##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended:
    December 31,
    2010o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number: 0-33501
  Northrim Bancorp,
    Inc.
  (Exact name of registrant as
    specified in its charter)
  Alaska(State of
    Incorporation)

92-0175752(I.R.S. Employer
    Identification No.)  3111 C Street,
 Anchorage, Alaska 99503
 (Address of principal executive
    offices) (Zip Code)
  (907)
    562-0062
 (Registrants telephone number)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Common Stock, $1.00 par value
 (Title of Class)
  The NASDAQ Stock Market, LLC
 (Name of Exchange on Which
    Listed)
  Securities registered pursuant to Section 12(g) of the
    Act: N/A
  o þ
   o þ
   þ o
  Regulation S-T þ o
  Regulation S-K Form 10-K Form 10-K.  Yes o þ
    Large accelerated filer o

Accelerated filer þ

Non-accelerated filero
    (Do not check if a smaller reporting company)

Smaller Reporting company o   Rule 12b-2 o þ
       DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





Northrim
    BanCorp, Inc.
    Annual Report on
    Form 10-K
    December 31, 2010
    Table of Contents
   
 Part IItem 1.

Business

1Item 1A.

Risk Factors

8Item 1B.

Unresolved Staff Comments

12Item 2.

Properties

12Item 3.

Legal Proceedings

12Part IIItem 4.

Removed and ReservedItem 5.

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

13Item 6.

Selected Financial Data

15Item 7.

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

17Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk

40Item 8.

Financial Statements and Supplementary Data

43Item 9.

Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure

86Item 9A.

Controls and Procedures

86Item 9B.

Other Information

87Part IIIItem 10.

Directors, Executive Officers and Corporate
    Governance

87Item 11.

Executive Compensation

87Item 12.

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

87Item 13.

Certain Relationships and Related Transactions,
    and Director Independence

88Item 14.

Principal Accounting Fees and Services

88Part IVItem 15.

Exhibits and Financial Statement Schedules

88Index to Exhibits

89Signatures

91EX-21.1EX-23.1EX-23.2EX-24.1EX-31.1EX-31.2EX-32.1EX-32.2   i




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##### Table of Contents



Part I
  Item 1.
    Business    General
  Northrim
    BanCorp, Inc.
    Subsidiaries
    
    Northrim Bank (the Bank), a state chartered,
    full-service commercial bank headquartered in Anchorage, Alaska.
    The Bank is regulated by the Federal Deposit Insurance
    Corporation and the State of Alaska Department of Community and
    Economic Development, Division of Banking, Securities and
    Corporations. The Bank has ten branch locations; seven in
    Anchorage, one in Fairbanks, and one each in Eagle River and
    Wasilla. We also operate in the Washington and Oregon market
    areas through Northrim Funding Services (NFS), a
    division of the Bank that was formed in 2004. We offer a wide
    array of commercial and consumer loan and deposit products,
    investment products, and electronic banking services over the
    Internet;
    Northrim Investment Services Company (NISC) was
    formed in November 2002 to hold the Companys 48% equity
    interest in Elliott Cove Capital Management LLC, (Elliott
    Cove), an investment advisory services company. In the
    first quarter of 2006, through NISC, we purchased a 24% interest
    in Pacific Wealth Advisors, LLC (PWA), an investment
    advisory, trust, and wealth management business located in
    Seattle, Washington;
    Northrim Capital Trust 1 (NCT1), an entity that
    we formed in May of 2003 to facilitate a trust preferred
    securities offering by the Company; and
    Northrim Statutory Trust 2 (NST2), an entity
    that we formed in December of 2005 to facilitate a trust
    preferred securities offering by the Company.    
    Northrim Capital Investments Co. (NCIC) is a
    wholly-owned subsidiary of the Bank, which holds a 24% interest
    in the profits and losses of a residential mortgage holding
    company, Residential Mortgage Holding Company LLC
    (RML). The predecessor of RML, Residential Mortgage
    LLC, was formed in 1998 and has offices throughout Alaska. RML
    also operates in real estate markets in the states of Washington
    and South Carolina through joint ventures. In March and December
    of 2005, NCIC purchased ownership interests totaling 50.1% in
    Northrim Benefits Group, LLC (NBG), an insurance
    brokerage company that focuses on the sale and servicing of
    employee benefit plans; and
    Northrim Building LLC (NBL) is a wholly-owned
    subsidiary of the Bank that owns and operates the Companys
    main office facility at 3111 C Street in Anchorage.  Segments
   1




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##### Table of Contents



Overview
    and Business Strategy
    
    Anchorage: We have two major financial
    centers in Anchorage, four smaller branches, and one supermarket
    branch. We continue to explore 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. In the second quarter of
    2008, we opened another branch in Fairbanks that is located
    within a large newly developed retail area. In the third quarter
    of 2010, we consolidated the operations of our Fairbanks
    branches into the facility that was completed in 2008.
    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.    
    Pursuing Strategic Opportunities for Additional Growth:We expect to seek 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 in the future. We believe that our 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 lending, further diversifying our loan portfolio.
    Although to a lesser degree than the Bank of America branch
    acquisition, we believe that our October 2007 acquisition of
    Alaska First Bank & Trust, N.A. also strengthened our
    position in the Anchorage market. We expect to continue seeking
    similar opportunities to further our growth and increase our
    market share in the areas we serve.
    Improving Credit Quality: In 2007, we formed
    a Quality Assurance department to provide independent, detailed
    financial analysis of our largest, most complex loans. In
    addition, this department, along with the Chief Lending Officer
    and others in the Loan Administration department, has developed
    processes to analyze and manage various concentrations of credit
    within the overall loan portfolio. The Loan Administration
    department has also enhanced the procedures and processes for
    the analysis and reporting of problem loans along with the
    development of strategies to resolve them. In 2011, we plan to
    continue with these initiatives. In addition, we will continue
    to devote resources towards the reduction of our nonperforming
    assets and substandard loans.
    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. We had 268 full-time equivalent
    employees at December 31, 2010. None of our employees are
    covered by a collective bargaining agreement. We consider our
    relations with our employees to be satisfactory. 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.
    High Performance Checking: In the first part
    of 2005, we launched our High Performance Checking
    (HPC) product consisting of several consumer
    checking accounts tailored to the needs of specific segments of
    our market, including a totally free checking product. We
    supported the new products with a targeted marketing program and
    extensive branch sales promotions. Through the concentrated
    efforts of our branch employees, we increased the number of our
    deposit accounts and the balances in them. In the fourth quarter
    of 2006, we introduced HPC for our business checking accounts.
    In 2007 through 2010, we continued to market the HPC products
    through a targeted mailing program and branch promotions, which 2




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##### Table of Contents



helped us to increase the number of these accounts. In 2011, we
    plan to continue to support the HPC consumer and business
    checking products.  
    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 increased and may
    continue to increase lending and core deposit volumes.
    Providing Competitive and Responsive Real Estate Lending:We are a significant land development and residential
    construction lender and an active lender in the commercial real
    estate market in our Alaskan markets. We believe 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. In 2011, we will continue to make a
    substantial effort to decrease our loans measured for impairment
    and other real estate owned (OREO), many of which
    consist of residential construction and land development loans.
    As a result of these efforts and continued projected slowness in
    the residential real estate market, we expect our loan balances
    in the residential construction sector to remain stable in 2011.    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
  Elliott
    Cove Capital Management LLC
     3




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Northrim
    Funding Services
    Alaska
    Economy
               4




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##### Table of Contents



Competition
        Number of



Market Share ofFinancial Institution

Branches

Total Deposits

Deposits(Dollars in Thousands)Northrim Bank


8
(1)

$
728,841



17
%Wells Fargo Bank Alaska


14



1,990,627



46
%First National Bank Alaska


10



924,999



21
%Key Bank


4



695,568



16
%Total


36


$
4,340,035



100
%   (1)
    Does not reflect our Fairbanks or Wasilla branches  Supervision
    and Regulation
   5




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out-of-state out-of-state
           6




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7




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Available
    Information
  Form 10-K Form 10-Q, Form 8-K http://www.northrim.com
  http://www.sec.gov
  Item 1A.
    Risk
    Factors   8




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We
    operate in a highly regulated environment and changes of or
    increases in banking or other laws and regulations or
    governmental fiscal or monetary policies could adversely affect
    us.
          We may be
    adversely impacted by the unprecedented volatility in the
    financial markets.
   9




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##### Table of Contents




    We expect to face continued increased regulation of our
    industry, including as a result of the Stabilization Act and
    Dodd Frank legislation. Compliance with such regulation may
    increase our costs and limit our ability to pursue business
    opportunities.
    Competition in our industry could intensify as a result of the
    increasing consolidation of financial services companies in
    connection with current market conditions.
    We have been required to pay significantly higher FDIC premiums
    because market developments have significantly depleted the
    insurance fund of the FDIC and reduced the ratio of reserves to
    insured deposits.  Declines
    in the residential housing market would have a negative impact
    on our residential housing market income.
    Our loan
    loss allowance may not be adequate to cover future loan losses,
    which may adversely affect our earnings.
    We have a
    significant concentration in real estate lending. The sustained
    downturn in real estate within our markets has had and is
    expected to continue to have a negative impact on our results of
    operations.
      Real
    estate values may continue to decrease leading to additional and
    greater than anticipated loan charge-offs and valuation write
    downs on our other real estate owned (OREO)
    properties.
   10




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Changes
    in market interest rates could adversely impact the
    Company.
    Our
    financial performance depends on our ability to manage recent
    and possible future growth.
    Our
    concentration of operations in the Anchorage, Matanuska Susitna
    Valley, and Fairbanks areas of Alaska makes us more sensitive to
    downturns in those areas.
    The
    financial services business is intensely competitive and our
    success will depend on our ability to compete
    effectively.
    We may be
    unable to attract and retain key employees and
    personnel.
   11




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##### Table of Contents



A failure
    of a significant number of our borrowers, guarantors and related
    parties to perform in accordance with the terms of their loans
    would have an adverse impact on our results of
    operations.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Locations

Type

Leased/OwnedMidtown Financial Center: Northrim Headquarters 
    3111 C Street, Anchorage, AK

Traditional

Land leased;
    building ownedSouthSide Financial Center
    8730 Old Seward Highway, Anchorage, AK

Traditional

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

Traditional

OwnedHuffman Branch
    1501 East Huffman Road, Anchorage, AK

Supermarket

LeasedJewel Lake Branch
    9170 Jewel Lake Road, Anchorage, AK

Traditional

LeasedSeventh Avenue Branch
    517 West Seventh Avenue, Suite 300, Anchorage, AK

Traditional

LeasedWest Anchorage Branch/Small Business Center
    2709 Spenard Road, Anchorage, AK

Traditional

OwnedEagle River Branch
    12812 Old Glenn Highway, Eagle River, AK

Traditional

LeasedFairbanks Financial Center
    360 Merhar Avenue, Fairbanks, AK

Traditional

OwnedWasilla Financial Center
    850 E. USA Circle, Suite A, Wasilla, AK

Traditional

Owned   Item 3.
    Legal
    Proceedings   12




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Part II Item 5.
    Market
    for Registrants Common Equity, Related Stockholder
    Matters, and Issuer Purchases of Equity Securities      First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter2010High

$
17.20


$
17.58


$
17.96


$
19.32Low

$
15.38


$
15.48


$
15.35


$
16.492009High

$
11.70


$
15.23


$
15.83


$
17.30Low

$
6.86


$
9.65


$
13.31


$
14.92     Repurchase
    of Securities
    Equity
    Compensation Plan Information
  Notes to Consolidated Financial Statements
  Number of SecuritiesNumber of Securities to be

Weighted-Average Exercise

Remaining Available forIssued Upon Exercise of

Price of Outstanding

Future Issuance UnderOutstanding Options,

Options, Warrants and

Equity Compensation PlansWarrants and Rights

Rights

(Excluding SecuritiesPlan Category

(a)

(b)

Reflected in Column (a))Equity compensation plans
    approved by security holders

351,703


$13.70



300,545Total

351,703


$13.70



300,545  13




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##### Table of Contents



Stock
    Performance Graph
    Total
    Return Performance
  
  Period EndingIndex

12/31/05

12/31/06

12/31/07

12/31/08

12/31/09

12/31/10Northrim BanCorp, Inc.

