Northrim BanCorp, Inc. (NASDAQ:NRIM) today reported net profits of $4.1 million, or $0.62 per diluted share, in the third quarter of 2012, compared to $3.1 million, or $0.48 per diluted share in the preceding quarter and $2.5 million or $0.38 per diluted share in the third quarter a year ago. Third quarter earnings were positively impacted by net recoveries of previously charged-off loans totaling $1.4 million and continuing strong revenue from Northrim’s residential mortgage affiliate. For the first nine months of 2012, Northrim earned $9.8 million, or $1.49 per diluted share, up from $8.1 million, or $1.24 per diluted share in the like period a year ago.
“Our third quarter financial results reflect the improvements in our business and in our market, with top line growth, a nice addition to revenue from our credit administration efforts and continuing strong contributions from our mortgage affiliate,” said Marc Langland, Chairman, President and CEO of Northrim BanCorp, Inc. “The profitability of our franchise continues to be reflected in steady growth in shareholders’ equity along with a 15% increase in our regular dividend payments in the third quarter of this year to $0.15 per share on a quarterly basis.”
Financial Highlights (at or for the period ended September 30, 2012, compared to June 30, 2012, and September 30, 2011)
- Diluted earnings per share in the third quarter of 2012 were $0.62, compared to $0.48 per diluted share in the preceding quarter, and $0.38 per diluted share in the quarter ended September 30, 2011.
- Third quarter 2012 total revenues that include net interest income plus other operating income increased to $14.8 million, up 4%, compared to the second quarter of 2012 and 8% versus the third quarter of 2011.
- Net interest income increased to $10.6 million for the third quarter of 2012, compared to $10.5 million in the quarter ended June 30, 2012 and $10.4 million in the quarter ended September 30, 2011. For the first nine months of 2012, net interest income was $31.4 million, compared to $31.6 million in the first nine months of 2011.
- Northrim raised its quarterly cash dividend to $0.15 per share in the third quarter of 2012, compared to $0.13 per share in the third quarter of 2011, which provides a yield of approximately 2.9% at current market share prices.
- Tangible book value was $19.43 per share at September 30, 2012, an increase of 9% from $17.82 per share a year ago.
- Other operating income, which includes revenues from financial services affiliates, service charges, and electronic banking, contributed 28.2% to third quarter 2012 total revenues, compared to contributions of 26.2% to total revenues in the preceding quarter and 24.5% to third quarter 2011 total revenues.
- Asset quality improved with nonperforming assets declining to $10.7 million, or 0.94% of total assets at September 30, 2012, compared to $12.5 million, or 1.16% of total assets at the end of June 2012 and $13.8 million, or 1.29% of total assets a year ago.
- The allowance for loan losses totaled 2.46% of gross loans at September 30, 2012, compared to 2.51% at the end of the second quarter of 2012 and 2.56% a year ago. Northrim realized a $1 million recovery on a previously charged-off loan in the third quarter ending September 30, 2012 and other recoveries totaling $500,000, compared to recoveries of $240,000 in the preceding quarter and $324,000 in the third quarter a year ago. As a result, Northrim recorded a negative loan loss provision of $1.4 million in the third quarter ending September 30, 2012, compared to loan loss provisions of $89,000 in the preceding quarter and $550,000 in the third quarter a year ago.
- Third quarter 2012 net interest margin (NIM) was 4.36%, down 15 basis points from the second quarter of 2012 and down 9 basis points from the year ago quarter.
- In the third quarter of 2012, Northrim established a $349,000 reserve for its purchased receivables assets based on a five year average of historical losses on these accounts. The purchased receivables balances are listed on the balance sheet net of this reserve.
- Northrim remains well-capitalized with Tier 1 Capital to Risk Adjusted Assets at September 30, 2012, of 15.36%, compared to 15.44% at the end of the prior quarter and 15.39% a year ago. Tangible common equity to tangible assets was 11.17% at September 30, 2012, compared to 11.47% in the preceding quarter and 10.86% a year ago.
- In June 2012, Northrim was added to the U.S. Small-Cap Russell 2000 ® Index after the Russell Investment Group reconstituted its comprehensive set of U.S. and global equity indexes in June of this year. Membership in the Russell 2000, which remains in place for one year, is based on membership in the broad-market Russell 3000 ® Index.
“Our portfolio loans grew 7% year-over-year due to the efforts of our expanded lending team,” said Joe Beedle, President and CEO of Northrim Bank. “We are seeing success in bringing new customers to Northrim. Our focus is on businesses operating in some of Alaska’s strongest sectors, including natural resources, health care, and Alaska Native American corporations.”