8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): August 6, 2014

NORTHRIM BANCORP, INC.

(Exact name of registrant as specified in its charter)

Alaska	0-33501	92-0175752
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
3111 C Street, Anchorage, Alaska		99503
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 907-562-0062

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry Into a Material Definitive Agreement

On August 6, 2014, Northrim Capital Investments Co., (“NCIC”) an Alaska corporation and wholly-owned subsidiary of Northrim Bank (“Northrim Bank”), entered into a Unit Purchase Agreement (the “Purchase Agreement”) with Residential Mortgage Holding Company, LLC, an Alaska limited liability company (“RML”) and the equity owners of RML identified in the Purchase Agreement (the “Selling Members”).

Northrim Bank is a wholly-owned subsidiary of Northrim Bancorp, Inc. (“Northrim”). A wholly-owned subsidiary of RML, Residential Mortgage, LLC (“Residential Mortgage”) originates residential mortgages throughout Alaska and to a lesser extent, in Washington state.

The Purchase Agreement provides that, upon the terms and subject to the conditions set forth therein, NCIC will acquire all of the membership units in RML (the “Membership Units”) , owned by the Selling Members, which constitute approximately 76.5% of the total outstanding Membership Units (the “Acquired Units”). NCIC presently holds 23.5% of the total outstanding Membership Units in RML and subsequent to the acquisition of the Acquired Units, NCIC will own 100% of the outstanding Membership Units. The aggregate consideration payable by NCIC for the Acquired Units (the “Purchase Price”) shall be equal to $17,782,742 in cash, plus the assignment to certain Selling Members of life insurance policies held by RML, having an aggregate cash surrender value of $3,687,544, plus earn-out payments, if any, minus the aggregate amount of outstanding indebtedness of RML at closing (outside of indebtedness included in the definition of Net Closing Equity Amount), plus any difference between RML’s actual Net Closing Equity Amount at the closing of the transaction and a targeted Net Closing Equity Amount of $24,965,734. The Purchase Price will be paid to the Selling Members in the form of unsecured promissory notes issued to each Selling Member for their respective portion of the Purchase Price. The unsecured promissory notes are payable two business days after the closing of the transaction. The Purchase Price is also subject to certain post-closing adjustments based on differences between the preliminary Net Closing Equity Amount and the actual Net Closing Equity Amount to be calculated within 30 days following the closing of the transaction.

The Selling Members may receive additional cash proceeds(the “Earn-Out Payments”) based on the adjusted earnings of RML in all or a portion of the calendar years 2014, 2015, 2016, 2017, 2018 and 2019 (each an “Earn-Out Year” and collectively, the “Earn-Out Period” ). Under the Purchase Agreement, the Selling Members will receive Earn-Out Payments equal to:

1. 40% of adjusted earnings of RML between $1,000,000 and $2,000,000 (“Tier One Earn-Out Amount”);

2. 50% of adjusted earnings of RML between $2,000,000 and $3,000,000 plus the Tier One Earn-Out Amount (“Tier Two Earn-Out Amount”);

3. 70% of adjusted earnings of RML between $3,000,000 and $4,000,000 plus the Tier Two Earn-Out Amount (“Tier Three Earn-Out Amount”);

4. 85% of adjusted earnings of RML between $4,000,000 and $6,000,000 plus the Tier Three Earn-Out Amount (“Tier Four Earn-Out Amount”); and

5. 55% of adjusted earnings of RML over $6,000,000 plus the Tier Four Earn-Out Amount.

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The terms of the Purchase Agreement also allow NCIC to withhold and deduct from the Earn-Out Payments any amount owned to NCIC under the indemnification provisions of the Purchase Agreement.

NCIC’s obligation to make the Earn-Out Payments to the Selling Members during the Earn-Out Period will terminate if two or more of the Selling Members: terminate their employment with Residential Mortgage without good reason; are terminated for “cause”; become deceased; or suffer any mental or physical disability, which prevents such Selling Member from performing the essential functions of a professional and executive employee. During the Earn-Out Period, NCIC has also agreed to maintain RML as a separate entity or business unit and to direct all first priority residential mortgage loan business of Northrim Bank through RML.

The Purchase Agreement contains customary representations and warranties from NCIC, RML and the Selling Members. Additionally, RML has made representations and warranties on behalf of both RML and its wholly-owned subsidiary Residential Mortgage related to: financial statements, indebtedness, absence of changes, contracts, mortgage servicing and origination matters, pipeline loans, mortgages held for sale and hedging arrangements, compliance with legal requirements, and related party transactions.

