Nasdaq (NASDAQ) · Financial Services
Northrim BanCorp, Inc. NRIM
MonitorScore band: 60–70
Scored as a financial: return on invested capital has no meaning for a bank or an insurer, so that criterion is removed from both the score and the maximum.
The thesis, in one sentence
A top-performing Alaskan community bank with a wide net interest margin and strong returns on tangible equity, but trading essentially at intrinsic value, with the main risks in merger execution and a credit problem that has become concentrated rather than broad.
Written for this site in plain English, without figures. The arithmetic is in the full report.
The thesis is from the deep report of 2026-09-02; the verdict badge reflects the latest scoring of 2026-09-06.
Key risks
- Credit risk is concentrated in one borrower with no specific provision
- Merger execution runs until a systems conversion late next year
- The book multiple only holds while returns stay well above regional peers
What would change the verdict
- Net interest income stops expanding for a full quarter
- Net margin deteriorates for two consecutive quarters as the concentrated exposure resolves
- Dilution from the acquisition exceeds the contracted cap
- Return on equity falls toward the bear-case level
Read it yourself
Step five of the method is the reader's: open the latest annual or quarterly report and read it before acting on anything here. A score is a summary, and a summary is not understanding.
Next report expected 2026-10-28. The deep report was written against the filings available on 2026-09-02; anything published since is not in it.
Price, one year
Open this week — scorecard, figures and executive summary
This ticker's exact score, its 30-criterion scorecard with the evidence behind each score, the DCF and Monte Carlo figures and the report's executive summary are open to everyone this week, no email required. The chapters after the summary are not — the demo ticker shows what a complete report looks like.
| Score | 61.9% (weighted sum out of 59 points) |
|---|---|
| DCF (min / base / max) | -8.7% / 3% / 34.3% |
| P(undervalued) | 54% (20,000 simulations) |
| p5 | p10 | p25 | p50 | p75 | p90 | p95 |
|---|---|---|---|---|---|---|
| -38.2% | -30.8% | -16.4% | 3.4% | 27.4% | 54.6% | 73.6% |
Percentiles, as a percentage margin against the reference price.
scenarios below today's pricescenarios above today's pricetoday's pricerange of the DCF modelsbase case
Scorecard — all 30 criteria
| # | Criterion | Evidence | Score |
|---|---|---|---|
| Graham | |||
| 1 | Current earnings multiple, against its own sectorpriced in the cheapest tier of its own sector | P/E 8,4x GAAP TTM / 9,83x on normalized profit (excl. PWA gain 14,5M USD) vs small regional bank peers ~11x fwd -- below the 30th percentile of the sector | 1 |
| 2 | Price to book — or cash generation, for intangible-heavy sectorsbook multiple low by the standards of its sector; for technology, semiconductors, pharma and e-commerce a high free-cash-flow yield replaces it, because book value means little there | P/B 1,62x (P/TBV 1,90x) -- in the 1,5-2,5x band | 0.5 |
| 3 | Earnings multiple times book multiplethe combined earnings-and-book multiple below a Graham-style ceiling | P/E x P/B = 8,40 x 1,624 = 13,6 (16,0 on normalized P/E) -- below 22,5 | 1 |
| 4 | Dividend actually paida dividend paid without interruption over the last five years | Dividend paid uninterrupted for 31+ years; 0,16 USD/quarter, unchanged Q1->Q2 2026 | 1 |
| 5 | Dividend yielda dividend yield well above what the average listed company pays | Dividend yield 2,39% ($0,64/year at $26,74) — in the 1,5-3,5% band | 0.5 |
| 6 | Leveragedebt below equity, or a net cash position; for banks and insurers this is judged on regulatory capital instead | Bank: Total RBC 14,46% vs the well-capitalized threshold 10,0%, CET1 10,90%, leverage 9,32%; GOL debt maturities out to Dec. 2035; holding-company leverage 23,5% of equity | 1 |
| 7 | Return on invested capital against the cost of that capitalreturns on invested capital clearly above what the capital costs; not computable for financials, which is why their denominator differs | N/A -- ROIC makes no sense for a bank (denominator 59). Adjusted proxy ROE TTM 17,33% | 0 |
| 8 | Earnings growth over five yearsearnings per share higher than they were five years ago | Normalized EPS 2021 ~1,51 USD -> 2025 ~2,39 USD (CAGR ~12%), but the trajectory is choppy (2022-2023 below 2021), not smooth compounding | 0.5 |