100.00

121.42

104.43

52.43

88.55

103.99Russell 3000

100.00

115.71

121.66

76.27

97.89

114.46SNL Bank $1B-$5B

100.00

115.72

84.29

69.91

50.11

56.81  14




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##### Table of Contents



Item 6.
    Selected
    Financial Data  2010

2009

2008

2007

2006Unaudited(In Thousands Except Per Share Amounts)Net interest income

$44,213

$46,421

$45,814

$49,830

$47,522Provision for loan losses

5,583

7,066

7,199

5,513

2,564Other operating income

12,377

13,084

11,354

9,844

7,766Other operating expense

37,624

41,357

40,394

34,953

31,476Income before income taxes

13,383

11,082

9,575

19,208

21,248Income taxes

3,918

2,967

3,122

7,260

7,978Net Income

9,465

8,115

6,453

11,948

13,270Less: Net income attributable to noncontrolling interest

399

388

370

290

296Net income attributable to Northrim Bancorp

$9,066

$7,727

$6,083

$11,658

$12,974Earnings per share:Basic

$1.42

$1.22

$0.96

$1.82

$2.02Diluted

1.40

1.20

0.95

1.80

1.99Cash dividends per share

0.44

0.40

0.66

0.57

0.45Assets

$1,054,529

$1,003,029

$1,006,392

$1,014,714

$925,620Portfolio loans

671,812

655,039

711,286

714,801

717,056Deposits

892,136

853,108

843,252

867,376

794,904Long-term debt

4,766

4,897

15,986

1,774

2,174Junior subordinated debentures

18,558

18,558

18,558

18,558

18,558Shareholders equity

117,122

111,020

104,648

101,391

95,418Book value per share

$18.21

$17.42

$16.53

$16.09

$15.61Tangible book value per share

$16.86

$16.01

$15.06

$14.51

$14.48Net interest margin (tax
    equivalent)(1)

4.92%

5.33%

5.26%

5.89%

5.89%Efficiency
    ratio(2)

65.96%

68.96%

70.05%

58.01%

56.06%Return on assets

0.90%

0.79%

0.62%

1.24%

1.46%Return on equity

7.87%

7.08%

5.85%

11.70%

14.45%Equity/assets

11.11%

11.07%

10.40%

10.00%

10.31%Dividend payout ratio

31.41%

33.18%

68.93%

30.54%

21.43%Nonperforming loans/portfolio loans

1.70%

2.67%

3.66%

1.59%

0.92%Net charge-offs/average loans

0.66%

1.00%

0.86%

0.86%

0.16%Allowance for loan losses/portfolio loans

2.14%

2.00%

1.81%

1.64%

1.69%Nonperforming assets/assets

2.07%

3.47%

3.84%

1.56%

0.79%Tax rate

29%

27%

34%

38%

38%Number of banking offices

10

11

11

10

10Number of employees (FTE)

268

295

290

302

277   (1)
    Tax-equivalent net interest margin is a non-GAAP performance
    measurement in which interest income on non-taxable investments
    and loans is presented on a tax-equivalent basis using a
    combined federal and state statutory rate of 41.11% in both 2010
    and 2009.(2)
    In managing our business, we review the efficiency ratio
    exclusive of intangible asset amortiztion (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. 15




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##### Table of Contents



Reconciliation
    of Selected Financial Data to GAAP Financial Measures
    (1)
  Years Ended December 31,

2010

2009

2008

2007

2006(In Thousands)Net interest
    income(2)

$44,213

$46,421

$45,814

$49,830

$47,522Noninterest income

12,377

13,084

11,354

9,844

7,766Noninterest expense

37,624

41,357

40,394

34,953

31,476Less intangible asset amortization

299

323

347

337

482Adjusted noninterest expense

$37,325

$41,034

$40,047

$34,616

$30,994Efficiency ratio

65.96%

68.96%

70.05%

58.01%

56.06%   (1)
    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.(2)
    Amount represents net interest income before provision for loan
    losses. 16




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    Note
    Regarding Forward-Looking Statements
  Form 10-K
  Executive
    Overview
  
    The Companys net income increased 17% to
    $9.1 million, or $1.40 per diluted share, for the year
    ended December 31, 2010 from $7.7 million, or $1.20
    per diluted share, for the year ended December 31, 2009,
    reflecting continuing improvement in credit quality, increased
    gains from sales of other real estate owned (OREO), and lower
    expenses.
    Our provision for loan losses in 2010 decreased by
    $1.5 million, or 21%, to $5.6 million from
    $7.1 million in 2009 as our net charge-offs decreased from
    $6.9 million in 2009 to $4.3 million in 2010. In
    addition our nonperforming loans at December 31, 2010
    decreased by $6.1 million, or 35%, from $17.5 million
    at December 31, 2009 to $11.4 million.
    Other operating expenses decreased $3.7 million, or 9% in
    2010 to $37.6 million from $41.3 million in 2009
    primarily due to decreased expenses related to other real estate
    owned and increased gains on sale and rental income from other
    real estate owned. The gains on sale and rental income generated
    from other real estate owned are included as negative expense
    items in the non-interest expense section of the Consolidated
    Statement of Income.
    The Company continued to maintain strong capital ratios with
    Tier 1 Capital/risk adjusted assets of 14.08% at
    December 31, 2010 as compared to 13.98% a year ago. The
    Companys tangible common equity to tangible assets at year
    end 2010 was 10.36%, up from 10.26% at year end 2009.
    Nonperforming assets were reduced 37%
    year-over-year
    to $21.8 million at December 31, 2010 or 2.07% of
    total assets, compared to $34.8 million or 3.47% of total
    assets at December 31, 2009.
    The allowance for loan losses (Allowance) totaled
    2.14% of total portfolio loans at December 31, 2010,
    compared to 2.00% at December 31, 2009. The Allowance to
    nonperforming loans also increased to 126.21% at
    December 31, 2010 from 74.94% at December 31, 2009.
    The cash dividend paid on December 17, 2010, rose 20% to
    $0.12 per diluted share from $0.10 per diluted share paid in the
    fourth quarter of 2009.   17




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Critical
    Accounting Estimates
      Allowance for loan losses:
         18




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Goodwill and other intangibles:
        Valuation of other real estate owned:
    Results
    of Operations
  Net
    Income
     19




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Net
    Interest Income
       20




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Years Ended December 31,

2010

2009

2008Average

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)

$646,677

$44,926

6.95%

$688,347

$48,830

7.09%

$702,117

$53,287

7.59%Securities

187,155

4,594

2.45%

144,713

4,499

3.11%

134,705

5,493

4.08%Short term investments

70,336

178

0.25%

43,041

161

0.37%

40,082

936

2.34%Total interest-earning assets

904,168

49,698

5.50%

876,101

53,490

6.11%

876,904

59,716

6.81%Noninterest-earning assets

106,398





105,578





108,140Total assets

$1,010,566





$981,679





$985,044Liabilities and Shareholders Equity:Deposits:Interest-bearing demand accounts

$125,360

$176

0.14%

$115,065

$170

0.15%

$97,171

$578

0.59%Money market accounts

132,264

673

0.51%

127,651

740

0.58%

187,779

3,306

1.76%Savings accounts

183,636

1,120

0.61%

169,812

1,240

0.73%

187,225

3,444

1.84%Certificates of deposit

147,081

2,704

1.84%

173,777

3,651

2.10%

145,153

4,851

3.34%Total interest-bearing deposits

588,341

4,673

0.79%

586,305

5,801

0.99%

617,328

12,179

1.97%Borrowings

34,341

812

2.36%

35,935

1,268

3.53%

41,567

1,723

4.15%Total interest-bearing liabilities

622,682

5,485

0.88%

622,240

7,069

1.14%

658,895

13,902

2.11%Demand deposits and other noninterest-bearing liabilities

272,645





250,342





222,247Total liabilities

895,327





872,582





881,142Shareholders equity

115,239





109,097





103,902Total liabilities and shareholders equity

$1,010,566





$981,679





$985,044Net interest income



$44,213





$46,421





$45,814Net interest
    margin(3)





4.89%





5.30%





5.22%   (1)
    
    Interest income includes loan fees.
    Loan fees recognized during the period and included in the yield
    calculation totalled $2.6 million, $2.7 million and
    $3.1 million for 2010, 2009 and 2008, respectively.(2)
    
    Nonaccrual loans are included with
    a zero effective yield. Average nonaccrual loans included in the
    computation of the average loans were $13.8 million,
    $19.1 million, and $13.2 million in 2010, 2009 and
    2008, respectively.(3)
    
    The net interest margin on a tax
    equivalent basis was 4.92%, 5.33%, and 5.26%, respectively, for
    2010, 2009, and 2008. 21




---



##### Table of Contents



2010 compared to 2009

2009 compared to 2008Increase (decrease) due to

Increase (decrease) due toVolume

Rate

Total

Volume

Rate

Total(In Thousands)Interest Income:Loans

$(2,911)

$(993)

$(3,904)

$(1,029)

$(3,428)

$(4,457)Securities

337

(243)

95

452

(1,446)

(994)Short term investments

35

(18)

17

75

(850)

(775)Total interest income

$(2,538)

$(1,254)

$(3,792)

$(502)

$(5,724)

$(6,226)Interest Expense:Deposits:Interest-bearing demand accounts

$13

$(7)

$6

$132

$(540)

$(408)Money market accounts

29

(95)

(67)

(829)

(1,737)

(2,566)Savings accounts

118

(238)

(120)

(294)

(1,911)

(2,205)Certificates of deposit

(522)

(425)

(947)

1,363

(2,562)

(1,199)Total interest on deposits

(362)

(766)

(1,128)

372

(6,750)

(6,378)Borrowings

(54)

(401)

(456)

(216)

(238)

(454)Total interest expense

$(416)

$(1,168)

$(1,584)

$156

$(6,988)

$(6,832)   Provision
    for Loan Losses
   22




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##### Table of Contents



Other
    Operating Income
    Years Ended December 31,

2010

$ Change

% Change

2009

$ Change

% Change

2008(In Thousands)Other Operating IncomeDeposit service charges

$2,636

$(347)

-12%

$2,983

$(300)

-9%

$3,283Employee benefit plan income

1,900

161

9%

1,739

288

20%

1,451Purchased receivable income

1,839

(267)

-13%

2,106

(454)

-18%

2,560Electronic banking fees

1,758

216

14%

1,542

349

29%

1,193Equity in earnings from RML

1,401

(948)

-40%

2,349

1,754

295%

595Rental income

810

(40)

-5%

850

387

84%

463Merchant credit card transaction fees

484

78

19%

406

(45)

-10%

451Loan service fees

401

(107)

-21%

508

32

7%

476Equity in loss from Elliott Cove

(1)

114

-99%

(115)

(9)

8%

(106)Other income

500

4

1%

496

(346)

-41%

842Operating sources

11,728

(1,136)

-9%

12,864

1,656

15%

11,208Gain on sale of securities available for sale, net

649

429

195%

220

74

51%

146Other sources

649

429

195%

$220

74

51%

146Total other operating income

$12,377

$(707)

