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Northrim BanCorp Profits Increased 63% to $3.2 Million, or $0.49 Per Share, in 3Q10


ANCHORAGE, Alaska, Oct. 26, 2010 (GLOBE NEWSWIRE) -- Northrim BanCorp,
Inc. (Nasdaq:NRIM) ("Northrim"), the bank holding company for Northrim
Bank, today reported net income in the third quarter increased 63% to
$3.2 million, or $0.49 per diluted share, boosted by $1.2 million in
gains on sale of other real estate owned and a $1 million reduction in
the provision for loan losses. In the second quarter of 2010, net
income was $2.1 million, or $0.33 per diluted share, and in the third
quarter a year ago it was $1.9 million, or $0.30 per diluted share. For
the first nine months of 2010, profits grew 25% to $7.2 million, or
$1.11 per diluted share, from $5.8 million, or $0.90 per diluted share,
in the like period a year ago.

Financial Highlights (at or for the quarter ended September 30, 2010,
compared to June 30, 2010, and September 30, 2009)


-- Northrim continued to maintain strong capital ratios with Tier 1
Capital/risk adjusted assets of 14.46% as compared to 14.77% in the
immediate prior quarter and 13.96% a year ago. Because the company
elected not to participate in the Capital Purchase Program sponsored by
the U. S. Treasury in 2008, these ratios do not reflect any government
investment in Northrim.
-- Northrim's tangible common equity to tangible assets at quarter end was
10.50%, up from 10.32% a year earlier.
-- Nonperforming assets declined in the quarter to $25.0 million or 2.41%
of total assets, compared to $28.4 million, or 2.82% of total assets at
the end of the second quarter 2010 and $39.0 million or 3.95% at
September 30, 2009.
-- Book value was $18.22 per share and tangible book value was $16.86 per
share, up from $17.28 and $15.85 respectively a year earlier.
-- The allowance for loan losses continued to increase, now totaling 2.31%
of total portfolio loans at September 30, 2010, compared to 2.00% at
September 30, 2009. The allowance for loan losses to nonperforming loans
also increased to 105.93% from 46.62% a year ago.
-- Other operating income, which includes revenues from service charges,
electronic banking, and financial services affiliates, contributed 29%
of total third quarter revenues and 25% of year-to-date revenues.
-- The cash dividend paid on September 17, 2010, rose 20% to $0.12 per
diluted share from $0.10 per diluted share paid in the prior quarter.




"The improvement in our credit quality has helped us to increase our
earnings this year," said Marc Langland, Chairman, President and CEO.
"In addition, we are generating good revenues from our financial
services affiliates, where we provide mortgages, wealth management,
employee benefits and receivables financing in both the Alaska and the
greater Seattle market. These affiliated businesses help us to
strengthen our relationship with our customers."

Alaska Economic Update

According to the Department of Labor, "Alaska's seasonally adjusted
unemployment rate for August was 7.7%, unchanged from July. The
comparable national jobless rate for August was 9.6%, up slightly from
9.5% in July. One year ago, the national unemployment rate was 9.7%
compared to 8.2% for Alaska. August was the 22nd consecutive month that
Alaska's unemployment rate was lower than the nation's." The average
monthly payroll job count in Alaska has increased 1% to 325,875 from
322,550 through August of 2010 when compared to the first eight months
of 2009.

According to the Bureau of Economic Analysis, personal income in Alaska
rose 3.5% between the second quarter of 2009 and 2010. This is compared
to 2.2% growth over the same period in the US. Personal income in
Alaska has grown for six consecutive quarters between the first quarter
of 2009 and the second quarter of 2010.

The retail sector is currently benefitting from the seasonal boost in
consumption generated from the Permanent Fund Dividend, which paid
$1,281 to every resident early in October.

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 our 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 3% to $1.04 billion at September 30, 2010,
from $1.01 billion at June 30, 2010, and 5% from $986 million at
September 30, 2009, with an increase in overnight and portfolio
investments offsetting continuing maturities in the construction loan
portfolio and lower levels of commercial loans. Total portfolio loans
decreased 6% in the third quarter to $635 million from $674 million a
year ago. Loans held for sale increased to $20.1 million, reflecting
the rebound in mortgage refinancing this quarter. These loans were
purchased from our mortgage affiliate and are held until their final
sale in the secondary market.

