R E P O R T T O S H A R E H O L D E R S | 2006
Table of Contents
Message to Shareholders, 1
Financial Highlights, 3
Alaska 101: Understanding Alaska’s Economy, 4
2006 Highlights, 7
Northrim’s Board of Directors, 14
Northrim’s Officers, 15
Statement of Values, 16
Marc Langland, Chairman, President & CEO
Northrim Co-Founder
44 years in the financial industry
M A R C L A N G L A N D | Message to Shareholders
Northrim BanCorp had another good year in 2006. Strong results in
our core banking operations and contributions from new lines of business
and affiliates resulted in further growth in shareholder value. The strategic
direction set by your board of directors, and implemented by the company’s
experienced and dedicated employees, continues to be reflected in our financial
results. Alaska’s economy is strong, and with some caution, I am optimistic
about its future.
Net income for 2006 was $13 million, up 16% for the year. Total assets are
now $926 million, up 3%. Our High Performance Checking program continues
to deliver as we planned. We are increasing deposits, and the lower cost of
these funds available for lending has improved our net interest margin.
Our focus for a number of years has been to increase non-interest income,
and we are seeing success. Service charges for 2006 were up 10% and our
purchased receivable income grew 87%. We have invested in affiliated
companies that provide complementary services to our customers, where
our strong existing relationships have laid the groundwork of experience
and trust. Our new employee benefits affiliate, Northrim Benefits Group,
has delivered good value to our business customers as well as a positive
contribution to our financial results – both in commissions on benefit plan sales
and our share of the company’s income.
For our shareholders, diluted earnings per share grew 22% in 2006 and
the tangible book value per share grew 14%. We paid our 47th consecutive
quarterly cash dividend in the fourth quarter of 2006, and a 5% stock dividend
1
in September 2006.
Northrim is guided by our core values, which start with Customer First
Service. I believe our reputation for service is unmatched in the markets we
serve. We protect this reputation through significant investments in skilled,
qualified staff and ongoing training. The growing complexity of our business,
keen competition for employees, and increasing layers of regulation put
pressure on employee costs, but we have been very successful in managing
those costs – in 2006, our efficiency ratio was 56%.
The past year was an interesting one for the Alaska economy, with dramatic
increases in oil taxes and failed negotiations for a gas line contract. We are
poised on the brink of great success, but decisions made in the political arena
in the next year will be critical. Alaska’s elected officials and business leaders
are working very hard to finalize negotiations for a gas pipeline to get our 35
trillion cubic feet of gas reserves to market, but for now, oil remains the main
driver of our economy. Production is declining and we know from experience
that while prices are high now, they can be extremely volatile.
To balance Alaska’s dependence on oil and gas resources,
As events unfold in 2007, Northrim will focus on our
we have the Alaska Permanent Fund, which at $37 billion
strengths, prepare for new opportunities, and continue to
generates a stable and growing revenue stream – although
deliver value to our shareholders. On behalf of Northrim’s
Alaska’s citizens have not yet determined how and when
Board of Directors and our nearly 300 employees, we thank
those revenues will be tapped. I continue to believe that
you for placing your trust and your investment with us.
Alaska needs a long-range fiscal plan to balance state
revenues with the very real needs of our young state. The
gas pipeline is a cornerstone to this fiscal plan because it will
stimulate increased exploration and development, not only
Marc Langland
for gas, but also for oil.
