|
| |
| Contact: | Joe Schierhorn, Chief Operating Officer, President, and CEO of Northrim Bank |
| | (907) 261-3308 |
| | Latosha Frye, Chief Financial Officer |
| | (907) 261-8763 |
Northrim BanCorp Earns $3.4 Million, or $0.48 per Diluted Share in 1Q16
ANCHORAGE, Alaska - May 3, 2016 - Northrim BanCorp, Inc. (NASDAQ:NRIM) (“Northrim” or the "Company") today reported net income in the first quarter of 2016 was $3.4 million, or $0.48 per diluted share, compared to $4.1 million, or $0.59 per diluted share in the fourth quarter of 2015 and $3.6 million, or $0.51 per diluted share, in the first quarter of 2015.
“Our first quarter results primarily reflect the seasonal trends in the Alaska economy,” said Joseph Beedle, President and CEO. “Moderate year-over-year loan and deposit growth, a stable net interest margin, and a profitable quarter for mortgage banking despite a decrease in refinance activity contributed to net income in the first quarter of 2016. The acquisitions we made in 2014 continue to contribute to earnings and enhance our Alaska banking franchise.”
Financial Highlights
|
| | | | | | | | | | | | | | | |
| | Three Months Ended |
| (Dollars in thousands, except per share data) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 |
| Total assets |
| $1,500,199 |
|
| $1,499,492 |
|
| $1,539,253 |
|
| $1,500,331 |
|
| $1,447,984 |
|
| Total portfolio loans |
| $970,517 |
|
| $980,787 |
|
| $973,680 |
|
| $974,849 |
|
| $960,564 |
|
| Average portfolio loans |
| $980,117 |
|
| $979,789 |
|
| $982,301 |
|
| $966,952 |
|
| $946,074 |
|
| Total deposits |
| $1,246,968 |
|
| $1,240,792 |
|
| $1,264,919 |
|
| $1,238,717 |
|
| $1,191,013 |
|
| Average deposits |
| $1,236,555 |
|
| $1,291,133 |
|
| $1,230,243 |
|
| $1,193,362 |
|
| $1,161,496 |
|
| Total shareholders' equity |
| $180,398 |
|
| $177,214 |
|
| $175,336 |
|
| $171,082 |
|
| $167,384 |
|
| Net income attributable to Northrim BanCorp |
| $3,376 |
|
| $4,106 |
|
| $5,335 |
|
| $4,781 |
|
| $3,561 |
|
| Diluted earnings per share |
| $0.48 |
|
| $0.59 |
|
| $0.77 |
|
| $0.69 |
|
| $0.51 |
|
| Return on average assets | 0.91 | % | 1.05 | % | 1.42 | % | 1.33 | % | 1.01 | % |
| Return on average shareholders' equity | 7.61 | % | 9.37 | % | 12.37 | % | 11.46 | % | 8.65 | % |
Tax equivalent net interest margin* | 4.29 | % | 4.10 | % | 4.38 | % | 4.44 | % | 4.39 | % |
Efficiency ratio* | 74.47 | % | 74.23 | % | 66.93 | % | 68.64 | % | 76.09 | % |
Tangible common equity/tangible assets* | 10.61 | % | 10.40 | % | 10.00 | % | 9.97 | % | 10.07 | % |
Tangible book value per share* |
| $22.78 |
|
| $22.31 |
|
| $22.09 |
|
| $21.47 |
|
| $20.92 |
|
| Dividends per share |
| $0.19 |
|
| $0.19 |
|
| $0.19 |
|
| $0.18 |
|
| $0.18 |
|
* References to tax equivalent net interest margin, the efficiency ratio (exclusive of intangible asset amortization), tangible book value per share, tangible common equity and tangible assets (all of which exclude intangible assets) represent non-GAAP financial measures. Management has presented these non-GAAP measurements in this earnings release because it believes these measures are useful to investors. See page 14 of this release for reconciliations of these measures to GAAP financial measures.
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
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| |
| • | Northrim Bancorp was recognized as one of the best-performing community banks of 2015 with assets between $1 billion and $10 billion, for the second consecutive year, by S&P Global Market Intelligence. |
| |
| • | In the first quarter of 2016, net income attributable to Northrim was $3.4 million, or $0.48 per diluted share, with net income from home mortgage lending operations contributing $588,000 or $0.08 per diluted share to profits. In the first quarter of 2015, net income attributable to Northrim was $3.6 million or $0.51 per diluted share, boosted by $1.3 million or $0.19 per diluted share in net income from home mortgage lending operations. |
| |
| • | Net interest income increased 4% to $14.2 million in the first quarter of 2016 from $13.6 million a year ago. |
| |
| • | Tax equivalent net interest margin* was 4.29% in the first quarter of 2016 compared to 4.39% in the first quarter a year ago and 4.10% in the fourth quarter of 2015. |
| |
| • | Total revenues for the first quarter of 2016, which includes net interest income plus other operating income, decreased 4% to $23.3 million from $24.2 million in the first quarter of 2015, mainly as a result of a higher contribution from home mortgage lending operations in 2015 due to greater refinance activity. |
| |
| • | Northrim paid a quarterly cash dividend of $0.19 per share in March 2016, up from the $0.18 per share dividend paid in the first quarter a year ago. The dividend provides an annual yield of approximately 2.95% at current market share prices. |
| |
| • | Tangible book value* increased to $22.78 per share at March 31, 2016, compared to $22.31 at December 31, 2015 and $20.92 per share a year ago. This increase in tangible book value, combined with a total dividend of $0.75 over the past year, resulted in an intrinsic return of 12.48% for the past twelve month period. Tangible common equity to tangible assets* was 10.61% at March 31, 2016, compared to 10.40% December 31, 2015, and 10.07% one year ago. |
| |
| • | Northrim remains well-capitalized with Tier 1 Capital to Risk Adjusted Assets of 13.66% at March 31, 2016, compared to 13.34% at December 31, 2015, and 12.71% a year ago. |
Alaska Economic Update
At the three economic summits Northrim hosted in April, Mark Edwards, Northrim Bank’s Senior Economist, provided updates on the state economy and gave business owners tips on weathering the downturn in oil prices and other economic shocks. “The persistence of low oil prices has created some uncertainty in the Alaska economy, and the Department of Labor has predicted a 0.7% (2,500) eventual job loss by the end of 2016. Nevertheless, employment, population and real estate markets have remained stable,” said Edwards. “While the oil industry and state and municipal government spending are set for some contraction, other economic sectors will experience moderate growth in the next several years, including military expansion, tourism and health care. We are also seeing business owners exercising discipline, building reserves, not over-expanding and preparing to constructively respond to a slowing economy. Our state government will need to utilize financial reserves and earnings from its $53 billion savings reserves as well as implement broad based taxes and reduce spending. Taken together, all of these factors give us reasonable consensus for now that our financial sector will remain relatively stable.”
"Alaskans received welcome news from the Air Force with the April 4th announcement of the final decision to send two squadrons of F-35A fighter aircraft to Eielson Air Force Base near Fairbanks” said Beedle. The decision will bring 54 new stealth strike fighters to Alaska, accompanied by an estimated 3,000 people connected to the F-35 program, including airmen and contractors. Eielson has “the largest airspace in the Air Force,” a “strategically important location with a world-class training environment” and easy access to the Joint Pacific Alaska Range Complex -- all of which, combined, “ensures realistic combat training,” said Deborah Lee James, Secretary of the Air Force. The new F-35As are scheduled to arrive in Fairbanks in 2020, and construction at the base should begin in fiscal year 2017. The Air Force estimated that homing two new F-35A squadrons at Eielson would boost the total base population to 7,751 by adding 2,765 people, including 1,076 active-duty military members, 487 civilian and contractor employees, and 1,202 military dependents. Currently, just short of 2,000 active-duty military personnel are stationed at the base. The Air Force estimates the construction will cost $453 million.
