NRIM 10-K & 10-Q changes, risk factors and insider trading

•Fiscal challenges facing U.S. government, including government shutdowns, could negatively impact financial markets which in turn could have an adverse effect on our financial position or results of operations.

•Climate change, related legislative and regulatory initiatives, severe weather, natural disasters, and other external events could significantly impact our business.

Our earnings and cash flows are largely dependent upon our net interest income. Net interest income is the difference between interest income earned on interest-earning assets such as loans and securities and interest expense paid on interest-bearing liabilities such as deposits and borrowed funds. Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions, inflationary trends, changes in government spending and debt issuances and policies of various governmental and regulatory agencies and, in particular, the FRB. Changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and investments and the amount of interest we pay on deposits and borrowings, but such changes could also affect (i) our ability to originate loans and obtain deposits; (ii) the fair value of our financial assets and liabilities; and (iii) the average duration of our mortgage portfolio and other interest-earning assets. Although the Federal Open Market Committee (“FOMC”) lowered rates slightly in 2024,2025, and as of December 31, 2024,2025, the target range for the federal funds rate had been decreased to 4.25%3.50% to 4.50%,3.75%, it remains uncertain whether the FOMC may return to increase the target range for the federal funds rate to attain a monetary policy sufficiently restrictive to return inflation to more normalized levels, begin to reduce the federal funds rate or leave the rate at its current level for a lengthy period of time.

Inflation has continued to be heightened in 2024recent years at levels not seen for over 40 years. Inflationary pressures are currently expected to moderate but continue in 2025.2026. Inflation could lead to increased costs to our customers, making it more difficult for them to repay their loans or other obligations increasing our credit risk. Sustained higher interest rates by the FRB may be needed to tame persistent inflationary price pressures, which could push down asset prices and weaken economic activity. A deterioration in economic conditions in the United States and our regional markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations.

Our success depends, to a certain extent, upon global, domestic and local economic and political conditions, as well as governmental monetary policies. Conditions such as changes in interest rates, money supply, levels of employment and other factors beyond our control may have a negative impact on economic activity. Additionally, an open conflict or war across any region, including, but not limited to, the conflict in Iran, could have a material adverse effect on our results of operations. Any contraction of economic activity, including an economic recession, may adversely affect our asset quality, deposit levels and loan demand and, therefore, our earnings. In particular, interest rates are highly sensitive to many factors that are beyond our control, including global, domestic and local economic conditions and the policies of various governmental and regulatory agencies and, specifically, the FRB.

The tightening of the FRB’s monetary policies, including repeated and aggressive increases in target range for the federal funds rate as well as the conclusion of the FRB’s tapering of asset purchases, together with ongoing economic and geopolitical instability,instability increases the risk of an economic recession. Although forecasts have varied, many economists are projecting that,a whilemodest indicatorsincrease ofin U.S.gross economicdomestic performance,output suchin as2026, incomeslightly growth,higher may be strongunemployment, and levelsmoderation of inflation mayin continuecoming toquarters, decrease,however, other forecasts indicate that the U.S. economy may be flat or experience a modest decrease in gross domestic output in 2025 while inflation is expected to remain elevated relative to historic levels in the coming quarters.flat. Any such downturn in economic output, especially domestically and in the Alaska and other markets in which we operate, may adversely affect our asset quality, deposit levels, loan demand and results of operations.

We are operating in an uncertain economic environment. The pandemic caused a global economic slowdown, and while we have seen economic recovery, continuing supply chain issues, implementation of tariffs, fluctuations in oil prices, labor shortages and inflation risk are affecting the continued recovery. In the longer term, relatively low oil prices are expected to negatively impact the overall economy in Alaska on a larger scale as we estimate that one third of the Alaskan economy is related to oil. Financial institutions continue to be affected by changing conditions in the real estate and financial markets, along with an arduous regulatory climate. Continued economic uncertainty and a recessionary or stagnant economy could result in financial stress on the Bank's borrowers, which could adversely affect our business, financial condition and results of operations. In addition, Alaska is highly dependent on foreign trade, particularly with respect to China, Australia, Japan, and South Korea and uncertain tariff policies may negatively impact foreign trade. Deteriorating conditions in the regional economies of Anchorage, Matanuska-Susitna Valley, Fairbanks, and the Southeast areas of Alaska served by the Company could drive losses beyond that which is provided for in our allowance for credit losses. We may also face the following risks in connection with events:

We are subject to lending concentration risks.

Interest rate changes, such as rate increases implemented by the FRB, have in the past, and may in the future, result in lower rate locks and closed loan volume, which may adversely impact the earnings and results of operations of RML. In addition, the recentany increase and future increase, as is currently expected, in interest rates has in the past, and may in the future, materially and adversely affect our future loan origination volume and margins.

The Company’s technologies, systems, networks and software, and those of other financial institutions have been, and are likely to continue to be, the target of cybersecurity threats and attacks, which may range from uncoordinated individual attempts to sophisticated and targeted measures directed at us. With the advent of artificial intelligence, these cybersecurity threats are more sophisticated and prevalent than ever before. These cybersecurity threats and attacks may include, but are not limited to, breaches, unauthorized access, misuse, malicious code, computer viruses and denial of service attacks that could result in unauthorized access, misuse, loss or destruction of data (including confidential customer information), account takeovers, unavailability of service or other events. These types of threats may result from human error, fraud or malice on the part of external or internal parties, or from accidental technological failure. Further, to access our products and services our customers may use computers and mobile devices that are beyond our security control systems. The risk of a security breach or disruption, particularly through cyber-attack or cyber intrusion, including by computer hackers, has increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