The loan portfolio remains diversified with commercial loans accounting
for 37% of the portfolio and commercial real estate accounting for 48%
of the portfolio at September 30, 2010. Construction and land
development loans, which accounted for 8% of the loan portfolio at
September 30, 2010, are down 38% to $51.0 million from $82.2 million a
year ago, reflecting the maturing of projects funded in past years, the
reduction in new project starts in the past two years, and continuing
successful collection efforts.

Nonperforming assets at September 30, 2010 declined by $14.0 million
year-over-year and $3.4 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 $22.2 million at September
30, 2010, compared to $25.1 million at June 30, 2010, and $52.6 million
in the third quarter a year ago.
-- Nonperforming loans totaled $13.9 million, or 2.19% of total portfolio
loans at September 30, 2010, compared to $28.9 million, or 4.28% of
total portfolio loans a year ago.
-- The $4.8 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 2%. Of the 68
original units, 35 condos have been sold and 22 are rented, providing
positive year-to-date cash flow for the project.
-- Sales of OREO continued during the third quarter, with 26 properties
sold for an aggregate of $3.3 million, generating a $332,000 net gain
over current carrying value. The Company also recognized $830,000 in
deferred gains on sales of OREO property that occurred in previous
periods and now meet the accounting requirements for gain recognition.
The deferred gains recognized in the current period included $422,000
related to one commercial property that was sold in 2007, and the
remainder of these gains were from the sale of ten condominiums and two
lots sold in late 2009 and throughout the first half of 2010. At
September 30, 2010, the company had $194,000 in remaining deferred gains
on sale of OREO property.
-- Year-to-date OREO sales generated $9.2 million in gross proceeds,
$613,000 in gain on sale of 62 properties total. Year-to-date gain on
the sale of OREO totaled $1.4 million including recognition of the
$830,000 in deferred gains discussed above.
-- Net charge-offs in the third quarter of 2010, totaled $132,000, or 0.02%
of average loans, reflecting the effects of $661,000 in recoveries,
compared to net charge-offs of $1.1 million, or 0.16% of average loans
during the third quarter of 2009. Year-to-date net charge-offs totaled
$1.6 million, or 0.32%, annualized, of average loans, down from $4.3
million, or 0.83%, annualized, of average loans in the first nine months
of 2009.
-- The coverage ratio of the allowance to nonperforming loans increased to
105.93% at September 30, 2010, compared to 46.62% in the third quarter a
year ago. This increase is primarily due to the decrease in
nonperforming loans to $13.9 million at September 30, 2010 from $28.9
million at September 30, 2009.




"We are pleased with the pace of our OREO sales and with the stability
of our real estate markets, which allowed us to book gains this
quarter," said Joe Beedle, President of Northrim Bank.

The allowance for loan losses was $14.7 million, or 2.31% of portfolio
loans at the end of the third quarter of 2010, compared to $14.4
million, or 2.30% of total loans at June 30, 2010, and $13.5 million,
or 2.00% of total loans a year ago.

The investment portfolio increased 39% to $215.0 million at the end of
the third quarter, from $154.3 million a year ago. At September 30,
2010, the portfolio was comprised of 71% U.S. Agency securities, 11%
securities of Alaskan municipalities, utilities, or state agencies, 17%
corporate bonds, 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. "We have
instituted an outreach program to leverage this deposit growth and add
new loan relationships."

Total deposits grew 3% in the quarter and 5% year-over-year to $878.7
million at September 30, 2010, compared to $851.5 million at June 30,
2010 and $837.1 million a year ago. "All of our deposits are in-market
and time deposits continue to be heavily weighted to shorter-term
maturities," said Chris Knudson, Chief Operating Officer.
Noninterest-bearing demand deposits at September 30, 2010, increased 5%
from a year ago and account for 32% of total deposits. Interest-bearing
demand deposits also increased 9% year-over-year and account for 14% of
total deposits. The Alaska CD (a flexible certificate of deposit
program) grew 3% and accounts for 13% of total deposits. Savings
account balances were up 24% from a year ago and represent 9% of total
deposits. Money market balances were up 7% and account for 15% of all
deposits and time deposit balances fell 7% year-over year and now
account for 17% of total deposits.

Shareholders' equity increased 6% to $116.9 million, or $18.22 book
value per share, at quarter end, compared to $109.9 million, or $17.28
book value per share, at September 30, 2009. Tangible book value per
share was $16.86 up from $15.85 a year earlier. Northrim remains well
capitalized with Tier 1 Capital to Risk Adjusted Assets of 14.46% at
September 30, 2010.

