Exhibit 99.1
Northrim News
Headquarters: 3111 C Street, Anchorage, AK 99503
For Immediate Release
Date: Contact: Phone: | October 25, 2005 Joe Schierhorn, Chief Financial Officer (907) 261-3308 |
Northrim BanCorp Reports Earnings Per Share Up 9% for Third Quarter 2005
on Strong Loan and Deposit Growth
ANCHORAGE, AK—October 25, 2005—Northrim BanCorp, Inc. (the “company”) (Nasdaq: NRIM) reported today that net income for the third quarter of 2005 increased 5% to $2.8 million, from $2.7 million for the same period last year. Diluted earnings per share for the third quarter were $0.47, a 9% increase from $0.43 per share in the like period of 2004. For the nine-month period ended September 30, 2005, the company’s net income was $8.1 million, up 3% from $7.8 million for the same period in 2004. Diluted earnings per share for the first nine months of 2005 were $1.30, a 4% increase from $1.25 per share in the like period of 2004.
Total assets at September 30, 2005, were $850 million, up 8% from $786 million a year ago. Total portfolio loans at September 30, 2005, which exclude loans for sale, grew 10% to $711 million, compared to $644 million at September 30, 2004. Commercial loans accounted for a majority of this loan growth, increasing $56 million to $295 million at September 30, 2005, an increase of 24% from $239 million at September 30, 2004. The remainder of the loan growth was split between commercial real estate and construction loans.
Deposits for the nine-month period increased 9% to $746 million, up from $687 million a year ago. The Alaska CD continued to lead deposit growth, increasing 56% over the period ended September 30, 2004. “We are pleased with this quarter’s financial results,” said Marc Langland, President and CEO. “They reflect strength in our core banking services – loans and deposits – as well as good performance from new lines of business and affiliates.”
Net interest income, before the provision for loan losses, increased 9% to $11.1 million for the third quarter of 2005, from $10.2 million for the same quarter last year. Net interest income, as a percentage of average earning assets on a tax equivalent basis (net interest margin), for the third quarter of 2005 equaled 5.68%, down from 5.70% in the third quarter of 2004. The cycle of increasing rates by the Federal Reserve is driving deposit rates up at a greater pace than assets can be adjusted.
At September 30, 2005, the allowance for loan losses was $11.2 million, or 1.58% of portfolio loans and 192% of non-performing loans. A year ago, the allowance for loan losses was $10.7 million, or 1.66% of portfolio loans and 128% of non-performing loans. The provision for loan losses for the quarter ended September 30, 2005, increased 199% to $428,000 from $143,000 in the third quarter a year ago. The provision for loan losses for the third quarter of 2005 covered net loan charge-offs and an increase in classified loans.
Net loan charge-offs for the third quarter of 2005 were $62,000 versus net loan recoveries of $256,000 for the third quarter of 2004. Non-performing assets totaled $5.9 million, or .69% of total assets, at September 30, 2005, down from $8.4 million or 1.06% of total assets at September 30, 2004.
Other operating income increased 69% to $1.5 million in the third quarter of 2005, due primarily to increases in income from purchased receivables and earnings from Northrim’s affiliated mortgage company. Purchased receivables income from Northrim’s Washington-based Northrim Funding Services division, and the Business Managerâ and MedCash Managerâ services offered in Alaska, increased 389% to $308,000 in the third quarter of 2005, from $63,000 in the third quarter a year ago. Earnings from the mortgage affiliate in the third quarter of 2005 increased to $276,000 from $15,000 a year ago.
Other operating expense was $7.6 million in the third quarter of 2005, an increase of 16% from the $6.5 million expense in the same period in 2004. Salaries and other personnel expense increased 18%, to $4.5 million, from $3.8 million a year ago, with the increase split mainly between increased salary costs and higher medical expenses. Other expense increased 16% to $2.1 million, from $1.8 million in the third quarter of 2004, in part due to higher marketing costs for Northrim Bank’s new High Performance Checking program. “We have been very pleased with the account growth we’ve seen in the early stages of this new program,” said Chris Knudson, COO and Executive Vice President. “Over time, we expect this program to diversify Northrim’s deposit base, increase deposit service charges, reduce our deposit costs, and generate more internal funds to meet our strong loan demand.”
