 $2,463,806 $2,434,083 $2,485,055 $2,427,930 


    Additional Financial Information
    (Dollars in thousands)
    (Unaudited)

    Asset Quality   

      September 30,
    2024 
    		 June 30,
    2024    		 September 30,
    2023
    		 
    Nonaccrual loans$4,944 $4,830 $6,492 
    Loans 90 days past due and accruing 17 17 28 
    Total nonperforming loans 4,961 4,847 6,520 
    Nonperforming loans guaranteed by government — — (1,455) 
    Net nonperforming loans 4,961 4,847 5,065 
    Other real estate owned— — 150 
    Repossessed assets297 297 — 
    Net nonperforming assets$5,258 $5,144 $5,215 
    Nonperforming loans, net of government guarantees / portfolio loans 0.25% 0.26%0.29%
    Nonperforming loans, net of government guarantees / portfolio loans, net of government guarantees 0.26%0.28%0.31%
    Nonperforming assets, net of government guarantees / total assets 0.18%0.18% 0.19%
    Nonperforming assets, net of government guarantees / total assets net of government guarantees 0.19%0.19% 0.19%
    Adversely classified loans, net of government guarantees$6,503 $7,068 $7,250 
    Special mention loans, net of government guarantees$9,641 $8,902 $5,457 
    Loans 30-89 days past due and accruing, net of government guarantees / portfolio loans 0.08%0.03%—% 
    Loans 30-89 days past due and accruing, net of government guarantees / portfolio loans, net of government guarantees 0.09%0.04% —%
    Allowance for credit losses / portfolio loans 0.97% 0.94%0.96%
    Allowance for credit losses / portfolio loans, net of government guarantees 1.04% 1.01% 1.02%
    Allowance for credit losses / nonperforming loans, net of government guarantees 394%365% 326%
    Gross loan charge-offs for the quarter$15 $— $91 
    Gross loan recoveries for the quarter ($111) ($26) ($187) 
    Net loan (recoveries) charge-offs for the quarter ($96) ($26) ($96) 
    Net loan charge-offs (recoveries) year-to-date ($164) ($68) ($134) 
    Net loan charge-offs (recoveries) for the quarter / average loans, for the quarter — % — % (0.01)% 
    Net loan charge-offs (recoveries) year-to-date / average loans, year-to-date annualized (0.01)% (0.01) % (0.01)% 
        

    Additional Financial Information
    (Dollars in thousands)
    (Unaudited)

    Average Balances, Yields, and Rates                

     Three Months Ended
     September 30, 2024 June 30, 2024 September 30, 2023 
     Average BalanceAverage
    Tax
    Equivalent
    Yield/Rate    		Average
    Balance    		Average
    Tax
    Equivalent
    Yield/Rate    		Average
    Balance    		Average
    Tax
    Equivalent
    Yield/Rate
    Assets      
    Interest bearing deposits in other banks$28,409 5.28%$17,352 5.27%$42,273 5.39%
    Portfolio investments 619,012 2.80% 639,980 2.82% 715,767 2.43%
    Loans held for sale 93,689 6.20% 65,102 6.08% 62,350 6.34%
    Portfolio loans 1,933,181 6.91% 1,845,832 6.87% 1,695,736 6.61%
    Total interest-earning assets 2,674,291 5.92% 2,568,266 5.83% 2,516,126 5.48%
    Nonearning assets 196,266   204,509   205,770  
    Total assets$2,870,557  $2,772,775  $2,721,896  


    Liabilities and Shareholders’ Equity    		      
    Interest-bearing deposits$1,796,107 2.24%$1,725,013 2.21%$1,619,478 1.75%
    Borrowings 43,555 4.07% 38,390 3.92% 76,681 4.73%
    Total interest-bearing liabilities 1,839,662 2.29% 1,763,403 2.25% 1,696,159 1.88%
    Noninterest-bearing demand deposits 722,000   706,339   747,147  
    Other liabilities 52,387   58,549   52,078  
    Shareholders’ equity 256,508   244,484   226,512  
    Total liabilities and shareholders’ equity$2,870,557  $2,772,775  $2,721,896  
    Net spread 3.63% 3.58% 3.60%
    NIM 4.29% 4.24% 4.15%
    NIMTE* 4.35% 4.30% 4.21%
    Cost of funds 1.64% 1.60% 1.31%
    Average portfolio loans to average      
    interest-earning assets 72.29%  71.87%  67.39% 
    Average portfolio loans to average total deposits 76.77%  75.92%  71.65% 
    Average non-interest deposits to average      
    total deposits 28.67%  29.05%  31.57% 
    Average interest-earning assets to average      
    interest-bearing liabilities 145.37%  145.64%  148.34% 

