8-K
FIRST NORTHERN COMMUNITY BANCORP (FNRN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 18, 2024
FIRST NORTHERN COMMUNITY BANCORP
(Exact Name of Registrant as Specified in Its Charter)
000-30707
(Commission File Number)
| California | 68-0450397 |
|---|---|
| (State or Other Jurisdiction of Incorporation) | (I.R.S. Employer Identification No.) |
195 N FIRST STREET
DIXON, California 95620
(Address of principal executive offices, including zip code)
(707) 678-3041
(Registrant’s telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br> <br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| FNRN | FNRN |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 7.01 REGULATION FD DISCLOSURE
On June 18, 2024, First Northern Community Bancorp (the “Company”) released an investor presentation (the “Investor Presentation”) which includes updates regarding the Company’s financial position, business, and operations that management of the Company intends to use from time to time in investor communications and conferences. A copy of the Investor Presentation is attached hereto as Exhibit 99.1.
In accordance with General Instruction B.2 of Form 8-K, the information furnished in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is not to be incorporated by reference into any filing by the Company, under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language contained in such filing, unless otherwise expressly stated in such filing. By filing this Form 8-K and furnishing this information pursuant to Item 7.01, the Company makes no admission as to the materiality of any information in this Form 8-K, including Exhibit 99.1, that is required to be disclosed solely by Regulation FD.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K, including Exhibit 99.1, includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "would," "poised," "believes," "predicts," "potential," "continue," and similar expressions, are intended to identify such forward-looking statements; however the absence of these words does not mean the statements are not forward-looking. These forward-looking statements are intended to provide investors with additional information with which they may assess the Company’s future potential. Forward-looking statements in this communication include matters that involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this communication. Such risk factors include, among others: the effects of and changes in monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board and their effects on inflation risk; political and economic uncertainty, including any decline in global, domestic or local economic conditions or the stability of credit and financial markets; and other relevant risks described under the heading "Risk Factors" in the Company's annual and quarterly reports filed with the Securities and Exchange Commission (the "SEC") and other documents filed, or to be filed, by the Company with the SEC. All such factors are difficult to predict and are beyond the Company's ability to control or predict. All of these forward-looking statements are based on assumptions about an uncertain future and on information available to the Company at the date of these statements. There are numerous risks and uncertainties that could and will cause actual results to differ materially and adversely from those contained in the forward-looking statements in this communication. There also may be additional risks that the Company does not presently know, or that the Company currently believes to be immaterial, that could also cause actual results to differ materially and adversely from those contained in these forward-looking statements. Forward-looking statements speak only as of the date they are made, and, except as otherwise required by law, the Company undertakes no obligation and does not intend to update these forward-looking statements to reflect events, facts, assumptions or circumstances occurring after the date of this communication. You are cautioned not to place undue reliance on these forward-looking statements.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit No. Description
99.1 First Northern Community Bancorp Investor Presentation, dated June 18, 2024
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: June 18, 2024 | First Northern Community Bancorp<br><br> <br>(Registrant) |
|---|---|
| /s/ Jeremiah Z. Smith | |
| By: Jeremiah Z. Smith | |
| President/Chief Executive Officer |
Investor Presentation Date of Pres 2024 Investor Presentation June 18, 2024 First Northern Community Bancorp
Disclaimer This investor presentation has been prepared by First Northern Community Bancorp (the “Company” or “FNRN”) solely for informational purposes based on its own information, as well as information from public sources. Certain of the information contained herein may be derived from information provided by industry sources. The Company believes such information is accurate and that the sources from which it has been obtained are reliable. However, the Company has not independently verified such information and cannot guarantee the accuracy of such information, and no representation, expressed or implied, is made as to such information’s accuracy or completeness. This investor presentation has been prepared to assist interested parties in making their own evaluation of the Company and does not purport to contain all of the information that may be relevant. In all cases, interested parties should conduct their own investigation and analysis of the Company and the data set forth in the investor presentation and other information provided by or on behalf of the Company. Use of Non-GAAP Financial Measures This presentation includes the use of certain measures that have not been calculated in accordance with U.S. generally acceptable accounting principles (GAAP) such as, but not limited to, Tangible Common Equity Ratio, Efficiency Ratio and Pre-Tax, Pre-Provision Net Income. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Reconciliations for non-GAAP measure to GAAP measures are included in the Appendix to this investor presentation. Use of Projections This presentation contains projections, including cashflow projections relating to the company’s investment portfolio. Our independent auditors have not audited, reviewed, compiled, or performed any procedures with respect to the projections for the purpose of their inclusion in this presentation, and accordingly, have not expressed an opinion or provided any other form of assurance with respect thereto for the purpose of this presentation. These projections are for illustrative purposes only and should not be relied upon as being indicative of future results. The assumptions and estimates underlying the projected information are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projected information. Even if our assumptions and estimates are correct, projections are inherently uncertain due to a number of factors outside our control. Accordingly, there can be no assurance that the projected results are indicative of our future performance or that actual results will not differ materially from those presented in the projected information. Inclusion of the projected information in this presentation should not be regarded as a representation by any person that the results contained in the projected information will be achieved.Cautionary Statement Regarding Forward-Looking InformationThis communication includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “would,” “poised,” “believes,” “predicts,” “potential,” “continue,” and similar expressions, are intended to identify such forward-looking statements; however the absence of these words does not mean the statements are not forward-looking. These forward-looking statements are intended to provide investors with additional information with which they may assess our future potential. Forward-looking statements in this communication include matters that involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this communication. Such risk factors include, among others: the effects of and changes in monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board and their effects on inflation risk; political and economic uncertainty, including any decline in global, domestic or local economic conditions or the stability of credit and financial markets; and other relevant risks described under the heading “Risk Factors” in the Company’s annual and quarterly reports filed with the Securities and Exchange Commission (the “SEC”) and other documents filed, or to be filed, by the Company with the SEC. All such factors are difficult to predict and are beyond the Company’s ability to control or predict. All of these forward-looking statements are based on assumptions about an uncertain future and on information available to the Company at the date of these statements. There are numerous risks and uncertainties that could and will cause actual results to differ materially and adversely from those contained in the forward-looking statements in this communication. There also may be additional risks that the Company does not presently know, or that the Company currently believes to be immaterial, that could also cause actual results to differ materially and adversely from those contained in these forward-looking statements. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation and does not intend to update these forward-looking statements to reflect events, facts, assumptions or circumstances occurring after the date of this communication. You are cautioned not to place undue reliance on these forward-looking statements. 2
First Northern Community Bancorp Branches Community bank headquartered in Greater Sacramento Region; Opened in 1910 1910 EST, Strategic Footprint: 14 Branches; Colusa Branch (Colusa County), Willows and Orland Branches (Glenn County) acquired January 2023 86.5% of Deposits are Core Deposits 3 Experienced and Capable Leadership Team $1.89 billion in total assets as of March 31, 2024
Senior Management Team 4 AMANDA CONNELL Senior Vice President KEVIN SPINK First Northern Community Bancorp JEFFREY ADAMSKI DENISE E. BURRIS MIKE WEBBERSenior Vice President Marketing & Communications Director JEREMIAH Z. SMITH President & CEO First Northern Bank & First Northern Community Bancorp BRETT HAMILTON LIBBY FEYHExecutive Vice President Chief Human Resources Officer
First Northern Bank exists to build long-lasting relationships where we can address specific financial needs on a personalized basis, provide opportunities for our employees, and be committed and passionate about making a difference in our communities. Our Purpose Statement 5
Attractive Markets 2022 Population: 449K 2022 Median Household Income: $93K 2023 Business Core Deposit Market Share: 16.78% 2022 Population: 222K 2022 Median Household Income: $82K 2023 Business Core Deposit Market Share: 24.33% 2022 Population: 1.6M 2022 Median Household Income: $84K 2023 Business Core Deposit Market Share: 3.92% 2022 Population: 22K 2022 Median Household Income: $73K 2023 Business Core Deposit Market Share: 6.66% 2022 Population: 28K 2022 Median Household Income: $63K 2023 Business Core Deposit Market Share: 10.9% 2022 Population: 418K 2022 Median Household Income: $106K 2023 Business Core Deposit Market Share: 3.45% Colusa County Glenn County Yolo County Sacramento County Solano County Branches: 3 Branches: 4 Branches: 2 Branches: 1 Branches: 2 Branches: 2 Placer County 6 Note: 2023 Business Core Deposit Market Share information as of December 31, 2023 was sourced from California Banksite Corporation. 2022 Population and median household income data was sourced from the U.S. Census Bureau.
