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Northrim BanCorp 2010 Profits Increase 17% to $9.1 Million, or $1.40 Per Share



ANCHORAGE, Alaska, Jan. 25, 2011 (GLOBE NEWSWIRE) -- Northrim BanCorp,
Inc. (Nasdaq:NRIM) (Northrim), the bank holding company for Northrim
Bank, today reported its full year net income increased 17% to $9.1
million, or $1.40 per diluted share, reflecting continuing improvement
in credit quality, increased gains from sales of other real estate
owned (OREO), and lower expenses. Northrim earned $7.7 million, or
$1.20 per share in 2009. In the fourth quarter of 2010, net income was
$1.8 million, or $0.28 per diluted share, and in the fourth quarter a
year ago it was $1.9 million, or $0.30 per diluted share.

Financial Highlights (at or for the periods ended December 31, 2010,
compared to September 30, 2010, and December 31, 2009)


-- Northrim continued to maintain strong capital ratios with Tier 1
Capital/risk adjusted assets of 14.08% as compared to 14.46% in the
immediate prior quarter and 13.98% a year ago. Northrim's tangible
common equity to tangible assets at year end was 10.36%, up from 10.26%
a year earlier.
-- Nonperforming assets were reduced 37% year-over-year to $21.8 million or
2.07% of total assets, compared to $34.8 million or 3.47% of total
assets at December 31, 2009 and 12.8% compared to $25.0 million, or
2.41% of total assets at September 30, 2010.
-- Book value was $18.21 per share and tangible book value was $16.86 per
share, up from $17.42 and $16.01, respectively, a year earlier.
-- The allowance for loan losses totaled 2.14% of total portfolio loans at
December 31, 2010, compared to 2.00% at December 31, 2009. The allowance
for loan losses to nonperforming loans also increased to 126.21% from
74.94% a year ago.
-- Other operating income, which includes revenues from service charges,
electronic banking, and financial services affiliates, accounted for
approximately 24% and 22% of fourth quarter and full year total
revenues, respectively.
-- 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.




"The continuing improvement in asset quality, growing operational
efficiencies and solid contributions from our affiliated financial
services business produced a profitable year in 2010," said Marc
Langland, Chairman, President and CEO. "While Alaska has avoided much
of the turmoil from the economic downturn of the past two years, we are
still seeing soft loan demand as businesses remain cautious. We are
investing in marketing our brand to build awareness in our markets and
are working to gain loan volume in 2011."

Alaska Economic Update

Alaska has weathered the "Great Recession" better than almost any other
state in the nation, due largely to a natural resources based economy
which continues to benefit from rising commodities and energy prices.
Alaska remains one of the few states in the nation with a stable fiscal
foundation and one of the few government entities in the world with
strong reserves. Alaska now has more than $12 billion in liquid
reserves, a projected fiscal 2011 surplus of more than $2 billion and a
Permanent Fund balance of $38.5 billion, which paid a 2010 dividend of
$1,281 to every Alaskan citizen. According to a November 2010 ranking
by the Sovereign Wealth Fund Institute, Alaska's Permanent Fund ranks
10th in the world by assets among oil-funded Sovereign Wealth Funds and
18th among all sovereign wealth funds.

In 2010, employment in Alaska rose by a modest 1,900 jobs, or .6%,
according to the preliminary report from the Alaska Department of
Labor. Alaska's unemployment rate was 8% in November 2010 as compared
to 9.8% for the United States. This marks the 25th consecutive month
that Alaska's unemployment rate has been lower than the rest of the
nation.

Northrim Bank hosts the Alaskanomics blog to provide news, analysis and
commentary on Alaska's economy. With contributions from economists,
business leaders, policy makers and everyday Alaskans, Alaskanomics
aims to engage readers in an ongoing conversation about the statewide
economy, now and in the future. Join the conversation at
www.Alaskanomics.com for more information on the Alaska economy by
visiting www.northrim.com and click on the "About Alaska" tab.