-5%

$13,084

$1,730

15%

$11,354   2010
    Compared to 2009
  point-of-sale
  point-of-sale Point-of-sale point-of-sale
  2009
    Compared to 2008
   23




---



##### Table of Contents



point-of-sale
    Other
    Operating Expense
    Years Ended December 31,

2010

$ Change

% Change

2009

$ Change

% Change

2008(In Thousands)Other Operating ExpenseSalaries and other personnel expense

$21,637

$(537)

-2%

$22,174

$1,178

6%

$20,996Occupancy

3,704

17

0%

3,687

288

8%

3,399Insurance expense

1,902

(813)

-30%

2,715

936

53%

1,779Marketing

1,782

465

35%

1,317

(241)

-15%

1,558Professional and outside services

1,315

(483)

-27%

1,798

(60)

-3%

1,858Equipment

1,116

(102)

-8%

1,218

(15)

-1%

1,233Software expense

741

(78)

-10%

819

(20)

-2%

839Amortization of low income housing tax investments

861

79

10%

782

83

12%

699Internet banking expense

622

64

11%

558

46

9%

512Impairment on purchased receivables, net

402

236

142%

166

(27)

-14%

193Intangible asset amortization

299

(24)

-7%

323

(24)

-7%

347OREO expense, net rental income and gains on sale:OREO operating expense

882

109

14%

773

172

29%

601Impairment on OREO

246

(579)

-70%

825

(1,133)

-58%

1,958Rental income on OREO

(610)

(584)

2246%

(26)

(25)

2500%

(1)Gains on sale of OREO

(1,663)

(1,210)

267%

(453)

(408)

907%

(45)Subtotal

(1,145)

(2,264)

-202%

1,119

(1,394)

-55%

2,513Prepayment penalty on long term debt

-

(718)

-100%

718

718

NA

Other expenses

4,388

425

11%

3,963

(505)

-11%

4,468Total other operating expense

$37,624

$(3,733)

-9%

$41,357

$963

2%

$40,394   2010
    Compared to 2009
   24




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##### Table of Contents



2009
    Compared to 2008
      Income
    Taxes
    Financial
    Condition
  Investment
    Securities Portfolio
         25




---



##### Table of Contents



AmortizedDecember 31,

Cost

Fair Value(In thousands)Securities Available for Sale:2010:U.S. Treasury & government sponsored entities

$164,604

$164,685Muncipal Securities

9,503

9,624U.S. Agency Mortgage-backed Securities

71

73Corporate Bonds

38,732

39,628Total

$212,910

$214,0102009:U.S. Treasury & government sponsored entities

$141,371

$142,000Muncipal Securities

6,184

6,270U.S. Agency Mortgage-backed Securities

85

87Corporate Bonds

28,242

29,802Total

$175,882

$178,1592008:U.S. Treasury & government sponsored entities

$110,882

$112,584Muncipal Securities

5,054

4,881U.S. Agency Mortgage-backed Securities

345

361Corporate Bonds

23,203

23,184Total

$139,484

$141,010Securities Held to Maturity:2010:Municipal Securities

$6,125

$6,286Total

$6,125

$6,2862009:Municipal Securities

$7,285

$7,516Total

$7,285

$7,5162008:Municipal Securities

$9,431

$9,502Total

$9,431

$9,502   other-than-temporary
 26




---



##### Table of Contents



other-than-temporary other-than-temporary
    MaturityWithin





Over1 Year

1-5 Years

5-10 Years

10 Years

Total(In Thousands)Securities Available for Sale:U.S. Treasury & government sponsored entitiesBalance

$32,124


$132,561



$



$



$164,685Weighted Average Yield

2.50%


0.93%



0.00%



0.00%



1.24%Municipal SecuritiesBalance




3,108



4,309



2,207



9,624Weighted Average Yield

0.00%


2.33%



4.32%



4.75%



3.77%U.S. Agency Mortgage-backed SecuritiesBalance








73







73Weighted Average Yield

0.00%


0.00%



4.45%



0.00%



4.45%Corporate BondsBalance

10,109


14,929



14,590







39,628Weighted Average Yield

5.18%


2.67%



2.17%



0.00%



3.13%TotalBalance

42,233


150,598



18,972



2,207



214,010Weighted Average Yield

3.14%


1.13%



2.66%



4.75%



1.70%Securities Held to Maturity:Municipal SecuritiesBalance

$2,325


$1,532



$2,429



$



$6,286Weighted Average Yield

3.84%


4.15%



4.16%



0.00%



4.04%     Loans
    loan-to-one-borrower
 27




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##### Table of Contents



December 31,

2010

2009

2008

2007

2006Percent



Percent



Percent



Percent



PercentAmount

of total

Amount

of total

Amount

of total

Amount

of total

Amount

of total(In Thousands)Commercial loans


$256,971



38.25%



$248,205



37.89%



$293,249



41.23%



$284,956



39.87%



$287,281



40.06%Real estate loans:Construction


62,620



9.32%



62,573



9.55%



100,438



14.12%



138,070



19.32%



153,059



21.35%Real estate term


312,128



46.46%



301,816



46.08%



268,864



37.80%



243,245



34.03%



237,599



33.14%Home equity lines and other consumer


43,264



6.44%



45,243



6.91%



51,447



7.23%



51,274



7.17%



42,140



5.88%Total


674,983



100.47%



657,837



100.43%



713,998



100.39%



717,545



100.38%



720,079



100.42%Less:Unearned loan fees net of origination costs


(3,171)



-0.47%



(2,798)



-0.43%



(2,712)



-0.39%



(2,744)



-0.38%



(3,023)



-0.42%Net loans


$671,812



100.00%



$655,039



100.00%



$711,286



100.00%



$714,801



100.00%



$717,056



100.00%   Commercial Loans:
  Commercial Real Estate:
 28




---



##### Table of Contents



Construction Loans: one-to-four-family
    Home Equity Lines and Other Consumer
    Loans:
  Maturities and Sensitivities of Loans to Change in
    Interest Rates:
  MaturityWithin



Over1 Year

1-5 Years

5 Years

Total(In Thousands)Commercial


$104,722



$102,984



$49,265



$256,971Construction


49,855



221



12,544



62,620Real estate term


33,246



72,111



206,771



312,128Home equity lines and other consumer


1,203



8,733



33,328



43,264Total


$189,026



$184,049



$301,908



$674,983Fixed interest rate


$94,020



$90,309



$65,598



$249,927Floating interest rate


95,006



93,740



236,310



425,056Total


$189,026



$184,049



$301,908



$674,983     Loans Held for Sale:
 29




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##### Table of Contents



Nonperforming
    Assets
    December 31,

2010

2009

2008

2007

2006(In Thousands)Nonperforming loansNonaccrual loans

$11,414


$12,738



$20,593



$9,673



$5,176Accruing loans past due 90 days or more




1,000



5,411



1,665



708Troubled debt restructuring




3,754











748Total nonperforming loans

$11,414


$17,492



$26,004



$11,338



$6,632Real estate owned & repossessed assets

10,403


17,355



12,617



4,445



717Total nonperforming assets

$21,817


$34,847



$38,621



$15,783



$7,349Allowance for loan losses to portfolio loans

2.14%


2.00%



1.81%



1.64%



1.69%Allowance for loan losses to nonperforming loans

126%


75%



50%



104%



183%Nonperforming loans to portfolio loans

1.70%


2.67%



3.66%



1.59%



0.92%Nonperforming assets to total assets

2.07%


3.47%



3.84%



1.56%



0.79%   Nonaccrual, Accruing Loans 90 Days or More Past Due, and
    Troubled Debt Restructuring (TDR):
      Loans Measured for Impairment, Other Real Estate Owned and
    Repossessed Assets, and Potential Problem Loans:
   30




---



##### Table of Contents



December 31,

2010

2009

2008(In Thousands)Balance, beginning of the year

$17,355


$12,617



$4,445Transfers from loans

2,841


12,441



9,395Investment in other real estate owned

235


1,699



3,273Proceeds from the sale of other real estate owned

(11,124)


(9,120)



(2,583)Gain on sale of other real estate owned, net

1,663


453



45Deferred gain on sale of other real estate owned

(369)


90



Impairment on other real estate owned

(246)


(825)



(1,958)Balance, End of Year

$10,355


$17,355



$12,617   Allowance
    for Loan Losses and Reserve for Unfunded
    Commitments
    
    A specific allocation for impaired
    loans.  Management determined the fair value of
    the majority of these loans based on the underlying collateral
    values. This analysis is based upon a specific analysis for each
    impaired loan, including appraisals on loans secured by real
    property, managements assessment of the current market,
    recent payment history, and an 31




---



##### Table of Contents



evaluation of other sources of repayment. In-house evaluations
    of fair value are used in the impairment analysis in some
    situations. Inputs to the in-house evaluation process include
    information about sales of comparable properties in the
    appropriate markets and changes in tax assessed values. The
    Company obtains appraisals on real and personal property that
    secure its loans during the loan origination process in
    accordance with regulatory guidance and its loan policy. The
    Company obtains updated appraisals on loans secured by real or
    personal property based upon its assessment of changes in the
    current market or particular projects or properties, information
    from other current appraisals, and other sources of information.
    Appraisals may be adjusted downward by the Company based on our
    evaluation of the facts and circumstances on a case by case
    basis. External appraisals may be discounted when management
    believes that the absorption period used in the appraisal is
    unrealistic, when expected liquidation costs exceed those
    included in the appraisal, or when managements evaluation
    of deteriorating market conditions warrant an adjustment.
    Additionally, the Company may also adjust appraisals in the
    above circumstances between appraisal dates. The Company uses
    the information provided in these updated appraisals along with
    its evaluation of all other information available on a
    particular property as it assesses the collateral coverage on
    its performing and nonperforming loans and the impact that may
    have on the adequacy of its Allowance. The specific allowance
    for impaired loans, as well as the overall Allowance, may
    increase based on the Companys assessment of updated
    appraisals. See Note 21 of the Notes to Consolidated
    Financial Statementsincluded in Item 8 of this report
    for further discussion of the Companys estimation of the
    fair value of impaired loans.    
    A general allocation.  The Company has
    identified segments and classes of loans not considered impaired
    for purposes of establishing the general allocation allowance.
    The Company determined the disaggregation of the loan portfolio
    into segments and classes based on our assessment of how
    different pools of loans with like characteristics in the
    portfolio behave over time. This determination is based on
    historical experience and managements assessment of how
    current facts and circumstances are expected to affect the loan
    portfolio.      
    An unallocated reserve.  The unallocated
    portion of the Allowance provides for other credit losses
    inherent in our loan portfolio that may not have been
    contemplated in the specific and general components of the
    Allowance, and it acknowledges the inherent imprecision of all
    loss prediction models. The unallocated component is reviewed
    periodically based on trends in credit losses and overall
    economic conditions.  Form 10-K
 32




---



##### Table of Contents



December 31, 2010

December 31, 2009Impaired

Formula-based





Impaired

Formula-basedAllowance applicable to:

Total

Loans

Amounts

Other

Total

Loans

Amounts

Other(In Thousands)Commercial

$6,374

$274

$6,100

$

$4,964

$850

$4,114

$Construction

1,035

73

962



2,156

869

1,287

Real estate term

4,270

36

4,234



2,680

143

2,537

Home equity lines and other consumer

741



741



501

1

500

Unallocated

1,986





1,986

2,807





2,807Total

$14,406

$383

$12,037

$1,986

$13,108

$1,863

$8,438

$2,807       December 31,

2010

2009

2008

2007

2006% of Total



% of Total



% of Total



% of Total



% of TotalAllowance applicable to:

Amount

Loans(1)

Amount

Loans(1)

Amount

Loans(1)

