Financial Institutions Expand
to Pacific Northwest
digital services grow
By Tracy Barbour
The Pacific Northwest—which is gener- ally thought to include Washington, Oregon, Idaho and sometimes Montana, Wyoming, and California—has strong
historical ties with Alaska. There are considerable similarities between Alaska and these
other states, each boasting wide-open spaces,
an abundance of natural resources, and a
bold, independent spirit.
Over the years, Alaska’s financial institutions
have taken different approaches to expanding
into the Pacific Northwest and tapping into
its economy, which is driven by diverse industries. For example, Northrim has made brick-and-mortar investments in the region. First
National Bank of Alaska partners with other
banks to fund loans. Denali State Bank is expanding its online presence to broaden customers’ access to banking services, particularly for
those who have relocated to the Pacific Northwest and elsewhere in the Lower 48. And Denali Federal Credit Union is pursuing a merger
partnership agreement to further enhance its
involvement in the Pacific Northwest market.
Northrim Bank, which serves 90 percent of
Alaska’s population, has about 400 employ-
ees and fourteen branches in Anchorage, the
Matanuska Valley, Juneau, Fairbanks, Ket-
chikan, and Sitka. The full-service, commu-
nity bank has a history of Pacific Northwest
expansion. In 2002, Northrim was an original
investor in Elliott Cove Capital Management,
a Seattle-based capital management firm and
insurance agency serving individual investors
and financial institutions. Elliott Cove offers
investment portfolios, annuities, and other in-
surance products for individual investors and
retirement plans for community businesses,
professional firms, and nonprofit organizations.
In 2004, the bank opened Northrim
Funding Services as a result of an acquisition.
The Bellevue, Washington-based firm provides
asset-based lending and factoring (purchasing)
of accounts receivable to businesses primarily in Alaska, the western United States, and
Then in 2006, Northrim Bank made anoth-
er major investment in the Pacific Northwest.
The company assumed a minority ownership
interest in Pacific Wealth Advisors, which
operates offices in Seattle. Pacific Wealth
Advisors has two subsidiaries: Pacific Port-
folio Consultants and Pacific Portfolio Trust
Company. Pacific Portfolio is an independent
wealth management and investment advisor
serving high-net-worth individuals and fami-
lies as well as institutions. “It has over $3.6 bil-
lion under management; a third of that is in
Alaska, and two thirds is in the Pacific North-
west,” says Mike Martin, executive vice presi-
dent, COO, and general counsel at Northrim
Bank. “And they continue to expand.”
Several years ago, Pacific Portfolio—of
which Northrim owns 24 percent—opened
an office in Alaska. The company maintains a
team of experienced advisors to serve clients in
Alaska as well as the greater Pacific Northwest.
Another example of Northrim’s service expansion is Residential Mortgage, one of the
largest mortgage loan originators in Alaska.
Recently, Residential Mortgage—which is
wholly owned by Northrim—has had the opportunity to originate mortgage loans in Washington, and it plans to expand to other states.
Residential Mortgage has had some regulatory opportunities to originate loans in
other states, Martin says, so it makes sense to
originate mortgage loans in these additional
areas. Plus, as Alaskans migrate to the Lower
48, there’s a direct nexus with originating
loans in Washington and western states.
The bank’s rationale for expanding into
the Pacific Northwest region was primarily
customer-driven, according to Executive Vice
President and Chief Lending Officer Mike Hus-
ton. “The number one reason is we’re following
our customers,” he explains. “That is the most
common place for our customers to expand
and invest in additional projects. There’s signif-
icant trade between the Pacific Northwest and
Alaska, so it’s natural to expand there.”
Northrim’s investments in the Pacific
Northwest region allow the bank to diversify its
portfolio, have more sources of revenue, and ac-
quire more customers. It also brings additional
expertise and value to customers in Alaska. “It’s
being able to provide a full range of financial
services to our customers,” Huston says.
Huston says Northrim Bank has no cur-
rent plans to expand into other regions of
the country but will continue to conduct
business in the western United States. In ad-
dition, the bank will keep concentrating on
opportunities in Alaska, where it is firmly
rooted. “We are bullish and optimistic about
the Alaska economy,” Huston says. “We do
have some issues that need to be resolved, in-
cluding the budget situation, but we feel there
is a lot of opportunity in Alaska, and we re-
main focused in this area.”
From a banking perspective, Martin says,
there is tremendous difference between oper-
ating in Alaska and in the Pacific Northwest.
Two key areas of distinction are the geo-
graphic landscape and level of competition.
For example, with Alaska’s extreme size,
there is a huge distance between Northrim’s
northernmost branch in Fairbanks and its
most southernmost branch in Ketchikan.
The lack of a road system and other infra-
structure makes banking more challenging
in many Alaska communities.
The competition level is starkly different
in both markets. There are seven banks operating in Alaska. In Washington and Oregon Michael Martin