Auburn National Bancorporation, Inc. (Nasdaq: AUBN) reported net
earnings of $1.9 million, or $0.53 per share, for the third quarter
of 2021, compared to $1.9 million, or $0.54 per share, for the
third quarter of 2020. Net earnings for the first nine months of
2021 were $6.2 million, or $1.74 per share, compared to $5.4
million, or $1.51 per share, for the first nine months of 2020.
“Along with our third quarter 2021 results, I am
pleased to announce that we have no COVID-19 loan deferrals
outstanding at September 30, 2021. This compares to $112.7
million in loan deferrals or 24% of total loans at June 30, 2020,
the first quarterly period we began offering COVID-19 loan
modifications,” said Robert W. Dumas, Chairman, President and
CEO.
“We hoped that by working with our customers
through payment deferrals, combined with proceeds from the Paycheck
Protection Program, it would allow the vast majority of small
businesses to make it through this difficult period. We are
encouraged about the direction of the economies in our markets as
borrowers that were most impacted by the pandemic continue to
improve their financial performance,” continued Mr. Dumas.
Total revenue declined approximately 4% in the
third quarter of 2021, compared to the third quarter of 2020,
primarily due to reduced mortgage lending income.
Net interest income (tax-equivalent) was $6.2
million for the third quarter of 2021, a 3% increase compared to
$6.0 million for the third quarter of 2020. This increase was
primarily due to the reduced costs of our interest-bearing
liabilities and increased securities holdings as a percentage of
our total assets. These increases were partially offset by a
decrease in average loans.
Net interest margin (tax-equivalent) decreased to 2.51% in the
third quarter of 2021, compared to 2.72% for the third quarter of
2020, primarily due to the continued lower interest rate
environment and continued growth in deposits. Our
deposits continue to grow, primarily as a result of customers’
increased savings and liquidity, and our focus on our customers.
Deposit levels also increased in 2020 and 2021 due to COVID-19
related government stimulus and relief programs.
At September 30, 2021, the Company’s allowance for loan losses
was $5.1 million, or 1.13% of total loans, compared to $5.6
million, or 1.22% of total loans, at December 31, 2020, and $5.6
million, or 1.18% of total loans, at September 30, 2020.
The Company made no provision for loan losses during the third
quarter of 2021, compared to a provision for loan losses of $250
thousand during the third quarter of 2020. The
provision for loan losses is based upon various estimates and
judgments, including the absolute level of loans, economic
conditions, loan growth, credit quality and the amount of net
charge-offs.
At September 30, 2021, we had no loans where we had granted loan
payment deferrals or other loan modifications, compared to $112.7
million, or 24% of total loans at June 30, 2020, the first
quarterly period we began offering loan modifications to assist
customers through the COVID-19 pandemic, and $87.1 million or 18%
of total loans at September 30, 2020.
Noninterest income was $1.0 million for the third quarter of
2021, a 32% decrease compared to $1.4 million for the third quarter
of 2020. The decrease in noninterest income was primarily due
to a decrease in mortgage lending income of $0.4 million as
refinance activity slowed in our primary market area.
Noninterest expense was $4.7 million for the third quarter of
2021, largely unchanged, compared to the third quarter of 2020.
Income tax expense was $0.4 million for the third quarter of
2021 and 2020, respectively. The Company’s effective tax rate for
the third quarter of 2021 was 17.07%, compared to 17.23% in the
third quarter of 2020.
The Company paid cash dividends of $0.26 per share in the third
quarter of 2021, an increase of 2% from the same period in 2020.
The Company’s share repurchases of $1.3 million since December 31,
2020 resulted in 37,093 fewer outstanding common shares at
September 30, 2021. At September 30, 2021, the Bank’s regulatory
capital ratios were well above the minimum amounts required to be
“well capitalized” under current regulatory standards.
About Auburn National Bancorporation, Inc.
Auburn National Bancorporation, Inc. (the “Company”) is the
parent company of AuburnBank (the “Bank”), with total assets of
approximately $1.1 billion. The Bank is an Alabama state-chartered
bank that is a member of the Federal Reserve System, which has
operated continuously since 1907. Both the Company and the Bank are
headquartered in Auburn, Alabama. The Bank conducts its business in
East Alabama, including Lee County and surrounding areas. The Bank
operates eight full-service branches in Auburn, Opelika, Valley,
and Notasulga, Alabama. The Bank also operates loan production
offices in Auburn and Phenix City, Alabama. Additional information
about the Company and the Bank may be found by visiting
www.auburnbank.com.
Cautionary Notice Regarding Forward-Looking
Statements
This press release contains “forward-looking statements” within
the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934, including, without limitation, statements
about future financial and operating results, costs and revenues,
the effects of the COVID-19 pandemic and related government,
Federal Reserve monetary and regulatory actions, including economic
conditions generally and in our markets, loan demand, mortgage
lending activity, changes in the mix of our earning assets
(including those generating tax exempt income) and our deposit and
wholesale liabilities, net interest margin, yields on earning
assets, securities valuations and performance, interest rates
(generally and those applicable to our assets and liabilities),
noninterest income, loan performance, loan deferrals and
modifications, nonperforming assets, other real estate owned,
provision for loan losses, charge-offs, other-than-temporary
impairments, collateral values, credit quality, asset sales,
insurance claims, and market trends, as well as statements with
respect to our objectives, expectations and intentions and other
statements that are not historical facts. Actual results may
differ from those set forth in the forward-looking statements.
Forward-looking statements, with respect to our beliefs, plans,
objectives, goals, expectations, anticipations, estimates and
intentions, involve known and unknown risks, uncertainties and
other factors, which may be beyond our control, and which may cause
the actual results, performance, achievements, or financial
condition of the Company or the Bank to be materially different
from future results, performance, achievements, or financial
condition expressed or implied by such forward-looking
statements. You should not expect us to update any
forward-looking statements.
