Northrim BanCorp Earns $11.8 Million, or $2.09 Per Diluted Share, in Second Quarter 2025
ANCHORAGE, Alaska, July 23, 2025 (GLOBE NEWSWIRE) -- Northrim BanCorp, Inc. (NASDAQ:NRIM) ("Northrim" or the "Company") today reported net income of $11.8 million, or $2.09 per diluted share, in the second quarter of 2025, compared to $13.3 million, or $2.38 per diluted share, in the first quarter of 2025, and $9.0 million, or $1.62 per diluted share, in the second quarter a year ago. The increase in second quarter 2025 profitability as compared to the second quarter a year ago was primarily the result of an increase in net interest income, higher purchased receivable income, and increased mortgage banking income, which were partially offset by a higher provision for credit losses, higher other operating expenses, and a higher provision for income taxes. Net interest income increased primarily due to higher loan balances and higher yields on earning assets. Purchased receivable income increased primarily due to the Company's acquisition of Sallyport Commercial Finance, LLC ("Sallyport or SCF"), which was completed on October 31, 2024. Sallyport and its direct and indirect subsidiaries provide services and products related to purchased receivable factoring and asset-based lending in the United States, Canada, and the United Kingdom.
Dividends per share in the second quarter of 2025 remained consistent with the first quarter of 2025 at $0.64 per share as compared to $0.61 per share in the second quarter of 2024.
"Strong loan growth, increasing asset yields, and stable funding costs drove record net interest income in the second quarter of this year," said Mike Huston, Northrim's President and Chief Executive Officer. "We continue to attract new customers to Northrim and believe we have an opportunity to steadily increase our market share over the next few years."
Second Quarter 2025 Highlights:
Net interest income in the second quarter of 2025 increased 7% to $33.6 million compared to $31.3 million in the first quarter of 2025 and increased 24% compared to $27.1 million in the second quarter of 2024.
Net interest margin on a tax equivalent basis ("NIMTE")* was 4.72% for the second quarter of 2025, up 11-basis points from the first quarter of 2025 and up 42-basis points from the second quarter a year ago.
Return on average assets ("ROAA") was 1.48% and return on average equity ("ROAE") was 16.37% for the second quarter of 2025 compared to ROAA of 1.76 and ROAE of 19.70 in the prior quarter and ROAA of 1.31% and ROAE of 14.84% for the second quarter of 2024.
Portfolio loans were $2.20 billion at June 30, 2025, up 4% from the preceding quarter and up 17% from a year ago, primarily due to new customer relationships and expanding market share, as well as retaining certain mortgages originated by Residential Mortgage, a subsidiary of Northrim Bank (the "Bank"). The Company sold $61 million in consumer mortgages in the second quarter of 2025 that were included in loans held for investment as of the end of 2024 to reduce the concentration of residential real estate loans and to provide additional liquidity for future commercial and construction loan growth.
Total deposits were $2.81 billion at June 30, 2025, up 1% from the preceding quarter, and up 14% from $2.46 billion a year ago. Non-interest bearing demand deposits increased 5% from the preceding quarter and increased 10% year-over-year to $777.9 million at June 30, 2025 and represent 28% of total deposits.
The average cost of interest-bearing deposits was 2.04% at June 30, 2025, up slightly from 2.01% at March 31, 2025 and down from 2.21% at June 30, 2024.
Mortgage loan originations were $277.1 million in the second quarter of 2025, up from $121.6 million in the first quarter of 2025 and up from $181.5 million in the second quarter a year ago. Mortgage loans funded for sale were $249.7 million in the second quarter of 2025, compared to $108.5 million in the first quarter of 2025 and $152.3 million in the second quarter of 2024.
