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Subsequent Event (Notes)
3 Months Ended
Mar. 31, 2014
Subsequent Events [Abstract]  
Subsequent Event
Subsequent Event
On April 1, 2014 the Company completed the acquisition of Alaska Pacific Bancshares, Inc. ("Alaska Pacific") pursuant to an Agreement and Plan of Merger, dated as of October 21, 2013 (the "Merger Agreement"). As a result of this transaction, Alaska Pacific was merged into the Company and Alaska Pacific Bank was merged into Northrim Bank. The primary reason for the acquisition was to expand the Company's geographic footprint in Alaska. Under the terms of the Merger Agreement, Northrim paid $17.57 per share in either cash, shares of the Company's common stock, or a combination thereof for each outstanding share of Alaska Pacific common stock. The total purchase price was $13.9 million, which was comprised of the issuance of 290,212 shares of the Company's common stock (at a volume weighted average closing price of $25.66 per share) and $6.4 million in cash.
The results of operations for Alaska Pacific will be included in the Company's consolidated financial statements from the date of acquisition. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the April 1, 2014 acquisition date.
The application of the acquisition method of accounting resulted in the recognition of a bargain purchase gain of approximately $300,000 and a core deposit intangible of $623,000, or 0.5% of core deposits. The bargain purchase gain represents the excess of the estimated fair value of the net assets acquired in excess of the purchase price. This acquisition resulted in a bargain purchase gain primarily due to the inclusion of certain adjustments to the purchase price for potential risks identified by the Company during the due diligence and price negotiation stages of the acquisition that were concluded in October of 2013. As of the date of this Form 10-Q, the Company has concluded that the potential risks identified at that time do not represent a liability to the Company and, accordingly, they have not been allocated any value in the application of the acquisition method of accounting.