Our customers and employees have been, and will continue to be, targeted by parties using artificial intelligence, fraudulent e-mails and other communications in attempts to misappropriate passwords, payment card numbers, bank account information or other personal information or to introduce viruses or other malware through “trojan horse” programs to our customers’ computers. These communications may appear to be legitimate messages sent by the Bank or other businesses, but direct recipients to fake websites operated by the sender of the e-mail or request that the recipient send a password or other confidential information via e-mail or download a program. Despite our efforts to mitigate these threats through product improvements, use of encryption and authentication technology to secure online transmission of confidential consumer information, and customer and employee education, such attempted frauds against us or our merchants and our third-party service providers remain a serious issue. The pervasiveness of cyber security incidents in general and the risks of cyber-crime are complex and continue to evolve. In addition, following COVID-19, we have modified our business practices with aA portion of our employees are working remotely from their homes.homes, Theand the continuation of these work-from-home measures also introduces additional operational risk, including increased cybersecurity risk. In light of several recent high-profile data breaches at other companies involving customer personal and financial information, we believe the potential impact of a cyber security incident involving the Company, any exposure to consumer losses and the cost of technology investments to improve security could cause customer and/or Bank losses, damage to our brand, and increase our costs.

Technology and other changes are allowing parties to complete financial transactions through alternative methods that historically have involved banks. For example, consumers can now maintain funds that would have historically been held as bank deposits in brokerage accounts, mutual funds or general-purpose reloadable prepaid cards. Consumers can also complete transactions, such as paying bills and/or transferring funds directly without the assistance of banks. Transactions utilizing digital assets, including cryptocurrencies, stablecoins and other similar assets, have increased substantially over the course of the last several years.years and are expected to continue following the passage of the GENIUS Act in 2025. Certain characteristics of digital asset transactions, such as agentic artificial intelligence, the speed with which such transactions can be conducted, the ability to transact without the involvement of regulated intermediaries, the ability to engage in transactions across multiple jurisdictions, and the anonymous nature of the transactions, are appealing to certain consumers notwithstanding the various risks posed by such transactions as illustrated by the current and ongoing market volatility. Accordingly, digital asset service providers, which at present are not subject to the extensive regulation of banking organizations and other financial institutions, have become active competitors for our customers’ banking business. The process of eliminating banks as intermediaries, known as “disintermediation,” could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits. Further, an initiative by the CFPB, as prompted by the current Presidential Administration,CFPB to promote “open and decentralized banking” through the proposal of a Personal Financial Data Rights rule designed to facilitate the transfer of customer information at the direction of the customer to other financial institutions is expected to go into effect in 2026 and could lead to greater competition for products and services among banks and nonbanks alike if a final rule is adopted.alike. The timing of and prospects for any such action are uncertain at this time. The loss of these revenue streams and the lower cost of deposits as a source of funds could have a material adverse effect on our financial condition and results of operations.

Additionally, under our loan servicing program we retain servicing rights on mortgage loans originated by RML and sold to AHFC. If we breach any of the representations and warranties in our servicing agreements with AHFC, we may be required to repurchase any loan sold under this program and record a loss upon repurchase and/or bear any subsequent loss on the loan. We may not have any remedies available to us against third parties for such losses, or the remedies might not be as broad as the remedies available to the Alaska Housing Finance CorporationAHFC against us.

The Dodd-Frank Act has had a substantial impact on our industry, including the creation of the CFPB with broad powers to regulate consumer financial products such as credit cards and mortgages, the creation of a Financial Stability Oversight Council comprised of the heads of other regulatory agencies, has resulted in new capital requirements from federal banking agencies, placed new limits on electronic debit card interchange fees, and requires banking regulators, the SEC and national stock exchanges to adopt significant new corporate governance and executive compensation reforms. Regulators have significant discretion and authority to prevent or remedy practices that they deem to be unsafe or unsound, or violations of laws or regulations by financial institutions and holding companies in the performance of their supervisory and enforcement duties. The exercise of regulatory authority may have a negative impact on our financial condition and results of operations. Additionally, our business is affected significantly by the fiscal and monetary policies of the U.S. federal government and its agencies, including the FRB.

Following the 2024 elections, Republicans control the White House and both Chambers of Congress. As a result, Republicans will be able to set the policy agenda both legislatively and in the regulatory agencies that have rulemaking and supervisory authority over the financial services industry generally and the Bank specifically. Although agendas are expected to vary substantially from the agenda of the prior Democratic administration, congressional committees with jurisdiction over the banking sector may continue to pursue, oversight in a variety of areas, including improving competition in the banking sector and changes to the oversight of bank mergers and acquisitions, and establishing a regulatory framework for digital assets and markets. The prospects for the enactment of major banking reform legislation under the new Congress are unclear at this time.

Moreover, the turnover of the Presidential Administration in 2025 resulted in certain changes in the leadership and senior staffs of the federal banking agencies and the Treasury Department. These changes are likely to continue to impact the rulemaking, supervision, examination and enforcement priorities and policies of the agencies and likely will continue to do so over the next several years. The potential impact of any changes in agency personnel, policies and priorities on the financial services sector, including the Bank, cannot be predicted at this time.

Fiscal challenges facing the U.S. government, including government shutdowns, could negatively impact financial markets which in turn could have an adverse effect on our financial position or results of operations.