Amount

Loans(1)

Amount

Loans(1)(In Thousands)Commercial


$6,374



38%



$3,962



38%



$5,558



41%



$6,496



40%



$8,208



40%Construction


1,035



9%



1,365



9%



1,736



14%



940



19%



330



21%Real estate term


4,270



46%



565



47%



306



38%



1,661



34%



964



33%Home equity lines and other consumer


741



7%



50



6%



61



7%



16



7%



6



6%Unallocated


1,986



0%



7,166



0%



5,239



0%



2,622



0%



2,617



0%Total


$14,406



100%



$13,108



100%



$12,900



100%



$11,735



100%



$12,125



100%   (1)
    
    Represents percentage of this
    category of loans to total loans. 33




---



##### Table of Contents



December 31,

2010

2009

2008

2007

2006(In Thousands)Balance at beginning of period

$13,108

$12,900

$11,735

$12,125

$10,706Charge-offs:Commercial loans

(3,919)

(3,372)

(4,187)

(4,291)

(2,545)Construction loans

(1,519)

(1,308)

(1,004)

(2,982)

Real estate loans

(342)

(2,478)

(1,402)

(599)

Home equity and other consumer loans

(322)

(509)

(132)

(45)

(72)Total charge-offs

(6,102)

(7,667)

(6,725)

(7,917)

(2,617)Recoveries:Commercial loans

1,490

736

577

1,723

1,086Construction loans

4

7

61

50

Real estate loans

232

11

3



355Home equity and other consumer loans

91

55

50

21

31Total recoveries

1,817

809

691

1,794

1,472Charge-offs net of recoveries

(4,285)

(6,858)

(6,034)

(6,123)

(1,145)Allowance aquired with Alaska First acquisition







220

Provision for loan losses

5,583

7,066

7,199

5,513

2,564Balance at end of period

$14,406

$13,108

$12,900

$11,735

$12,125Ratio of net charge-offs to average loans outstanding during the
    period

0.66%

1.00%

0.86%

0.86%

0.16%       Purchased
    Receivables
      Deposits
   34




---



##### Table of Contents



December 31,

2010

2009

2008Average

Average

Average

Average

Average

Averagebalance

rate paid

balance

rate paid

balance

rate paid(In Thousands)Interest-bearing demand accounts


$125,360



0.14%



$115,065



0.15%



$97,171



0.59%Money market accounts


132,264



0.51%



127,651



0.58%



187,779



1.76%Savings accounts


183,636



0.61%



169,812



0.73%



187,225



1.84%Certificates of deposit


147,081



1.84%



173,777



2.10%



145,153



3.34%Total interest-bearing accounts


588,341



0.79%



586,305



0.99%



617,328



1.97%Noninterest-bearing demand accounts


264,853







241,547







212,447Total average deposits


$853,194







$827,852







$829,775   Certificates of Deposit:
  Year Ending December 31, 2010Time Certificates of Depositsof $100,000 or MorePercent ofTotalAmount

Deposits(In Thousands)Amounts maturing in:Three months or less


$18,412



22%Over 3 through 6 months


10,502



12%Over 6 through 12 months


34,848



41%Over 12 months


20,553



24%Total


$84,315



100%     Alaska Certificates of Deposit:
 35




---



##### Table of Contents



Alaska Permanent Fund:
  Borrowings
  FHLB:
  Federal Reserve Bank:
    Other Long-term Borrowings:
  Other Short-term Borrowings:
     36




---



##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodWithin





Over1 Year

1-3 Years

3-5 Years

5 Years

Total(In Thousands)December 31, 2010:Certificates of deposit

$103,704


$34,137



$332



$



$138,173Short-term debt obligations

13,494














13,494Long-term debt obligations

141


304



4,321







4,766Junior subordinated debentures












18,558



18,558Operating lease obligations

748


1,076



781



4,381



6,986Other long-term liabilities

317














317Total

$118,404


$35,517



$5,434



$22,939



$182,294December 31, 2009:Certificates of deposit

$100,099


$44,251



$479



$22



$144,851Short-term debt obligations

7,423














7,423Long-term debt obligations

132


287



4,478







4,897Junior subordinated debentures












18,558



18,558Operating lease obligations

888


1,450



863



4,735



7,936Other long-term liabilities

412














412Total

$108,954


$45,988



$5,820



$23,315



$184,077   90-day 90-day
  Off-Balance
    Sheet Arrangements  Commitments and Contingent
    Liabilities
       37




---



##### Table of Contents



Liquidity
    and Capital Resources
             38




---



##### Table of Contents



DilutedDiluted EPS

EPS withoutYears Ending:

as Reported

Stock Repurchase2010

$1.40

$1.252009

$1.20

$1.082008

$0.95

$0.852007

$1.80

$1.642006

$1.99

$1.83   90-day
  90-day
         39




---



##### Table of Contents



ActualAdequately -


Well -


Ratio


ActualDecember 31, 2010

Capitalized


Capitalized


BHC


Ratio BankTier 1 risk-based capital


4.00%



6.00%



14.08%



13.11%Total risk-based capital


8.00%



10.00%



15.33%



14.36%Leverage ratio


4.00%



5.00%



12.15%



11.30%    Effects of Inflation and Changing Prices:
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk      12-month
         40




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##### Table of Contents



Estimated maturity or repricing at December 31, 2010Within 1 year

1-5 years

35 years

Total(In Thousands)Interest -Earning Assets:Overnight investments

$50,080


$



$



$50,080Investment securities

68,309


142,863



10,966



222,138Loans:Commercial

190,396


59,375



1,993



251,764Real estate construction

47,718


807



11,806



60,331Real estate term

130,865


171,168



6,568



308,601Loans held for sale

5,558










5,558Home equity line and other consumer

16,611


14,210



12,052



42,873Total interest-earning assets

$509,537


$388,423



$43,385



$941,345Percent of total interest-earning assets

54%


41%



5%



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

$138,072


$



$



$138,072Money market accounts

149,104










149,104Savings accounts

177,726










177,726Certificates of deposit

101,707


36,466







138,173Short-term borrowings

13,495










13,495Long-term borrowings

1,208


3,557







4,765Junior subordinated debentures

18,558










18,558Total interest-bearing liabilities

$599,870


$40,023



$



$639,893Percent of total interest-bearing liabilities

94%


6%



0%



100%Interest sensitivity gap

$(90,333)


$348,400



$43,385



$301,452Cumulative interest sensitivity gap

$(90,333)


$258,067



$301,452Cumulative interest sensitivity gap as a percentage of total
    assets

-9%


24%



29%      41




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##### Table of Contents



12-month 12-month
 42




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  Form 10-K
  Report of the Independent Registered Public
    Accounting Firms

44Consolidated Balance Sheets at December 31,
    2010 and 2009

46For the Years Ended December 2010, 2009 and 2008:Consolidated Statements of Income

47Consolidated Statements of Changes in
    Shareholders Equity and Comprehensive Income

48Consolidated Statements of Cash Flows

49Notes to Consolidated Financial Statements

50  43




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm     Internal Control  Integrated
    Framework
        Internal Control  Integrated Framework
      44




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
                 45




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##### Table of Contents



Consolidated
    Financial Statements
  NORTHRIM BANCORP, INC.
 Consolidated
    Balance Sheets
 December 31, 2010 and 2009
  2010

2009(In Thousands Except Share Amounts)AssetsCash and due from banks

$15,953

$19,395Overnight investments

50,080

47,326Investment securities available for sale

214,010

178,159Investment securities held to maturity

6,125

7,285Total Portfolio Investments

220,135

185,444Investment in Federal Home Loan Bank stock, at cost

2,003

2,003Loans held for sale

5,558

Loans

671,812

655,039Allowance for loan losses

(14,406)

(13,108)Net Loans

662,964

641,931Purchased receivables, net

16,531

7,261Accrued interest receivable

3,401

3,986Premises and equipment, net

29,048

28,523Goodwill and intangible assets

8,697

8,996Other real estate owned

10,355

17,355Other assets

35,362

40,809Total Assets

$1,054,529

$1,003,029LiabilitiesDeposits:Demand

$289,061

$276,532Interest-bearing demand

138,072

134,899Savings

77,411

66,647Alaska CDs

100,315

104,840Money market

149,104

125,339Certificates of deposit less than $100,000

53,858

64,652Certificates of deposit greater than $100,000

84,315

80,199Total Deposits

892,136

853,108Securities sold under repurchase agreements

12,874

6,733Other borrowings

5,386

5,587Junior subordinated debentures

18,558

18,558Other liabilities

8,453

8,023Total Liabilities

937,407

892,009Commitments and contingencies



Shareholders EquityPreferred Stock, $1 par value, 2,500,000 shares
    authorized, none issued or outstandingCommon stock, $1 par value, 10,000,000 shares
    authorized, 6,427,237 and 6,371,455 shares issued and
    outstanding at December 31, 2010 and 2009, respectively

6,427

6,371Additional paid-in capital

52,658

52,139Retained earnings

57,339

51,121Accumulated other comprehensive income

648

1,341Total Northrim Bancorp Shareholders Equity

117,072

110,972Noncontrolling interest

50

48Total Shareholders Equity

117,122

111,020Total Liabilities and Shareholders Equity

$1,054,529

$1,003,029    46




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##### Table of Contents



NORTHRIM
    BANCORP, INC.
 Consolidated Statements of Income
   2010

2009

2008(In Thousands Except Per Share Amounts)Interest IncomeInterest and fees on loans

$44,926

$48,830

$53,287Interest on investment securities-available for sale

4,316

4,134

5,066Interest on investment securities-held to maturity

278

365

427Interest on overnight investments

178

103

429Interest on domestic certificates of deposit



58

507Total Interest Income

49,698

53,490

59,716Interest ExpenseInterest expense on deposits, borrowings and junior subordinated
    debentures

5,485

7,069

13,902Net Interest Income

44,213

46,421

45,814Provision for loan losses

5,583

7,066

7,199Net Interest Income After Provision for Loan Losses

38,630

39,355

38,615Other Operating IncomeService charges on deposit accounts

2,636

2,983

3,283Employee benefit plan income

1,900

1,739

1,451Purchased receivable income

1,839

2,106

2,560Electronic banking income

1,758

1,542

1,193Equity in earnings from RML

1,401

2,349

595Gain on sale of securities

649

220

146Equity in earnings (loss) from Elliott Cove

(1)

(115)

(106)Other income

2,195

2,260

2,232Total Other Operating Income

12,377

13,084

11,354Other Operating ExpenseSalaries and other personnel expense

21,637

22,174

20,996Occupancy

3,704

3,687

3,399Insurance expense

1,902

2,715

1,779Marketing expense

1,782

1,317

1,558Professional and outside services

1,315

1,798

1,858Equipment expense

1,116

1,218

1,233Software expense

920

979

1,015Amortization of low income housing tax investments

869

790

707Operational losses, net

803

497

561Internet banking expense

622

558

512Impairment on purchased receivables, net

402

166

193Intangible asset amortization expense

299

323

347OREO expense, net rental income and gains on sale

(1,145)

1,119

2,513Prepayment penalty on long term debt



718

Other expense

3,398

3,298

3,723Total Other Operating Expense

37,624

41,357

40,394Income Before Provision for Income Taxes

13,383

11,082

9,575Provision for income taxes

3,918

2,967

3,122Net Income

9,465

8,115

6,453Less: Net income attributable to the noncontrolling interest

399

388

370Net income attributable to Northrim Bancorp

$9,066

$7,727

$6,083Earnings Per Share, Basic

$1.42

$1.22

$0.96Earnings Per Share, Diluted

$1.40

$1.20

$0.95Weighted Average Shares Outstanding, Basic

6,398,329

6,345,948

6,358,595Weighted Average Shares Outstanding, Diluted

6,480,905

6,417,057

6,388,681    47




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##### Table of Contents



NORTHRIM
    BANCORP, INC.
 Consolidated Statements of Changes
    in
   AccumulatedCommon Stock

