v3.26.1
Segment Information
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
Segment Information Segment Information
    The Company's operations are managed along three operating segments: Community Banking, Home Mortgage Lending, and Specialty Finance. The Company reevaluated our reportable operating segments in the fourth quarter of 2024 concurrent with the acquisition of Sallyport Commercial Finance, LLC (“SCF”), which resulted in the addition of the Specialty Finance segment. The Community Banking segment's principal business focus is the offering of loan and deposit products to business and consumer customers in its primary market areas. As of March 31, 2026, the Community Banking segment operated 20 branches throughout Alaska. The Home Mortgage Lending segment's principal business focus is the origination and sale of mortgage loans for 1-4 family residential properties, mortgage loan servicing for a portion of mortgage loans sold, and investment in certain 1-4 family residential mortgage loans on our balance sheet. The Specialty Finance segment's principal business focus is factoring, asset based lending and alternative working capital solutions to small and medium sized enterprises, and includes SCF and Northrim Funding Services, which was previously reported in the Community Banking segment prior to the acquisition of SCF.
The Company's reportable segments are determined by our Chief Financial Officer and the Chief Executive Officer, whom collectively are the designated chief operating decision maker. The reportable segments are determined based on information provided about the Company's products and services offered. They are also distinguished by the level of information provided to the chief operating decision maker, who uses the information to review performance of various components of the business, which are then aggregated if operating performance, products and services, and customers are similar. The chief operating decision maker evaluates the financial performance of the Company's business components such as by evaluating revenue streams, significant expenses, and budget to actual results in assessing the performance of the Company's segments and in the determination of allocating resources. Segment pretax net income or loss is used to assess the performance of the community banking segment by monitoring the margin between interest income and interest expense and the efficiency ratio specific to the segment. Segment pretax net income or loss is used to assess the performance of the home mortgage lending segment by monitoring the premium received on loan sales, the margin between interest income and interest expense, and the profitability of home mortgage servicing activities. Segment pretax net income or loss is used to assess the performance of the specialty finance segment by monitoring pretax income and the yield of purchased receivable fees.
Accounting policies for segments are the same as those described in Note 1 to the Consolidated Financial Statements. Interest expense is allocated to each segment based on average cash utilized to fund the operations of the segment and the average cost of interest-bearing liabilities for the consolidated entity. Indirect salary expense for activities such as general management, accounting and finance, human resources, compliance, information technology, risk management, and internal audit are allocated based on the average percentage of employee time spent working in each specific segment.
    Summarized financial information for the Company's reportable segments and the reconciliation to the consolidated financial results for the periods presented is shown in the following tables:
Three Months Ended March 31, 2026
(In Thousands)Community BankingHome Mortgage LendingSpecialty FinanceConsolidated
Interest income$40,037 $4,190 $669 $44,896 
Interest expense8,197 1,394 644 10,235 
   Net interest income31,840 2,796 25 34,661 
Provision (benefit) for credit losses
153 562 245 960 
   Net interest income after provision for credit losses31,687 2,234 (220)33,701 
Net realized gains on mortgage loans sold— 2,997 — 2,997 
Change in fair value of mortgage loan commitments, net— 720 — 720 
Total production revenue— 3,717 — 3,717 
Mortgage servicing revenue— 2,667 — 2,667 
Change in fair value of mortgage servicing rights:
   Due to changes in model inputs of assumptions— 463 — 463 
   Other— (590)— (590)
Total mortgage servicing revenue, net— 2,540 — 2,540 
Other mortgage banking revenue— 204 — 204 
     Total mortgage banking revenue— 6,461 — 6,461 
Purchased receivable income— — 6,132 6,132 
Other operating income2,416 — (130)2,286 
     Total other operating income2,416 6,461 6,002 14,879 
Salaries and other personnel expense12,392 5,275 1,839 19,506 
Data processing expense2,835 300 170 3,305 
Occupancy expense1,565 468 71 2,104 
Professional and outside services831 253 75 1,159 
Marketing expense756 137 8 901 
Insurance expense385 19 — 404 
Compensation expense - Sallyport acquisition payments— — 500 500 
Other operating expense1,626 749 368 2,743 
     Total other operating expense20,390 7,201 3,031 30,622 
   Income before provision for income taxes13,713 1,494 2,751 17,958 
Provision for income taxes3,213 408 662 4,283 
Net income $10,500 $1,086 $2,089 $13,675 
Three Months Ended March 31, 2026
(In Thousands)Community BankingHome Mortgage LendingSpecialty FinanceConsolidated
Interest income
$40,037 $4,190 $669 $44,896 
Mortgage banking income - external revenue
— 6,461 — 6,461 
Mortgage banking income - intersegment revenues
— 954 — 954 
Purchased receivable income
— — 6,132 6,132 
Other operating income
2,416 — (130)2,286 
42,453 11,605 6,671 60,729 
Reconciliation of revenue
Elimination of intersegment revenues
— (954)— (954)
     Total consolidated revenues
$42,453 $10,651 $6,671 $59,775 
Less:
Interest expense
8,197 1,394 644 10,235 
Provision (benefit) for credit losses
153 562 245 960 
     Segment gross profit
34,103 8,695 5,782 48,580 
Less(1):
Salaries and other personnel expense$12,392 $5,275 $1,839 $19,506 
Data processing expense2,835 300 170 3,305 
Occupancy expense1,565 468 71 2,104 
Professional and outside services831 253 75 1,159 
Marketing expense756 137 8 901 
Insurance expense385 19 — 404 
Compensation expense - Sallyport acquisition payments
— — 500 500 
Intersegment expense
954 — — 954 
Other segment items(2)
1,626 749 368 2,743 
     Segment expense
21,344 7,201 3,031 31,576 
Reconciliation of expense
Elimination of intersegment expense
($954)$— $— (954)
     Total consolidated expense
$20,390 $7,201 $3,031 $30,622 
     Income before provision for income taxes
$13,713 $1,494 $2,751 $17,958 
1The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. All expenses are allocated to a segment.