Chairman, President & Chief Executive Officer
2
F I N A N C I A L H I G H L I G H T S | 2006
2006
2005
2004
2003
2002
(In Thousands Except Per Share Data)
$47,522
2,564
7,658
31,368
21,248
296
20,952
7,978
$43,908
1,170
4,833
29,477
18,094
-
18,094
6,924
$41,271
1,601
3,792
26,535
16,927
-
16,927
6,227
$39,267
3,567
6,089
24,728
17,061
-
17,061
6,516
$34,670
3,095
5,199
23,061
13,713
-
13,713
5,171
$12,974
$11,170
$10,700
$10,545
$8,542
$2.12
2.09
0.47
$925,620
717,056
794,904
2,174
18,558
95,418
$15.61
$14.48
5.89%
55.97%
1.46%
14.45%
10.31%
21.43%
0.92%
0.16%
1.69%
0.79%
10
277
$1.78
1.72
0.43
$895,580
705,059
779,866
2,574
18,558
84,474
$13.86
$12.65
5.66%
59.72%
1.33%
13.17%
9.44%
22.92%
0.86%
0.18%
1.52%
0.69%
10
272
$1.68
1.63
0.38
$800,726
678,269
699,061
2,974
8,000
83,358
$13.01
$11.97
5.88%
58.07%
1.41%
13.50%
10.41%
21.57%
0.97%
0.16%
1.59%
0.82%
10
272
$1.68
1.61
0.33
$738,569
601,119
646,197
3,374
8,000
75,285
$11.82
$10.73
6.04%
53.71%
1.50%
14.89%
10.19%
19.04%
1.72%
0.33%
1.70%
1.40%
10
268
$1.33
1.29
0.20
$704,249
534,990
626,415
3,774
-
68,373
$10.66
$9.51
5.82%
56.92%
1.33%
13.32%
9.71%
14.29%
1.09%
0.36%
1.61%
0.81%
10
246
3
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Unaudited
Net interest income
Provision for loan losses
Other operating income
Other operating expense
Income before income taxes and minority interest
Minority interest in subsidiaries
Pre tax income
Income taxes
Net income
Earnings per share:
Basic
Diluted
Cash dividends per share
Assets
Loans
Deposits
Long-term debt
Junior subordinated debentures
Shareholders’ equity
Book value
Tangible book value
Net interest margin (tax equivalent)
Efficiency ratio (cash)
Return on assets
Return on equity
Equity/assets
Dividend payout ratio
Nonperforming loans/portfolio loans
Net charge-offs/average loans
Allowance for loan losses/portfolio loans
Nonperforming assets/assets
Number of banking offices
Number of employees (FTE)
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Alaska 101 | U N D E R S TA N D I N G A L A S K A’ S E C O N O M Y
ALASKA IS VAST, WILD, AND REMOTE. ITS BREATHTAKING SCENERY,
PLENTIFUL WILDLIFE AND ABUNDANT NATURAL RESOURCES, AND
THE PIONEERING SPIRIT OF ITS PEOPLE, SET IT APART.
4
Northrim was founded in Alaska, by Alaskans, and it’s the home of our
headquarters and most of our operations. Northrim BanCorp is one of Alaska’s few
publicly held companies, and the company has thrived in Alaska’s unique economy, with
Northrim Bank growing to be Alaska’s third-largest commercial bank in just 16 years.
Alaska has 670,000 people and a land area of 375 million acres – at one person
per square mile, Alaska has the lowest population density of the 50 states. More than
two-thirds of Alaskans live in Anchorage, Fairbanks and the Matanuska Valley – in
part because, unlike the other 49 states, the government owns the majority of
Alaska’s lands.
Alaska’s economy is different in many ways from that of the other 49 states.
According to the U.S. Department of Energy, Alaska ranks third in the nation
(behind Texas and federal offshore leases) for both crude oil reserves and production,
providing 17% of U.S. crude oil production. The Alaska Permanent Fund, Alaska’s
successful Native corporations, a legacy of significant federal spending, and our
strategic location for air transport are also unique drivers of the economy. Tourism,
mining, and fishing, while modest in comparison to oil production, provide balance
and diversity. Plans for construction of a gasline to deliver Alaska’s vast natural gas
reserves to market, while not certain at this time, have the potential to dramatically
alter the economic landscape in Alaska for years to come.
Natural resources have always been the basis of Alaska’s economy, although the
mix of those resources has changed dramatically. The Alaska Department of Revenue
reports that in the years before statehood, from 1868 to 1958, Alaska’s resource
production was 63% fish, 32% gold and copper, and 5% fur. Since statehood, 85% of
Alaska’s resource production has been in oil and gas.
Oil and Gas
The State of Alaska owns the North Slope oil fields, including Prudhoe Bay – the
largest oilfield in North America. The Trans-Alaska oil pipeline was completed in
1977, and from first oil through 2005, the state has collected nearly $55 billion in oil
revenues, according to the Alaska Department of Revenue.
Recent high oil prices and a significant change in the oil tax regime resulted in
a substantial windfall for the state government. The Alaska Department of Revenue
reports that the state collected $3.7 billion in total petroleum revenue in fiscal year
2006, making up 86% of the State’s general fund revenues.
North Slope oil production continues to decline from its peak of two million
barrels per day in 1988, falling below one million barrels per day in 2001 to a 2006
production level of 845,000 barrels per day, according to the Alaska Department
of Revenue.
Source: Alaska Department of Revenue
Source: Alaska Department of Revenue
U N D E R S TA N D I N G A L A S K A’ S E C O N O M Y | Alaska 101
The state’s three major producers, and many smaller
companies, are spending millions of dollars to explore
for new oil, develop technology to produce more oil from
existing fields, and unlock Alaska’s massive resource of
viscous oil – all in an effort to flatten the decline curve.
The International Energy Agency estimates that Alaska
has known reserves of 20 billion barrels of viscous oil. As
technology evolves to economically produce this oil, these
untapped resources may be available to fill the petroleum
production gap until a natural gas pipeline can be developed.
