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FIRST NORTHERN COMMUNITY BANCORP (FNRN)·Q2 2025 Earnings Summary
Executive Summary
- Q2 2025 delivered stronger profitability: net income $5.5M (+23.6% y/y) and diluted EPS $0.35, with ROAA 1.18% and ROAE 11.67% .
- Net interest margin expanded to 3.85% (+21 bps q/q; +19 bps y/y), lifting net interest income to $16.95M (+6.3% q/q; +6.1% y/y); cost of funds remained contained at 0.88% .
- Credit costs were zero as the bank released a specific $2.8M reserve initially recorded in Q1; pooled/unfunded reserves rose with loan growth and updated forecasts .
- Deposits declined to $1.663B (-2.2% vs Dec-24), while equity increased to $194.9M; book value per share rose to $12.32 aided by earnings and AOCI improvement .
- Capital return remains supportive: 215,883 shares repurchased for $2.2M in H1; potential stock reaction catalyst is continued NIM expansion with disciplined deposit pricing .
What Went Well and What Went Wrong
What Went Well
- Net interest margin expansion to 3.85% drove a $1.01M q/q increase in net interest income; management attributed this to higher loan/securities yields and disciplined deposit pricing keeping interest-bearing liability costs nearly flat .
- No provision expense in Q2 as the company released a $2.8M specific reserve from Q1, supporting bottom-line growth (+48.9% q/q net income) .
- Shareholder value actions: H1 repurchases of 215,883 shares ($2.2M) and book value per share increased $0.51 to $12.32 in Q2; “We remain committed to improving shareholder value” — Jeremiah Z. Smith, President & CEO .
What Went Wrong
- Deposits fell to $1.663B (-2.17% vs Dec-24; -$36.8M), continuing pressure from the rate environment and competition for funding .
- Non-interest expense, while down q/q, rose y/y to $10.893M (+5.8%), partially offsetting revenue tailwinds .
- Investment securities declined to $593.6M (-6.36% vs Dec-24), reflecting asset mix shifts and potentially constraining future securities-based yield contribution .
Financial Results
Quarterly Operating Metrics
Note: FNRN does not report “Revenue” in the corporate sense; we show Net interest income and Non-interest income as the primary drivers of total revenues.
Balance Sheet Metrics
KPIs and Shares
Guidance Changes
Earnings Call Themes & Trends
No Q2 2025 earnings call transcript was available for review; analysis below reflects press releases and the 8-K .
Management Commentary
- “We are pleased to report strong second quarter results, with net income increasing by 23.6% compared to the same quarter last year. Our net margin expanded to 3.85%… due to higher yields on our loan and securities portfolios, along with disciplined deposit pricing that kept interest-bearing liability costs nearly flat during the quarter.” — Jeremiah Z. Smith, President & CEO .
- “We recorded no provision for credit losses in the quarter, due to the release of a $2.8 million specific reserve initially recorded during the first quarter of 2025. The release of specific provision was offset by an increase in pooled and unfunded reserves tied to loan growth and changes in economic forecasts.” — Jeremiah Z. Smith .
- “During the first two quarters of the year, we repurchased 215,883 shares for total consideration of $2.2 million… book value per share increased $0.51 to $12.32 as of June 30, 2025.” — Jeremiah Z. Smith .
Q&A Highlights
No Q2 2025 earnings call transcript was available; therefore, no Q&A themes or guidance clarifications can be reported for this quarter .
Estimates Context
- S&P Global consensus EPS and revenue estimates for Q2 2025 were unavailable; as a result, no beat/miss comparison can be made to Wall Street consensus for this quarter (Values retrieved from S&P Global).
- Actual results: diluted EPS $0.35; net income $5.466M; Net interest income $16.953M and non-interest income $1.537M .
- Given NIM expansion and zero provision in Q2, forward estimates may need to reflect higher NII run-rate and normalized credit costs, balanced against ongoing deposit outflows and modest loan growth .
Key Takeaways for Investors
- NIM expansion to 3.85% and disciplined funding costs drove a solid q/q and y/y lift in NII; sustaining margin momentum is a key near-term driver .
- Zero provision in Q2 was aided by the release of a specific $2.8M reserve; monitor the sustainability of lower credit costs as pooled/unfunded reserves were increased for loan growth and macro updates .
- Deposits continue to trend lower (-2.17% vs YE); watch pricing and mix as competitive funding pressures persist and could cap NIM expansion if repricing accelerates .
- Capital and book value per share strengthened, supported by earnings and AOCI improvement; H1 buybacks ($2.2M) provide EPS support and signal confidence .
- Loan growth is modest (+1.6% vs YE), led by commercial lending, offset by CRE, agricultural, and residential mortgage net reductions; asset mix should support yields but limits volume growth .
- With no formal guidance provided, execution around margin defense, deposit stabilization, and credit normalization will anchor the medium-term thesis .
- In the absence of consensus estimates, traders should focus on sequential NIM trajectory and funding cost behavior as primary stock drivers; any evidence of deposit stabilization would be a positive catalyst .