| 9 | Consistency of profitprofitable in every one of the last five years | Positive profit in every one of the last 5 years (37,5 / 30,7 / 25,4 / 37,0 / 64,6 mil. USD) | 1 |
| 10 | Price against the Graham Numberprice below the Graham Number computed from earnings and book value | Graham Number = sqrt(22,5 x fwd EPS 2,60 x BVPS 15,63) = $30,15; price $26,74 = discount 11,3%, at the edge of the -10% threshold | 1 |
| Buffett | |||
| 11 | A durable moata competitive advantage that is clear and defensible — brand, network, switching cost, licence or cost position | Real but non-transferable regional moat: 17,5% of Alaska deposits (3rd place), 64% in Nome, non-interest-bearing deposits 27,66% of the total and +14,5% in 6 months; in Oregon (PBCO) and in national factoring the franchise has no track record | 0.5 |
| 12 | How long the moat lastsan advantage that should still be standing a decade from now | The Alaska deposit franchise is durable, but ~18,5% of the combined company's assets will come from a market with no local advantage; PBCO not integrated until Q4 2027 | 0.5 |
| 13 | Return on equity, sustaineda high return on equity held for years without leaning on debt, measured after one-off gains are normalised away | 3-year normalized ROE: 10,8% (2023) / 14,6% (2024) / 18,1% (2025) -- only the last year above 15%; adjusted ROE TTM 17,33%. In the 10-15% band for most of the window | 0.5 |
| 14 | Margins against the sectornet or operating margins above the sector average, by a clear gap | NIMTE 5,01% vs the regional bank average ~3,4% (+160 bp); efficiency ratio 59,44%; ROAE 17,7% vs sector 10-12% | 1 |
| 15 | Quality of managementa management team with a long track record of allocating capital well | Huston has been CEO for only 2 years and 5 months (Chairman since 01.01.2026); Outsider score 3/5 -- coherent capital decisions, but the defining decision (PBCO) still not closed and not integrated | 0.5 |
| 16 | Skin in the gamemanagement owns a meaningful part of the company and is not selling | 16 directors and executive officers together hold 536.875 shares = ~2,4%; no controlling shareholder; more than 60% of CEO pay is short-term/deferred cash | 0.5 |
| 17 | Predictabilitya business simple enough that next year can be reasoned about | Simple model (commercial bank), but the PBCO merger makes the next 6-8 quarters hard to forecast; mitigating factor since July: credit quality has proven better than thought (criticized loans -20,1%, potential problem loans -45,8%) | 0.5 |
| 18 | Retained earnings put to workevery unit of profit kept in the business creates more than a unit of value | Contrarian buybacks in 2023 at ~10,79 USD/share post-split (today 25,38 USD, +135%), stopped entirely at 1,90x TBV; PBCO paid entirely in expensive paper (1,90x TBV) for assets at 1,67x. But the largest capital use in the company's history (21% dilution) is contracted and untested | 0.5 |
| 19 | Pricing powerable to pass inflation on to customers without losing them | Partial pricing power: interest-bearing deposit cost -33 bp (2,04% -> 1,71%) and CDs -8,3%, but loan yield DECLINED 5 bp (6,99% -> 6,94%); the margin expansion is ~60% cyclical, ~40% structural | 0.5 |
| 20 | Margin of safety against the valuation modelsprice meaningfully below where the triangulated models put intrinsic value; for banks the dividend discount model is used, never analyst consensus | Median of the 5 triangulated models +3,0% (band -8,7% ... +34,3%); Monte Carlo 20.000 scenarios: median +3,4%, P(undervalued) 54,0%, P(MOS>30%) only 23% -- a small discount, not a margin of safety | 0.5 |
| Lynch | |||
| 21 | Growth against the multiple paid for itthe multiple paid is small relative to the growth rate bought | PEG unreliable — choppy growth, affected by the one-off PWA and the SCF acquisition (not pure organic) | 1 |
| 22 | Rate of profit growthearnings per share compounding fast over the last three years, after one-off and cyclical gains are normalised away | 3-year normalized EPS CAGR ~21%, but from a base coming out of the 2022-2023 cyclical trough (mortgage banking collapse); capped at 0,5 as cyclical earnings | 0.5 |
| 23 | Fits a Lynch categoryclearly a fast grower, a stalwart or an asset play — not an ambiguous cyclical or a risky turnaround | Regional bank sensitive to the rate cycle + an early-stage roll-up -- a mixed/cyclical category, not a pure Fast Grower or Stalwart | 0.5 |
| 24 | An unfashionable corner of the marketin a business or a sector nobody is excited about | Boring sector (Banks - Regional), coverage of 2-4 analysts, KBW only initiated in July 2026 with Market Perform | 1 |
