Northrim BanCorp Q3 net income falls on higher credit losses

By Reuters News


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

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 EPS

$0.63

Q3 Net Income

$14.4 mln

Q3 Net Interest Income

$38.9 mln

Q3 Net Interest Margin

5.02%


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 - Home BancShares Q3 revenue rises on net interest income strength

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


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(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.)

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