0 8 T W O T H O U S A N D E I G H T
I
A N N U A L R E P O R T
Proud to be Alaskan Contents
1 Message to Shareholders
5
Financial Snapshot
7 Understanding Alaska’s
Economy
11 2008 Highlights
14 Northrim Affiliates
16 Board of Directors
Message to Shareholders
Marc Langland,
Chairman, President & CEO
Northrim Co-Founder
As I write this message, the U.S. economy remains under
considerable stress. The complexity of the economic situation,
the speed of changes in the markets, and the amount and type of
government intervention make it difficult to know when we will
have market stability.
The stock prices and public perception of all financial
institutions have been significantly impacted by negative news
about the government “bailout” and the spending habits of the very
large investment and national banks.
We decided against participating in the government programs
to provide additional capital to banks, because of the uncertainty
surrounding the restrictions on these funds, the dilution to our
existing shareholders, and our current strong balance sheet. We
remain confident that we have the capital, liquidity, and financial
strength to weather the current economic downturn without any
assistance from the federal government.
Northrim is a community bank, and like most community
banks, we are distinguished by the close relationships we have with
our communities and our customers. In contrast to large national
banks, we did not invest in complex financial instruments and we
did not make subprime mortgages. Because we make decisions
locally and know our depositors and our borrowers, we can adjust
more quickly to the current market, and we believe that we are
better positioned to take advantage of opportunities as market
conditions improve.
The strength of a community bank also reflects the strength
of the local economy. While Alaska will not entirely escape this
economic crisis, I believe that businesses and consumers in Alaska
are reacting to the national news with more uncertainty and caution
than is warranted by Alaska’s economic indicators – and perceptions
and attitudes impact spending and investment.
Alaska appeared to weather the second half of 2008 much
better than the rest of the nation. Population and job growth are
relatively stable, and unemployment rates in our largest cities are
lower than the U.S. average.
(Continued on page 3)
“
We believe the company has the
fundamental financial strength, the right
talent, the confidence of our customers, and
the unique knowledge of our market areas
to be successful now and in the future.
AN Nu Al re p o r t 2 0 0 8
N o r t h r iM
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2
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Message to Shareholders Continued
Per capita income increased in 2008 due to record
high Permanent Fund Dividends, an energy rebate, and
continued increases in employment, which helped to
offset higher energy costs.
We believe that Alaska’s housing market is much
stronger than the rest of the country. The Mortgage
Bankers Association reports that Alaska had the lowest
percentage of delinquent mortgages in the U.S.
through the third quarter of 2008 and the third lowest
percentage of foreclosures. Prices have remained stable
and with a low housing inventory, particularly in new
construction, we expect a much quicker turnaround for
our housing market than in the Lower 48.
High oil prices through the first half of 2008
allowed Alaska’s state government to put billions into
reserve accounts to provide funding for future state
needs. The surplus funded a larger capital budget that
is expected to provide funds for projects over the next
several years.
If oil prices remain low, however, it will have
a dampening impact on petroleum exploration
and development because of the high costs of
development in Alaska’s remote and rugged
environment. While progress continues on a natural
gas pipeline, economic and political uncertainty may
impact the project scope and schedule.
With our state’s relatively strong economy,
and federal stimulus programs slated to provide an
additional $1 billion in projects and programs, we
expect Alaska’s businesses to recover their confidence
and begin making investments more quickly than in
the rest of the country. We believe we have positioned
the company to remain strong until that begins, and to
be ready to take advantage of those new opportunities
we foresee.
While many of our financial indicators were
positive, net income in 2008 was down over 2007
due to an increased provision for loan losses and
higher expenses associated with bank-owned
properties. We are disappointed with the growth in
our nonperforming assets as the residential sales
cycle slowed, but we expect that to reduce as time
goes on. With very few new housing units on the
market, and stable valuations, we feel we have a good
opportunity to liquidate our troubled assets over the
next two years. Despite these challenges with credit
quality, primarily in a few large relationships, we have
maintained a high net interest margin relative to our
peers by doing a good job with pricing our loans and
deposits.
