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Sep 30, 2022
Northrim BanCorp Q3 2022 Earnings Report
Northrim BanCorp's profitability increased due to a rise in net interest income.
Key Takeaways
Northrim BanCorp reported a net income of $10.1 million, or $1.76 per diluted share, for Q3 2022, driven by an increase in net interest income. The company saw growth in core loans and deposit market share, benefiting from the rising interest rate environment.
Net interest income increased by 18% to $26.3 million compared to the previous quarter and increased 29% compared to the same quarter last year.
Net Interest Margin on a tax equivalent basis was 4.27%, a 57-basis point increase from the previous quarter and an 80-basis point increase compared to the same quarter last year.
The weighted average interest rate for new loans booked in the third quarter of 2022 was 5.76% compared to 4.66% in the second quarter of 2022 and 4.04% in the third quarter a year ago.
Total deposits were $2.44 billion, up 4% from the preceding quarter, and up 6% from a year ago.
Forward Guidance
The company expects its net interest margin to continue to improve with expected increases in interest rates during the fourth quarter of 2022.
Positive Outlook
- Nearly 75% of the loan portfolio has adjusting rates.
- Large cash position will reprice immediately upon any rate increases.
- New customer relationships continue to expand and grow.
- Alaska economy is experiencing recovery in jobs from pandemic lows.
- Tourism activity is improving.
Challenges Ahead
- Inflation is impacting business activity.
- Incomes are rising, but not at the same pace as inflation.
- Housing market is slowing down as interest rates rise rapidly.
- Real GSP decreased in Alaska in the second quarter of 2022.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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