NCIC, RML and the Selling Members have each agreed to customary covenants, including, among others, the preparation and filing of all necessary regulatory applications and notifications. RML has covenanted to NCIC that it will conduct its business and operations in the ordinary course. RML and each Selling Member also agreed to prohibitions against seeking any alternative acquisition transaction.

The Purchase Agreement is subject to various customary conditions, including, among others, receipt of required regulatory approvals, accuracy of the representations and warranties of RML and the Selling Members, no material adverse effect shall have occurred, receipt by NCIC of executed employment agreements with certain Selling Members in forms provided prior to the date of the Purchase Agreement.

The Purchase Agreement may be terminated upon mutual agreement, in the event closing has not occurred by December 1, 2014, failure to receive governmental approvals, and other customary termination provisions. Termination of the Purchase Agreement will not result in payment of a termination fee by any of NCIC, RML or the Seller Members.

The Purchase Agreement provides for indemnification periods of 18 months for general representations and warranties, 5 years for tax, employment issues and various other representations specified in the Purchase Agreement, and indefinitely for intentional misrepresentation, fraud and willful misconduct. In the event that RML suffers damages due to a breach or inaccuracy in any of their representations and warranties, indemnification for such damages will be apportioned 76.5% to the Selling Members and 23.5% to NCIC. The total amount of indemnification payments that each Selling Member is required to make under the Purchase Agreement is limited to the amount of each Selling Members pro-rata share of $1,000,000 plus any Earn-Out Payments actually received by (or payable to) such Selling Member, while indemnification payments required to be made under the Purchase Agreement by NCIC are limited to $1,000,000 plus all Earn-Out Payments paid or payable under the terms of the Purchase Agreement. Further, pursuant to the terms of the Purchase Agreement, NCIC must first seek recovery from the Earn-Out Payments for any indemnification claim arising out of a breach of the representations, warranties or covenants of RML.

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The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full and complete text of the Purchase Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014.

Item 7.01 Regulation FD Disclosure

The information furnished under Item 7.01 of this Current Report shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Attached as Exhibit 99.1 are presentation materials relating to Northrim BanCorp, Inc.

Item 8.01. Other Events.

On August 7, 2014, Northrim and RML issued a joint press release announcing the execution of the Purchase Agreement. A copy of the joint press release is attached hereto as Exhibit 99.2, and is incorporated by reference herein.

Forward-looking Statements

This current report on Form 8-K contains “forward-looking statements” that are subject to risks and uncertainties. These statements include, but are not limited to, descriptions of Northrim’s and RML’s financial condition, results of operations, mortgage origination volumes, asset and credit quality trends and profitability and statements about the expected timing, completion, financial benefits and other effects of the proposed acquisition of RML by Northrim Bank. All statements, other than statements of historical fact, regarding the financial position, business strategy and respective management’s plans and objectives for future operations of each of Northrim and RML are forward-looking statements. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. 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, Northrim’s management, RML, or RML’s 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 respective 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 actual results to differ materially and adversely from expectations as indicated in the forward-looking statements. These risks and uncertainties include: expected cost savings, synergies and other financial benefits from the proposed acquisition of RML by Northrim Bank might not be realized within the expected time frames and costs or difficulties relating to integration matters might be greater than expected; the requisite shareholder and regulatory approvals for the proposed merger might not be obtained; and the ability of Northrim and RML to execute their respective business plans (including the proposed acquisition of RML by Northrim Bank). Further, actual results may be affected by the ability to compete on price and other factors with other financial institutions; customer

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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 the cost of funds and return on assets. In addition, there are risks inherent in the mortgage and banking industries relating to collectibility 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 other filings of Northrim made 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. These forward-looking statements are made only as of the date of this current report, and neither Northrim nor RML undertakes an obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this current report.

Item 9.01 Financial Statements and Exhibits

Exhibit No.	Description
99.1	Presentation Materials relating to Northrim BanCorp, Inc.
99.2	Press Release dated August 7, 2014.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	NORTHRIM BANCORP, INC.
Date: August 7, 2014	By:	/s/ Joseph M. Schierhorn
		Joseph M. Schierhorn
		Executive Vice President and COO

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Exhibit Index

Exhibit No.	Description
99.1	Presentation Materials relating to Northrim BanCorp, Inc
99.2	Press Release dated August 7, 2014.

