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FIRST NORTHERN COMMUNITY BANCORP (FNRN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 diluted EPS was $0.23, down 37% q/q and 12% y/y, as a $2.8M specific reserve drove provision expense of $0.85M versus a reversal last quarter and last year .
  • Net interest margin expanded to 3.64% (+4 bps q/q, +15 bps y/y) on higher securities yields and disciplined deposit pricing; cost of funds held at 0.86% .
  • Efficiency ratio deteriorated to 66.62% from 57.34% in Q4 due to higher non-interest expense and provision, offsetting margin gains .
  • Book value per share rose to $11.81 (+6.8% q/q) on earnings and $8.9M AOCI improvement; company remains “well capitalized” (>10% total risk-based capital) .
  • No formal guidance or earnings call transcript available; focus near term is credit quality normalization after the specific reserve and continued margin discipline .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin improved to 3.64% from 3.60% in Q4 and 3.49% last year, aided by “increased yields on our securities portfolio and disciplined pricing on our interest-bearing deposits” while maintaining high levels of non-interest-bearing deposits .
  • Shareholder equity increased $11.5M q/q to $187.8M and book value per share rose from $11.06 to $11.81; management emphasized commitment to improving shareholder value through earnings retention and reduced AOCI loss .
  • Cost of funds remained low at 0.86%, supporting spread stability despite the rate backdrop .

What Went Wrong

  • Provision for credit losses swung to an expense of $0.85M from a $0.45M reversal in Q4 and a $0.30M reversal in Q1 2024, driven by a $2.8M specific reserve, pressuring earnings despite margin gains .
  • Efficiency ratio rose to 66.62% from 57.34% in Q4 on higher non-interest expense (+12% q/q), indicating operating leverage headwinds .
  • Deposits declined $25.3M q/q to $1.675B and are down $34.1M y/y; total assets and loans were modestly lower q/q, reflecting cautious growth amid credit normalization .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Net Interest Income ($USD Millions)$15.362 $16.524 $15.943
Provision for Credit Losses ($USD Millions)($0.300) ($0.450) $0.850
Non-Interest Income ($USD Millions)$1.507 $1.490 $1.453
Non-Interest Expense ($USD Millions)$11.227 $10.329 $11.590
Pre-Tax Income ($USD Millions)$5.942 $8.135 $4.956
Income Tax ($USD Millions)$1.666 $2.289 $1.285
Net Income ($USD Millions)$4.276 $5.846 $3.671
Diluted EPS ($)$0.26 $0.37 $0.23
Net Interest Margin (annualized, %)3.49% 3.60% 3.64%
Cost of Funds (annualized, %)0.76% 0.86% 0.86%
Efficiency Ratio (%)66.55% 57.34% 66.62%
Balance Sheet KPIsQ4 2024Q1 2025
Total Assets ($USD Millions)$1,891.722 $1,875.700
Cash & Equivalents ($USD Millions)$119.448 $111.717
Net Loans incl. HFS ($USD Millions)$1,046.852 $1,041.210
Investments ($USD Millions)$633.853 $637.168
Total Deposits ($USD Millions)$1,700.089 $1,674.807
Shareholders’ Equity ($USD Millions)$176.332 $187.805
Average Balances & Yields (select)Q1 2024Q4 2024Q1 2025
Avg Loans ($USD Millions)$1,047.358; Yield 5.16% $1,047.358; Yield 5.23% $1,042.559; Yield 5.29%
Taxable Securities ($USD Millions)$525.261; Yield 2.17% $598.665; Yield 2.83% $587.332; Yield 3.00%
Interest-Bearing Due from Banks ($USD Millions)$123.224; Yield 4.99% $104.261; Yield 5.33% $70.468; Yield 4.18%
Interest-Bearing Liabilities ($USD Millions)$945.236; Rate 1.35% $982.413; Rate 1.52% $980.682; Rate 1.47%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal Financial GuidanceFY/Q1 2025None provided None provided Maintained (no guidance)
DividendQ1 2025N/A5% stock dividend paid Mar 25, 2025; record date Feb 28, 2025 Announced and executed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Net Interest MarginMaintained NIM; deposit growth of $25M in Q3 . Year-end 2024 cost of funds 0.84% (full-year) .NIM improved to 3.64% on higher securities yields, disciplined deposit pricing; COF 0.86% .Improving NIM; stable COF.
Credit Quality/ProvisionQ3: Reversal of provision ($0.55M) after full collection of non-performing loan; nonaccruals fell by $2.8M . Q4: Reversal of provision ($0.45M) driven by prior recoveries .Specific reserve of $2.8M led to $0.85M provision expense; calculated loss rates declined .From favorable reversals to expense due to specific reserve.
Capital & Book ValueBook value per share rose to $11.92 in Q3; equity $182.0M . Year-end equity $176.3M; BVPS $11.06 .Equity up to $187.8M; BVPS $11.81; AOCI loss decreased $8.9M .Strengthening capital/book value via earnings/AOCI.
Deposits/MixQ3: Deposits $1.73B; growth during quarter .Deposits $1.675B (-$25M q/q; -$34M y/y); high non-interest-bearing balances cited .Modest decline; emphasis on low-cost mix.
Balance Sheet GrowthQ3: Assets $1.93B; loan growth in commercial/CRE/mortgage with ag/construction declines .Assets $1.876B; loans modestly lower; investments up slightly .Flat-to-down near term as credit normalizes.

