Net earnings for the parent of First Northern Bank last year increased 7.4 percent from 2016, despite a $1.7 million one-time adjustment because of the new federal tax law.
Dixon-based First Northern Community Bancorp (OTCQB: FNRN) on Tuesday night reported 2017 net income $8.7 million, or 75 cents per diluted share, compared with $8.1 million, or 70 cents a share, last year. For the fourth quarter, ended Dec. 31, net income was $0.9 million, or 8 cents a share, down 60.8 percent from $2.3 million, or $0.20 cents a share, a year before.
President and CEO Louise Walker said in a statement the bank had near-record earnings in 2017.
“We experienced solid gains in net interest income, investment and brokerage services income, and mortgage-related income,” she said. “In addition, our relationship bankers were able to successfully attract many business clients coming from a number of local banks in our region that have recently been acquired.
The federal Tax Cuts and Jobs Act, signed into law Dec. 22, reduced the federal corporate income tax rate to 21 percent from 35 percent, effective Jan. 1. The bancorp said it remeasured its net deferred tax asset in December, as the law was enacted in 2017 but the new tax rate did not take effect until this year. This remeasurement resulted in a reduction in the value of our net deferred tax asset by 14 cents per diluted share, which was recorded as additional income tax expense for the fourth quarter.
Total assets at the end of 2017 were $1.22 billion, up 4.4 percent for the year. Total deposits were $1.10 billion, up 3.9 percent. Total net loans, including those held for sale, increased 10.0 percent to $740.2 million.
First Northern at year-end remained “well-capitalized” under regulatory definitions, exceeding the 10 percent total risk-based capital ratio threshold, the bancorp said.
The bancorp on Tuesday also declared a 4 percent stock dividend, payable March 29 to shareholders of record as of Feb. 28.
The bank has 10 branches, in Dixon, Davis, West Sacramento, Fairfield, Vacaville, Winters, Woodland, Sacramento, Roseville and Auburn. It has a full-service trust department in Sacramento and a commercial lending office in Walnut Creek.
The company’s stock price Wednesday morning was unchanged, at $13.50 a share.