Stock valuations in the overall market and in the
financial industry in particular are down significantly,
and we are in that mix. It will take time before the
government’s new plans and policies have an impact
on consumer and investor confidence, and in turn, on
economic growth. However, we believe the company
has the fundamental financial strength, the right talent,
the confidence of our customers, and the unique
knowledge of our market areas to be successful now
and in the future.
We appreciate your continued confidence and
support.
We, along with other business leaders in Alaska,
believe it is important for the state government to
create more incentives, and remove barriers, for oil and
gas development in order to support state government
spending as well as the economy as a whole.
Marc Langland
Chairman, President & CEO
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the port of Anchorage
serves 80% of Alaska’s
maritime trade and
90% of its population.
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Net income | $Thousands
Loans | $Thousands
$1,000,000
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
assets | $Thousands
$1,000,000
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
2004
2005
2006
2007
2008
4
N o r t h r iM
AN Nu Al re p o r t 2 0 0 8
2008 Financial Snapshot
Unaudited
(In Thousands Except Per Share Amounts)
2 0 0 8
2 0 0 7
2 0 0 6
2 0 0 5
2 0 0 4
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)
$45,814
$49,830
$47,522
$43,908
$41,271
7,199
11,399
40,439
9,575
370
9,205
3,122
5,513
9,954
2,564
7,766
1,170
4,933
1,601
3,893
35,063
31,476
29,577
26,636
19,208
21,248
18,094
16,927
290
18,918
7,260
296
20,952
7,978
-
-
18,094
16,927
6,924
6,227
$6,083
$11,658
$12,974
$11,170
$10,700
$0.96
0.95
0.66
$1.82
1.80
0.57
$2.02
1.99
0.45
$1.70
1.64
0.40
$1.60
1.55
0.36
$1,006,392
$1,014,714
$925,620
$895,580
$800,726
711,286
714,801
717,056
705,059
678,269
843,252
867,376
794,904
779,866
699,061
15,986
18,558
1,774
18,558
104,648
101,391
$16.53
$15.06
5.26%
70.07%
0.62%
5.85%
10.40%
68.93%
3.66%
0.86%
1.81%
3.84%
11
290
$16.09
$14.51
5.89%
58.09%
1.24%
11.70%
10.00%
30.54%
1.59%
0.86%
1.64%
1.56%
10
302
2,174
18,558
95,418
$15.61
$14.48
5.89%
56.06%
1.46%
14.45%
10.31%
21.43%
0.92%
0.16%
1.69%
0.79%
10
277
2,574
18,558
84,474
$13.86
$12.65
5.66%
59.80%
1.33%
13.17%
9.44%
22.92%
0.86%
0.18%
1.52%
0.69%
10
272
2,974
8,000
83,358
$13.01
$11.97
5.88%
58.16%
1.41%
13.50%
10.41%
21.57%
0.97%
0.16%
1.59%
0.82%
10
272
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6
N o r t h r iM
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understanding Alaska’s economy
By TiM Br adNEr
Alaska is affected by difficult economic conditions
facing the nation and the world, but industries that
are the foundation for the state’s economy are still
strong. Oil and gas and major minerals production
activities are continuing, despite significant declines
in petroleum and base metals prices. Seafood
harvesting is stable. The military, an important part of
the economy, will maintain a strong presence because
bases in Alaska are critical to the nation’s defense due
to Alaska’s geographic position.
The strong financial position of the state
government, at least in the near term, is also an important
advantage. State as well as federal spending supports a
major part of Alaska’s economy. Oil and gas revenues pay
for about 90 percent of the state’s budget and while those
are sharply reduced Alaska does have approximately
$7.6 billion in financial reserves that can be used to
support the state budget through several lean years.
Alaska’s financial strength, a result of past oil
revenues that have been saved and invested, is
expressed in other ways. For example, two state
development corporations, the Alaska Industrial
Development and Export Authority (AIDEA) and the
Alaska Housing Finance Corporation (AHFC), have
substantial endowments of surplus oil revenues
appropriated by the Legislature. The earnings on
these are invested in private sector development,
in industrial projects and business loans in the case
of AIDEA and housing in the case of AHFC. Both
corporations have bonding authority, which is also
used to support their activities.