Financial Highlights
Three Months Ended
(Dollars in thousands, except per share data)
June 30, 2025
March 31, 2025
December 31, 2024
September 30, 2024
June 30, 2024
Total assets
$
3,243,760
$
3,140,960
$
3,041,869
$
2,963,392
$
2,821,668
Total portfolio loans
$
2,202,115
$
2,124,330
$
2,129,263
$
2,007,565
$
1,875,907
Total deposits
$
2,809,170
$
2,777,977
$
2,680,189
$
2,625,567
$
2,463,806
Total shareholders' equity
$
290,219
$
279,756
$
267,116
$
260,050
$
247,200
Net income
$
11,778
$
13,324
$
10,927
$
8,825
$
9,020
Diluted earnings per share
$
2.09
$
2.38
$
1.95
$
1.57
$
1.62
Return on average assets
1.48
%
1.76
%
1.43
%
1.22
%
1.31
%
Return on average shareholders' equity
16.37
%
19.70
%
16.32
%
13.69
%
14.84
%
NIM
4.66
%
4.55
%
4.41
%
4.29
%
4.24
%
NIMTE*
4.72
%
4.61
%
4.47
%
4.35
%
4.30
%
Efficiency ratio
64.68
%
63.54
%
66.96
%
66.11
%
68.78
%
Total shareholders' equity/total assets
8.95
%
8.91
%
8.78
%
8.78
%
8.76
%
Tangible common equity/tangible assets*
7.50
%
7.41
%
7.23
%
8.28
%
8.24
%
Book value per share
$
52.55
$
50.67
$
48.41
$
47.27
$
44.93
Tangible book value per share*
$
43.35
$
41.47
$
39.17
$
44.36
$
42.03
Dividends per share
$
0.64
$
0.64
$
0.62
$
0.62
$
0.61
Common stock outstanding
5,522,271
5,520,892
5,518,210
5,501,943
5,501,562
* References to NIMTE, tangible book value per share, and tangible common equity to tangible common assets, (both of which exclude intangible assets) represent non-GAAP financial measures. Management has presented these non-GAAP measurements in this earnings release, because it believes these measures are useful to investors. See the end of this release for reconciliations of these non-GAAP financial measures to GAAP financial measures.
Alaska Economic Update(Note: sources for information included in this section are included on page 14.)
The Alaska Department of Labor ("DOL") has reported Alaska's seasonally adjusted unemployment rate in May of 2025 was 4.7% compared to the U.S. rate of 4.2%. The rate has held steady in Alaska at 4.7% for eight consecutive months. The total number of payroll jobs in Alaska, not including uniformed military, increased 1.1% or 3,800 jobs between May of 2024 and May of 2025.
According to the DOL, the Oil and Gas sector had the largest growth rate in new jobs of 8.8% through May of this year compared to the prior year, up 700 direct jobs. The Construction sector added 700 positions for a year-over-year growth rate of 3.7% through May of 2025. The larger Health Care sector grew by 1,200 jobs for an annual growth rate of 2.9%. Transportation, Warehousing and Utilities added 600 jobs for a 2.3% growth rate over the same period. Professional and Business Services increased 500 jobs year-over-year through May of 2025, up 1.7%.
The Government sector grew by 200 jobs for 0.2% growth, adding 400 State positions while losing 200 Federal jobs in Alaska over the same period. Declining sectors between May 2024 and May 2025 were Information down 100 jobs or (-2.3%), Manufacturing (primarily seafood processing) shrinking 200 positions (-2.1%), Wholesale Trade lost 100 jobs (-1.5%) and Financial Activities, down 100 jobs (-0.9%).
Alaska's seasonally adjusted personal income was $57.4 billion in the first quarter of 2025 according to the Federal Bureau of Economic Analysis ("BEA"). This was an annualized improvement in the first quarter of 6.4% for Alaska, compared to the national average of 6.7%. Alaska enjoyed an annual personal income improvement of 6% in 2024 compared to the U.S. increase of 5.4%, ranking Alaska 6th best in the nation. The $885 million increase in personal income in the first quarter of 2025 in Alaska came from a $352 million increase in net earnings from wages, $440 million growth in government transfer receipts, and a $92 million increase in investment income.
