##### Table of Contents



SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  ANNUAL REPORT UNDER
    SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2006
  Commission File Number 0-33501
  Northrim BanCorp,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Alaska

92-0175752(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification Number)  3111 C Street
 Anchorage, Alaska 99503
 (Address of principal executive
    offices) (Zip Code)
  Registrants Telephone Number, Including Area Code:
 (907) 562-0062
  Securities Registered Pursuant to Section 12(b) of the
    Act:
 None
  Securities Registered Pursuant to Section 12(g) of the
    Act:
 Common Stock, $1.00 Par Value
 (Title of Class)
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K.  Yes o þ
  Rule 12b-2
  o þ o
  Rule 12b-2 o þ
      Form 10-K Form 10-K




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##### 



Northrim
    BanCorp, Inc.
    Table of Contents
  PageNorthrim BanCorp,
    Inc.About the
    Company


1Financial
    SectionSelected Financial
    Data


5Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


7Report of
    Independent Registered Public Accounting Firm


30Consolidated
    Financial Statements


32Notes to
    Consolidated Financial Statements


36Annual Report on
    Form 10-K


62EXHIBIT 10.16EXHIBIT 10.17EXHIBIT 10.18EXHIBIT 10.19EXHIBIT 10.20EXHIBIT 23EXHIBIT 24EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2     Note Regarding
    Forward-Looking Statements
  This report includes forward-looking statements within the
    meaning of Section 21E of the Securities Exchange Act of
    1934, as amended. These forward-looking statements describe
    Northrims managements expectations about future
    events and developments such as future operating results, growth
    in loans and deposits, continued success of Northrims
    style of banking, and the strength of the local economy. All
    statements other than statements of historical fact, including
    statements regarding industry prospects and future results of
    operations or financial position, made in this report are
    forward-looking. We use words such as anticipates,
    believes, expects, intends
    and similar expressions in part to help identify forward-looking
    statements. Forward-looking statements reflect managements
    current expectations and are inherently uncertain. Our actual
    results may differ significantly from managements
    expectations, and those variations may be both material and
    adverse. Forward-looking statements are subject to various risks
    and uncertainties that may cause our actual results to differ
    materially and adversely from our expectations as indicated in
    the forward-looking statements. These risks and uncertainties
    include: the general condition of, and changes in, the Alaska
    economy; factors that impact our net interest margins; and our
    ability to maintain asset quality. Further, actual results may
    be affected by our ability to compete on price and other factors
    with other financial institutions; customer acceptance of new
    products and services; the regulatory environment in which we
    operate; and general trends in the local, regional and national
    banking industry and economy. Many of these risks, as well as
    other risks that may have a material adverse impact on our
    operations and business, are identified in our filings with the
    SEC. However, you should be aware that these factors are not an
    exhaustive list, and you should not assume these are the only
    factors that may cause our actual results to differ from our
    expectations. In addition, you should note that we do not intend
    to update any of the forward-looking statements or the
    uncertainties that may adversely impact those statements.
 i




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##### Table of Contents



Northrim
    BanCorp, Inc.
    About the Company  Overview
            
    Anchorage: We have two major financial
    centers in Anchorage, four smaller branches, and one supermarket
    branch. We are also exploring future branching opportunities in
    this market.
    Fairbanks: We opened our financial center in
    Fairbanks, Alaskas second largest city, in mid-1996. This
    branch has given us a strong foothold in Interior Alaska, and
    management believes that there is significant potential to
    increase our share of that market. We plan to begin construction
    of a second branch in the Fairbanks market in the second quarter
    of 2007.
    Eagle River: We also serve Eagle River, a
    community outside of Anchorage. In January of 2002, we moved
    from a supermarket branch into a full-service branch to provide
    a higher level of service to this growing market.
    Wasilla: Wasilla is a rapidly growing market
    in the Matanuska Valley outside of Anchorage where we completed
    construction of a new financial center in December of 2002 and
    moved from our supermarket branch and loan production office
    into this new facility. 1




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##### Table of Contents



Elliott
    Cove Capital Management LLC
  start-up
    Northrim
    Funding Services
    High
    Performance Checking
      Business
    Strategies
    
    Providing Customer First Service: We believe
    that we provide a high level of customer service. Our guiding
    principle is to serve our market areas by operating with a
    Customer First Service philosophy, affording our
    customers the highest priority in all aspects of our operations.
    To achieve this objective, our management emphasizes the hiring
    and retention of competent and highly motivated employees at all
    levels of the organization. Management believes that a
    well-trained and highly motivated core of employees allows
    maximum personal contact with customers in order to understand
    and fulfill customer needs and preferences. This Customer
    First Service philosophy is combined with our emphasis on
    personalized, local decision making.
    Emphasizing Business and Professional
    Lending: We endeavor to provide commercial lending
    products and services, and to emphasize relationship banking
    with businesses and professional individuals. Management
    believes that our focus on providing financial services to
    businesses and professional individuals has and may continue to
    increase lending and core deposit volumes.
    Providing Competitive and Responsive Real Estate
    Lending: We estimate that we are a major land
    development and residential construction lender and an active
    lender in the commercial real estate market. Management believes
    that our willingness to provide these services in a professional
    and responsive manner has contributed significantly to our
    growth. Because of our relatively small size, our experienced
    senior management can be more involved with serving customers
    and making credit decisions, allowing us to compete more
    favorably for lending relationships.
    Pursuing Strategic Opportunities for Additional
    Growth: Management believes that the Bank of
    America branch acquisition in 1999 significantly strengthened
    our local market position and enabled us to further capitalize
    on expansion opportunities resulting from the demand for a
    locally based banking institution providing a high level of
    service. Not only did the acquisition increase our size, number
    of branch offices and lending capacity, but it also expanded our
    consumer 2




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##### Table of Contents



lending, further diversifying our loan portfolio. We expect to
    continue seeking similar opportunities to further our growth
    while maintaining a high level of credit quality. We plan to
    affect our growth strategy through a combination of growth at
    existing branch locations, new branch openings, primarily in
    Anchorage, Wasilla and Fairbanks, and strategic banking and
    non-banking acquisitions.  
    Developing a Sales Culture: In 2003, we
    conducted extensive sales training throughout the Company and
    developed a comprehensive approach to sales. Since then, we have
    continued with this sales training in all of our major customer
    contact areas. Our goal throughout this process is to increase
    and broaden the relationships that we have with new and existing
    customers and to continue to increase our market share within
    our existing markets.  Services
    Deposit Services:
    
    An indexed money market deposit account;
    A
    Jump-Up
    certificate of deposit (CD) that allows additional
    deposits with the opportunity to increase the rate to the
    current market rate for a similar term CD;
    An indexed CD that allows additional deposits, quarterly
    withdrawals without penalty, and tailored maturity
    dates; and
    Arrangements to courier noncash deposits from our customers to
    their branch.  Lending Services:
  Other Customer Services: 24-hour drive-up, drive-up
  Directors and Executive Officers:
  Executive
    Officers/Age

Occupation*R. Marc Langland, 65

Chairman, President, &
    CEO of the Company and the Bank, and Director, Alaska Air Group*Christopher N. Knudson, 53

Executive Vice President and Chief
    Operating Officer of the Company and the BankJoseph M. Schierhorn, 49

Executive Vice President, Chief
    Financial Officer, and Compliance Manager of the Company and the
    BankJoseph M. Beedle, 55

Executive Vice President of the
    Company and Chief Lending Officer of the BankVictor P. Mollozzi, 57

Senior Vice President, Senior
    Credit Officer of the Bank    3




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##### Table of Contents



Directors/Age

OccupationLarry S. Cash, 55

President and CEO, RIM Architects
    (Alaska), Inc.; CEO, RIM Architects (Guam), LLC.Mark G. Copeland, 64

Owner and sole member of Strategic
    Analysis, LLC, a management consulting firmFrank A. Danner, 73

Secretary/Treasurer, IMEX, Ltd.
    dba Dynamic Properties (real estate firm)Ronald A. Davis, 74

Former Vice President, Acordia of
    Alaska Insurance (full service insurance agency)Anthony Drabek, 59

President and CEO, Natives of
    Kodiak, Inc. (Alaska Native Corporation), Chairman and
    President, Koncor Forest Products Co.; Secretary/Director,
    Atikon Forest Products Co.Richard L. Lowell, 66

Former Chairman, Ribelin Lowell
    Alaska USA Insurance Brokers, Inc. (insurance brokerage firm)Irene Sparks Rowan, 65

Former Chairman and Director,
    Klukwan, Inc. (Alaska Native Corporation) and its subsidiariesJohn C. Swalling, 57

President, Swalling &
    Associates, P.C. (accounting firm)David G. Wight, 66

Former President and CEO, Alyeska
    Pipeline Service Company, and Director, Storm Cat Energy
    Corporation  4