Note: No Q1 2025 earnings call transcript was posted; company IR pages show press releases only in this window .

Management Commentary

  • “First quarter results reported continued momentum in improving our net margin… an improvement of 15 basis points, or 4.3%. This improvement was partially due to increased yields on our securities portfolio and disciplined pricing on our interest-bearing deposits… our high levels of non-interest-bearing deposits… kept our cost of funds low.”
  • “Our improvement in net margin was offset by an increase in loan loss provision due to a specific reserve of $2.8 million… As a result, the Company recorded provision expense of $850,000 for the quarter compared to a release of provision of $300,000 for the same period last year.”
  • “Stockholders’ equity [improved] from $176.3 million… to $187.8 million… primarily due to net income of $3.7 million and a decrease in accumulated other comprehensive loss of $8.9 million… book value per share… rose from $11.06… to $11.81.”

Q&A Highlights

  • No Q1 2025 earnings call transcript available; management’s disclosures were via the 8‑K and press release .
  • Key clarifications embedded in release: drivers of NIM expansion (securities yields, deposit pricing, non-interest-bearing mix) and the specific credit reserve causing provision expense .

Estimates Context

  • Wall Street consensus (S&P Global) for Q1 2025 EPS and revenue was unavailable for FNRN due to limited analyst coverage; as a result, no beat/miss determination versus consensus can be made. Values retrieved from S&P Global.
  • Investors should anchor on reported diluted EPS ($0.23) and operating metrics, and monitor subsequent quarters for restoration of coverage or management guidance .

Key Takeaways for Investors

  • Margin trajectory improving: NIM at 3.64% with low cost of funds; continued deposit discipline and securities yields are tailwinds for spread income .
  • Credit normalization is the near-term swing factor: the $2.8M specific reserve and $0.85M provision drove the earnings decline; watch nonaccrual trends and future provisions for follow-through .
  • Operating leverage compressed: efficiency ratio worsened to 66.62%; focus on expense control and revenue mix to regain Q4’s operating efficiency levels .
  • Capital strengthening: equity up $11.5M q/q; BVPS to $11.81 with AOCI improvement, providing balance sheet resilience and potential for capital actions as conditions stabilize .
  • Deposits modestly lower: -$25M q/q, -$34M y/y; maintaining non-interest-bearing mix is critical to sustaining low funding costs in a competitive market .
  • No formal guidance or consensus estimates: trading likely keyed to credit updates and NIM sustainability rather than estimate beats/misses; monitor future disclosures and quarterly trends .
  • Corporate action: 5% stock dividend paid March 25, 2025; share count/ EPS figures are adjusted accordingly, supporting liquidity and shareholder engagement .