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Northrim (NRIM) Rewards Investors With a 20% Dividend Hike

Northrim BanCorp Inc. NRIM has announced that its board of directors approved a regular quarterly cash dividend of 60 cents per share. This represents a jump of 20% from its prior payout.

The dividend will be paid out on Mar 17 to shareholders of record as on Mar 9. Prior to this, the company had hiked its dividend in August 2022 by 22% to 50 cents. In fact, NRIM has increased its dividend 11 times in the last five years.

Based on the increased rate, the annual dividend comes to $2.40 per share. This results in an annualized dividend yield of 4.57%, considering Northrim’s last day’s closing price of $52.50. The yield is impressive compared with the industry average of 2.36%. The yield is not only attractive for investors but also represents a steady income stream.

Apart from regular dividend payouts, NRIM has been rewarding shareholders with a share repurchase program. This January, an expansion of its share repurchase program was approved, under which the company was authorized to buy back up to 285,000 shares. Since the inception of the stock buyback plan, it has repurchased more than 2.05 million shares.

The company has a strong balance sheet position, with no debt as of Dec 31, 2022. Thus, NRIM’s efforts to boost shareholder value seem sustainable on the back of solid earnings strength.

Through its strong cash-generation capabilities, the company is not only rewarding shareholders but also retaining sufficient capital for growing organically. A rise in core loan balance, higher fee and interest income and increasing interest rates will support Northrim’s financials.

Over the past year, shares of NRIM have rallied 20.3% against the industry’s fall of 23.1%.

Zacks Investment Research
Zacks Investment Research

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Northrim currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Banks Taking Similar Actions

Over the past week, BankUnited, Inc. BKU and M&T Bank MTB have announced an increase in their quarterly dividend payouts.

BankUnited’s board of directors approved a quarterly cash dividend of 27 cents per share, representing an increase of 8% from the prior payout. The dividend will be paid out on Apr 28 to shareholders of record as of Apr 12.

Prior to this hike, BKU announced a 9% dividend hike in March 2022. That was the second time the company had announced an increase to its quarterly dividend.

M&T Bank’s board of directors announced a dividend of $1.30 per share, marking an 8.3% increase from the prior payout. The dividend will be paid out on Mar 31 to shareholders of record on Mar 6.

Prior to this, M&T Bank hiked its dividend by 9.1% to $1.20 per share in November 2021. We believe such disbursements highlight the company’s operational strength and commitment to enhancing shareholder wealth.

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