Asset Quality and Balance Sheet Review

Northrim's total assets grew 2% to $1.05 billion at December 31, 2010,
from $1.04 billion at September 30, 2010, and 5% from $1.00 billion at
December 31, 2009, with an increase in overnight and portfolio
investments offsetting reductions in other real estate owned and
relatively flat loan growth. While the total portfolio loans increased
3% at year end, at $647 million, average loans were down 6% year over
year, reflecting soft demand in the commercial lending market in
Alaska. Loans held for sale dropped to $5.6 million at December 31,
2010 as compared to $20.1 million at September 30, 2010 and no
outstanding balance at December 31, 2009, as the refinancing surge
created by historically low mortgage interest rates in 2009 began to
decrease in the latter part of 2010. Loans held for sale were purchased
from Northrim's mortgage affiliate and are held until their final sale
in the secondary market.

Commercial real estate loans accounted for 46% of the loan portfolio
and commercial loans comprised 38% of the loan portfolio at December
31, 2010. Construction and land development loans, which accounted for
9% of the loan portfolio at December 31, 2010, were up from the prior
quarter and year ago levels due to the final funding phase for an $11
million commercial real estate project that is near completion.
Construction balances totaled $62.6 million at December 31, 2010.

Nonperforming assets at December 31, 2010, declined by $13.0 million
year-over-year and $3.2 million from the preceding quarter. The risk
profile of the portfolio improved as a result of the following
developments:


-- Loans measured for impairment decreased to $18.3 million at December 31,
2010, compared to $22.2 million at September 30, 2010, and $46.3 million
at December 31, 2009.
-- Nonperforming loans totaled $11.4 million, or 1.70% of total portfolio
loans at December 31, 2010, compared to $17.5 million, or 2.67% of total
portfolio loans a year ago.
-- The $4.6 million condominium conversion project in Anchorage that moved
into OREO during the fourth quarter of 2009 continues to generate rental
income producing an average yield of approximately 3%. Of the 68
original units, 37 condos have been sold and 21 are rented, providing
positive year-to-date cash flow for the project.
-- Sales of OREO continued during the fourth quarter, with 17 properties
sold for an aggregate of $1.9 million, generating a $220,000 net gain.
-- For the full year, OREO sales generated $11.1 million in gross proceeds
and a $1.7 million gain on sale of 79 properties. The gains on sale and
rental income generated from OREO properties are included as negative
expense items in the non-interest expense section of the three and
twelve month income statements.
-- Net charge-offs in the fourth quarter of 2010, totaled $2.7 million, or
0.41% of average loans. The majority of these charge-offs were incurred
on one commercial loan for a marine construction company and another
loan for a tract of undeveloped land in Fairbanks where the charge-off
was taken based on the receipt of an updated appraisal on the property.
The commercial loan was placed in a nonperforming status in the fourth
quarter of 2010, and the land loan had been in a nonperforming status
since the first quarter of 2010.
-- In 2010, net charge-offs totaled $4.3 million, or 0.66%, annualized, of
average loans, down from $6.9 million, or 1.00%, annualized, of average
loans in 2009.
-- The coverage ratio of the allowance to nonperforming loans increased to
126.21% at December 31, 2010, compared to 74.94% a year ago. This
increase is primarily due to the decrease in nonperforming loans to
$11.4 million at year end from $17.5 million a year ago.




"We continue to see improvement in our loan portfolio, reflecting
generally stable real estate values in our market," said Joe Beedle,
President of Northrim Bank. "The higher level of net charge-offs in the
fourth quarter resulted primarily from the nature of the two loans. We
have approximately 2% of our loan portfolio in raw land. Also, the
Fairbanks parcel was appraised at a significantly lower value based on
the updated information available at the time."

The allowance for loan losses was $14.4 million, or 2.14% of portfolio
loans in the fourth quarter of 2010, compared to $14.7 million, or
2.31% of total loans in the third quarter, and $13.1 million, or 2.00%
of total loans a year ago.