Alaska Permanent Fund
The Alaska Permanent Fund was created by voters in
1976 and begun with an initial deposit of $734,000. Alaska
state law requires that at least 25% of the state’s non-
renewable mineral royalties be deposited in the fund as
they are earned.
The fund’s earnings are used to inflation-proof the fund
and, for the past 25 years, to pay an annual dividend to each
eligible Alaskan. According to state law, funds left after
inflation-proofing and the dividend payment are available for
the legislature to spend for any public purpose. The Alaska
Department of Revenue reports that the 2006 dividend of
$1,106.96 was paid to more than 600,000 Alaskans, for an
economic boost of $667 million.
The Alaska Permanent Fund’s market value as of
December 31, 2006 was $37.3 billion, making it one of the
largest investment funds in the world, according to Alaska’s
Permanent Fund Corporation.
Alaska Native Corporations
The 1971 Alaska Native Claims Settlement Act
(ANCSA) established for-profit corporations to manage
44 million acres and $1 billion awarded to Alaska Native
corporations to settle aboriginal land claims. This approach
to land claims settlements was unique in the U.S., and was
designed to allow Alaska Natives to build economic self-
sufficiency.
Thirteen regional corporations and 200 village
corporations were created, and by many measures have been
very successful. The University of Alaska’s Institute of
Social and Economic Research (ISER) reports that these
corporations own 12% of Alaska’s land, make up 1 in 6 of
Alaska’s largest 100 employers, generate $4.5 billion in
annual revenues, and have distributed more than $1.3 billion
in dividends to their shareholders.
Alaska Native corporations have been successful in
winning federal contracts for work all over the globe, and
own real estate and other investments throughout the U.S.,
generating new cash for Alaska’s economy. They also own
Alaska ventures including oilfield service companies, hotels,
restaurants, and timber companies.
Federal Spending
Federal spending has always been important to Alaska’s
economy. According to ISER, military spending made up
the largest percentage of federal spending in Alaska forty
years ago, but since then, spending in other areas has grown
dramatically. In 2004, the federal government spent $8.4
billion in Alaska, with just over $2 billion by the Department
of Defense. Federal spending is equal to all the wages paid
by private industry in Alaska, and supports one in three
Alaska jobs.
The U.S. Census Bureau reports that Alaska has had
the highest per capita federal spending in the U.S. for the
past sixteen years, in part due to support for 21,000 military
personnel, large federal land holdings, basic infrastructure
needs in a young and undeveloped state, and the higher costs
of construction.
5
Source: Alaska Department of Revenue
Source: U.S. Census Bureau
Alaska 101 | U N D E R S TA N D I N G A L A S K A’ S E C O N O M Y
Air Cargo Hub
Alaska’s strategic location within ten hours flight
time of 90% of the industrialized world, special rules that
allow air cargo to be transferred between international and
domestic carriers only in Anchorage, and increased flights
allowed by new treaties, made Anchorage’s Ted Stevens
International Airport the third-busiest air cargo airport
in the world in 2005 according to the Airports Council
International. With runways that can handle the largest
freighters, and a stellar record for keeping flights going no
matter the weather – the airport has only been closed once
in the past 15 years – FedEx, UPS and other major freight
companies have significant operations in Anchorage.
The Anchorage Economic Development Corporation
reports that Alaska is home to the second-largest FedEx
facility in the world, with more than 400 flights each month
and 60,000 packages sorted each day. UPS ships all of
its air cargo to and from Asia through Anchorage, and
recently decided to base 80 pilots here, according to
published news reports.
Tourism, Mining & Fishing
ISER reports that tourists contributed $1.6 billion
to Alaska’s economy in 2005, and the tourism industry
now supports 30,000 jobs. The NorthWest Cruise Ship
Association reports that cruise ships brought 950,000
visitors to Alaska in 2006, about half of the total visitors to
the state. Cruise lines have made significant investments in
hotels, specially-equipped rail cars, motorcoaches, and tour
companies to service their customers, and work with more
than 1,700 Alaska businesses to provide goods and services,
according to the association.
The Alaska Department of Natural Resources reported
that the mining industry contributed $1.9 billion to the
Alaska economy in 2005 – $1.5 billion in production values
for zinc, gold, lead, silver, copper and other minerals and
$400 million for exploration and development.
Alaska has a number of very large mines in production.
The Red Dog mine in the Northwest Arctic Borough is the
largest zinc producer in the world, accounting for 80% of
U.S. production in 2006, according to the U.S. Geological
Survey. The agency reported that zinc prices increased
substantially in 2006, compared to previous years.