Because of these basic strengths Alaska
employment remains stable, although it is always
subject to seasonal fluctuation. Total Alaska wage
and salary employment in December, 2008 remained
at about the same level, and was even slightly
up, compared with employment in December,
2007, according to data compiled by the state
Department of Labor and Workforce Development. A
consensus among economists studying Alaska is that
employment may turn down slightly, about 1 percent,
in 2009.
Another important economic indicator is the level of
construction. Work on new projects in 2009 is expected
to be only slightly down, about 3 percent, compared
with strong years in 2008 and 2007. Private construction
is expected to be reduced substantially but this is
expected to be offset with sharply increased public
sector building by the federal and state governments.
The business activities of Alaska’s Native
corporations are also important to the state’s economy.
These private corporations, formed under the Alaska
Native Claims Settlement Act of 1971, own 45
million acres of land with considerable potential for
minerals, oil and gas and timber development. Native
corporations today are engaged in mining, petroleum
production and oil services including drilling, as well as
timber harvesting. Several have revenues that exceed
$1 billion a year. Most of these corporations also do
business out of state and bring profits home. Where
possible, however, Native corporations prefer to invest
in Alaska and create job opportunities for shareholders.
The existence of a large pool of private capital with
a preference for Alaskan investment is a strategic
advantage.
However, there are ways that economic troubles
elsewhere are affecting Alaska. Although Alaska’s
economy is stable, consumer confidence is being
eroded by a constant barrage of bad economic news
from other states. This is illustrated best by a 15 to 20
percent decline in new car sales for some auto dealers
in the state, although the drop is about half of what car
dealers in other states are experiencing.
Tourism, an important seasonal industry, is
anticipated to be down in 2009, perhaps substantially.
However, the large cruise companies and smaller
Alaska tourism firms hope to offset part of this with
aggressive marketing and discounting.
International air cargo is also an important
business for Alaska’s airports and private firms that
support aviation activities. The global recession has cut
into the transport of high-value goods to and from the
continental U.S. and Asia. Many of the Asia-U.S. cargo
flights stop to refuel in Anchorage and Fairbanks, and
many transfer cargo in Anchorage. There has been a
downturn in cargo flights.
(Continued on page 8)
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7
understanding Alaska’s economy Continued
OiL & Gas
M iN Er aLs
Zinc and other metals prices are
down, which affects some of
Alaska’s producing mines. The
Red Dog zinc mine in northwest
Alaska, the world’s largest, will
continue in production as will
the Greens Creek Mine near
Juneau, which produces silver
and other metals besides zinc.
Gold prices remain high, which
is helping gold mines like Fort
Knox and Pogo, near Fairbanks.
Development work is also
continuing on large new gold
projects like the Donlin Creek
prospect on the Kuskokwim River,
which will be one of the world’s
largest gold mines, and the very
large Pebble gold/copper project
near Lake Illiamna, southwest
of Anchorage. Capital for new
exploration has been affected by
tight capital markets but there
is exploration being funded.
International Tower Hills, an
exploration company, recently
discovered a major new gold
deposit north of Fairbanks.
Directly and indirectly, petroleum
production underpins a third of
the state’s economy, so Alaskans
watch the industry carefully. Crude
oil prices are down and this will
cut into exploration and some
development work in existing fields.
However, oil projects typically
involve long lead times and the
petroleum industry believes that
the current downturn is cyclical,
and there will be recovery. This
can be seen in BP’s work in 2009 to
develop its new offshore Liberty oil
field and a heavy oil project in the
Milne Point field; in ConocoPhillips’
and Anadarko Petroleum’s efforts
to further develop the Alpine oil
field and explore in the National
Petroleum Reserve-Alaska; in
ExxonMobil’s gas cycling and
condensate production project
at Point Thomson; in work by Eni
Oil and Gas to develop the new
Nikaitchuq offshore field; and
the continued development by
Pioneer Natural Resources of the
Oooguruk offshore field which
began production in 2008. Two
consortiums are also working on
competing plans for a natural
gas pipeline, and there are plans
for smaller gas pipelines to bring
natural gas to Southcentral Alaska.