The investment portfolio increased 19% to $222.1 million at the end of
the fourth quarter, from $187.45 million a year ago. At December 31,
2010, the portfolio was comprised of 65% U.S. Agency securities, 12%
securities of Alaskan municipalities, utilities, or state agencies, 13%
corporate bonds, 9% U.S. Treasuries, and 1%, or $2 million of stock in
the Federal Home Loan Bank of Seattle. "With strong local deposit
growth, we continue to build our securities portfolio, emphasizing
high-quality and short duration," said Joe Schierhorn, Chief Financial
Officer. "Our advertising campaign is successfully building awareness
of Northrim Bank and bringing new commercial relationships to our
franchise."

Total deposits grew 2% in the quarter and 5% year-over-year to $892.1
million at December 31, 2010, compared to $878.7 million at September
30, 2010 and $853.1 million a year ago. "We continue to have a solid
core deposit base with no brokered funding," said Chris Knudson, Chief
Operating Officer. "In fact, certificates of deposits have dropped to
16% of the total deposit mix at year end." Noninterest-bearing demand
deposits at December 31, 2010, increased 5% from a year ago and account
for 32% of total deposits. Interest-bearing demand deposits also
increased 2% year-over-year and account for 15% of total deposits. The
Alaska CD (a flexible certificate of deposit program) was down 4% and
accounts for 11% of total deposits. Savings account balances were up
16% from a year ago and represent 9% of total deposits. Money market
balances were up 19% and account for 17% of all deposits, and time
deposit balances fell 5% year-over year.

Shareholders' equity increased 5% to $117.1 million, or $18.21 book
value per share, at year end, compared to $111.0 million, or $17.42
book value per share, at December 31, 2009. Tangible book value per
share was $16.86 up from $16.01 a year earlier. Northrim remains well
capitalized with Tier 1 Capital to Risk Adjusted Assets of 14.08%, Tier
1 Capital to Average Assets of 12.15%, and Total Capital to Risk
Adjusted Assets of 15.33% at December 31, 2010.

Review of Operations

Northrim's 2010 revenues (net interest income plus other operating
income) were down 5% for the year at $56.6 million compared to $59.5
million in 2009, reflecting continuing compression of its net interest
margin, reduced contribution from its mortgage affiliate, and lower fee
income from deposit accounts. Continuing contributions from its
employee benefit plan affiliate and securities partially offset these
lower revenue items in 2010. Fourth quarter 2010 revenue was $14.3
million compared to $14.1 million in the third quarter of 2010 and
$14.7 million for the fourth quarter of 2009.

In 2010, net interest income before provision for loan losses was $44.2
million compared to $46.4 million in 2009. Fourth quarter 2010 net
interest income, before the provision for loan losses, was $10.9
million flat with the immediate prior quarter and down 8% from $11.8
million for the same quarter a year ago.

Northrim's net interest margin (net interest income as a percentage of
average earning assets on a tax equivalent basis) was 4.92% in 2010
down 41 basis points from the 5.33% net interest margin generated in
2009. In the fourth quarter of 2010, net interest margin was 4.57%
compared to 4.77% in the third quarter of 2010 and 5.26% in the fourth
quarter a year ago. "The current low interest rate environment has
helped keep our cost of funds low, and while borrowing is very
affordable for business as well, demand still remains muted," said
Beedle. "Consequently, we have seen a drop in net interest margin over
the course of the year. When interest rates start to move up, we expect
there to be a lagging effect to our margin because many of our loans
have minimum interest rates. As a result, we believe our cost of funds
will rise faster than yields on assets for the short term."

Northrim booked a $2.4 million loan loss provision in the fourth
quarter of 2010, compared to $417,000 in the immediate prior quarter
and $2.2 million the fourth quarter a year ago. "In the third quarter
of 2010 we benefited from a large recovery and fewer loan charge-offs,"
said Schierhorn. For 2010, the provision for loan losses totaled $5.6
million compared to $7.1 million in 2009.

