On July 22, 2026, Anchorage, Alaska-based Northrim BanCorp, Inc. (NASDAQ: NRIM) (“Northrim” or “the company”), parent company of Northrim Bank, announced that it had entered into a definitive merger agreement with Medford, Oregon-based PBCO Financial Corporation (OTCID: PBCO), parent company of People’s Bank of Commerce (“People’s Bank”). Under the agreement, PBCO will merge with and into Northrim in an all-stock transaction valued at ~$167 million, representing 1.73x tangible book value. The transaction is expected to close in 4Q26 or early 1Q27, subject to customary regulatory and shareholder approvals. Julia Beattie, President and CEO of People’s Bank, will remain with Northrim as Oregon Market President, while one PBCO director will join the boards of Northrim and Northrim Bank.
KBRA views the proposed acquisition as strategically aligned with Northrim’s efforts to diversify beyond its core Alaska franchise and establish a relationship-focused banking presence in Lower 48 markets. The transaction is Northrim’s first out-of-state branch expansion and provides an established platform across Southern Oregon and the Willamette Valley through PBCO’s 11 branches. The acquisition is expected to add ~$777 million in assets, resulting in a combined institution with ~$4.2 billion in assets, $3.0 billion in loans, and $3.5 billion in deposits. Pro forma projections indicate solid profitability following the transaction, supported, in part, by anticipated cost savings equal to approximately 24% of PBCO’s noninterest expense base. Northrim intends to continue building capital ahead of closing, with management projecting a pro forma CET1 ratio of approximately 11.3%, compared to 10.9% at 2Q26. Moreover, the company’s strong internal capital generation should support continued capital accretion following the close.
The two organizations appear well aligned, operating relationship-focused community banking models with disciplined credit management. While PBCO’s loan portfolio carries a higher CRE concentration, the composition of the combined pro forma portfolio is not expected to change materially. KBRA views the due diligence process as comprehensive, with Northrim reviewing 76% of PBCO’s total loan balances, including all adversely classified loans, all loans exceeding $1 million, and all watch loans greater than $400,000. NRIM expects to record a gross credit mark of $7.5 million, or 1.26% of PBCO’s loans, as well as an interest rate mark of $11.9 million, or 2.0% of loans, which is expected to accrete over 3.5 years. The transaction also adds Steelhead Finance, PBCO’s trucking-focused factoring business, which management expects to integrate alongside Northrim’s Sallyport Commercial Finance platform. Steelhead’s experienced operating team will remain in place, while the combined specialty finance businesses should benefit from additional referral opportunities. From a funding perspective, PBCO contributes a high-quality, relationship-based deposit franchise, including 37% of noninterest-bearing deposits, supporting favorable pro forma deposit costs of ~1.25%. Overall, in KBRA’s view, the acquisition would strengthen Northrim’s franchise through greater geographic diversification, enhanced scale, and a solid core funding base, while preserving sound capital and credit fundamentals. Although execution risk is inherent in any bank acquisition, KBRA believes such risk is moderated by Northrim’s prior acquisition experience, the retention of PBCO’s local leadership, the similar cultures and credit philosophies of the two institutions, and the manageable size of the transaction.
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