Northrim Bancorp Inc · NASDAQ:NRIM
Northrim Bancorp — Q3 2024 Earnings Presentation
20 slides from Northrim Bancorp's earnings presentation, Nov 1, 2024
Slide 1: Investor Presentation Third Quarter 2024
Investor Presentation Third Quarter 2024 Nasdaq: NRIM 1
Slide 2: Northrim Overview
Northrim Overview $3.0 billion community bank founded in 1990 to provide financial services to Alaskan residents and businesses Fairbanks Nome • Superior customer first service • Strong balance sheet Wasilla • Solid net interest margin; pricing reflects quality service Soldotna • Focus on asset qual
Slide 3: 3rd Quarter 2024 Financial Highlights
3rd Quarter 2024 | Financial Highlights1 Earnings & Profitability Q3-24 Q2-24 Q3-23 Earnings per Share $1.57 $1.62 $1.48 Net Income EPS Net Income (in Thousands) $8,825 $9,020 $8,374 $8.825 million $1.57 Net Interest Margin 4.29% 4.24% 4.15% ROAA 1.22% 1.31% 1.22% ROAE 13.69% 14.84% 14.67% Dividends
Slide 4: Shareholder Value Creation Through TBV Accretion, Dividends and Buy Backs
Shareholder Value Creation Through TBV1 Accretion, Dividends2 and Buy Backs Q3 2024 Dividend $0.62 Annualized Dividend $2.48 TBV Dividend per Share Price @ October 23, 2024 $69.02 Dividend Yield 3.59% $44.36 $39.68 $36.88 $35.55 $2.44 $2.40 $32.88 $29.12 $27.57 $25.70 $1.82 $24.70 $22.31 $1.50 $20.8
Slide 5: Investment Opportunity
Investment Opportunity Unique Banking Environment Provides Opportunities to Gain Market Share • Northrim deposit market share has increased by 540 basis points since 2018 Alaska Banking Environment Drives Higher Yields on Loans and Lower Deposit Costs • Northrim loan yields averaged 5.64% over last
Slide 6: Capital Investment Drives Economic Growth - Partial List of Projects
Capital Investment Drives Economic Growth - Partial List of Projects • $6 billion in various federal infrastructure projects over the next 5 years • $250 million port of Nome • $170 million Lowell Creek flood diversion in Seward • $88 million Moose Creek dam in North Pole to protect Fairbanks • $46
Slide 7: Oil and Gas Development Drives Economic Growth
Oil and Gas Development Drives Economic Growth Future Oil Development Projects • Alaska North Slope oil production averaged 479,000 barrels per day (bpd) in 2023 • Production is projected to increase to 640,200 bpd by 2033 • Santos and Repsol making $2.6 billion investment in Pikka. 80k bpd, 768 mil
Slide 8: Steady Loan Growth Supported by Increasing Market Share
Steady Loan Growth Supported by Increasing Market Share Portfolio Loans Outstanding ($2.01 billion) 0.4% $2,000 9% $2,007 $1,786 31% $7 16% $1,500 $1,495 $118 $1,296 Loan $305 Composition $0 $0 $1,139 6.85% (9/30/2024) $1,000 $1,043 $984 6.49% 5.96% 5.74% 5.71% 20% $500 5.18% 5.08% 24% Consumer othe
Slide 9: Diversified Loan Portfolio Limits Concentration Risk
Diversified Loan Portfolio Limits Concentration Risk Special Industries as Percentage of Total Portfolio Loans ($2.01 billion) $127M 15% $120M 17% $110M $100M $97M 5% $80M $84M $82M 16% CRE Nonowner $71M Occupied $68M 8% $60M (9/30/2024) $53M $40M 12% 18% $20M 9% Office, Class A or B Retail Centers
Slide 10: Commercial Real Estate Non-Owner Occupied Portfolio Details
Commercial Real Estate Non-Owner Occupied Portfolio Details CRE Non-owner Occupied Portfolio Metrics (9/30/2024) Average Loan Size $1.49 million Nonaccrual $0.00 million Special Mention $2.27 million / 0.39% of CRE Non-Owner Occupied Adversely Classified $8.85 million / 1.51% of CRE Non-Owner Occupi
