Northrim Bancorp Stock Price, News & Analysis
Company Description
Northrim BanCorp, Inc. (NASDAQ: NRIM) is a financial holding company in the savings institutions industry within the finance and insurance sector. According to company disclosures and recent press releases, Northrim is the holding company for Northrim Bank, an Alaska-based community bank, and operates through banking and specialty finance activities that serve business and consumer customers.
Northrim Bank is described as an Alaska-based community bank with 20 branches throughout the State of Alaska. The bank emphasizes detailed knowledge of Alaska’s economy and a "Customer First Service" philosophy. The bank’s community banking activities include loan and deposit products for business and consumer customers in its market areas, as reflected in the company’s segment disclosures and earnings releases.
Business Segments and Operations
Based on the company’s description and segment information, Northrim BanCorp operates in three reportable segments:
- Community Banking – Offers loan and deposit products to business and consumer customers in its market areas. Earnings releases highlight growth in portfolio loans, deposits, and net interest income, indicating an emphasis on lending and deposit gathering.
- Home Mortgage Lending – Conducted primarily through Residential Mortgage, LLC, a regional home mortgage company that is a wholly owned subsidiary of Northrim Bank. Company earnings releases reference mortgage loan originations and mortgage loans funded for sale, and note that Residential Mortgage’s activity is concentrated in Alaska markets such as Anchorage and the Matanuska-Susitna Borough.
- Specialty Finance – Includes Northrim Funding Services, a division of Northrim Bank that operates a factoring and asset-based lending division in the State of Washington, and Sallyport Commercial Finance, LLC (SCF), a specialty finance company that is a wholly owned subsidiary of Northrim Bank. Company disclosures state that Sallyport and its direct and indirect subsidiaries provide services and products related to purchased receivable factoring and asset-based lending in the United States, Canada, and the United Kingdom.
The company’s earnings releases also refer to purchased receivable income associated with the acquisition of Sallyport Commercial Finance, LLC, underscoring the role of specialty finance in its overall business mix.
Geographic Focus and Market Context
Northrim’s primary banking footprint is in Alaska, where Northrim Bank operates 20 branches. Company communications indicate that the bank’s residential lending activity is concentrated in Anchorage and the Matanuska-Susitna Borough. The bank sponsors the "Alaskanomics" blog to provide news, analysis, and commentary on Alaska’s economy, reflecting a focus on regional economic conditions.
In addition to its Alaska banking presence, Northrim’s specialty finance activities extend beyond the state. Northrim Funding Services operates a factoring and asset-based lending division in the State of Washington, while Sallyport Commercial Finance, LLC and its subsidiaries provide factoring and asset-based lending services in the United States, Canada, and the United Kingdom.
Capital and Funding Activities
Public filings and press releases show that Northrim BanCorp uses both equity and debt to support its growth and regulatory capital ratios. In an 8-K filing and related press release, the company reported the completion of a private placement of $60.0 million in aggregate principal amount of 6.875% Fixed-to-Floating Rate Subordinated Notes due 2035. The company stated that the notes are intended to qualify as Tier 2 capital for regulatory capital purposes and that it intends to use the net proceeds for general corporate purposes and to support regulatory capital ratios for growth initiatives.
The subordinated notes were issued under an Indenture between Northrim BanCorp, Inc. and U.S. Bank Trust Company, National Association, as trustee. The company also entered into Registration Rights Agreements with the purchasers, under which Northrim agreed to take certain actions to provide for the exchange of the notes for subordinated notes registered under the Securities Act of 1933 with substantially the same terms.
Stock and Corporate Actions
Northrim BanCorp’s common stock trades on the NASDAQ under the symbol NRIM. An 8-K filing describes a 4-for-1 forward stock split of the company’s outstanding common stock, approved by the Board of Directors. The stock split was effected through the filing of Articles of Amendment to the company’s Amended and Restated Articles of Incorporation with the Alaska Division of Corporations, Business & Professional Licensing. The amendment proportionally increased the number of authorized shares of common stock from 10,000,000 to 40,000,000 and proportionally decreased the par value of common stock from $1.00 to $0.25.