FederalAs evidenced by the U.S. government shutdown in November 2025, federal budget deficit concerns and the potential for political conflict over legislation to fund U.S. government operations and raise the U.S. government’s debt limit may increase the possibility of a default by the U.S. government on its debt obligations, related credit-rating downgrades, or an economic recession in the United States. Many of our investment securities are issued by the U.S. government and government agencies and sponsored entities. As a result of uncertain domestic political conditions, including potential future federal government shutdowns, the possibility of the federal government defaulting on its obligations for a period of time due to debt ceiling limitations or other unresolved political issues, investments in financial instruments issued or guaranteed by the federal government pose liquidity risks. In connection with prior political disputes over U.S. fiscal and budgetary issues leading to theprevious U.S. government shutdown in 2011,shutdowns, S&P lowered its long term sovereign credit rating on the U.S. from AAA to AA+. In 2024,November Congress narrowly averted2025, a government43 day shutdown by passing a continuing resolutionoccurred and ifthe apotential budgetfor or another continuing resolution is not passed by March 14, 2025, thefurther U.S. government would again be faced with a government shutdown. In part due to repeated debt-limit political standoffs and last-minute resolutions,shutdowns in 20232026 a rating agency downgraded the U.S. long-term foreign-currency issuer default rating to AA+ from AAA and reiterated the AA+ rating in August 2024.remains. A further downgrade, or a downgrade by other rating agencies, as well as sovereign debt issues facing the governments of other countries, could have a material adverse impact on financial markets and economic conditions in the U.S. and worldwide.

The FDIC insures deposits at FDIC-insured financial institutions, including the Bank. The FDIC charges insured financial institutions premiums to maintain the Deposit Insurance Fund ("DIF") at a specific level. Historically, unfavorable economic conditions increased bank failures and these additional failures decreased the DIF. In order to restore the DIF to its statutorily mandated minimums the FDIC significantly increased deposit insurance premium rates, including the Bank's. FDIC insurance premiums could increase in the future in response to similar declining economic conditions. The FDIC may continue to increase the assessment rates or impose additional special assessments in the future to restore and then steadily increase the DIF to these statutory target levels. Any increase in the Bank's FDIC premiums could have an adverse effect on its business, financial condition and results of operations.

We are subject to changes in tax law that could increase our effective tax rates. These law changes may be retroactive to previous periods and as a result could negatively affect our current and future financial performance. For example, legislation enacted in 20172017, and extended in 2025, resulted in a reduction in our federal corporate tax rate from 35% in 2017 to 21% in 2018, which had a favorable impact on our earnings and capital generation abilities. However, this legislation also enacted limitations on certain deductions, such as the deduction of FDIC deposit insurance premiums, which partially offset the anticipated increase in net earnings from the lower tax rate. Any increase in the corporate tax rate or surcharges that may be adopted by Congress would adversely affect our results of operations in future periods.

In addition, the Bank’s customers experienced and likely will continue to experience varying effects from both the individual and business tax provisions of the TaxOne Big Beautiful Bill Act adopted on July 4, 2025 and other future changes in tax law and such effects, whether positive or negative, may have a corresponding impact on our business and the economy as a whole.

Whether we resume, and the amount and timing of such stock repurchases is subject to capital availability and periodic determinations by our Board of Directors. The Company continues to evaluate the potential impact that regulatory proposals may have on our liquidity and capital management strategies, including Basel III and those required under the Dodd-Frank Act. The actual amount and timing of future share repurchases, if any, will depend on market and economic conditions, applicable SEC rules, federal and state regulatory restrictions, and various other factors, including the recently implemented 1% excise tax on repurchases of stock. In addition, the amount we spend and the number of shares, if any, we are able to repurchase under our stock repurchase program may further be affected by a number of other factors, including the stock price and blackout periods in which we are restricted from repurchasing shares. Our stock repurchases may change from time to time, and we cannot provide assurance that we will continue to repurchase stock in any particular amounts or at all. A reduction in or elimination of our stock repurchases could have a negative effect on our stock price.

Climate change, related legislative and regulatory initiatives, severe weather, natural disasters, and other external events could significantly impact our business.

SevereConcerns over the long-term impacts of climate change have led to governmental efforts around the world to mitigate those impacts. As a result, political and social attention to the issue of climate change has increased. The U.S. government, state legislatures and federal and state regulatory agencies are likely to continue to propose and advance numerous legislative and regulatory initiatives seeking to mitigate the effects of climate change. These initiatives and increasing supervisory expectations may require the Company to expend significant capital and incur compliance, operating, maintenance and remediation costs. In addition, severe weather events of increasing strength and frequency due to climate change cannot be predicted and may be exacerbated by global climate change, natural disasters, including volcanic eruptions and earthquakes, and other adverse external events could have a significant impact on our ability to conduct business or upon third parties who perform operational services for us. In addition, there is continuing uncertainty over demand for oil and gas in part due to consumer demand and regulatory changes from climate change related policies. Such events could affect the stability of our deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in lost revenue, or cause us to incur additional expenses. Although management has established disaster recovery policies and procedures, there can be no assurance of the effectiveness of such policies and procedures, and the occurrence of any such event could have a material adverse effect on our business, financial condition and results of operations.

Net income increased 46%75% to $37.0$64.6 million or $6.62$2.87 per diluted share for the year ended December 31, 2024,2025, from $25.4$37.0 million, or $4.49$1.66 per diluted share, for the year ended December 31, 2023.2024. Return of average assets as 2.02% in 2025 compared to 1.29% in 2024. The increase in net income is primarily the result of a $7.3 million increase in net income in the Home Mortgage Lending segment, as well as a $4.9$19.2 million increase in net income in the Community Banking segment.segment, a $14.5 million gain on sale of all of the operating assets of PWA, as well as an $8.4 million increase in net income in the Specialty Finance segment Highlights for the year ended December 31, 2025 are as follows:

•Net income in the Community Banking segment increased 19%63% or $4.9$19.2 million, to $30.3$49.5 million in 20242025 as compared to 2023.2024. This increase was primarily the result of a 7%$20.5 million, or 20% increase in net interest income due to increased interest income on loans whichand wasshort term investments, as well as a $14.5 million gain on sale of the operating assets of PWA. These increases were only partially offset by higher interestoperating expenseexpenses onand deposits.an increase in provision for income taxes.

