Alaska Housing Market Slows Bank’s Earnings
The slowing Alaska housing market and concerns over bad credit home loans put a dent in Northrim Bank’s first-quarter earnings, the company said in a statement Monday.
Parent company Northrim BanCorp Inc. reported that its first-quarter profits fell to $2.7 million, or 44 cents a share, compared to $2.9 million, or 47 cents a share during the same period a year ago.
“Residential real estate developers experienced slower sales during the winter and general business activity was also seasonally slow during the first quarter,” Marc Langland, Northrim president and CEO, said.
“This seasonality impacts all financial results, including profitability ratios, deposit and home loan portfolio growth and asset quality.”
Northrim’s affiliate companies helped soften the blow caused by slowing mortgage loan demand, generating upwards of 40 percent of Northrim’s noninterest income.
Purchased receivable income grew 36 percent to $427,000 and employee benefit plan income increased 49 percent to $257,000.
“The addition of these two complementary business services to our core banking business has been well received by our customers, and we believe that there are further opportunities for us to expand our fee-based business,” Chris Knudson, Chief Operating Officer, said.
The recent introduction of the bank’s High Performance Checking for businesses will target new business deposits in 2007.
Overall revenues grew 8 percent, to $13.8 million during the quarter, as expenses rose 12 percent, with compensation, Internet banking and training costs accounting for the majority of the costs.
Northrim is planning to relocate one of its Anchorage branches, and at the same time is looking at other expansion opportunities, like investigating the potential of adding a new branch in Fairbanks.
Northrim declared a cash dividend of 15 cents per share, a 20 percent increase from the previous dividend. Shareholders’ equity increased 13 percent for the quarter, to $15.82 per share.
In other news, Northrim BanCorp has scheduled its annual meeting for May 23, beginning at 9 a.m. at the Hilton Anchorage Hotel.
SOURCE: Alaska Journal