The Greens Creek mine, near Juneau, produced 9.7
million ounces of silver in 2005 – making it one of the
largest silver producers in the world – along with gold, zinc
and lead, according to the Alaska Department of Natural
Resources. The Fort Knox Mine, near Fairbanks, started
production in 1997 and the state reports it has produced
3.3 million ounces of gold through 2005. The Pogo mine,
near Delta Junction, began production in 2006, and the
state estimates the mine will produce 350,000 to 500,000
ounces of gold each year for the mine’s estimated 10-year
life. In addition to these large producing mines, the state
reports that a number of important prospects are under
development in many different parts of Alaska.
Alaska’s rich fisheries produce more than half of the
seafood harvested in the United States, according to the U.S.
Department of Commerce, and Alaska’s wild salmon are
prized all over the world. The Alaska Department of Fish
and Game reported that the preliminary value of seafood
harvested in Alaska in 2006 was $1.4 billion.
The Gas Pipeline
Alaska has one of the largest reserves of natural gas
in the country, with 35 trillion cubic feet of known reserves
and total reserves that may be as high as 100 trillion cubic
feet, according to the U.S. Geological Survey.
With estimated project costs of $20 to $30 billion,
only recently were natural gas prices high enough to justify
construction of a pipeline to deliver Alaska’s gas reserves
to market. The gas leaseholders – Alaska’s current oil
producers – began work to study the line several years ago
and started negotiating a contract with the State of Alaska
in 2006 for a pipeline that would follow the Alaska Highway
through Canada and terminate in the Midwest. There are
other proposals for pipeline routes, and much disagreement
over what concessions the State of Alaska should offer. Once
those decisions are made, several years of design, permitting
and construction lie ahead before the first gas is produced.
If a gas pipeline is built, Alaskans believe the state will
see tremendous growth in jobs and business opportunities,
and have a new source of state revenue. With a means to
transport gas to market, companies are expected to ramp
up their exploration activities, which ultimately could result
not only in additional gas discoveries, but also in more oil
discoveries to help stem the decline in oil production.
6
BY M AN Y MEAS URE S, NORT H RI M’S F INAN CI AL PERF ORM ANC E IN 200 6 WAS
STRONG, FO R THE CO MPANY AND FO R O UR S HAREHO LD ERS .
H I G H L I G H T S | 2006
Joe Schierhorn, Chief Financial Officer
Executive Officer since 2001
18 years in the financial industry
Net Income Up 16%
The company’s net income for 2006 was $13 million, up 16% from $11.2 million for
2005. Total interest income for 2006 was $69.5 million, and total interest expense
$22 million, for net interest income of $47.5 million, an 8% increase over 2005.
Net Interest Margin Up
The company’s net interest margin for 2006 was 5.89%, which we believe is a
very good result in today’s yield curve environment. Northrim’s expanded deposit
base gave the bank access to lower-cost funds for lending, which helped to boost
our margin.
Non-Interest Income Grows
Other operating income, or non-interest income, grew 58% in 2006 to $7.7 million,
including $1.1 million in new benefit plan income from our employee benefits
affiliate. Our purchased receivables line of business grew 87% in 2006, to $1.9
million. Earnings from our mortgage affiliate continued to rebound, increasing
32% over 2005. Other income grew 21%, to $4 million for 2006, due to increases in
revenues from deposit service charges, electronic banking and merchant services;
and smaller losses from our affiliate, Elliott Cove Capital Management.
Lower Expense Growth Yields Improved Efficiency Ratio
Other operating expense for 2006 increased 6%, to $31.4 million. The company
controlled expenses despite a competitive labor market and increases in transaction
volumes. With expenses growing more slowly than income, the efficiency ratio
improved to 56% for the year, from 60% for 2005.
7
Assets Grow to $926 Million
Total assets for 2006 grew 3%, with loans growing 2% to $717 million. Assets from
purchased receivables were $21 million for 2006, a 74% increase from 2005.
Deposits Grow to $795 Million; Deposit Mix Changes
Total deposits for 2006 grew 2%, with lower-cost deposits increasing 8% and
higher-cost deposits declining 2% over 2005 levels. Northrim’s focus on attracting
new demand deposits helped to change this deposit mix and reduce the company’s
cost of funds.
Shareholder Value Grows
Northrim continues to build value for our shareholders. Our share price is up 19%
year over year, market capitalization up $27 million, and our annual cash dividend is
now at 50 cents per share.