Review of Operations

Including increased contributions from Northrim's mortgage affiliate
and gains from sales of OREO, revenue (net interest income plus other
operating income) grew to $15.4 million up from $14.7 million in the
preceding quarter and $15.1 million in the third quarter of 2009.
Year-to-date revenue totaled $44.2 million compared to $45.2 million in
the first nine months of 2009.

Third quarter 2010 net interest income, before the provision for loan
losses, was $10.9 million compared to $11.1 million in the preceding
quarter and $11.7 million in the third quarter of 2009. In the first
nine months of 2010, net interest income before provision for loan
losses was $33.3 million compared to $34.6 million in the first nine
months of 2009.

Northrim's net interest margin (net interest income as a percentage of
average earning assets on a tax equivalent basis) was 4.77% in the
third quarter of 2010, compared to 5.06% in the second quarter of 2010
and 5.38% in the third quarter a year ago. For the first nine months of
2010, Northrim's net interest margin was 5.05% compared to 5.36% in the
like period a year ago. " The combination of lower rates on our loans
and securities along with lower loan volumes has led to a lower
margin," said Beedle. "As a result of these factors we expect pressures
on our margin to continue for the next few quarters."

Northrim added $417,000 to the loan loss provision in the third quarter
of 2010, compared to $1.4 million in both the immediate prior quarter
and the third quarter a year ago. Year-to-date, the provision for loan
losses totaled $3.2 million compared to $4.9 million in the first nine
months of 2009. In the third quarter of 2010, net interest income,
after the provision for loan losses, was $10.5 million compared to $9.7
million in the prior quarter and $10.4 million a year ago. For the
first nine months of 2010, net interest income after the provision for
loan losses was $30.1 million compared to $29.7 million in the like
period a year ago.

Total other operating income increased 24% for the third quarter of
2010 from the prior quarter and grew 33% year-over-year reflecting
strong contributions from the company's mortgage affiliate and
increased gains on the sale of OREO. Other operating income totaled
$4.5 million in the third quarter of 2010 compared to $3.6 million in
the second quarter of 2010 and $3.4 million in the third quarter of
2009. For the first nine months of 2010, other operating income totaled
$10.9 million compared to $10.6 million for the first nine months of
2009. Deposit account service charge income declined 14% in the linked
quarter to $659,000 down from $762,000 in the preceding quarter and
compared to $791,000 in the third quarter of 2009, reflecting
legislative changes on the assessment of overdraft fees for debit card
transactions. For the first nine months of the year, service charges on
deposit accounts were down 7% to $2.1 million from $2.3 million a year
ago.

Purchased receivable income contributed $485,000 to third quarter
revenues, compared to $595,000 in the preceding quarter and $474,000 in
the year ago quarter. Year-to-date, purchased receivables income
contributed $1.4 million compared to $1.7 million for the first nine
months of 2009. "Purchase receivables are a good source of revenues for
us, allowing us to offer local financing options for small businesses
in the Puget Sound area," said Beedle.

Employee benefit plan income contributed $466,000 to third quarter
revenues compared to $469,000 for the third quarter of 2009.
Year-to-date employee benefit plan income totaled $1.4 million, up from
$1.3 million a year ago. "Health care benefits are important to our
small business customers and this product offering is a good source of
revenues and a competitive differentiator for us in our market," noted
Langland. "We also benefit from the two wealth management affiliates in
which we have an ownership interest, Elliott Cove Capital and Pacific
Wealth Advisors. Both of these firms provide additional financial
choices to our customers while adding value to the overall customer
relationship."

Income from Northrim's mortgage affiliate contributed $570,000 to third
quarter revenues, up from $385,000 in the third quarter a year ago.
"Continuing declines in mortgage rates are stimulating another
refinance wave in the mortgage market," said Knudson.

Third quarter operating expense was down 2% from the second quarter and
down 8% year-over-year, reflecting reduced salary and other personnel
expenses, insurance expenses, and OREO management costs. In addition,
the third quarter of 2009 included a one-time $718,000 prepayment
penalty on Federal Home Loan Bank advances. Noninterest expense in the
third quarter of 2010 was $10.0 million compared to $10.9 million in
the third quarter a year ago. Noninterest expense in the first nine
months of 2010 was $30.3 million compared to $31.9 million in the like
period a year ago.

