Northrim Bancorp Inc · NASDAQ:NRIM
Northrim Bancorp — Merger or Acquisition (November 2024)
18 slides from Northrim Bancorp's merger presentation, Nov 1, 2024
Slide 1: Strategic Acquisition of Sallyport Commercial Finance
Strategic Acquisition of Sallyport Commercial Finance Investor Presentation November 1, 2024 Nasdaq: NRIM 1
Slide 2: Forward Looking Statement
Forward Looking Statement 2 This investor presentation 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
Slide 3: Overview of Sallyport Commercial Finance
Overview of Sallyport Commercial Finance 3 Select Financial Highlights1,2 85 Active Clients 22% Debts Factored CAGR Since 2015 11% Adjusted Pre-Tax ROAA $19.5M Total Net Revenue 26% Revenue Yield $7.7M Adjusted Pre-Tax Net Income Company Overview • Founded in 2014, Sallyport Commercial Finance (“Sal
Slide 4: Historical Financial Summary
$17.4 $19.1 $32.9 $46.0 $57.2 $51.3 $67.1 $67.0 $85.4 $75.6 $154 $223 $281 $446 $597 $520 $765 $1,157 $966 $874 -$500 $0 $500 $1, 00 $1, 50 $0. 0 $20. 0 $40. 0 $60. 0 $80. 0 $100.0 $120.0 $140.0 2015 2016 2017 2018 2019 2020 2021 2022 2023 LTM 9/30/24 NFE ($M) Debts Factored ($M) Adj. Pretax Net Inc
Slide 5: Historical Credit Performance
1.1% 0.5% 1.3% 2.8% 1.0% 1.6% 6.1% 2.0% (1.5%) 2.0% 30.5% 28.0% 27.3% 27.7% 26.3% 25.2% 30.7% 26.3% 26.5% 26.7% 29.4% 27.5% 26.0% 24.9% 25.3% 23.5% 24.6% 24.4% 28.0% 24.7% -6. 0% -1. 0% 4.0% 9.0% 14. 0% 19. 0% 24. 0% 29. 0% 34. 0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD 9/30/24 (Annualized)
Slide 6: Market Opportunity
$3.6 $5.7 2022 2031E Market Opportunity 6 Total Global Factoring Market ($T)1 Total Global Private ABL Market ($T)1 U.S. Small Business Market2 • The global factoring market size was worth over $3.6T in 2022 and is expected to grow to over $5.7T by 2031 • The growth in the factoring market is driven
Slide 7: Transaction Culminating a Longstanding Relationship
Transaction Culminating a Longstanding Relationship 7 • Completed a comprehensive due diligence review of all aspects of Sallyport’s business by an internal diligence team along with our advisors and consultants • Internal review of 85% of the outstanding credits • Conducted third party Quality of E
Slide 8: Strategic Rationale
Strategic Rationale 8 Financially Compelling • Significant accretion (on accrual and cash basis) to projected earnings in first full year, with significant ramp- up as business transitions to bank-funded model o Robust accretion expected to both ROAA and ROATCE • Manageable initial tangible book val
Slide 9: Transaction Overview & Pro Forma Impact
Target • Sallyport Commercial Finance, LLC Purchase Price • $47.9 million upfront and $6.0 million deferred, paid out in equal installments over three years Consideration • 100% cash Executive Management • Executive management will remain with the company in current roles One-Time Costs • Approximat
Slide 10: Summary Overview of Northrim Funding Services
Summary Overview of Northrim Funding Services 10 • Northrim Funding Services is a division of Northrim Bank that offers factoring solutions to small businesses • Started in 2004; based out of Bellevue, Washington • Higher risk-adjusted returns • Ability to reduce credit exposure to troubled Northrim
Slide 11: Overview of Northrim
a Northrim BanCorp, Inc. Overview of Northrim
Slide 12: Northrim Overview
Northrim Overview 12 $3.0 billion community bank founded in 1990 to provide financial services to Alaskan residents and businesses • Superior customer first service • Strong balance sheet • Solid net interest margin; pricing reflects quality service • Focus on asset quality • Diversified revenue sou
Slide 13: 3rd Quarter 2024 Financial Highlights
3rd Quarter 2024 | Financial Highlights 13 Earnings & Profitability Q3-24 Q2-24 Q3-23 Earnings per Share $1.57 $1.62 $1.48 Net Income (in Thousands) $8,825 $9,020 $8,374 Net Interest Margin 4.29% 4.24% 4.15% ROAA 1.22% 1.31% 1.22% ROAE 13.69% 14.84% 14.67% Dividends per Share $0.62 $0.61 $0.60 Balan
Slide 14: Shareholder Value Creation Through TBV Accretion, Dividends and Buy Backs
Shareholder Value Creation Through TBV Accretion, Dividends and Buy Backs 14 Shares outstanding (millions) 6.427 6.467 6.512 6.538 6.854 6.877 6.898 6.872 6.883 6.560 6.250 6.020 5.700 5.513 5.502 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Sept-'24 Q3 2024 Dividend $0.62 A
Slide 15: Investment Opportunity
Investment Opportunity 15 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 la
Slide 16: Appendix
a Northrim BanCorp, Inc. Appendix
Slide 17: Non-GAAP Reconciliation
17 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 18: Non-GAAP Reconciliation
18 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 $1
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