DIXON, Calif. - First Northern Community Bancorp (OTCQB:FNRN), the holding company for First Northern Bank, has announced the launch of a stock repurchase initiative. Starting May 1, 2024, the program is set to run through April 30, 2026, with the possibility of an earlier termination.
The plan authorizes the buyback of up to 6% of the company's outstanding common shares, which translates to approximately 933,043 shares based on the current count of 15,550,731 shares as of March 21, 2024.
The repurchase program, which follows a stock dividend paid on March 25, 2024, is designed to utilize a maximum of $8.4 million, calculated from the March 21 closing stock price of $9.00 per share. The board has affirmed that these repurchases will not compromise the corporation's capital strength.
Transactions will be conducted in compliance with Rule 10b-18 of the Securities and Exchange Commission, which sets forth regulations on the timing, pricing, and volume of stock buybacks.
This strategic move aims to optimize capital management, enhance shareholder equity returns, and improve market liquidity for First Northern Community Bancorp's shares. The company's leadership believes that the repurchase program will positively influence the corporation's financial metrics without affecting its regulatory capital positions.
First Northern Bank has been a fixture in Solano County since 1910 and offers a range of services including small-business, commercial, and real estate lending, as well as mortgage loans. Recognized for its financial stability with ratings from Veribanc and Bauer Financial, First Northern Bank operates across several Northern California counties and offers non-FDIC insured investment and brokerage services at its branches.
Investors should note that this announcement contains forward-looking statements regarding the anticipated benefits of the repurchase program. These statements are subject to risks and uncertainties, and actual outcomes may differ.
This news is based on a press release statement, and investors are encouraged to consider the company's latest SEC filings for a more comprehensive understanding of risk factors that could affect these forward-looking statements.
InvestingPro Insights
As First Northern Community Bancorp (OTCQB:FNRN) embarks on its newly announced stock repurchase program, InvestingPro data indicates some key financial metrics that could be of interest to investors.
With a market capitalization of $134.19 million and a price-to-earnings (P/E) ratio of 5.96, the company presents a value proposition that appears attractive when juxtaposed with its near-term earnings growth. In fact, the P/E ratio adjusted for the last twelve months as of Q4 2023 is 6.54, suggesting a consistent valuation picture over the recent period.
The company's revenue growth is also noteworthy, with an 18.36% increase over the last twelve months as of Q4 2023. This figure aligns with the company's strategic initiatives, like the stock repurchase program, aimed at enhancing shareholder value.
Moreover, the stock is trading near its 52-week high, with a price percentage of 97.56% of the high, reflecting investor confidence in the company's financial health and market position.
One of the InvestingPro Tips suggests that the Relative Strength Index (RSI) indicates the stock is in overbought territory, which could be a signal to investors to monitor the stock's performance closely, especially in the context of the repurchase program. Another tip points to the company's low earnings multiple, which, combined with strong profitability over the last twelve months, could signal an undervalued stock to potential investors.
For those interested in deeper analysis, there are additional InvestingPro Tips available that could further guide investment decisions. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for a comprehensive investment toolkit. With these insights, stakeholders can better gauge the potential impact of First Northern Community Bancorp's stock repurchase initiative on the company's financial standing and market performance.
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