Net interest income after the provision for loan losses was $38.6
million compared to $39.4 million a year ago. In the fourth quarter of
2010, net interest income, after the provision for loan losses, was
$8.5 million compared to $10.5 million in the prior quarter and $9.6
million a year ago.

Total other operating income decreased 5% in 2010 with the increased
gains on the sale of securities partially offsetting the decline in
earnings from Northrim's mortgage affiliate. Other operating income
totaled $12.4 million in 2010 compared to $13.1 million in 2009. In the
fourth quarter, other operating income was $3.4 million compared to
$3.2 million in the third quarter of 2010 and $2.9 million in the
fourth quarter of 2009. Deposit account service charge income declined
12% for the year reflecting legislative changes on the assessment of
overdraft fees for debit card transactions.

Purchased receivables income contributed $445,000 to fourth quarter
revenues, compared to $485,000 in the preceding quarter and $400,000 in
the fourth quarter a year ago. For the year, purchased receivables
income contributed $1.8 million compared to $2.1 million in 2009. "The
slowdown in the economy has reduced the balances of receivables for our
customers, which has decreased the earnings for this product. We
continue to build our customer base and believe our Seattle-based
asset-based lending division will benefit from the emerging economic
recovery in the Puget Sound area," said Beedle.

Income from Northrim Benefits Group, Northrim's employee benefit plan
affiliate, contributed $483,000 to fourth quarter revenues compared to
$457,000 for the fourth quarter of 2009. In 2010, employee benefit plan
income totaled $1.9 million, up from $1.7 million a year ago. "With the
changes in health insurance that are being implemented, we are seeing
more customers looking for counsel on how best to provide health care
benefits to their employees. We believe Northrim Benefits Group is able
to meet this important need for customers and this product offering is
another sound reason our customers turn to us first when they need
financial services," noted Langland. "Our two wealth management
affiliates in which we have an ownership interest, Elliott Cove Capital
and Pacific Wealth Advisors, also contribute to our bottom line and add
value to the overall customer relationships."

Income from Northrim's mortgage affiliate contributed $1.4 million to
2010 revenues, down from the near record level of $2.3 million in 2009.
Fourth quarter mortgage revenues were $722,000, up from $352,000 in the
fourth quarter a year ago. "Historically low mortgage interest rates
generated strong refinancing activity in 2010, which is unlikely to
continue in 2011," said Knudson.

Fourth quarter operating expense was down 6% year-over-year, reflecting
reduced salary and other personnel expenses, insurance expenses, and
net OREO costs. Operating expense for the fourth quarter was up 6% from
the third quarter primarily due to the $422,000 deferred gain on sale
of OREO that was recognized in the third quarter related to one
commercial property that was sold in 2007. Noninterest expense in the
fourth quarter of 2010 was $9.2 million compared to $9.9 million in the
fourth quarter a year ago. Noninterest expense in 2010 was $37.6
million compared to $41.4 million in the like period a year ago.

The effective tax rate for the fourth quarter ending December 31, 2010
was 26%, as compared to 33% in the third quarter ending September 30,
2010 and 24% in the fourth quarter ending December 31, 2009. The
decrease in the tax rate between the third quarter ending September 30,
2010 and the fourth quarter ending December 31, 2010 is the result of
increased tax exempt interest income on investments and tax credits
relative to the level of taxable income for the period.

The efficiency ratio during 2010 improved 300 basis points to 65.96%
from 68.96% a year ago. In the fourth quarter of 2010, the efficiency
ratio was 64.20%, compared to 61.25% in the third quarter of 2010 and
66.85% in the fourth quarter a year ago. The efficiency ratio measures
overhead costs as a percentage of total revenues and is calculated by
dividing noninterest expense, excluding intangible asset amortization
expense, by net interest income and noninterest income.

