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Northrim Bancorp Up to Strong Buy on Recent Acquisition News

Zacks Equity Research

On Aug 12, Zacks Investment Research upgraded Northrim Bancorp Inc. (NRIM) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

The rank upgrade of this Alaska-based bank was driven by strong estimate revisions on the back of the recent acquisition announcement, dividend increase and impressive second-quarter 2014 results.

On Aug 7, Northrim Bancorp announced that it has inked a cash deal to acquire one of the biggest mortgage originators in Alaska – Residential Mortgage Holding Company, LLC, (‘RML’) – by purchasing the remaining 76.5% stake in it. At present, Northrim Capital Investment Company (‘NCIC’) holds 23.5% of the membership interests in RML.

The deal, which is expected to close in fourth-quarter 2014, is currently valued at $29.8 million. Management expects the deal to be accretive to 2014 earnings.

On Aug 1, Northrim Bancorp declared a 6% hike in its regular quarterly cash dividend of 18 cents per share. The new dividend will be paid on Sep 19 to shareholders of record as of the close of business on Sep 11.

Further, on Jul 22, Northrim Bancorp released its second-quarter 2014 results. Earnings per share of 63 cents significantly outpaced the Zacks Consensus Estimate of 37 cents, marking the second consecutive quarter of earnings beat. Also, the reported figure was up from the prior-year quarter earnings of 40 cents per share. Notably, the acquisition of Alaska Pacific Bancshares contributed to revenues and earnings in the second-quarter results.

The Zacks Consensus Estimate for 2014 advanced 18.5% to $2.11 per share over the past 30 days. Also, for 2015, it moved north 12.4% to $2.53 per share.

Other Stocks to Consider

Other stocks in the finance sector worth considering include Central Valley Community Bancorp (CVCY), Sierra Bancorp (BSRR) and Great Southern Bancorp Inc. (GSBC). All three stocks hold the same rank as Northrim Bancorp.

Read the Full Research Report on NRIM
Read the Full Research Report on CVCY
Read the Full Research Report on BSRR
Read the Full Research Report on GSBC

Zacks Investment Research