Regulatory Matters

12 Months Ended

Dec. 31, 2012

Regulatory Matters [Abstract]

Regulatory Matters

NOTE 21 - Regulatory Matters

The Company and Northrim Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Northrim Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and Northrim Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory practices.  The Company’s and Northrim Bank’s capital amounts and classification are also subject to qualitative judgment by the regulators about components, risk weightings, and other factors.

Federal banking agencies have established minimum amounts and ratios of total and Tier I capital to risk-weighted assets, and of Tier I capital to average assets.  The regulations set forth the definitions of capital, risk-weighted and average assets.  Management believes, as of December 31, 2012, that the Company and Northrim Bank met all capital adequacy requirements.

The tables below illustrate the capital requirements for the Company and the Bank and the actual capital ratios for each entity that exceed these requirements.  Management intends to maintain a Tier 1 risk-based capital ratio for the Bank in excess of 10% in 2013, exceeding the FDIC’s “well-capitalized” capital requirement classification.  The dividends that the Bank pays to the Company are limited to the extent necessary for the Bank to meet the regulatory requirements of a “well-capitalized” bank.  The capital ratios for the Company exceed those for the Bank primarily because the $18 million trust preferred securities offerings that the Company completed in the second quarter of 2003 and in the fourth quarter of 2005 are included in the Company’s capital for regulatory purposes although they are accounted for as a liability in its financial statements.  The trust preferred securities are not accounted for on the Bank’s financial statements nor are they included in its capital.  As a result, the Company has $18 million more in regulatory capital than the Bank at December 31, 2012 and 2011, which explains most of the difference in the capital ratios for the two entities.

Northrim BanCorp, Inc.	Actual				Adequately-Capitalized			Well-Capitalized
(In Thousands)	Amount		Ratio		Amount		Ratio	Amount		Ratio
As of December 31, 2012:
Total Capital (to risk-weighted assets)	$	158,820	16.60	%	$	76,540	> 8.0%	$	95,675	> 10.0%
Tier I Capital (to risk-weighted assets)	$	146,802	15.34	%	$	38,280	> 4.0%	$	57,419	>  6.0%
Tier I Capital (to average assets)	$	146,802	12.99	%	$	45,205	> 4.0%	$	56,506	>  5.0%
As of December 31, 2011:
Total Capital (to risk-weighted assets)	$	147,848	16.46	%	$	71,858	> 8.0%	$	89,823	> 10.0%
Tier I Capital (to risk-weighted assets)	$	136,553	15.20	%	$	35,935	> 4.0%	$	53,903	>  6.0%
Tier I Capital (to average assets)	$	136,553	12.83	%	$	42,573	> 4.0%	$	53,216	>  5.0%
Northrim Bank		Actual			Adequately-Capitalized			Well-Capitalized
(In Thousands)		Amount	Ratio			Amount	Ratio		Amount	Ratio
As of December 31, 2012:
Total Capital (to risk-weighted assets)	$	143,684	15.12	%	$	76,023	> 8.0%	$	95,029	> 10.0%
Tier I Capital (to risk-weighted assets)	$	131,748	13.87	%	$	37,995	> 4.0%	$	56,993	>  6.0%
Tier I Capital (to average assets)	$	131,748	11.74	%	$	44,889	> 4.0%	$	56,111	>  5.0%
As of December 31, 2011:
Total Capital (to risk-weighted assets)	$	135,394	15.14	%	$	71,542	> 8.0%	$	89,428	> 10.0%
Tier I Capital (to risk-weighted assets)	$	124,152	13.89	%	$	35,753	> 4.0%	$	53,629	>  6.0%
Tier I Capital (to average assets)	$	124,152	11.72	%	$	42,373	> 4.0%	$	52,966	>  5.0%