•The net interest margin increased to 4.69% in 2025 from 4.28% in 2024 from 4.14% in 2023 mostly due to an increase in average yields on interest earning assets in 20242025 compared to 20232024 as a result of higher interest rates, as well as an increasechange in the mix of earning assets which includes a higher percentage of loans in 20242025 versus 2023.2024. These factors were only partially offset by an increase in the cost of interest-bearing liabilities.

•Nonperforming loans, net of government guarantees, increased to $11.3 million at the end of 2025 compared to $7.5 million at the end of 2024 compared to $5.0 million at the end of 2023,2024, while total adversely classified loans, net of government guarantees at December 31, 20242025 increased to $9.6$33.5 million from $7.1$9.6 million at December 31, 2023.2024. The Allowance for Credit Losses (“ACL”) for loans totaled 1.03% of total portfolio loans at December 31, 2024,2025, comparedconsistent towith 0.97%1.03% at December 31, 2023.2024. The ACL for loans as a percentage of total portfolio loans, net of government guarantees was 1.10% at December 31, 2024 compared to 1.02% atboth December 31, 2023.2025 and December 31, 2024.

•Total shareholders' equity was $267.1$326.5 million as of December 31, 2024,2025, up 14%22% from $234.7$267.1 million a year ago. Shareholders' equity was positively impacted by the fair value of the available for salessale securities portfolio which increased $9.4shareholders' equity $7.8 million in 20242025 as compared to 2023.2024. The Company continued to maintain strong regulatory capital ratios with Tier 1 Capital to Risk Adjusted Assets of 9.76%10.67% at December 31, 2024.2025.

4Tax-equivalent net4Net interest margin tax-equivalent is a non-GAAP performance measurement in which interest income on non-taxable investments and loans is presented on a tax-equivalent basis using a combined federal and state statutory rate of 28.43%. Management believes that tax-equivalent net interest margin tax-equivalent is a useful financial measure because it enables investors to evaluate net interest margin excluding tax expense in order to monitor our effectiveness in growing higher interest yielding assets and managing our costs of interest bearing liabilities over time on a fully tax equivalent basis. See reconciliation to net interest margin, the most comparable GAAP measurement below.

5In managing our business, we review the adjusted efficiency ratio exclusive of intangible asset amortization, which is a non-GAAP performance measurement. Management believes that this is a useful financial measurement because we believe this presentation provides investors with a more accurate picture of our operating efficiency. The efficiency ratio is calculated by dividing other operating expense, exclusive of intangible asset amortization, by the sum of net interest income and other operating income. Other companies may define or calculate this data differently. For additional information see the "Other Operating Expense" section in Part II. Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this report. See reconciliation to efficiency ratio, the most comparable GAAP measurement below.

6Number of banking offices does not include RML, NFS, or SCF locations. 2025 and 2024 number of banking offices includes 20 full service branches. 2023 number of banking offices includes 19 full service branches and one loan production office. 2022 number of banking offices includes 18 full service branches and one loan production office. 2021 number of banking offices includes 17 full service branches and one loan production office. 2020 number of banking offices includes 16 full service branches and one loan production office.

Reconciliation of adjusted efficiency ratio exclusive of intangible asset amortization (non-GAAP) to efficiency ratio.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although we believe these non-GAAP financial measures are frequently used by stakeholdersshareholders in the evaluation of the Company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of results as reported under GAAP.

For information regarding risk factors, please refer to Part I. Item 1A in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as updated by the Company's periodic filings with the SEC. These factors could materially and adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this Quarterly Report on Form 10-Q. The Company believes that there has been no material change in its risk factors haveas notpreviously changeddisclosed materiallyin the Company's Form 10-K for the year ended December 31, 2025 other than as ofset Marchforth 31, 2026.below.

This quarterly report on Form 10-Q includes “forward-looking statements,” as that term is defined for purposes of Section 21E of the Securities Exchange Act of 1934, as amended, which are not historical facts. These forward-looking statements describe management’s expectations about future events and developments such as future operating results, growth in loans and deposits, continued success of the Company’s style of banking, and the strength of the local economy. All statements, other than statements of historical fact, regarding our financial position, business strategy, management’s plans and objectives for future operations are forward-looking statements. We use words such as “anticipate,” “believe,” “expect,” “intend” and similar expressions in part to help identify forward-looking statements. Forward-looking statements reflect management’s current plans and expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations, and those variations may be both material and adverse. Forward-looking statements are subject to various risks and uncertainties that may cause our actual results to differ materially and adversely from our expectations as indicated in the forward-looking statements. These risks and uncertainties include: descriptions of Northrim’s financial condition, results of operations, asset based lending volumes, asset and credit quality trends and profitability; the ability of Northrim to execute its business plans; potential further increases in interest rates; the value of securities held in our investment portfolio; the impact of the results of government shutdowns and government initiatives on the regulatory landscape, natural resource extraction industries, and capital markets; the impact of declines in the value of commercial and residential real estate markets, high unemployment rates, tariffs, inflationary pressures and slowdowns in economic growth; risks related to the proposed merger with PBCO Financial Corporation including, among others, (i) failure to complete the merger or unexpected delays related to the merger or either party’s inability to obtain regulatory, shareholder approvals, or satisfy other closing conditions required to complete the merger, (ii) regulatory approvals resulting in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction, (iii) certain restrictions during the pendency of the merger that may impact the parties’ ability to pursue certain business opportunities or strategic transactions, (iv) diversion of management’s attention from ongoing business operations and opportunities, (v) cost savings and any revenue or expense synergies from the merger may not be fully realized or may take longer than anticipated to be realized, (vi) deposit attrition, customer or employee loss, and/or revenue loss as a result of the announcement of the merger, (viii) expenses related to the merger being greater than expected, and (ix) shareholder litigation that could prevent or delay the closing of the Merger or otherwise negatively impact our business and operations; changes in banking regulation or actions by bank regulators; potential further increases in inflation, supply-chain constraints, and potential geopolitical instability, including the wars in Ukraine and Iran; financial stress on borrowers (consumers and businesses) as a result of higher rates or an uncertain economic environment; the general condition of, and changes in, the Alaska economy; our ability to maintain or expand our market share or net interest margin; the sufficiency of our allowance for credit losses and the accuracy of the assumptions or estimates used in preparing our financial statements, including those related to current expected credit losses accounting guidance; our ability to maintain asset quality; our ability to implement our marketing and growth strategies; our ability to identify and address cyber-security risks, including security breaches, “denial of service attacks,” “hacking,” and identity theft and increased cyber threats due to artificial intelligence; disease outbreaks; and our ability to execute our business plan. Further, actual results may be affected by competition 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. 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 Part II. Item 1A Risk Factors of this report and Part I. Item 1A in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, as well as in our other filings 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. In addition, you should note that forward looking statements are made only as of the date of this report and that we do not intend to update any of the forward-looking statements or the uncertainties that may adversely impact those statements, other than as required by law.