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##### Table of Contents



Selected
    Financial Data  2006

2005

2004

2003

2002Unaudited(In Thousands Except Per Share Data)Net interest income

$47,522

$43,908

$41,271

$39,267

$34,670Provision for loan losses

2,564

1,170

1,601

3,567

3,095Other operating income

7,658

4,833

3,792

6,089

5,199Other operating expense

31,368

29,477

26,535

24,728

23,061Income before income taxes and
    minority interest

21,248

18,094

16,927

17,061

13,713Minority interest in subsidiaries

296







Pre tax income

20,952

18,094

16,927

17,061

13,713Income taxes

7,978

6,924

6,227

6,516

5,171Net income

$12,974

$11,170

$10,700

$10,545

$8,542Earnings per share:Basic

$2.12

$1.78

$1.68

$1.68

$1.33Diluted

2.09

1.72

1.63

1.61

1.29Cash dividends per share

0.47

0.43

0.38

0.33

0.20Assets

$925,620

$895,580

$800,726

$738,569

$704,249Loans

717,056

705,059

678,269

601,119

534,990Deposits

794,904

779,866

699,061

646,197

626,415Long-term debt

2,174

2,574

2,974

3,374

3,774Junior subordinated debentures

18,558

18,558

8,000

8,000

Shareholders equity

95,418

84,474

83,358

75,285

68,373Book value

$15.61

$13.86

$13.01

$11.82

$10.66Tangible book value

$14.48

$12.65

$11.97

$10.73

$9.51Net interest margin (tax
    equivalent)

5.89%

5.66%

5.88%

6.04%

5.82%Efficiency ratio
    (cash)(1)

55.97%

59.72%

58.07%

53.71%

56.92%Return on assets

1.46%

1.33%

1.44%

1.50%

1.33%Return on equity

14.45%

13.17%

13.50%

14.89%

13.32%Equity/assets

10.31%

9.44%

10.41%

10.19%

9.71%Dividend payout ratio

21.43%

22.92%

21.57%

19.04%

14.29%Nonperforming loans/portfolio loans

0.92%

0.86%

0.97%

1.72%

1.09%Net charge-offs/average loans

0.16%

0.18%

0.16%

0.33%

0.36%Allowance for loan
    losses/portfolio loans

1.69%

1.52%

1.59%

1.70%

1.61%Nonperforming assets/assets

0.79%

0.69%

0.82%

1.40%

0.81%Number of banking offices

10

10

10

10

10Number of employees (FTE)

277

272

272

268

246   (1)
    In managing our business, we review the efficiency ratio
    exclusive of intangible asset amortization (see definition in
    table below), which is not defined in accounting principles
    generally accepted in the United States (GAAP). The
    efficiency ratio is calculated by dividing noninterest expense,
    exclusive of intangible asset amortization, by the sum of net
    interest income and noninterest income. Other companies may
    define or calculate this data differently. We believe this
    presentation provides investors with a more accurate picture of
    our operating efficiency. In this presentation, noninterest
    expense is adjusted for intangible asset amortization. For
    additional information see the Noninterest Expense
    section in Item 7. Managements Discussion and
    Analysis of Financial Condition and Results of Operation
    of this report. 5




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##### Table of Contents



Reconciliation
    of Selected Financial Data to GAAP Financial
    Measures(2)
  Years ended December 31,

2006

2005

2004

2003

2002Net interest
    income(1)


$47,522



$43,908



$41,271



$39,267



$34,670Noninterest income


7,658



4,833



3,792



6,089



5,199Noninterest expense


31,368



29,477



26,535



24,728



23,061Intangible asset amortization


482



368



368



368



368Adjusted noninterest expense


$30,886



$29,109



$26,167



$24,360



$22,693Efficiency ratio


56.85%



60.48%



58.88%



54.52%



57.84%Efficiency ratio (less intangible
    asset amortization)


55.97%



59.72%



58.07%



53.71%



56.92%Tax rate


38%



38%



37%



38%



38%   (1)
    Amount represents net interest income before provision for loan
    losses.(2)
    These unaudited schedules provide selected financial information
    concerning the Company that should be read in conjunction with
    Item 7. Managements Discussion and Analysis of
    Financial Condition and Results of Operations of this
    report. 6




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##### Table of Contents



Managements
    Discussion and Analysis of Financial Condition and

Results of Operation  Overview
              Results
    of Operations
  Net
    Income
    Net
    Interest Income
   7




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8




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##### Table of Contents



Years Ended December 31,

2006

2005

2004Average

Interest



Average

Interest



Average

Interestoutstanding

earned/

Yield/

outstanding

earned/

Yield/

outstanding

earned/

Yield/balance

paid(1)

rate

balance

paid(1)

rate

balance

paid(1)

rate(In Thousands)Assets:Loans(2)

$712,116

$65,347

9.18%

$698,240

$55,870

8.00%

$628,830

$45,898

7.30%Securities

71,164

2,757

3.87%

61,125

2,202

3.60%

64,008

2,492

3.89%Overnight investments

27,665

1,374

4.97%

19,232

709

3.69%

11,633

164

1.41%Total interest-earning assets

810,945

69,478

8.57%

778,597

58,781

7.55%

704,471

48,554

6.89%Noninterest-earning assets

77,920





63,810





54,788Total assets

$888,865





$842,407





$759,259Liabilities and Shareholders
    EquityDeposits:Interest-bearing demand accounts

$78,872

$830

1.05%

$65,890

$369

0.56%

$57,373

$221

0.39%Money market accounts

151,871

6,053

3.99%

139,331

3,876

2.78%

126,567

1,527

1.21%Savings accounts

254,209

10,113

3.98%

207,277

6,263

3.02%

139,876

2,290

1.64%Certificates of deposit

94,595

3,320

3.51%

138,284

3,482

2.52%

155,134

2,671

1.72%Total interest-bearing deposits

579,547

20,316

3.51%

550,782

13,990

2.54%

478,950

6,709

1.40%Borrowings

26,052

1,640

6.30%

18,792

883

4.70%

14,525

574

3.95%Total interest-bearing liabilities

605,599

21,956

3.63%

569,574

14,873

2.61%

493,475

7,283

1.48%Demand deposits and other
    noninterest-bearing liabilities

193,461





188,000





186,506Total liabilities

799,060





757,574





679,981Shareholders equity

89,805





84,833





79,278Total liabilities and
    shareholders equity

$888,865





$842,407





$759,259Net interest income



$47,522





$43,908





$41,271Net interest
    margin(3)





5.86%





5.64%





5.86%   (1)
    
    Interest income included loan fees.(2)
    
    Nonaccrual loans are included with
    a zero effective yield.(3)
    
    The net interest margin on a tax
    equivalent basis was 5.89%, 5.66%, 5.88%, 6.04%, and 5.82%,
    respectively, for 2006, 2005, 2004, 2003, and 2002. 9




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##### Table of Contents



2006 compared to 2005

2005 compared to 2004Increase (decrease) due to

Increase (decrease) due toVolume

Rate

Total

Volume

Rate

TotalInterest Income:Loans

$1,129

$8,348

$9,477

$5,327

$4,645

$9,972Securities

381

174

555

(109)

(181)

(290)Overnight investments

371

294

665

157

388

545Total interest income

$1,881

$8,816

$10,697

$5,375

$4,852

$10,227Interest Expense:Deposits:Interest-bearing demand accounts

$85

$376

$461

$37

$112

$148Money market accounts

375

1,802

2,177

168

2,181

2,349Savings accounts

1,605

2,245

3,850

1,441

2,532

3,973Certificates of deposit

(1,292)

1,130

(162)

(250)

1,061

811Total interest on deposits

773

5,554

6,326

1,396

5,885

7,281Borrowings

403

354

757

188

121

309Total interest expense

$1,176

$5,908

$7,083

$1,584

$6,006

$7,590   Other
    Operating Income
    Years Ended December 31,

2006

2005

2004

2003

2002(In Thousands)Other Operating IncomeDeposit service charges

$1,975

$1,800

$1,718

$1,805

$1,687Purchased receivable income

1,855

993

201

35

Employee benefit plan income

1,113







Electronic banking fees

790

632

608

563

654Equity in earnings from RML

649

493

438

2,785

1,917Merchant credit card transaction
    fees

531

444

414

363

423Other transaction fees

227

214

204

247

283Loan service fees

531

374

379

416

350Equity in loss from Elliott Cove

(230)

(424)

(457)

(554)

(239)Other income

217

298

136

74

11Operating sources

7,658

4,824

3,641

5,734

5,086Gain on sale of securities
    available for sale, net



9

151

310

113Gain on sale of other real estate
    owned







45

Other sources



9

151

355

113Total other operating income

$7,658

$4,833

$3,792

$6,089

$5,199  10




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##### Table of Contents



year-over-year
                start-up
 11




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##### Table of Contents



Expenses
  Provision for Loan Losses:
  Other Operating Expense:
  Years ended December 31,

2006

2005

2004

2003

2002(In Thousands)Other Operating ExpenseSalaries and other personnel
    expense

$19,277

$17,656

$15,708

$14,180

$13,023Occupancy, net

2,503

2,417

2,130

2,000

2,040Equipment, net

1,350

1,371

1,372

1,504

1,405Marketing

1,641

1,657

1,201

1,205

1,136Intangible asset amortization

482

368

368

368

368Other expenses

6,115

6,008

5,756

5,471

5,089Total other operating expense

$31,368

$29,477

$26,535

$24,728

$23,061   Share-Based Payment.
       12




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##### Table of Contents



Income Taxes:
  Financial
    Condition
  Assets
  Loans and Lending Activities
  General:
     13




