Northrim BanCorp : Investor Presentation First Quarter 2023
May 10, 2023 at 03:52 pm EDT
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Investor Presentation
First Quarter 2023
Nasdaq: NRIM
1
Northrim Overview
$2.6 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 sources
Leadership to build Alaska's economy
2023 plan to open permanent branch in Nome and LPO in Homer
Nome
Legend
Scale:100mi
Branches: 19
Fairbanks
Soldotna
Juneau
Kodiak
Sitka
Anchorage HQ &
9 Branches
Ketchikan
1990
1999
2000
2007
2008
2014
2020
2021
2022
2023
Founded
Acquired Bank of
Wells Fargo
Acquired Alaska
Assets exceed
Acquired Alaska
Assets exceed
Originated approx.
Opened temporary
Opened Kodiak
America
acquisition of
First Bank & Trust
$1 Billion
Pacific Bankshares
$2 Billion
5,800 ($613M) PPP
branch in Nome
branch
Branches
National Bank
loans (2,300 to
of Alaska
new customers)
2
1st Quarter 2023 | Financial Highlights
Earnings & Profitability
Q1-23
Q4-22
Q1-22
Earnings per Share
$0.84
$1.48
$1.20
Net Income
$4.83
$8.60
$7.23
Net Interest Margin
4.22%
4.31%
3.18%
ROAA
0.76%
1.26%
1.12%
ROAE
8.73%
15.71%
12.36%
Dividends per Share
$0.60
$0.50
$0.41
Balance Sheet & Capital
Total Loans
$1,535
$1,502
$1,377
Core Loans (Total Loans excluding PPP)
$1,531
$1,495
$1,313
Total Deposits
$2,296
$2,387
$2,343
Total Capital / Risk Adjusted Assets
13.60%
13.64%
14.49%
Shareholders' equity / Total assets
8.70%
8.18%
8.60%
TCE
8.13%
7.62%
8.04%
Tangible Book Value per Share
$36.74
$35.55
$35.67
Asset Quality
NPAs / Total Assets, net govt guarantees
0.25%
0.24%
0.50%
Total Loan ACL/Portfolio Loans
0.92%
0.92%
0.82%
Net Income
$4.83 million
ROAA 0.76%
Core Loan
Growth
16.6% YoY
Portfolio Loan
Yield
6.28%
EPS
$0.84
ROAE 8.73%
NIM
4.22%
Cost of IB
Deposits
1.20%
Dollars in millions, except per share amounts
3
Investment Opportunity
Unique Banking Environment Provides Opportunities to Gain Market Share
Northrim deposit market share has increased by 36% since 2017
"Land and Expand" strategy leveraging state-leading success in PPP program to add customers
Alaska Banking Environment Drives Higher Yields on Loans and Lower Deposit Costs
Northrim loan yields averaged 5.61% over last 10 years vs 4.93% in the U.S.
Northrim interest-bearing deposits costs averaged 30 bps over last 10 years vs 57 bps in the U.S.
Increasingly diverse economy
Experienced Management Team Delivering Asset and Profitability Growth
Branch expansion strategy benefiting from competitor pull back
Adding additional team members has enhanced loan and deposit originations
Credit culture has positioned bank for potential economic downturn
Asset Sensitivity Expected to Drive Increasing Profitability
27% of loans mature or reprice in the next three months, 15% of loans mature or reprice in three to twelve months, and 17% of loans mature or reprice in one to two years
16% of earning assets reprice immediately when prime or other rate indices change
34% of deposits are non-interest bearing
Capital Management
Repurchased ~20% of outstanding shares in last 4 years
Increased dividend by 100% in last 4 years, currently at $0.60 / share / quarter
4
Steady Loan Growth Supported by Increasing Market Share
"Land and Expand" strategy building on success of PPP efforts
$1,500
$1,250
$1,000
Portfolio Loans Outstanding ($1.54 billion)
$4
$1,531
$1,495
$118
$1,296
$305
$0 $1,139
$0
$0$1,043
8%
8%
39%
Loan
$750
$955
$984
6.28%
5.96%
Composition
(3/31/2023)
28%
$500
5.74%
5.71%
$250
$0
5.47%
5.08%
5.18%
0.3%
17%
Commercial
SBA PPP
CRE owner occupied
CRE nonowner occupied
2017
2018
2019
2020
2021
2022
3/31/23
Core loans outstanding
PPP loans outstanding
Yield %
Construction
Consumer
YTD Portfolio Loan Yield:
6.28%
5
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Disclaimer
Northrim BanCorp Inc. published this content on 10 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 May 2023 19:51:09 UTC.
Northrim BanCorp, Inc. is a bank holding company. The Company is primarily engaged in the delivery of business and personal banking services through its wholly owned banking subsidiary, Northrim Bank (the Bank). It operates through two segments: Community Banking and Home Mortgage Lending. The Community Banking segment's principal business focus is the offering of loan and deposit products to business and consumer customers in its primary market areas. The Home Mortgage Lending segment's principal business focus is the origination and sale of mortgage loans for one-to-four family residential properties. The Bank also engages in retail mortgage origination services through its wholly owned subsidiary, Residential Mortgage Holding Company, LLC. Additionally, the Bank, through its wholly owned subsidiary, Northrim Funding Services (NFS), operates a factoring division in Bellevue, Washington. The Bank has about 19 branches in Anchorage, the Matanuska Valley, Soldotna, Juneau, and others.