Diverse Commercial Client Portfolio (by industry) 7 As of March 31, 2024
While many banks claim to offer exceptional customer service, our annual customer retention rate of over 97% speaks volumes about our dedication to satisfying our customers. Maintaining our dominance in community bank market share within our key markets solidifies our position as the top choice. Committed to Providing Exceptional Experiences A Dedication to Remaining Independent We’ve Stood the Test of Time Competitive Advantages Our managers and lenders boast an average of over 24 years of experience in banking. At First Northern Bank, we possess the expertise to grasp the nuances and complexities across various industries, leveraging local decision-making to meet the diverse needs of our local business owners. Driven by our core values of People First, Absolute Integrity, and a Zest for Excellence, we are motivated to craft innovative banking solutions for our clients. This commitment is realized through the collaborative efforts of our talented teams, resulting in the development of cutting-edge products and services to satisfy those we serve. Your Community Bank with a Dedicated Local Mortgage Division A Culture of Ownership #1 in Small Business Lending Championing Clean Energy Lending Remaining True To Our Values We invest in the best bankers resulting in First Northern Bank being the region’s #1 local small business lender. Experience the confidence of working with a trusted mortgage lender offering local underwriting, decision-making, and processing – all within your community. With a track record of financing millions of dollars in clean energy projects, First Northern Bank actively supports the financing of local clean energy initiatives. Recruiting Seasoned Professionals to Lead Our Initiatives In 1996, the Board of Directors adopted a Policy of Independence to share with our customers, communities and shareholders, our intention of remaining independent. First Northern Bank has operated safely under the same ownership through- out two World Wars, the Great Depression, 20 recessions, and 2 pandemics. Today, stronger than ever! With over 54% of our employees holding stock in First Northern Bank, they are personally invested in ensuring customer satisfaction and the overall success of the Bank. 1 California Banksite Corporation (CBC), June 2023 2 Sourced from ffiec.gov 2 1 8
Investment Highlights 9 Capacity to Grow Featured Business Lines Consistent organic growth Robust capital levels Attractive markets SBA Preferred Lender Focus on local commercial lending relationships Core deposit franchise Strong Balance Sheet Favorable liquidity position Long history of low credit losses Attractive loan yields Consistent & Improving Profitability Low cost of funds Disciplined expense management Focus on Efficiency Strategies Clear Vision New product development Investing in technology Growth beyond Greater Sacramento Region 105,717+ Hours of Community Service since 2006 $3.5 million in support to local non-profits since 2001 Community Impact as of March 31, 2024
• • 10 Financial Highlights
Results 2024 as of March 31, 2024 Strong Balance Sheet Growth Consistent Profitability (Year to Date) Positive Trends in Key Metrics Continued Strong Credit Quality Total Assets $1.89 Billion PTPP Earnings1 $5.6 Million ROAA 0.92% NPAs/Assets 0.5% Total Gross Loans $1.05 Billion Net Income $4.3 Million ROACE 10.69% NPLs/Loans 0.8% Total Deposits $1.71 Billion Basic Earnings Per Share $0.28 Net Interest Margin 3.49% Reserves/Loans 1.52% Total Common Equity $162.3 Million Efficiency Rat io 65.3% Reserves/NPA’s 184.9% 11 2 1 – Pre-tax, pre-provision income is a non-U.S. GAAP financial measure derived from U.S. GAAP-based amounts. Refer to the non-GAAP reconciliation on page 29 for reconciliation to U.S. GAAP-based amounts. 2 – Efficiency ratio is a non-U.S. GAAP financial measure derived from U.S. GAAP-based amounts. Refer to the non-GAAP reconciliation on page 28 for reconciliation to U.S. GAAP-based amounts.