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##### Table of Contents



Nonperforming Loans; Real Estate
    Owned:
  December 31,

2006

2005

2004

2003

2002(In Thousands)Nonperforming loansNonaccrual loans

$5,176

$5,090

$5,876

$7,426

$4,717Accruing loans past due
    90 days or more

708

981

290

2,283

1,019Restructured loans

748



424

597

Total nonperforming loans

6,632

6,071

6,590

10,306

5,736Real estate owned

717

105





Total nonperforming assets

$7,349

$6,176

$6,590

$10,306

$5,736Allowance for loan losses to
    portfolio loans

1.69%

1.52%

1.59%

1.70%

1.61%Allowance for loan losses to
    nonperforming loans

183%

176%

163%

99%

148%Nonperforming loans to portfolio
    loans

0.92%

0.86%

0.97%

1.72%

1.09%Nonperforming assets to total
    assets

0.79%

0.69%

0.82%

1.40%

0.81%   Nonaccrual, Accruing Loans 90 Days or More Past Due, and
    Restructured Loans:
      Potential Problem Loans:
  Analysis of Allowance for Loan Losses:
   14




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##### Table of Contents



December 31,

2006

2005

2004

2003

2002% of Total



% of Total



% of Total



% of Total



% of TotalBalance applicable to:

Amount

Loans(1)

Amount

Loans(1)

Amount

Loans(1)

Amount

Loans(1)

Amount

Loans(1)(Dollars in Thousands)Commercial

$8,208

40%

$6,913

41%

$5,130

39%

$5,610

37%

$4,285

35%Construction

330

21%

246

19%

276

18%

282

17%

1,327

15%Real estate term

964

33%

1,214

35%

1,634

37%

413

40%

275

40%Loans for sale



0%



0%



0%



0%



1%Installment and other consumer

6

6%

37

5%



6%

3

6%

22

9%Unallocated

2,617

0%

2,296

0%

3,724



3,878



2,567Total

$12,125

100%

$10,706

100%

$10,764

100%

$10,186

100%

$8,476

100%   (1)
    Represents percentage of this category of loans to total loans.    December 31,

2006

2005

2004

2003

2002(In Thousands)Balance at beginning of period


$10,706



$10,764



$10,186



$8,476



$7,200Charge-offs:Commercial loans


(2,545)



(1,552)



(2,067)



(2,067)



(1,791)Construction loans






(100)











Real estate loans














(127)



(67)Installment and other consumer
    loans


(72)



(63)



(84)



(91)



(257)Total charge-offs


(2,617)



(1,715)



(1,471)



(2,285)



(2,115)Recoveries:Commercial loans


1,086



418



200



279



168Construction loans






15



185







Real estate loans


355



15







111



48Installment and other consumer
    loans


31



39



63



38



80Total recoveries


1,472



487



448



428



296Charge-offs net of recoveries


(1,145)



(1,228)



(1,023)



(1,857)



(1,819)Provision for loan losses


2,564



1,170



1,601



3,567



3,095Balance at end of period


$12,125



$10,706



$10,764



$10,186



$8,476Ratio of net charge-offs to
    average loans outstanding during the period


0.16%



0.18%



0.16%



0.33%



0.36%   Credit Authority and Loan Limits:
  loan-to-one-borrower
 15




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##### Table of Contents



Loan Policy:
  Loans Receivable:
  Loan Portfolio Composition:
  December 31,

2006

2005

2004

2003

2002Percent



Percent



Percent



Percent



PercentAmount

of total

Amount

of total

Amount

of total

Amount

of total

Amount

of total(Dollars in Thousands)Commercial loans


$287,281



40.06%



$287,617



40.79%



$267,737



39.47%



$220,774



36.73%



$187,312



35.01%Real estate loans:Construction


153,059



21.35%



131,532



18.66%



122,873



18.12%



102,311



17.02%



82,739



15.47%Real estate term


237,599



33.14%



252,395



35.80%



252,358



37.21%



239,545



39.85%



212,740



39.77%Real estate loans for sale






0.00%







0.00%







0.00%



1,395



0.23%



7,437



1.39%Installment and other consumer loans


42,140



5.88%



36,519



5.18%



38,166



5.63%



39,796



6.62%



47,415



8.86%Total


720,079



100.42%



708,063



100.43%



681,134



100.42%



603,821



100.45%



537,643



100.50%Less:Unearned purchase discount






0.00%







0.00%



(44)



-0.01%



(44)



-0.01%



(44)



-0.01%Unearned loan fees net of
    origination costs


(3,023)



-0.42%



(3,004)



-0.43%



(2,821)



-0.42%



(2,658)



-0.44%



(2,609)



-0.49%Net loans


$717,056



100.00%



$705,059



100.00%



$678,269



100.00%



$601,119



100.00%



$534,990



100.00%     MaturityWithin

1-5

Over 51 Year

Years

Years

Total(In Thousands)Commercial


$151,755



$87,093



$48,433



$287,281Construction


140,775



10,656



1,628



153,059Real estate term


59,140



70,870



107,589



237,599Installment and other consumer


1,032



8,032



33,076



42,140Total


$352,702



$176,651



$190,726



$720,079Fixed interest rate


$130,689



$56,828



$55,869



$243,386Floating interest rate


222,013



119,823



134,857



476,693Total


$352,702



$176,651



$190,726



$720,079  16




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##### Table of Contents



Commercial Loans:
  Construction Loans:
  Land Development:
  One-to-Four-Family
    Residences: one-to-four-family one-to-four-family
  Commercial Construction:
  Real Estate Loans for Sale:
  Commercial Real Estate:
    Consumer Loans:
  Off-Balance Sheet Arrangements  Commitments and
    Contingent Liabilities:
  Investments
    and Investment Activities
  General:
 17




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##### Table of Contents



Investment Portfolio Composition:
  Securities Available For Sale: and/or
  Securities Held To Maturity:
    Amortized

MarketDecember 31,

Cost

Value(In Thousands)Securities Available for
    Sale:2006:U.S. Treasury


$16,860



$16,840Government Sponsored Entities


70,438



69,971Mortgage-backed Securities


183



182Total


$87,481



$86,9932005:U.S. Treasury


$15,930



$15,761Government Sponsored Entities


37,140



36,482Mortgage-backed Securities


242



240Total


$53,312



$52,4832004:U.S. Treasury


$5,503



$5,481Government Sponsored Entities


53,628



53,656Mortgage-backed Securities


311



312Total


$59,442



$59,449Securities Held to
    Maturity:2006:Municipal securities


$11,776



$11,775Total


$11,776



$11,7752005:Municipal securities


$936



$957Total


$936



$9572004:Municipal securities


$724



$771Total


$724



$771  18




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##### Table of Contents



Market Value, Maturities and Weighted Average
    Yields:
  MaturityWithin

1-5

5-10

Over 101 Year

Years

Years

Years

Total(Dollars In Thousands)Securities Available for
    Sale:U.S. TreasuryBalance


$16,840



$



$



$



$16,840Weighted Average Yield


3.78%



0.00%



0.00%



0.00%



3.78%Government Sponsored EntitiesBalance


16,779



53,192











69,971Weighted Average Yield


3.65%



4.96%



0.00%



0.00%



4.65%Mortgage-Backed SecuritiesBalance














182



182Weighted Average Yield


0.00%



0.00%



0.00%



5.35%



5.35%TotalBalance


$33,619



$53,192



$



$182



$86,993Weighted Average Yield


3.71%



4.96%



0.00%



5.35%



4.48%Securities Held to
    Maturity:Municipal SecuritiesBalance


$70



$10,351



$1,354



$



$11,775Weighted Average Yield


4.12%



3.80%



3.76%



0.00%



3.80%     Purchased
    Receivables
  General: ® ®
    Policy and Authority Limits:
  Liabilities
  Deposits
  General:
 19




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##### Table of Contents



Average Balances and Rates:
  December 31,

2006

2005

2004

2003

2002Average

Average

Average

Average

Average

Average

Average

Average

Average

Averagebalance

rate paid

balance

rate paid

balance

rate paid

balance

rate paid

balance

rate paid(Dollars in Thousands)Interest-bearing demand accounts


$78,872



1.05%



$65,890



0.56%



$57,373



0.39%



$52,955



0.39%



$49,198



0.72%Money market accounts


151,871



3.99%



139,331



2.78%



126,567



1.21%



134,582



0.96%



131,227



1.57%Savings accounts


254,209



3.98%



207,277



3.02%



139,876



1.64%



104,158



1.13%



82,061



1.84%Certificates of deposit


94,595



3.51%



138,284



2.52%



155,134



1.72%



164,847



2.14%



172,531



3.50%Total interest-bearing accounts


579,547



3.51%



550,782



2.54%



478,950



1.40%



456,542



1.36%



435,017



2.29%Noninterest-bearing demand accounts


185,958







182,535







181,731







159,858







135,181Total average deposits


$765,505







$733,317







$660,681







$616,400







$570,198   Certificates of Deposit:
  Alaska Certificates of Deposit:
  Alaska Permanent Fund:
  Borrowings
  FHLB:
  Other Short-term Borrowing:
  Contractual
    Obligations
    Payments Due by PeriodWithin

1-3

3-5

OverDecember 31, 2006

1 Year

Years

Years

5 Years

Total(In Thousands)Long-term debt obligations


$400



$800



$800



$18,732



$20,732Operating lease obligations


1,434



2,928



2,867



3,711



10,940Other long-term liabilities


1,217



3,277











4,494Total


$3,051



$7,005



$3,667



$22,443



$36,166   20




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##### Table of Contents



Payments Due by PeriodWithin

1-3

3-5

OverDecember 31, 2005

1 Year

Years

Years

5 Years

Total(In Thousands)Long-term debt obligations


$400



$800



$800



$18,574



$20,574Operating lease obligations


1,338



2,420



225



1,544



5,527Other long-term liabilities


















Total


$1,738



$3,220



$1,025



$20,118



$26,101     Liquidity
    and Capital Resources
       21




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##### Table of Contents



DilutedDiluted EPS

EPS withoutYears Ending:

as Reported

Stock Repurchase2006


$2.09



$1.922005


$1.72



$1.642004


$1.63



$1.572003


$1.61



$1.572002


$1.29



$1.28              22




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##### Table of Contents



Adequately -


Well -


Actual


ActualDecember 31, 2006

Capitalized


Capitalized


Ratio BHC


Ratio BankTier 1 risk-based capital


4.00%



6.00%



12.95%



11.09%Total risk-based capital


8.00%



10.00%



14.21%



12.35%Leverage ratio


4.00%



5.00%



11.71%



10.06%    Effects
    of Inflation and Changing Prices
    Market
    for Common Stock
        First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter2006High

$
21.77


$
23.90


$
27.33


$
27.68Low

$
20.70


$
21.37


$
22.04


$
25.892005High

$
23.98


$
23.81


$
23.90


$
24.29Low

$
22.10


$
21.02


$
22.27


$
22.14  23




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##### Table of Contents



Market
    Price of and Dividends on the Registrants Common Equity
    and Related Stockholder Matters
  Stock
    Performance Graph
    Total
    Return Performance
  
  December 31,

2001

2002

2003

2004

2005

2006Northrim BanCorp, Inc.