ThE N aTu r aL G as PiPELiNE
The long-term future of Alaska’s
economy is linked to continued
oil production and, at some point,
a large natural gas pipeline. Oil
production is declining but if a
gas pipeline is built it will spur
new exploration for gas, during
which more oil will inevitably be
discovered. Two groups are now
working on competing projects, one
being the Denali consortium that is
led by BP and ConocoPhillips, two
North Slope producing companies.
The second is a project led by
TransCanada, a major independent
pipeline company. Both groups plan
“open seasons” in 2010 to solicit
customers to ship gas. If enough
pipeline capacity is committed
through shipping contracts, a
project developer will be able to
raise financing and proceed with
construction. The current economic
environment is raising some
concerns as to whether enough
potential customers will be able to
sign contracts in 2010, but there is
little doubt that North America will
ultimately need the large reserves of
gas on the North Slope that are now
stranded.
8
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Tim Bradner is the co-publisher of the Alaska Economic Report and the Alaska Legislative Digest. The views expressed
are those of the author and are intended to give the reader an overview of the Alaska economy.
sTaTE GO vErNMENT
MiLiT ary
Fi shEr iEs
There is sufficient liquidity in
state reserve accounts to offset
anticipated revenue gaps for four
years or longer without enacting
tax increases or reducing the state’s
approximate $5 billion-a-year
operating budgets. While this is a
strength, because the state budget
is a major force in the economy,
it also means state reserves will
be diminished in the following
years when funds may be needed
to bridge a six-to-eight-year gap
between revenues from declining
oil production and revenues from
natural gas production, if a gas
pipeline is built. Alaska does have a
structural fiscal problem and need
for revenue sources other than oil
and gas that must be addressed
someday. One new revenue source
could be a portion of the $1 billion-
plus annual earnings of the $30
billion Alaska Permanent Fund.
Today the earnings are reinvested
into the Fund and used to pay the
annual citizen dividends.
Because of its geographic
position, Alaska has played a
key role in the nation’s defenses
since World War II and the Cold
War. Substantial investments
and troop increases have been
made in Army and Air Force
installations in recent years,
including units designated
for quick mobilization. Bases
in Alaska give the military the
ability to quickly mobilize forces
and equipment to several parts
of the globe. Ample space
available for air and ground
training is another strategic
advantage. Alaska has seen a
30 percent increase in military
forces stationed in the state
since 2000.
Seafood has been a mainstay of
Alaska’s economy since before the
Gold Rush. The industry has its ups
and downs with cycles in harvests
and markets, but it is now broadly
diversified. It is expected that
2009 will see the value of harvests
decline from strong years in 2007
and 2008 but still maintain levels
that are close to historical averages.
Generally, high-value products
like king salmon and halibut and
niche salmon products like Copper
River sockeyes will see soft markets
because of economic conditions.
However, seafood that is priced
moderately such as pink and chum
salmon and most sockeye salmon,
as well as groundfish like pollock,
should see stable markets and
prices. A very positive development
for fishermen this year is that fuel
prices will be down substantially.
in these difficult economic times Alaska is fortunate to have assets that will help the state ride through
the recession. the state of Alaska’s financial reserves, ongoing production operations at Alaska’s oil
fields, producing mines, Alaska’s military bases that are important to national defense, and rich fisheries
in coastal waters, are strengths that most other states would envy.
N o r t h r iM
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Northrim financed the expansion of
h20asis, a popular indoor water park.
10
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2008 highlights
NOrThriM rEMaiNs Pr OFiT aBLE dEsPiTE NaTiONaL ECONOMiC dOWNTurN
Net income was $6.1 million for the year ended December 31, 2008, compared to $11.7 million for 2007. Northrim
decided against participating in the government programs to provide additional capital to banks because of the
uncertainty surrounding the restrictions on these funds, the dilution to existing shareholders, and the bank’s
current strong balance sheet.
assE T s rEMaiN sTaBLE
NE T iN TErEsT MarGiN r EMaiNs hiGh
Total assets remain stable at $1.0 billion at December
31, 2008, compared to $1.0 billion a year ago. For the
year, the allowance for loan losses was increased by
$1.2 million to $12.9 million.