“News from the North Slope is less encouraging,” Edwards noted. Two oil drilling services firms announced lay-offs of a total of 113 employees in April. Beset by low oil prices and reduced income, the oil and gas industry in Alaska shed about 1,000 jobs, or 7% of the industry’s workforce in the state in 2015. Unemployment benefits are up sharply.
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
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The number of former industry workers receiving the benefits rose to 1,209 in February, up from 545 the year before, according to the Alaska Department of Labor. Additionally, preliminary information from the Department of Labor indicates that this trend has continued through the first quarter of this year with a total decrease of 1,900 jobs in the oil and gas sector as compared to the same period last year.
Northrim Bank sponsors economic summits in Anchorage, Fairbanks and Juneau in April of every year, with more than 500 people attending in 2016: the economic presentation from Mark Edwards and the investment update from Pacific Wealth Management, a Northrim affiliate, are available at www.northrim.com. In addition, Northrim hosts the Alaskanomics blog to provide news, analysis, and commentary on Alaska’s economy. Join the conversation at Alaskanomics.com or for more information on the Alaska economy, visit: www.northrim.com and click on the “About Northrim” link and then click "Alaska's Economy". Information from our website is not incorporated into, and does not form a part of this press release.
Review of Income Statement
Consolidated Income Statement
Net interest income decreased 2% to $14.2 million in the first quarter of 2016 as compared to $14.4 million in the previous quarter primarily due to lower net interest income from loans held for sale as a result of the seasonality of the mortgage lending cycle in the Alaska market. Net interest income increased 4% in the current quarter from $13.6 million in the first quarter a year ago, mainly reflecting growth in portfolio loans.
Net Interest Income/Net Interest Margin
First quarter 2016 net interest margin ("NIM") and tax equivalent NIM*, improved to 4.23% and 4.29% from 4.05% and 4.10%, respectively, in the preceding quarter which was adversely impacted by higher cash and investment balances that decreased NIM by 20 basis points last quarter. In addition, winter in Alaska creates seasonal reduction in both construction and mortgage lending, while average deposits generally peak at the end of the year and begin to decrease in the first quarter. The NIM and tax equivalent NIM* declined in the current quarter from 4.34% and 4.39%, respectively, in the first quarter a year ago. Northrim's NIM, which is primarily comprised of activities in the community banking segment, remained well above the average for the 334 banks in the SNL U.S. Bank index of 2.78% as of the end of 2015. “We are continuing to forecast tax equivalent NIM* stabilizing in the 4.20% to 4.30% range, regardless of interim changes in Fed Funds rates. NIM should benefit, if interest rates rise sharply or the yield curve steepens,” said Joe Schierhorn, Northrim Bank’s CEO, President, and Chief Operating Officer.
Provision for Loan Losses
The provision for loan losses increased to $703,000 in the first quarter of 2016 from $376,000 in the preceding quarter and $326,000 in the first quarter of 2015. The year-over-year increase is primarily due to an increase in adversely classified loans. The increase compared to the prior quarter is due to the Company's assessment of current economic conditions in our market.
Other Operating Income
In addition to home mortgage lending, Northrim has interests in other businesses that complement its core community banking activities. It provides financial services to businesses and individuals through these interests, including purchased receivables financing, employee benefit plans, and wealth management.
Other operating income on a consolidated basis decreased 10% to $9.1 million in the first quarter of 2016 from $10.1 million in the preceding quarter and decreased 14% from $10.5 million in the year ago quarter. Lower contribution from our home mortgage segment in the current quarter was the primary reason for the decrease in other operating income as compared to both prior periods, however this decrease in mortgage banking income was partially offset by growth in employee benefit plan income during the current quarter as compared to the first quarter of 2015.
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
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Other Operating Expenses
Operating expenses decreased 5% to $17.4 million in the first quarter of 2016 compared to $18.2 million in the fourth quarter of 2015 and declined 6% from $18.5 million in the first quarter of 2015. The change in the fair value of the earn-out liability associated with the acquisition of Residential Mortgage Holding Company, LLC ("RML") primarily accounted for the decrease in other operating expense in both periods, however this decrease was partially offset by increases in salaries and other personnel expenses during the quarter as compared to prior periods. Excluding the change in the fair value of the earn-out liability, other operating expenses in the first quarter of 2016 increased 1% as compared to the fourth quarter of 2015 and increased 2% as compared to the first quarter of 2015. Operating expenses in the community banking segment, excluding the change in the fair value of the earn-out liability, increased 3% in the first quarter of 2016 as compared to the previous quarter and increased 4% compared to the same quarter a year ago. These increases were mainly the result of increases in salaries and personnel expenses, including increases in medical claims costs. The Company is self-insured, but maintains a stop loss policy to limit exposure to individual claims in excess of $140,000.
Community Banking
|
| | | | | | | | | | | | | | | |
| | Three Months Ended |
| (Dollars in thousands, except per share data) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 |
| Net interest income |
| $13,933 |
|
| $14,008 |
|
| $14,425 |
|
| $13,984 |
|
| $13,516 |
|
| Provision for loan losses | 703 |
| 376 |
| 676 |
| 376 |
| 326 |
|
| Other operating income | 3,409 |
| 3,794 |
| 4,269 |
| 3,704 |
| 3,229 |
|
| Change in fair value, RML earn-out liability | 130 |
| 1,225 |
| 780 |
| 587 |
| 1,502 |
|
| Other operating expense | 12,306 |
| 11,965 |
| 11,853 |
| 11,430 |
| 11,822 |
|
| Income before provision for income taxes | 4,203 |
| 4,236 |
| 5,385 |
| 5,295 |
| 3,095 |
|
| Provision for income taxes | 1,285 |
| 985 |
| 1,513 |
| 1,722 |
| 804 |
|
| Net income | 2,918 |
| 3,251 |
| 3,872 |
| 3,573 |
| 2,291 |
|
| Less: net income attributable to the noncontrolling interest | 130 |
| 120 |
| 197 |
| 162 |
| 72 |
|
| Net income attributable to Northrim BanCorp |
| $2,788 |
|
| $3,131 |
|
| $3,675 |
|
| $3,411 |
|
| $2,219 |
|
| Average diluted shares | 6,964,707 |
| 6,971,828 |
| 6,952,209 |
| 6,941,671 |
| 6,930,873 |
|
| Diluted earnings per share |
| $0.40 |
|
| $0.45 |
|
| $0.53 |
|
| $0.49 |
|
| $0.32 |
|
Net income attributable to Northrim for the community banking segment in the first quarter of 2016 was $2.8 million compared to $2.2 million in the year ago quarter and $3.1 million in the fourth quarter of 2015. Net income attributable to Northrim for the community banking segment increased year over year mainly as a result of the $1.4 million decline in earn-out payments in 2016 compared to the same period a year ago. “RML continues to outperform our original projections made when we purchased the business in December 2014. This quarter, they still exceeded our original estimates, but to a lesser degree than we have seen in the past 5 quarters,” said Latosha Frye, Chief Financial Officer. The earn-out payments related to the acquisition of RML are an obligation of Northrim Bank and are therefore included in the community banking segment results. “RML continues to generate solid mortgage production and contribute to profitability. This acquisition has been positive for us to date."