100.00



95.91



166.68



173.87



175.88



213.55Russell 3000


100.00



78.46



102.83



115.11



122.16



141.35SNL $500M-$1B Bank Index


100.00



127.67



184.09



208.62



217.57



247.44  24




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##### Table of Contents



Repurchase
    of Securities
    Equity
    Compensation Plan Information
  Number of securitiesNumber of securities



remaining available forto be issued

Weighted-average

future issuance underupon exercise of

exercise price of

equity compensation plansoutstanding options,

outstanding options,

(Excluding Securitieswarrants and rights

warrants and rights

Reflected in ColumnPlan Category

(a)

(b)

(a))Equity compensation plans approved
    by security holders


439,027



$13.37



173,734Total


439,027



$13.37



173,734   Recent
    Accounting Pronouncements
  Accounting for Certain Hybrid Financial
    Instruments Accounting for
    Servicing of Financial Assets, an amendment of FASB Statement
    No. 140 Fair Value
    Measurements Employers
    Accounting for Defined Benefit Pension and Other Postretirement
    Plans, an amendment of FASB Statements No. 87, 88, 106, and
    132R Accounting for
    Uncertainty in Income Taxes  an interpretation of
    FASB Statement No. 109.
  Share-Based Payment Accounting for Stock-Based
    Compensation. Accounting for Stock Issued to Employees
         25




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##### Table of Contents



GrantedOptions:

Nov. 2006

Nov. 2005

Dec. 2004Expected option life (years)


7.4



7.5



7.7Risk free rate


4.57%



4.45%



4.09%Dividends per share


$0.56



$0.50



$0.44Expected volatility factor


37.44%



37.06%



39.28%     Fair
    Value Disclosures  Prior to FASB 123R
    Adoption
    2005

2004Net income (in thousands)


As reported



$11,170



$10,700Less stock-based employee
    compensation






(173)



(163)Net income


Pro forma



$10,997



$10,537Earnings per share, basic


As reported



$1.78



$1.68Pro forma



$1.75



$1.65Earnings per share, diluted


As reported



$1.72



$1.63Pro forma



$1.70



$1.60     Transition Election Related to Accounting for the Tax
    Effects of Share-Based Payment Awards
    (FSP 123R-3),
 26




---



##### Table of Contents



Quantitative
    and Qualitative Disclosure About Market Risk
    12-month
       27




---



##### Table of Contents



Estimated maturity or repricing at December 31, 2006Within 1 year

1-5 years

35 years

Total(In Thousands)Interest-Earning Assets:Money market investments


$18,717



$



$



$18,717Investment securities


33,690



63,543



3,092



100,325Loans:Commercial


239,215



43,966



1,429



284,610Real estate construction


150,808



506



1,628



152,942Real estate term


153,748



75,337



6,238



235,323Installment and other consumer


15,549



14,829



11,650



42,028Total interest-earning assets


$611,727



$198,181



$24,037



$833,945Percent of total interest-earning
    assets


73%



24%



3%



100%Interest-Bearing Liabilities:Interest-bearing demand accounts


$89,476



$



$



$89,476Money market accounts


157,345











157,345Savings accounts


255,822











255,822Certificates of deposit


59,357



26,537



24



85,918FHLB advances










2,174



2,174Other borrowings


4,328











4,328Junior subordinated debentures


18,558











18,558Total interest-bearing liabilities


$584,886



$26,537



$2,198



$613,621Percent of total interest-bearing
    liabilities


95%



4%



0%



100%Interest sensitivity gap


$26,841



$171,644



$21,839



$220,324Cumulative interest sensitivity gap


$26,841



$198,485



$220,324Cumulative interest sensitivity
    gap as a percentage of total assets


3%



21%



24%      28




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##### Table of Contents



12-month
  Critical
    Accounting Estimates
      Controls
    and Procedures
  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
    Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f)
    Internal
    Control  Integrated Framework.
     29




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm                 
     30




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
             
     31




---



##### Table of Contents



Consolidated
    Financial Statements      2006

2005(In Thousands Except Share Amounts)AssetsCash and due from banks
    (Note 2)

$25,565

$28,854Money market investments
    (Note 3)

18,717

60,836Investment securities held to
    maturity (Note 4)

11,776

936Investment securities available
    for sale (Note 4)

86,993

52,483Investment in Federal Home
    Loan Bank stock (Note 4)

1,556

1,556Total Portfolio Investments

100,325

54,975Loans (Note 5)

717,056

705,059Allowance for loan losses
    (Note 6)

(12,125)

(10,706)Net Loans

704,931

694,353Purchased receivables

21,183

12,198Accrued interest receivable

4,916

4,397Premises and equipment, net
    (Note 7)

12,874

10,603Intangible assets (Notes 1
    and 8)

6,903

7,385Other assets (Notes 1 and 8)

30,206

21,979Total Assets

$925,620

$895,580LiabilitiesDeposits:Demand

$206,343

$196,616Interest-bearing demand

89,476

75,988Savings

48,330

46,790Alaska CDs

207,492

197,989Money market

157,345

151,903Certificates of deposit less than
    $100,000 (Note 9)

57,601

59,331Certificates of deposit greater
    than $100,000 (Note 9)

28,317

51,249Total Deposits

794,904

779,866Borrowings (Note 10)

6,502

8,415Junior subordinated debentures
    (Note 11)

18,558

18,558Other liabilities

10,209

4,267Total Liabilities

830,173

811,106Minority interest in subsidiaries

29

Shareholders Equity
    (Note 16 and 17)Common stock, $1 par value,
    10,000,000 shares authorized,
    6,114,247 and 5,803,487 shares issued and outstanding
    at December 31, 2006 and 2005, respectively

6,114

5,803Additional paid-in capital

46,379

39,161Retained earnings

43,212

39,999Accumulated other comprehensive
    income-
    net unrealized gains/losses on available for sale on investment
    securities

(287)

(489)Total Shareholders Equity

95,418

84,474Commitments and contingencies
    (Notes 2, 4, 10, 15, 18, 19, and 22)Total Liabilities and
    Shareholders Equity

$925,620

$895,580    32




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##### Table of Contents



NORTHRIM
    BANCORP, INC.
    2006

2005

2004(In Thousands Except Per Share Amounts)Interest IncomeInterest and fees on loans

$65,347

$55,870

$45,898Interest on investment
    securities-available for sale (Note 4)

2,396

2,171

2,400Interest on investment
    securities-held to maturity (Note 4)

403

31

92Interest on money market
    investments

1,375

709

164Total Interest Income

69,521

58,781

48,554Interest ExpenseInterest expense on deposits and
    borrowings (Note 12)

21,999

14,873

7,283Net Interest Income

47,522

43,908

41,271Provision for loan losses
    (Note 6)

2,564

1,170

1,601Net Interest Income After
    Provision for Loan Losses

44,958

42,738

39,670Other Operating IncomeService charges on deposit accounts

1,975

1,800

1,718Purchased receivable income

1,855

993

201Employee benefit plan income

1,113



Equity in earnings from mortgage
    affiliate

649

493

438Equity in loss from Elliott Cove

(230)

(424)

(457)Other income

2,296

1,971

1,892Total Other Operating Income

7,658

4,833

3,792Other Operating ExpenseSalaries and other personnel
    expense

19,277

17,656

15,708Occupancy, net

2,503

2,417

2,130Equipment expense

1,350

1,371

1,372Marketing expense

1,641

1,657

1,201Intangible asset amortization
    expense

482

368

368Other expense

6,115

6,008

5,756Total Other Operating Expense

31,368

29,477

26,535Income Before Income Taxes and
    Minority Interest

21,248

18,094

16,927Minority interest in subsidiaries

296



Income Before Income Taxes

20,952

18,094

16,927Provision for income taxes
    (Note 13)