Alaska's Gross State Product ("GSP") in the first quarter of 2025 reached $72 billion according to the BEA. Alaska's inflation adjusted "real" GSP increased 1.5% in 2024 and decreased -1.8% annualized in the first quarter of 2025. The average U.S. GDP growth rate was 2.8% for 2025 and -0.5% in the first quarter of 2025. Alaska's real GSP decrease in the first quarter of 2025 was primarily caused by a decrease in the Mining, Oil & Gas sector, somewhat offset by improvements in the Construction sector.
Alaska exported $5.9 billion in goods to foreign countries in 2024 according to the U.S. International Trade Administration. China is the largest importer of Alaska's products at $1.5 billion, followed by Australia at $804 million, Japan at $674 million and South Korea at $634 million in 2024. Fish and related maritime products accounted for the largest volume at $2.1 billion, followed by minerals and ores at $2 billion, and primary metals at $992 million in 2024. Oil & Gas exports are $380 million because the majority of Alaska's production is refined and consumed in the United States. Chief Credit Officer and Bank Economist Mark Edwards stated, "President Trump's significant changes to international tariffs has created uncertainty in trade markets. At this time, it is unknown how each country will respond. Alaska's natural resources are highly valued commodities throughout the world. If issues arise with one country, such as China, it is most likely that Alaska's products will be redirected to other markets like Japan and South Korea or sold domestically in the United States. Canada is the largest long-term investor in Alaska's mining industry. This involves significant fixed capital investments made over decades that are unlikely to shift dramatically in the short-run. Alaska's Legislature just passed a bill HJR-11 with an approval vote of 33-4 titled, Recognizing and honoring the relationship between Canada and Alaska. It highlights the deeply interconnected friendship between Alaska and Canada culturally, economically, and militarily."
According to the US Bureau of Labor Statistics, the Consumer Price Index ("CPI") for the U.S. increased 2.7% between June of 2024 and June of 2025. In Alaska, the rate of CPI increase was lower at 1.6% for the same time period. Food and beverage, housing costs, and medical care costs were the largest causes for inflation. Declining motor fuel prices, transportation, recreation and household furnishing costs have helped moderate inflationary pressures in Alaska.
The monthly average price of Alaska North Slope ("ANS") crude oil has ranged between $76.39 a barrel in January of 2025 and $67.07 in May of the prior year. The June 2025 average was $72.62. The Alaska Department of Revenue ("DOR") calculated ANS crude oil production was 461 thousand barrels per day ("bpd") in Alaska's fiscal year ending June 30, 2024. Production rose to 469 thousand bpd in fiscal year ending June 30, 2025. In the Spring 2025 Revenue Forecast published March 12, 2025, the DOR expects production to continue to grow to 663 thousand bpd by fiscal year 2034. This is primarily a result of new production coming on-line in and around the NPR-A region west of Prudhoe Bay. A partnership between Santos and Repsol is constructing the new Pikka field and ConocoPhillips is developing the large new Willow field. There are also a number of smaller new fields in the ANS that are contributing to the State of Alaska's production growth estimates.
The Alaska Permanent Fund is seeded annually by the oil wealth the State continues to save each year and has grown significantly over 40 years of successful investment. As of May 31, 2025 the fund's value was $83.13 billion. According to the DOR it is scheduled to contribute $3.7 billion to Alaska General Fund in fiscal year 2025 for general government spending and to pay the annual dividend to Alaskan residents.
According to the Alaska Multiple Listing Services, the average sales price of a single family home in Anchorage rose 6.2% in 2024 to $510,064, following a 5.2% increase in 2023. This was the seventh consecutive year of price increases. Through June of 2025 prices have continued to increase on average 2.6% to $523,059.
The average sales price for single family homes in the Matanuska Susitna Borough rose 3.8% in 2024 to $412,859, after increasing 4% in 2023. This continues a trend of average price increases for more than a decade in the region. Through June of 2025 prices have continued to increase on average 6.9% to $441,463. These two markets represent where the vast majority of the Bank's residential lending activity occurs.