EX-99.1

Exhibit 99.1

Exhibit 99.1

Northrim BanCorp,Inc.

ACQUISITION OF RESIDENTIAL MORTGAGE HOLDING COMPANY, LLC.

Investor Presentation—August 6, 2014

FORWARD LOOKING STATEMENTS

This presentation contains “forward-looking statements” that are subject to risks and uncertainties. These statements include, but are not limited to, descriptions of Northrim’s and RML’s financial condition, mortgage origination volume, results of operations, asset and credit quality trends and profitability and statements about the expected timing, completion, financial benefits and other effects of the proposed acquisition of Residential Mortgage Holding Company, LLC. (“RML” ) by Northrim Bank. All statements, other than statements of historical fact, regarding the financial position, business strategy and respective management’s plans and objectives for future operations of each of Northrim and RML are forward-looking statements. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. When used in this presentation, the words “anticipate,” “believe,” “estimate,” “expect,” and “intend” and words or phrases of similar meaning, as they relate to Northrim, Northrim management, RML, or RML 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 respective 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 actual results to differ materially and adversely from expectations as indicated in the forward-looking statements. These risks and uncertainties include: expected cost savings, synergies and other financial benefits from the proposed transaction might not be realized within the expected time frames and costs or difficulties relating to integration matters might be greater than expected; the requisite regulatory approvals for the proposed transaction might not be obtained; and the ability of Northrim and RML to execute their respective business plans (including the acquisition of RML by Northrim Bank). Further, actual results may be affected by the 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 the 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 other filings of Northrim made with the Securities and Exchange Commission. 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. These forward-looking statements are made only as of the date of this presentation, and neither Northrim nor RML undertakes an obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this presentation.

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ANTICIPATED TRANSACTION HIGHLIGHTS

Strategic Rationale

NRIM affiliate with strong historical profitability and complementary cultures

Low execution risk: NRIM has a 15 year history and a 23.5% ownership in Residential Mortgage

Reinforces NRIM’s #3 market share in Alaska (a)

Increases Non Interest Income from 22% of revenues to 38%

Financially Attractive

Healthy EPS accretion: 5% in 2014 and 12% in 2015

Internal rate of return of 15%

Tangible book value dilution earned back in 6.89 years (b)

Effective use of capital to enhanced profitability and shareholder value

Capital ratios remain strong on a pro forma basis

(a) Based on market share for deposits provided by SNL.

(b) Tangible book value is a non-GAAP measure defined by Northrim as shareholders equity, less goodwill and intangible assets. Tangible book value was $21.73 per share at June 30, 2014, while the most comparable GAAP measure, book value (shareholders’ equity) was $22.97 per share at June 30, 2014. See Northrim’s Quarterly Report on Form 10-Q for the period ended March 31, 2014 for further information regarding the reconciliation of tangible book value with book value.

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OVERVIEW OF RESIDENTIAL MORTGAGE HOLDING COMPANY, LLC

Founded:

Business:

Relationship with NRIM:

Service Territory:

1998

Full service mortgage company 23.5% ownership, founding member 9 branches in Alaska and one affiliate (Homestate Mortgage Company–30% owned)

Products:

Servicing:

Market Position:

Origination Volume in $ millions:

1–4 Single family mortgages (FHA, VA, FNMA or FHLMC) All production sold “service released” One of the largest mortgage originators in Alaska

TOTAL PURCHASE REFINANCINGS % OF ALASKA MARKET (b) (c) 2014 YTD (a) $ 290 $257 $ 33 21.9% 2013 $ 792 $624 $168 19.8% 2012 $1,032 $589 $443 19.7%

Pre Tax Income

YTD June 2014: $ 1,759 FY 2013: $ 4,466 FY 2012: $11,164

(a) For six months ended 6/30/14

(b) Market share information available only for First Quarter 2014.

