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September 30, 2010

VIA EDGAR AND OVERNIGHT DELIVERY

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-4561

    Attention:

     David Lyon

Kathryn McHale

    Re:

     Northrim Bancorp, Inc.

Form 10-K for the fiscal year ended December 31, 2009

Form 10-Q for the fiscal quarter ended March 31, 2010

Form 10-Q for the fiscal quarter ended June 30, 2010

File No. 0-33501

Dear Mr. Lyon:

On behalf of our client, Northrim BanCorp, Inc., an Alaska corporation (the “Company”), and
pursuant to the applicable provisions of the Securities Exchange Act of 1934, as amended, and the
rules promulgated thereunder, reference is made to your letter dated September 1, 2010, containing
certain comments regarding the above-referenced Form 10-K for the Fiscal Year Ended December 31,
2009 and Forms 10-Q for the fiscal quarters ended March 31, 2010 and June 30, 2010. We have
carefully reviewed and considered each comment contained in that letter, and would respectfully
submit in response the proposed actions indicated below. For ease of reference, each of your
comments is set forth below with our response set forth immediately below.

Staff Comment No. 1: Form 10-K for the Fiscal Year Ended December 31, 2009

Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

Analysis of Allowance for Loan Losses, page 28

    1.

    We note from your allocation of the allowance for loan losses on page 30 that your
unallocated allowance is approximately 55%, 41%, and 22% of your total allowance for loan
losses at December 31, 2009, 2008, and 2007, respectively. Further we note that you have
been in business since 1990, and accordingly would have a substantial operating history
from which to draw in evaluating your historical loss rates. Please tell us and revise
future filings to more clearly describe how you arrived at the allowance for loan losses
amounts allocated to the various loan categories versus the unallocated amount, including:

Securities and Exchange Commission

Division of Corporation Finance

September 30, 2010

Page 2 of 12

    a.

    Specifically and separately disclose where your specific reserves for
identified impaired loans are reflected in the allocation table.

    b.

    Similarly, specifically and separately disclose where your
formula-based reserve amounts are reflected in the allocation table.

    c.

    If the formula-based amounts are reflected in the unallocated line
item, revise to add a paragraph below the table to disclose that fact and to
separately quantify the amount of such formula-based reserves as calculated for
each loan category.

    d.

    Bridge the gap between the unallocated reserve of 55% to the allocated
allowance for real estate term of 4% though real estate term loans made up 46% of
the loan portfolio and had $2.5 million of charge-offs during 2009.

RESPONSE: The Company maintains an Allowance for Loan Losses (the “Allowance”) to
reflect inherent losses from its loan portfolio as of the balance sheet date. In determining its
total Allowance, the Company first estimates a specific allowance for impaired loans. This
analysis is based upon a specific analysis for each impaired loan, including appraisals on loans
secured by real property, management’s assessment of the current market, recent payment history
and an evaluation of other sources of repayment. Then the Company estimates a general allowance
for all other separately identifiable classes of loans that were not impaired in accordance with
our internal risk classification system for loans that have higher risk within the portfolio
based on management’s judgment.

(a) Specific Reserves

For the year ended December 31, 2009, the Company determined the allocated portion of the
Allowance by first calculating a specific allowance for impaired loans in accordance with the
accounting guidance in ASC Topic 310-10-35. The specific allowance for impaired loans is
included within each portfolio segment by type in the allowance allocation table. We will revise
future filings to include a footnote to our allowance allocation table to specifically note
where the reserves for impaired loans are included in the tabular presentation.

(b) General Reserves

The Company identified the following classes of loans not considered impaired at December 31,
2009 and as of June 30, 2010 for purposes of establishing the allocated portion of the general
reserve of the Allowance. In management’s judgment, these identifiable classes of loans carried
higher levels of risk based upon our operating history and were subject to our formula based
methodology:

    •

    Special mention loans: Loans in this category have deteriorated sufficiently that
they would have difficulty in refinancing; similarly, purchasers of the business would
not be eligible for bank financing unless they represent a significantly stronger
credit risk. There is deterioration of financial condition or collateral value, still
reasonably secured by collateral or net worth. Although the bank is presently protected
from loss,

Securities and Exchange Commission

Division of Corporation Finance

September 30, 2010

Page 3 of 12

    potential weaknesses are apparent which, if not corrected, could cause future problems.