12 Consistent Balance Sheet Growth Total Assets ($B) Total Deposits ($B) Total Gross Loans (Includes LHFS) ($MM) Total Equity ($MM) CAGR = Compound Annual Growth Rate CAGR = 7.5% CAGR = 5.6% CAGR = 3.8% CAGR = 8.0 % 133 151 151 125 159 162
13 Strong Profitability Net Income ($MM) Net Interest Income ($MM) Non-interest Expense ($MM) Pre-Tax, Pre-Provision Income ($MM)
Liquidity as of March 31, 2024 14 Low Loan to Deposit Ratio Provides Margin Expansion Opportunities Ample Liquidity and Room for Loan Growth
Investment Portfolio by fair value, as of March 31, 2024 Effective duration of 2.99 100% of investment securities classified as available for sale. Stable steady cash flow profile in both up and down rate scenarios provides ongoing reinvestment opportunities and liquidity. 15.2% 39.7% 20.1% 15.9% 9.0% 15 Cash Flow Projections
2024 loan yield through Represents a 7.7% improvement March 31, 2024 = 5.16%. over the 4.79% loan yield achieved for the first quarter of 2023. Loan Portfolio as of March 31, 2024 Interest Income ($000) & Yields on Loans 16 March 2024 LOAN MIX
Commercial $266 $363 $133 $---- $---- 139 Commercial Real Estate 466 4,875 555 ---- ---- ---- Agriculture ---- 9,130 8,712 7,416 2,871 2,728 Residential Mortgage 172 153 138 123 424 1,315 Residential Construction ---- ---- ---- ---- ---- 4,000 Consumer 253 690 659 637 703 602 Total Nonaccrual $1,157 $15,211 $10,197 $8,176 $3,998 $8,784 Loan Loss Reserve $12,356 $15,416 $13,952 $14,792 $16,596 $16,246 Reserve as a % of Nonaccrual 1,067.9% 101.3% 136.8% 180.9% 415.1% 184.9% Nonperforming Loans ($000) 2019 2020 2021 2022 2023 Q1 2024 Nonaccrual Loans Sound Credit Culture as of March 31, 2024 Loan Chargeoffs and Recoveries ($000) 17
Attractive Deposit Franchise as of March 31, 2024 Core Deposits 44.0% 22.5% 25.5% 8.0% 18 Q1 2024 DEPOSIT MIX
Strong Deposit Mix Drives Low Cost of Funds 19 Non-Interest Bearing Deposits ($000) Interest Bearing Deposits ($000)
Robust Capital Position 20 * Regulatory Capital - Bank Only 1 – Tangible common equity to tangible assets (the “tangible common equity ratio”) is a non-U.S. GAAP financial measure derived from U.S. GAAP based amounts. Refer to the non-GAAP reconciliation on page 27 for a reconciliation to U.S. GAAP-based amounts. 1
Per Share Data Basic Earnings per Share (EPS) Tangible Book Value per Share 21 1 1 – Tangible book value per share is a non-U.S. GAAP financial measure derived from U.S. GAAP based amounts. Refer to the non-GAAP reconciliation on page 27 for a reconciliation to U.S. GAAP-based amounts. 1
NASDAQ Peer Comparison 22
• OUR ZEST FOR EXCELLENCE 23
Elk Grove Food Bank Sacramento Century Ride for Families in Need Acres of Hope, Auburn, CA Keaton’s Cancer Alliance, Roseville, CA Community Reinvestment of Community Service since 2006 in Donations made to local non-profits since 2001. 104,532+ Hours $3.5 Million Through volunteerism and service on boards and committees, we reinvest our time and monetary support to communities we serve by supporting local non-profits, service clubs, chambers and charitable organizations. Our directors, management team, and employees are involved in hundreds of activities, and generously give their time, energy, and talent. We offer our employees participation in a Community Service Program which supports activities that enhance and serve the communities in which we live and work. This program incentivizes employees who volunteer 100+ hours per calendar year within the communities that the company serves. 24