About Northrim BanCorp

Northrim BanCorp, Inc. is the parent company of Northrim Bank, a
commercial bank that provides personal and business banking services
through locations in Anchorage, Eagle River, Wasilla, and Fairbanks,
Alaska, and an asset based lending division in Washington. The bank
differentiates itself with a "Customer First Service" philosophy.
Affiliated companies include Elliott Cove Capital Management, LLC;
Residential Mortgage, LLC; Northrim Benefits Group, LLC; and Pacific
Wealth Advisors, LLC.

The Northrim BanCorp, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=3818




www.northrim.com




Sources include the State of Alaska Department of Labor and US
Department of Commerce Bureau of Economic Analysis




Income Statement
-------------------------------
(Dollars in thousands, except
per share data) Three Months Ending
-----------------------------------------------
December September Three December One
(Unaudited) 31, 30, Month 31, Year

% %
2010 2010 Change 2009 Change
--------- --------- ------ --------- ------
Interest Income:
Interest and fees on loans $11,043 $11,249 -2% $12,158 -9%
Interest on portfolio
investments 987 963 2% 1,147 -14%
Interest on overnight
investments 59 54 9% 39 51%
--------- --------- ------ --------- ------
Total interest income 12,089 12,266 -1% 13,344 -9%
Interest Expense:
Interest expense on deposits 972 1,161 -16% 1,306 -26%

Interest expense on borrowings 207 209 -1% 201 3%
--------- --------- ------ --------- ------

Total interest expense 1,179 1,370 -14% 1,507 -22%
--------- --------- ------ --------- ------
Net interest income 10,910 10,896 0% 11,837 -8%

Provision for loan losses 2,416 417 479% 2,200 10%
--------- --------- ------ --------- ------
Net interest income after
provision for loan losses 8,494 10,479 -19% 9,637 -12%
Other Operating Income:
Service charges on deposit
accounts 515 659 -22% 714 -28%
Purchased receivable income 445 485 -8% 400 11%
Employee benefit plan income 483 466 4% 457 6%
Electronic banking income 474 449 6% 418 13%
Equity in earnings from
mortgage affiliate 722 570 27% 352 105%
Gain on sale of securities 178 58 207% -- NA

Other income 545 513 6% 575 -5%
--------- --------- ------ --------- ------
Total other operating income 3,362 3,200 5% 2,916 15%
Other Operating Expense:
Salaries and other personnel
expense 5,221 5,394 -3% 5,285 -1%
Occupancy expense 872 1,016 -14% 898 -3%
Insurance expense 420 502 -16% 449 -6%
Marketing expense 459 445 3% 366 25%
Professional and outside
services 412 338 22% 370 11%
Equipment expense 295 304 -3% 331 -11%
Impairment on purchased
receivables, net (2) (3) -33% -- NA
Intangible asset amortization
expense 70 76 -8% 76 -8%
OREO expense, net rental
income and gains on sale (238) (969) -75% 395 -160%

Other expense 1,723 1,607 7% 1,692 2%
--------- --------- ------ --------- ------
Total other operating
expense 9,232 8,710 6% 9,862 -6%
Income before provision for
income taxes 2,624 4,969 -47% 2,691 -2%
--------- --------- ------ --------- ------

Provision for income taxes 675 1,629 -59% 649 4%
--------- --------- ------ --------- ------

Net income 1,949 3,340 -42% 2,042 -5%
--------- --------- ------ --------- ------
Less: Net income
attributable to the
noncontrolling interest 101 162 -38% 96 5%
--------- --------- ------ --------- ------
Net income attributable to
Northrim BanCorp $1,848 $3,178 -42% $1,946 -5%
--------- --------- ------ --------- ------

Basic EPS $0.29 $0.50 -42% $0.31 -6%
Diluted EPS $0.28 $0.49 -43% $0.30 -7%
Average basic shares 6,419,561 6,401,069 0% 6,367,520 1%
Average diluted shares 6,501,873 6,479,813 0% 6,449,876 1%