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The efficiency ratio was 59.48 % for the third quarter of 2005, an increase from 58.22% for the same period a year ago. In the third quarter of 2005, the company’s return on average assets (ROA) was 1.33%, compared to 1.39% in the same quarter a year ago. Return on average equity was 13.31% in the quarter, compared to 13.44% in 2004.
Tangible book value per share was $13.12 at September 30, 2005, which was an increase over the same period a year ago, when tangible book value per share was $12.23. Shareholders’ equity increased 2% to $83 million, from $81.2 million, and book value per share increased to $14.21 from $13.33 in the same period last year.
In September 2002, the company instituted a stock repurchase program. The company repurchased 236,000 shares of stock in the three-month period ending September 30, 2005 under this program, which leaves 117,213 remaining shares authorized for repurchase under the stock repurchase program.
Northrim BanCorp, Inc. is the parent company of Northrim Bank, a full-service commercial bank that provides a full range of personal and business banking services through locations in Anchorage, Eagle River, Wasilla, and Fairbanks, Alaska, and a factoring division in Washington. The bank differentiates itself with a “Customer First Service” philosophy. Affiliated companies include Elliott Cove Capital Management, LLC; Residential Mortgage; and Northrim Benefits Group, LLC.
www.northrim.com
This release may contain “forward-looking statements” that are subject to 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 or management, are intended to help identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 or expand our market share or net interest margins, and to implement our marketing and growth strategies. 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 collectibility 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 our other filings with the SEC and the FDIC. 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.
Balance Sheet | ||||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||
September 30, | December 31, | September 30, | Annual | |||||||||||||||||||||
2005 | 2004 | 2004 | % Change | |||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Cash and due from banks | $ | 31,460 | $ | 18,936 | $ | 26,649 | 18 | % | ||||||||||||||||
Overnight investments | 7,330 | 12,157 | 19,573 | -63 | % | |||||||||||||||||||
Portfolio investments | 60,110 | 61,475 | 65,138 | -8 | % | |||||||||||||||||||
Loans for sale | — | — | 465 | n/a | ||||||||||||||||||||
Portfolio loans | 710,944 | 678,269 | 644,267 | 10 | % | |||||||||||||||||||
Allowance for loan losses | (11,248 | ) | (10,764 | ) | (10,692 | ) | 5 | % | ||||||||||||||||
Net loans | 699,696 | 667,505 | 634,040 | 10 | % | |||||||||||||||||||
Premises and equipment, net | 10,762 | 10,583 | 10,742 | 0 | % | |||||||||||||||||||
Purchased receivables | 10,532 | 2,191 | 2,324 | 353 | % | |||||||||||||||||||
Intangible assets | 6,358 | 6,634 | 6,726 | -5 | % | |||||||||||||||||||
Other assets | 23,509 | 21,245 | 20,822 | 13 | % | |||||||||||||||||||
Total assets | $ | 849,757 | $ | 800,726 | $ | 786,014 | 8 | % | ||||||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||