According to the company’s disclosures, each shareholder of record as of the effective time of the stock split received three additional shares of common stock for every share held, and trading in the company’s common stock was expected to begin on a split-adjusted basis under the existing trading symbol NRIM.
Dividends and Shareholder Returns
Company press releases indicate that Northrim BanCorp pays regular quarterly cash dividends on its common stock. For example, the Board of Directors declared quarterly cash dividends of $0.64 per share in multiple quarters and later announced a $0.16 per share dividend following the stock split, with the company noting the implied dividend yield at various share prices. These disclosures show that cash dividends are a component of the company’s approach to providing returns to shareholders.
Earnings and Performance Highlights
In a series of earnings press releases, Northrim BanCorp reported net income and related performance metrics for recent quarters. The company attributed changes in profitability to factors such as:
- Increases in net interest income driven by higher earning asset balances, lower interest-bearing liability balances, higher yields on earning assets, and a lower cost of funds.
- Higher purchased receivable income, particularly following the acquisition of Sallyport Commercial Finance, LLC.
- Increased mortgage banking income associated with higher mortgage loan originations and mortgage loans funded for sale.
- Gains from the sale of certain assets by Pacific Wealth Advisors, in which Northrim held a minority interest.
The company’s disclosures also reference non-GAAP financial measures, such as net interest margin on a tax equivalent basis (NIMTE), adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average shareholders’ equity, and adjusted efficiency ratio, which are presented alongside reconciliations to GAAP measures in the full earnings releases.
Risk, Asset Quality, and Ratings
A credit rating agency report summarized in a press release assigned debt and deposit ratings to Northrim BanCorp, Inc. and Northrim Bank. According to that report, the ratings reflect factors such as:
- Earnings supported by a low-cost deposit franchise and a higher-yielding commercial loan portfolio.
- Meaningful noninterest income contributions, including those related to specialty finance activities.
- A history of low credit costs and minimal net charge-offs over a multi-year period.
- Capital levels influenced by organic loan growth, share repurchases, and acquisitions, with management indicating a target for core capital more in line with historical levels over the longer term.
- Deposit funding that is primarily core deposit based, with minimal reliance on wholesale funding sources, and a loan-to-deposit ratio characterized as conservative in the rating report.
The rating agency also noted Northrim’s deposit market share within its operating footprint in Alaska and commented on asset quality metrics such as classified loans as a percentage of loans.
Role in the Alaska Economy
Northrim BanCorp’s earnings releases include an Alaska Economic Update section that discusses employment, personal income, gross state product, exports, inflation, oil prices, and housing markets in Alaska. These sections reference data from sources such as the Alaska Department of Labor, the Federal Bureau of Economic Analysis, the U.S. International Trade Administration, and the U.S. Bureau of Labor Statistics. The company notes that Anchorage and the Matanuska-Susitna Borough represent the markets where the vast majority of Northrim Bank’s residential lending activity occurs.
The bank’s sponsorship of the Alaskanomics blog, which provides news, analysis, and commentary on Alaska’s economy, further illustrates Northrim’s focus on regional economic conditions and its interest in providing information about the state’s economic environment.
Corporate Structure and Subsidiaries
According to company press releases, Northrim BanCorp, Inc. is the holding company of:
- Northrim Bank – An Alaska-based community bank with 20 branches throughout the State of Alaska.
- Northrim Funding Services – A division of Northrim Bank that operates a factoring and asset-based lending division in the State of Washington.
- Sallyport Commercial Finance, LLC – A specialty finance company that, together with its direct and indirect subsidiaries, provides services and products related to purchased receivable factoring and asset-based lending in the United States, Canada, and the United Kingdom.
- Residential Mortgage, LLC – A regional home mortgage company and wholly owned subsidiary of Northrim Bank that originates residential mortgage loans, many of which are sold into the secondary market.
These entities form the core of Northrim’s community banking, home mortgage lending, and specialty finance activities.