The efficiency ratio during the third quarter of 2010 was 64.47%,
compared to 68.63% in the second quarter of 2010 and 71.42% in the
third quarter a year ago. The efficiency ratio, calculated by dividing
noninterest expense, excluding intangible asset amortization expense,
by net interest income and noninterest income, measures overhead costs
as a percentage of total revenues.

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
-----------------------------------------------

Three
Month One
September June 30, % September Year %
(Unaudited) 30, 2010 2010 Change 30, 2009 Change
--------- --------- ------ --------- ------
Interest Income:
Interest and fees on loans $11,249 $11,212 0% $12,218 -8%
Interest on portfolio
investments 963 1,315 -27% 1,155 -17%
Interest on overnight
investments 54 42 29% 31 74%
--------- --------- ------ --------- ------
Total interest income 12,266 12,569 -2% 13,404 -8%
Interest Expense:
Interest expense on deposits 1,161 1,265 -8% 1,351 -14%
Interest expense on
borrowings 209 201 4% 311 -33%
--------- --------- ------ --------- ------

Total interest expense 1,370 1,466 -7% 1,662 -18%
--------- --------- ------ --------- ------
Net interest income 10,896 11,103 -2% 11,742 -7%


Provision for loan losses 417 1,375 -70% 1,374 -70%
--------- --------- ------ --------- ------
Net interest income after
provision for loan losses 10,479 9,728 8% 10,368 1%

Other Operating Income:
Service charges on deposit
accounts 659 762 -14% 791 -17%
Purchased receivable income 485 595 -18% 474 2%
Employee benefit plan income 466 530 -12% 469 -1%
Electronic banking income 449 435 3% 463 -3%
OREO gain on sale and rental
income 1,277 383 233% 206 520%
Equity in earnings from
mortgage affiliate 570 182 213% 385 48%
Gain on sale of securities 58 132 -56% 24 142%

Other income 513 586 -12% 553 -7%
--------- --------- ------ --------- ------
Total other operating
income 4,477 3,605 24% 3,365 33%

Other Operating Expense:
Salaries and other personnel
expense 5,394 5,402 0% 5,730 -6%
Occupancy expense 1,016 897 13% 977 4%
Marketing expense 445 439 1% 317 40%
Insurance expense 502 422 19% 502 0%
OREO expense, including any
impairment 308 343 -10% 309 0%
Professional and outside
services 338 323 5% 374 -10%
Equipment expense 304 244 25% 286 6%
Purchased receivable (gain)
losses (3) 406 -101% -- NA
Intangible asset amortization
expense 76 77 -1% 82 -7%
Prepayment penalty on FHLB
advance repayments -- -- NA 718 -100%

Other expense 1,607 1,618 -1% 1,577 2%
--------- --------- ------ --------- ------
Total other operating
expense 9,987 10,171 -2% 10,872 -8%

Income before provision for
income taxes 4,969 3,162 57% 2,861 74%
--------- --------- ------ --------- ------

Provision for income taxes 1,629 912 79% 810 101%
--------- --------- ------ --------- ------

Net income 3,340 2,250 48% 2,051 63%
--------- --------- ------ --------- ------
Less: Net income
attributable to the
noncontrolling interest 162 110 47% 102 59%
--------- --------- ------ --------- ------
Net income attributable to

Northrim BanCorp $3,178 $2,140 49% $1,949 63%
--------- --------- ------ --------- ------


Basic EPS $0.50 $0.34 47% $0.31 61%
Diluted EPS $0.49 $0.33 48% $0.30 63%
Average basic shares 6,401,069 6,386,925 0% 6,348,519 1%
Average diluted shares 6,479,813 6,473,622 0% 6,422,262 1%








Income Statement

(Dollars in thousands, except Nine Months Ended September
per share data) 30,
----------------------------

One
Year
%
(Unaudited) 2010 2009 Change
--------- --------- ------
Interest Income:
Interest and fees on loans $33,883 $36,672 -8%
Interest on portfolio
investments 3,607 3,352 8%
Interest on overnight
investments 119 122 -2%
--------- --------- ------
Total interest income 37,609 40,146 -6%
Interest Expense:
Interest expense on deposits 3,701 4,495 -18%

Interest expense on borrowings 605 1,067 -43%
--------- --------- ------

Total interest expense 4,306 5,562 -23%
--------- --------- ------
Net interest income 33,303 34,584 -4%


Provision for loan losses 3,167 4,866 -35%
--------- --------- ------
Net interest income after
provision for loan losses 30,136 29,718 1%

