$15.15
$29.33
bear $15.15
base $22.11
bull $29.33
margin of safety $14.00
market price* $16.75
First Northern Community Bancorp owns First Northern Bank, a community bank founded in Dixon, California in 1910 that gathers deposits and lends to households, small businesses, commercial real estate owners and farms in Solano, Yolo, Sacramento, Placer, El Dorado, Glenn and Colusa Counties. It has about $1.93 billion of assets, $1.69 billion of deposits, roughly $1.07 billion of loans and $217 million of shareholders' equity (June 30, 2026). Its shares moved from the over-the-counter market to the Nasdaq Capital Market on April 24, 2026. Instead of a cash dividend it pays a 5% stock dividend each year and returns cash through buybacks ($4.7 million in 2025), so all per-share figures here are on today's roughly 16.5 million diluted shares. How we measure earning power. We start from the cash the bank's operations actually generate, strip out timing swings in receivables and payables, and charge stock-based pay and all equipment spending as costs. Two refinements this time lower the figure slightly versus our previous work. First, that cash measure never charges the bank for loan losses (loan write-offs pass through the loan book, not operating cash), so we deduct a normal credit cost of about 0.15% of loans a year, roughly $1.2 million after tax; actual net charge-offs were $0.9 million in both 2024 and 2025. Second, branch rent paid on operating leases (about $1.1 million a year) was partly escaping the measure, so we deduct about $0.9 million a year for it. In 2025 the bank also spent $14.2 million buying federal clean-energy tax credits at a discount and used them against its tax bill; we treat that purchase as a prepayment of taxes rather than an operating cost, and we exclude the one-time $1.2 million discount gain from normal earnings. Anchor. On that basis cash earnings per share were $1.07 in 2021, $1.31 in 2022, $1.48 in 2023, $1.40 in 2024 and $1.16 in 2025 before our two refinements. We anchor on 2021-2025 because the bank has been essentially the same size since its deposits jumped in 2020-2021 (deposits $1.73 billion at end-2021 versus $1.69 billion today), and that window covers both near-zero interest rates (2021) and the high-rate years (2023-2024). The median, $1.31, less the credit and lease charges, gives a normal level of about $1.18 per share. We previously anchored on 2019-2025, which mixed in the smaller pre-2020 bank, and did not charge credit losses or lease costs; the two changes roughly offset at the anchor. Recent trend. Measured cash earnings fell 17% in 2025 (from $1.40 to $1.16), even though net income rose to $21.1 million from $20.0 million. The drop traces to items that do not recur at that size: $1.4 million of non-cash accretion on bonds bought below face value, the excluded $1.2 million tax-credit gain, and equipment spending of $1.7 million against $0.3 million the year before. Our base case assumes 1.5% growth from the $1.18 normal level in its first year, above the 2025 decline, because the first half of 2026 (reported August 2026) shows net income up 16% to $10.6 million and net interest income up about 4% to $34.2 million, despite a $0.9 million loan-loss provision. Growth we credit. Deposits grew 5.9% a year from 2015 to 2025, and 4.7% a year before the pandemic, but that pace stalled after 2021 and total deposits are slightly lower today than at the end of 2021. So the base case credits only 1.5% a year for ten years, well below the long record, and no growth after that. We give no credit to margin expansion, new markets or acquisitions, and no extra credit for buybacks, since buybacks are simply a use of the same cash we are already valuing. What keeps it going after ten years. The durable asset is a 115-year-old base of local deposits spread across a seven-county footprint, much of it low-cost checking and savings money that has stayed with the bank through several rate cycles. We assume that earning power continues at the year-ten level without further growth. Debt. This is a bank, so the interest it pays on deposits is the cost of its raw material rather than a financing choice, and our cash earnings are already measured after that interest. The holding company has no bonds, no subordinated debt and no preferred stock, and it had no borrowings outstanding at year-end 2025 (it took and repaid a $20 million Federal Home Loan Bank advance during the year). In each case below, what the business is worth and what shareholders own are therefore the same figure, with nothing owed to lenders ahead of them. Our previous analysis was right not to subtract debt; this version states it explicitly and moves the balance-sheet risk into the bear case. Base case, about $22.11 per share. Cash earnings of about $1.18 per share grow 1.5% a year to about $1.37 in year ten and hold there. The business is worth about $365 million; it owes lenders nothing; shareholders' value is about $365 million, or $22.11 per share. Bear case, about $15.15 per share. Interest rates return toward 2021 levels and the margin falls back to where it was then, cutting normal cash earnings to about $0.94 per share, the 2021 result after our credit and lease charges. On top of that, a downturn in Sacramento Valley farming or commercial real estate, where about 84% of loans are secured by real estate, brings two years of loan losses near 0.75% of loans (about $8 million a year before tax). No growth thereafter. The business is worth about $250 million; it owes lenders nothing; shareholders' value is about $250 million, or $15.15 per share. The bank's $19.8 million of after-tax unrealized losses on its bond portfolio (June 2026) would only become real if heavy deposit outflows forced sales. With equity at about 11% of assets and no borrowings, we do not think that is the 10th-percentile outcome, so we left it out of this case. Bull case, about $29.33 per share. The margin gains of 2025 (net interest margin 3.77% versus 3.60% in 2024) and early 2026 hold, keeping normal cash earnings near the 2023-2024 level of about $1.32 per share, and deposits and loans grow 3% a year for ten years. That is still below the bank's 4.7% pre-pandemic pace. The business is worth about $459 million. In addition, the bank carries capital well above what regulators require (equity of 11.3% of assets), and we credit about $25 million ($1.51 per share) of that surplus as returnable to shareholders. It owes lenders nothing, so shareholders' value is about $484 million, or $29.33 per share. Why the estimate is lower than before. Our earlier work assumed mid-single-digit growth for five years and growth continuing indefinitely afterwards. Deposits have not grown since 2021, so we now credit only modest growth for ten years and none after that. Together with the explicit charge for loan losses, this lowers every case; the base falls from about $34 to about $22. What would make this wrong. Our estimate is too low if deposit growth resumes at the pre-pandemic pace, and too high if rate cuts squeeze the margin faster than we assume or if farm or real estate credit losses run well above the charge we have made. Net income did hold between $20.0 million and $21.6 million a year from 2023 through 2025.