| 25 | A story that can be told simplythe investment case can be explained in a couple of minutes, without jargon | Story explainable in 2 minutes: Alaska's #3 bank with cheap deposits, buying a bank in Oregon | 1 |
| 26 | Insider ownershipfounders or insiders hold a large stake and have been buying, not selling | Insiders ~2,4%, no reported purchases; the only holder above 5% is Dimensional Fund Advisors (~6,1%), a passive quantitative fund | 0.5 |
| 27 | A solid balance sheetnet cash, or debt far below equity | Solid balance sheet: equity 347,6 mil. USD, borrowings 81,6 mil. USD (23,5%), no maturities for 24 months, zero financial maintenance covenants | 1 |
| 28 | Market sharetaking share from competitors rather than merely defending it | Loans +4,0% in 6 months (~8% annualized), non-interest-bearing deposits +14,5%, mortgage production from AZ/CO/PNW 22% -> 27%; but the Alaska deposit share (17,5%, 3rd place) is not documented as growing | 0.5 |
| 29 | Analyst coveragefollowed by few institutional analysts, if any | 2-4 analysts; 12-month consensus price target made up of 2 estimates (30,50 USD) | 1 |
| 30 | Dilution from share-based payshare-based compensation consumes only a marginal slice of revenue each year | SBC 1,7 mil. USD in 2025 = below 1% of revenue, and the real organic dilution is +0,44% over 12 months (the 302,9% in the data pack is an artifact of the 4:1 split on 18.09.2025). BUT the future CONTRACTED dilution from PBCO is ~21% -- the single biggest risk in the file | 0 |
Subtotals
| Graham | 7.5 |
|---|---|
| Buffett | 5.5 |
| Lynch | 6 |
| Total (30) | 19 |
| Score | 61.9% / 59 |
Executive summary, with figures
NRIM — Northrim BanCorp, Inc. — Deep-value analysis (REFRESH)
Analysis date: 2026-09-02 · Price: $25.38 (data pack yfinance + tracker, 2026-09-02) · Market cap: $564.6M · Sector: Financial Services / Banks – Regional · Exchange: NASDAQ · HQ: Anchorage, Alaska · CIK: 0001163370
REFRESH mode. The reference analysis is the one from 2026-07-28 (
rapoarte/deep/2026-07-28-deep-NRIM.md, verdict MONITOR at a price of $26.74). The quarter-over-quarter table triage flagged a new filing (10-Q Q2 2026, filed 2026-07-31) and one unverifiable falsifier (the NIM engine). What I inherit and what I re-derive is stated explicitly at the start of each chapter.New primary sources for this refresh: 10-Q Q2 2026 (filed 2026-07-31, accession 0001163370-26-000029, document
nrim-20260630.htm) — not in the local file; the automated EDGAR downloader only downloads 10-Qs for a completed fiscal year, so I pulled it directly from EDGAR and converted it with the filing-text extractor. The rest: 10-K FY2025 (2026-03-06), DEF 14A (2026-04-14), the Q2 2026 results 8-K and the PBCO merger 8-K (both 2026-07-23).
Executive summary
What I inherit unchanged from the reference analysis: the business description and three-segment structure, the nature of the regional moat, the PBCO deal terms (1.160 ratio, ~$167.3M, ~21% dilution, closing Q4 2026/Q1 2027), management's capital-allocation profile, the fact that the "302.9% dilution" in the data pack is an artifact of the 4-for-1 split on September 18, 2025, and the $57.44M owner-earnings base. None of these have moved: the new filing covers exactly the same quarter (Q2 2026) the July report had already analyzed from the July 22-23 8-K press release. The refresh doesn't bring a new quarter of profit — it brings the exhibits behind the press release.
What I re-derive, and why it matters. The four tables in the 10-Q that the press release didn't contain partially reverse the reference thesis's most emphasized red flag:
- Criticized loans FELL, they didn't rise: $86,318 thousand (12/31/2025) → $68,996 thousand (06/30/2026), −20.1%; net of government guarantees $43,979 → $42,606 thousand, −3.1%. As a share of the portfolio: 3.76% → 2.89% [10-Q Q2 2026, Note 3, risk-rating-by-origination-year tables].
- Potential problem loans fell by half: $21.2M (12/31/2025) → $11.5M (06/30/2026), and the 10-Q states explicitly why: "primarily due to the transfer of three loans to a single borrower to nonaccrual status, as well as paydowns" [10-Q, MD&A, "Potential problem assets"].
- So the nonaccrual jump from $11.97M to $22.98M is not new deterioration — it's the migration of an already-identified exposure from the watchlist into nonaccrual. The Community Banking segment's net adversely classified assets are $28.9M at 06/30/2026 versus $32.1M at 06/30/2025: down 10% year-over-year, after rising 75% in Q2 2025 [10-Q, MD&A, Community Banking segment].