Other Operating Income:
Service charges on deposit
accounts 2,121 2,269 -7%
Employee benefit plan income 1,417 1,282 11%
Purchased receivable income 1,394 1,706 -18%
Electronic banking Income 1,284 1,124 14%
OREO gain on sale and rental
income 1,930 446 333%
Gain on sale of securities 471 220 114%
Equity in earnings from
mortgage affiliate 679 1,997 -66%

Other income 1,649 1,570 5%
--------- --------- ------
Total other operating income 10,945 10,614 3%

Other Operating Expense:
Salaries and other personnel
expense 16,416 16,889 -3%
Occupancy, net 2,832 2,789 2%
Insurance expense 1,482 2,266 -35%
Marketing expense 1,323 951 39%
OREO expense, including any
impairment 1,023 1,170 -13%
Professional and outside
services 903 1,061 -15%
Equipment expense 821 887 -7%
Intangible asset amortization
expense 229 247 -7%
Purchased receivable (gain)
losses 404 (16) 2625%
Prepayment penalty on FHLB
advance repayment -- 718 -100%

Other expense 4,889 4,979 -2%
--------- --------- ------
Total other operating
expense 30,322 31,941 -5%

Income before provision for
income taxes 10,759 8,391 28%
--------- --------- ------

Provision for income taxes 3,243 2,318 40%
--------- --------- ------

Net income 7,516 6,073 24%
--------- --------- ------
Less: Net income
attributable to the
noncontrolling interest 298 292 2%
--------- --------- ------
Net income attributable to
Northrim BanCorp $7,218 $5,781 25%
--------- --------- ------

Basic EPS $1.13 $0.91 24%
Diluted EPS $1.11 $0.90 23%
Average basic shares 6,391,252 6,388,757 0%
Average diluted shares 6,473,915 6,406,117 1%








Balance Sheet
(Dollars in thousands,
except per share data)

Three
Month One
September June 30, % September Year %
(Unaudited) 30, 2010 2010 Change 30, 2009 Change
---------- ---------- ------ --------- ------

Assets:
Cash and due from banks $22,367 $22,316 0% $24,979 -10%
Overnight investments 60,939 82,749 -26% 51,120 19%
Portfolio investments 215,037 177,050 21% 154,272 39%

Loans:
Commercial loans 237,667 244,291 -3% 249,171 -5%
Commercial real
estate 305,808 290,122 5% 298,828 2%
Construction loans 50,979 49,122 4% 82,160 -38%
Consumer loans 43,882 47,202 -7% 46,047 -5%
Other loans 90 134 -33% 691 -87%

Unearned loan fees (2,951) (2,498) 18% (2,706) 9%
---------- ---------- ------ --------- ------
Total portfolio
loans 635,475 628,373 1% 674,191 -6%

Loans held for sale 20,082 8,210 145% -- NA
---------- ---------- ------ --------- ------
Total loans 655,557 636,583 3% 674,191 -3%
Allowance for loan
losses (14,711) (14,427) 2% (13,452) 9%
---------- ---------- ------ --------- ------
Net loans 640,846 622,156 3% 660,739 -3%
Purchased receivables,
net 8,654 10,754 -20% 8,202 6%
Premises and equipment,
net 28,769 27,932 3% 28,889 0%
Goodwill and intangible
assets 8,767 8,843 -1% 9,072 -3%
Other real estate owned 11,019 12,973 -15% 10,118 9%

Other assets 41,536 42,391 -2% 38,301 8%
---------- ---------- ------ --------- ------

Total assets $1,037,934 $1,007,164 3% $985,692 5%
========== ========== ====== ========= ======

Liabilities:
Demand deposits $281,972 $272,743 3% $267,291 5%
Interest-bearing demand 126,056 120,826 4% 115,337 9%
Savings deposits 77,971 71,167 10% 62,761 24%
Alaska CDs 111,526 113,692 -2% 108,057 3%
Money market deposits 132,349 126,841 4% 123,239 7%

Time deposits 148,854 146,216 2% 160,423 -7%
---------- ---------- ------ --------- ------
Total deposits 878,728 851,485 3% 837,108 5%
Securities sold under
repurchase agreements 9,996 8,871 13% 5,090 96%
Other borrowings 5,506 5,532 0% 5,649 -3%
Junior subordinated
debentures 18,558 18,558 0% 18,558 0%

Other liabilities 8,290 8,694 -5% 9,356 -11%
---------- ---------- ------ --------- ------
Total liabilities 921,078 893,140 3% 875,761 5%

