Updated 3/11/2025
Northrim BanCorp (NASDAQ: NRIM) isn’t a stock that grabs headlines, but for income-focused investors, it has a lot to offer. This Alaska-based regional bank has built a solid reputation for stability, responsible management, and steady dividend payments. While regional banks can come with their share of challenges, Northrim’s strong financial footing and attractive dividend yield make it worth considering.
For those seeking reliable income, NRIM checks many of the right boxes. Let’s take a closer look at its dividend profile, financial health, and whether it fits into a long-term dividend strategy.
Key Dividend Metrics
📈 Dividend Yield: 3.57% (Forward)
💵 Annual Dividend: $2.56 per share
📊 5-Year Average Dividend Yield: 4.13%
🔄 Dividend Growth: Consistent increases over time
💰 Payout Ratio: 37.16% (Plenty of room for future growth)
📅 Next Dividend Date: March 14, 2025
🚀 Quarterly Earnings Growth: 65.2% year-over-year
Dividend Overview
Northrim offers an appealing 3.57% forward dividend yield, which is attractive compared to many regional banks. With an annual dividend of $2.56 per share, investors receive a steady stream of income without concerns of overextension.
One of the most encouraging signs is the low payout ratio of 37.16%. That means the company is paying out less than half of its earnings in dividends, leaving plenty of room for future increases while still investing in growth.
The company’s dividend history reflects a strong commitment to returning capital to shareholders, and with earnings on the rise, there’s potential for continued increases. Investors who appreciate consistency will find Northrim’s track record reassuring.
Dividend Growth and Safety
Dividend reliability isn’t just about the current yield—it’s about sustainability and growth. NRIM has kept its five-year average dividend yield at 4.13%, which suggests a steady approach rather than drastic jumps or cuts.
The company’s earnings growth is another big positive. Quarterly earnings have surged 65.2% year-over-year, a strong signal that management is effectively navigating the banking landscape. A healthy return on equity (ROE) of 14.73% reinforces this, indicating that NRIM is making smart financial moves.
One area to keep an eye on is operating cash flow, which has been negative at -$8.73 million. While this isn’t an immediate red flag, cash flow is a key component of dividend sustainability. If this trend persists, it could limit dividend growth in the future.
Chart Analysis
The price action on Northrim BanCorp (NRIM) tells an interesting story, especially for dividend investors who also pay attention to technical trends. The stock has experienced strong momentum over the past year, but recent price movements suggest a shift in sentiment.
Price Movement and Moving Averages
Looking at the overall trend, NRIM has been in a strong uptrend for much of the past year, climbing from levels near $50 to a peak above $90 before pulling back. The 50-day moving average has served as a key support level for most of this run, but in recent weeks, the price has broken below it. That’s often a sign that the trend is weakening or entering a period of consolidation.
The 200-day moving average, which tends to act as long-term support, is now coming into play. The price is currently hovering near this level, meaning that the next few trading sessions will be crucial. A bounce off the 200-day moving average could signal renewed strength, while a break below it might indicate further downside pressure.
Volume and Market Participation
One notable pattern in the volume data is the spike in trading activity in early 2025, which coincided with the stock reaching new highs. That kind of volume surge typically means heavy institutional involvement, and it often marks an inflection point.
More recently, volume has tapered off, suggesting that enthusiasm has cooled. Selling volume has outpaced buying on several down days, which aligns with the current pullback. However, the absence of extreme volume on the decline suggests that this isn’t a panic sell-off but rather a controlled correction.
Relative Strength Index (RSI)
The RSI indicator, positioned in the lower section of the chart, has steadily declined over the past few months. After being in overbought territory when the stock was above $90, it has now dropped toward the lower end of the range. Currently, RSI is approaching oversold levels, which could indicate that the stock is near a point where buyers might start stepping in.
If RSI dips below 30, that would typically suggest an oversold condition, potentially setting up a short-term bounce. However, RSI alone isn’t a guarantee of a reversal—it’s more of a signal that momentum has shifted significantly to the downside.
Recent Candlestick Action
The last five trading sessions have shown a mix of indecision and continued selling pressure. Recent daily candles feature wicks on both ends, suggesting that buyers and sellers are battling for control. The most recent close at 71.87 is slightly above the day’s low, indicating some support. However, the inability to push higher suggests that there isn’t strong buying pressure just yet.
If the stock forms a strong reversal candle, such as a bullish engulfing pattern or hammer near the 200-day moving average, it could be an early sign that sentiment is shifting. On the other hand, a close below this key support level would likely trigger further downside.
Analyst Ratings
📈 Upgrades
In December 2024, a well-known investment firm initiated coverage on NRIM with an outperform rating and a price target of $96.50. Analysts cited the company’s strong financial performance, well-managed acquisitions, and consistent earnings growth as key reasons for their optimism. Additionally, they pointed to NRIM’s ability to navigate interest rate fluctuations while maintaining solid loan growth, making it a standout in the regional banking space.
📉 Downgrades
On the other hand, in early 2025, another analyst firm downgraded NRIM, citing concerns about broader economic uncertainties affecting regional banks. Their caution stemmed from the possibility of a slowdown in loan origination and pressure on net interest margins as the Federal Reserve potentially shifts its monetary policy stance. While the firm still viewed NRIM as a fundamentally sound company, they suggested the current valuation already reflected much of its near-term growth potential.
🎯 Consensus Price Target
The consensus among analysts pegs NRIM’s price target at approximately $93.25, indicating some upside potential from its recent levels. While bullish analysts believe the stock has room to run due to strong earnings and asset quality, those with a more cautious stance highlight external risks such as economic headwinds and regulatory factors that could weigh on future growth.