The Alaska Multiple Listing Services reported a 3.4% increase in the number of units sold in Anchorage when comparing 2024 to 2023. The first six months of 2025 has seen a 4.8% increase in home sales compared to the first half of 2024 in Anchorage.
There was virtually no change in the number of homes sold in the Matanuska Susitna Borough, with only four fewer homes sold in 2024 than in 2023 or -0.2%. In the first six months of 2025 the number of units sold has increased 13.1% in the Matanuska Susitna Borough compared to the first half of 2024.
Northrim Bank sponsors the Alaskanomics blog to provide news, analysis, and commentary on Alaska's economy. Join the conversation at Alaskanomics.com, or for more information on the Alaska economy, visit: www.northrim.com and click on the "Business Banking" link and then click "Learn." Information from our website is not incorporated into, and does not form, a part of this earnings release.
Review of Income Statement
Consolidated Income Statement
In the second quarter of 2025, Northrim generated a ROAA of 1.48% and a ROAE of 16.37%, compared to 1.76% and 19.70%, respectively, in the first quarter of 2025 and 1.31% and 14.84%, respectively, in the second quarter a year ago.
Net Interest Income/Net Interest Margin
Net interest income increased 7% to $33.6 million in the first quarter of 2025 compared to $31.3 million in the first quarter of 2025 and increased 24% compared to $27.1 million in the second quarter of 2024. Interest expense on deposits increased to $10.3 million in the second quarter of 2025 compared to $9.9 million in the first quarter of 2025 and compared to $9.5 million in the second quarter of 2024.
NIMTE* was 4.72% in the second quarter of 2025 up from 4.61% in the preceding quarter and 4.30% in the second quarter a year ago. NIMTE* increased 42 basis points in the second quarter of 2025 compared to the second quarter of 2024 primarily due to a favorable change in the mix of earning-assets towards higher loan balances as a percentage of total earning-assets, higher yields on those assets as variable rate loans reset at higher rates which were only partially offset by an increase in borrowings. The weighted average interest rate for new loans booked in the second quarter of 2025 was 7.27% compared to 7.30% in the first quarter of 2025 and 7.90% in the second quarter a year ago. The yield on the investment portfolio in the second quarter of 2025 increased to 3.07% from 2.97% in the first quarter of 2025 and 2.82% in the second quarter of 2024. "We are continuing to see some benefits from the repricing of our loan portfolio and new production increasing our margin" said Jed Ballard, Chief Financial Officer. Northrim's NIMTE* continues to remain above the peer average of 3.26% posted by the S&P U.S. Small Cap Bank Index with total market capitalization between $250 million and $1 billion as of March 31, 2025.
Provision for Credit Losses
Northrim recorded a provision for credit losses of $2.0 million in the second quarter of 2025, which was comprised of a provision for credit losses on loans of $1.8 million, a $157,000 provision for credit losses on unfunded commitments, and a provision for credit losses on purchased receivables of $18,000. This compares to a benefit to the provision for credit losses of $1.4 million in the first quarter of 2025, which was comprised of a benefit to the provision for credit losses on loans of $1.1 million, a $322,000 benefit for credit losses on unfunded commitments, and a provision for credit losses on purchased receivables of $46,000. In the second quarter a year ago, Northrim recorded a benefit to the provision for credit losses of $120,000 which was comprised of a $134,000 provision for credit losses on loans and a $254,000 benefit to the provision for credit losses on unfunded commitments.
The increase to the provision for credit losses on loans in the second quarter of 2025 as compared to the prior quarter and the same quarter a year ago was primarily a result of increased loan balances as well as an increase in estimated loss rates due to less favorable economic forecasts and trends in qualitative factors. The increase to the provision for unfunded commitments in the second quarter of 2025 was primarily due to an increase in estimated loss rates which was only partially offset by changes in mix of unfunded commitments.