Shareholders' Equity:
Northrim BanCorp
shareholders' equity 116,814 113,981 2% 109,900 6%
---------- ---------- ------ --------- ------

Noncontrolling interest 42 43 -2% 31 35%
---------- ---------- ------ --------- ------
Total shareholders'
equity 116,856 114,024 2% 109,931 6%
---------- ---------- ------ --------- ------
Total liabilities and
shareholders' equity $1,037,934 $1,007,164 3% $985,692 5%
========== ========== ====== ========= ======





Financial Ratios and Other Data
(Dollars in thousands, except per
share data)

September June 30, September
(Unaudited) 30, 2010 2010 30, 2009
--------- --------- ---------
Asset Quality:
Nonaccrual loans $13,688 $14,413 $22,432
Loans 90 days past due 200 1,000 2,625

Restructured loans -- -- 3,800
--------- --------- ---------
Total nonperforming loans 13,888 15,413 28,857
Other real estate owned 11,019 12,973 10,118

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

Total nonperforming assets $25,012 $28,386 $38,975
--------- --------- ---------
Nonperforming loans / portfolio
loans 2.19% 2.45% 4.28%
Nonperforming assets / assets 2.41% 2.82% 3.95%
Allowance for loan losses /
portfolio loans 2.31% 2.30% 2.00%
Allowance / nonperforming loans 105.93% 93.60% 46.62%
Gross loan charge-offs for the
quarter $793 $1,136 $1,522
Gross loan recoveries for the
quarter $661 $142 $413
Net loan charge-offs for the
quarter $132 $994 $1,109
Net loan charge-offs year-to-date $1,563 $1,431 $4,314
Net loan charge-offs for the
quarter / average loans, quarter 0.02% 0.16% 0.16%
Net loan charge-offs year-to-date
/ average loans, annualized 0.32% 0.45% 0.83%

Capital Data (At quarter end):
Book value per share $18.22 $17.85 $17.28
Tangible book value per share $16.86 $16.46 $15.85
Tangible Common Equity/Tangible
Assets 1 10.50% 10.53% 10.32%
Tier 1 Capital / Risk Adjusted
Assets 14.46% 14.77% 13.96%
Total Capital / Risk Adjusted
Assets 15.72% 16.02% 15.21%
Tier 1 Capital / Average Assets 12.48% 12.52% 12.29%
Shares outstanding 6,409,799 6,386,925 6,359,650
Unrealized gain on AFS
securities, net of income taxes $1,476 $1,242 $1,727

Profitability Ratios (For the
quarter):
Net interest margin (tax
equivalent)2 4.77% 5.06% 5.38%
Efficiency ratio3 64.47% 68.63% 71.42%
Return on average assets 1.24% 0.86% 0.79%
Return on average equity 10.89% 7.52% 7.05%

Profitability Ratios (Year-to-date):
Net interest margin (tax
equivalent)2 5.05% 5.20% 5.36%
Efficiency ratio 3 68.01% 69.89% 70.12%
Return on average assets 0.97% 0.83% 0.79%
Return on average equity 8.45% 7.19% 7.15%

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 assets to equity would
be total assets to total equity. Total equity to total assets was
11.26% at September 30, 2010 as compared to 11.32% at June 30, 2010
and 11.15% at September 30, 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)
(Unaudited)

Three One
September June 30, Month September Year
30, % 30, %
2010 2010 Change 2009 Change
---------- -------- ------ --------- ------

Average Quarter Balances
Total loans $645,126 $635,810 1% $674,872 -4%
Total earning assets 913,082 885,059 3% 868,459 5%
Total assets 1,018,867 993,460 3% 972,837 5%

Noninterest-bearing
deposits 269,721 259,799 4% 247,647 9%
Interest-bearing
deposits 591,319 578,875 2% 568,754 4%
Total deposits 861,040 838,674 3% 816,401 5%

Shareholders' equity 115,813 114,143 1% 109,695 6%


Average Year-to-date
Balances - unaudited
Loans $643,189 $642,204 0% $692,788 -7%
Total earning assets 887,490 874,482 1% 868,507 2%
Total assets 995,287 983,302 1% 976,073 2%

Noninterest-bearing
deposits 257,483 251,262 2% 233,261 10%
Interest-bearing
deposits 582,614 578,189 1% 588,105 -1%
Total deposits 840,097 829,451 1% 821,366 2%

Shareholders' equity 114,194 113,371 1% 108,157 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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