7,978

6,924

6,227Net Income

$12,974

$11,170

$10,700Earnings Per Share, Basic

$2.12

$1.78

$1.68Earnings Per Share, Diluted

$2.09

$1.72

$1.63Weighted Average
    Shares Outstanding, Basic

6,120,002

6,286,774

6,383,281Weighted Average
    Shares Outstanding, Diluted

6,205,826

6,481,794

6,584,146    33




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##### Table of Contents



NORTHRIM
    BANCORP, INC.
     Common StockAccumulatedAdditional



otherNumber

Par

paid-in

Retained

comprehensiveof shares

value

capital

earnings

income

Total(In Thousands)Balance as of January 1, 2004


6,050



$6,050



$45,615



$22,997



$623



$75,285Cash dividend declared














(2,308)







(2,308)Exercise of Stock Options


39



39



(150)











(111)Excess tax benefits from
    share-based payment arrangements










411











411Comprehensive income:Change in unrealized holding
    (gain/loss) on available for sale investment securities, net of
    related income tax effect (Note 14)


















(619)



(619)Net Income














10,700







10,700Total Comprehensive Income






















10,081Balance as of December 31,
    2004


6,089



$6,089



$45,876



$31,389



$4



$83,358Cash dividend declared














(2,560)







(2,560)Stock option expense










68











68Exercise of stock options


23



23



106











129Excess tax benefits from
    share-based payment arrangements










140











140Treasury stock buy-back


(309)



(309)



(7,029)











(7,338)Comprehensive income:Change in unrealized holding
    (gain/loss) on available for sale investment securities, net of
    related income tax effect (Note 14)


















(493)



(493)Net Income














11,170







11,170Total Comprehensive Income






















10,677Balance as of December 31,
    2005


5,803



$5,803



$39,161



$39,999



($489)



$84,474Cash dividend declared














(2,780)







(2,780)Stock dividend


291



291



6,690



(6,981)







Stock option expense










390











390Exercise of stock options


38



38



300











338Excess tax benefits from
    share-based payment arrangements










230











230Treasury stock buy-back


(18)



(18)



(392)











(410)Comprehensive income:Change in unrealized holding
    (gain/loss) on available for sale investment securities, net of
    related income tax effect (Note 14)


















202



202Net Income














12,974







12,974Total Comprehensive Income






















13,176Balance as of December 31,
    2006


6,114



$6,114



$46,379



$43,212



($287)



$95,418    34




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##### Table of Contents



NORTHRIM
    BANCORP, INC.
    Consolidated Statements of Cash Flows
    Years Ended December 31, 2006, 2005 and 2004
  2006

2005

2004(In Thousands)Operating Activities:Net income

$12,974

$11,170

$10,700Adjustments to Reconcile Net Income
    to Net Cash Provided by Operating Activities:Security (gains), net



(9)

(151)Depreciation and amortization of
    premises and equipment

1,116

1,244

1,142Amortization of software

354

544

558Intangible asset amortization

482

368

368Amortization of investment security
    premium, net of discount accretion

(133)



151Deferred tax (benefit)

(1,826)

(821)

(1,260)Stock-based compensation

390

68

Excess tax benefits from
    share-based payment arrangements

(230)

(140)

(411)Deferral of loan fees and costs, net

19

183

163Provision for loan losses

2,564

1,170

1,601Earnings in excess of distributions
    from RML

(124)

(11)

(71)Equity in loss from Elliott Cove

230

424

457Minority interest in subsidiaries

296



(Increase) in accrued interest
    receivable

(519)

(719)

(378)(Increase) in other assets

(7,234)

(494)

(656)Increase (decrease) of other
    liabilities

6,160

578

296Net Cash Provided by Operating
    Activities

14,519

13,555

12,509Investing Activities:Investment in securities:Purchases of investment
    securities 
    available-for-sale

(40,643)

(10,874)

(28,341)Purchases of investment
    securities 
    held-to-maturity

(10,905)

(277)

Proceeds from sales/maturities of
    securities 
    available-for-sale

6,608

17,012

38,559Proceeds from calls/maturities of
    securities 
    held-to-maturity

65

65

220Investment in Federal Home
    Loan Bank stock, net



(254)

244Investment in purchased
    receivables, net

(8,985)

(10,007)

(1,729)Investments in loans:Sales of loans and loan
    participations

22,601

25,116

20,036Loans made, net of repayments

(35,762)

(53,317)

(98,373)Investment in Elliott Cove

(210)

(150)

(250)Investment in NBG



(1,146)

Subscription in PWA



(2,015)

Loan to Elliott Cove, net of
    repayments

58

(575)

(250)Loan to PWA, net of repayments

385

(385)Purchases of premises and equipment

(3,387)

(1,264)

(618)Net Cash Used by Investing
    Activities

(70,175)

(38,071)

(70,502)Financing Activities:Increase in deposits

15,038

80,805

52,864Increase (decrease) in borrowings

(1,913)

1,937

1,335Distributions to minority interests

(267)



Proceeds from issuance of common
    stock

338

129

(111)Excess tax benefits from
    share-based payment arrangements

230

140

411Proceeds from issuance of junior
    subordinated debentures



10,000

Repurchase of common stock

(410)

(7,338)

Cash dividends paid

(2,768)

(2,560)

(2,308)Net Cash Provided by Financing
    Activities

10,248

83,113

52,191Net Increase (Decrease) by Cash and
    Cash Equivalents

(45,408)

58,597

(5,802)Cash and cash equivalents at
    beginning of period

89,690

31,093

36,895Cash and Cash Equivalents at End of
    Year

$44,282

$89,690

$31,093Supplemental Information:Income taxes paid

$9,296

$7,550

$6,825Interest paid

$21,891

$14,741

$7,766Conversion of Elliott Cove loan to
    equity

$

$

$625    See
    accompanying notes to the consolidated financial statements.
 35




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##### Table of Contents



Notes to
    Consolidated Financial Statements  NOTE 1 
    Organization and Summary of Significant Accounting
    Policies
        Estimates and Assumptions:
  Cash and Cash Equivalents:
  Investment Securities: available-for-sale available-for-sale
  Held-to-maturity
    Loans and Loan Fees:
 36




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##### Table of Contents



Allowance for Loan Losses:
    Purchased Receivables:
  Premises and Equipment:
  Intangible Assets:
  Other Assets:
  Other Real Estate:
  Advertising:
  Income Taxes:
  Earnings Per Share:
  Stock Option Plans:
 37




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##### Table of Contents



2005

2004Net income (in thousands)

As reported

$11,170

$10,700Less stock-based employee
    compensation



(173)

(163)Net income

Pro forma

$10,997

$10,537Earnings per share, basic

As reported

$1.78

$1.68Pro forma

$1.75

$1.65Earnings per share, diluted

As reported

$1.72

$1.63Pro forma

$1.70

$1.60   Comprehensive Income:
  Reclassifications:
  Segments:
  Geographic Concentration and Alaska
    Economy:
  Consolidation Policy:
  NOTE 2 
    Cash and Due from Banks
    NOTE 3 
    Money Market Investments
    December 31,

2006

2005(In Thousands)Interest bearing deposits at
    Federal Home Loan Bank (FHLB)

$18,717

$54,036Fed funds sold



6,800Total

$18,717

$60,836   one-day
 38




---



##### Table of Contents



NOTE 4 
    Investment Securities
    Gross

GrossAmortized

Unrealized

Unrealized

MarketCost

Gains

Losses

Value(In Thousands)2006:Securities Available for SaleU.S. Treasury

$16,860

$

$20

$16,840Government Sponsored Entities

70,438

16

483

69,971Mortgage-backed Securities

183



1

182Total

$87,481

$16

$504

$86,993Securities Held to MaturityMunicipal Securities

$11,776

$32

$33

$11,775Federal Home Loan Bank Stock

$1,556

$

$

$1,5562005:Securities Available for SaleU.S. Treasury

$15,930

$

$169

$15,761Government Sponsored Entities

37,140



659

36,482Mortgage-backed Securities

242



2

240Total

$53,312

$

$830

$52,483Securities Held to MaturityMunicipal Securities

$936

$28

$7

$957Federal Home Loan Bank Stock

$1,556

$

$

$1,556     December 31,

Less Than 12 Months

More Than 12 Months

TotalUnrealized



Unrealized



UnrealizedFair Value

Losses

Fair Value

Losses

Fair Value

Losses(In Thousands)2006:Securities Available for SaleU.S. Treasury

$5,862

$5

$10,978

$15

$16,840

$20Government Sponsored Entities





39,966

483

39,966

483Mortgage-backed Securities





182

1

182

1Total

$5,862

$5

$51,126

$499

$56,988

$504Securities Held to MaturityMunicipal Securities

$8,105

$30

$274

$3

$8,379

$33   39




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##### Table of Contents



December 31,

Less Than 12 Months

More Than 12 Months

TotalUnrealized



Unrealized



UnrealizedFair Value

Losses

Fair Value

Losses

Fair Value

Losses(In Thousands)2005:Securities Available for SaleU.S. Treasury

$4,883

$53

$10,878

$116

$15,761

$169Government Sponsored Entities

10,519

176

25,963

483

36,482

659Mortgage-backed Securities

240

2





240

2Total

$15,642

$231

$36,841

$599

$52,483

$830Securities Held to MaturityMunicipal Securities

$270

$7





$270

$7   other-than-temporarily
    Within





Over

Amortized

Market1 Year

1-5 Years

5-10 Years

10 Years

Cost

Value(In Thousands)Securities Available for SaleU.S. Treasury

$16,860

$

$

$

$16,860

$16,840Government Sponsored Entities

16,902

53,536





70,438

69,971Mortgage-backed Securities







183

183

182Total

$33,762

$53,536

$

$183

$87,481

$86,993Weighted Average Yield

3.71%

4.96%

0.00%

5.35%

4.48%

Securities Held to MaturityMunicipal Securities

$70

$10,357

$1,349

$

$11,776

$11,775Weighted Average Yield

4.12%

3.80%

3.76%

0.00%

3.80%

  40




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##### Table of Contents



Gross

GrossDecember 31,

Proceeds

Gains

Losses(In Thousands)2006:Available-for-Sale
    Securities

$

$

$Held-to-Maturity
    Securities

$

$

$2005:Available-for-Sale
    Securities

$6,148

$44

$35Held-to-Maturity
    Securities

$

$

$2004:Available-for-Sale
    Securities

$3,789

$151

$Held-to-Maturity
    Securities

$

$

$       December 31,

2006

2005

2004(In Thousands)U.S. Treasury

$438

$472

$67Government Sponsored Entities

1,948

1,688

2,319Other

10

11

14Total

$2,396

$2,171

$2,400    41




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##### Table of Contents



NOTE 5 
    Loans
    December 31,

2006

2005(In Thousands)Commercial

$287,281

$287,617Real estate construction

153,059

131,532Real estate term

237,599

252,395Installment and other consumer

42,140

36,519Sub-total

720,079

708,063Less: Unearned origination fees,
    net of origination costs

(3,023)

