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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

(Mark One)

[X]     Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2002

[   ]     Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 000-33501

NORTHRIM BANCORP, INC.

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   [X]               No   [   ]

The number of shares of the issuer’s Common Stock outstanding at July 31, 2002 was 6,127,445.

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PART I				FINANCIAL INFORMATION
Item 1.				Consolidated Financial Statements (unaudited)
				Consolidated Balance Sheets
				- June 30, 2002 (unaudited)			3
				- December 31, 2001			3
				Consolidated Statements of Income (unaudited)
				- Three and six months ended June 30, 2002 and 2001			4
				Consolidated Statements of Comprehensive Income (unaudited)
				- Six months ended June 30, 2002 and 2001			5
				Consolidated Statements of Cash Flows (unaudited)
				- Six months ended June 30, 2002 and 2001			6
				Notes to the Consolidated Financial Statements			7
Item 2.				Management’s Discussion and Analysis of Financial Condition and Results of Operation			10
Item 3.				Qualitative and Quantitative Disclosures About Market Risk			20
Item 4.				Submission of Matters To A Vote of Security Holders			21
PART II				OTHER INFORMATION
Item 6.				Exhibits and Reports on Form 8-K			22
SIGNATURES							23

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PART 1. FINANCIAL INFORMATION

ITEM 1. Financial Statements

NORTHRIM BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2002 and DECEMBER 31, 2001
(in thousands)

						June 30,				December 31,
						2002				2001
						(unaudited)				(audited)
ASSETS
	Cash and due from banks					$	21,676			$	26,040
	Money market investments						3,094				15,832
	Investment securities held to maturity						1,281				1,832
	Investment securities available for sale						73,440				74,111
	Investment in Federal Home Loan Bank stock						2,740				2,660
	Real estate loans for sale						290				19,496
	Loans						504,169				463,066
	Allowance for loan losses						(7,545	)			(7,200	)
		Net loans					496,914				475,362
	Premises and equipment, net						6,434				5,877
	Accrued interest receivable						3,577				3,470
	Intangible assets						7,554				7,737
	Other assets						9,484				7,597
				Total Assets		$	626,194			$	620,518
LIABILITIES
	Deposits:
		Demand				$	134,066			$	128,881
		Interest-bearing demand					49,680				49,916
		Savings					81,667				47,669
		Money market					117,628				139,524
		Certificates of deposit less than $100,000					79,115				86,631
		Certificates of deposit greater than $100,000					91,019				97,986
			Total deposits				553,175				550,607
	Borrowings						6,164				5,682
	Other liabilities						2,595				3,438
			Total liabilities				561,934				559,727
SHAREHOLDERS’ EQUITY
	Common stock, $1 par value, 10,000,000 shares authorized, 6,127,445 and 6,106,823 shares issued and outstanding at June 30, 2002 and December 31, 2001, respectively						6,127				6,107
	Additional paid-in capital						47,133				47,023
	Retained earnings						10,197				7,140
	Accumulated other comprehensive income — unrealized gain (loss) on securities, net						803				521
			Total shareholders’ equity				64,260				60,791
				Total Liabilities and Shareholders’ Equity		$	626,194			$	620,518

See notes to the consolidated financial statements

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NORTHRIM BANK
CONSOLIDATED STATEMENTS OF INCOME
FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(in thousands)

