Northrim BanCorp, Inc. (NASDAQ: NRIM) today reported net profits increased 26% to $11.4 million, or $1.74 per diluted share, in 2011, compared to $9.1 million, or $1.40 per diluted share a year ago. Improving asset quality, growing other operating income, improving operating efficiencies and continuing growth in transaction deposit balances generated an increase in profitability in 2011. In the fourth quarter of 2011, Northrim’s profits increased 30% to $3.3 million, or $0.50 per diluted share compared to $2.5 million, or $0.38 per diluted share, in the third quarter of 2011 and increased 76% compared to $1.8 million, or $0.28 per diluted share, in the fourth quarter a year ago.
“We are proud that we have generated sufficient profits over the last 20 years that have allowed us to make consecutive quarterly dividend payments to our shareholders over the past 17 years,” said Marc Langland, Chairman, President and CEO of Northrim BanCorp, Inc. “We have been fortunate to operate in Alaska’s stable economic climate, and we are continuing to build on this solid foundation.”
Financial Highlights (at or for the period ended December 31, 2011, compared to September 30, 2011, and December 31, 2010)
- Diluted earnings per share in the fourth quarter of 2011 increased to $0.50, up 32% from the preceding quarter and 79% from the fourth quarter of 2010. For 2011, diluted earnings per share increased 24% to $1.74 from $1.40 in 2010.
- Northrim paid a quarterly cash dividend of $0.13 per share in the fourth quarter of 2011, compared to a quarterly cash dividend of $0.12 per share in the fourth quarter of 2010, which provides a yield of approximately 2.7% at current market share prices.
- At year end 2011, tangible book value grew 7% to $18.09 per share from a year ago.
- Average loans increased 6% during the fourth quarter of 2011 and 2% year-over-year, reflecting improving loan demand from Alaskan businesses.
- Other operating income, which includes revenues from financial services affiliates, service charges, and electronic banking contributed 26.5% to fourth quarter 2011 total revenues and 23.6% to annual 2011 revenues, compared to contributions of 23.6% to fourth quarter 2010 total revenue and 21.9% to annual 2010 revenues.
- Northrim remains well-capitalized with Tier 1 Capital to Risk Adjusted Assets at December 31, 2011 of 15.20%, compared to 15.39% at the end of the prior quarter and 14.08% a year ago. Tangible common equity to tangible assets was 10.86% at December 31, 2011, unchanged from the preceding quarter and up from 10.36% a year ago.
- Asset quality continued to improve with nonperforming assets declining to $12.5 million, or 1.16% of total assets at December 31, 2011, compared to $13.8 million, or 1.29% of total assets at the end of September 2011, and $21.8 million, or 2.07% of total assets a year ago.
- The allowance for loan losses totaled 2.56% of gross loans at December 31, 2011, unchanged from the preceding quarter, and up from 2.14% a year ago. The allowance for loan losses to nonperforming loans also increased to 224.2% at December 31, 2011, from 204.6% in the preceding quarter and 126.2% a year ago.
- Fourth quarter 2011 net interest margin (NIM) was 4.55% up 10 basis points from the third quarter of 2011 and down 2 basis points from the year ago quarter. Year-to-date 2011 NIM was 4.59% compared to 4.92% in 2010.
“Both our loan and deposit mix have benefited from the success of a number of marketing and advertising campaigns, as well as the hard work of our relationship managers,” said Joe Beedle, President and CEO of Northrim Bank. “Commercial loans are up 11% from the prior quarter and now account for 39% of total portfolio loans. Transaction accounts (excluding time deposits) are up 6% for the year in 2011 and now account for 88% of total deposits.”
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