Net income attributable to Northrim for the community banking segment decreased compared to the previous quarter primarily due to increases in the provision for loan losses, other operating expenses, and the provision for income taxes and a decrease in other operating income primarily resulting from a decrease in gains on the sale of securities and a decrease in bankcard fees mainly due to the seasonality of Alaska's economy. These changes were partially offset by a decrease in the expense associated with the change in the fair value of the earn-out liability.
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
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Home Mortgage Lending Operations
|
| | | | | | | | | | | | | | | |
| | Three Months Ended |
| (Dollars in thousands, except per share data) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 |
| Net interest income |
| $241 |
|
| $392 |
|
| $257 |
|
| $211 |
|
| $116 |
|
| Provision for loan losses | — |
| — |
| — |
| — |
| — |
|
| Other operating income | 5,696 |
| 6,310 |
| 8,138 |
| 7,859 |
| 7,306 |
|
| Other operating expense | 4,935 |
| 5,039 |
| 5,570 |
| 5,736 |
| 5,137 |
|
| Income before provision for income taxes | 1,002 |
| 1,663 |
| 2,825 |
| 2,334 |
| 2,285 |
|
| Provision for income taxes | 414 |
| 688 |
| 1,165 |
| 964 |
| 943 |
|
| Net income attributable to Northrim BanCorp |
| $588 |
|
| $975 |
|
| $1,660 |
|
| $1,370 |
|
| $1,342 |
|
| | | | | | |
| Average diluted shares | 6,964,707 |
| 6,971,828 |
| 6,952,209 |
| 6,941,671 |
| 6,930,873 |
|
| Diluted earnings per share |
| $0.08 |
|
| $0.14 |
|
| $0.24 |
|
| $0.20 |
|
| $0.19 |
|
| | | | | | |
| Mortgage commitments |
| $83,823 |
|
| $71,280 |
|
| $74,637 |
|
| $87,460 |
|
| $81,214 |
|
| Mortgage loans funded for sale |
| $133,050 |
|
| $159,590 |
|
| $201,402 |
|
| $216,450 |
|
| $176,373 |
|
| Mortgage loan refinances to total fundings | 16 | % | 12 | % | 10 | % | 20 | % | 39 | % |
| | | | | | |
| Net realized gains on mortgage loans sold |
| $4,777 |
|
| $5,216 |
|
| $7,496 |
|
| $7,532 |
|
| $6,154 |
|
| Change in fair value of mortgage loan commitments, net | 48 |
| (57 | ) | (5 | ) | (140 | ) | 818 |
|
| Total production revenue | 4,825 |
| 5,159 |
| 7,491 |
| 7,392 |
| 6,972 |
|
| Mortgage servicing revenue, net | 701 |
| 820 |
| 308 |
| 30 |
| 23 |
|
| Other mortgage banking revenue | 170 |
| 331 |
| 339 |
| 437 |
| 311 |
|
| Total mortgage banking income |
| $5,696 |
|
| $6,310 |
|
| $8,138 |
|
| $7,859 |
|
| $7,306 |
|
“Last year’s first quarter mortgage lending volumes were boosted by strong refinancing activity, which accounted for 39% of total loans funded in that quarter. In this year’s first quarter production, refinancing activity only accounted for 16% of loans funded,” said Schierhorn. “We are continuing to see demand for mortgages in most Alaska communities, with commitments for new mortgages growing 6% from the preceding quarter, but down 7% from last year’s levels.
In the fourth quarter of 2015, Northrim began servicing the loans RML originates for the Alaska Housing Finance Corporation, which account for approximately 20% of loans funded. Servicing income, which includes origination of new mortgage servicing rights, contributed $701,000 to first quarter 2016 mortgage banking income and $820,000 to fourth quarter 2015 mortgage banking income. “The servicing portfolio is building momentum and is expected to continue to grow each quarter.” Schierhorn continued. “In addition, we are beginning to convert RML’s mortgage borrowers to Northrim banking customers, and are gaining traction with expanding our relationships with customers on both sides of the business.”
Balance Sheet Review
Northrim’s assets increased 4% to $1.50 billion at March 31, 2016, compared to $1.45 billion a year ago, which mainly reflects continued loan growth during the year. Total assets were unchanged at the end of the first quarter of 2016 compared to the end of the fourth quarter of 2015.
Average balances of interest bearing deposits in other banks decreased by 62% in the first quarter to $38.0 million from $101.2 million in the fourth quarter, mainly as a result of seasonality combined with the withdrawal of a single large short-term deposit in December 2015.
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
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Investment securities increased 2% to $299.1 million from $293.8 million the preceding quarter and 15% from $260.3 million a year ago. The investment portfolio generated an average net tax equivalent yield of 1.49% for the first quarter of 2016 and the average estimated duration of the investment portfolio was 1.39 years at March 31, 2016.
At March 31, 2016, loans held for sale declined to $38.9 million, a 23% reduction since the end of the fourth quarter of 2015 and a 37% decrease from the end of the first quarter of 2015, as a result of more moderate mortgage loan production in the first quarter of 2016 compared to these prior periods.
Portfolio loans were down 1% at March 31, 2016 compared to the end of the previous quarter end but grew 1% from the end of the first quarter of 2015 to $970.5 million. Average portfolio loans in the first quarter of 2016 were consistent with the previous quarter and increased 4% from the end of the first quarter of 2015. “One large commercial real estate loan was paid off at the end of the first quarter of 2016 that impacted first quarter loan growth, which when combined with normal seasonality primarily accounts for the lack of growth in the portfolio in the first quarter of 2016 compared to the previous quarter. Borrowers for construction and land development loans generally accelerate demand in the spring and summer. Residential housing construction loans remained consistent at approximately 4% of portfolio loans during the past year,” Schierhorn noted.
Northrim’s deposit base continues to be 100% Alaska-based, and is primarily made up of low-cost transaction accounts. Balances in transaction accounts at March 31, 2016, represented 89% of total deposits compared to 88% a year ago. At March 31, 2016, total deposits were $1.25 billion, up 5% from $1.19 billion a year ago and up slightly from $1.24 billion at the end of the immediate prior quarter. Year-over-year, average non-interest bearing deposits grew 11% and average interest-bearing deposits increased 4% for the first quarter of 2016.
Other borrowings increased to $7.7 million at March 31, 2016 from $2.1 million at December 31, 2015, and decreased from $22.6 million at March 31, 2015. The decrease in other borrowings from the end of the first quarter of 2015 primarily reflects the increased use of Northrim’s internal liquidity to fund mortgage loans held for sale instead of short term borrowing facilities from outside providers.
Shareholders’ equity increased 8% to $180.4 million, or $26.23 per share, at March 31, 2016, compared to $167.4 million, or $24.42 per share, a year ago. Tangible book value per share* was $22.78 at March 31, 2016, compared to $20.92 per share a year ago and $22.31 per share at December 31, 2015. Northrim remains well-capitalized with Tier 1 Capital to Risk Adjusted Assets of 13.66% at March 31, 2016.