(3,004)Total loans

717,056

705,059Allowance for loan losses

(12,125)

(10,706)Net Loans

$704,931

$694,353            42




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##### Table of Contents



MaturityWithin



Over1 Year

1-5 Years

5 Years

Total(In Thousands)Commercial

$149,325

$86,951

$48,334

$284,610Construction

140,658

10,656

1,628

152,942Real estate term

58,131

70,772

106,420

235,323Installment and other consumer

1,032

8,032

32,964

42,028Total

$349,146

$176,411

$189,346

$714,903Fixed interest rate

$130,312

$56,601

$54,489

$241,402Floating interest rate

218,834

119,810

134,857

473,501Total

$349,146

$176,411

$189,346

$714,903     December 31,

2006

2005(In Thousands)Balance, beginning of the year

$2,995

$3,132Loans made

11,520

16,848Repayments or change to
    nondirector status

13,392

16,985Balance, end of year

$1,123

$2,995    43




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##### Table of Contents



NOTE 6 
    Allowance for Loan Losses
    December 31,

2006

2005

2004(In Thousands)Balance, beginning of the year

$10,706

$10,764

$10,186Provision charged to operations

2,564

1,170

1,601Charge-offs:Commercial

(2,544)

(1,552)

(1,387)Construction



(100)

Real estate





Installment and other consumer

(72)

(63)

(84)Total Charge-offs

(2,616)

(1,715)

(1,471)Recoveries:Commercial

1,086

418

200Construction



15

185Real estate

354

15

Installment and other consumer

31

39

63Total Recoveries

1,471

487

448Charge-offs net of recoveries

(1,145)

(1,228)

(1,023)Balance, End of Year

$12,125

$10,706

$10,764     NOTE 7 
    Premises and Equipment
    December 31,

Useful Life

2006

2005(In Thousands)Land



$1,443

$1,443Vehicle

3 years

61

61Furniture and equipment

3-7 years

9,608

8,915Tenant improvements

2-11 years

7,307

4,839Buildings

39 years

6,865

6,848Total Premises and Equipment



25,284

22,106Accumulated depreciation and
    amortization



(12,410)

(11,503)Total Premises and Equipment, Net



$12,874

$10,603    44




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##### Table of Contents



NOTE 8 
    Other Assets
    December 31,

2006

2005(In Thousands)Intangible assets:Goodwill

$5,735

$5,735Core deposits intangible

163

531NBG customer relationships

1,005

1,119Total

$6,903

$7,385Prepaid expenses

$719

$572Software

553

466Deferred taxes, net

10,560

8,838Note receivable from Elliott Cove

617

1,060Investment in Elliott Cove

80

101Investment in PWA

1,894

2,015Investment in RML Holding Company

4,327

4,203Investment in Low Income Housing
    Partnerships

8,220

2,440Other assets

3,236

2,284Total

$30,206

$21,979         Year Ending December 31:(In Thousands)2007

$2782008

1152009

1152010

1152011

115Thereafter

430Total

$1,168  45




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##### Table of Contents



start-up
        December 31,

2006

2005(In Thousands)AssetsCurrent assets

$53,072

$70,315Long-term assets

6,455

5,958Total Assets

$59,527

$76,273LiabilitiesCurrent liabilities

$41,980

$58,285Long-term liabilities

964

1,906Total Liabilities

42,944

60,191Shareholders Equity

16,583

16,082Total Liabilities and
    Shareholders Equity

$59,527

$76,273Income/expenseGross income

$17,036

$15,819Total expense

14,403

13,107Joint venture allocations

102

(522)Net Income

$2,735

$2,190     NOTE 9 
    Deposits
   46




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##### Table of Contents



Year Ending December 31:(In Thousands)2007

$59,3572008

16,8522009

9,4252010

1462011

114Thereafter

24Total

$85,918     NOTE 10 
    Borrowings
          NOTE 11 
    Junior Subordinated Debentures
  90-day
 47




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##### Table of Contents



90-day
  NOTE 12 
    Interest Expense
    December 31,

2006

2005

2004(In Thousands)Interest-bearing demand accounts

$830

$369

$221Money market accounts

6,053

3,876

1,527Savings accounts

10,113

6,263

2,290Certificates of deposit greater
    than $100,000

1,425

2,170

1,620Certificates of deposit less than
    $100,000

1,897

1,312

1,051Borrowings

1,681

883

574Total

$21,999

$14,873

$7,283  48




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##### Table of Contents



NOTE 13 
    Income Taxes
    Current Tax

Deferred

TotalDecember 31,



Expense

(Benefit)

Expense(In Thousands)2006:

Federal

$7,828

($1,436)

$6,392State

2,012

(426)

1,586Total



$9,840

($1,862)

$7,9782005:

Federal

$6,148

($639)

$5,509State

1,597

(182)

1,415Total



$7,745

($821)

$6,9242004:

Federal

$6,139

($998)

$5,141State

1,348

(262)

1,086Total



$7,487

($1,260)

$6,227     December 31,

2006

2005

2004(In Thousands)Computed expected
    income tax expense

$7,333

$6,333

$5,924State income taxes, net

1,031

920

706Other

(386)

(329)

(403)Total

$7,978

$6,924

$6,227     December 31,

2006

2005

2004(In Thousands)Provision for loan losses

$7,113

$5,796

$5,612Loan fees, net of costs

1,240

1,227

1,150Unrealized gain on
    available-for-sale
    investment securities

201

341

(3)Depreciation

826

678

386Other, net

1,180

796

528Net Deferred Tax Asset

$10,560

$8,838

$7,673    49




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##### Table of Contents



NOTE 14 
    Comprehensive Income
    TaxBefore Tax

(Expense)December 31,

Amount

Benefit

Net Amount(In Thousands)2006:Unrealized net holding losses on
    investment securities arising during 2006

$342

($140)

$202Plus: Reclassification adjustment
    for net realized gains included in net income





Net unrealized losses

$342

($140)

$2022005:Unrealized net holding losses on
    investment securities arising during 2005

($828)

$340

($488)Plus: Reclassification adjustment
    for net realized gains included in net income

(9)

4

(5)Net unrealized losses

($837)

$344

($493)2004:Unrealized net holding losses on
    investment securities arising during 2004

($900)

$370

($530)Plus: Reclassification adjustment
    for net realized gains included in net income

(151)

62

(89)Net unrealized losses

($1,051)

$432

($619)   NOTE 15 
    Employee Benefit Plans
         50




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##### Table of Contents



NOTE 16 
    Common Stock
        NOTE 17 
    Options
  10-year
 51




---



##### Table of Contents



Options
    and Restricted Stock Outstanding
    WeightedShares

Average

Range ofUnder

Exercise

ExerciseOption

Price

PriceDecember 31, 2003 outstanding

443,058

$9.90

$6.32-$22.01Granted  2004

52,295

18.87Forfeited

(7,085)

12.74Exercised

(62,950)

6.41December 31, 2004 outstanding

425,319

$11.48

$6.32-$22.01Granted  2005

48,709

19.43Forfeited

(3,004)

16.93Exercised

(25,873)

9.15December 31, 2005 outstanding

445,150

$12.45

$6.32-$22.01Granted  2006

47,363

19.30Forfeited

(6,217)

16.15Exercised

(47,269)

10.25December 31, 2006 outstanding

439,027

$13.37

$7.52-$27.24     WeightedAverageNumber of

ExerciseShares

PriceOutstanding at January 1, 2006

429,662

$12.90Changes during the period:Granted

33,554

27.24Exercised

(47,269)

10.25Forfeited

(4,910)

20.45Outstanding at December 31,
    2006

411,037

$14.28Options exercisable at
    December 31, 2006

338,100

$11.98Unexercisable options at
    December 31, 2006

72,937

$24.92  52




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##### Table of Contents



WeightedNumber of

Average FairShares

ValueOutstanding at January 1, 2006

15,488

$22.77Changes during the period:Granted

13,809

26.44Vested



Forfeited

(1,307)

22.77Outstanding at December 31,
    2006

27,990

$24.58             GrantedOptions:

