First Northern Community Bancorp

What they do

The Company operates through its wholly-owned subsidiary, First Northern Bank of Dixon, which was established in 1910 and has fourteen full-service branches in Auburn, Colusa, Davis, Dixon, Fairfield, Orland, Rancho Cordova, Roseville, Sacramento, Vacaville, West Sacramento, Winters, Willows and Woodland, plus a satellite office in a Davis retirement community and a residential mortgage loan office. It takes demand, interest-bearing transaction, savings and time deposits and makes commercial, consumer and real estate-related loans; it also rents safe deposit boxes and offers equipment leasing, credit cards, merchant card processing and payroll services through third parties. Investment and brokerage services are provided by Raymond James Financial Services advisors from offices in West Sacramento, Roseville, Davis and Auburn, and the Bank owns Yolano Realty Corporation for managing selected other real estate owned. As of December 31, 2025, the Company had approximately $1.91 billion in consolidated assets, $1.70 billion in liabilities, $212.0 million in stockholders' equity and 204 full-time-equivalent employees.

Revenue drivers

• Loan and lease interest and fees — The largest source of interest income, comprising approximately 70% of interest income for the year ended December 31, 2025; total net loans including loans held-for-sale were $1.09 billion at June 30, 2026.
• Investment securities interest — Approximately 22% of interest income for the year ended December 31, 2025, from a portfolio that includes U.S. Treasury, U.S. government agency, state and political subdivision, collateralized mortgage obligation and GSE mortgage-backed securities.
• Due from banks interest-bearing accounts — Approximately 6% of interest income for the year ended December 31, 2025.
• Non-interest income, including investment and brokerage services — Total non-interest income was $1.8 million in the quarter ended June 30, 2026, up 14.7% year over year, with investment and brokerage services income up 141.3%, helped by the Beacon Wealth acquisition completed in the fourth quarter of 2025.

Recent performance

For the six months ended June 30, 2026, net income was $10.6 million, or $0.64 per diluted share, up 16.4% from $9.1 million, or $0.55 per diluted share, a year earlier. Second quarter 2026 net income was $4.7 million, or $0.29 per diluted share, down 13.5% from $5.5 million, or $0.33 per diluted share, in the second quarter of 2025. Total assets were $1.93 billion at June 30, 2026, up $54.4 million, or 2.9%, year over year, and total deposits were $1.69 billion, up $28.6 million, or 1.7%. Net loans including held-for-sale were $1.09 billion, up $29.0 million, or 2.7%, driven by commercial loan growth partly offset by reductions in commercial real estate, agriculture, residential mortgage and consumer loans. The annualized net interest margin was 3.75% and cost of funds 0.90% for the second quarter of 2026, while non-accrual loans declined 7.1% to $4.6 million.

Strategy

Management highlighted strong loan growth, improved credit quality and disciplined balance sheet management in the second quarter of 2026, with net loans up $27.9 million, or 10.5% annualized, during the quarter. A systems upgrade project accelerated in the second quarter, raising staffing, data processing and consulting expenses, with elevated costs expected through planned fourth-quarter project implementation and anticipated efficiency benefits beginning in 2027. The Company uplisted to The Nasdaq Capital Market on April 24, 2026 and was added to the Russell 3000 Index effective June 29, 2026, which management says increased trading volume, liquidity and institutional visibility. The Beacon Wealth acquisition in the fourth quarter of 2025 is cited as continuing to lift non-interest income. Management also noted book value per share rose from $13.03 at March 31, 2026 to $13.24 at June 30, 2026.

Risks

• Tariff and trade policy — The 10-K risk factors state that U.S. tariff measures announced in 2025, retaliatory tariffs by other countries, and the February 20, 2026 Supreme Court ruling invalidating IEEPA-based tariffs could materially adversely affect the Bank's customers and therefore its business, financial condition and results of operations.
• Concentration in California markets — The Bank's deposits are attracted mainly from northern and central Solano County, southern and central Yolo County and Placer County, so its results are tied to the economies of those specific California markets.
• Credit quality — Non-accrual loans were $4.6 million at June 30, 2026; the loan portfolio includes commercial, commercial real estate, agriculture, residential mortgage and consumer loans, and the second quarter release noted net reductions in several of these categories.
• Elevated operating costs — Management said the systems upgrade project accelerated in the second quarter of 2026, producing higher staffing, data processing and consulting expenses, and expects these elevated costs to continue through fourth-quarter implementation.

Outlook

Management expects elevated systems upgrade costs to continue through planned fourth-quarter project implementation, after which it anticipates enhanced capabilities, improved process efficiencies and long-term operating benefits beginning in 2027. The Company reported it remained 'well capitalized' under regulatory definitions as of June 30, 2026, exceeding the 10% total risk-based capital ratio threshold. Management cited the Nasdaq uplisting and Russell 3000 inclusion as improving trading liquidity and institutional visibility, and framed these alongside book value per share growth as execution of its long-term shareholder value strategy.