Good morning, and welcome to the 2026 Annual Shareholders Meeting of Northrim BanCorp. I am Mike Huston, Chairman, President, CEO, and COO of Northrim BanCorp. Only ballots of valid shareholders of record can be counted this morning. With me on the call today is Jed Ballard, Executive Vice President, Chief Financial Officer of Northrim BanCorp and Northrim Bank. I also want to recognize additional members of our bank executive team. Amber Zins, Executive Vice President, Chief Operating Officer. Jason Criqui, Executive Vice President, Chief Banking Officer. Mark Edwards, Executive Vice President, Chief Credit Officer, and Bank Economist, and Nathan Reed, Executive Vice President, Chief Information Officer. I would also like to recognize the members of our board of directors who are present this morning, along with Gabe Nachand of Baker Tilly, our independent registered public audit firm.
Finally on the call is our independent inspector of election, Jim Rate, who will accurately report the results of such votes. I'll start by reviewing what to expect on today's call. First, we'll conduct the official business of the meeting, which will include approval of the 2025 annual meeting minutes and the 2025 annual report. I will give a short update from the year, and Jed Ballard will report on our financial performance. The shareholder votes on proxy items will then be announced. At the end of the meeting, we will answer questions from shareholders. If you'd like to ask a question, please type it into the question box within the online meeting screen and be sure to state your name at the start of your question. At this time, I formally call the 2026 Northrim BanCorp annual meeting to order.
Please note that 79% of the shareholders of record are present, either online or by proxy, and this constitutes a quorum for the transaction of business today. The prior year annual meeting minutes and annual report have been made available to shareholders on the virtual meeting website during this meeting. Unless there are objections, they will be accepted as presented. To be fully compliant, I want to point out the following statement displayed on the screen. In short, be aware that due to unforeseen changes in the economy, interest rates, or other factors, any forward-looking statements or future events we discuss today may not happen exactly as we anticipate. Now, I'll provide a review of the company's 2025 performance. 2025 was an outstanding year for Northrim and reflects the continued execution of our long-term strategy and the strength of the relationships we've built across Alaska.
We achieved record profitability driven by strong growth in both loans and deposits, as well as gains from the sale of assets by Pacific Wealth Advisors. This performance was also reflected in continued market share growth, reaching approximately 17.5% of Alaska deposits. We were also proud to receive national recognition as one of the highest performing community banks in the nation by three respected financial firms, Piper Sandler, S&P Global, and Raymond James. Beyond financial results, we continue to invest in our people, technology, and communities. We now have over 500 employees across Alaska and continue to build our leadership team. We contributed $1.7 million to our communities with over 4,000 employee volunteer hours. We remained focused on affordable housing, financing hundreds of housing units across the state in 2025. Strategically, we completed a $60 million subordinated debt offering, enhancing capital and achieving an investment-grade rating.
Now I will turn it over to our CFO, Jed Ballard, to review the company's financial results in more detail. Jed?
Thank you, Mike. I'll provide a brief overview of our financial performance for 2025 and the first quarter of 2026. We ended 2025 with strong earnings and solid profitability. Net income totaled approximately $64.6 million with diluted earnings per share of $2.87. Return metrics remained strong with return on average assets of 2.02% and return on average equity of 21.7%, reflecting continued discipline, balance sheet management, and strong operating performance. Moving into 2026, first quarter results demonstrate continued momentum. Net income for the first quarter was $13.7 million, or $0.61 per share. Profitability remains healthy with return on assets of 1.69% and return on equity of 16.6%. From a margin perspective, our tax equivalent net interest margin was 4.77% in the Q1 , slightly improved from the 2025 levels, supported by strong loan yields of approximately 6.86%. In terms of growth, we continue to see solid balance sheet expansion.
Loans increased to approximately $2.36 billion, reflecting year-over-year growth of about 11%, while deposits grew to $2.87 billion. Credit quality remains sound with non-performing assets at 0.45% of total assets and strong reserve levels, supporting our overall risk profile. Our capital position continues to be a strength of the bank. Total capital ratios improved over 14%, helped by our issuance of $60 million of subordinated debt at the end of 2025, with tangible common equity and book value per share continuing to grow, with tangible book value reaching $12.81 per share. Finally, we remain committed to delivering shareholder value. We declared a dividend of $0.16 per share in the Q1 , and our long-term capital management strategy, including share repurchases, has contributed to meaningful earnings per share and tangible book value growth over time.
Overall, our results reflect consistent performance, strong fundamentals, and a balanced approach to growth, profitability, and risk management as we move through 2026. Thank you all for your time, and please don't hesitate to reach out at any time if you have any questions.
Thanks, Jed. Overall, 2025 reflects the strength of Northrim's diversified business model, disciplined growth strategy, and commitment to long-term shareholder value. Let's turn to the results of the shareholder vote. We had four items to vote on this year. We enjoyed approximately 79% voter turnout online, and thank you all. Proposal number one, election of directors, passes. All were reelected by an average positive vote of 98% of all votes cast. Proposal number two, approval of the first amendment to the 2025 Stock Incentive Plan to add non-employee directors to the class of eligible participants, passes by an average positive vote of 93% of all votes cast. Proposal number three, advisory vote on executive compensation, passes by an average positive vote of 97% of all votes cast.
Proposal number four, ratify selection of independent registered public accounting firm, Baker Tilly, also passes by an average positive vote of 99% of all votes cast. Thank you. Now, we will be happy to take questions from shareholders. As mentioned at the beginning of the meeting, if you would like to ask a question, please type it into the question box within the online meeting screen, and be sure to state your name at the start of the question. All right. We have no questions. At this time, our meeting is adjourned.
Ladies and gentlemen, this does conclude today's meeting. Thank you for your participation, and you may now disconnect.