Net interest margin was 5.26% down from 5.89% in
2007. The margin remained high compared to peer
banks despite the continuing pressure from the rapid
drop in interest rates.
a FFiLia TEs GENEr a TE iNCrEasEd
iNCOME
BaNk C ONTiNuEs TO BE WELL-CaPiT aLizEd
Financial services affiliates helped to generate a
15% annual increase in other operating income.
Employee benefit plan affiliate Northrim Benefits
Group increased contributions 22%. Low interest rates
spurred a refinancing boom that continues for our
mortgage affiliate, Residential Mortgage, and increased
contributions 31% year-over-year.
TOTaL dEPOsiT s dECrEasEd
Total Deposits were $843 million compared to $867
million a year earlier. The Alaska CD and money market
accounts decreased by 37% and 27%, respectively, as
customers moved into other interest bearing accounts.
At December 31, 2008, time deposit balances increased
68% reflecting the movement of customers from
lower yielding accounts to higher yielding certificates
of deposit. Non interest bearing demand deposits
increased 9% and interest bearing demand deposits
grew 5% year-over-year reflecting the continuing success
of the High Performance Checking program. Savings
account balances increased 5% compared to a year ago.
Northrim remains well-capitalized with Tier 1 Capital/
risk adjusted assets of 12.65% at December 31, 2008,
up from 12.32% a year ago.
Fai rB aNk s FiNaN CiaL CE NT Er OPE Ns
Construction was completed and the new Fairbanks
Financial Center opened to the public in April 2008.
The lending staff was relocated to the new location
situated in the heart of the Interior city’s growing retail
district. This is Northrim’s second Fairbanks branch.
P rEsi dEN T MarC L aN G L aNd NaM Ed
O uT sT aNd iN G aL as k aN O F ThE yEar
The Alaska State Chamber of Commerce awarded
Chairman, President & CEO Marc Langland their William
A. Egan award in 2008 naming him the Outstanding
Alaskan of the Year for his substantial and continual
contributions of statewide significance while working
in the private sector. The Chamber cited Langland’s
keen interest in Alaska’s economy and his advocating
strongly for a long-term fiscal plan for Alaska and
appropriate development of Alaska’s vast natural
resources.
(Continued on page 13)
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2008 highlights Continued
sE vENTh avENuE Br aNCh rELOC aTEd
Northrim’s Seventh Avenue Branch was relocated in
2008 and is now situated at street level in one corner
of Anchorage’s new downtown parking garage next to
the city’s recently built $111 million Dena’ina Civic and
Convention Center.
NOrThriM FiNaNCiaL ExPErT s
E duC aTE PuBLiC ON ThE ECONOMy
With the public’s uneasiness with the state of the
national and local economies, Northrim executives
and lending officers have gone into the community
to present economic overviews to numerous business
groups and professional organizations educating them
on the strength of the bank and the Alaska economy.
Thousands of Alaskans have listened to interviews on
local radio and television stations and read newspaper
and magazine articles featuring Northrim’s financial
experts. In addition, a twice-yearly Alaska economic
overview has been produced by Northrim and is
available on our website, www.northrim.com.
Community highlights
BaNk EMPLOyEEs shiNE iN
uNiTEd Way C aMP aiGN
Northrim employees donated nearly $52,000 through
payroll deductions in 2008 to the United Way. Along
with the company match, Northrim and its employees
donated more than $80,000 to the effort.
EMPLO yEEs TEa Ch kids TO savE
Northrim employees went into elementary school
classrooms in Anchorage, Eagle River, Wasilla and
Fairbanks for Teach Children To Save Day. Hundreds
of students across the state were taught from grade-
appropriate curricula about the benefits of saving money.
rOL L iN G i N ThE M O N Ey FO r
JuNiOr aChiE vE M EN T
Northrim employees formed 11 teams and raised
more than $7,000 for Junior Achievement in the
organization’s annual 2008 Bowl-A-Thon in Anchorage.