2006 | H I G H L I G H T S
Chris Knudson, Chief Operating Officer
Executive Officer since 1990
31 years in the financial industry
8
High Performance Checking
Northrim Bank is in its second year of the High Performance Checking (HPC)
program, and it has been a key part of our strategy to move beyond our beginnings
as a business bank and realize the bank’s tremendous potential as a full-service
commercial bank. Our Customer First Service philosophy has long attracted
customers, but starting in 2005, we took a more aggressive approach to marketing
our personal checking accounts. With a new array of customer-focused accounts, a
highly targeted direct mail program, and extensive staff training, we have
been very successful. Northrim launched the program with the assistance of
Haberfeld Associates, joining 120 other banks nationwide that have implemented
the HPC program.
Referrals – through “Tell A Friend” coupons distributed to each new account holder
and with each deposit slip – have consistently exceeded projections. Northrim’s
reputation in our markets, and the motivation and enthusiasm of our staff, has made
the difference in referrals.
The bank had high expectations for the program, and we have begun to realize
those expectations. First, non-interest income has grown through increased volume
of point-of-sale transactions, ATM fees, VISA check card and other fees.
We have also increased productivity because our branches are handling a much
higher volume of transactions without significant increases in staffing. And finally,
we have many more customers we can introduce to the bank’s other services
– consumer loans are up, customers are opening other accounts, and we are making
more referrals to our affiliates.
Northrim customer Alaska Laser Wash has been in business since 1997 and has three locations in Anchorage.
H I G H L I G H T S | 2006
In October 2006, we began a “soft launch” of our HPC program for business
customers, once again redesigning our accounts to meet business customers’
needs. We’ve already been successful in opening more business accounts, and we
implemented a direct mail program late in the first quarter of 2007.
The HPC program is a great fit with our existing sales training approach
– relationship selling through extensive mentoring and coaching - because our
employees now have something new and exciting to sell.
New Branches
The success of HPC led Northrim to re-examine our branching strategy. New
branches require a substantial capital investment, and we had not opened a new
facility since 2003. With HPC, it makes sense to open new branches in our existing
markets. In late 2006, we moved our Jewel Lake Branch from a grocery store facility
to a nearby building, growing from 400 square feet to 2,500 square feet. A drive-
through offers additional convenience for our customers, and the branch offers
enhanced privacy and a better banking environment for our customers and our staff.
After hiring a consultant to review our markets for branch opportunities, we are
pursuing the steps needed to open an additional branch in Anchorage and a second
branch in Fairbanks.
Electronic Banking
We converted our electronic banking system to a new platform in late 2006. We had
some conversion problems that inconvenienced our customers, but have resolved the
majority of those issues. The new platform offers greatly enhanced functionality
and security for individual customers and large and small businesses.
9
Northrim customer Alaska Serigraphics is one of Alaska’s leading screenprinting companies, in business since 1981.
2006 | H I G H L I G H T S
10
Joe Beedle, Chief Lending Officer
Executive Officer since 2006
33 years in the financial industry
H I G H L I G H T S | 2006
Continued Focus on Loan Quality
Northrim focused on strengthening our existing loan portfolio and internal
processes and procedures in 2006. We began reviewing our existing loans in detail,
working with our largest customers to analyze their operating and financial results
in a much more detailed and consultative approach. We established best practices in
software and underwriting, began a comprehensive training and evaluation program
for loan officers and support staff, and developed more efficient workflows across
lending functions.
We expect these investments in our people and our processes to result in a stronger
loan portfolio, and in future loan growth, as we help our customers to be more
successful in their businesses through appropriate use of credit.
Purchased Receivables Up 74%
One area of growth for 2006 was in purchased receivables. Our Washington-based
Northrim Funding Services added $4.7 million in purchased receivables in 2006,
and our Business Manager and MedCash Manager products added another $4.3
million. This is still a small segment of our business, but we have been successful
in a very competitive market in the Pacific Northwest, and we see great potential in
Alaska where rapidly growing companies have little access to capital.
New Opportunities for Consumer Lending
One cross-selling opportunity with our new checking account customers is
consumer loans. Northrim invested in training and automated credit scoring and
pricing to make it easier to offer consumer loans to our existing customers. In
branches where we do not have dedicated lending staff, we’ve been pleased with
the number of submissions we have received from branch staff for centralized
processing. Gross new consumer loans booked in 2006 were up 68% over 2005, to
$16.5 million. More than 1,400 new consumer loans were booked in 2006.
11
Small Business Center Shows Growth
Northrim’s Small Business Center was designed to be a comfortable environment
for our small business customers. With our automated credit scoring and pricing
system in place, we have increased the volume of small business loans approved by
this process by 19%, to $40.7 million, while freeing up lenders to work more closely
with our customers.