2Other segment items for each reportable segment include:
Community Banking: OREO (income) expense, net of rental income and gains on sale, director fees, operational charge offs net of recoveries, loan collection and collateral costs, and other miscellaneous operating costs related to community banking activities.
Home Mortgage Lending: OREO (income) expense, net of rental income and gains on sale related home mortgage loans, director fees related at RML, loan collection and collateral costs related to home mortgage loans, and other miscellaneous operating costs related to home mortgage lending activities.
Specialty Finance: miscellaneous operating costs related to specialty finance activities.
Three Months Ended March 31, 2025
(In Thousands)Community BankingHome Mortgage LendingSpecialty FinanceConsolidated
Interest income$36,573 $4,392 $596 $41,561 
Interest expense8,422 1,346 496 10,264 
   Net interest income28,151 3,046 100 31,297 
Provision (benefit) for credit losses
(1,768)(307)666 (1,409)
   Net interest income after provision for credit losses29,919 3,353 (566)32,706 
Net realized gains on mortgage loans sold— 1,580 — 1,580 
Change in fair value of mortgage loan commitments, net— 660 — 660 
Total production revenue— 2,240 — 2,240 
Mortgage servicing revenue— 2,696 — 2,696 
Change in fair value of mortgage servicing rights:
   Due to changes in model inputs of assumptions— (322)— (322)
   Other— (533)— (533)
Total mortgage servicing revenue, net— 1,841 — 1,841 
Other mortgage banking revenue— 170 — 170 
     Total mortgage banking revenue— 4,251 — 4,251 
Purchased receivable income— — 6,150 6,150 
Other operating income2,703 — (64)2,639 
     Total other operating income2,703 4,251 6,086 13,040 
Salaries and other personnel expense10,764 4,769 1,690 17,223 
Data processing expense2,670 263 171 3,104 
Occupancy expense1,381 438 70 1,889 
Professional and outside services562 256 297 1,115 
Marketing expense519 150 3 672 
Insurance expense989 22 6 1,017 
Compensation expense - Sallyport acquisition payments
— — 600 600 
Other operating expense1,696 592 263 2,551 
     Total other operating expense18,581 6,490 3,100 28,171 
Income before provision for income taxes14,041 1,114 2,420 17,575 
Provision (benefit) for income taxes3,253 310 688 4,251 
Net income$10,788 $804 $1,732 $13,324 
Three Months Ended March 31, 2025
(In Thousands)Community BankingHome Mortgage LendingSpecialty FinanceConsolidated
Interest income
$36,573 $4,392 $596 $41,561 
Mortgage banking income - external revenue
— 4,251 — 4,251 
Mortgage banking income - intersegment revenues
— 441 — 441 
Purchased receivable income
— — 6,150 6,150 
Other operating income
2,703 — (64)2,639 
39,276 9,084 6,682 55,042 
Reconciliation of revenue
Elimination of intersegment revenues
— (441)— (441)
     Total consolidated revenues
$39,276 $8,643 $6,682 $54,601 
Less:
Interest expense
8,422 1,346 496 10,264 
Provision (benefit) for credit losses
(1,768)(307)666 (1,409)
     Segment gross profit
32,622 7,604 5,520 45,746 
Less(1):
Salaries and other personnel expense$10,764 $4,769 $1,690 $17,223 
Data processing expense2,670 263 171 3,104 
Occupancy expense1,381 438 70 1,889 
Professional and outside services562 256 297 1,115 
Marketing expense519 150 3 672 
Insurance expense989 22 6 1,017 
Compensation expense - Sallyport acquisition payments
— — 600 600 
Intersegment expense
441 — — 441 
Other segment items(2)
1,696 592 263 2,551 
     Segment expense
19,022 6,490 3,100 28,612 
Reconciliation of expense
Elimination of intersegment expense
($441)$— $— (441)
     Total consolidated expense
$18,581 $6,490 $3,100 $28,171 
     Income before provision for income taxes
$14,041 $1,114 $2,420 $17,575 
1The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. All expenses are allocated to a segment.
2Other segment items for each reportable segment include:
Community Banking: OREO (income) expense, net of rental income and gains on sale, director fees, operational charge offs net of recoveries, loan collection and collateral costs, and other miscellaneous operating costs related to community banking activities.
Home Mortgage Lending: OREO (income) expense, net of rental income and gains on sale related home mortgage loans, director fees related at RML, loan collection and collateral costs related to home mortgage loans, and other miscellaneous operating costs related to home mortgage lending activities.
Specialty Finance: miscellaneous operating costs related to specialty finance activities.
March 31, 2026
(In Thousands)Community BankingHome Mortgage LendingSpecialty FinanceConsolidated
Total assets$2,775,963 $401,203 $177,742 $3,354,908 
Loans held for sale$— $81,179 $— $81,179 
Loans
$2,081,912 $264,662 $12,128 $2,358,702 
Purchased receivables, net$— $— $105,029 $105,029 
Goodwill$7,525 $7,492 $34,857 $49,874 

December 31, 2025
(In Thousands)Community BankingHome Mortgage LendingSpecialty FinanceConsolidated
Total assets$2,724,236 $390,242 $175,795 $3,290,273 
Loans held for sale$— $100,323 $— $100,323 
Loans
$2,034,834 $243,167 $17,498 $2,295,499 
Purchased receivables, net$— $— $101,642 $101,642 
Goodwill$7,525 $7,492 $34,857 $49,874