Analyst opinions remain mixed, with some seeing NRIM as an attractive long-term investment based on its financial discipline, while others suggest that the recent price appreciation might limit near-term gains. As always, investors should weigh these perspectives alongside their own risk tolerance and investment goals.
Earning Report Summary
Northrim BanCorp just wrapped up a strong year, posting solid financial results that reflect both growth and stability. The bank has been making smart moves in managing interest rates, growing its loan portfolio, and improving efficiency, which all contributed to a strong finish in 2024.
Fourth Quarter Performance
In the last three months of the year, Northrim reported $10.9 million in net income, which works out to $1.95 per share. That’s a big jump from the $7.1 million or $1.19 per share in the same quarter a year ago. Total revenue for the quarter hit $39.5 million, up from $33.2 million in the prior year’s fourth quarter. Clearly, business is picking up, and the bank is making the most of it.
Full-Year Results
For the entire year, net income came in at $37 million, or $6.72 per share, which is a major improvement over the $25.3 million (or $4.53 per share) posted in 2023. Total revenue climbed 21% to $151.9 million, showing strong momentum across the board.
Key Financial Metrics
- Net interest income: The bank earned $110.8 million in net interest income for 2024, up from $91.5 million in 2023. The steady rise in interest rates helped, but so did smart lending decisions.
- Net interest margin (NIM): Northrim’s net interest margin edged up to 4.33%, meaning it made more money on its loans compared to what it paid out in interest.
- Non-interest income: Revenue from things like mortgage banking and financial services jumped to $41.1 million, compared to $33.7 million the year before.
- Efficiency ratio: The bank managed costs better, bringing its efficiency ratio down to 67.6% from 72.6% in 2023. A lower number means it’s spending less to generate revenue.
Loan and Deposit Growth
Loans grew by 12%, hitting $1.22 billion by the end of the year, fueled by commercial real estate and construction lending. Deposits also saw healthy growth, rising 10% to $1.5 billion. That suggests customers are sticking around and trusting the bank with their money.
Asset Quality and Capital Strength
Northrim’s loan portfolio remains in good shape. Non-performing loans make up just 0.53% of the total, slightly higher than last year’s 0.38%, but still very manageable. The bank has also set aside $15.2 million to cover potential loan losses, showing it’s prepared for any bumps in the road.
Capital levels remain strong, with a total capital ratio of 14.8% and a tier 1 leverage ratio of 11.2%—both well above regulatory requirements. That gives Northrim plenty of flexibility to grow while keeping risks in check.
Management’s Take
Leadership credits the strong year to solid risk management, disciplined expense control, and a focus on supporting the local economy. They’ve positioned the bank well to navigate future market conditions while continuing to serve their customers across Alaska.
Overall, it was a strong year for Northrim, with meaningful growth across key financial areas and a solid outlook heading into 2025.
Financial Health and Stability
A strong dividend starts with a strong balance sheet, and NRIM holds up well in this department. The company’s profit margin sits at 24.33%, while its operating margin is a solid 33.26%, showing efficiency in its operations.
On the liquidity side, NRIM holds $76.11 million in cash, which provides flexibility in uncertain times. Its total debt of $53.85 million is reasonable, especially when compared to its cash position.
One particularly notable figure is the book value per share of $48.41. With a price-to-book ratio of 1.48, the stock isn’t trading at an inflated level, meaning investors aren’t overpaying for the company’s net assets.
Valuation and Stock Performance
NRIM’s stock has had a strong run, currently sitting at $71.87 per share. That’s a significant jump from its 52-week low of $43.92, reflecting a more than 50% recovery.
The stock’s 52-week high is $91.72, so while there’s still room to climb, it has already come a long way from last year’s lows. Investors who bought in at lower levels have seen strong gains, but for those considering entry now, it’s worth being aware of this recent rally.
From a valuation perspective, NRIM trades at a trailing P/E of 10.84 and a forward P/E of 9.02. These numbers suggest the stock is still reasonably priced, especially for a bank with strong earnings growth.
The price-to-sales ratio of 2.58 and price-to-book ratio of 1.48 are in line with regional banking peers, further supporting the idea that NRIM isn’t overvalued.
Risks and Considerations
Every investment comes with risks, and while NRIM has a lot going for it, there are a few things to keep in mind.
Regional Dependence – As a bank operating primarily in Alaska, NRIM’s fortunes are tied to the state’s economy. Any downturn in the region’s economic activity could impact loan growth and profitability.
Interest Rate Sensitivity – Like all banks, NRIM is affected by interest rate movements. While higher rates have been beneficial in recent years, a sharp decline could pressure margins.
Cash Flow Concerns – The negative operating cash flow of -$8.73 million is something to monitor. While earnings are strong, consistent negative cash flow could become a headwind for dividend growth.
Stock Volatility – Even with a relatively low beta of 0.85, NRIM’s stock price has seen wide swings. A 52-week range of $43.92 to $91.72 shows that while there is upside potential, investors should be prepared for price fluctuations.
Institutional Influence – With 73.32% of shares held by institutions, large-scale buying or selling by funds could impact stock movements. While institutional ownership often signals confidence, it can also contribute to volatility.
Final Thoughts
For investors focused on dividend income, Northrim BanCorp offers a compelling mix of stability, yield, and financial strength. Its low payout ratio, strong earnings growth, and well-managed balance sheet make it an appealing choice for those seeking reliable income.
At the same time, the stock has run up significantly from its lows, meaning that investors should consider potential volatility. While it remains attractively valued compared to earnings, the recent rally suggests that buying at the right price is key.
Overall, NRIM is a solid regional bank with a strong commitment to dividends, a well-capitalized balance sheet, and the ability to weather economic cycles. For those looking to add a dependable dividend payer to their portfolio, it’s a name worth watching.
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