Income Statement
-------------------------------
(Dollars in thousands, except
per share data) Year Ended December 31,
----------------------------
One
(Unaudited) Year

%
2010 2009 Change
--------- --------- ------
Interest Income:
Interest and fees on loans $44,926 $48,830 -8%
Interest on portfolio
investments 4,594 4,499 2%
Interest on overnight
investments 178 161 11%
--------- --------- ------
Total interest income 49,698 53,490 -7%
Interest Expense:
Interest expense on deposits 4,673 5,801 -19%

Interest expense on borrowings 812 1,268 -36%
--------- --------- ------

Total interest expense 5,485 7,069 -22%
--------- --------- ------
Net interest income 44,213 46,421 -5%

Provision for loan losses 5,583 7,066 -21%
--------- --------- ------
Net interest income after
provision for loan losses 38,630 39,355 -2%
Other Operating Income:
Service charges on deposit
accounts 2,636 2,983 -12%
Purchased receivable income 1,839 2,106 -13%
Employee benefit plan income 1,900 1,739 9%
Electronic banking Income 1,758 1,542 14%
Equity in earnings from
mortgage affiliate 1,401 2,349 -40%
Gain on sale of securities 649 220 195%

Other income 2,194 2,145 2%
--------- --------- ------
Total other operating income 12,377 13,084 -5%
Other Operating Expense:
Occupancy expense 3,704 3,687 0%
Insurance expense 1,902 2,715 -30%
Marketing expense 1,782 1,317 35%
Professional and outside
services 1,315 1,798 -27%
Equipment expense 1,116 1,218 -8%
Impairment on purchased
receivables, net 402 -- NA
Intangible asset amortization
expense 299 323 -7%
OREO expense, net rental
income and gains on sale (1,145) 1,119 -202%
Prepayment penalty on FHLB
advance repayment -- 718 -100%
--------- --------- ------
Total other operating
expense 37,624 41,357 -9%
Income before provision for
income taxes 13,383 11,082 21%

Provision for income taxes 3,918 2,967 32%
--------- --------- ------

Net income 9,465 8,115 17%
--------- --------- ------
Less: Net income
attributable to the
noncontrolling interest 399 388 3%
--------- --------- ------
Net income attributable to
Northrim BanCorp $9,066 $7,727 17%
--------- --------- ------

Basic EPS $1.42 $1.22 16%
Diluted EPS $1.40 $1.20 17%
Average diluted shares 6,480,905 6,417,057 1%







Balance Sheet
------------------------
(Dollars in thousands, except per
share data)
December September Three December One
(Unaudited) 31, 30, Month 31, Year

% %
2010 2010 Change 2009 Change
---------- ---------- ------ ---------- ------

Assets:
Cash and due from banks $15,953 $22,367 -29% $19,395 -18%
Overnight investments 50,080 60,939 -18% 47,326 6%
Portfolio investments 222,138 215,037 3% 187,447 19%

Loans:
Commercial loans 256,842 237,667 8% 248,195 3%
Commercial real
estate 312,128 305,808 2% 301,816 3%
Construction loans 62,620 50,979 23% 62,573 0%
Consumer loans 43,188 43,882 -2% 45,168 -4%
Other loans 204 90 127% 85 140%

Unearned loan fees (3,170) (2,951) 7% (2,798) 13%
---------- ---------- ------ ---------- ------
Total portfolio
loans 671,812 635,475 6% 655,039 3%

Loans held for sale 5,558 20,082 -72% -- NA
---------- ---------- ------ ---------- ------
Total loans 677,370 655,557 3% 655,039 3%
Allowance for loan
losses (14,406) (14,711) -2% (13,108) 10%
---------- ---------- ------ ---------- ------
Net loans 662,964 640,846 3% 641,931 3%
Purchased receivables,
net 16,531 8,654 91% 7,261 128%
Premises and equipment,
net 29,048 28,769 1% 28,523 2%
Goodwill and intangible
assets 8,697 8,767 -1% 8,996 -3%
Other real estate owned 10,355 11,019 -6% 17,355 -40%