(c) Source: Alaska Housing Finance Corporation and Residential Mortgage Holdings Company, LLC

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ESTIMATED MARKET SHARE OF RESIDENTIAL MORTGAGE IN ALASKA (Single family & condominium loans, $ Millions)

(IN $MILLIONS) TOTAL ALASKA MARKET RML RML MARKET OF SHARE

2014 YTD (a) $ 494 $ 108 21.9% 2013 $4,006 $ 792 19.8% 2013 $5,233 $1,032 19.7% 2011 $3,852 $ 820 21.5% 2010 $4,467 $ 960 21.5% 2009 $5,782 $1,111 19.2% 2008 $3,815 $ 712 18.7%

Average: 20.05%

(a) For the three months ended 3/31/14

Source: Alaska Housing Finance Corporation and Residential Mortgage Holding Company, LLC

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NORTHRIM BANK AND RESIDENTIAL MORTGAGE BRANCH SYSTEM: EXTENDED ALASKA COVERAGE

Fairbanks

Alaska

Anchorage Soldotna

Juneau Kodiak

Sitka

Ketchikan

Northrim Bank Branches (15) Residential Mortgage Branches (9)

Gulf of Alaska

Yukon Territory

Cook Inlet

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TRANSACTION OVERVIEW

Estimated Transaction Value: $29.8 million

Consideration Mix: 100% cash

Structure (a): (1) Estimated Initial Payment of approximately $22.4 million at closing

(2) Five year earn-out based on pre-tax earnings and employment of principals. Estimated total earn-out payments: $7.4 million

Termination Fee/Walk Aways: None. Standard Material Adverse Effect and closing conditions applicable to financial institutions

Combined Transaction Costs: $400,000 (estimated)

Anticipated Cost savings: 4.0% (administrative expenses and warehouse lines)

Board Representation/ No Board representation. Senior Management of RML remains in place under Senior Management: 5 year employment agreements

Required Approvals: FDIC and State of Alaska

Due Diligence: Completed, including extensive review of all operations

Expected Closing: Fourth quarter of 2014

(a) See Exhibit A for Earn out formula

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STRATEGIC RATIONALE

Acquisition of a well established organization intimately known to Northrim since 1998 and expected low execution risk

Provides #3 position in Alaska mortgage market

Enhances Non Interest Income

Alaska housing markets are stable and improving

— Alaska housing markets has been steadier than other markets in the US — The number of building permits rose 9% in 2013, most since 2007 (a)

(a) Source: US Census Bureau. See appendix for data on building permits.

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PRO FORMA FINANCIAL IMPACT

Transaction Multiples (a) Acquisition of Residential Mortgage Comparable Deal Medians (b)

Book Value 1.26X 1.97X Last Twelve Months Earnings 12.6X 10.8X Price to Revenues 1.26X 1.85X

Transaction Metrics (estimated)

2014 EPS Accretion (c) 5.1% 2015 EPS Accretion 12.0% Internal Rate of Return 15.0% Tangible Book Value Per Share Earnback (d) 6.89 years

Consolidated Capital Ratios

(As of 6/30/14) Pro Forma

TCE/TA 11.02% 9.29%

Leverage Ratio 12.55% 10.76% Tier 1 Ratio 14.26% 12.13% Total Risk-based Capital Ratio 15.51% 13.38%

(a) NRIM data as of 6/30/2014.

(b) Source: SNL. Includes mortgage banking transactions announced since January 2011 which disclosed transaction terms. (c) Excludes one time expenses.

(d) Calculated as the number of years that the initial tangible book value dilution will be earned back on incremental earnings from the acquisition. Initial tangible book value per share dilution includes all estimated acquisition expenses.

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CONCLUSION

Northrim is buying 100% of an affiliate in expected low execution risk transaction

Acquisition is in line with Northrim strategic plan of strengthening its Alaska market share

Transaction expected to increase and diversify Northrim’s non interest income and position it for further growth of fee businesses

Financially attractive; expected 15% EPS accretion in 2015 and strong pro forma capital ratios

Complementary business models with strong franchises and consistent profitability

Increased size and scale favorably positions the company for further acquisitions and growth strategies

Transaction intended to enhance Northrim’s long-term shareholder value

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APPENDIX

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EARN-OUT PAYMENTS

EARN OUT PAYMENTS—The sellers will have the right to receive additional payments for the 60 months following closing based on the adjusted earnings of Residential Mortgage adjusted for certain benefits brought about by NRIM

These payments are contingent upon the continued employment of at least two of three sellers with RML for the duration of the earn-out

Payments for each 12 month period following closing will be calculated as follows: If Adjusted Earnings are: (a) less than $1 million: 0% (b) $1 to $2 million: 40% of earning over $1 million (c) $2 to $3 million: $400,000 plus 50% of earnings over $2 million (d) $3 to $4 million: $900,000 plus 70% of earnings over $3 million (e) $4 to $6 million: $1,600,000 plus 85% of earnings over $4 million