Demand deposits | $ | 180,832 | $ | 183,959 | $ | 186,577 | -3 | % | ||||||||||||||||
Interest-bearing demand | 69,465 | 59,933 | 61,989 | 12 | % | |||||||||||||||||||
Savings deposits | 48,415 | 47,406 | 48,557 | 0 | % | |||||||||||||||||||
Alaska CDs | 175,110 | 123,223 | 112,482 | 56 | % | |||||||||||||||||||
Money market deposits | 140,855 | 142,181 | 135,763 | 4 | % | |||||||||||||||||||
Time deposits | 131,581 | 142,359 | 141,721 | -7 | % | |||||||||||||||||||
Total deposits | 746,258 | 699,061 | 687,089 | 9 | % | |||||||||||||||||||
Borrowings | 7,622 | 6,478 | 4,960 | 54 | % | |||||||||||||||||||
Trust preferred securities | 8,000 | 8,000 | 8,000 | 0 | % | |||||||||||||||||||
Other liabilities | 4,879 | 3,829 | 4,789 | 2 | % | |||||||||||||||||||
Total liabilities | 766,759 | 717,368 | 704,838 | 9 | % | |||||||||||||||||||
Shareholders' equity | 82,998 | 83,358 | 81,176 | 2 | % | |||||||||||||||||||
Total liabilities and equity | $ | 849,757 | $ | 800,726 | $ | 786,014 | 8 | % | ||||||||||||||||
Average Quarter Balances — unaudited | ||||||||||||||||||||||||
Loans | $ | 703,933 | $ | 664,978 | $ | 626,891 | 12 | % | ||||||||||||||||
Total earning assets | 779,557 | 740,256 | 714,075 | 9 | % | |||||||||||||||||||
Total assets | 846,092 | 796,697 | 769,952 | 10 | % | |||||||||||||||||||
Non-interest bearing deposits | 185,291 | 191,863 | 192,369 | -4 | % | |||||||||||||||||||
Interest bearing deposits | 555,361 | 503,697 | 479,777 | 16 | % | |||||||||||||||||||
Total deposits | 740,652 | 695,560 | 672,146 | 10 | % | |||||||||||||||||||
Shareholders' equity | 84,701 | 82,693 | 79,846 | 6 | % | |||||||||||||||||||
Average Year-to-date Balances — unaudited | ||||||||||||||||||||||||
Loans | $ | 692,980 | $ | 628,830 | $ | 616,693 | 12 | % | ||||||||||||||||
Total earning assets | 762,437 | 704,471 | 692,456 | 10 | % | |||||||||||||||||||
Total assets | 823,175 | 759,259 | 746,689 | 10 | % | |||||||||||||||||||
Non-interest bearing deposits | 179,343 | 181,731 | 178,329 | 1 | % | |||||||||||||||||||
Interest bearing deposits | 534,566 | 478,951 | 470,842 | 14 | % | |||||||||||||||||||
Total deposits | 713,909 | 660,682 | 649,171 | 10 | % | |||||||||||||||||||
Shareholders' equity | 85,078 | 79,278 | 78,131 | 9 | % |
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Income Statement | ||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||
Quarter Ended September 30: | ||||||||||||||||||||
| ||||||||||||||||||||
2005 | 2004 | % Change | ||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||
Interest Income: | ||||||||||||||||||||
Interest and fees on loans | $ | 14,364 | $ | 11,437 | 26 | % | ||||||||||||||
Interest on portfolio investments | 567 | 603 | -6 | % | ||||||||||||||||
Interest on overnight investments | 116 | 79 | 47 | % | ||||||||||||||||
Total interest income | 15,047 | 12,119 | 24 | % | ||||||||||||||||
Interest Expense: | ||||||||||||||||||||
Interest expense on deposits | 3,711 | 1,780 | 108 | % | ||||||||||||||||
Interest expense on borrowings | 199 | 140 | 42 | % | ||||||||||||||||
Total interest expense | 3,910 | 1,920 | 104 | % | ||||||||||||||||
Net interest income | 11,137 | 10,199 | 9 | % | ||||||||||||||||
Provision for loan losses | 428 | 143 | 199 | % | ||||||||||||||||