Nonperforming assets, net of government guarantees, decreased during the quarter to $11.9 million at June 30, 2025, compared to $12.3 million at March 31, 2025, and increased compared to $5.1 million at June 30, 2024. The increase in nonperforming assets, net of government guarantees at June 30, 2025 compared to June 30, 2024 is primarily the result of the acquisition of Sallyport in the fourth quarter of 2024.
The allowance for credit losses on loans was 290% of nonperforming loans, net of government guarantees, at the end of the second quarter of 2025, compared to 262% three months earlier and 365% a year ago.
Other Operating Income
In addition to home mortgage lending, Northrim has interests in other businesses that complement its core community banking activities, including purchased receivables financing and wealth management. Other operating income contributed $16.6 million, or 33% of total second quarter 2025 revenues, as compared to $13.0 million, or 29% of revenues in the first quarter of 2025, and $9.6 million, or 26% of revenues in the second quarter of 2024. The increase in other operating income in the second quarter of 2025 as compared to the second quarter of 2024 was primarily the result of increased purchased receivable income due to the Company's acquisition of Sallyport on October 31, 2024. Mortgage banking income in the second quarter of 2025 increased as compared to the first quarter of 2025 and second quarter of 2024 due to a higher volume of mortgage activity. See further discussion regarding mortgage activity contained under "Home Mortgage Lending" below.
Other Operating Expenses
Operating expenses were $32.5 million in the second quarter of 2025, compared to $28.2 million in the first quarter of 2025, and $25.2 million in the second quarter of 2024. The increase in other operating expenses in the second quarter of 2025 compared to the first quarter of 2025 was primarily due to an increase in salaries and other personnel expense, including $980,000 in higher mortgage commissions expense due to higher mortgage volume, $763,000 in higher salary expense, a $760,000 increase in group medical expenses, and increases in profit share expense and payroll taxes. Additionally, marketing expense increased due to timing of annual charitable contributions. The increase in total other operating expenses in the second quarter of 2025 compared to the second quarter a year ago was primarily due to an increase in salaries and other personnel expense, the increase in compensation expense for Sallyport acquisition payments, and an increase in data processing expense. Total other operating expense increased $2.1 million in the Specialty Finance segment in the second quarter of 2025 compared to the second quarter of 2024 due to the acquisition of Sallyport on October 31, 2024.
Income Tax Provision
In the second quarter of 2025, Northrim recorded $4.0 million in state and federal income tax expense for an effective tax rate of 25.3%, compared to $4.3 million, or 24.2% in the first quarter of 2025 and $2.5 million, or 21.9% in the second quarter a year ago. The increase in the tax rate in the second quarter of 2025 as compared to the first quarter of 2025 and second quarter of 2024 is primarily the result of a decrease in tax credits and tax exempt interest income as a percentage of pre-tax income in 2025 as compared to 2024.
Community Banking
Northrim is committed to meeting the needs of the diverse communities in which it operates. As a testament to that support, the Bank has branches in four regions of Alaska identified by the Federal Reserve as 'distressed or underserved non-metropolitan middle-income geographies'.
Net interest income in the Community Banking segment totaled $30.0 million in the second quarter of 2025, compared to $28.2 million in the first quarter of 2025 and $24.3 million in the second quarter of 2024. Net interest income increased $5.7 million or 23% in the second quarter of 2025 as compared to the second quarter of 2024 mostly due to higher interest income on loans. This increase was only partially offset by lower interest income on investments and higher interest expense on deposits and borrowings.
The provision for credit losses in the Community Banking segment was $1.3 million in the second quarter of 2025 compared to a benefit to the provision for credit losses of $1.8 million in the first quarter of 2025 and a benefit to the provision for credit losses of $184,000 in the same quarter a year ago. The increase to the provision for credit losses in the Community Banking segment in the second quarter of 2025 as compared to the prior quarter and the same quarter a year ago was primarily a result of increased loan balances as well as an increase in estimated loss rates due to less favorable economic forecasts and trends in qualitative factors. In the first quarter of 2025, the Company recorded a net benefit for credit losses in the Community Banking segment primarily due to changes in the Company's loss rate regression models for commercial, commercial real estate, and construction loans. These decreases in the provision were only partially offset by increases in estimated loss rates for management's assessment of economic conditions and an increase for higher loan balances.