(f) Over $6 million: $3,300,000 plus 55% of earnings over $6 million

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ALASKA PURCHASE MORTGAGE VOLUME HAS BEEN STEADIER THAN US AVERAGE

Single family and condominium new loan and refinancing activity in Alaska ($ Millions)

TOTAL NEW LOANS REFINANCING REFINANCING (AS A % OF TOTAL )

2013 $4,006 $2,424 $1,582 39.5% 2012 $5,233 $2,136 $3,097 59.2% 2011 $3,852 $1,795 $2,057 53.4% 2010 $4,467 $2,094 $2,373 53.1% 2009 $5,782 $2,085 $3,697 63.9% 2008 $3,815 $2,197 $1,618 42.4% 2007 NA $2,460 NA NA 2006 NA $2,560 NA NA 2005 NA $2,294 NA NA 2004 NA $2,095 NA NA 2003 NA $2,116 NA NA 2002 NA $1,954 NA NA 2001 NA $1,677 NA NA 2000 NA $1,111 NA NA

Source: Alaska Housing Finance Corporation

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BUILDING ACTIVITY—ALASKA STATEWIDE, 1980–2013

ALASKA BUILDING PERMITS

Number of new, privately owned housing, 1-5 units authorized

12000

10000

8000

6000

4000

2000

0

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

11,248

9% increase in 2013, most since 2007

1081

Source: US Census Bureau, 2013 is November

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EX-99.2

Exhibit 99.2

Contact:
Joe Beedle, Northrim Bank President and CEO (907) 261-3338	Roger Aldrich, Co-Managing Member (907) 222-8822
Joe Schierhorn, Northrim BanCorp, Inc. Executive Vice President, COO (907) 261-3308	George Porter, Co-Managing Member (907) 222-8802

JOINT NEWS RELEASE

Northrim BanCorp to Acquire Residential Mortgage, LLC for $29.8_Million

Conference Call Scheduled for Friday, August 8, at 10:00 a.m. Alaska Time

ANCHORAGE, AK —August 7, 2014—Northrim BanCorp, Inc. (“Northrim”) (NASDAQ: NRIM) and Residential Mortgage Holding Company, LLC, (“RML”) today jointly announced the signing of a definitive purchase agreement (the “Purchase Agreement”) for a wholly-owned subsidiary of Northrim Bank, Northrim Capital Investment Company (“NCIC”), to acquire 76.5% of the membership interests in RML, the parent company of Residential Mortgage, LLC (“Residential Mortgage”) in a cash transaction currently valued at $29.8 million.

Northrim Bank was an original investor in Residential Mortgage when it was founded in 1998 and currently owns, through NCIC, the remaining 23.5% of the membership interests in RML. Residential Mortgage, a wholly-owned subsidiary of RML, is one of the largest mortgage originators in Alaska, funding approximately $792 million in loans in 2013 and approximately $1.2 billion in 2012.

“We expect the transaction to close in the fourth quarter of 2014,” said Marc Langland, Chairman, President, and CEO of Northrim. “We view this transaction as another opportunity to advance our vision to be Alaska’s premier financial institution, deploy capital strategically, and increase our ability to provide financial services to our customers.”

Northrim Bank’s board of directors and RML’s owners unanimously approved the transaction, which is subject to approval by applicable bank regulators, as well as other customary closing conditions. In order to ensure continuity of management of Residential Mortgage, Northrim Bank intends to offer five year employment contracts to each of the three principals of Residential Mortgage.

“As one of the largest mortgage originators in the Alaska market, Residential Mortgage is well-known and respected,” said Joe Beedle, Northrim Bank’s President and CEO. “We are excited about the opportunities for growth and expansion that this acquisition brings.”

“We believe that joining Northrim Bank will generate long-term benefits for both companies and provide the capital and expertise we need to further build our market share in Alaska and potentially expand into new markets in the future,” said Roger Aldrich, Co-Managing member of RML.

“Having worked with the principals of Residential Mortgage for sixteen years, we recognized their leadership in Alaska’s residential finance market and value their continued ability to network with us to provide important financial services to our customers,” said Joe Schierhorn, Chief Operating Officer for Northrim.

“Northrim is one of Alaska’s premier companies, and we believe transitioning to become a full subsidiary of Northrim Bank will bring ongoing benefits to our customers and employees,” said George Porter, Co-Managing member of RML.

