Northrim BanCorp, Inc. Expands Stock Repurchase Program

Rhea-AI Summary

Northrim BanCorp, Inc. (NRIM) has announced the authorization for the repurchase of up to 110,000 shares of its common stock, which is approximately 2% of the currently issued and outstanding shares. The company's Chief Financial Officer, Jed Ballard, expressed confidence in the stock repurchase program, citing its contribution to long-term value for shareholders, return on equity, and growth in earnings per share. Since 2018, Northrim has repurchased and retired 1,511,383 shares. The company intends to repurchase its shares in the open market or through privately negotiated transactions, with the flexibility to modify, suspend, or terminate the program at any time. The decision to repurchase shares will be based on market conditions and other corporate considerations, aiming for accretive earnings while maintaining well-capitalized financial institution guidelines. Northrim currently has 5.5 million shares of common stock outstanding.

Positive

• Positive factors include the company's commitment to shareholder value through stock repurchases, which has contributed to return on equity and growth in earnings per share. The flexibility to modify, suspend, or terminate the repurchase program based on market conditions and corporate considerations reflects prudent financial management.

Negative

• None.

Financial Analyst

The authorization of a stock repurchase program by Northrim BanCorp, Inc. signals a strategic use of the company's capital, with the intention to enhance shareholder value. By reducing the number of outstanding shares, the company effectively increases the ownership stake of the remaining shareholders and can potentially improve financial ratios such as earnings per share (EPS) and return on equity (ROE). This action often conveys the management's confidence in the company's financial health and future prospects.

In assessing the impact of this repurchase on the market, it's crucial to analyze the potential liquidity effects. Repurchasing 110,000 shares, which represents approximately 2% of the currently issued and outstanding shares, is a significant but not excessive amount that is unlikely to disrupt the market for the stock. However, it could provide support for the stock price by creating additional demand. Investors will need to monitor market conditions and the company's performance to understand the full implications of the repurchase program.

Market Research Analyst

From a market perspective, Northrim BanCorp's announcement can be interpreted as a positive signal, potentially indicating that the company's management believes the stock is undervalued. It is also indicative of the company's capital allocation strategy, which prioritizes returning value to shareholders over other investments or acquisitions. This can be attractive to value-oriented investors who look for companies with shareholder-friendly policies.

It's important to consider the broader economic context when evaluating the repurchase program. In a market where banking stocks might be under pressure due to interest rate changes or economic uncertainties, a repurchase announcement could be particularly reassuring to investors. The historical context provided, citing repurchases since 2018, helps to establish a track record of consistent shareholder value focus, which can be a strong point of consideration for long-term investors.

Economist

Stock repurchase programs like the one Northrim BanCorp has announced are often seen in an economic environment where companies hold excess capital and face limited growth opportunities. In such scenarios, repurchasing shares can be a prudent decision to optimize capital structure. However, it is essential to ensure that such buybacks do not come at the expense of necessary capital expenditures or investment in growth opportunities, as this could hamper long-term competitiveness and financial health.

Moreover, the company's commitment to maintaining capital ratios above the well-capitalized threshold is a prudent measure, particularly for financial institutions that must navigate stringent regulatory environments. Investors should appreciate this balance between returning capital to shareholders and ensuring the stability and regulatory compliance of the institution. The interplay between these factors can greatly influence investor sentiment and the company's stock performance in both the short and long term.

ANCHORAGE, Alaska, Jan. 26, 2024 (GLOBE NEWSWIRE) -- Northrim BanCorp, Inc. (NASDAQ:NRIM) today announced that its Board of Directors has authorized for repurchase up to an additional 110,000 shares of its common stock, or approximately 2% of the currently issued and outstanding shares.

“Northrim’s stock repurchase program has helped to build long-term value for our shareholders and we feel that it continues to be a good use of capital to continue building on that value,” stated Jed Ballard, Chief Financial Officer. “Since 2018, we have repurchased and retired 1,511,383 shares, which we believe contributes to our return on equity and long-term growth in earnings per share.”

The company intends to repurchase its shares in the open market or privately negotiated transactions, as permitted under applicable rules and regulations. The repurchase program may be modified, suspended or terminated by the Board of Directors at any time without notice. The extent to which the company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations, including targets whereby repurchases are accretive to earnings while maintaining capital ratios that exceed the guidelines for a well-capitalized financial institution. The company currently has 5.5 million shares of common stock outstanding.

About Northrim BanCorp

Northrim BanCorp, Inc. is the parent company of Northrim Bank, an Alaska-based community bank with 19 branches in Anchorage, the Matanuska Valley, Soldotna, Juneau, Fairbanks, Ketchikan, Sitka, Kodiak, and Nome, and a loan production office in Homer, 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

Contact:	Joe Schierhorn, President, CEO, and COO
	(907) 261-3308
	Jed Ballard, Chief Financial Officer
	(907) 261-3539

FAQ

How many shares of Northrim BanCorp, Inc. common stock are outstanding?

Northrim BanCorp, Inc. currently has 5.5 million shares of common stock outstanding.

What percentage of currently issued and outstanding shares is the company authorized to repurchase?

Northrim BanCorp, Inc. is authorized to repurchase up to approximately 2% of the currently issued and outstanding shares, which amounts to 110,000 shares.

Who stated that the stock repurchase program has helped to build long-term value for shareholders?

Jed Ballard, the Chief Financial Officer of Northrim BanCorp, Inc., stated that the stock repurchase program has helped to build long-term value for shareholders.

How many shares has Northrim BanCorp, Inc. repurchased and retired since 2018?

Northrim BanCorp, Inc. has repurchased and retired 1,511,383 shares since 2018.

How does the company intend to repurchase its shares?

The company intends to repurchase its shares in the open market or through privately negotiated transactions, as permitted under applicable rules and regulations.

Can the repurchase program be modified, suspended, or terminated?

Yes, the repurchase program may be modified, suspended, or terminated by the Board of Directors at any time without notice.

How will the decision to repurchase shares be made?

The decision to repurchase shares will depend upon market conditions and other corporate considerations, aiming for accretive earnings while maintaining well-capitalized financial institution guidelines.