Alaska’s seasonally adjusted unemployment rate was 4.8%4.6% atin the endMay of 2025,2026, compared to 4.4%4.3% for the United States, according to the Alaska Department of Labor and Workforce Development. Both rates were unchanged from April of 2026. Alaska had a total of 323,900343,600 payroll jobs in DecemberMay of 20252026 in Alaska, not including uniformed military. This was anconsistent increasewith May of 0.5%2025. Year over year, the private sector grew by 0.9%, while the government sector declined 2.9%. The Federal component lost 1,500 jobs, or 1,500-9.8% since May of 2025, the State of Alaska decreased -700 jobs or 2.9% and Local government decreased -0.5%. The largest private sector growth came from DecemberOil of& 2024.Gas, up 1,000 direct jobs or +11.6%. Transportation, Warehousing and Utilities grew 1,600 jobs or +5.9% and Financial Activities added 200 jobs or +1.9%.

Alaska’s seasonally adjusted aggregate personal income was $59.2$60 billion in the thirdfirst quarter of 20252026 according to the Federal Bureau of Economic Analysis (“BEA”). Alaska enjoyed an annual personal income improvement of 4.4%2.9% between the thirdfirst quarter of 20242025 and the thirdfirst quarter of 2025.2026. PerBased on a population estimate of 736,884 people, the per capita personal income in Alaska was estimated$81,386. atThis $79,850is compared to the U.S. average of $76,513,$77,816, according to the BEA, ranking Alaska 14th11th highest of the 50 U.S. states.

Alaska’s Gross State Product (“GSP”) in the thirdfirst quarter of 20252026 reached $75.3$78.8 billion according to the BEA. Alaska’s inflation adjusted “real” GSP increased 1.5%2.1% in 2024, and 3.8% annualized throughbetween the thirdfirst quarter of 2025.2025 and 2026. The average U.S. GDP growth rate was 2.8%2.7% for 2024, and 4.4% annualized through the thirdsame quartertime of 2025.period.

Alaska exported $6.7 billion in goods directly to foreign countries in 2025 according to the U.S. Census Bureau, a 13.4% increase over 2024 totals. South Korea took over the top trade spot by importing $1.1 billion in goods directly from Alaska. This was a 73% increase over 2024. South Korea imports significant quantities of fish, lead and zinc. The rapid growth came primarily from $515 million in gold and silver purchases in 2025. Australia imported over $1 billion in goods, primarily gold, zinc and lead. Australia’s growth rate in Alaska products was 30% in 2025. Japan moved up to the third spot with a 38% growth in purchases totaling $927 million in 2025. Japan has been a leading customer of a large variety of fish products from Alaska for decades and also purchases an array of minerals. China slipped from first to fourth place due in part to complex U.S. tariff negotiations. China’s imports from Alaska dropped 47% from $1.5 billion in 2024 to $803 million in 2025. Oil & Gas does not contribute a significant amount to international exports ($246 million in 2025) because the majority of Alaska’s production is refined and consumed within the United States.

According to the U.S. Bureau of Labor Statistics, the Consumer Price Index (“CPI”) for the U.S. increased 2.4%3.8% between FebruaryApril of 2025 and FebruaryApril of 2026. In Alaska, the rate of increase was lowerhigher at 1.5%4.3% for the same time period. The largest increases since last FebruaryApril came from Apparel (+9.7%), Motor Fuel (+4.9%33.1%), Apparel (+15%), Recreation (+5.3%), and Housing (+3.3%), and Recreation (+2%4.8%). SlowerThere increases orwere declining costs in FoodNew and BeverageUsed Vehicles (+1.7%) Medical Care (+1.2%), Education (-1.3%-2.8%), and TransportationEducation (-3.3%-2%), helpedto help moderate inflationary pressures in Alaska relative to the U.S. in 2025.Alaska.