The terms of the transaction call for Northrim Bank to make an estimated payment of approximately $22.4 million at closing that consists of $17.8 million in cash and the assignment of life insurance policies with cash surrender values totaling $3.7 million to certain members of RML, subject to a closing adjustment currently estimated at $900,000 to cover any difference between the equity of RML at June 30, 2014, and its equity at the close of the transaction. The Purchase Agreement also contains an earn-out provision that requires Northrim Bank to pay the current owners of RML additional cash proceeds currently estimated at $7.4 million over a five year period, provided that the annual adjusted earnings of RML achieve thresholds specified in the Purchase Agreement during that period. The initial estimated cash payment of $22.4 million for 76.5% of RML represents 126% of the book value for that portion of RML at June 30, 2014. As a result, Northrim will realize an estimated dilution of 9.5% in its tangible book value¹. “We expect the transaction to be accretive to earnings in 2014 and that we will earn back the dilution to our tangible book value in less than seven years,” added Langland.

Northrim BanCorp’s legal counsel for the transaction was Davis Wright Tremaine LLP and its investment banking consultant was Jean-Luc Servat of Panoramic Capital Advisors. RML’s legal counsel for the transaction was the Durrell Law Group P.C.

Conference Call Information

Management will host a conference call on Friday, August 8, at 10:00 a.m. Alaska Time (2:00 p.m. ET) to discuss the RML acquisition. This call will be broadcast live via the internet. Investment professionals and all current and prospective shareholders are invited to access the live call by dialing 412-317-6016. To listen to the call online, either live or archived, visit the Investor Relations page of Northrim’s website at www.northrim.com. The audio recording of the completed conference call will be available on Northrim’s website shortly after the completion of the call for a period of 30 days.

About Northrim BanCorp

Northrim BanCorp, Inc. is the parent company of Northrim Bank, an Alaska-based community bank with 15 branches in Anchorage, the Matanuska Valley, Juneau, Fairbanks, Ketchikan, and Sitka serving 75% of Alaska’s population; and an asset based lending division in Washington. The Bank differentiates itself with its detailed knowledge of Alaska’s economy and its “Customer First Service” philosophy. Affiliated companies include Elliott Cove Insurance Agency, LLC; Elliott Cove Capital Management, LLC; Residential Mortgage, LLC; Northrim Benefits Group, LLC; and Pacific Wealth Advisors, LLC.

About Residential Mortgage, LLC

Residential Mortgage, LLC is an Alaskan-owned mortgage company established in 1998 and currently has nine offices statewide. In 2013, Residential Mortgage, LLC originated approximately $792 million in mortgage loans, giving it 19.7% of the Alaska mortgage origination market in that year.

Forward-Looking Statement

This release contains “forward-looking statements” that are subject to risks and uncertainties. These statements include, but are not limited to, descriptions of Northrim’s and RML’s financial condition, mortgage origination volume, results of operations, asset and credit quality trends and profitability and statements about the expected timing, completion, financial benefits and other effects of the proposed acquisition of RML by Northrim Bank. All statements, other than statements of historical fact, regarding the financial position, business strategy and respective management’s plans and objectives for future operations of each of Northrim and RML are forward-looking statements. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. 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, Northrim management, RML, or RML 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 respective expectations as reflected in forward-looking statements are reasonable, we cannot assure

¹  Tangible book value is a non-GAAP measure defined by Northrim as shareholders equity, less goodwill and intangible assets. Tangible book value was $21.73 per share at June 30, 2014, while the most comparable GAAP measure, book value (shareholders’ equity) was $22.97 per share at June 30, 2014. See Northrim’s Quarterly Report on Form 10-Q for the period ended March 31, 2014 for further information regarding the reconciliation of tangible book value with book value.

readers that those expectations will prove to be correct. Forward-looking statements are subject to various risks and uncertainties that may cause actual results to differ materially and adversely from expectations as indicated in the forward-looking statements. These risks and uncertainties include: expected cost savings, synergies and other financial benefits from the proposed transaction might not be realized within the expected time frames and costs or difficulties relating to integration matters might be greater than expected; the requisite regulatory approvals for the proposed transaction might not be obtained; and the ability of Northrim and RML to execute their respective business plans (including the acquisition of RML by Northrim Bank). Further, actual results may be affected by the 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 the 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 other filings of Northrim made 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. These forward-looking statements are made only as of the date of this release, and neither Northrim nor RML undertakes an obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this release.

www.northrim.com

Transmitted on GlobeNewswire on August 7, 2014, at 5:00 a.m. Alaska Daylight Time.