First Northern Community Bancorp Reports Record Year End 2023 Net Income of $21.6 Million

First Northern Community Bancorp (the “Company”, OTCQX: FNRN), holding company for First Northern Bank (“First Northern” or the “Bank”), today reported 2023 annual net income of $21.6 million, or $1.41 per diluted share, increases of 35.7% and 35.6%, respectively, when compared to net income of $15.9 million, or $1.04 per diluted share, for 2022. Net income for the year included the bargain purchase gain resulting from our branch acquisition completed in the first quarter of 2023. On an after-tax basis, the bargain purchase gain contributed $1.0 million to net income for the year ended December 31, 2023.

Net income for the quarter ended December 31, 2023 totaled $6.9 million, or $0.45 per diluted share, compared to net income of $4.7 million, or $0.31 per diluted share, for the quarter ended December 31, 2022. The increase in net income on a quarter over quarter basis was largely driven by the reversal of provision for credit losses which totaled $2.0 million for the quarter ended December 31, 2023, compared to no provision for credit losses for the quarter ended December 31, 2022. The reversal of provision for credit losses of $2.0 million was primarily due to the payoff of a non-performing agricultural loan relationship that resulted in recoveries of previously charged-off principal totaling $2.6 million, partially offset by provision for credit losses due to loan growth during the quarter.

Total assets as of December 31, 2023 were $1.87 billion, an increase of $0.5 million, or 0.03%, compared to December 31, 2022. Total deposits as of December 31, 2023 were $1.69 billion, a decrease of $34.4 million, or 2.0%, compared to December 31, 2022. Total net loans (including loans held-for-sale) as of December 31, 2023 were $1.1 billion, an increase of $82.3 million, or 8.5%, compared to total net loans (including loans held-for-sale) of $970.1 million as of December 31, 2022. The increase in net loans was primarily driven by growth in commercial real estate and residential mortgage loans partially offset by net reductions in agricultural loans.

The Company continued to be “well capitalized” under regulatory definitions, exceeding the 10% total risk-based capital ratio threshold as of December 31, 2023.

Commenting on the Company’s year-end 2023 financial results, First Northern Bank’s President & Chief Executive Officer Jeremiah Smith stated, “We are pleased to report robust financial results for the year 2023. Our success was partially driven by the heightened interest rate environment and subsequent balance sheet repricing. This resulted in record net interest income of $66.5 million for the year, an increase of $11.8 million, or 21.7%, compared to the previous year’s $54.7 million. The Company ended the year with a record $21.6 million of net income, an increase of 35.7% over the $15.9 million earned in 2022. We believe the success we experienced in 2023 was driven by the significant demand for our approach to relationship banking across the Sacramento region and surrounding communities, and reflects the trust our clients and communities have placed in First Northern Bank. Further, we’re proud to announce that our trading upgrade from the OTCQB Venture Market to the OTCQX Best Market is complete. The OTCQX should provide improved visibility for our stock to investors, brokers, and market makers, with the aim of enhancing shareholder value for FNRN.”