Nov. 2006

Nov. 2005

Dec. 2004Expected option life (years)

7.4

7.5

7.7Risk free rate

4.57%

4.45%

4.09%Dividends per Share

$0.56

$0.50

$0.44Expected volatility factor

37.44%

37.06%

39.28%    53




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##### Table of Contents



Years Ended December 31,

2006

2005

2004(Dollars in Thousands)Options:Weighted-average grant-date fair
    value of stock options granted:

$9.79

$8.28

$8.49Total fair value of shares vested
    during the period:

256

173

163Total intrinsic value of options
    exercised:

672

340

999Restricted stock units:Weighted-average grant-date fair
    value of stock options granted:

$26.44

$20.21

$21.88Total fair value of shares vested
    during the period:





Total intrinsic value of options
    exercised:





       Average PeriodUnamortized

to ExpenseExpense

(years)(Dollars in Thousands)Stock options

$632

1.8Restricted stock

455

2.0Total

$1,087

1.8     No. FAS No. 123(R)-3, Transition Election Related to Accounting for the Tax
    Effects of Share-Based Payment Awards (FSP
    123R-3),
 54




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##### Table of Contents



NOTE 18 
    Commitments and Contingent Liabilities
    Year Ending December 31:(In Thousands)2007

$1,4342008

1,4622009

1,4662010

1,4552011

1,412Thereafter

3,711Total

$10,940       Off-Balance Sheet Financial Instruments:
    December 31,

2006

2005(In Thousands)Off-balance sheet commitments:Commitments to extend credit

$144,364

$151,316Standby letters of credit

27,685

20,788       NOTE 19 
    Regulatory Matters
   55




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##### Table of Contents



Consolidated

Actual

Adequately-Capitalized

Well-CapitalizedAmount

Ratio

Amount

Ratio

Amount

Ratio(In Thousands)As of December 31,
    2006:Total Capital (to risk-weighted
    assets)

$116,991

14.21%

$65,864


8.0%

$82,330

10.0%Tier I Capital (to
    risk-weighted assets)

$106,674

12.95%

$32,949


4.0%

$49,424

6.0%Tier I Capital (to average
    assets)

$106,674

11.71%

$36,439


4.0%

$45,548

5.0%As of December 31,
    2005:Total Capital (to risk-weighted
    assets)

$106,587

13.35%

$63,872


8.0%

$79,840

10.0%Tier I Capital (to
    risk-weighted assets)

$96,598

12.10%

$31,933


4.0%

$47,900

6.0%Tier I Capital (to average
    assets)

$96,598

10.81%

$35,744


4.0%

$44,680

5.0%  Northrim Bank

Actual

Adequately-Capitalized

Well-CapitalizedAmount

Ratio

Amount

Ratio

Amount

Ratio(In Thousands)As of December 31,
    2006:Total Capital (to risk-weighted
    assets)

$101,520

12.35%

$65,762

8.0%

$82,202

10.0%Tier I Capital (to
    risk-weighted assets)

$91,220

11.09%

$32,902

4.0%

$49,353

6.0%Tier I Capital (to average
    assets)

$91,220

10.06%

$36,270

4.0%

$45,338

5.0%As of December 31,
    2005:Total Capital (to risk-weighted
    assets)

$92,004

11.57%

$63,616

8.0%

$79,519

10.0%Tier I Capital (to
    risk-weighted assets)

$82,056

10.32%

$31,805

4.0%

$47,707

6.0%Tier I Capital (to average
    assets)

$82,056

9.24%

$35,522

4.0%

$44,403

5.0%   NOTE 20 
    Fair Value of Financial Instruments
    Cash and Money Market Investments:
 56




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##### Table of Contents



Investment Securities:
  Loans:
  Purchased Receivables:
  Deposit Liabilities:
  Borrowings:
  Junior Subordinated Debentures:
  Commitments to Extend Credit and Standby Letters of
    Credit:
  Limitations:
  57




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##### Table of Contents



December 31,

2006

2005Carrying

Fair

Carrying

FairAmount

Value

Amount

Value(In Thousands)Financial Assets:Cash and money market investments

$44,282

$44,282

$89,690

$89,690Investment securities

100,325

100,324

54,975

54,996Net loans

704,931

698,346

694,353

686,984Purchased receivables

21,183

21,183

12,198

12,198Accrued interest receivable

4,916

4,916

4,397

4,397Financial
    Liabilities:Deposits

$794,904

$794,520

$779,866

$779,677Accrued interest payable

577

577

469

469Borrowings

6,502

6,395

8,415

8,271Junior subordinated debentures

18,558

18,558

18,558

18,558Unrecognized Financial
    Instruments:Commitments to extend credit

$144,364

$1,444

$151,316

$1,513Standby letters of credit

27,685

277

20,788

208   NOTE 21 
    Quarterly Results of Operations (Unaudited)
  2006 Quarter Ended

Dec. 31

Sept. 30

June 30

March 31(In Thousands Except Per Share Amounts)Total interest income

$18,653

$17,841

$16,963

$16,064Total interest expense

5,893

5,904

5,437

4,765Net interest income

12,760

11,937

11,526

11,299Provision for loan losses

800

850

860

54Other operating income

2,076

2,203

1,951

1,428Other operating expense

8,028

7,661

7,715

7,964Income before income taxes and
    minority interest

6,008

5,629

4,902

4,709Minority interest in subsidiaries

78

70

103

45Pre tax income

5,930

5,559

4,799

4,664Income taxes

2,241

2,108

1,860

1,769Net Income

$3,689

$3,451

$2,939

$2,895Earnings per share, basic

$0.60

$0.56

$0.48

$0.47Earnings per share, diluted

$0.59

$0.56

$0.47

$0.47   58




---



##### Table of Contents



2005 Quarter Ended

Dec. 31

Sept. 30

June 30

March 31(In Thousands Except Per Share Amounts)Total interest income

$16,344

$15,047

$14,078

$13,312Total interest expense

4,730

3,910

3,403

2,83Net interest income

11,614

11,137

10,675

10,482Provision for loan losses

642

428

100

Other operating income

1,426

1,494

1,065

848Other operating expense

7,371

7,605

7,373

7,128Income before income taxes

5,027

4,598

4,267

4,202Income taxes

1,935

1,756

1,611

1,622Net Income

$3,092

$2,842

$2,656

$2,580Earnings per share, basic

$0.51

$0.46

$0.42

$0.40Earnings per share, diluted

$0.49

$0.44

$0.40

$0.39     NOTE 22 
    Disputes and Claims
   59




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##### Table of Contents



NOTE 23 
    Parent Company Financial Information
    Balance Sheets for
    December 31,

2006

2005

2004(In Thousands)AssetsCash

$12,629

$11,014

$8,735Investment in Northrim Bank

97,806

87,922

80,797Investment in NISC

2,530

2,484

552Investment in NCT1

248

248

248Investment in NST2

310

310

Other assets

440

891

252Total Assets

$113,963

$102,869

$90,584LiabilitiesJunior subordinated debentures

$18,558

$18,558

$8,248Taxes payable and other payables

(84)

(252)

(1,084)Other liabilities

71

89

62Total Liabilities

18,395

18,395

7,226Shareholders EquityCommon stock

6,114

5,803

6,089Additional paid-in capital

46,379

39,161

45,876Retained earnings

43,212

39,999

31,389Accumulated other comprehensive
    income- 
    net unrealized gains on available for sale investment securities

(287)

(489)

4Total Shareholders Equity

95,418

84,474

83,358Total Liabilities and
    Shareholders Equity

$113,963

$102,869

$90,584   Statements of Income for Years
    Ended:

2006

2005

2004(In Thousands)IncomeInterest income

$578

$229

$177Net income from Northrim Bank

14,432

12,118

11,659Net loss from NISC

(170)

(233)

(269)Other income





1Total Income

14,840

12,114

11,568ExpenseInterest expense

1,360

565

387Administrative and other expenses

1,262

846

954Total Expense

2,622

1,411

1,341Net Income Before Income Taxes

12,218

10,703

10,227Income tax expense (benefit)

(756)

(467)

(473)Net Income

$12,974

$11,170

$10,700  60




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##### Table of Contents



Statements of Cash Flows for Years
    Ended:

2006

2005

2004(In Thousands)Operating Activities:Net income

$12,974

$11,170

$10,700Adjustments to Reconcile Net
    Income to Net Cash:Equity in undistributed earnings
    from subsidiaries

(9,512)

(7,385)

(8,015)Stock-based compensation

390

68

Changes in other assets and
    liabilities

583

220

398Net Cash Used from Operating
    Activities

4,435

4,073

3,083Investing Activities:Investment in NISC &
    NCT1 & NST2

(210)

(2,165)

(250)Net Cash Used by Investing
    Activities

(210)

(2,165)

(250)Financing Activities:Dividends paid to shareholders

(2,768)

(2,560)

(2,308)Proceeds from issuance of trust
    preferred securities



10,000

Proceeds from issuance of common
    stock and excess tax benefits

568

269

300Repurchase of common stock

(410)

(7,338)

Net Cash Provided by Financing
    Activities

(2,610)

371

(2,008)Net Increase by Cash and Cash
    Equivalents

1,615

2,279

825Cash and Cash Equivalents at
    beginning of period

11,014

8,735

7,910Cash and Cash Equivalents at end
    of period

$12,629

$11,014

$8,735  61




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##### Table of Contents



Annual
    Report on
    Form 10-K      92-0175752    (907) 562-0062
        Rule 12b-2
      Rule 12b-2
  Regulation S-K Form 10-K.
      Form 10-K Form 10-K.
 62




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##### Table of Contents



Index
  Part I

PageItem 1.

