First Northern Bancorp (FNRN) of Dixon, Calif., is nearly halfway out of the Treasury Department's Small Business Lending Fund.
The parent of the $831 million-asset First Northern Bank said Friday that it has redeemed $10 million of the $22.8 million in preferred stock that it issued to the Treasury as part of the SBLF. The lender joined the SBLF in September 2011.
The redemption will reduce the company's annual dividend payment by about $500,000 at the current dividend rate of 5%, the press release said.
"The SBLF capital infusion was a great opportunity for our company to continue to meet the credit needs of small businesses in the communities we serve," said company president and chief executive Louise Walker in a news release. "However, our improving asset quality, earnings and increasing deposit levels give us the flexibility to continue to meet small business loan needs while beginning to execute on our objective of redeeming our SBLF capital as time and conditions allow."
First National Bank's fourth-quarter profit was up over 500% compared to the final quarter of 2011, to $1.1 million. The bank earned $4.6 million on the year, a 70% rise from 2011.
Few of the 332 institutions that participated in the SBLF have redeemed their shares. QCR Holdings (QCRH) in Moline, Ill., and Oak Valley Bancorp (OVLY) of Oakdale, Calif., have also made partial repayments to the Treasury.