Northrim a Leader in Residential Construction
Northrim knows the residential construction market, and we work with Alaska’s
top builders. Our staff is knowledgeable and experienced, and maintains close
involvement in the homebuilding industry. While homebuilders in many other
parts of the U.S. have seen slumping sales, Alaska’s real estate market continues to
support quality homebuilders.
Northrim customer Duke Investments, LLC, owns the Anchorage Chili’s franchise.
2006 | H I G H L I G H T S
Elliott Cove
Capital Management
Northrim helped to found Elliott
Cove Capital Management, a
Seattle based company providing
investment management services,
and now owns a 47% equity interest
in the company. Elliott Cove now
has $109 million in assets under
management, half of which has
come from Northrim customers.
Northrim has 11 active Investment
Advisor Representatives who, as
dual employees of Northrim and
Elliott Cove, work with Northrim’s
customers to sell Elliott Cove
services. All have passed their
Series 65 licensing examination
and are registered to do business in
the State of Alaska. They receive
ongoing sales, operations and
compliance training from Elliott
Cove. Northrim’s in-house referral
program helps branch and loan
staff identify customers who would
benefit from investing in Elliott
Cove products.
Northrim has been very successful
in selling Elliott Cove products,
and our customer feedback on the
performance of their Elliott Cove
portfolios has been very positive.
Elliott Cove’s focus on providing
above average returns at below
average risks has been successful in
attracting and retaining customers’
investment dollars – and adds
additional value to our relationship
with the customer.
Elliott Cove is an American
Banking Association and
Washington Bankers’ Association
endorsed vendor. They partner with
four other community banks in the
Pacific Northwest.
12
H I G H L I G H T S | 2006
13
Northrim customer Morrison Auto Group has been in business in Alaska since 1977.
Northrim | B OA R D O F D I R E C T O R S
NORT HRIM IS GOVERNED BY A
SE AS ONED BOARD OF DIRECTORS
W IT H MANY YEARS OF EXPERIENCE
IN SUC CESSFUL ORGANIZATI ON S
W IT H IN AND OUTSIDE OF ALASKA.
Larry S. Cash | Director since 1995
President and CEO, RIM Architects
(Alaska) since 1986.
Northrim Directors. Back row, left to right: Chris Knudson, Richard
Lowell, Larry Cash, Marc Langland, David Wight, Ronald Davis,
Mark Copeland. Front row, left to right: Irene Sparks Rowan, Frank
Danner. Not pictured: Chris Swalling and Anthony Drabek.
Mark G. Copeland | Director since 1990
Owner of Strategic Analysis, LLC, a management consulting firm, since 1999.
Member of Copeland, Landye, Bennett and Wolf, LLP, a law firm, for 30 years prior to that time.
Frank A. Danner | Director since 1990
Secretary/Treasurer of IMEX Ltd. dba Dynamic Properties since 1990.
President and CEO of Far North Fishermen, Inc., a commercial fishing enterprise, from 1978 to 2003.
Partner of KPMG LLP from 1968 to 1989.
14
Ronald A. Davis | Director since 1997
CEO and Administrator, Tanana Valley Clinic until his retirement in 1998.
Secretary/Treasurer, Canoe Alaska from 1996 to 1999.
Vice President, Acordia of Alaska Insurance from 1999 to 2003.
Anthony Drabek | Director since 1991
President and CEO, Natives of Kodiak, Inc., an Alaska native corporation, since 1989.
Chairman and President, Koncor Forest Products Company. Secretary/Director, Atikon Forest Products Company.
Richard L. Lowell | Director since 1990
Chairman of the Board, Ribelin Lowell Alaska USA Insurance Brokers from 2004 to 2006.
President, Ribelin Lowell & Company, an insurance brokerage firm, from 1985 to 2004.
Irene Sparks Rowan | Director since 1991
Director, Klukwan, Inc., an Alaska native corporation, from 1988 to 2000.
John C. Swalling | Director since 2002
President, Swalling & Associates, PC, an accounting firm, since 1991.
David G. Wight | Director since 2006
President & CEO, Alyeska Pipeline Service Company from 2000 to 2006, following a 40-year
career with the Amoco Corporation, which became BP in 1998.
N O R T H R I M | Officers
Assistant Vice Presidents
Lynn Akers, Branch Mgr., Huffman
Erika Bills, Business Development Officer,
Wasilla Financial Center
Roxanne Broughton, Commercial Loan Officer,
Wasilla Financial Center
Cindy Cevasco, Branch Mgr., Wasilla Financial Center
Latosha Dickinson, Lead Accountant for Financial Reporting
Julee Drennan, Human Resources Officer
Carol Ellis, Branch Mgr., Customer Service Center
Tammy Ferriss, Community Development &
Compliance Officer
Angela Freeman, Training Mgr.
