1. Project Financing Options
Jim Culley - VP, Commercial Loan Unit Manager
Tammy Kosa – VP, Regional Market Manager
Jim -
Name
Title
Years in Banking
Years with Northrim
Tammy
26 years in Banking
15 years with Northrim
Investment Advisor Representative (Business Retirement Plans)

2. Who are we? Founded 1990 – Marc Langland and Arnold Espe
Alaskan Community Bank
One of three publicly traded companies headquartered in Alaska
15 branches statewide
New Soldotna Financial Center opening May 6th!
Total assets $1.5 billion
as of 12/31/2018
Northrim Background
28th year in business
One of only three publicly traded companies that are headquartered in the State of Alaska
Two telecommunications and one financial institution
Founded in 1990 – following 1987 stock market crash, significant oil price drops and 13 financial institution failures across Alaska
Marc Langland and Arne Espe
“Still a need for a community bank focused on Customer Service”
Trailer in parking lot of Midtown and $8 million seed money 21 employees
Today – 15 branches statewide including Fairbanks, Wasilla, Eagle River, Anchorage, Sitka, Ketchikan and Juneau
In application process for new branch in Soldotna
14 Residential Mortgage offices
400 employees
$1.5 billion on assets

3. The regulatory environment
80’s Banking Crisis
Worst global credit disaster in history
Massive taxpayer industry rescue and widespread changes to regulatory environment
Financial Institutions Reform, Recovery and Enforcement Act (FIRREA)
Appraisals
Capital reserve requirements
CRA Ratings
Dodd-Frank
Post
CFPB
HVCRE
Before we discuss the different types of loan options available, it is important to have a brief history of the regulatory environment and why we do what we do
1980s
From , a total of $1,617 commercial and savings banks failed – total assets of $519 billion
Led to first ever operating loss for FDIC which continued until 1991
No single factor that led to the crisis
Deregulation gave S&Ls more competitive advantage
Allowing thrifts to have up to 20-40% of assets in nonresidential real estate and 20-30% in consumer lending
Allowed thrifts to take on more risks in relatively unknown areas
Economic downturns caused collapse in real estate and energy prices
Ultimately led to government intervention and increased regulation
Financial Institutions Reform, Recovery and Enforcement Act (FIRREA)
Ensure real estate appraisals are performed up to standard
Increase capital reserve requirements and increased public oversight
Required Community Reinvestment Act ratings
Dodd-Frank
Aftermath of
Creation of Consumer Financial Protection Bureau (CFPB) to protect against abuses related to credit card, mortgages and other financial products
Now that we looked at a quick overview of the regulatory environment, let’s talk about what is available for commercial projects in terms of lending

4. Lending options Standard Bank Commercial Loan SBA 504 AIDEA Tax-Exempt
Other Avenues…
There are several options available for commercial loans:
Standard Bank Commercial Loan
SBA 504 – Small Business Adminstration
Alaska Industrial Development Export Authority – better known as AIDEA
Tax-Exempt Deals
Out-of-the-box options
The key factor in determining which loan is a best fit for your project depends on:
The amount of money you want to bring to the table
Rate/Term Desired
Fees
Project Type
It’s important to work with a lender that has an understand of these different options in order to help you secure funds with the best terms

5. Standard bank commercial loan
75% Loan-to-Value
Rate
Fixed or Variable/Adjustable
Term
10-25 years
Cost
Appraisal, Environmental Reviews, Surveys, Title
Standard Bank Commercial Loans
75% Loan-to-Value of Real Estate – excludes any equipment
Example of Doctor’s Office – building and land would be including in valuation but Xray machine, computers, lab equipment, etc. not included
Best for deals where the borrower is willing to bring 25% to the table so significant upfront investment for higher dollar projects– owned land can be included in this 25%
Rate can be fixed, variable and/or adjustable
Term is anywhere from years
Costs generally include
Appraisal
Environmental Reviews
Surveys
Title
Loan Origination

6. SBA 504 90% Loan-to-Value Rate Term Cost
Bank = Fixed or Variable/Adjustable
SBA =10-yr 4.62% 20-yr 4.37% yr 4.54%
Rates for April 2019
Term
Bank = years; SBA = years
SBA/Bank Terms do not have to match
Cost
Standard Bank Fees
SBA: 2.15% of SBA loan amount + $2,750 doc fee
With a Small Business Administration (SBA 504) deal, it lowers the amount of funds being brought upfront to the project
90% Loan-to-Value
Bank loans 50%
SBA loans 40% as a second lienholder behind bank
Rate for the SBA portion as of April 2019 is 4.360%
Term – both the bank and SBA offer terms – important to know that these terms do not have to match. You can choose a 10-year term for the bank portion and a 25 year term for the SBA portion
Cost – standard fees from the bank side plus 2.15% of SBA balance (ex: $500,000 SBA portion = $10.750) plus $2,750 document prep fee

7. AIDEA Alaska industrial development and export authority
75% LTV
Bank keeps 10%
AIDEA up to 90%
Rate –
Bank = Fixed or Variable/Adjustable
AIDEA - Fixed or Variable
Term years
Cost
Standard Bank Fees
AIDEA: $1100 app fee applied toward 1% commitment
AIDEA = Alaska Industrial Development and Export Authority
75% Loan to Value – bank keeps 10% of the deal and AIDEA can take up to 90%
Rate is fixed or variable – very attractive rates
Term anywhere from 5-25 years fixed
Cost – Standard bank fees plus $1100 application fee and 1% commitment fee to AIDEA

8. Tax exempt Tax exempt bonds – Projects $5+ million
Industrial Development Bonds
501(c)(3) Bonds
Exempt Facility Bonds
Up to 100% financing
Rate – vary depending on bond rating/term
Term – Up to 30 years
Costs –
Standard Bank Fees
Attorney fees/Possible bond issuance fees

9. Other avenues
Non-Real Estate Collateral
Equipment

10. Questions? Jim Culley 455-1101 james.culley@nrim.com Tammy Kosa