The monthly average price of Alaska North Slope (“ANS”) crude oil ranged between $76.39 a barrel in January of 2025 and $62.70 in December 2025. Prices began to rise dramatically in 2026 after conflictconflicts began in Venezuela and Iran. ANS was priced at $110a monthly average price of $111.17 in April of 2026 and $114.66 a barrel onin MarchMay 31,of 2026. ANS has been earning a consistent premium over Brent and West Texas crude prices. The Alaska Department of Revenue (“DOR”) calculated ANS crude oil production was 468 thousand barrels per day (“bpd”) in Alaska’s fiscal year ending June 30, 2025. In the Fall 2025 Revenue Forecast published December 19, 2025, the DOR expects production to average 457 thousand bpd in fiscal year 2026 and 518 thousand bpd in fiscal year 2027. Over the next decade it is expected to continue to grow to 621 thousand bpd, or 33% by fiscal year 2036. This is primarily a result of new production coming on-line in and around the NPR-A region west of Prudhoe Bay. A partnership between Santos and Repsol is constructing the new Pikka field and ConocoPhillips is developing the large new Willow field. There are also several smaller new fields in Alaska’s North Slope that are contributing to the State of Alaska’s production growth estimate.

The Alaska Permanent Fund is seeded annually by the oilnatural resource wealth the State continues to save each year and has grown significantly over 40 years of successful investment. As of FebruaryMay 28,31, 2026 the fund’s value was $88.8$92.2 billion. According to the DOR it is scheduled to contribute $3.8 billion to Alaska’s General Fund in fiscal year 2026 and $4 billion in fiscal year 2027 for general government spending and to pay the annual dividend in October to Alaskan residents.

According to the Alaska Multiple Listing Services, the average sales price of a single-family home in Anchorage rose 4.4% in 2025 to $532,339, following an increase of 6.2% in 2024 and 5.2% in 2023. This was the eighth consecutive year of price increases. In the first six months of 2026, prices are up 6.5% on average to $567,221.

The average sales price for single family homes in the Matanuska Susitna Borough rose 6.6% in 2025 to $440,217, after climbing 3.8% in 2024 and 4% in 2023. In the first half of 2026 average prices in the Matanuska Susitna Borough are up 2.9%. This continues a trend of average price increases for more than a decade in the region. These two markets represent where the majority of the Bank’s residential lending activity occurs.

The Alaska Multiple Listing Services reported a 0.6%1% decreaseincrease in the number of units sold in Anchorage when comparing 2025January to 2024.June There2026 wereto 2,222the homessame soldperiod in 20252025. andThe 2,235number sold in 2024. Last year there were 1,766of homes sold in the Matanuska Susitna Borough,Borough comparedin the first half of 2026 is 1.9% lower than January to 1,632June in 2024, an increase of 8.2%.2025.

The Board of Governors of the Federal Reserve System lowered its benchmark interest rate target to 3.50%-3.75% as of both MarchJune 31,30, 2026 and December 31, 2025. The prime rate of interest was 6.75% as of both MarchJune 31,30, 2026 and December 31, 2025.

Highlights and Summary of Performance - FirstSecond Quarter of 2026

The Company reported net income and earnings per diluted share of $13.7$15.3 million and $0.61,$0.68, respectively, for the firstsecond quarter of 2026 compared to net income and earnings per diluted share of $13.3$11.8 million and $0.60,$0.52, respectively, for the second quarter of 2025. The Company reported net income and earnings per diluted share of $29.0 million and $1.29, respectively, for the first quartersix months of 2026 compared to net income and earnings per diluted share of $25.1 million and $1.12, respectively, for the first six months of 2025. The increase in net income infor the second quarter of 2026 compared to the periodsame quarter last year iswas mostly due to an increase in net interest income. The increase in net income for the first six months of 2026 compared to the same period a year ago was primarily due to an increase in net interest income and higher mortgage banking income, which were partially offset by aan higherincrease in the provision for credit losses and higher other operating expenses.

•Net interest margin was 4.72%4.96% for the firstsecond quarter of 2026, up 17-basis30-basis points from the firstsecond quarter a year ago.

•Portfolio loans were $2.36$2.39 billion at MarchJune 31,30, 2026, up 11%4% from aDecember year31, ago,2025, primarily due to new customer relationships and expanding market share, as well as retaining certain mortgages originated by Residential Mortgage, a subsidiary of the Bank.

•Total deposits were $2.87$2.92 billion at MarchJune 31,30, 2026, up 2%4% from $2.81 billion at December 31, 2025. Non-interest bearing demand deposits increased 11%6% year-over-year to $826.4$826.3 million at MarchJune 31,30, 2026 and represent 29%28% of total deposits.

•The average cost of interest-bearing deposits was 1.77%1.71% at MarchJune 31,30, 2026, down from 2.01%2.04% at MarchJune 31,30, 2025.

•Average purchased receivables and loan balances for the Specialty Finance segment were $132.2$141.5 million for the firstsecond quarter of 2026, compared to average balances of $97.1$124.1 million for the firstsecond quarter of 2025.

Nonperforming assets: Nonperforming assets, net of government guarantees were $15.3$23.0 million at MarchJune 31,30, 2026 and $11.4 million at December 31, 2025. Other Real Estate Owned (“OREO”), net of government guarantees was $1.0$1.2 million at MarchJune 31,30, 2026 and zero at December 31, 2025. Repossessed assets were zero at both MarchJune 31,30, 2026 and December 31, 2025. Nonperforming loans, net of government guarantees increased $2.9$10.5 million or 25%93% to $14.2$21.8 million as of MarchJune 31,30, 2026 from $11.3 million as of December 31, 2025, primarily due to the addition of fourthree loans to a single borrower in the first threesix months of 2026. Nonperforming purchased receivables decreased $67,000 or 100% to zero as of MarchJune 31,30, 2026 from $67,000 as of December 31, 2025 as a result of a paydown received on one relationship. Of the nonperforming assets, net of government guarantees at MarchJune 31,30, 2026, $10.5$18.6 million are attributable to the Community Banking segment, $499,000$494,000 are attributable to the Home Mortgage Lending segment, and $4.3$3.9 million are attributable to the Specialty Finance segment. The increase in nonperforming assets was primarily in the Community Banking segment and was mostly attributable to one relationship which includes both commercial real estate and commercial loans which are well-collateralized.

