Northrim BanCorp Q3 net income falls on higher credit losses

Overview

• Alaska community bank's Q3 net income and EPS declined yr/yr due to higher credit losses

• Q3 net interest income and margin rose, supported by deposit growth and higher loan balances

• Company continues progress on previously announced PBCO Financial acquisition, expected to close Q1 2027

Outlook

• Northrim expects to complete PBCO Financial acquisition in Q1 2027, pending approvals

• Company anticipates more than $4 bln in assets after PBCO acquisition

• Northrim says collection of a Specialty Finance loan impairment may take several quarters to resolve

Result Drivers

• CREDIT LOSS PROVISION - Co said higher provision for credit losses tied to a single relationship in Specialty Finance segment reduced Q3 earnings

• NET INTEREST INCOME - Record net interest income and net interest margin above 5% drove a 21% increase in pre-provision net revenue, per CEO Mike Huston

• MORTGAGE SEGMENT - Co said Home Mortgage Lending segment had a strong quarter, supported by increased mortgage servicing revenue and fair value gains

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for Northrim BanCorp Inc is $30.50, about 26.5% above its October 14 closing price of $24.11

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 11 three months ago

Reuters Recommended Reads

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• Oct 14 - Equity Bancshares Q3 core EPS rises on loan growth, lifts dividend

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)