The employees fielded more teams and raised
more money than any other company in the event.
Employees also taught numerous Junior Achievement
classes in Anchorage, Eagle River, Wasilla, and Fairbanks
in 2008.
hO M EL Ess shE LTEr BEN EFiT s
Fr O M EMP LO yE Es’ EF FOrT s
Northrim employees volunteered at the Salvation Army
McKinnell House homeless shelter preparing meals
for shelter residents and elderly shut-ins in Anchorage
during United Way’s Day of Caring. Employees also
taught financial literacy classes to residents. In addition,
the shelter benefited from an auction of employee-
donated goods and services in September. Employees
bid on the items and raised more than $8,000, with the
McKinnell House receiving about half of the total.
NOrThriM P rEsE N TEd WiTh sChO O L
B u siN Ess ParTN ErshiP sTar aWar d
Northrim Bank and its employee volunteers were
presented with a 2008 School Business Partnership Star
Award to recognize their efforts at Fairview Elementary
School in Anchorage. Employees regularly volunteer
to help children with their reading, help during Math
Night, judge the science fair, recognize student “good
citizens,” teach financial literacy to parents, and more.
The award is given to business partners who give
enthusiastic support to the school, have a commitment
to educational enhancement of youth, are dedicated
to the continuation and success of the program,
participate regularly, and have a willingness to be
flexible and innovative in supporting and assuring
success.
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Northrim Affiliates
NOrThr iM BENEFiT s GrOuP
r Esi dE N Ti aL MOrTGa G E
Northrim Benefits Group is based in Anchorage,
Alaska and offers employee health benefits solutions
to businesses. The company offers medical insurance,
including high deductible plans, health savings
accounts, dental and vision plans; and life insurance as
well as short- and long-term disability coverage.
Northrim Bank acquired a majority ownership
position in Northrim Benefits Group in 2005. The
company offers its clients 35 years of employee
benefits experience in Alaska. Through its affiliation
with Northrim Bank, Northrim Benefits Group has
experienced significant growth in all areas of its
business having doubled its client base and revenues
over the past three years. This “value added” approach
of doing business has blended well with Northrim’s
“Customer First Service” philosophy.
With annual medical insurance premiums
increasing, Northrim Benefits Group’s role is that of
a strategic business partner developing customized
health benefit plans for its clients featuring the right
products at the most reasonable rates. The company
prides itself on its ability to provide continued savings
to its customers and to offer new, innovative products
and services to the markets it serves.
Northrim Benefits Group is a profitable, stable
company focused on expanding its health care benefits
network. Its strategic partnership with Northrim Bank
has provided a strong referral network for clients and
has added significant value to the Bank’s customers.
Northrim Bank has been affiliated with Residential
Mortgage, LLC since 1998. The company provides
single- and multi-family home financing. With 12 offices
in Alaska, including five joint ventures with real estate
companies, and nearly 170 employees statewide,
Residential Mortgage provided over 3,100 loans to
Alaskans for the purchase of homes or to refinance
their existing homes in 2008. The company closed $713
million worth of loans in 2008, up 8% from $662 million
in 2007.
Residential Mortgage opened two new offices in
Alaska in 2008. They now have five offices in Anchorage,
two in Wasilla, and one each in Fairbanks, Eagle River,
Soldotna, Kodiak, and Juneau.
Statistics continue to show that Alaska has
weathered the national mortgage problems better than
almost any state. At the end of the third quarter of 2008,
Alaska ranked in first place with the lowest number of
delinquent loans and the third lowest in foreclosures
of all 50 states according to the Mortgage Bankers
Association. Many major cities and regions of the U.S.
saw 10% to 20% declines in property values with the
hardest hit areas’ values dropping nearly 40%. According
to the Alaska Multiple Listing Service and the Greater
Fairbanks Board of Realtors, the average sales price in
2008 for residential homes in Anchorage was down just
0.4% from 2007. In Fairbanks, Wasilla, and Palmer prices
were down 3.6%, 0.7%, and 0.3% respectively.