Potential problem assets: Potential problem loans are loans which are currently performing in accordance with contractual terms but that have developed negative indications that the borrower may not be able to comply with present payment terms and which may later be included in nonaccrual or past due. These loans are closely monitored and their performance is reviewed by management on a regular basis. All potential problem loans are individually evaluated for the purposes of establishing an allowance for credit losses. At MarchJune 31,30, 2026, management had identified $20.1$11.5 million potential problem loans, down slightly from $21.2 million at December 31, 2025. This decrease is primarily due to the transfer of three loans to a single borrower to nonaccrual status, as well as paydowns which occurred in the first quartersix months of 2026.

Our critical accounting estimates are described in detail in Part II. Item 7, Management’s Discussion and Analysis, and in Note 1, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to the valuation techniques or assumptions within the models that affect our estimates during the firstsecond quarter of 2026.

Allowance for Credit Losses Policy: Management performs a hypothetical sensitivity analysis of our Allowance for Credit Losses (“ACL”) quarterly to understand the impact of a change in a key input on our ACL. As of MarchJune 31,30, 2026, if the four-quarter U.S. unemployment rate forecast had been approximately 3% higher and the four-quarter annualized growth rate in the U.S. Gross Domestic Product had been approximately 13%12% lower, our ACL for loans would have increased $483,000,$519,000, or 2%. As of MarchJune 31,30, 2026, if the four-quarter national unemployment rate forecast had been approximately 28%29% higher and the four-quarter annualized growth rate in the U.S. Gross Domestic Product had been approximately 6%3% lower, which represents management's estimate of long-term mean rates for these economic factors, our ACL for loans would have increased $2.4$2.2 million, or 10%.9%. As of MarchJune 31,30, 2026, if the estimated prepayment and curtailment rates are doubled (with a maximum rate of 100%), our ACL for loans would have decreased $2.2$2.1 million, or 9%. As of MarchJune 31,30, 2026, if the estimated prepayment and curtailment rates are cut in half, our ACL for loans would have increased $1.8$1.7 million, or 7%. These sensitivity analyses include the impact to both the quantitative and qualitative components of our ACL. Changes in quantitative inputs and qualitative loss factors may not occur in the same direction or magnitude across all segments of our loan portfolio and deterioration in some quantitative inputs and qualitative loss factors may offset improvement in others. This sensitivity analysis does not represent a change to our expectations of the economic environment but provides a hypothetical result to assess the sensitivity of the ACL to a change in a key input. This sensitivity analysis does not incorporate changes to management’s judgment of qualitative loss factors.

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED MARCHJUNE 31,30, 2026 AS COMPARED TO THE THREE AND SIX MONTHS ENDED MARCHJUNE 31,30, 2025

Net income for the firstsecond quarter of 2026 increased $351,000$3.6 million to $13.7$15.3 million as compared to $13.3$11.8 million for the same period in 2025. The increase in net income in the firstsecond quarter of 2026 as compared to the same quarter a year ago is mostly due to a $3.4$3.5 million increase in net interest income and a $2.2 million increase in mortgage banking income. These increases were only partially offset by a $2.5 million increase in other operating expenses and $2.4 million increase in provision for credit losses.

Net income in the Community Banking segment decreasedincreased $288,000$4.0 million or 3%52% in the firstsecond quarter of 2026 compared to the same period a year ago primarily due to an increase in the provision for credit losses and salaries and other personnel expense which were only partially offset by an increase in net interest incomeincome, which totaled $31.8$33.2 million in the firstsecond quarter of 2026, and $28.2$30.0 million in the firstsecond quarter of 2025.2025, as well as a decrease in other operating expenses and the provision for credit losses. Net interest income increased $3.7$3.3 million or 13%11% in the firstsecond quarter of 2026 as compared to the firstsecond quarter of 2025 mostly due to higher interest income on loansloans, investments, and deposits in banks as well as lower interest expense on deposits.

The provision for credit losses in the Community Banking segment was $153,000$503,000 in the firstsecond quarter of 2026 compared to a benefit to the provision for credit losses of $1.8$1.3 million in the same quarter a year ago. The increasedecrease to the provision for credit losses in the Community Banking segment in the firstsecond quarter of 2026 as compared to the same quarter a year ago was primarily a result of thelarger factincreases thatin therequalitative were changesfactors in the Company'ssecond lossquarter rateof regression2025 modelswhen foradversely commercial,classified commercialassets, realnet estate,of andgovernment constructionguarantees loansincreased 75% to $32.1 million. Adversely classified assets, net of government guarantees are $28.9 million in the firstCommunity quarterBanking ofsegment 2025.at June 30, 2026.

Other operating expenses in the Community Banking segment totaled $20.4 million in the firstsecond quarter of 2026, updown $1.8$1.3 million or 10%6% from $18.6$21.8 million in the firstsecond quarter a year ago. The increasedecrease in the firstsecond quarter of 2026 as compared to the same quarter a year ago was mostly due to a $1.6$942,000 million increasedecrease in salaries and other personnel expense,expense whichdue includesto $771,000lower ingroup highermedical salaryclaims expense and alower $296,000accruals increasefor inprofit groupsharing medicaland expenses,related taxes, as well as increases in occupancy expense, marketing expense, professional fees, and data processing expense. These increases were partially offset by a decrease in insurance expense. Insurance expense decreased due to a decrease in FDIC insurance expense resultingdue primarilyto fromimproved higher capital ratios. The issuance of subordinated debentures in the fourth quarter of 2025 positively impacted the Company's risk basedregulatory capital ratios whichand benefiteda thedecrease FDIC'sin calculation for insurancemarketing expense. These decreases were only partially offset by an increase in professional fees.