Other assets 38,763 41,536 -7% 44,795 -13%
---------- ---------- ------ ---------- ------

Total assets $1,054,529 $1,037,934 2% $1,003,029 5%
========== ========== ====== ========== ======

Liabilities:
Demand deposits $289,061 $281,972 3% $276,532 5%
Interest-bearing demand 138,072 126,056 10% 134,899 2%
Savings deposits 77,411 77,971 -1% 66,647 16%
Alaska CDs 100,315 111,526 -10% 104,840 -4%
Money market deposits 149,104 132,349 13% 125,339 19%

Time deposits 138,173 148,854 -7% 144,851 -5%
---------- ---------- ------ ---------- ------
Total deposits 892,136 878,728 2% 853,108 5%
Securities sold under
repurchase agreements 12,874 9,996 29% 6,733 91%
Other borrowings 5,386 5,506 -2% 5,587 -4%
Junior subordinated
debentures 18,558 18,558 0% 18,558 0%

Other liabilities 8,453 8,290 2% 8,023 5%
---------- ---------- ------ ---------- ------

Total liabilities 937,407 921,078 892,009
---------- ---------- 2% ---------- 5%

Shareholders' Equity:
Northrim BanCorp
shareholders' equity 117,072 116,814 0% 110,972 5%
---------- ---------- ------ ---------- ------

Noncontrolling interest 50 42 19% 48 4%
---------- ---------- ------ ---------- ------
Total shareholders'
equity 117,122 116,856 0% 111,020 5%
---------- ---------- ------ ---------- ------
Total liabilities and
shareholders' equity $1,054,529 $1,037,934 2% $1,003,029 5%
========== ========== ====== ========== ======







Financial Ratios and Other Data
--------------------------------------
(Dollars in thousands, except per share data)
December September December
(Unaudited) 31, 30, 31,

2010 2010 2009
--------- --------- ---------

Asset Quality:
Nonaccrual loans $11,414 $13,688 $12,738
Loans 90 days past due -- 200 1,000

Restructured loans -- -- 3,754
--------- --------- ---------
Total nonperforming loans 11,414 13,888 17,492
Other real estate owned 10,355 11,019 17,355

Repossessed assets 48 105 --
--------- --------- ---------

Total nonperforming assets $21,817 $25,012 $34,847
--------- --------- ---------
Nonperforming loans / portfolio loans 1.70% 2.19% 2.67%
Nonperforming assets / total assets 2.07% 2.41% 3.47%
Allowance for loan losses / portfolio
loans 2.14% 2.31% 2.00%
Allowance / nonperforming loans 126.21% 105.93% 74.94%
Gross loan charge-offs for the
quarter $3,223 $793 $2,728
Gross loan recoveries for the quarter $501 $661 $184
Net loan charge-offs for the quarter $2,722 $132 $2,544
Net loan charge-offs year-to-date $4,285 $1,563 $6,858
Net loan charge-offs for the quarter
/ average loans, quarter 0.41% 0.02% 0.38%
Net loan charge-offs year-to-date /
average loans, annualized 0.66% 0.32% 1.00%

Capital Data (At quarter end):
Book value per share $18.21 $18.22 $17.42
Tangible book value per share $16.86 $16.86 $16.01
Tangible Common Equity/Tangible
Assets 1 10.36% 10.50% 10.26%
Tier 1 Capital / Risk Adjusted Assets 14.08% 14.46% 13.98%
Total Capital / Risk Adjusted Assets 15.33% 15.72% 15.24%
Tier 1 Capital / Average Assets 12.15% 12.48% 12.13%
Shares outstanding 6,427,237 6,409,799 6,371,455
Unrealized gain on AFS securities,
net of income taxes $648 $1,476 $1,341