Other operating expenses in the Community Banking segment totaled $21.8 million in the second quarter of 2025, up $3.2 million or 17% from $18.6 million in the first quarter of 2025, and up $3.7 million or 20% from $18.1 million in the second quarter a year ago. The increase in the second quarter of 2025 as compared to the prior quarter and compared to the same quarter a year ago was primarily due to increases in salaries and other personnel expense, including $667,000 in higher salary expense, an $873,000 increase in group medical expenses, as well as increases in profit share expense and payroll taxes. Additionally, marketing expense increased due to timing of annual charitable contributions.
The following tables provide highlights of the Community Banking segment of Northrim:
Three Months Ended
(Dollars in thousands, except per share data)
June 30, 2025
March 31, 2025
December 31, 2024
September 30, 2024
June 30, 2024
Net interest income
$
29,971
$
28,151
$
27,643
$
25,928
$
24,318
(Benefit) provision for credit losses
1,319
(1,768
)
771
1,492
(184
)
Other operating income
3,268
2,703
2,535
3,507
2,451
Other operating expense
21,764
18,581
19,116
18,723
18,069
Income before provision for income taxes
10,156
14,041
10,291
9,220
8,884
Provision for income taxes
2,413
3,253
1,474
2,133
1,786
Net income
$
7,743
$
10,788
$
8,817
$
7,087
$
7,098
Weighted average shares outstanding, diluted
5,611,558
5,608,102
5,597,889
5,583,055
5,558,580
Diluted earnings per share attributable to Community Banking
$
1.37
$
1.93
$
1.58
$
1.26
$
1.27
Year-to-date
(Dollars in thousands, except per share data)
June 30, 2025
June 30, 2024
Net interest income
$
58,122
$
48,533
(Benefit) provision for credit losses
(449
)
13
Other operating income
5,971
4,919
Other operating expense
40,345
35,247
Income before provision for income taxes
24,197
18,192
Provision for income taxes
5,666
3,752
Net income Community Banking segment
$
18,531
$
14,440
Weighted average shares outstanding, diluted
5,611,734
5,562,025
Diluted earnings per share
$
3.30
$
2.59
Home Mortgage Lending
During the second quarter of 2025, mortgage loans funded for sale were $249.7 million, compared to $108.5 million in the first quarter of 2025, and $152.3 million in the second quarter of 2024.
During the second quarter of 2025, the Bank purchased loans of $27.5 million from its subsidiary, Residential Mortgage, of which approximately half were jumbos, one-quarter were mortgages for second homes, and one-quarter were adjustable rate mortgages, with a weighted average interest rate of 6.71%, as compared to $13.1 million and 6.39% in the first quarter of 2025, and $29.2 million and 6.82% in the second quarter of 2024. Net interest income contributed $3.5 million to total Home Mortgage Lending revenue in the second quarter of 2025, up from $3.0 million in the prior quarter, and up from $2.8 million in the second quarter a year ago.
The Company reclassified $100 million in consumer mortgages held for investment to held for sale in the first quarter of 2025 and recorded unrealized losses of $1.2 million related to this portfolio in the first quarter of 2025. In the second quarter of 2025, the Company sold $61 million of the $100 million that was reclassified to loans held for sale in the first quarter of 2025 for a total realized loss of $545,000.
The Arizona, Colorado, and Pacific Northwest mortgage expansion markets were responsible for 22% of Residential Mortgage's $216 million total production in the second quarter of 2025 (excluding the $61 million in mortgages sold noted above), 20% of $122 million total production in the first quarter of 2025, and 22% of $182 million total production in the second quarter of 2024.