Net income in the Home Mortgage Lending segment increaseddecreased $282,000$322,000 or 35%17% in the firstsecond quarter of 2026 compared to the same period a year ago primarily due to higher other operating expenses and lower mortgage servicing revenue, which was only partially offset by ana increasedecrease in the provision for credit losses, higher other operating expenses, and lower net interest incomelosses in the Home Mortgage Lending segment.segment due to lower loan growth. During the firstsecond quarter of 2026, mortgage loans funded for sale were $123.4$239.1 million, compared to $108.5$249.7 million in the firstsecond quarter of 2025.

The provision for credit losses in the Home Mortgage Lending segment was $562,000$279,000 in the firstsecond quarter of 2026 compared to a benefit to the provision for credit losses of $307,000$639,000 in the firstsecond quarter of 2025. The increasedecrease in the provision for credit losses in the firstsecond quarter of 2026 in the Home Mortgage Lending segment as compared to the same quarter a year ago was primarily a result of highera growthlower increase in loan balances.balances primarily due to the the sale of mortgage loans.

Other operating expenses in the Home Mortgage Lending segment totaled $7.2$8.1 million in the firstsecond quarter of 2026 compared to $6.5$7.6 million in the firstsecond quarter a year ago. The increase in the firstsecond quarter of 2026 as compared to the same quarter a year ago was mostly due to increases in salaries and other personnel expense due to higher commissionsgroup paidmedical to mortgage originators due to higher volume.expenses.

The Arizona, Colorado, and Pacific Northwest mortgage expansion markets were responsible for 35%27% of Residential Mortgage's $152$222 million total production in the firstsecond quarter of 2026 and 20%22% of $122$216 million total production in the firstsecond quarter a year ago.

As of MarchJune 31,30, 2026, Northrim serviced 6,6376,657 loans in its $1.64$1.66 billion home-mortgage-servicing portfolio, ana 11%7% increase from the $1.48$1.55 billion serviced a year ago.

Net income in the Specialty Finance segment increaseddecreased $357,000$116,000 or 21%6% in the firstsecond quarter of 2026 compared to the same period a year ago primarily due to higher other operating expenses, which were only partially offset by increased purchased receivable balances.

Average purchased receivables and loan balances for the Specialty Finance segment were $132.2$141.5 million for the firstsecond quarter of 2026, compared to average balances of $97.1$124.1 million for the firstsecond quarter of 2025.

Net interest income for the firstsecond quarter of 2026 increased 11% or $3.4$3.5 million, to $34.7$37.1 million as compared to $31.3$33.6 million for the firstsecond quarter of 2025. The net interest margin increased 1730 basis points to 4.72%4.96% in the firstsecond quarter of 2026 as compared to 4.55%4.66% in the firstsecond quarter of 2025. The increase in net interest income in the firstsecond quarter of 2026 compared to the same period in 2025 was primarily the result of increased interest on loans, loans held for sale, interest bearing deposits in other banks, and long term investments, as well as a decrease in interest expense on deposits,deposits and borrowings, which were only partially offset by an increase in interest expense on borrowings.subordinated debentures. The increase in net interest margin in the firstsecond quarter of 2026 as compared to the same period of 2025 was primarily due to a favorable change in the mix of earning-assets towards higher loan balances as a percentage of total earning-assetsearning-assets, as well as a decrease in the cost of interest-bearing deposits.deposits and higher average yields on interest-earning assets.

The following table compares average balances and rates as well as margins on earning assets for the three-month periods ended MarchJune 31,30, 2026 and 2025. Average yields or costs are calculated on a tax-equivalent basis.

3Interest income includes loan fees. Loan fees recognized during the period and included in the yield calculation totaled $1.2$1.4 million and $1.1$1.2 million in the firstsecond quarter of 2026 and 2025, respectively.

4Nonaccrual loans are included with a zero effective yield. Average nonaccrual loans included in the computation of the average loan balances were $13.2$16.4 million and $7.6$8.1 million in the firstsecond quarter of 2026 and 2025, respectively.

The following tables set forth the changes in consolidatedtax equivalent net interest income attributable to changes in volume and to changes in interest rates for the three-month periods ending MarchJune 31,30, 2026 and 2025. Changes attributable to the combined effect of volume and interest rate have been allocated proportionately to the changes due to volume and the changes due to interest rates. The Company did not have any fed funds sold or securities purchased with agreements to resell for the three-month periods ending MarchJune 31,30, 2026 and 2025.

The provision or benefit for credit loss is the amount of expense or benefit that, based on our judgment, is required to maintain the Allowance for Credit Losses (“ACL”) at an appropriate level under the Company's Current Expected Credit Losses (“CECL”) model. The determination of the amount of the ACL is complex and involves a high degree of judgment and subjectivity. The following table presents the major categories of credit loss expense for the three-monthsix-month periods ended MarchJune 31,30, 2026 and 2025:

Other operating income for the three-monthsix-month period ended MarchJune 31,30, 2026 increased $1.8$1.9 million, or 14%,7%, to $14.9$31.6 million as compared to $13.0$29.7 million for the same period in 2025, primarily due to a $2.2$1.9 million increase in mortgage banking income due to higher production, as well as a $576,000 increase in purchased receivable income in the first quartersix months of 2026 compared to the same quarterperiod a year ago. Bankcard fees and services charges on deposit accounts also increased in the first six months of 2026 compared to the same period a year ago. These increases were partially offset by a decrease in other income mostly attributable to lower merchant fees and a decrease in the fair value of commercial servicing rights. The fair value of marketable equity securities decreased $206,000$120,000 in the first quartersix months of 2026 compared to the same quarterperiod a year ago.