Additional



OtherNumber

Par

Paid-in

Retained

Comprehensive

Noncontrollingof Shares

Value

Capital

Earnings

Income

Interest

Total(In Thousands)Balance as of January 1, 2008

6,300

$6,300

$50,798

$44,068

$225

$24

$101,415Cash dividend declared







(4,193)





(4,193)Stock option expense





597







597Exercise of stock options

31

31

(3)







28Excess tax benefits from share-based payment arrangements





66







66Distributions to noncontrolling interest











(358)

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









676



676Net Income attributable to the noncontrolling interest











370

370Net Income attributable to Northrim Bancorp







6,083





6,083Total Comprehensive Income













6,759Balance as of December 31, 2008

6,331

$6,331

$51,458

$45,958

$901

$36

$104,684Cash dividend declared







(2,564)





(2,564)Stock option expense





648







648Exercise of stock options

40

40

7







47Excess tax benefits from share-based payment arrangements





26







26Distributions to noncontrolling interest











(376)

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









440



440Net Income attributable to the noncontrolling interest











388

388Net Income attributable to Northrim Bancorp







7,727





7,727Total Comprehensive Income













8,167Balance as of December 31, 2009

6,371

$6,371

$52,139

$51,121

$1,341

$48

$111,020Cash dividend declared







(2,848)





(2,848)Stock option expense





466







466Exercise of stock options

56

56

(132)







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





185







185Distributions to noncontrolling interest











(397)

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









(693)



(693)Net Income attributable to the noncontrolling interest











399

399Net Income attributable to Northrim Bancorp







9,066





9,066Total Comprehensive Income













8,373Balance as of December 31, 2010

6,427

$6,427

$52,658

$57,339

$648

$50

$117,122    48




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##### Table of Contents



NORTHRIM
    BANCORP, INC.Consolidated Statements of Cash
    Flows
   2010

2009

2008(In Thousands)Operating Activities:Net income

$9,465

$8,115

$6,453Adjustments to Reconcile Net Income to Net Cash Provided by
    Operating Activities:Security gains

(649)

(220)

(146)Depreciation and amortization of premises and equipment

1,582

1,635

1,384Amortization of software

179

160

176Intangible asset amortization

299

323

347Amortization of investment security premium, net of discount
    accretion

376

300

72Deferred tax liability (benefit)

5,777

(1,496)

(3,638)Stock-based compensation

466

648

597Excess tax benefits from share-based payment arrangements

(185)

(26)

(66)Deferral of loan fees and costs, net

373

86

(32)Provision for loan losses

5,583

7,066

7,199Gain on sale of loans held for sale

(23)

(64)

Purchases of loans held for sale

(70,385)

(75,096)

Proceeds from the sale of loans held for sale

64,850

75,160

Purchased receivable recovery

402

166

193Gain on sale of other real estate owned

(1,663)

(453)

(45)Impairment on other real estate owned

246

825

1,958Distributions (proceeds) in excess of earnings from RML

(851)

(492)

49Equity in loss from Elliott Cove

1

115

106Loss on prepayment of borrowings



718

Decrease in accrued interest receivable

585

826

420(Increase) decrease in other assets

926

(6,503)

1,985Decrease of deferred gain on sales of other real estate owned

369

90

Increase (decrease) of other liabilities

595

(1,901)

(748)Net Cash Provided by Operating Activities

18,318

9,982

16,264Investing Activities:Investment in securities:Purchases of investment securities 
    available-for-sale

(236,299)

(158,405)

(134,237)Purchases of investment securities 
    held-to-maturity

(792)

(1,217)

(1,001)Proceeds from maturities of securities 
    available-for-sale

171,145

114,375

119,093Proceeds from sales of securities 
    available-for-sale

28,667

7,551

23,371Proceeds from calls/maturities of securities 
    held-to-maturity

1,684

3,360

3,265Proceeds from maturities of domestic certificates of deposit



14,500

55,500Purchases of domestic certificates of deposit



(5,000)

(65,000)(Investment in) repayment from purchased receivables

(9,672)

11,648

169Loan paydowns, net of new advances

(24,272)

36,862

(11,882)Proceeds from sale of other real estate owned

11,124

9,120

2,583Investment in other real estate owned

(235)

(1,699)

(3,273)Investment in Elliott Cove

(100)



(100)Loan to Elliott Cove, net of repayments

135

(121)

108Purchases of premises and equipment

(2,107)

(425)

(15,496)Purchases of software, net of disposals

(212)

(103)

(106)Net Cash Provided (Used) by Investing Activities

(60,934)

30,446

(27,006)Financing Activities:Increase (decrease) in deposits

39,028

9,856

(24,124)Increase (decrease) in securities sold under repurchase
    agreements

6,141

5,103

(12,366)Proceeds from borrowings





27,490Paydowns on borrowings

(201)

(23,607)

(1,788)Distributions to noncontrolling interest

(397)

(376)

(358)Proceeds from issuance of common stock



47

28Excess tax benefits from share-based payment arrangements

185

26

66Cash dividends paid

(2,828)

(2,586)

(4,182)Net Cash Provided (Used) by Financing Activities

41,928

(11,537)

(15,234)Net Increase (Decrease) by Cash and Cash Equivalents

(688)

$28,891

(25,976)Cash and Cash Equivalents at Beginning of Year

66,721

37,830

63,806Cash and Cash Equivalents at End of Year

$66,033

$66,721

$37,830Supplemental Information:Income taxes paid

$2,769

$5,536

$5,657Interest paid

$5,579

$7,578

$13,708Transfer of loans to other real estate owned

$2,841

$12,441

$9,395Loans made to facilitate sales of other real estate owned

$6,092

$2,597

$Cash dividends declared but not paid

$20

$26

$39    49




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##### Table of Contents



Notes to
    Consolidated Financial Statements  NOTE 1 
    Summary of Significant Accounting Policies
    Method of Accounting:
  Reclassifications:
  Segments:
  Cash and Cash Equivalents:
  Investment Securities:
      Federal Home Loan Bank Stock:
 50




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##### Table of Contents



Loans Held for Sale:
  Loans:
              Allowance for Loan Losses:
       51




---



##### Table of Contents



Reserve for Unfunded Loan Commitments and Letters of
    Credit:
  Purchased Receivables:
  Premises and Equipment:
  Intangible Assets:
  Other Real Estate Owned:
  Other Assets:
   52




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##### Table of Contents



Advertising:
  Income Taxes:
  Earnings Per Share:
    December 31,

2010

2009

2008(In Thousands, Exceptper Share Data)Net income

$9,066

$7,727

$6,083Basic weighted average common shares outstanding

6,398

6,346

6,359Dilutive effect of potential common shares from awards granted
    under equity incentive program

83

71

30Diluted weighted average common shares outstanding

6,481

6,417

6,389Earnings per common shareBasic

$1.42

$1.22

$0.96Diluted

$1.40

$1.20

$0.95     Stock Option Plans:
  Comprehensive Income:
  Concentrations:
 53




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##### Table of Contents



Recent
    Accounting Pronouncements
  Accounting for
    Transfers of Financial Assets 2009-01 Accounting for Transfers and
    Servicing of Financial Assets and Extinguishments of
    Liabilities
  Amendments to
    FASB Interpretation 46(R) (as amended) 2009-01 Consolidation of Variable Interest Entities
  2010-20, ASC 310-30, Receivables  Loans and Debt Securities Acquired
    with Deteriorated Credit Quality. 2010-20
  2011-01, 2010-10 ,
    Deferral of the Effective Date of Disclosures about
    Troubled Debt Restructurings. 2011-01 2010-20.
  NOTE 2 
    Cash and
    Due from Banks   54




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##### Table of Contents



NOTE 3 
    Overnight
    Investments  one-day
  December 31,

2010

2009(In Thousands)Interest-bearing deposits at Federal Home Loan Bank (FHLB)

$150

$255Interest-bearing deposits at Federal Reserve Bank (FRB)

49,830

47,071Interest-bearing deposits at Other Institutions

100

Total

$50,080

$47,326   NOTE 4 
    Investment
    Securities    Gross

GrossAmortized

Unrealized

UnrealizedDecember 31,

Cost

Gains

Losses

Fair Value(In Thousands)2010:Securities available for saleU.S. Treasury & government sponsored entities

$164,604

$430

$349

$164,685Municpal Securities

9,503

123

2

9,624U.S. Agency Mortgage-backed Securities

71

2



73Corporate bonds

38,732

954

58

39,628Total securities available for sale

$212,910

$1,509

$409

$214,010Securities held to maturityMunicipal securities

$6,125

$161

$

$6,286Total securities held to maturity

$6,125

$161

$

$6,2862009:Securities available for saleU.S. Treasury & government sponsored entities

$141,371

$989

$360

$142,000Municpal Securities

6,184

86



6,270U.S. Agency Mortgage-backed Securities

85

2



87Corporate bonds

28,242

1,576

16

29,802Total securities available for sale

$175,882

$2,653

$376

$178,159Securities Held to MaturityMunicipal Securities

$7,285

$231

$

$7,516Total securities held to maturity

$7,285

$231

$

$7,516  55




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##### Table of Contents



Less Than 12 Months

More Than 12 Months

TotalUnrealized



Unrealized



UnrealizedDecember 31,

Fair Value

Losses

Fair Value

Losses

Fair Value

Losses(In Thousands)2010:Securities Available for SaleU.S. Treasury & government sponsored entities

$87,758

$349

$

$

$87,758

$349Municipal Securities

897

2





897

2Corporate Bonds

7,272

58





7,272

58Total

$95,927

$409

$

$

$95,927

$4092009:Securities Available for SaleU.S. Treasury & government sponsored entities

$57,595

$360

$

$

$57,595

$360Corporate Bonds

1,417

16





1,417

16Total

$59,012

$376

$

$

$59,012

$376   available-for-sale other-than-temporarily
 56




---



##### Table of Contents



WeightedAmortized



AverageCost

Fair Value

Yield(In Thousands)US Treasury and government sponsored entities
    Within 1 year

$32,013

$32,124

2.50%1-5 years

132,591

132,561

0.93%Total

$164,604

$164,685

1.24%U.S. Agency Mortgage-backed securities 5-10 years

$71

$73

4.45%Total

$71

$73

4.45%Corporate bonds
    Within 1 year

$10,027

$10,109

5.18%1-5 years

14,227

14,929

2.67%5-10 years

14,478

14,590

2.17%Total

$38,732

$39,628

3.13%Municipal securities
    Within 1 year

$2,301

$2,325

3.84%1-5 years

4,532

4,640

2.92%5-10 years

6,619

6,738

4.26%Over 10 years

2,176

2,207

4.75%Total

$15,628

$15,910

3.88%     Gross

GrossDecember 31,

Proceeds

Gains

Losses(In Thousands)2010:Available for sale securities

$
28,667

$649

$Held to maturity securities

$


$

$2009:Available for sale securities

$
7,551

$220

$Held to maturity securities

$


$

$2008:Available for sale securities

$
23,371

$146

$Held to maturity securities

$


$

$  57




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##### Table of Contents



December 31,

2010

2009

2008(In Thousands)U.S. Treasury and government sponsored entities

$2,579

$2,507

$4,225U.S. Agency Mortgage-backed Securities

4

6

18Other

1,446

1,369

651Total taxable interest income

$4,029

$3,882

$4,894Municipal Securities

287

252

172Total tax-exempt interest income

287

252

172Total

$4,316

$4,134

$5,066   NOTE 5 
    Loans    December 31,

2010

2009(In Thousands)Commercial

$256,971

$248,205Real estate construction

62,620

62,573Real estate term

312,128

301,816Home equity lines and other consumer

43,264

45,243Sub-total

$674,983

$657,837Less: Unearned origination fees, net of origination costs

(3,171)

