Northrim Bancorp

1. Credit Risk: As a bank, Northrim Bancorp is exposed to credit risk, which refers to the potential loss that can occur if borrowers are unable to repay their loans. This risk is particularly high in times of economic downturns when default rates may increase.

2. Interest Rate Risk: Northrim Bancorp is also exposed to interest rate risk, which refers to the potential loss that can occur due to changes in interest rates. As a bank, Northrim Bancorp generates a significant portion of its income from the difference between the interest it earns on loans and the interest it pays on deposits. If interest rates rise, the bank’s interest income may decrease, negatively affecting its profitability.

3. Liquidity Risk: Northrim Bancorp is also exposed to liquidity risk, which refers to the risk of not being able to meet its financial obligations due to a shortage of liquid assets. This risk is particularly relevant for banks, as they rely on deposits and other short-term funding sources to finance their operations.

4. Market Risk: Northrim Bancorp is exposed to market risk, which refers to the potential loss that can occur due to fluctuations in interest rates, exchange rates, and equity prices. This risk can negatively impact the bank’s trading income and investment portfolio.

5. Operational Risk: As a financial institution, Northrim Bancorp is also exposed to operational risk, which refers to the potential loss that can occur due to failures or weaknesses in its operational processes, systems, or human error. This risk includes cyber threats, fraud, and other operational failures.

6. Regulatory Risk: Northrim Bancorp is subject to various laws and regulations, and any violations can result in financial penalties and damage to its reputation.

7. Reputational Risk: The financial industry is highly competitive, and any negative publicity, such as fraud or data breaches, can damage Northrim Bancorp’s reputation and result in a loss of customers.

8. Economic and Political Risk: Northrim Bancorp operates in Alaska, where economic and political conditions can impact its business operations. Economic downturns and political instability can lead to a decrease in demand for loans and affect the bank’s overall profitability.

9. Merger and Acquisition Risk: Northrim Bancorp may pursue mergers and acquisitions to expand its business. However, these transactions can be complicated and risky, and if not managed properly, they can result in financial losses and damage to the bank’s reputation.

10. Cybersecurity Risk: As a financial institution that holds sensitive customer information, Northrim Bancorp is at risk of cyberattacks, data breaches, and other forms of cybercrime, which can lead to financial losses and reputational damage.