Profitability Ratios (For the quarter):
Net interest margin (tax equivalent)2 4.57% 4.77% 5.26%
Efficiency ratio3 64.20% 61.25% 66.85%
Return on average assets 0.69% 1.24% 0.77%
Return on average equity 6.20% 10.89% 6.90%

Profitability Ratios (Year-to-date):
Net interest margin (tax equivalent)2 4.92% 5.05% 5.33%
Efficiency ratio 3 65.96% 68.01% 68.96%
Return on average assets 0.90% 0.97% 0.79%
Return on average equity 7.87% 8.45% 7.08%

1 Tangible common equity to tangible assets is a non-GAAP ratio that
represents total equity less goodwill and intangible assets divided by
total assets less goodwill and intangible assets. This ratio has
received more attention over the past several years from stock
analysts and regulators. The GAAP measure of comon equity to assets
would be total assets to total equity. Total equity to total assets
was 11.11% at December 31, 2010 as compared to 11.26% at September
30, 2010 and 11.07% at December 31, 2009.
2 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.
3 The efficiency ratio is a non-GAAP ratio that is calculated by
dividing non-interest expense, exclusive of intangible asset
amortization, by the sum of net interest income and non-interest
income.







Average Balances
-------------------------
(Dollars in thousands, except per
share data)
December September Three December One
(Unaudited) 31, 30, Month 31, Year

% %
2010 2010 Change 2009 Change
---------- ---------- ------ -------- ------
Average Quarter Balances
Total loans $657,029 $645,126 2% $675,166 -3%
Total earning assets 953,658 913,082 4% 898,635 6%
Total assets 1,055,902 1,018,867 4% 998,313 6%

Noninterest-bearing
deposits 286,722 269,721 6% 266,135 8%
Interest-bearing
deposits 605,335 591,319 2% 580,962 4%
Total deposits 892,057 861,040 4% 847,097 5%

Shareholders' equity 118,340 115,813 2% 111,886 6%

Average Year-to-date
Balances
Loans $646,677 $643,189 1% $688,347 -6%
Total earning assets 904,168 887,490 2% 876,101 3%
Total assets 1,010,566 995,287 2% 981,679 3%

Noninterest-bearing
deposits 264,853 257,483 3% 241,547 10%
Interest-bearing
deposits 588,341 582,614 1% 586,305 0%
Total deposits 853,194 840,097 2% 827,852 3%

Shareholders' equity 115,239 114,194 1% 109,097 6%



FORWARD LOOKING STATEMENTS

This release may contain "forward-looking statements" that are subject
to risks and uncertainties. Readers should not place undue reliance on
forward-looking statements, which reflect management's views only as of
the date hereof. All statements, other than statements of historical
fact, regarding our financial position, business strategy and
management's plans and objectives for future operations are
forward-looking statements. When used in this report, the words
"anticipate," "believe," "estimate," "expect," and "intend" and words
or phrases of similar meaning, as they relate to Northrim or
management, are intended to help identify forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. Although we believe that management's expectations as reflected
in forward-looking statements are reasonable, we cannot assure readers
that those expectations will prove to be correct. Forward-looking
statements are subject to various risks and uncertainties that may
cause our actual results to differ materially and adversely from our
expectations as indicated in the forward-looking statements. These
risks and uncertainties include our ability to maintain or expand our
market share or net interest margins, and to implement our marketing
and growth strategies. Further, actual results may be affected by our
ability to compete on price and other factors with other financial
institutions; customer acceptance of new products and services; the
regulatory environment in which we operate; and general trends in the
local, regional and national banking industry and economy as those
factors relate to our cost of funds and return on assets. In addition,
there are risks inherent in the banking industry relating to
collectability of loans and changes in interest rates. Many of these
risks, as well as other risks that may have a material adverse impact
on our operations and business, are identified in our other filings
with the SEC. However, you should be aware that these factors are not
an exhaustive list, and you should not assume these are the only
factors that may cause our actual results to differ from our
expectations.

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