(2,798)Total loans

671,812

655,039Allowance for loan losses

(14,406)

(13,108)Net Loans

$657,406

$641,931       
    Risk Code 1  Excellent: Loans in this grade
    are those where the borrower has substantial financial capacity,
    above average profit margins, and excellent liquidity. Cash flow
    has been consistent and is well in excess of debt servicing
    requirements. Loans in this grade may secured by cash
    and/or
    negotiable securities having a readily ascertainable market
    value and may also be fully guaranteed by the
    U.S. government, and other approved governments and
    financial institutions. Loans in this grade have borrowers with
    exceptional credit ratings and would compare to AA ratings as
    established Standard & Poors. 58




---



##### Table of Contents




    Risk Code 2  Good: Loans in this grade are
    those to borrowers who have demonstrated satisfactory asset
    quality, earnings history, liquidity and other adequate margins
    of creditor protection. Borrowers exhibit positive fundamentals
    in terms of working capital, cash flow sufficient to service the
    debt, and debt to worth ratios. Borrowers for loans in this
    grade are capable of absorbing normal economic or other setbacks
    without difficulty. The borrower may exhibit some weaknesses or
    varying historical profitability. Management is considered
    adequate in all cases. Borrowing facilities may be unsecured or
    secured by customary acceptable collateral with well defined
    market values. Additional support for the loan is available from
    secondary repayment sources
    and/or
    adequate guarantors.
    Risk Code 3  Satisfactory: Loans in this grade
    represent moderate credit risk due to some instability in
    borrower capacity and financial condition. These loans generally
    require average loan officer attention. Characteristics of
    assets in this classification may include: marginal debt service
    coverage, newly established ventures, limited or unstable
    earnings history, some difficulty in absorbing normal setbacks,
    and atypical maturities, collateral or other exceptions to
    established loan policies. In all cases, such weaknesses are
    offset by well secured collateral positions
    and/or
    acceptable guarantors.
    Risk Code 4  Watch List: Loans in this grade
    are acceptable, but additional attention is needed. This is an
    interim classification reserved for loans that are intrinsically
    creditworthy but which require specific attention. Loans may
    have documentation deficiencies that are deemed correctable, may
    be contrary to current lending policies, or may have
    insufficient credit or financial information. Loans in this
    grade may also be characterized by borrower failure to comply
    with loan covenants or to provide other required information. If
    such conditions are not resolved within 90 days from the
    date of the assignment of Risk Code 4, the loan may warrant
    further downgrade.
    Risk Code 5  Special Mention: Loans in this
    grade have had a deterioration of financial condition or
    collateral value, but are still reasonably secured by collateral
    or net worth of the borrower. Although the Company is presently
    protected from loss, potential weaknesses are apparent which, if
    not corrected, could cause future problems. Loans in this
    classification warrant more than the ordinary amount of
    attention but have not yet reached the point of concern for
    loss. Loans in this category have deteriorated sufficiently that
    they would have difficulty in refinancing. Loans in this
    classification may show one or more of the following
    characteristics: inadequate loan documentation, deteriorating
    financial condition or control over collateral, economic or
    market conditions which may adversely impact the borrower in the
    future, unreliable or insufficient credit or collateral
    information, adverse trends in operations that are not yet
    jeopardizing repayment, or adverse trends in secondary repayment
    sources.
    Risk Code 6  Substandard: Loans in this grade
    are no longer adequately protected due to declining net worth of
    the borrower, lack of earning capacity, or insufficient
    collateral. The possibility for loss of some portion of the loan
    principal cannot be ruled out. Loans in this grade exhibit
    well-defined weaknesses that bring normal repayment into doubt.
    Some of these weaknesses may include: unprofitable or poor
    earnings trends of the borrower or property, declining
    liquidity, excessive debt, significant unfavorable industry
    comparisons, secondary repayment sources are not available, or
    there is a possibility of a protracted work-out.
    Risk Code 7  Doubtful: Loans in this grade
    exhibit the same weaknesses as those classified Substandard, but
    the traits are more pronounced. Collection in full is
    improbable, however the extent of the loss may be indeterminable
    due to pending factors which may yet occur that could salvage
    the loan, such as possible pledge of additional collateral, sale
    of assets, merger, acquisition or refinancing. Borrowers in this
    grade may be on the verge of insolvency or bankruptcy, and
    stringent action is required on the part of the loan officer.
    Risk Code 8  Loss: Loans in this grade are
    those that are largely non-collectible or those in which
    ultimate recovery is too distant in the future to warrant
    continuance as a bankable asset. This classification does not
    mean that the asset has absolutely no recovery or salvage value,
    but rather it is not practical or desirable to defer charging
    the loan off even though recovery may be affected in the future. 59




---



##### Table of Contents



Home equity linesReal estate



and otherCommercial

construction

Real estate term

consumer

Total(In Thousands)Risk Code 1  Excellent

$500

$

$

$852

$1,352Risk Code 2  Good

89,015

356

67,790

986

158,147Risk Code 3  Satisfactory

134,815

51,537

227,990

38,162

452,504Risk Code 4  Watch

5,147

174

2,107

2,137

9,565Risk Code 5  Special Mention

18,748

250

4,241

654

23,893Risk Code 6  Substandard

7,964

10,303

10,000

465

28,732Risk Code 7  Doubtful

782





8

790Subtotal

$256,971

$62,620

$312,128

$43,264

$674,983Less: Unearned origination fees, net of origination costs









(3,171)$671,812     Recorded30-59

60-89

Greater

Total



Total

Investment > 90DaysPast

Days

Than

Past



Financing

Days andDue

Past Due

90 Days

Due

Current

Receivables

Accruing(In Thousands)Risk Code 1  Excellent

$

$

$

$

$1,352

$1,352

$Risk Code 2  Good









158,147

158,147

Risk Code 3  Satisfactory

351





351

452,153

452,504

Risk Code 4  Watch

103

500



603

8,962

9,565

Risk Code 5  Special Mention

310





310

23,583

23,893

Risk Code 6  Substandard

648

387



1,035

27,697

28,732

Risk Code 7  Doubtful









790

790

Subtotal

$1,412

$887

$

$2,299

$672,684

$674,983

$Less: Unearned origination fees, net of origination costs











$(3,171)$671,812

$  60




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##### Table of Contents



December 31, 2010(In Thousands)Commercial

$5,207Construction

2,289Real estate term

3,527Home equity lines and other consumer

391Total

$11,414       Unpaid



Average

InterestRecorded

Principal

Related

Recorded

IncomeInvestment

Balance

Allowance

Investment

Recognized(In Thousands)With no related allowance recordedCommercial

$4,615

$6,736

$

$5,573

$296Construction

5,719

5,798



6,344

12Real estate term

4,725

5,878



4,776

190Home equity lines and other consumer

231

231



237

9$15,290

$18,643

$

$16,930

$507With an allowance recordedCommercial

$988

$988

$274

$975

$48Construction

1,724

1,768

74

1,748

Real estate term

256

256

36

263

9Home equity lines and other consumer









$2,968

$3,012

$384

$2,986

$57TotalCommercial

$5,603

$7,724

$274

$6,548

$344Construction

7,443

7,566

74

8,092

12Real estate term

4,981

6,134

36

5,039

199Home equity lines and other consumer

231

231



237

9$18,258

$21,655

$384

$19,916

$564  61




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##### Table of Contents



MaturityWithin

Within





Over

Over1 Year

1 Year

1-5 Years

1-5 Years

5 Years

5 YearsDecember 31, 2010

Fixed

Float

Fixed

Float

Fixed

Float

Total(In Thousands)Commercial

$38,038

$62,791

$38,316

$63,658

$7,266

$41,695

$251,764Construction

35,658

11,908

221



12,544



60,331Real estate term

12,823

18,368

45,274

26,232

19,032

186,872

308,601Home equity lines and other consumer

922

281

5,892

2,745

25,829

7,204

42,873Total

$87,441

$93,348

$89,703

$92,635

$64,671

$235,771

$663,569       December 31,

2010

2009(In Thousands)Balance, beginning of the year

$974

$890Loans made

490

631Repayments or change to nondirector status

772

547Balance, end of year

$692

$974     NOTE 6 
    Allowance
    for Loan Losses   62




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##### Table of Contents



and/or
 63




---



##### Table of Contents



Real



Home equityestate

Real estate

lines and otherCommercial

construction

term

consumer

Unallocated

Total(In Thousands)Balance, beginning of year

$3,962

$1,365

$565

$50

$7,166

$13,108Charge-Offs

(3,919)

(1,519)

(342)

(322)



(6,102)Recoveries

1,490

4

232

91



1,817Provision

4,841

1,185

3,815

922

(5,180)

5,583Balance, end of year

$6,374

$1,035

$4,270

$741

$1,986

$14,406Balance, end of year: Individually evaluated for impairment

$274

$74

$36

$

$

$384Balance, end of year: Collectively evaluated for impairment

$6,100

$961

$4,234

$741

$1,986

$14,022     Home equityReal estate



lines and otherCommercial

construction

Real estate term

consumer

Total(In Thousands)Balance, end of year

$256,971

$62,620

$312,128

$43,264

$674,983Balance, end of year: Individually evaluated for impairment

$5,603

$7,443

$4,981

$231

$18,258Balance, end of year: Collectively evaluated for impairment

$251,368

$55,177

$307,147

$43,033

$656,725     Home equitylines andReal estate

Real estate

otherDecember 31,

Total

Commercial

Construction

term

consumer

Unallocated(In Thousands)Individually evaluated for impairment:Risk Code 6  Substandard

$384

$274

$74

$36

$

$Collectively evaluated for impairment:Risk Code 3  Satisfactory

7,999

3,514

813

3,215

457

Risk Code 4  Watch

853

316

8

315

214

Risk Code 5  Special Mention

2,365

2,209

6

103

47

Risk Code 6  Substandard

815

57

134

601

23

Risk Code 7  Doubtful

4

4







Unallocated

1,986









1,986$14,406

$6,374

$1,035

$4,270

$741

$1,986  64




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##### Table of Contents



Form 10-K
  NOTE 7 
    Premises
    and Equipment    December 31,

Useful Life

2010

2009(In Thousands)Land



$3,201

$3,201Vehicle

3 years



61Furniture and equipment

3-7 years

9,639

9,056Tenant improvements

2-15 years

6,800

6,409Buildings

39 years

24,756

24,247Total Premises and Equipment



44,396

42,974Accumulated depreciation and amortization



(15,348)

(14,451)Total Premises and Equipment, Net



$29,048

$28,523     NOTE 8 
    Other
    Real Estate Owned    Years Ended December 31,

2010

$ Change

% Change

2009

$ Change

% Change

2008(In Thousands)Net OREO expense, net rental income and gains on sale:OREO operating expense

$882

$109

14%

$773

$172

29%

$601Impairment on OREO

246

(579)

-70%

825

(1,133)

-58%

1,958Rental income on OREO

(610)

(584)

2246%

(26)

(25)

2500%

(1)Gains on sale of OREO

(1,663)

(1,210)

267%

(453)

(408)

907%

(45)Total

$(1,145)

$(2,264)

-202%

$1,119

$(1,394)