Business

1-4,
    7-21, 61-68General

1-4,
    61-68Investment Portfolio

17-19,
    39-41, 55-56Loan Portfolio

13-17,
    41-42Summary of Loan Loss Experience

13-17,
    41-43Deposits

19-20,
    45-46Return on Equity and Assets

5Short-term Borrowings

20, 46Item 1A.

Risk Factors

67-68Item 1B.

Unsolved Staff Comments

NoneItem 2.

Properties

69Item 3.

Legal Proceedings

58Item 4.

Submission of Matters to a Vote of
    Security Holders

NonePart
    IIItem 5.

Market for Registrants
    Common Equity and, Related Stockholder Matters and Issuer
    Purchases of Equity Securities

21-25,
    50Item 6.

Selected Financial Data

5-6Item 7.

Managements Discussion and
    Analysis of Financial Condition and Results of Operations

7-29Item 7A.

Quantitative and Qualitative
    Disclosures about Market Risk

27-29Item 8.

Financial Statements and
    Supplementary Data

32-60Item 9.

Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure

NoneItem 9A.

Conclusion Regarding the
    Effectiveness of Disclosure Controls and Procedures

29Managements Report on
    Internal Control Over Financial Reporting

29Report of Independent Registered
    Public Accounting Firm: Effectiveness of Internal Control Over
    Financial Reporting

30Item 9B.

Other Information

NonePart IIIItem 10.

Directors and Executive Officers
    of the Registrant

*Item 11.

Executive Compensation

*Item 12.

Security Ownership of Certain
    Beneficial Owners and Management and Related Stockholder Matters

*Item 13.

Certain Relationships, Related
    Transactions and Director Independence

*Item 14.

Principal Accountant Fees and
    Services

*Part IVItem 15.

Exhibits, Financial Statement
    Schedules

70-71    63




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##### Table of Contents



General
    Competition
    out-of-state
   64




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##### Table of Contents



Market Share in Greater Anchorage AreaNumber of

Total

Market shareFinancial institution

branches

deposits

of deposits(Dollars in thousands)Northrim Bank

8(1)

$656,735

21%Wells Fargo Bank Alaska

14

1,260,082

40%First National Bank Alaska

10

805,796

25%Key Bank

4

411,111

13%Alaska First Bank & Trust

2

45,917

1%Total

47

$3,179,641

100%     Employees
    and Key Personnel
      Alaska
    Economy
       65




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##### Table of Contents



and/or
  Supervision
    and Regulation
       66




---



##### Table of Contents



out-of-state out-of-state
                 67




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##### Table of Contents



Risk
    Factors
      Adequacy of Loan Loss Allowance:
  Growth and Management:
  Changes in Market Interest Rates:
  Geographic Concentration:
  Regulation:
 68




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##### Table of Contents



Competition: and/or
  Credit Risk:
 69




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##### Table of Contents



Properties
    Locations

Type

Leased/OwnedMidtown Financial Center: Northrim
    Headquarters3111 C Street, Anchorage, AK

Traditional

LeasedSouthSide Financial Center8730 Old
    Seward Highway, Anchorage, AK

Traditional

Land leased; building owned36th Avenue Branch811 East
    36th Avenue, Anchorage, AK

Traditional

OwnedHuffman Branch1501 East Huffman
    Road, Anchorage, AK

Supermarket

LeasedJewel Lake Branch9170 Jewel Lake
    Road, Anchorage, AK

Traditional

LeasedSeventh Avenue Branch550 West
    Seventh Avenue, Anchorage, AK

Traditional

LeasedWest Anchorage Branch/Small
    Business Center2709 Spenard Road, Anchorage, AK

Traditional

OwnedEagle River Branch12812 Old Glenn
    Highway, Fire Lake Plaza, Eagle River, AK

Traditional

LeasedFairbanks Financial Center714
    Fourth Avenue, Suite 100, Fairbanks, AK

Traditional

LeasedWasilla Financial
    Center850 E. USA Circle, Suite A, Wasilla, AK

Traditional

Owned   Financial
    Statements and Exhibits
  Financial
    Statements
             70




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##### Table of Contents



Exhibits
  Index to Exhibits
  ExhibitNumber

Name of Document3.1

Amended and Restated Articles of
    Incorporation(1)3.2

Bylaws(1)4.1

Form of Common Stock
    Certificate(1)4.2

Pursuant to
    Section 6.0(b)(4)(iii)(A) of
    Regulation S-K,
    copies of instruments defining rights of holders of long-term
    debt and preferred securities are not filed. The Company agrees
    to furnish a copy thereof to the Securities and Exchange
    Commission upon request4.3

Indenture dated as of
    December 16,
    2006(5)4.4

Form of Junior Subordinated Debt
    Security due
    2036(5)10.1

Employee Stock Option and
    Restricted Stock Award
    Plan(1)10.2

2000 Employee Stock Incentive
    Plan(1)10.7

Plan and Agreement of
    Reorganization between the Registrant and Northrim Bank dated as
    of March 7,
    2001(2)10.8

Supplemental Executive Retirement
    Plan dated July 1, 1994, as amended January 8,
    2004(3)10.9

Supplemental Executive Retirement
    Deferred Compensation
    Plan(2)10.10

2004 Stock Incentive
    Plan(3)10.11

Employment Agreement with Robert
    Shake(4)10.12

Capital Securities Purchase
    Agreement dated December 14,
    2005(5)10.13

Amended and Restated Declaration of
    Trust Northrim Statutory Trust 2 dated as of
    December 16,
    2005(5)10.14

Amended and Restated Employment
    Agreement with Joseph M.
    Beedle(6)10.15

Amended and Restated Employment
    Agreement with R. Marc
    Langland(7)10.16

Amended and Restated Employment
    Agreement with R. Marc
    Langland(8)10.17

Amended and Restated Employment
    Agreement with Joseph M.
    Schierhorn(8)10.18

Amended and Restated Employment
    Agreement with Christopher N.
    Knudson(8)10.19

Amended and Restated Employment
    Agreement with Joseph M.
    Beedle(8)10.20

Amended and Restated Employment
    Agreement with Victor P.
    Mollozzi(8)21

SubsidiariesNorthrim BankNorthrim Investment
    Services CompanyNorthrim Capital
    Trust 123

Consent of KPMG
    LLP(8)24

Power of
    Attorney(8)31.1

Certification of Chief Executive
    Officer pursuant to 18 U.S.C. § 1350, as adopted
    pursuant to Section 302 of the Sarbanes-Oxley Act of
    2002(8)31.2

Certification of Chief Financial
    Officer pursuant to 18 U.S.C. § 1350, as adopted
    pursuant to Section 302 of the Sarbanes-Oxley Act of
    2002(8)32.1

Certification of Chief Executive
    Officer pursuant to 18 U.S.C. § 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002(8)32.2

Certification of the Chief
    Financial Officer pursuant to 18 U.S.C. § 1350,
    as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of
    2002(8)     (1)
    
    Incorporated by reference to the Companys
    Form 8-A,
    filed with the SEC on January 14, 2002(2)
    
    Incorporated by reference to the Companys
    Form 10-K
    for the year ended December 31, 2002, filed with the SEC on
    March 19, 2003(3)
    
    Incorporated by reference to the Companys
    Form 10-K
    for the year ended December 31, 2003, filed with the SEC on
    March 15, 2004(4)
    
    Incorporated by reference to the Companys
    Form 10-K
    for the year ended December 31, 2004, filed with the SEC on
    March 15, 2005(5)
    
    Incorporated by reference to the Companys
    Form 10-K
    for the year ended December 31, 2005, filed with the SEC on
    March 16, 2006(6)
    
    Incorporated by reference to the Companys
    Form 8-K,
    filed with the SEC on May 19, 2006(7)
    
    Incorporated by reference to the Companys
    Form 8-K,
    filed with the SEC on June 2, 2006(8)
    
    Filed with this
    Form 10-K 71




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##### Table of Contents



Signatures
    Northrim BanCorp, Inc.
  By
    /s/ R. Marc Langland                   Form 10-K, attorney-in-fact
  Larry S. Cash
    Mark G. Copeland
    Frank A. Danner
    Anthony Drabek
    Christopher N. Knudson

R. Marc Langland
    Richard L. Lowell
    Irene Sparks Rowan
    John C. Swalling
    David G. Wight   By
    /s/ R. Marc Langland  Attorney-in-fact
   72




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##### Table of Contents



Investor
    Information
  Annual
    Meeting
  Date:

Thursday, May 3, 2007Time:

9 a.m.Location:

Hilton Anchorage Hotel
    500 West Third Avenue
    Anchorage, AK 99501   Stock
    Symbol
    Auditor
    Transfer
    Agent and Registrar
  1-800-937-5449
  Legal
    Counsel
    Information
    Requests
    
    Visit our home page, www.northrim.com, and click on the
    For Investorssection for stock information
    and copies of earnings and dividend releases.
    If you would like to be added to Northrims investor
    e-mail list
    or have investor information mailed to you, send a request to
    investors@nrim.com or call our Corporate Secretary at
    (907) 261-3301.  Written requests should be mailed to the following
    address:
    99524-1489
  (907) 562-0062
 (907) 562-1758
 E-mail:
 http://www.northrim.com
 73