					Three Months Ended:								Six Months Ended:
					June 30,								June 30,
					2002				2001				2002				2001
					(unaudited)								(unaudited)
Interest Income
	Interest and fees on loans				$	9,812			$	10,962			$	19,440			$	21,848
	Interest on investment securities:
		Assets available for sale				906				923				1,903				2,012
		Assets held to maturity				58				57				118				112
	Interest on money market investments					47				132				80				387
			Total Interest Income			10,823				12,074				21,541				24,359
Interest Expense
	Interest expense on deposits and borrowings					2,666				4,433				5,357				9,436
			Net Interest Income			8,157				7,641				16,184				14,923
Provision for loan losses						515				460				875				820
			Net Interest Income After Provision for Loan Losses			7,642				7,181				15,309				14,103
Other Operating Income
	Service charges on deposit accounts					425				427				814				844
	Other income					789				788				1,391				1,352
			Total Other Operating Income			1,214				1,215				2,205				2,196
Other Operating Expense
	Salaries and other personnel expense					3,108				3,077				6,219				6,043
	Occupancy, net					471				461				948				925
	Equipment expense					376				383				746				771
	Marketing expense					310				305				622				606
	Supply expense					116				112				210				234
	Intangible asset amortization expense					92				208				184				417
	Other operating expense					1,198				1,098				2,322				2,132
			Total Other Operating Expense			5,671				5,644				11,251				11,128
			Income Before Income Taxes			3,185				2,752				6,263				5,171
	Provision for income taxes					1,200				1,019				2,288				1,921
			Net Income		$	1,985			$	1,733			$	3,975			$	3,250
	Earnings Per Share, Basic				$	0.32			$	0.28			$	0.65			$	0.53
	Earnings Per Share, Diluted				$	0.31			$	0.28			$	0.63			$	0.52
	Weighted Average Shares Outstanding, Basic					6,122,012				6,101,396				6,115,078				6,101,396
	Weighted Average Shares Outstanding, Diluted					6,368,437				6,263,602				6,351,709				6,248,813

See notes to the consolidated financial statements

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NORTHRIM BANCORP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(in thousands)

			Six Months Ended:
			June 30,
			2002				2001
			(unaudited)				(unaudited)
Net income			$	3,975			$	3,250
Other comprehensive income, net of tax:
	Unrealized gains (losses) on securities:
	Unrealized holding gains (losses) arising during period			315				275
	Less: reclassification adjustment for gains included in net income			33				27
Comprehensive income			$	4,257			$	3,498

See notes to the consolidated financial statements

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NORTHRIM BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(in thousands)

						Six Months Ended:
						June 30,
						2002				2001
						(unaudited)				(unaudited)
Operating Activities
		Net income				$	3,975			$	3,250
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
	Security (gains) losses						(52	)			(46	)
	Depreciation and amortization of premises and equipment						544				616
	Amortization of software						181				152
	Intangible asset amortization						184				417
	Deferred tax expense (benefit)						(351	)			(236	)
	Deferral of loan fees and costs, net						500				45
	Gain on sale of building						(6	)			(19	)
	Provision for loan losses						875				820
	(Increase) decrease in accrued interest receivable						(107	)			363
	(Increase) decrease in other assets						(1,719	)			(1,571	)
	Amortization of investment security premium, net of discount accretion						74				46
	Increase (decrease) of other liabilities						(837	)			171
				Net Cash Provided by Operating Activities			3,261				4,008
Investing Activities
	Investment in securities:
		Purchases of investment securities:
			Available-for-sale				(37,799	)			(43,933	)
		Proceeds from sales / maturities of securities:
			Available-for-sale				39,202				57,001
	Investments in loans:
		Sales of loans and loan participations					54,392				189,875
		Loans made, net of repayments					(77,319	)			(238,271	)
	Purchases of premises and equipment						(1,101	)			23
				Net Cash Provided (Used) by Investing Activities			(22,625	)			(35,305	)
Financing Activities
	Increase (decrease) in deposits						2,568				28,799
	Increase (decrease) in borrowings						482				(511	)
	Net proceeds from issuance of common stock						130				0
	Cash dividends paid						(918	)			(832	)
				Net Cash Provided (Used) by Financing Activities			2,262				27,456
				Net Increase (Decrease) in Cash and Cash Equivalents			(17,102	)			(3,841	)
	Cash and cash equivalents at beginning of period						41,872				41,310
	Cash and cash equivalents at end of period					$	24,