Net interest income after provision for loan losses | 10,709 | 10,056 | 6 | % | ||||||||||||||||
Other Operating Income: | ||||||||||||||||||||
Service charges on deposit accounts | 475 | 439 | 8 | % | ||||||||||||||||
Earning from mortgage affiliate | 276 | 15 | 1740 | % | ||||||||||||||||
Purchased receivable income | 308 | 63 | 389 | % | ||||||||||||||||
Other income | 435 | 368 | 18 | % | ||||||||||||||||
Total other operating income | 1,494 | 885 | 69 | % | ||||||||||||||||
Other Operating Expense: | ||||||||||||||||||||
Salaries and other personnel expense | 4,489 | 3,794 | 18 | % | ||||||||||||||||
Occupancy, net | 616 | 542 | 14 | % | ||||||||||||||||
Equipment expense | 332 | 325 | 2 | % | ||||||||||||||||
Intangible asset amortization expense | 92 | 92 | 0 | % | ||||||||||||||||
Other expense | 2,076 | 1,792 | 16 | % | ||||||||||||||||
Total other operating expense | 7,605 | 6,545 | 16 | % | ||||||||||||||||
Income before income taxes | 4,598 | 4,396 | 5 | % | ||||||||||||||||
Provision for income taxes | 1,756 | 1,699 | 3 | % | ||||||||||||||||
Net income | $ | 2,842 | $ | 2,697 | 5 | % | ||||||||||||||
Basic EPS | $ | 0.48 | $ | 0.44 | 9 | % | ||||||||||||||
Diluted EPS | $ | 0.47 | $ | 0.43 | 9 | % | ||||||||||||||
Average basic shares | 5,925,212 | 6,086,677 | -3 | % | ||||||||||||||||
Average diluted shares | 6,111,146 | 6,259,297 | -2 | % |
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Income Statement | ||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||
Nine Months Ended September 30: | ||||||||||||||||||||
| ||||||||||||||||||||
2005 | 2004 | % Change | ||||||||||||||||||
Interest Income: | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
Interest and fees on loans | $ | 40,590 | $ | 33,355 | 22 | % | ||||||||||||||
Interest on portfolio investments | 1,673 | 1,899 | -12 | % | ||||||||||||||||
Interest on overnight investments | 174 | 99 | 76 | % | ||||||||||||||||
Total interest income | 42,437 | 35,353 | 20 | % | ||||||||||||||||
Interest Expense: | ||||||||||||||||||||
Interest expense on deposits | 9,501 | 4,561 | 108 | % | ||||||||||||||||
Interest expense on borrowings | 641 | 422 | 52 | % | ||||||||||||||||
Total interest expense | 10,142 | 4,983 | 104 | % | ||||||||||||||||
Net interest income | 32,295 | 30,370 | 6 | % | ||||||||||||||||
Provision for loan losses | 528 | 1,001 | -47 | % | ||||||||||||||||
Net interest income after provision for loan losses | 31,767 | 29,369 | 8 | % | ||||||||||||||||
Other Operating Income: | ||||||||||||||||||||
Service charges on deposit accounts | 1,327 | 1,313 | 1 | % | ||||||||||||||||
Earnings from mortgage affiliate | 337 | 181 | 86 | % | ||||||||||||||||
Purchased receivable income | 654 | 143 | 357 | % | ||||||||||||||||
Other income | 1,089 | 1,039 | 5 | % | ||||||||||||||||
Total other operating income | 3,407 | 2,676 | 27 | % | ||||||||||||||||
Other Operating Expense: | ||||||||||||||||||||
Salaries and other personnel expense | 13,273 | 11,664 | 14 | % | ||||||||||||||||
Occupancy, net | 1,757 | 1,564 | 12 | % | ||||||||||||||||
Equipment expense | 1,025 | 1,016 | 1 | % | ||||||||||||||||
Intangible asset amortization expense | 276 | 276 | 0 | % | ||||||||||||||||
Other expense | 5,776 | 5,165 | 12 | % | ||||||||||||||||
Total other operating expense | 22,107 | 19,685 | 12 | % | ||||||||||||||||