    Additional Financial Information
    (Dollars in thousands) (Unaudited)

    Average Balances, Yields, and Rates        

     Year-to-date
     September 30, 2024 September 30, 2023
     AverageAverage
    Tax Equivalent    		 AverageAverage
    Tax Equivalent
    BalanceYield/Rate BalanceYield/Rate
    Assets     
    Interest bearing deposits in other banks$35,747 5.34% $79,362 4.82%
    Portfolio investments 643,221 2.82%  723,693 2.41%
    Loans held for sale 63,917 6.14%  40,433 6.06%
    Portfolio loans 1,857,756 6.85%  1,608,293 6.46%
    Total interest-earning assets 2,600,641 5.81%  2,451,781 5.30%
    Nonearning assets 200,619    192,430  
    Total assets$2,801,260   $2,644,211  


    Liabilities and Shareholders' Equity    		     
    Interest-bearing deposits$1,751,179 2.20% $1,577,308 1.51%
    Borrowings 35,327 3.76%  52,075 4.23%
    Total interest-bearing liabilities 1,786,506 2.23%  1,629,383 1.60%
    Noninterest-bearing demand deposits 711,197    746,251  
    Other liabilities 57,097    42,596  
    Shareholders' equity 246,460    225,981  
    Total liabilities and shareholders' equity$2,801,260   $2,644,211  
    Net spread 3.58%  3.70%
    NIM 4.23%  4.17%
    NIMTE* 4.29%  4.24%
    Cost of funds 1.59%  1.10%
    Average portfolio loans to average interest-earning assets 71.43%   65.60% 
    Average portfolio loans to average total deposits 75.45%   69.22% 
    Average non-interest deposits to average total deposits 28.88%   32.12% 
    Average interest-earning assets to average interest-bearing liabilities 145.57%   150.47% 


    Additional Financial Information
    (Dollars in thousands, except per share data)
    (Unaudited)

    Capital Data (At quarter end)

       
          September 30, 2024     June 30, 2024 September 30, 2023
    Book value per share     
    $47.27    		 $44.93 $40.60 
    Tangible book value per share*     $44.36 $42.03 $37.72 
    Total shareholders’ equity/total assets     8.78% 8.76%  8.07 %
    Tangible Common Equity/Tangible Assets*     8.28% 8.24%  7.54 %
    Tier 1 Capital / Risk Adjusted Assets     11.53% 11.68%  11.67 %
    Total Capital / Risk Adjusted Assets     12.50% 12.58%  12.58 %
    Tier 1 Capital / Average Assets     9.08% 9.17%  9.02 %
    Shares outstanding     5,501,943 5,501,562  5,548,436 
    Total unrealized loss on AFS debt securities, net of income taxes     ($7,617) ($15,197)  ($26,526)
    Total unrealized gain on derivatives and hedging activities, net of
    income taxes    		     $863 $1,212 $1,485 
       
    Profitability Ratios  
      September 30, 
    2024    		 June 30,
    2024    		 March 31, 
    2024    		 December 31, 2023 September 30,
    2023


    For the quarter:    		  
    NIM    4.29% 4.24% 4.16% 4.06%  4.15% 
    NIMTE*    4.35% 4.30% 4.22% 4.12%  4.21% 
    Efficiency ratio    66.11% 68.78% 68.93% 72.21%  66.64% 
    Return on average assets    1.22% 1.31% 1.19% 0.93%  1.22% 
    Return on average equity    13.69% 14.84% 13.84% 11.36%  14.67% 


     September 30, September 30, 
    2024 2023
    Year-to-date:   
    NIM4.23%4.17%
    NIMTE*4.29%4.24%
    Efficiency ratio67.86%72.79%
    Return on average assets1.24%0.95%
    Return on average equity14.12%11.11%


    *Non-GAAP     Financial Measures
    (Dollars and shares in thousands, except per share data) (Unaudited)

    Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although we believe these non-GAAP financial measures are frequently used by stakeholders in the evaluation of the Company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of results as reported under GAAP.

    Net interest margin on a tax equivalent basis

    Net interest margin on a tax equivalent basis (“NIMTE”) is a non-GAAP performance measurement in which interest income on non-taxable investments and loans is presented on a tax equivalent basis using a combined federal and state statutory rate of 28.43% in both 2024 and 2023. The most comparable GAAP measure is net interest margin and the following table sets forth the reconciliation of NIMTE to net interest margin for the periods indicated.