- Actual losses are near zero: gross loan charge-offs $394 thousand in H1 2026, recoveries $71 thousand → $323 thousand net, i.e. 0.014% of the portfolio over six months. The loan provision was $2,047 thousand — 6.3× realized losses. The bank is building its reserve, not harvesting it.
What's worsening, on the other hand — and this is a new finding, not inherited: the purchased receivables (factoring, Specialty Finance) book. It grew 20.8% in six months ($101.6M → $122.8M) while revenue from it grew 4.6% ($12,047 → $12,605 thousand), and its provision was zero for all of 2025 and all of Q1 2026, rebuilt only in Q2 2026 to $610 thousand = 0.49% of balance — on a book that in 2025 posted a net charge-off ratio of 2.16% of average balance [10-K FY2025, purchased receivables ACL table; 10-Q Q2 2026, Note 4]. Management's own stated reason for rebuilding it is itself a signal: "an increase in concentration of these assets."
Model correction — mandatory. The Monte Carlo simulation in the delta-triage pack is invalid: it received --oe 57443 (thousand USD) alongside --sh 22.11 (millions of shares), a 1000× unit error. That's why it reported a median intrinsic value of $26,756.51/share and a median MOS of +103,849% — figures absurd on their face, but which would have passed unnoticed as a marker line. I reran it with correct units (--oe 57.443 --sh 22.544): median IV $26.24, median MOS +3.4%, undervaluation probability 54.0%. The same error existed in the reference report (its DEEPMC line was just as inflated) — so this isn't a new regression, it's an inherited error the refresh fixes.
The thesis, updated. Northrim remains an Alaska community bank with top-tier profitability for the sector (ROAE 17.7%, TTM adjusted ROTE 20.5%), trading at 8.2× TTM GAAP profit, 9.8× adjusted profit (excluding the $14.5M one-off gain from the Pacific Wealth Advisors sale) and 1.90× tangible book value. The growth engine — net interest margin expansion — is confirmed and more durable than I thought: of the +29 bp of NIMTE year-over-year (4.72% → 5.01%), only part comes from deposit repricing; the rest comes from the asset mix (loans rose from 75.19% to 79.29% of interest-earning assets) and from the securities portfolio rolling upward (yield 3.07% → 3.79%) — two favorable winds independent of the Fed's next move.
Estimated value (5 triangulated models): from −8.7% (EPV at an 11% cost of capital) to +34.3% (excess-return P/TBV with a sustained 17% ROTE), with the base (median) at +3.0%. Monte Carlo across 20,000 scenarios: P10 −30.8%, P50 +3.4%, P90 +54.6%, P(undervalued) 54.0%. A wide range, centered on zero.
Verdict: MONITOR — unchanged from July, but with the reasons reweighted. Credit risk, which was reason #2 for caution in July, has materially eased in light of the 10-Q. PBCO execution risk remains intact and unmitigated. A new, concrete risk has appeared (under-provisioning of the factoring book). The stock is close to normalized intrinsic value; it doesn't justify a firm conviction position at $25.38, but the qualitative thesis is more solid than it looked five weeks ago.
That is chapter one of the deep report, figures included. Chapters two onwards stay closed for the five open tickers. See what a complete analysis looks like — this week's demo ticker: SNT Energy Co., Ltd. (100840) →
Full report contents
- Executive summary
- 🔒 The business and its moat (Available in the full report)
- 🔒 Management and capital allocation (Available in the full report)
- 🔒 What changed in the last 4 quarters (Q3 2025 → Q2 2026) (Available in the full report)
- 🔒 Balance sheet analysis — Quality of Earnings (Thornton O'Glove method) (Available in the full report)
- 🔒 The CEO profile — Outsider traits (William Thorndike method) (Available in the full report)
- 🔒 Accounting red flags (Available in the full report)
- 🔒 Triangulated valuation (Available in the full report)
- 🔒 Pre-mortem — why the thesis could be wrong (Available in the full report)
- 🔒 Verdict compared with the tracker's GBL score (Available in the full report)
- 🔒 Markers (Available in the full report)
- 🔒 Sources (Available in the full report)
See what a complete analysis looks like — this week's demo ticker: SNT Energy Co., Ltd. (100840) →
Evaluation history
| Date | Verdict |
|---|---|
| 2026-07-19 | Interesting |
| 2026-07-28 | Interesting |
| 2026-09-02 | Monitor |
| 2026-09-06 | Monitor |
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