-55%

$2,513  65




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##### Table of Contents



NOTE 9 
    Goodwill,
    Intangibles and Other Assets    December 31,

2010


2009(In Thousands)Intangible assets:Goodwill

$
7,525


$
7,524Core deposits intangible


626



810NBG customer relationships


546



662Total

$
8,697


$
8,996Prepaid expenses

$
5,573


$
6,873Software


432



396Deferred taxes, net


9,658



14,951Note receivable from Elliott Cove


544



677Investment in Elliott Cove


66



(34
)Investment in PWA


1,734



1,778Investment in RML Holding Company


5,146



4,652Investment in Low Income Housing Partnerships


5,297



6,158Bank owned life insurance


2,826



2,719Taxes receivable


2,517



342Other assets


1,569



2,297Total

$
35,362


$
40,809            66




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##### Table of Contents



Year Ending December 31:(In Thousands)2011

$2762012

2522013

2282014

2042015

153Thereafter

60Total

$1,173   Affiliates
  start-up
        December 31,

2010

2009(Unaudited)(In Thousands)AssetsCash

$10,226

$8,495Loans held for sale

85,668

67,745Other assets

12,490

11,562Total Assets

$108,384

$87,802LiabilitiesLines of credit

$81,911

$63,975Other liabilities

6,526

5,884Total Liabilities

88,437

69,859Shareholders Equity

19,947

17,943Total Liabilities and Shareholders Equity

$108,384

$87,802Income/expenseGross income

$24,701

$27,229Total expense

18,605

18,436Joint venture allocations

(230)

319Net Income

$5,866

$9,112  67




---



##### Table of Contents



Low
    Income Housing Partnerships
   68




---



##### Table of Contents



NOTE 10 
    Deposits    Year Ending December 31:(In Thousands)2011

$103,7042012

20,7122013

13,4252014

1292015

203Total

$138,173         NOTE 11 
    Borrowings             69




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##### Table of Contents



Year Ending December 31:(In Thousands)2011

$13,6352012

1472013

1572014

4,321Total

$18,260   NOTE 12 
    Junior
    Subordinated Debentures  90-day
  90-day
 70




---



##### Table of Contents



NOTE 13 
    Interest
    Expense    December 31,

2010

2009

2008(In Thousands)Interest-bearing demand accounts

$176

$170

$578Money market accounts

673

740

3,306Savings accounts

1,120

1,240

3,444Certificates of deposit greater than $100,000

1,533

1,968

2,361Certificates of deposit less than $100,000

1,171

1,683

2,490Borrowings

812

1,268

1,723Total

$5,485

$7,069

$13,902   NOTE 14 
    Income
    Taxes      Current Tax

Deferred

TotalDecember 31,

Expense

(Benefit)

Expense(In Thousands)2010:Federal

$(1,655)

$4,918

$3,263State

(204)

859

655Total

$(1,859)

$5,777

$3,9182009:Federal

$3,703

$(1,274)

$2,429State

760

(222)

538Total

$4,463

$(1,496)

$2,9672008:Federal

$5,360

$(2,822)

$2,538State

1,400

(816)

584Total

$6,760

$(3,638)

$3,122     December 31,

2010


2009


2008(In Thousands)Computed expected income tax expense

$
4,545


$
3,743


$
3,222State income taxes, net


426



350



380Low income housing credits


(841
)


(769
)


(695
)Other


(212
)


(357
)


215Total

$
3,918


$
2,967


$
3,122  71




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##### Table of Contents



December 31,

2010


2009


2008(In Thousands)Deferred Tax Asset:Allowance for loan losses

$
5,912


$
10,676


$
9,855Loan fees, net of costs


1,304



1,150



1,115Depreciation and amortization


698



884



814Other real estate owned


932



1,279



907Other


3,743



4,158



4,824Total Deferred Tax Asset

$
12,589


$
18,147


$
17,515Deferred Tax Liability:Unrealized gain on
    available-for-sale
    investment securities

$
(452
)

$
(936
)

$
(629
)Intangible amortization


(1,789
)


(1,630
)


(1,504
)Other


(690
)


(630
)


(1,620
)Total Deferred Tax Liability

$
(2,931
)

$
(3,196
)

$
(3,753
)Net Deferred Tax Asset

$
9,658


$
14,951


$
13,762      72




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##### Table of Contents



NOTE 15 
    Comprehensive
    Income    TaxBefore Tax

(Expense)December 31,

Amount

Benefit

Net Amount(In Thousands)2010:Unrealized net holding gains on investment securities arising
    during 2010

$(528)

$217

$(311)Plus: Reclassification adjustment for net realized gain (loss)
    included in net income

(649)

267

(382)Net unrealized gains

$(1,177)

$484

$(693)2009:Unrealized net holding gains on investment securities arising
    during 2009

$967

$(397)

$570Plus: Reclassification adjustment for net realized gain (loss)
    included in net income

(220)

90

(130)Net unrealized gains

$747

$(307)

$4402008:Unrealized net holding gains on investment securities arising
    during 2008

$1,290

$(528)

$762Plus: Reclassification adjustment for net realized gain (loss)
    included in net income

(146)

60

(86)Net unrealized gains

$1,144

$(468)

$676   NOTE 16 
    Employee
    Benefit Plans         73




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##### Table of Contents



NOTE 17 
    Common
    Stock      NOTE 18 
    Options  10-year
    Shares

Weighted

Range ofUnder

Average

ExerciseOption

Exercise Price

PriceGranted  2008

58,127

$5.71Forfeited

(5,021)

13.31Exercised

(47,657)

7.56December 31, 2008 outstanding

493,894

$13.16

$7.17-$25.94Granted  2009

41,166

$5.21Forfeited

(1,103)

12.70Exercised

(60,202)

5.89December 31, 2009 outstanding

473,755

$13.40

$7.17-$25.94Granted  2010

38,260

$5.50Forfeited

(43,895)

17.55Exercised

(116,417)

8.31December 31, 2010 outstanding

351,703

$13.70

$11.31-$25.94  74




---



##### Table of Contents



WeightedNumber of

AverageShares

Exercise PriceOutstanding at January 1, 2010

396,911

$15.99Changes during the period:Granted

11,601

18.13Forfeited

(40,289)

19.13Exercised

(101,156)

9.56Outstanding at December 31, 2010

267,067

$18.04Options exercisable at December 31, 2010

238,397

$18.29Unexercisable options at December 31, 2010

28,670

$16.01     WeightedNumber of

AverageShares

Fair ValueOutstanding at January 1, 2010

76,844

$16.27Changes during the period:Granted

26,659

18.13Vested

(15,261)

23.00Forfeited

(3,606)

17.08Outstanding at December 31, 2010

84,636

$15.61          75




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##### Table of Contents



GrantedStock Options:

Nov. 2010

Nov. 2009

Nov. 2008Expected option life (years)

7.8

8.4

8.4Risk free rate

2.16%

3.30%

4.70%Dividends per Share

$0.48

$0.40

$0.40Expected volatility factor

28.86%

29.77%

30.21%       Years Ended December 31,

2010

2009

2008(In Thousands, Except Per Share Data)Options:Weighted-average grant-date fair value per share of stock
    options granted:

$4.42

$4.73

$3.74Total fair value of shares vested during the period:

112

260

296Total intrinsic value of options exercised:

781

351

382Restricted stock units:Weighted-average grant-date fair value per share of stock
    options granted:

$18.13

$16.28

$12.74    76




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##### Table of Contents



Average PeriodUnamortized

to ExpenseExpense

(years)(In Thousands)Stock options

$110

1.6Restricted stock

780

1.8Total

$890

1.7     NOTE 19 
    Commitments
    and Contingent Liabilities    Year Ending December 31:(In Thousands)2011

$7482012

6402013

4362014

4272015

354Thereafter

4,381Total

$6,986     Year Ending December 31:(In Thousands)2011

$7682012

4572013

138Total

$1,363  77




---



##### Table of Contents



Off-Balance Sheet Financial
    Instruments:
    December 31,

2010

2009(In Thousands )Off-balance sheet commitments:Commitments to extend credit

$181,305

$166,704Standby letters of credit

$19,085

$16,913         NOTE 20 
    Regulatory
    Matters       78




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##### Table of Contents



Consolidated

Actual

Adequately-Capitalized

Well-CapitalizedAmount

Ratio

Amount

Ratio

Amount

Ratio(In Thousands)As of December 31, 2010:Total Capital (to risk-weighted assets)

$138,796

15.33%

$72,431


3
    8.0%

$90,539

3
    10.0%Tier I Capital (to risk-weighted assets)

$127,444

14.08%

$36,206


3
    4.0%

$54,309

3
    6.0%Tier I Capital (to average assets)

$127,444

12.15%

$41,957


3
    4.0%

$52,446

3
    5.0%As of December 31, 2009:Total Capital (to risk-weighted assets)

$131,976

15.24%

$69,279


3
    8.0%

$86,598

3
    10.0%Tier I Capital (to risk-weighted assets)

$121,202

13.98%

$34,679


3
    4.0%

$52,018

3
    6.0%Tier I Capital (to average assets)

$121,202

12.13%

$39,968


3
    4.0%

$49,960

3
    5.0%  Northrim Bank

Actual

Adequately-Capitalized

Well-CapitalizedAmount

Ratio

Amount

Ratio

Amount

Ratio(In Thousands)As of December 31, 2010:Total Capital (to risk-weighted assets)

$129,599

14.36%

$72,200

3
    8.0%

$90,250

3
    10.0%Tier I Capital (to risk-weighted assets)

$118,279

13.11%

$36,088

3
    4.0%

$54,132

3
    6.0%Tier I Capital (to average assets)

$118,279

11.30%

$41,869

3
    4.0%

$52,336

3
    5.0%As of December 31, 2009:Total Capital (to risk-weighted assets)

$122,625

14.30%

$68,601

3
    8.0%

$85,752

3
    10.0%Tier I Capital (to risk-weighted assets)

$111,879

13.05%

$34,292

3
    4.0%

$51,439

3
    6.0%Tier I Capital (to average assets)

$111,879

11.33%

$39,498

3
    4.0%

$49,373

3
    5.0%   NOTE 21 
    Fair
    Value Measurements    Level 1:
  Level 2:
  Level 3:
    Cash, Due from Banks and Overnight
    Investments:
 79




---



##### Table of Contents



Investment Securities:
  Loans Held for Sale:
  Loans:
  Purchased Receivables:
  Accrued Interest Receivable:
  Deposit Liabilities:
  Accrued Interest Payable:
  Securities Sold Under Repurchase
    Agreements:
  Borrowings:
  Junior Subordinated Debentures:
  Assets Subject to Nonrecurring Adjustment to Fair Value:
      Commitments to Extend Credit and Standby Letters of
    Credit:
 80




---



##### Table of Contents



Limitations:
  December 31,

2010

2009Carrying

Fair

Carrying

FairAmount

Value

Amount

Value(In Thousands)Financial Assets:Cash and cash equivalents

$66,033

$66,033

$66,721

$66,721Investment securities

221,138

222,299

187,447

187,678Loans

662,964

659,650

641,931

616,476Purchased receivables

16,531

16,531

7,261

7,261Accrued interest receivable

3,401

3,401

3,986

3,986Financial Liabilities:Deposits

$892,136

$890,729

$853,108

$841,629Accrued interest payable

300

300

394

394Securities sold under repurchase agreements

12,874

12,874

6,733

6,733Borrowings

5,386

4,759

5,587

4,941Junior subordinated debentures

18,558

15,106

18,558

10,111Unrecognized Financial Instruments:Commitments to extend
    credit(a)

$181,305

$1,813

$166,704

$1,667Standby letters of credit

19,085

191

16,913

169   (a)
    
    Carrying amounts reflect the
    notional amount of credit exposure under these financial
    instruments. 81