Asset Quality
“While nonperforming assets remain low, we had an increase in net charge-offs unrelated to the oil sector,” said Schierhorn. The following table details loan charge-offs, by industry:
|
| | | | | | | | | |
| (Dollars in thousands) | Three Months Ended |
| | March 31, 2016 | December 31, 2015 | March 31, 2015 |
| Charge-offs: | | | |
| Agriculture, forestry, fishing and hunting |
| $493 |
|
| $65 |
|
| $— |
|
| Construction | 218 |
| — |
| — |
|
| Transportation and warehousing | 22 |
| — |
| — |
|
| Other services | — |
| 54 |
| — |
|
| Accommodation and food services | — |
| 23 |
| 100 |
|
| Health care and social assistance | — |
| — |
| 7 |
|
| Consumer | 1 |
| 96 |
| 81 |
|
| Total charge-offs |
| $734 |
|
| $238 |
|
| $188 |
|
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
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At March 31, 2016, nonperforming assets, net of government guarantees decreased to 0.29% of total assets from 0.35% at the end of the preceding quarter, and non-performing loans were stable at 0.17% of portfolio loans from the preceding quarter and down from 0.35% a year ago.
Performing restructured loans that were not included in nonaccrual loans at the end of the first quarter of 2016 improved to $11.6 million from $11.8 million at the end of the previous quarter but grew from $5.8 million at the end of the first quarter a year ago, primarily due to a single lending relationship for a medical business that was restructured in the fourth quarter of 2015. “The maturity of these loans was extended to allow the amortization schedules for the loans to more closely mirror the cash flow of this business,” Frye noted. Borrowers who are in financial difficulty and who have been granted concessions that may include interest rate reductions, term extensions, or payment alterations are categorized as restructured loans. “We present restructured loans that are performing separately from those that are classified as nonaccrual to provide more information on this category of loans and to differentiate between accruing performing and nonperforming restructured loans,” noted Frye.
Other real estate owned, net of government guarantees declined to $2.7 million at the end of the first quarter of 2016, compared to $3.3 million a year ago and from $3.1 million in the preceding quarter.
The allowance for loan losses was 1.87% of portfolio loans at March 31, 2016, compared to 1.85% at the end of 2015 and 1.76% at the end of the first quarter of 2015. Adversely classified loans were 4% of portfolio loans at the end of the first quarter of 2016 compared to 3% at the end of 2015 and less than 1% at the end of the first quarter of 2015. Adversely classified loans are loans that Northrim has classified as substandard, doubtful, and loss, net of government guarantees. There have been no downgrades in 2015 or the first quarter of 2016 related to the recent decrease in oil prices. As of March 31, 2016, $32.5 million, or 85% of adversely classified loans net of government guarantees are attributable to four relationships in the following sectors; one retail commercial business, one commercial real estate construction project, one retail medical business, and one residential land development project.
Northrim estimates that $44.1 million, or approximately 5% of portfolio loans as of March 31, 2016, have direct exposure to the oil and gas industry in Alaska, and none of these loans are adversely classified. Northrim has an additional $52.9 in unfunded commitments to companies with direct exposure to the oil and gas industry in Alaska. “We currently have no loans to oil producers or drilling and exploration companies," said Frye. "Our direct exposure to the oil and gas sector is to oilfield service companies and other companies that we have identified as significantly reliant upon activity in Alaska related to the oil and gas industry, such as lodging, equipment rental, transportation and other logistics services specific to this industry," stated Frye.
About Northrim BanCorp
Northrim BanCorp, Inc. is the parent company of Northrim Bank, an Alaska-based community bank with 14 branches in Anchorage, the Matanuska Valley, Juneau, Fairbanks, Ketchikan, and Sitka serving 90% of Alaska’s population; and an asset based lending division in Washington; and a wholly-owned mortgage brokerage company, Residential Mortgage Holding Company, LLC. The Bank differentiates itself with its detailed knowledge of Alaska’s economy and its “Customer First Service” philosophy. Affiliated companies include Northrim Benefits Group, LLC; and Pacific Wealth Advisors, LLC.
www.northrim.com
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
8 of 16
Forward-Looking Statement
This release may contain “forward-looking statements” as that term is defined for purposes of Section 21E of the Securities and Exchange Act. These statements are, in effect, management’s attempt to predict future events, and thus are subject to various risks and uncertainties. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. All statements, other than statements of historical fact, regarding our financial position, business strategy and management’s plans and objectives for future operations are forward-looking statements. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” and “intend” and words or phrases of similar meaning, as they relate to Northrim and its management are intended to help identify forward-looking statements. Although we believe that management’s expectations as reflected in forward-looking statements are reasonable, we cannot assure readers that those expectations will prove to be correct. Forward looking statements are subject to various risks and uncertainties that may cause our actual results to differ materially and adversely from our expectations as indicated in the forward-looking statements. These risks and uncertainties include: our ability to maintain strong asset quality and to maintain or expand our market share or net interest margins; and our ability to execute our business plan. Further, actual results may be affected by our ability to compete on price and other factors with other financial institutions; customer acceptance of new products and services; the regulatory environment in which we operate; and general trends in the local, regional and national banking industry and economy as those factors relate to our cost of funds and return on assets. In addition, there are risks inherent in the banking industry relating to collectability of loans and changes in interest rates. Many of these risks, as well as other risks that may have a material adverse impact on our operations and business, are identified in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and from time to time are disclosed in our other filings with the SEC. However, you should be aware that these factors are not an exhaustive list, and you should not assume these are the only factors that may cause our actual results to differ from our expectations. These forward-looking statements are made only as of the date of this release, and Northrim does not undertake any obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this release.