The provision for credit losses in the Home Mortgage Lending segment was $639,000 in the second quarter of 2025 compared to a benefit to the provision for credit losses of $307,000 in the first quarter of 2025 and a provision for credit loses of $64,000 in the second quarter of 2024. The increase in the provision for credit losses in the second quarter of 2025 in the Home Mortgage Lending segment as compared to the prior quarter and the same quarter a year ago was primarily a result of increased loan balances. The benefit to the provision for loan losses in the Home Mortgage Lending segment in the first quarter of 2025 was primarily the result of the reclassification of $100 million in mortgage loans to loans held for sale, which was only partially offset by an increase in the provision for loan losses due to changes in the Company's loss rate regression models for home mortgage loans.
The net change in fair value of mortgage servicing rights decreased mortgage banking income by $818,000 during the second quarter of 2025 compared to a decrease of $855,000 for the first quarter of 2025 and a decrease of $81,000 for the second quarter of 2024. Mortgage servicing revenue increased to $3.0 million in the second quarter of 2025 from $2.7 million in the prior quarter and increased from $2.2 million in the second quarter of 2024 due to an increase in production of Alaska Housing Finance Corporation (AHFC) mortgages, which contribute to servicing revenues at origination. In the second quarter of 2025, the Company's servicing portfolio increased $69.3 million compared to a $24.0 million increase in the first quarter of 2025, and an increase of $41.8 million in the second quarter of 2024.
As of June 30, 2025, Northrim serviced 6,458 loans in its $1.55 billion home-mortgage-servicing portfolio, a 5% increase compared to the $1.48 billion serviced as of the end of the first quarter of 2025, and a 41% increase from the $1.10 billion serviced a year ago.
The following tables provide highlights of the Home Mortgage Lending segment of Northrim:
Three Months Ended
(Dollars in thousands, except per share data)
June 30, 2025
March 31, 2025
December 31, 2024
September 30, 2024
June 30, 2024
Mortgage commitments
$
73,198
$
68,258
$
32,299
$
77,591
$
88,006
Mortgage loans funded for sale
$
249,680
$
108,499
$
162,530
$
209,960
$
152,339
Mortgage loans funded for investment
27,455
13,061
23,380
38,087
29,175
Total mortgage loans funded
$
277,135
$
121,560
$
185,910
$
248,047
$
181,514
Mortgage loan refinances to total fundings
10
%
11
%
11
%
6
%
6
%
Mortgage loans serviced for others
$
1,553,987
$
1,484,714
$
1,460,720
$
1,166,585
$
1,101,800
Net realized and unrealized gains on mortgage loans sold and held for sale
$
5,091
$
1,580
$
3,747
$
5,079
$
3,189
Change in fair value of mortgage loan commitments, net
(110
)
660
(665
)
60
390
Total production revenue
4,981
2,240
3,082
5,139
3,579
Mortgage servicing revenue
2,957
2,696
2,847
2,583
2,164
Change in fair value of mortgage servicing rights:
Due to changes in model inputs of assumptions1
(355
)
(322
)
1,372
(566
)
239
Other2
(463
)
(533
)
(499
)
(402
)
(320
)
Total mortgage servicing revenue, net
2,139
1,841
3,720
1,615
2,083
Other mortgage banking revenue
280
170
238
293
222
Total mortgage banking income
$
7,400
$
4,251
$
7,040
$
7,047
$
5,884
Net interest income
$
3,507
$
3,046
$
3,280
$
2,941
$
2,775
Provision (benefit) for credit losses
639
(307
)
305
571
64
Mortgage banking income
7,400
4,251
7,040
7,047
5,884
Other operating expense
7,593
6,490
7,198
7,643
6,697
Income before provision for income taxes
2,675
1,114
2,817
1,774
1,898
Provision for income taxes
746
310
842
497
532
Net income
$
1,929
$
804
$
1,975
$
1,277
$
1,366
Weighted average shares outstanding, diluted
5,611,558
5,608,102
5,597,889
5,583,055
5,558,580
Diluted earnings per share attributable to Home Mortgage Lending
$
0.34
$
0.14
$
0.35
$
0.23
$
0.25
1Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates.2Represents changes due to collection/realization of expected cash flows over time.