Income before income taxes | 13,067 | 12,360 | 6 | % | ||||||||||||||||
Provision for income taxes | 4,989 | 4,528 | 10 | % | ||||||||||||||||
Net income | $ | 8,078 | $ | 7,832 | 3 | % | ||||||||||||||
Basic EPS | $ | 1.34 | $ | 1.29 | 4 | % | ||||||||||||||
Diluted EPS | $ | 1.30 | $ | 1.25 | 4 | % | ||||||||||||||
Average basic shares | 6,039,990 | 6,075,439 | -1 | % | ||||||||||||||||
Average diluted shares | 6,227,120 | 6,269,060 | -1 | % |
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Other Data | ||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||
September 30, | December 31, | September 30, | ||||||||||||||||||
2005 | 2004 | 2004 | ||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||
Asset Quality: | ||||||||||||||||||||
Non accrual loans | $ | 5,407 | $ | 5,876 | $ | 6,879 | ||||||||||||||
Loans 90 days past due | 446 | 290 | 1,046 | |||||||||||||||||
Restructured loans | — | 424 | 443 | |||||||||||||||||
Total non-performing loans | 5,853 | 6,590 | 8,368 | |||||||||||||||||
Other real estate owned | — | — | — | |||||||||||||||||
Total non-performing assets | $ | 5,853 | $ | 6,590 | $ | 8,368 | ||||||||||||||
Non-performing loans / portfolio loans | 0.82 | % | 0.97 | % | 1.30 | % | ||||||||||||||
Non-performing assets / assets | 0.69 | % | 0.82 | % | 1.06 | % | ||||||||||||||
Allowance for loan losses / portfolio loans | 1.58 | % | 1.59 | % | 1.66 | % | ||||||||||||||
Allowance / non-performing loans | 192.17 | % | 163.34 | % | 127.77 | % | ||||||||||||||
Loan charge-offs, net for the quarter | $ | 62 | $ | 529 | $ | (256 | ) | |||||||||||||
Loan charge-offs, net year-to-date | $ | 44 | $ | 1,024 | $ | 495 | ||||||||||||||
Net loan charge-offs / average loans, annualized | 0.01 | % | 0.16 | % | 0.11 | % | ||||||||||||||
Other Data (At quarter end): | ||||||||||||||||||||
Book value per share | $ | 14.21 | $ | 13.69 | $ | 13.33 | ||||||||||||||
Tangible book value per share | $ | 13.12 | $ | 12.60 | $ | 12.23 | ||||||||||||||
Tier 1 / Risk Adjusted Assets | 10.91 | % | 11.62 | % | 11.73 | % | ||||||||||||||
Total Capital / Risk Adjusted Assets | 12.16 | % | 12.87 | % | 12.98 | % | ||||||||||||||
Tier 1 /Average Assets | 10.12 | % | 10.72 | % | 10.77 | % | ||||||||||||||
Shares outstanding | 5,840,265 | 6,089,120 | 6,087,470 | |||||||||||||||||
Unrealized gain (loss) on AFS securities, | ||||||||||||||||||||
net of income taxes | $ | (408 | ) | $ | 4 | $ | 207 | |||||||||||||
Other Data (For the quarter): | ||||||||||||||||||||
Net interest margin (tax equivalent) | 5.68 | % | 5.87 | % | 5.70 | % | ||||||||||||||
Efficiency ratio* | 59.48 | % | 56.24 | % | 58.22 | % | ||||||||||||||
Return on average assets | 1.33 | % | 1.43 | % | 1.39 | % | ||||||||||||||
Return on average equity | 13.31 | % | 13.79 | % | 13.44 | % | ||||||||||||||
Other Data (Year-to-date): | ||||||||||||||||||||
Net interest margin (tax equivalent) | 5.68 | % | 5.88 | % | 5.88 | % | ||||||||||||||
Efficiency ratio* | 61.15 | % | 58.07 | % | 58.73 | % | ||||||||||||||
Return on average assets | 1.31 | % | 1.41 | % | 1.40 | % | ||||||||||||||
Return on average equity | 12.69 | % | 13.50 | % | 13.39 | % | ||||||||||||||
*excludes intangible asset amortization expense |
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