References:
http://www.adn.com/article/20160404/air-force-oks-f-35-fighter-jet-squadrons-eielson-air-force-base
http://www.adn.com/article/20160404/two-alaska-oil-field-support-companies-announce-layoffs
http://aedcweb.com/wp-content/uploads/2016/04/AEDC-Employment-Report-Second-Edition-Sponsored-by-FNBA.pdf
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
9 of 16
|
| | | | | | | | | | | | | |
| Income Statement | | | | | |
| (Dollars in thousands, except per share data) | Three Months Ended |
| (Unaudited) | March 31, | December 31, | Three Month | March 31, | One Year |
| | 2016 | 2015 | % Change | 2015 | % Change |
| Interest Income: | | | | | |
| Interest and fees on loans |
| $13,778 |
|
| $14,080 |
| -2 | % |
| $13,467 |
| 2 | % |
| Interest on portfolio investments | 993 |
| 912 |
| 9 | % | 908 |
| 9 | % |
| Interest on deposits in banks | 47 |
| 71 |
| -34 | % | 11 |
| 327 | % |
| Total interest income | 14,818 |
| 15,063 |
| -2 | % | 14,386 |
| 3 | % |
| Interest Expense: | | | | | |
| Interest expense on deposits | 471 |
| 479 |
| -2 | % | 477 |
| -1 | % |
| Interest expense on borrowings | 173 |
| 184 |
| -6 | % | 277 |
| -38 | % |
| Total interest expense | 644 |
| 663 |
| -3 | % | 754 |
| -15 | % |
| Net interest income | 14,174 |
| 14,400 |
| -2 | % | 13,632 |
| 4 | % |
| | | | | | |
| Provision for loan losses | 703 |
| 376 |
| 87 | % | 326 |
| 116 | % |
| Net interest income after provision for loan losses | 13,471 |
| 14,024 |
| -4 | % | 13,306 |
| 1 | % |
| | | | | | |
| Other Operating Income: | | | | | |
| Mortgage banking income | 5,696 |
| 6,310 |
| -10 | % | 7,306 |
| -22 | % |
| Employee benefit plan income | 964 |
| 939 |
| 3 | % | 777 |
| 24 | % |
| Bankcard fees | 633 |
| 724 |
| -13 | % | 589 |
| 7 | % |
| Purchased receivable income | 534 |
| 549 |
| -3 | % | 589 |
| -9 | % |
| Service charges on deposit accounts | 499 |
| 486 |
| 3 | % | 490 |
| 2 | % |
| Gain (loss) on sale of securities | (23 | ) | 137 |
| -117 | % | 114 |
| -120 | % |
| Other income | 802 |
| 959 |
| -16 | % | 670 |
| 20 | % |
| Total other operating income | 9,105 |
| 10,104 |
| -10 | % | 10,535 |
| -14 | % |
| | | | | | |
| Other Operating Expense: | | | | | |
| Salaries and other personnel expense | 11,251 |
| 10,816 |
| 4 | % | 10,550 |
| 7 | % |
| Occupancy expense | 1,608 |
| 1,612 |
| 0 | % | 1,604 |
| 0 | % |
| Data processing expense | 1,084 |
| 1,070 |
| 1 | % | 1,096 |
| -1 | % |
| Marketing expense | 738 |
| 904 |
| -18 | % | 617 |
| 20 | % |
| Professional and outside services | 707 |
| 796 |
| -11 | % | 751 |
| -6 | % |
| Insurance expense | 315 |
| 264 |
| 19 | % | 324 |
| -3 | % |
| Change in fair value, RML earn-out liability | 130 |
| 1,225 |
| -89 | % | 1,502 |
| -91 | % |
| Intangible asset amortization expense | 35 |
| 40 |
| -13 | % | 73 |
| -52 | % |
| OREO (income) expense, net rental income and gains on sale | (26 | ) | (138 | ) | -81 | % | 297 |
| -109 | % |
| Other operating expense | 1,529 |
| 1,640 |
| -7 | % | 1,647 |
| -7 | % |
| Total other operating expense | 17,371 |
| 18,229 |
| -5 | % | 18,461 |
| -6 | % |
| | | | | | |
| Income before provision for income taxes | 5,205 |
| 5,899 |
| -12 | % | 5,380 |
| -3 | % |
| Provision for income taxes | 1,699 |
| 1,673 |
| 2 | % | 1,747 |
| -3 | % |
| Net income | 3,506 |
| 4,226 |
| -17 | % | 3,633 |
| -3 | % |
| Less: Net income attributable to the noncontrolling interest | 130 |
| 120 |
| 8 | % | 72 |
| 81 | % |
| Net income attributable to Northrim BanCorp |
| $3,376 |
|
| $4,106 |
| -18 | % |
| $3,561 |
| -5 | % |
| | | | | | |
| Basic EPS |
| $0.49 |
|
| $0.60 |
| -18 | % |
| $0.52 |
| -6 | % |
| Diluted EPS |
| $0.48 |
|
| $0.59 |
| -19 | % |
| $0.51 |
| -6 | % |
| Average basic shares | 6,877,140 |
| 6,872,249 |
| 0 | % | 6,854,189 |
| 0 | % |
| Average diluted shares | 6,964,707 |
| 6,971,828 |
| 0 | % | 6,930,873 |
| 0 | % |
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
10 of 16
|
| | | | | | | | | | | | | |
| Balance Sheet | | | | | |
| (Dollars in thousands) | | | | | |
| (Unaudited) | March 31, | December 31, | Three Month | March 31, | One Year |
| | 2016 | 2015 | % Change | 2015 | % Change |
| | | | | | |
| Assets: | | | | | |
| Cash and due from banks |
| $23,361 |
|
| $30,989 |
| -25 | % |
| $32,957 |
| -29 | % |
| Interest bearing deposits in other banks | 55,914 |
| 27,684 |
| 102 | % | 13,115 |
| 326 | % |
| Portfolio investments | 299,139 |
| 293,832 |
| 2 | % | 260,338 |
| 15 | % |
| | | | | | |
| Loans held for sale | 38,907 |
| 50,553 |
| -23 | % | 61,873 |
| -37 | % |
| | | | | | |
| Portfolio loans | 970,517 |
| 980,787 |
| -1 | % | 960,564 |
| 1 | % |
| Allowance for loan losses | (18,183 | ) | (18,153 | ) | 0 | % | (16,947 | ) | 7 | % |
| Net portfolio loans | 952,334 |
| 962,634 |
| -1 | % | 943,617 |
| 1 | % |
| Purchased receivables, net | 11,707 |
| 13,326 |
| -12 | % | 15,332 |
| -24 | % |
| Other real estate owned, net | 2,702 |
| 3,053 |
| -11 | % | 4,209 |
| -36 | % |
| Premises and equipment, net | 40,348 |
| 40,217 |
| 0 | % | 36,449 |
| 11 | % |
| Goodwill and intangible assets | 23,741 |
| 23,776 |
| 0 | % | 23,962 |
| -1 | % |
| Other assets | 52,046 |
| 53,428 |
| -3 | % | 56,132 |
| -7 | % |
| Total assets | $1,500,199 | $1,499,492 | 0 | % | $1,447,984 | 4 | % |
| | | | | | |
| Liabilities: | | | | | |
| Demand deposits |
| $442,842 |
|
| $430,191 |
| 3 | % |
| $410,464 |
| 8 | % |
| Interest-bearing demand | 195,896 |
| 209,291 |
| -6 | % | 179,124 |
| 9 | % |
| Savings deposits | 230,834 |
| 227,969 |
| 1 | % | 226,828 |
| 2 | % |
| Money market deposits | 240,675 |
| 236,675 |
| 2 | % | 227,345 |
| 6 | % |
| Time deposits | 136,721 |
| 136,666 |
| 0 | % | 147,252 |
| -7 | % |
| Total deposits | 1,246,968 |
| 1,240,792 |
| 0 | % | 1,191,013 |
| 5 | % |
| Securities sold under repurchase agreements | 25,946 |
| 31,420 |
| -17 | % | 17,820 |
| 46 | % |
| Other borrowings | 7,727 |
| 2,120 |
| 264 | % | 22,569 |
| -66 | % |
| Junior subordinated debentures | 18,558 |
| 18,558 |
| — | % | 18,558 |
| — | % |
| Other liabilities | 20,602 |
| 29,388 |
| -30 | % | 30,640 |
| -33 | % |
| Total liabilities | 1,319,801 |
| 1,322,278 |
| 0 | % | 1,280,600 |
| 3 | % |
| | | | | | |
| Shareholders' Equity: | | | | | |
| Northrim BanCorp shareholders' equity | 180,125 |
| 177,035 |
| 2 | % | 167,257 |
| 8 | % |
| Noncontrolling interest | 273 |
| 179 |
| 53 | % | 127 |
| 115 | % |
| Total shareholders' equity | 180,398 |
| 177,214 |
| 2 | % | 167,384 |
| 8 | % |
| Total liabilities and shareholders' equity |