     Three Months Ended
      September 30,   March 31,  December  September 30, 
      2024 June 30, 2024 2024  31, 2023  2023 
    Net interest income$28,842 $27,053 $26,447 $26,732 $26,350 
    Divided by average interest-bearing assets 2,674,291  2,568,266  2,558,558  2,612,297  2,516,126 
    Net interest margin (“NIM”)2 4.29% 4.24% 4.16% 4.06% 4.15%


    Net interest income$28,842 $27,053 $26,447 $26,732 $26,350 
    Plus: reduction in tax expense related to
    tax-exempt interest income    		 385  378  379  374  373 
      $29,227  $27,431  $26,826  $27,106  $26,723 
    Divided by average interest-bearing assets NIMTE2 2,674,291  2,568,266  2,558,558  2,612,297  2,516,126 
      4.35% 4.30% 4.22% 4.12% 4.21%


     
    Year-to-date
     September 30,September 30,
     2024  2023 
    Net interest income$82,342 $76,524 
    Divided by average interest-bearing assets 2,600,641  2,451,781 
    Net interest margin ("NIM")3 4.23% 4.17%
    Net interest income
    Plus: reduction in tax expense related to    		$82,342 $76,524 
    tax-exempt interest income 1,142  1,202 
     $83,484 $77,726 
    Divided by average interest-bearing assets 2,600,641  2,451,781 
    NIMTE3 4.29% 4.24%


    2    Calculated using actual days in the quarter divided by 366 for the quarters ended in 2024 and 365 for the quarters ended in 2023, respectively.

    3Calculated using actual days in the year divided by 366 for year-to-date period in 2024 and 365 for year-to-date period in 2023, respectively.


    *Non-GAAP Financial Measures
    (Dollars and shares in thousands, except per share data)
    (Unaudited)

    Tangible Book Value Per Share

    Tangible book value per share is a non-GAAP measure defined as shareholders’ equity, less intangible assets, divided by shares outstanding. The most comparable GAAP measure is book value per share and the following table sets forth the reconciliation of tangible book value per share and book value per share for the periods indicated.

      September 30, 
    2024    		 June 30, 2024 March 31, 
    2024    		 December
    31, 2023    		 September 30,
    2023
    Total shareholders’ equity$260,050$247,200$239,327$234,718$225,259
    Divided by shares outstanding 5,502 5,502 5,500 5,513 5,548
    Book value per share$47.27$44.93$43.52$42.57$40.60


      September 30, 
    2024    		 June 30, 2024 March 31, 
    2024    		 December
    31, 2023    		 September 30,
    2023
    Total shareholders’ equity$260,050$247,200$239,327$234,718$225,259
    Less: goodwill and intangible assets 15,967 15,967 15,967 15,967 15,973
     $244,083$231,233$223,360$218,751$209,286
    Divided by shares outstanding 5,502 5,502 5,500 5,513 5,548
    Tangible book value per share$44.36$42.03$40.61$39.68$37.72


    Tangible     Common Equity to Tangible Assets

    Tangible common equity to tangible assets is a non-GAAP ratio that represents total equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets. The most comparable GAAP measure of shareholders’ equity to total assets is calculated by dividing total shareholders’ equity by total assets and the following table sets forth the reconciliation of tangible common equity to tangible assets and shareholders’ equity to total assets.

    Northrim BanCorp, Inc.September 30,  March 31, DecemberSeptember 30,
     2024June 30, 2024 2024  31, 2023  2023 
    Total shareholders’ equity$260,050$247,200$239,327 $234,718 $225,259 
    Total assets2,963,3922,821,668 2,759,560  2,807,497  2,790,189 
    Total shareholders’ equity to total assets8.78 %8.76 % 8.67% 8.36% 8.07%
    Northrim BanCorp, Inc.September 30, March 31,DecemberSeptember 30,
     2024June 30, 2024 2024  31, 2023  2023 
    Total shareholders’ equity$260,050$247,200$239,327 $234,718 $225,259 
    Less: goodwill and other intangible assets, net15,96715,967 15,967  15,967  15,973 
    Tangible common shareholders’ equity$244,083$231,233$223,360 $218,751 $209,286 
    Total assets$2,963,392$2,821,668$2,759,560 $2,807,497 $2,790,189 
    Less: goodwill and other intangible assets, net15,96715,967 15,967  15,967  15,973 
    Tangible assets$2,947,425$2,805,701$2,743,593 $2,791,530 $2,774,216 
    Tangible common equity ratio8.28 %8.24 % 8.14% 7.84% 7.54%


    Note Transmitted on GlobeNewswire on October 23, 2024, at 2:30 pm Alaska Standard Time.

      
    Contact:Mike Huston, President, CEO, and COO
     (907) 261-8750
     Jed Ballard, Chief Financial Officer
     (907) 261-3539

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