The staff at Residential Mortgage takes pride in
their professionalism, their expertise in the lending
industry, and their commitment to providing quality
customer service.
14
N o r t h r iM
AN Nu Al re p o r t 2 0 0 8
Northrim has affiliations with four diverse companies offering investment, health insurance,
and mortgage services. these operations provide a broader range of services to our customers,
contribute to earnings growth, and help reduce risk.
PaCiFiC WEaLTh adv isOrs, LLC
EL LiOT T COvE C aPiT aL MaNa G E ME N T, L LC
Pacific Wealth Advisors, LLC is the holding
company for Pacific Portfolio Consulting, LLC, a fee-only
investment advisory firm serving affluent individuals,
families, corporations, foundations, endowments, and
not-for-profit organizations since 1992.
For individuals and families, Pacific Portfolio and
Pacific Portfolio Trust Company provide investment
advisory, investment management, wealth preservation,
and trust services. They guide clients through the
creation, preservation, and ultimate transfer of wealth
by providing needs-based investment planning,
financial planning, and estate planning services and
then assist in the execution and oversight of those
strategies and plans. As a fee-only advisor, the company
sells no product and thus is able to advise clients in an
environment free from any conflicts of interest.
For institutional clients, Pacific Portfolio
provides investment advisory services to retirement
plans, foundations, endowments and not-for-profit
organizations. These services include helping fiduciaries
determine appropriate goals and objectives for the plans
they are responsible for, investment manager selection,
monitoring and reporting, and when appropriate,
investment education services to both the trustees and
participants.
The firm advises on over $1 billion in assets and
has shown consistent growth in clients and assets since
the consulting firm was created. While its clients are
predominantly located in the Pacific Northwest and
Alaska, Pacific Portfolio serves clients on a nationwide
basis.
In 2002, Northrim Bank helped to found this
Seattle-based affiliate that offers long-term investment
portfolios not available through traditional banking
vehicles.
Northrim added two new Investment Advisor
Representatives (IARs) in 2008 bringing to eight the
number of active IARs in Alaska. Including those
offering services in the Pacific Northwest, there are 20
active Elliott Cove IARs. In addition to Northrim Bank,
four community banks in Washington also sell Elliott
Cove products including Whidbey Island Bank, Coastal
Community Bank, Eastside Commercial Bank and most
recently in 2008, the Bank of the Pacific. Northrim’s
representatives continue to generate about half of the
total assets under management.
Elliott Cove manages six distinct portfolios along
with several standalone funds to offer bank customers
access to sophisticated and efficient investment
vehicles that emphasize diversified asset allocation
rather than the practice of speculating—a good
fit for many of Northrim’s customers. Elliott Cove
portfolios range in risk from conservative to
aggressive, which provides customers with a
range of investment options.
Northrim IARs were successful in 2008 in
retaining customer relationships in a volatile
economic environment. At the end of 2008, Elliott
Cove had $68 million in assets under management.
N o r t h r iM
AN Nu Al re p o r t 2 0 0 8
15
2008 Board of Directors
Marc langland
Director since 1990
Chairman, President & CEO
Chris Knudson
Director since 1998
Chief Operating Officer
larry S. Cash
Director since 1995
President & CEO,
RIM Architects
(Alaska, California, Guam &
Hawaii) since 1986.
Mark G. Copeland
Director since 1990
Owner of Strategic Analysis,
LLC since 1999.
Member of Copeland,
Landye, Bennett & Wolf, LLP,
a law firm, for 30 years prior
to that time.
ronald A. Davis
Director since 1997
CEO & Administrator,
Tanana Valley Clinic until
his retirement in 1998.
Secretary/treasurer,
Canoe Alaska, 1996-1999.
Vice President, Acordia of
Alaska Insurance, 1999-2003.
Anthony Drabek
Director since 1991
President & CEO, Natives of
Kodiak, Inc., since 1989.