| $1,500,199 |
|
| $1,499,492 |
| 0 | % |
| $1,447,984 |
| 4 | % |
| | | | | | |
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
11 of 16
Additional Financial Information
(Dollars in thousands)
(Unaudited)
|
| | | | | | | | | | | | | | | | | |
| Composition of Portfolio Investments | | | | | | | |
| | March 31, 2016 | | December 31, 2015 | | March 31, 2015 |
| | Balance | % of total | | Balance | % of total | | Balance | % of total |
| U.S. Treasury securities |
| $35,264 |
| 11.8 | % | |
| $35,008 |
| 11.9 | % | |
| $15,151 |
| 5.8 | % |
| U.S. Agency securities | 205,405 |
| 68.7 | % | | 202,428 |
| 68.9 | % | | 185,105 |
| 71.1 | % |
| U.S. Agency mortgage-backed securities | 7 |
| — | % | | 809 |
| 0.3 | % | | 979 |
| 0.4 | % |
| Corporate bonds | 45,594 |
| 15.2 | % | | 42,542 |
| 14.5 | % | | 41,325 |
| 15.9 | % |
| Alaska municipality, utility, or state bonds | 10,400 |
| 3.5 | % | | 10,631 |
| 3.6 | % | | 13,525 |
| 5.2 | % |
| Other municipality, utility, or state bonds | 594 |
| 0.2 | % | | 598 |
| 0.2 | % | | 886 |
| 0.3 | % |
| FHLB Stock | 1,875 |
| 0.6 | % | | 1,816 |
| 0.6 | % | | 3,367 |
| 1.3 | % |
| Total portfolio investments |
| $299,139 |
| | |
| $293,832 |
| | |
| $260,338 |
| |
| | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Composition of Portfolio Loans | | | | | | | | | | | | |
| | March 31, 2016 | | December 31, 2015 | | September 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| | Balance | % of total | | Balance | % of total | | Balance | % of total | | Balance | % of total | | Balance | % of total |
| Commercial loans |
| $326,735 |
| 34 | % | |
| $329,534 |
| 33 | % | |
| $325,092 |
| 33 | % | |
| $334,181 |
| 34 | % | |
| $324,433 |
| 34 | % |
| CRE owner occupied loans | 128,933 |
| 13 | % | | 128,763 |
| 13 | % | | 112,527 |
| 12 | % | | 111,245 |
| 11 | % | | 109,967 |
| 11 | % |
| CRE nonowner occupied loans | 340,830 |
| 35 | % | | 352,098 |
| 36 | % | | 327,556 |
| 33 | % | | 334,124 |
| 35 | % | | 335,732 |
| 35 | % |
| Construction loans | 126,155 |
| 13 | % | | 119,419 |
| 12 | % | | 155,920 |
| 16 | % | | 139,916 |
| 14 | % | | 133,654 |
| 14 | % |
| Consumer loans | 52,115 |
| 5 | % | | 55,585 |
| 6 | % | | 56,933 |
| 6 | % | | 59,842 |
| 6 | % | | 61,240 |
| 6 | % |
| Subtotal | 974,768 |
| | | 985,399 |
| | | 978,028 |
| | | 979,308 |
| | | 965,026 |
| |
| Unearned loan fees, net | (4,251 | ) | | | (4,612 | ) | | | (4,348 | ) | | | (4,459 | ) | | | (4,462 | ) | |
| Total portfolio loans |
| $970,517 |
| | |
| $980,787 |
| | |
| $973,680 |
| | |
| $974,849 |
| | |
| $960,564 |
| |
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Composition of Deposits | | | | | | | | | | | | |
| | March 31, 2016 | | December 31, 2015 | | September 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| | Balance | % of total | | Balance | % of total | | Balance | % of total | | Balance | % of total | | Balance | % of total |
| Demand deposits |
| $442,842 |
| 35 | % | |
| $430,191 |
| 35 | % | |
| $485,304 |
| 39 | % | |
| $455,358 |
| 37 | % | |
| $410,464 |
| 35 | % |
| Interest-bearing demand | 195,896 |
| 16 | % | | 209,291 |
| 17 | % | | 179,080 |
| 14 | % | | 173,952 |
| 14 | % | | 179,124 |
| 15 | % |
| Savings deposits | 230,834 |
| 19 | % | | 227,969 |
| 18 | % | | 221,205 |
| 17 | % | | 227,530 |
| 18 | % | | 226,828 |
| 19 | % |
| Money market deposits | 240,675 |
| 19 | % | | 236,675 |
| 19 | % | | 236,488 |
| 19 | % | | 232,877 |
| 19 | % | | 227,345 |
| 19 | % |
| Time deposits | 136,721 |
| 11 | % | | 136,666 |
| 11 | % | | 142,842 |
| 11 | % | | 149,000 |
| 12 | % | | 147,252 |
| 12 | % |
| Total deposits |
| $1,246,968 |
| | |
| $1,240,792 |
| | |
| $1,264,919 |
| | |
| $1,238,717 |
| | |
| $1,191,013 |
| |
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
12 of 16
Additional Financial Information
(Dollars in thousands)
(Unaudited)
|
| | | | | | | | | | | | |
| Asset Quality | | | | | | |
| | March 31, | | December 31, | | March 31, | |
| | 2016 | | 2015 | | 2015 | |
| Nonaccrual loans |
| $3,196 |
| |
| $3,686 |
| |
| $4,810 |
| |
| Loans 90 days past due | 47 |
| | — |
| | — |
| |
| Total nonperforming loans | 3,243 |
| | 3,686 |
| | 4,810 |
| |
| Nonperforming loans guaranteed by government | (1,561 | ) | | (1,561 | ) | | (1,479 | ) | |
| Net nonperforming loans | 1,682 |
| | 2,125 |
| | 3,331 |
| |
| Other real estate owned | 2,702 |
| | 3,053 |
| | 4,209 |
| |
| Other real estate owned guaranteed by government | — |
| | — |
| | (891 | ) | |
| Net nonperforming assets |
| $4,384 |
| |
| $5,178 |
| |
| $6,649 |
| |
| Nonperforming loans / portfolio loans, net of government guarantees | 0.17 |
| % | 0.22 |
| % | 0.35 |
| % |
| Nonperforming assets / total assets, net of government guarantees | 0.29 |
| % | 0.35 |
| % | 0.46 |
| % |
| | | | | | | |
| Performing restructured loans |
| $11,600 |
| |
| $11,804 |
| |
| $5,789 |
| |
| Nonperforming loans plus performing restructured loans, net of government | | | | | | |
| guarantees |
| $13,282 |
| |
| $13,929 |
| |
| $9,120 |
| |
| Nonperforming loans plus performing restructured loans / portfolio loans, net of | | | | | | |
| government guarantees | 1.37 |
| % | 1.42 |
| % | 0.95 |
| % |
| Nonperforming assets plus performing restructured loans / total assets, net of | | | | | | |
| government guarantees | 1.07 |
| % | 1.13 |
| % | 0.86 |
| % |
| | | | | | | |
| Adversely classified loans, net of government guarantees |
| $38,361 |
| |
| $30,825 |
| |
| $6,908 |
| |
| | | | | | | |
| Allowance for loan losses / portfolio loans | 1.87 |
| % | 1.85 |
| % | 1.76 |
| % |
| Allowance for loan losses / nonperforming loans, net of government guarantees | 1,081 |
| % | 854 |
| % | 509 |
| % |
| | | | | | | |
| Gross loan charge-offs for the quarter |
| $734 |
| |
| $238 |
| |
| $188 |
| |
| Gross loan recoveries for the quarter |
| ($62 | ) | |
| ($166 | ) | |
| ($87 | ) | |
| Net loan charge-offs for the quarter |
| $672 |
| |
| $72 |
| |
| $102 |
| |
| Net loan charge-offs (recoveries) year-to-date |
| $672 |
| |
| $324 |
| |
| $102 |
| |
| Net loan charge-offs (recoveries) for the quarter / average loans, for the quarter | 0.07 |
| % | 0.01 |
| % | 0.01 |
| % |
|
| | | | | | | | | | | | | | | | | | | | | |
| Nonperforming Assets Rollforward | | | | | | |
| | Balance at | Additions | Payments | Writedowns/Charge-offs | Transfers to | Sales | Balance at |
| | December 31, 2015 | this quarter | this quarter | this quarter | OREO | this quarter | March 31, 2016 |
