Northrim BanCorp : Investor Presentation Second Quarter 2023

Investor Presentation

Second Quarter 2023

Nasdaq: NRIM

1

Northrim Overview

$2.6 billion community bank founded in 1990 to provide financial services to Alaskan residents and businesses

• Superior customer first service
• Strong balance sheet
• Solid net interest margin; pricing reflects quality service
• Focus on asset quality
• Diversified revenue sources
• Leadership to build Alaska's economy

Nome

Legend

Scale:100mi

Branches: 19

LPO: 1

Fairbanks

Soldotna				Juneau
Homer
Kodiak				Sitka
	Anchorage HQ &
		9 Branches	Ketchikan

1990	1999	2000	2007	2008	2014	2020	2021	2022	2023
Founded	Acquired Bank of	Wells Fargo	Acquired Alaska	Assets exceed	Acquired Alaska	Assets exceed	Originated approx.	Opened temporary	Opened Kodiak
	America	acquisition of	First Bank & Trust	$1 Billion	Pacific Bankshares	$2 Billion	5,800 ($613M) PPP	branch in Nome	branch
	Branches	National Bank					loans (2,300 to		Opened Homer
		of Alaska					new customers)		LPO
									Opened permanent
									Nome branch

2

2nd Quarter 2023 | Financial Highlights

Earnings & Profitability	Q2-23	Q1-23	Q2-22
Earnings per Share	$0.98	$0.84	$0.83
Net Income	$5.58	$4.83	$4.80
Net Interest Margin	4.14%	4.22%	3.67%
ROAA	0.85%	0.76%	0.74%
ROAE	9.85%	8.73%	8.58%
Dividends per Share	$0.60	$0.60	$0.41
Balance Sheet & Capital
Total Loans	$1,659	$1,535	$1,406
Core Loans (Total Loans excluding PPP)	$1,656	$1,531	$1,374
Total Deposits	$2,302	$2,296	$2,335
Total Capital / Risk Adjusted Assets	13.02%	13.60%	13.45%
Shareholders' equity / Total assets	8.39%	8.70%	8.24%
TCE	7.83%	8.13%	7.68%
Tangible Book Value per Share	$36.60	$36.74	$35.08
Asset Quality
NPAs / Total Assets, net govt guarantees	0.21%	0.25%	0.45%
Total Loan ACL/Portfolio Loans	0.94%	0.92%	0.82%

Net Income

$5.577 million

ROAA 0.85%

Core Loan

Growth

20.5% YoY

Portfolio Loan

Yield

6.48%

EPS

$0.98

ROAE 9.85%

NIM

4.14%

Cost of IB

Deposits

1.56%

Dollars in millions, except per share amounts

3

Investment Opportunity

Unique Banking Environment Provides Opportunities to Gain Market Share

• Northrim deposit market share has increased by 36% since 2018
• "Land and Expand" strategy leveraging state-leading success in PPP program to add customers

Alaska Banking Environment Drives Higher Yields on Loans and Lower Deposit Costs

• Northrim loan yields averaged 5.61% over last 10 years vs 4.93% in the U.S.
• Northrim interest-bearing deposits costs averaged 30 bps over last 10 years vs 57 bps in the U.S.
• Increasingly diverse economy

Experienced Management Team Delivering Asset and Profitability Growth

• Branch expansion strategy benefiting from competitor pull back
• Adding additional team members has enhanced loan and deposit originations
• Credit culture has positioned bank for potential economic downturn

Asset Sensitivity Expected to Drive Increasing Profitability

• 31% of loans mature or reprice in the next three months, 13% of loans mature or reprice in three to twelve months, and 17% of loans mature or reprice in one to two years
• 15% of earning assets reprice immediately when prime or other rate indices change
• 31% of deposits are non-interest bearing

Capital Management

• Repurchased ~20% of outstanding shares in last 4 years
• Increased dividend by 100% in last 4 years, currently at $0.60 / share / quarter

4

Steady Loan Growth Supported by Increasing Market Share

"Land and Expand" strategy building on success of PPP efforts

$1,500

$1,250

$1,000

Portfolio Loans Outstanding ($1.66 billion)

$1,656

$1,495

$118

$1,296

$305

$0 $1,139

$0

$0$1,043

10%

7%

40%

Loan

$750

$955

$984

6.39%

5.96%

Composition

(6/30/2023)

27%

$500

5.74%

5.71%

$250

$0

5.47%

5.08%

5.18%

	0.2%
	16%
Commercial	SBA PPP
CRE owner occupied	CRE nonowner occupied

2017	2018	2019	2020	2021	2022	6/30/23
Core loans outstanding	PPP loans outstanding		Yield %

Construction

Consumer

YTD Portfolio Loan Yield:

6.39%

5