Rankings and Recognition NATIONAL & STATE LOCAL Bauer Financial, Inc. Top Ranking “5-Star Superior” Veribanc, Inc. Rated “Green 3-Stars” American Banker Magazine Ranked in the Top 200 Community Banks in the nation (2019-2022). In 2022, First Northern Bank was one of 23 California banks that made the list and the only bank headquartered in the Greater Sacramento Region. Findley Reports, Inc. Top Ranking of “Super Premier Performing Bank” Sacramento Business Journal Ranked #8 on 2023 Top 25 Corporate Philanthropy Direct Giving List 2024 Best Bank of Yolo County Voted #1 by the residents and businesses of Yolo County for 20 years. 2023 Best Community Bank of Roseville & Granite Bay Voted #1 by community members through a year-long, online poll sponsored by the Roseville Press Tribune. 2021 West Sacramento Business of the Year Voted #1 Business by community members through the West Sacramento Chamber of Commerce. 2020 Winters Business of the Year Voted #1 Business by community members through the Winters Chamber of Commerce. #1 Local Small Business Lender in the Greater Sacramento Region and Solano County. SMALL BUSINESS LENDER 25
• • PEOPLE FIRST ABSOLUTE INTEGRITY ZEST F OR EXCELLENCE 26 • • Appendix
Non-GAAP Reconciliation Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per share are non-U.S. GAAP financial measures derived from U.S. GAAP-based amounts. We calculate the tangible common equity ratio by excluding the balance of intangible assets from common stockholders' equity and dividing by tangible assets. We calculate tangible book value per share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing common stockholders' equity by common shares outstanding. We believe that this information is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios. Accordingly, we believe that these non-U.S. GAAP financial measures provide information that is important to investors and that is useful in understanding our capital position and ratios. However, these non-U.S. GAAP financial measures are supplemental and are not a substitute for an analysis based on U.S. GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-U.S. GAAP measure of tangible common equity ratio to the U.S. GAAP measure of common equity ratio and tangible book value per share to the U.S. GAAP measure of book value per share are set forth below. #VALUE! 27
28 Non-GAAP Reconciliation For periods presented below, efficiency ratio is a non-U.S. GAAP financial measure derived from U.S. GAAP-based amounts. This figure represents the ratio of non-interest expense less other real estate owned operations and amortization of intangible assets expense to the sum of net interest income and total non-interest income. Management believes that the exclusion of such items from this financial measure provides useful information to gain an understanding of the operating results of our core business. This non-U.S. GAAP financial measure is supplemental and is not a substitute for an analysis based on U.S. GAAP measures. As companies may use different calculations for this measure, this presentation may not be comparable to other similarly titled measures reported by other companies. A calculation of the non-U.S. GAAP measure of efficiency ratio is set forth below.
Non-GAAP Reconciliation Pre-tax, pre-provision income is an non-U.S. GAAP financial measure derived from U.S. GAAP-based amounts. We calculate pre-tax, pre-provision income by excluding income tax and provision for credit losses from net income. Management believes that the exclusion of such items from this financial measure provides useful information to gain an understanding of the operating results of our core business. This non-U.S. GAAP financial measure is supplemental and is not a substitute for an analysis based on U.S. GAAP measures. As companies may use different calculations for this measure, this presentation may not be comparable to other similarly titled measures reported by other companies. A calculation of the non-U.S. GAAP measure of Pre-Tax pre-provision income is set forth below. 29
30 First Northern Community Bancorp June 18, 2024 THANK YOU