Slide 11: Deposit Franchise also Benefiting from Increasing Market Share
Deposit Franchise also Benefiting from Increasing Market Share Steady Market Share Growth Driving Deposits $3,000 8% 9% $2,500 $436 $331 $178 $193 $1,356 37% $1,397 $1,426 $1,404 $2,000 $176 15.7% Deposit $1,006 15.0% 17% Composition $1,500 (9/30/2024) 14.0% $164 $113 $756 13.0% $1,000 $694 12.3% $8
Slide 12: Net Interest Margin Driven by Asset Yields and Low Cost Liabilities
Net Interest Margin Driven by Asset Yields and Low Cost Liabilities Yield on Portfolio Loans • Increasing loan and portfolio investment yields support 6.75% 6.87% 6.91% increasing asset yields 6.61% 6.55% 6.48% ◦ 16 bps increase since Q1 2024 6.28% 6.05% 5.98% • Deposit franchise provides low cost f
Slide 13: Credit Quality – Non-Performing Assets
Credit Quality Improving – Non-Performing Credit and Assets (“NPAs”) a History of Low Charge-Offs • Nonperforming loans have steadily decreased for past Nonperforming loans, net govt. guarantees / 5 years Portfolio loans • Historically low charge-offs ◦ 0.02% Net Charge-offs / Loans 6-year average (
Slide 14: Operating Expenses Mitigated by Attractive Market Dynamics
Operating Expenses Mitigated by Attractive Market Dynamics • Alaskan operating expenses are higher than Higher Operating Expenses... mainland banks ◦ 1,300 miles from Nome to Ketchikan (1,400 miles from New York to Dallas) 4.15% 3.86% ◦ 6 branches only accessible by boat or 3.50% plane 3.06% 3.16% 2
Slide 15: Noninterest Income Supported by Multiple Business Lines
Noninterest Income Supported by Multiple Business Lines Business Line Description Operating Income 2024 ($29.0M) Treasury Management and Deposit • Includes bankcard fees and service Solutions charges on deposit accounts YTD 2023 YTD 2024 Q3-23 Q3-24 • Payables Automation • Fraud Mitigation • Account
Slide 16: Diversification has Enhanced Results Over the Long Term
Diversification has Enhanced Results Over the Long Term • Community Banking earnings have grown due to rising rates and successful expansion strategy EPS Contribution by Segment • Mortgage Lending tends to be more cyclical, but has been a strong contributor over the longer term $5.42 $4.93 $4.35 $2.
Slide 17: Appendix
a Northrim BanCorp, Inc. Appendix
Slide 18: Financial Highlights
Financial Highlights1 Balance Sheet 2020 2021 2022 2023 2023 Q3 2024 Q3 Total Assets $2,121,798 $2,724,719 $2,674,318 $2,807,497 $2,790,189 $2,963,392 Portfolio Loans 1,444,050 1,413,886 1,501,785 1,789,497 1,720,091 2,007,565 Deposits 1,824,981 2,421,631 2,387,211 2,485,055 2,427,930 2,625,567 Shar
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation (In thousands) 2020 2021 2022 2023 2023 Q3 2024 Q3 Shareholders' Equity $221,575 $237,817 $218,629 $234,718 $225,259 $260,050 Total Assets 2,121,798 2,724,719 2,672,041 2,807,497 2,790,189 2,963,392 Total Shareholders' Equity to Total Assets Ratio 10.44 % 8.73 % 8.18 % 8.36 %
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2010 2011 2012 2013 2014 2015 Shareholders' Equity $117,122 $125,435 $136,353 $144,318 $164,441 $177,214 Divided by Common Shares Outstanding 6,427 6,467 6,512 6,538 6,854 6,877 Book Value per Share $18.22 $19.40 $20.94 $22.07 $23.99 $25.77 Shareholders' Equity $117,122 $125,