| Commercial loans |
| $3,012 |
|
| $490 |
|
| ($109 | ) |
| ($733 | ) |
| $— |
|
| $— |
|
| $2,660 |
|
| Commercial real estate | 397 |
| — |
| (19 | ) | — |
| — |
| (107 | ) | 271 |
|
| Consumer loans | 277 |
| 48 |
| (12 | ) | (1 | ) | — |
| — |
| 312 |
|
| Non-performing loans guaranteed by government | (1,561 | ) | — |
| — |
| — |
| — |
| — |
| (1,561 | ) |
| Total non-performing loans | 2,125 |
| 538 |
| (140 | ) | (734 | ) | — |
| (107 | ) | 1,682 |
|
| Other real estate owned | 3,053 |
| — |
| — |
| — |
| — |
| (351 | ) | 2,702 |
|
| Total non-performing assets, | | | | | | | |
| net of government guarantees |
| $5,178 |
|
| $538 |
|
| ($140 | ) |
| ($734 | ) |
| $— |
|
| ($458 | ) |
| $4,384 |
|
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
13 of 16
Additional Financial Information
(Dollars in thousands)
(Unaudited)
|
| | | | | | | | | | | | | | | | | |
| Average Balances, Yields, and Rates | | | | | | | | |
| | Three Months Ended |
| | March 31, 2016 | | December 31, 2015 | | March 31, 2015 |
| | | Average | | | Average | | | Average |
| | Average | Tax Equivalent | | Average | Tax Equivalent | | Average | Tax Equivalent |
| | Balance | Yield/Rate | | Balance | Yield/Rate | | Balance | Yield/Rate |
| Assets | | | | | | | | |
| Interest bearing deposits in other banks |
| $38,024 |
| 0.49 | % | |
| $101,167 |
| 0.27 | % | |
| $14,580 |
| 0.30 | % |
| Portfolio investments | 291,607 |
| 1.49 | % | | 276,084 |
| 1.44 | % | | 270,743 |
| 1.47 | % |
| Loans held for sale | 38,164 |
| 3.87 | % | | 54,396 |
| 4.08 | % | | 43,361 |
| 3.70 | % |
| Portfolio loans | 980,117 |
| 5.55 | % | | 979,789 |
| 5.52 | % | | 946,074 |
| 5.62 | % |
| Total interest-earning assets | 1,347,912 |
| 4.48 | % | | 1,411,436 |
| 4.29 | % | | 1,274,758 |
| 4.62 | % |
| Nonearning assets | 141,282 |
| | | 143,789 |
| | | 154,433 |
| |
| �� Total assets |
| $1,489,194 |
| | |
| $1,555,225 |
| | |
| $1,429,191 |
| |
| | | | | | | | | |
| Liabilities and Shareholders' Equity | | | | | | | | |
| Interest-bearing deposits |
| $805,823 |
| 0.23 | % | |
| $811,455 |
| 0.23 | % | |
| $775,172 |
| 0.25 | % |
| Borrowings | 50,864 |
| 1.34 | % | | 58,687 |
| 1.22 | % | | 58,982 |
| 1.83 | % |
| Total interest-bearing liabilities | 856,687 |
| 0.30 | % | | 870,142 |
| 0.30 | % | | 834,154 |
| 0.36 | % |
| | | | | | | | | |
| Noninterest-bearing demand deposits | 430,732 |
| | | 479,678 |
| | | 386,324 |
| |
| Other liabilities | 23,379 |
| | | 31,608 |
| | | 41,788 |
| |
| Shareholders' equity | 178,396 |
| | | 173,797 |
| | | 166,925 |
| |
| Total liabilities and shareholders' equity |
| $1,489,194 |
| | |
| $1,555,225 |
| | |
| $1,429,191 |
| |
| Net spread | | 4.18 | % | | | 3.99 | % | | | 4.26 | % |
Net tax equivalent margin* | | 4.29 | % | | | 4.10 | % | | | 4.39 | % |
| Average portfolio loans to average | | | | | | | | |
| interest-earning assets | 72.71 | % | | | 69.42 | % | | | 74.22 | % | |
| Average portfolio loans to average total deposits | 79.26 | % | | | 75.89 | % | | | 81.45 | % | |
| Average non-interest deposits to average | | | | | | | | |
| total deposits | 34.83 | % | | | 37.15 | % | | | 33.26 | % | |
| Average interest-earning assets to average | | | | | | | | |
| interest-bearing liabilities | 157.34 | % | | | 162.21 | % | | | 152.82 | % | |
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
14 of 16
Additional Financial Information
(Dollars in thousands)
(Unaudited)
|
| | | | | | | | | | | | |
| Capital Data (At quarter end) | | | | | | |
| | March 31, 2016 | | December 31, 2015 | | March 31, 2015 | |
| Book value per share |
| $26.23 |
| |
| $25.77 |
| |
| $24.42 |
| |
Tangible book value per share* |
| $22.78 |
| |
| $22.31 |
| |
| $20.92 |
| |
Tangible Common Equity/Tangible Assets* | 10.61 |
| % | 10.40 |
| % | 10.07 |
| % |
| Tier 1 Capital / Risk Adjusted Assets | 13.66 |
| % | 13.34 |
| % | 12.71 |
| % |
| Total Capital / Risk Adjusted Assets | 14.92 |
| % | 14.60 |
| % | 13.96 |
| % |
| Tier 1 Capital / Average Assets | 11.87 |
| % | 10.03 |
| % | 10.35 |
| % |
| Shares outstanding | 6,877,140 |
| | 6,877,140 |
| | 6,854,189 |
| |
| Unrealized gain on AFS securities, net of income taxes |
| $458 |
| |
| ($395 | ) | |
| $747 |
| |
|
| | | | | | | | | | |
| Profitability Ratios | | | | | | | | | | |
| | March 31, 2016 | | December 31, 2015 | | September 30, 2015 | | June 30, 2015 | | March 31, 2015 | |
| For the quarter: | | | | | | | | | | |
Net tax equivalent margin* | 4.29 | % | 4.10 | % | 4.38 | % | 4.44 | % | 4.39 | % |
Efficiency ratio* | 74.47 | % | 74.23 | % | 66.93 | % | 68.64 | % | 76.09 | % |
| Return on average assets | 0.91 | % | 1.05 | % | 1.42 | % | 1.33 | % | 1.01 | % |
| Return on average equity | 7.61 | % | 9.37 | % | 12.37 | % | 11.46 | % | 8.65 | % |
*Non-GAAP Financial Measures
(Dollars in thousands, except per share data)
(Unaudited)
Efficiency Ratio
The efficiency ratio is a non-GAAP ratio that is calculated by dividing other operating expense, exclusive of intangible asset amortization, by the sum of net interest income and other operating income. The following tables set forth the calculation of the efficiency ratio: |
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | March 31, 2016 | | December 31, 2015 | | September 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| Other operating expense |
| $17,371 |
| |
| $18,229 |
| |
| $18,203 |
| |
| $17,753 |
| |
| $18,461 |
|
| Less: intangible asset amortization | 35 |
| | 40 |
| | 73 |
| | 72 |
| | 73 |
|
| |
| $17,336 |
| |
| $18,189 |
| |
| $18,130 |
| |
| $17,681 |
| |
| $18,388 |
|
| Net interest income |
| $14,174 |
| |
| $14,400 |
| |
| $14,682 |
| |
| $14,195 |
| |
| $13,632 |
|
| Plus: other operating income | 9,105 |
| | 10,104 |
| | 12,407 |
| | 11,563 |
| | 10,535 |
|
| |
| $23,279 |
| |
| $24,504 |
| |
| $27,089 |
| |
| $25,758 |
| |
| $24,167 |
|
| Efficiency ratio | 74.47 | % | | 74.23 | % | | 66.93 | % | | 68.64 | % | | 76.09 | % |
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
15 of 16
(Dollars in thousands, except per share data)
(Unaudited)
Tax-equivalent Net Interest Margin
Tax-equivalent net interest margin is a non-GAAP performance measurement in which interest income on non-taxable investments and loans is presented on a tax-equivalent basis using a combined federal and state statutory rate of 41.11% in both 2015 and 2014. The most comparable GAAP measure is net interest margin and the following table sets forth the reconciliation of tax-equivalent net interest margin to net interest margin.
