Northrim Bancorp Reports 62% Increase in Net Income for Q1 2025

Northrim Bancorp, Inc. reported a significant increase in financial performance for the first quarter of 2025, with net income rising to $13.3 million, or $2.38 per diluted share, compared to $8.2 million, or $1.48 per diluted share, in the same period last year. This 62% increase in net income was primarily driven by a rise in purchased receivable income, higher net interest income, and increased mortgage banking income, alongside a reduction in the provision for credit losses. The company's net interest income increased by 18% to $31.3 million, up from $26.4 million in the first quarter of 2024, reflecting a net interest margin of 4.55%, which is a 31 basis point improvement from the previous year.

In terms of operational metrics, total loans decreased slightly to $2.12 billion as of March 31, 2025, down from $2.13 billion at the end of 2024. This decline was attributed to the reclassification of $100 million in consumer mortgages to loans held for sale, which the company plans to sell in 2025 to enhance liquidity for future commercial and construction loan growth. Total deposits, however, increased by 4% to $2.78 billion, with demand deposits rising by 5%, indicating a strong customer base and effective deposit gathering strategies.

Strategically, Northrim Bancorp completed the acquisition of Sallyport Commercial Finance, LLC in late 2024, which has begun to contribute positively to the company's financial results. The acquisition is expected to enhance Northrim's presence in the specialty finance sector, providing factoring and asset-based lending solutions. The integration of Sallyport is anticipated to complement existing offerings and drive further growth in the specialty finance segment.

The company also reported a decrease in the allowance for credit losses to $20.9 million from $22 million at the end of 2024, reflecting improved credit quality and management's proactive measures in response to changing economic conditions. Nonperforming loans increased slightly to $8.0 million, while nonperforming assets totaled $12.3 million, indicating a need for continued vigilance in credit risk management.

Looking ahead, Northrim Bancorp remains optimistic about its growth trajectory, supported by a strong capital position and a diversified loan portfolio. The company is focused on leveraging its recent acquisition to expand its market share and enhance profitability while navigating potential economic challenges. Management anticipates continued growth in loans and deposits, driven by strategic initiatives and a favorable economic environment in Alaska.