Glenna Hartman, Credit Administration Officer
Sheila Hillegeist, Branch Mgr., Branch Administration
Janet Holland, Facilities Mgr.
Stacey Horn, Credit Administration Officer
Andrea Jacobson, Security Mgr.
Fiona Johnson, Branch Mgr., Midtown Financial Center
Tammy Kosa, Branch Mgr., Fairbanks Financial Center
Shanna Lankford, Branch Mgr., Seventh Avenue
Terry Lee, Electronic Banking Officer
Jeanine Lillo, Assistant Controller, Accounting
James Matherly, Commercial Loan Officer,
Fairbanks Financial Center
Maria Muehlenkamp, Business Development Officer,
Fairbanks Financial Center
Darci Ornellas, Commercial Cash Management
Jorge Pacpaco, Commercial Loan Officer
Amy Penrose, Branch Mgr., 36th Avenue
Rick Pinkerton, Account Executive
Fran Ponge, Branch Mgr., Branch Administration
Katie Sandau, Branch Mgr., West Anchorage
Paula Sanders-Grau, Branch Mgr.,
SouthSide Financial Center
Aracelis Santiago-Ortiz, Account Executive
Rina Suesue, Branch Mgr., Jewel Lake
Josie Thayer, Commercial Loan Officer
Sherry Townsend, Loan Servicing Officer
Sandra Walters, Branch Mgr., Eagle River
Herman White, Commercial Loan Officer,
Small Business Center
Michele Wrice, Business Analyst
Cathy Wright, Loan Admin. Support Officer
Sharon Wright, Loan Documentation Officer
(AVP and above as of 2/20/07)
15
Executive Officers
Marc Langland, Chairman of the Board,
President, Chief Executive Officer
Joseph Beedle, Chief Lending Officer
Steven Hartung, Quality Assurance Officer
Chris Knudson, Chief Operating Officer
Victor Mollozzi, Senior Credit Officer
Joe Schierhorn, Chief Financial Officer
Robert L. Shake, Executive Loan Mgr.
Senior Vice Presidents
Audrey Amundson, Accounting Mgr., Controller
Ken Ferguson, Commercial Real Estate Lending Mgr.
Carolyn Jennings, Branch Administration Mgr.
Richard Jerger, Chief Technology Officer
Daniel Lowell, Northrim Finding Services Mgr.
Kate Rice, Human Resources Mgr.
Gary Roderick, Commercial Loan Mgr.,
Fairbanks Financial Center
Debra Shannon, Chief Information Officer
Paul Wellman, Credit Administration Mgr.
Lynn Wolfe, Loan Support Services Mgr.
Vice Presidents
Julie Bailey, Community Development &
Compliance Officer
Ravnit Basi-LaChapelle, Risk Management Officer
Catherine Claxton, Commercial Real Estate
Loan Officer
Lori Cox, Item Processing Mgr.
Ray Dinger, Commercial Real Estate Loan Officer
Sherry Eagley, Bank Operations Mgr.
Barbara Ervin, Branch Administration, Operations Mgr.
Kimberly Farrell Brewington, Commercial Cash Management
Bonnie Fournier, Commercial Loan Officer
Sandi Garnand, Commercial Loan Officer
Leonard F. Horst, Commercial Loan Officer
Kelly Lykins-Longlet, Electronic Banking Mgr.
Sue Lyman, Small Business Center Mgr.
Kathy Martin, Construction Loan Officer,
Wasilla Financial Center
Jim Miller, Commercial Loan Officer
Robin Minard, Marketing and Communications Manager
Mary Perez, Branch Administration,
Sales & Service Mgr.
Ted Perez, Commercial Loan Officer
Janet Reeder, Internal Audit Mgr.
Margaret Rohacek, Relationship Mgr.,
Northrim Funding Services
Tara Tetzlaff, Construction Lending Mgr.
Hal Ward, Credit Administration Officer
Suzanne Whittle, Branch Administration,
Operations Mgr.
Northrim | O U R S TAT E M E N T O F VA L U E S
THI S IS A STATEME NT OF TH O SE COR E VALU ES WH IC H DEFI N E T HE
CHARACTER OF NO RTHRIM AND TH E ESS ENC E O F WH AT WE STAN D FOR.
Customer First Service:
We treat our customers in a caring and personal manner and show genuine concern
and respect for them as individuals. This is the driving force behind everything we do.
Integrity:
We value integrity in our employees, in our relationships with our customers, and in
our business practices. We believe it is important that customers can trust us to do
business in an ethical manner and that both customers and employees believe they are
treated with a sense of fairness.