---



##### Table of Contents



Quoted Prices inActive Markets for

Significant Other

SignificantIdentical Assets

Observable Inputs

UnobservableTotal

(Level 1)

(Level 2)

Inputs (Level 3)(In Thousands)2010:Available for sale securitiesU.S. Treasury

$20,970



$20,970

U.S. Government Sponsored Entities

153,339



153,339

U.S. Agency Mortgage-backed Securities

73



73Corporate bonds

39,628



39,628

Total

$214,010



$214,010

2009:Available for sale securitiesU.S. Treasury

$502



$502

U.S. Government Sponsored Entities

147,768



147,768

U.S. Agency Mortgage-backed Securities

87



87Corporate bonds

29,802



29,802

Total

$178,159



$178,159

     Quoted Prices inActive Markets for


Significant Other


Significant UnobservableIdentical Assets


Observable Inputs


Inputs


Total (gains)Total


(Level 1)


(Level 2)


(Level 3)


losses(In Thousands)2010:Loans measured for
    impairment1

$
2,968






$
2,234


$
734


$
(1,284
)Other real estate
    owned2


640











640



246Total

$
3,608






$
2,234


$
1,374


$
(1,038
)2009:Loans measured for
    impairment1

$
15,691






$
11,533


$
4,158


$
(622
)Other real estate
    owned2


7,330











10,520



825Total

$
23,021






$
11,533


$
14,678


$
203   1
    
    Relates to certain impaired
    collateral dependant loans. The impairment was measured based on
    the fair value of collateral, in accordance with GAAP.2
    
    Relates to certain impaired other
    real estate owned. This impairment arose from an adjustment to
    the Companys estimate of the fair market value of these
    properties based on changes in estimated costs to complete the
    projects. 82




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##### Table of Contents



NOTE 22 
    Quarterly
    Results of Operations (Unaudited)  2010 Quarter Ended

Dec. 31

Sept. 30

June 30

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

$12,089

$12,266

$12,569

$12,774Total interest expense

1,179

1,370

1,466

1,470Net interest income

10,910

10,896

11,103

11,304Provision for loan losses

2,416

417

1,375

1,375Other operating income

3,362

3,200

3,222

2,593Other operating expense

9,232

8,710

9,788

9,894Income before provision for income taxes

2,624

4,969

3,162

2,628Provision for income taxes

675

1,629

912

702Net Income

1,949

3,340

2,250

1,926Less: Net income attributable to the noncontrolling interest

101

162

110

26Net income attributable to Northrim

$1,848

$3,178

$2,140

$1,900BancorpEarnings per share, basic

$0.29

$0.50

$0.34

$0.30Earnings per share, diluted

$0.28

$0.49

$0.33

$0.29   2009 Quarter Ended

Dec. 31

Sept. 30

June 30

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

$13,344

$13,404

$13,455

$13,287Total interest expense

1,507

1,662

1,789

2,111Net interest income

11,837

11,742

11,666

11,176Provision for loan losses

2,200

1,374

2,117

1,375Other operating income

2,916

3,159

3,535

3,474Other operating expense

9,862

10,666

10,417

10,412Income before provision for income taxes

2,691

2,861

2,667

2,863Provision for income taxes

649

810

681

827Net Income

2,042

2,051

1,986

2,036Less: Net income attributable to the noncontrolling interest

96

102

109

81Net income attributable to Northrim Bancorp

$1,946

$1,949

$1,877

$1,955Earnings per share, basic

$0.31

$0.31

$0.29

$0.31Earnings per share, diluted

$0.30

$0.30

$0.29

$0.31  83




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##### Table of Contents



NOTE 23 
    Disputes
    and Claims    NOTE 24 
    Parent
    Company Financial Information    Balance Sheets for December 31,

2010

2009

2008(In Thousands)AssetsCash

$5,752

$5,220

$5,160Investment in Northrim Bank

125,762

120,509

114,623Investment in NISC

1,691

1,866

2,025Investment in NCT1

248

248

248Investment in NST2

310

310

310Due from NISC

593

479

382Due from Northrim Bank



111

14Other assets

1,523

1,088

678Total Assets

$135,879

$129,831

$123,440LiabilitiesJunior subordinated debentures

$18,558

$18,558

$18,558Other liabilities

249

301

234Total Liabilities

18,807

18,859

18,792Shareholders EquityCommon stock

6,427

6,371

6,331Additional paid-in capital

52,658

52,139

51,458Retained earnings

57,339

51,121

45,958Accumulated other comprehensive income

648

1,341

901Total Shareholders Equity

117,072

110,972

104,648Total Liabilities and Shareholders Equity

$135,879

$129,831

$123,440   Statements of Income for Years
    Ended:

2010

2009

2008(In Thousands)IncomeInterest income

$57

$70

$115Net income from Northrim Bank

10,246

9,247

7,813Net loss from NISC

(167)

(67)

(24)Other income

270



30Total Income

10,406

9,250

7,934ExpenseInterest expense

470

585

998Administrative and other expenses

1,579

2,137

1,765Total Expense

2,049

2,722

2,763Net Income Before Provision for Income Taxes

8,357

6,528

5,171Income tax expense (benefit)

(709)

(1,199)

(912)Net Income

$9,066

$7,727

$6,083  84




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##### Table of Contents



Statements of Cash Flows for Years
    Ended:

2010

2009

2008(In Thousands)Operating Activities:Net income

$9,066

$7,727

$6,083Adjustments to Reconcile Net Income to Net Cash:Equity in undistributed earnings from subsidiaries

(10,076)

(9,180)

(7,789)Stock-based compensation

466

648

597Changes in other assets and liabilities

(568)

(535)

611Net Cash Used from Operating Activities

(1,112)

(1,340)

(498)Investing Activities:Investment in Northrim Bank, NISC, NCT1 & NST2

4,307

3,891

5,795Net Cash Used by Investing Activities

4,307

3,891

5,795Financing Activities:Dividends paid to shareholders

(2,848)

(2,564)

(4,182)Proceeds from issuance of trust preferred securities





Proceeds from issuance of common stock and excess tax benefits

185

73

94Repurchase of common stock





Net Cash Provided by Financing Activities

(2,663)

(2,491)

(4,088)Net Increase by Cash and Cash Equivalents

532

60

1,209Cash and Cash Equivalents at beginning of period

5,220

5,160

3,951Cash and Cash Equivalents at end of period

$5,752

$5,220

$5,160  85




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
    Changes
    in Internal Controls
    Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f)
    Internal Control
     Integrated Framework
     86




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##### Table of Contents



Item 9B.
    Other
    Information   Part III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Executive
    Officers/Age

Occupation*R. Marc Langland, 69

Chairman, President, & CEO of the Company, Chairman &
    CEO of the Bank; Director, Alaska Air Group; Director, Usibelli
    Coal Mine, Inc.*Christopher N. Knudson, 57

Executive Vice President and Chief Operating Officer of the
    Company and the BankJoseph M. Schierhorn, 53

Executive Vice President and Chief Financial Officer of the
    Company and the BankJoseph M. Beedle, 59

Executive Vice President of the Company and President of the BankSteven L. Hartung, 64

Executive Vice President and Chief Credit Officer of the Company
    and the Bank    *
    
    Indicates individual serving as both director and executive
    officer.  Directors/Age

OccupationLarry S. Cash, 59

President and CEO, RIM Architects LLC (Alaska, Guam, Hawaii and
    California) since 1986Mark G. Copeland, 68

Owner and sole member of Strategic Analysis, LLC, a management
    consulting firmRonald A. Davis, 78

Former Vice President, Acordia of Alaska Insurance (full service
    insurance agency) and Former CEO and Administrator, Tanana
    Valley ClinicAnthony Drabek, 63

President and CEO, Natives of Kodiak, Inc. (Alaska Native
    Corporation) from 1989 until retirement in 2010; Chairman and
    President, Koncor Forest Products Co.Richard L. Lowell, 70

Former President, Ribelin Lowell & Company (insurance
    brokerage firm)Irene Sparks Rowan, 69

Former Director, Klukwan, Inc. (Alaska Native Corporation) and
    its subsidiariesJohn C. Swalling, 61

President and Director, Swalling & Associates, P.C.
    (accounting firm) since 1991David G. Wight, 70

President and CEO, Alyeska Pipeline Service Company from 2000
    until retirement in 2005; and Director, Storm Cat Energy since
    2006     Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters   87




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##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   Part IV  Item 15.
    Exhibits and
    Financial Statement Schedules    Form 10-K:
           88




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##### Table of Contents



Exhibits   3.1

Articles of Amendment to the Amended and Restated Articles of
    Incorporation (Incorporated by reference to Exhibit 3.3 of the
    Companys Form 10-Q for the quarter ended June 30, 2009,
    filed with the SEC on August 10, 2009.)3.2

Amended and Restated Bylaws (Incorporated by reference to
    Exhibit 3.4 of the Companys Current Report on Form 8-K
    filed with the SEC on November 24, 2009.)4.1

Pursuant to Item 601 (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 request.4.2

Indenture dated as of December 16, 2005 (Incorporated by
    reference to Exhibit 4.3 of the Companys Form 10-K for the
    year ended December 31, 2005, filed with the SEC on March, 16,
    2006.)4.3

Form of Junior Subordinated Debt Security due 2036 (Incorporated
    by reference to Exhibit 4.4 of the Companys Form 10-K for
    the year ended December 31, 2005, filed with the SEC on March,
    16, 2006.)10.36

Employment Agreement with R. Marc Langland dated January 1, 2011
    (Incorporated by reference to Exhibit 10.36 to the
    Companys Current Report on Form 8-K, filed with the SEC on
    January 5, 2011.)10.37

Employment Agreement with Christopher N. Knudson dated January
    1, 2011 (Incorporated by reference to Exhibit 10.37 to the
    Companys Current Report on Form 8-K, filed with the SEC on
    January 5, 2011.)10.38

Employment Agreement with Joseph M. Schierhorn dated January 1,
    2011 (Incorporated by reference to Exhibit 10.38 to the
    Companys Current Report on Form 8-K, filed with the SEC on
    January 5, 2011.)10.39

Employment Agreement with Joseph M. Beedle dated January 1, 2011
    (Incorporated by reference to Exhibit 10.39 to the
    Companys Current Report on Form 8-K, filed with the SEC on
    January 5, 2011.)10.40

Employment Agreement with Steven L. Hartung dated January 1,
    2011 (Incorporated by reference to Exhibit 10.40 to the
    Companys Current Report on Form 8-K, filed with the SEC on
    January 5, 2011.)21.1

Subsidiaries23.1

Consent of Moss Adams, LLP23.2

Consent of KPMG LLP24.1

Form of Power of Attorney31.1

Certification of Chief Executive Officer pursuant to
    18 U.S.C. § 1350, as adopted pursuant to Section 302
    of the Sarbanes-Oxley Act of 200231.2

Certification of Chief Financial Officer pursuant to
    18 U.S.C. § 1350, as adopted pursuant to Section 302
    of the Sarbanes-Oxley Act of 200232.1

Certification of Chief Executive Officer pursuant to
    18 U.S.C. § 1350, as adopted pursuant to Section 906
    of the Sarbanes-Oxley Act of 200232.2

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  89




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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.
 90




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##### Table of Contents



Signatures    Northrim BanCorp, Inc.
  By
    /s/   R.
    Marc Langland         
       
     Form 10-K
  Larry S. Cash


R. Marc LanglandMark G. Copeland


Richard L. LowellRonald A. Davis


Irene Sparks RowanAnthony Drabek


John C. SwallingChristopher N. Knudson


David G. Wight   By
    /s/  R.
    Marc Langland     91




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##### Table of Contents



Investor
    Information
  Annual
    Meeting
  Date:

Thursday, May 19, 2011Time:

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 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
 92