    •

    Substandard loans: Loans in this category are those that are no longer adequately
protected due to declining net worth, lack of earning capacity, or insufficient
collateral. The possibility for loss of some portion of the loan principal cannot be
ruled out. Loans exhibit well-defined weaknesses that bring normal repayment into
jeopardy.

    •

    Doubtful loans: Loans in this category exhibit the same weaknesses as those
classified “Substandard” but the traits are more pronounced. Collection in full is
improbable, however the extent of the loss may be indeterminable due to pending factors
which may yet occur that could salvage the loan, such as possible pledge of additional
collateral, sale of assets, merger, acquisition or refinancing.

    •

    Loans made to retail and general wholesale businesses.

    •

    Loans collateralized by accounts receivable, inventory, furniture fixtures and
equipment.

    •

    Loans for raw land, land development, and speculative construction loans with
expected sellout of greater than one year.

Special mention loans, substandard loans and doubtful loans are classes of loans that are
included in the Company’s internal risk classifications. These classifications are based in
large part upon regulatory definitions for classified loans. The other loan classes listed above
are separately identifiable classes of loans which management believes are subject to higher
levels of risk based on our operating history.

The loss factors that the Company applied to each class of loans within the various risk
classifications were based primarily on industry standards, input from our regulators, and
management’s own judgment. Management’s judgment was based on average historical losses incurred
by the Company for various portfolio classes. The formula based reserve for these loans was
included in the allocation table by loan type. We will revise future filings to include a
general allowance allocation for each loan type that is based on average historical losses as
adjusted for qualitative factors.

(c) Unallocated Reserves

For the year ended December 31, 2009 and as of June 30, 2010, the Company designated the
remaining balance of the Allowance as unallocated. Accordingly, the unallocated line item does
not include any formula based amounts. Rather, the unallocated portion of the Allowance was
analyzed based on a review of three year average loan loss rates for loans which did not have a
specific or general allocation as described above, combined with other qualitative factors. The
Company validated the unallocated portion of the Allowance by back testing it in relation to the
average historical loss rates for all loan classes that were not included in the calculation of
the allocated portion of the Allowance as described above as adjusted by qualitative factors
including the size and mix of the loan portfolio, historical and recent credit performance of
the loan portfolio (including the absolute level and trends in

Securities and Exchange Commission

Division of Corporation Finance

September 30, 2010

Page 4 of 12

delinquencies and impaired loans), national and local economic trends, business conditions,
underwriting policies and standards, and ratio analysis. The unallocated portion of the
Allowance was analyzed in relation to a range of these adjusted average historical loss rates.

In the second quarter of 2010, the Company began working on an expanded analysis of average
historical losses segregated by both major loan segments and classes, which includes our
internal risk rating system. Starting with the Company’s Form 10-Q for the quarter ending
September 30, 2010 and going forward, the Company’s Allowance will be calculated using these
average historical net loss rates calculated by loan segment and class over a three year period,
adjusted for similar qualitative factors discussed above. The Company also utilized a three year
period to analyze losses on the unallocated portion of the Allowance in the legacy methodology.
The unallocated portion of the Allowance will continue to be reviewed under the revised
methodology based on management’s assessment of the overall Allowance in light of average
historical loss factors as adjusted by qualitative factors.

The Company performed a retrospective review of the Allowance at December 31, 2009, March 31,
2010 and June 30, 2010 using the revised methodology described above. The following table
summarizes what the Allowance would have looked like at these period ending dates if the Company
had used the revised methodology to calculate the Allowance:

    December 31, 2009

    March 31, 2010

    June 30, 2010

    Impaired

    Formula-based

    Impaired

    Formula-based

    Impaired

    Formula-based

    Allownace applicable to:

    Total

    Loans

    Amounts

    Other

    Total

    Loans

    Amounts

    Other

    Total

    Loans

    Amounts

    Other

    Commercial

    $
    4,964

    $
    850

    $
    4,114

    —

    $
    5,530

    $
    1,190

    $
    4,340

    —

    $
    6,164

    $
    167

    $
    5,997

    —

    Construction

    2,156

    869

    1,287

    —

    1,708

    633

    1,075

    —

    1,619

    531

    1,088

    —

    Real estate term

    2,680

    143

    2,537

    —

    3,375

    118

    3,257

    —

    4,641

    121

    4,520

    —

    Home equity lines and
other consumer

    501

    1

    500

    —

    520

    1

    519

    —

    625

    1

    624

    —

    Unallocated

    2,807

    —

    —

    2,807

    2,913

    —

    —

    2,913

    1,378

    —

    —

    1,378

    Total

    $
    13,108

    $
    1,863

    $
    8,438

    $
    2,807

    $
    14,046

    $
    1,942

    $
    9,191

    $
    2,913

    $
    14,427

    $
    820

    $
    12,229

    $
    1,378

The following table shows the reported allocation of the Allowance based on the legacy
methodology. This table also addresses the questions in items 1a and 1b:

    December 31, 2009

    March 31, 2010

    June 30, 2010

    Impaired

    Formula-based

    Impaired

    Formula-based

    Impaired

    Formula-based

    Allowance applicable to:

    Total

    Loans

    Amounts

    Other

    Total

    Loans

    Amounts

    Other

    Total

    Loans

    Amounts

    Other

    Commercial

    $
    3,962

    $
    850

    $
    3,112

    —

    $
    4,838

    $
    1,190

    $
    3,648

    —

    $
    4,834

    $
    167

    $
    4,667

    —

    Construction

    1,365

    869

    496

    —

    1,197

    633

    564

    —

    1,281

    531

    750

    —

    Real estate term

    565

    143

    422

    —

    714

    118

    596

    —

    1,692

    121

    1,571

    —

    Home equity lines and
other consumer

    50

    1

    49

    —

    72

    1

    71

    —

    75

    1

    74

    —

    Unallocated

    7,166

    —

    —

    7,166

    7,225

    —

    —

    7,225

    6,545

    —

    —

    6,545

    Total

    $
    13,108

    $
    1,863

    $
    4,079

    $
    7,166

    $
    14,046

    $
    1,942

    $
    4,879

    $
    7,225

    $
    14,427

    $
    820

    $
    7,062

    $
    6,545

The Company reviewed the Allowance for the year ending December 31, 2009 and the quarters
ending March 31, 2010 and June 30, 2010 both in total and by loan category using both the legacy
methodology applied through June 30, 2010 and the revised methodology

Securities and Exchange Commission

Division of Corporation Finance

September 30, 2010

Page 5 of 12

that will be applied starting with the quarter ending September 30, 2010. The most significant
change in the Allowance using the revised methodology for each of these periods is a larger
allocation to the real estate sector of the Company’s loan portfolio. Additionally, the formula
based allocations for the commercial, construction and home equity lines and other consumer
mortgages also increase under the revised methodology. The reason for these changes arises from
the fact that the Company did not calculate a specific allocation by loan segment for loans risk
rated as watch or better under the legacy methodology. Rather, these loans were grouped into the
unallocated segment of the Allowance calculation. The calculation of the unallocated portion of
the Allowance under the legacy methodology was based on three year average historical loss rates
as adjusted for qualitative factors. The revised methodology results in a different allocation
of the segments of the Allowance but does not indicate that the overall Allowance is inadequate
or misstated. This is due to the fact that both methodologies utilize three year average
historical loss rates, as adjusted for qualitative factors, to analyze the overall allowance.
The revised methodology simply refines the calculation to allocate the Allowance to the
individual loan categories.

(d) Unallocated Reserve to Allocated Allowance for Real Estate Term

As noted above, prior to September 30, 2010, the Company calculated its Allowance by taking
specific allocations for impaired and quality graded loans as well as other specific
classes of loans. The remaining unallocated balance of the Allowance was reviewed in light of
average historical loss rates for the unallocated loans as adjusted for qualitative factors. At
December 31, 2009, the Company allocated $565,000 of its $13,108,000 Allowance to its commercial
real estate portfolio based upon its allocations for impaired and formula-based amounts as
indicated in the above table. The $2.5 million in commercial real estate charge-offs incurred in
2009 were a component of the Company’s calculation of its average historical loss history for
unallocated loans and used to analyze the unallocated portion of the Company’s allowance.

Please be advised that the Company will revise future filings to describe the revised
methodology and to more clearly describe how we arrived at the allowance for loan losses amounts
allocated to the various loan segments and classes versus the unallocated amount.

Staff Comment No. 2: Form 10-O for the Quarter Ended June 30, 2010

Item 1. Financial Statements

Notes to the Consolidated Financial Statements

Note 7, Variable Interest Entities, page 13

    2.

    We note your disclosure on page 13 that you determined Elliott Cove was a variable
interest entity (VIE) based on the $0.75 million outstanding line of credit you provided
them as of June 30, 2010. In addition, we note your disclosure on page 60 of the F