XML 45 R25.htm IDEA: XBRL DOCUMENT v2.4.1.9
Employee Benefit Plans
12 Months Ended
Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract]  
Employee Benefit Plans
Employee Benefit Plans
On July 1, 1992, Northrim Bank implemented a profit sharing plan, including a provision designed to qualify the plan under Section 401(k) of the Internal Revenue Code of 1986, as amended.  Employees may participate in the plan if they work more than 1,000 hours per year.  Under the plan, each eligible participant may contribute a percentage of their eligible salary to a maximum established by the IRS, and Northrim Bank provides for a mandatory $0.25 match for each $1.00 contributed by an employee up to 6% of the employee’s salary.  Northrim Bank may increase the matching contribution at the discretion of the Board of Directors.  The plan also allows Northrim Bank to make a discretionary contribution on behalf of eligible employees based on their length of service to Northrim Bank.
To be eligible for 401(k) contributions, participants must be employed at the end of the plan year, except in the case of death, disability or retirement.  Northrim Bank expensed $774,000, $673,000, and $620,000, in 2014, 2013, and 2012, respectively, for 401(k) contributions and included these expenses in salaries and other personal expense in the Consolidated Statements of Income.
Employees of RML may participate in RML's 401(k) profit sharing plan. Participation in the plan is available to RML employees who have completed three months of service with the Company and have attained the age of twenty and one-half years. RML expensed $12,000 in December 2014 for 401(k) contributions and included this expense in salaries and other personal expenses in the Consolidated Statements of Income.
On July 1, 1994, Northrim Bank implemented a Supplemental Executive Retirement Plan for executive officers of Northrim Bank whose retirement benefits under the 401(k) plan have been limited under provisions of the Internal Revenue Code. Contributions to this plan totaled $184,000, $220,000, and $302,000, in 2014, 2013, and 2012, respectively.  These expenses are included in salaries and other personnel expense in the Consolidated Statements of Income.  At December 31, 2014 and 2013, the balance of the accrued liability for this plan was included in other liabilities and totaled $2.5 million, respectively.
RML has established a Supplemental Executive Retirement Plan ("SERP"), under which RML has agreed to make payment to certain key executives, based on contributions made by RML to the plan and a variable rate of return. The SERP's assets primarily consist of the cash surrender value of life insurance policies. Contributions and earnings made to the participant accounts to the SERP are vested over ten years. RML recorded expense of $87,000 in December 2014. RML's recorded obligation under the SERP amounted to $4.4 million at December 31, 2014, and was included in other liabilities.
In February of 2002, Northrim Bank implemented a non-qualified deferred compensation plan in which certain of the executive officers participate.  Northrim Bank's net liability under this plan is dependent upon market gains and losses on assets held in the plan.  In 2014, 2013 and 2012, Northrim Bank recognized an increase in its liability of $140,000 and decreases in its liability of $99,000, and $330,000, respectively.  These expenses are included in salaries and other personnel expense in the Consolidated Statements of Income.  At December 31, 2014 and 2013, the balance of the accrued liability for this plan was included in other liabilities and totaled $1.3 million and $1.2 million, respectively.
In November of 2011, Northrim Bank implemented a Profit Sharing Plan.  Executive officers, in addition to all employees of Northrim Bank who commenced employment prior to the January 1 that precedes or coincides with a performance period, are eligible to participate in payments made from a profit sharing pool calculated in accordance with the provisions of the Profit Sharing Plan.  The aggregate amount to be paid to employees under the Profit Sharing Plan is determined using performance goals that are established by the Compensation Committee of the Board.  If the performance goals are met for the year, the profit sharing pool for the period is calculated based on a formula that is also approved by the Compensation Committee each year.  The Compensation Committee approved management’s recommendation based upon the calculated payout under the Profit Sharing Plan’s methodology resulting in aggregate payouts of $1 million, $858,000, and $894,000 for 2014, 2013, and 2012, respectively.  Information concerning the calculation of employee payments under the Profit Sharing Plan is set forth under the heading “Performance Based Annual Payment” in the Company’s definitive proxy statement for the 2015 Annual Shareholders’ Meeting and is incorporated into this report by reference.