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | March 31, 2016 | | December 31, 2015 | | September 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| Net interest income |
| $14,174 |
| |
| $14,400 |
| |
| $14,682 |
| |
| $14,195 |
| |
| $13,632 |
|
| Divided by average interest-bearing assets | 1,347,912 |
| | 1,411,436 |
| | 1,346,830 |
| | 1,301,740 |
| | 1,274,758 |
|
Net interest margin2 | 4.23 | % | | 4.05 | % | | 4.32 | % | | 4.37 | % | | 4.34 | % |
| | | | | | | | | | |
| Net interest income |
| $14,174 |
| |
| $14,400 |
| |
| $14,682 |
| |
| $14,195 |
| |
| $13,632 |
|
| Plus: reduction in tax expense related to | |
| | |
| | |
| | |
| | |
| tax-exempt interest income | 206 |
| | 186 |
| | 185 |
| | 199 |
| | 152 |
|
| |
| $14,380 |
| |
| $14,586 |
| |
| $14,867 |
| |
| $14,394 |
| |
| $13,784 |
|
| Divided by average interest-bearing assets | 1,347,912 |
| | 1,411,436 |
| | 1,346,830 |
| | 1,301,740 |
| | 1,274,758 |
|
Tax-equivalent net interest margin2 | 4.29 | % | | 4.10 | % | | 4.38 | % | | 4.44 | % | | 4.39 | % |
2Calculated using actual days in the quarter divided by 366 for quarter ended in 2016 and actual days in the quarter divided by 365 for quarters ended in 2015.
Tangible Book Value
Tangible book value is a non-GAAP measure defined as shareholders' equity, less intangible assets, divided by shares outstanding. The following table sets forth the reconciliation of tangible book value per share and book value per share.
|
| | | | | | | | | | | | | | | | | | | |
| | March 31, 2016 | | December 31, 2015 | | September 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| | | | | | | | | | |
| Total shareholder's equity |
| $180,398 |
| |
| $177,214 |
| |
| $175,336 |
| |
| $171,082 |
| |
| $167,384 |
|
| Less: goodwill and intangible assets | N/A |
| | N/A |
| | N/A |
| | N/A |
| | N/A |
|
| |
| $180,398 |
| |
| $177,214 |
| |
| $175,336 |
| |
| $171,082 |
| |
| $167,384 |
|
| Divided by shares outstanding | 6,877 |
| | 6,877 |
| | 6,859 |
| | 6,854 |
| | 6,854 |
|
| Book value per share |
| $26.23 |
| |
| $25.77 |
| |
| $25.56 |
| |
| $24.96 |
| | $24.42 |
|
| | | | | | | | | | | | | | | | | | | |
| | March 31, 2016 | | December 31, 2015 | | September 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| | | | | | | | | | |
| Total shareholder's equity |
| $180,398 |
| |
| $177,214 |
| |
| $175,336 |
| |
| $171,082 |
| |
| $167,384 |
|
| Less: goodwill and intangible assets | 23,741 |
| | 23,776 |
| | 23,817 |
| | 23,889 |
| | 23,962 |
|
| |
| $156,657 |
| |
| $153,438 |
| |
| $151,519 |
| |
| $147,193 |
| |
| $143,422 |
|
| Divided by shares outstanding | 6,877 |
| | 6,877 |
| | 6,859 |
| | 6,854 |
| | 6,854 |
|
| Tangible book value per share |
| $22.78 |
| |
| $22.31 |
| |
| $22.09 |
| |
| $21.47 |
| | $20.92 |
Northrim BanCorp Reports 1Q16 Earnings of $3.4 Million, or $0.48 Per Diluted Share
May 3, 2016
16 of 16
(Dollars in thousands, except per share data)
(Unaudited)
Tangible Common Equity to Tangible Assets
Tangible common equity to tangible assets is a non-GAAP ratio that represents total equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets. This ratio has received more attention over the past several years from stock analysts and regulators. The most comparable GAAP measure of shareholders' equity to total assets is calculated by dividing total shareholders' equity by total assets.
|
| | | | | | | | | | | | | | | | | | | |
| | March 31, 2016 | | December 31, 2015 | | September 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| | | | | | | | | | |
| Total shareholder's equity |
| $180,398 |
| |
| $177,214 |
| |
| $175,336 |
| |
| $171,082 |
| |
| $167,384 |
|
| Total assets | 1,500,199 |
| | 1,499,492 |
| | 1,539,253 |
| | 1,500,331 |
| | 1,447,984 |
|
| Total shareholder's equity to total assets | 12.02 | % | | 11.82 | % | | 11.39 | % | | 11.40 | % | | 11.56 | % |
|
| | | | | | | | | | | | | | | | | | | |
| | March 31, 2016 | | December 31, 2015 | | September 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| Total shareholders' equity |
| $180,398 |
| |
| $177,214 |
| |
| $175,336 |
| |
| $171,082 |
| |
| $167,384 |
|
| Less: goodwill and other intangible assets, net | 23,741 |
| | 23,776 |
| | 23,817 |
| | 23,889 |
| | 23,962 |
|
| Tangible common shareholders' equity |
| $156,657 |
| |
| $153,438 |
| |
| $151,519 |
| |
| $147,193 |
| |
| $143,422 |
|
| | | | | | | | | | |
| Total assets |
| $1,500,199 |
| |
| $1,499,492 |
| |
| $1,539,253 |
| |
| $1,500,331 |
| |
| $1,447,984 |
|
| Less: goodwill and other intangible assets, net | 23,741 |
| | 23,776 |
| | 23,817 |
| | 23,889 |
| | 23,692 |
|
| Tangible assets |
| $1,476,458 |
| |
| $1,475,716 |
| |
| $1,515,436 |
| |
| $1,476,442 |
| |
| $1,424,292 |
|
| Tangible common equity ratio | 10.61 | % | | 10.40 | % | | 10.00 | % | | 9.97 | % | | 10.07 | % |
-0-
Note Transmitted on GlobeNewswire on May 3, 2016, at 5:00 am Alaska Standard Time.