Chairman & President,
Koncor Forest Products Co.
Secretary/Director,
Atikon Forest Products Co.
richard l. lowell
Director since 1990
President, Ribelin Lowell &
Company, 1985 until his
retirement in 2004.
irene Sparks rowan
Director since 1991
Director, Klukwan, Inc., an
Alaska Native corporation,
1988-2000.
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, 2000-2005,
following 40 years with
Amoco Corporation
which became BP in 1998.
2008 Customer First Service
Award Winners
Northrim’s Customer First philosophy is the driving force behind
everything we do. The Customer First Service Award is one of the most
coveted awards an employee can receive. It recognizes excellence in
not only meeting, but exceeding Northrim’s customer service standards
and guarantees. These individuals were recognized in 2008 for
demonstrating the very highest level of service to our customers.
16
N o r t h r iM
AN Nu Al re p o r t 2 0 0 8
Jessica Noble
Downtown
Fairbanks
Branch
Angela
Turkington
Wasilla
Financial
Center
Sara
Kinsman
Midtown
Financial
Center
information and Addresses
a N NuaL MEE TiN G :
Thursday, May 14, 2009 • 9:00 a.m.
Hilton Anchorage Hotel • 500 W 3rd Ave., Anchorage, AK
sTOCk sy MB OL: Northrim BanCorp, Inc. (NRIM)
aud iTOr: KPMG LLP
Tr aNs F Er aGENT & rEG isTr ar:
American Stock Transfer & Trust Company
800-937-5449 • info@amstock.com
CrEdiT s:
Front cover; “Denali” by Alaskan artist James Belcher. The original oil
painting hangs in the lobby of our Downtown Fairbanks branch.
Other photos by Chris Arend Photography, Greg Martin Photography,
Alaska Stock Images.
Design & Printing; A.T. Publishing & Printing, Inc.
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.
LEGaL COuNsEL : Davis Wright Tremaine LLP
Member FDIC • Equal Opportunity Lender
iNvEsTOr rEquEsT s:
For stock information and copies of earnings and dividend
releases, click on “For Investors” section at www.northrim.com.
iNvEsTOr EMaiL suBsCriPTiON :
Send a request to investors@nrim.com;
call our Corporate Secretary at (907) 261-3301;
or, write Corporate Secretary, Northrim Bank
P.O. Box 241489, Anchorage, AK 99524-1489.
Jenna Lee
Huffman
Branch
Veronica
Thompson
Customer Service
Center
Dale Van
Sandt
Information
Systems
Aileen
Waltman
Item
Processing
Sarah Gaines
Human
Resources
NOrTh riM B aNk LOC aTiONs
a NChOr a GE
Northrim headquarters
P.O. Box 241489 • Anchorage, Alaska 99524-1489
Phone (907) 562-0062 • 1-800-478-2265 • www.northrim.com
Midtown Financial Center
3111 C Street
huffman Branch
1501 E. Huffman Road
Jewel Lake Branch
9170 Jewel Lake Road
southside Financial Center
8730 Old Seward Highway
West anchorage Branch & small Business Center
2709 Spenard Road
seventh avenue Branch
517 W. 7th Avenue
36th avenue Branch
811 E. 36th Avenue
E aGLE rivEr
Eagle river Branch
12812 Old Glenn Highway
WasiLL a
Wasilla Financial Center
850 E. USA Circle
FairB aNks
Fairbanks Financial Center
360 Merhar Avenue
downtown Fairbanks Branch
714 Fourth Avenue
BELLE vuE , WashiNGTON
Northrim Funding services
170 120th Avenue N.E., Suite 202
P.O. Box 50245 • Bellevue, WA 98015
Phone (425) 453-1105
a FFiLia TEd C OMPaNiEs
Elliott Cove Capital Management, LLC
1000 2nd Avenue, Suite 1440 • Seattle, WA 98104
Phone (206) 267-2683 • www.elliottcove.com/northrim
Northrim Benefits Group, LLC
2550 Denali Street, Suite 1502 • Anchorage, AK 99503
Phone (907) 263-1401
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