Northrim BanCorp, Inc. (NASDAQ: NRIM) completed a private placement of $60 million in 6.875% fixed‑to‑floating subordinated notes due 2035, a transaction that will be counted as Tier 2 capital on the bank’s balance sheet. The notes carry a 6.875% fixed rate for the first five years and then reset quarterly to the three‑month SOFR plus 348 basis points, providing a predictable interest expense profile while allowing the company to adjust to market conditions after the initial period.
The proceeds are earmarked for general corporate purposes and to bolster regulatory capital ratios. By adding Tier 2 capital, Northrim can increase its total capital ratio, which stood at 12.35% as of December 31, 2023, comfortably above the “well‑capitalized” threshold of 10%. The new capital will also give the bank flexibility to pursue lending growth and potential acquisitions without diluting equity.
Northrim’s recent earnings give context to the capital raise. In Q3 2025 the bank reported earnings per share of $0.72, a $0.24 beat over the consensus estimate of $0.48, driven by higher net interest income and disciplined operating costs. Revenue rose to $66.59 million from $50.60 million in the same quarter a year earlier, reflecting stronger loan demand in Alaska’s commodity‑heavy economy. The earnings beat and revenue growth underscore the bank’s solid operating performance, which supports the decision to raise additional capital.
Management said the new capital will fund a mix of organic growth initiatives, including expanding the loan portfolio in emerging sectors such as renewable energy projects and small‑business lending, and investing in technology upgrades to improve digital banking services. The bank’s CEO highlighted that the capital raise positions the company to capture market share in a competitive regional banking landscape while maintaining a strong capital cushion.
The announcement was met with positive market reaction. Analysts upgraded the bank’s rating and raised price targets, citing the strong earnings beat and the strategic use of the new capital. Institutional investors increased their positions, reflecting confidence in the bank’s capital strategy and growth prospects.
Overall, the $60 million subordinated notes offering strengthens Northrim BanCorp’s capital base, supports its growth strategy, and signals robust financial health to investors and regulators alike.
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