Flexible Approach:
We approach banking in a flexible and creative manner, which enables us to be
responsive to our customers and their particular situations. We view problems as
opportunities to improve, and changes as opportunities to grow and evolve.
Efficiency:
We recognize that in order to be successful and to remain competitive, we must keep
our costs at a reasonable level, strive to improve productivity, and continue to become
more efficient in the way we conduct our business.
16
Employees:
We are dedicated to hiring skilled Alaskans and providing ongoing training and
development so they can provide the expertise our customers expect, and can
be a resource our customers can count on. We are committed to having a work
environment where employees feel an ownership in the bank’s success and are
rewarded for performance.
Community Commitment:
We are closely tied to the Alaskan communities where we do business, and we believe
it is important that we provide leadership, and give back to those communities with
our time, talents, and dollars.
Shareholders:
We believe that our shareholders, by choosing to invest in Northrim, have expressed
their belief in us and our ability to protect and enhance their investment. By staying
true to the values stated herein, and by managing the bank in a prudent and fiscally
responsible manner, we build both short- and long-term value for our shareholders.
I N F O R M AT I O N A N D A D D R E S S E S | Investors
Annual Meeting
Date:
Time:
Location:
Thursday, May 3, 2007
9 a.m.
Hilton Anchorage Hotel
500 West Third Avenue
Anchorage, Alaska
Stock Symbol: Northrim BanCorp, Inc. stock is traded on
the Nasdaq Stock Market under the symbol, NRIM.
Auditor: KPMG LLP
Transfer Agent & Registrar
American Stock Transfer & Trust Company
Phone (800) 937-5449
info@amstock.com
Legal Counsel: Davis Wright Tremaine LLP
Information Requests
To obtain investor information for Northrim, visit our
home page at www.northrim.com and click on the “For
Investors” section for stock information and copies of
earnings and dividend releases.
If you would like to be added to Northrim’s investor email
list, send a request to investors@nrim.com or call our
Corporate Secretary at (907) 261-3301.
Written requests should be mailed to:
Corporate Secretary
Northrim Bank
P.O. Box 241489
Anchorage, Alaska 99524-1489
This report has not been approved or disapproved for accuracy
or adequacy by the Federal Deposit Insurance Corporation,
Federal Reserve Bank, Securities and Exchange Commission, or
any other regulatory authority.
Member FDIC
Equal Opportunity Employer
Editorial: Blythe Campbell Communications
Design/Production: Classic Design
Cover Photo: ©Chlaus Lotscher/AlaskaStock
All other photography: Chris Arend Photography
Printing: Northern Printing
N O R T H R I M | Locations
ANCHORAGE
Northrim Headquarters
P.O. Box 241489
Anchorage, Alaska 99524-1489
Phone (907) 562-0062
www.northrim.com
www.northrim.biz
Midtown Financial Center
3111 C Street
Phone (907) 562-0062
Huffman Branch
1501 E. Huffman Road
Phone (907) 348-5334
Jewel Lake Branch
9170 Jewel Lake Road
Phone (907) 266-7448
SouthSide Financial Center
8730 Old Seward Highway
Phone (907) 522-8886
West Anchorage Branch &
Small Business Center
2709 Spenard Road
Phone (907) 263-3389
Seventh Avenue Branch
550 W. 7th Avenue
Phone (907) 263-3226
36th Avenue Branch
811 E. 36th Avenue
Phone (907) 261-6241
EAGLE RIVER
Eagle River Branch
12812 Old Glenn Highway
Phone (907) 694-8998
WASILLA
Wasilla Financial Center
850 E. USA Circle
Phone (907) 376-0330
FAIRBANKS
Fairbanks Financial Center
714 Fourth Avenue
Phone (907) 452-1260
BELLEVUE, WASHINGTON
Northrim Funding Services
170 120th Avenue N.E., Suite 202
P.O. Box 50245
Bellevue, WA 98015
Phone (425) 453-1105
AFFILIATED COMPANIES
Elliott Cove Capital
Management, LLC
2003 Western Avenue, Suite 200
Seattle, WA 98121
Phone (206) 267-2683
www.elliottcove.com
Northrim Benefits Group, LLC
2550 Denali Street, Suite 1502
Anchorage, AK 99503
Phone (907) 263-1401
www.northrim.biz/affiliateco.htm
Residential Mortgage, LLC
Headquarters
100 Calais Drive
Anchorage, AK 99503
Phone (907) 222-8800
www.residentialmtg.com
Pacific Portfolio Consulting, LLC and
Pacific Portfolio Trust Company
Two Union Square
601 Union Street, Suite 4343
Seattle, WA 98101
Phone (206) 623-6641
www.pacific-portfolio.com