Year-to-date
(Dollars in thousands, except per share data)
June 30, 2025
June 30, 2024
Mortgage loans funded for sale
$
358,179
$
236,663
Mortgage loans funded for investment
40,516
46,578
Total mortgage loans funded
$
398,695
$
283,241
Mortgage loan refinances to total fundings
10
%
6
%
Net realized and unrealized gains on mortgage loans sold and held for sale
$
6,671
$
5,168
Change in fair value of mortgage loan commitments, net
550
777
Total production revenue
7,221
5,945
Mortgage servicing revenue
5,653
3,725
Change in fair value of mortgage servicing rights:
Due to changes in model inputs of assumptions1
(677
)
528
Other2
(996
)
(634
)
Total mortgage servicing revenue, net
3,980
3,619
Other mortgage banking revenue
450
351
Total mortgage banking income
$
11,651
$
9,915
Net interest income
$
6,553
$
5,007
Provision for credit losses
332
16
Mortgage banking income
11,651
9,915
Other operating expense
14,083
12,783
Income before provision for income taxes
3,789
2,123
Provision for income taxes
1,056
595
Net income Home Mortgage Lending segment
$
2,733
$
1,528
Weighted average shares outstanding, diluted
5,611,734
5,562,025
Diluted earnings per share
$
0.48
$
0.28
1Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates.2Represents changes due to collection/realization of expected cash flows over time.
Specialty Finance
The Company's Specialty Finance segment includes Northrim Funding Services and Sallyport. Northrim Funding Services is a division of the Bank and has offered factoring solutions to small businesses since 2004. Sallyport is a leading provider of factoring, asset-based lending and alternative working capital solutions to small and medium sized enterprises in the United States, Canada, and the United Kingdom that the Company acquired on October 31, 2024 in an all cash transaction valued at approximately $53.9 million. The composition of revenues for the Specialty Finance segment are primarily purchased receivable income, but also includes interest income from loans and other fee income.
The acquisition of Sallyport included $1.1 million in one-time deal related costs which are reflected in other operating expenses for the fourth quarter of 2024 in the tables below. Total pre-tax income for Sallyport for the second quarter of 2025 was $1.3 million compared to $1.3 million in the first quarter of 2025 and $945,000 for the two months of operations in the fourth quarter of 2024, excluding transaction costs.
Average purchased receivables and loan balances at Sallyport were $71.0 million for the second quarter of 2025 with a yield of 27.23% compared to average balances of $59.9 million for the first quarter of 2025 and a yield of 35.8%. The yield in the first quarter of 2025 included the recognition of $899,000 in nonaccrual fee income collected during the quarter related to two nonperforming receivables and the collection of a $350,000 line termination fee. The yield excluding these items for the first quarter of 2025 was 27.4%.
The following tables provide highlights of the Specialty Finance segment of Northrim:
Three Months Ended
(Dollars in thousands, except per share data)
June 30, 2025
March 31, 2025
December 31, 2024
September 30, 2024
June 30, 2024
Purchased receivable income
$
5,897
$
6,150
$
3,526
$
1,033
$
1,242
Other operating income
75
(64
)
(68
)
—
—
Interest income
782
596
407
158
170
Total revenue
6,754
6,682
3,865
1,191
1,412
Provision for credit losses
18
666
125
—
—
Compensation expense - SCF acquisition payments
600
600
—
—
—
Other operating expense
2,531
2,500
3,063
362
428
Interest expense
668
496
489
185
210
Total expense
3,817
4,262
3,677
547
638
Income before provision for income taxes
2,937
2,420
188
644
774
Provision for income taxes
831
688
53
183
218
Net income Specialty Finance segment
$
2,106
$
1,732
$
135
