Northrim Bancorp (NRIM) Shares Soar 2.28% on Upward Earnings Estimates

Northrim Bancorp (NRIM) shares surged 2.28% today, marking the fourth consecutive day of gains, with a cumulative increase of 7.10% over the past four days. The stock price reached its highest level since February 2025, with an intraday gain of 2.45%.

The strategy of buying NRIM shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years, with some volatility. Here’s a backtest analysis:

Overall Performance: From 2020 to 2025, NRIM's closing price increased from $25.78 to $46.86, representing a 81.77% gain. However, the strategy’s 81.77% gain is slightly lower than the total market's 90.57% gain, indicating that while NRIM performed well, the broader market outpaced it slightly.

Yearly Returns: Each year, the strategy delivered positive returns, with the exception of a 2.38% loss in 2023 due to market volatility. In 2020, the strategy gained 14.88%, and in 2025, it achieved a 12.35% return, indicating resilience in volatile markets.

Volatility: The strategy experienced higher volatility in 2023, with a maximum drawdown of 10.71% compared to NRIM's maximum drawdown of 8.76% over the same period. This suggests that while the strategy aimed to capture NRIM's growth, it also exposed investors to additional volatility.

Comparison with NRIM's Performance: The strategy's returns were generally in line with NRIM's performance, with some deviations due to market conditions. For instance, in 2020, NRIM outperformed the strategy, likely due to broader market factors favoring banks.

Conclusion: The strategy of buying NRIM after a recent high and holding for 1 week is a viable approach, offering consistent returns with some volatility. While it slightly underperformed the broader market, it leveraged NRIM's growth effectively. Investors should consider their risk tolerance and market outlook when employing this strategy, as it may not be immune to market fluctuations.

Note: The data is derived from backtesting calculations based on historical prices and does not account for transaction costs, taxes, or other factors that may affect actual returns.

Northrim Bancorp's recent stock performance can be attributed to several positive factors. Analysts have been revising their earnings estimates upward, reflecting optimism about the company's future performance. This trend is supported by empirical research showing a strong correlation between earnings estimate revisions and near-term stock price movements. The company's strong earnings outlook has been a key driver of its recent stock price gains.

Investor confidence in Northrim Bancorp's earnings growth prospects has been evident in its stock performance. Over the past four weeks, Northrim shares have increased by 22.7%, and over the last three months, the company's shares have gained 12.3%, outperforming the S&P 500. This strong performance has made Northrim an attractive choice for trend investors, who are drawn to its Momentum Score of A.