All written or oral forward-looking statements attributable to
us are expressly qualified in their entirety by this cautionary
notice, together with those risks and uncertainties described in
our annual report on Form 10-K for the year ended December 31,
2020 and otherwise in our other SEC reports and filings.
Explanation of Certain Unaudited Non-GAAP Financial
Measures
This press release contains financial information determined by
methods other than U.S. generally accepted accounting principles
(“GAAP”). The attached financial highlights include certain
designated net interest income amounts presented on a
tax-equivalent basis, a non-GAAP financial measure, and the
presentation and calculation of the efficiency ratio, a non-GAAP
measure. Management uses these non-GAAP financial measures in its
analysis of the Company’s performance and believes the presentation
of net interest income on a tax-equivalent basis provides
comparability of net interest income from both taxable and
tax-exempt sources and facilitates comparability within the
industry. Similarly, the efficiency ratio is a common measure that
facilitates comparability with other financial institutions.
Although the Company believes these non-GAAP financial measures
enhance investors’ understanding of its business and performance,
these non-GAAP financial measures should not be considered an
alternative to GAAP. Along with the attached financial highlights,
the Company provides reconciliations between the GAAP financial
measures and these non-GAAP financial measures.
Reports Third
Quarter Net Earnings/page 4 |
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Financial Highlights (unaudited) |
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Quarter ended September 30, |
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Nine months ended September 30, |
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(Dollars in thousands, except per share amounts) |
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2021 |
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2020 |
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2021 |
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2020 |
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Results of Operations |
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Net interest income (a) |
$ |
6,158 |
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$ |
5,990 |
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|
$ |
18,308 |
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$ |
18,519 |
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Less: tax-equivalent adjustment |
|
117 |
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|
122 |
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|
355 |
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|
369 |
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Net interest income (GAAP) |
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6,041 |
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|
5,868 |
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17,953 |
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18,150 |
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Noninterest income |
|
929 |
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1,374 |
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|
3,221 |
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|
3,972 |
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Total revenue |
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6,970 |
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|
7,242 |
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21,174 |
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|
22,122 |
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Provision for loan losses |
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— |
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250 |
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(600 |
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|
1,100 |
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Noninterest expense |
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4,709 |
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|
4,653 |
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|
14,294 |
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|
14,468 |
|
Income tax expense |
|
386 |
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|
|
403 |
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|
|
1,313 |
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|
1,156 |
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Net earnings |
$ |
1,875 |
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$ |
1,936 |
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$ |
6,167 |
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$ |
5,398 |
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Per share data: |
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Basic and diluted net earnings: |
$ |
0.53 |
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$ |
0.54 |
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$ |
1.74 |
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$ |
1.51 |
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Cash dividends declared |
$ |
0.26 |
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$ |
0.255 |
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$ |
0.78 |
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$ |
0.765 |
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Weighted average shares outstanding: |
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Basic and diluted |
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3,536,320 |
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3,566,239 |
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3,552,387 |
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3,566,184 |
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Shares outstanding, at period end |
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3,529,338 |
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3,566,276 |
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3,529,338 |
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3,566,276 |
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Book value |
$ |
29.73 |
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$ |
29.81 |
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$ |
29.73 |
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$ |
29.81 |
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Common stock price: |
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High |
$ |
35.36 |
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$ |
56.80 |
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$ |
48.00 |
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$ |
63.40 |
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Low |
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33.25 |
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26.26 |
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33.25 |
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24.11 |
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Period-end: |
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33.80 |
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36.26 |
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33.80 |
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36.26 |
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To earnings ratio |
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14.57 |
x |
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15.97 |
x |
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14.57 |
x |
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15.97 |
x |
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To book value |
|
114 |
% |
|
122 |
% |
|
114 |
% |
|
122 |
% |
Performance ratios: |
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Return on average equity (annualized) |
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7.01 |
% |
|
7.26 |
% |
|
7.70 |
% |
|
6.94 |
% |
Return on average assets (annualized) |
|
0.72 |
% |
|
0.84 |
% |
|
0.81 |
% |
|
0.81 |
% |
Dividend payout ratio |
|
49.06 |
% |
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47.22 |
% |
|
44.83 |
% |
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50.66 |
% |
Other financial data: |
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Net interest margin (a) |
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2.51 |
% |
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2.72 |
% |
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2.59 |
% |
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2.96 |
% |
Effective income tax rate |
|
17.07 |
% |
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17.23 |
% |
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17.55 |
% |
|
17.64 |
% |
Efficiency ratio (b) |
|
66.45 |
% |
|
63.19 |
% |
|
66.39 |
% |
|
64.33 |
% |
Asset Quality: |
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Nonperforming assets: |
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Nonperforming (nonaccrual) loans |
$ |
486 |
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$ |
549 |
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$ |
486 |
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$ |
549 |
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Total nonperforming assets |
$ |
486 |
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$ |
549 |
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$ |
486 |
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$ |
549 |
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Net (recoveries) charge-offs |
$ |
(12 |
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$ |
(17 |
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$ |
(101 |
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$ |
(89 |
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Allowance for loan losses as a % of: |
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Loans |
|
1.13 |
% |
|
1.18 |
% |
|
1.13 |
% |
|
1.18 |
% |
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Nonperforming loans |
|
1,053 |
% |
|
1,015 |
% |
|
1,053 |
% |
|
1,015 |
% |
Nonperforming assets as a % of: |
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Loans and other real estate owned |
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0.11 |
% |
|
0.12 |
% |
|
0.11 |
% |
|
0.12 |
% |
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Total assets |
|
0.05 |
% |
|
0.06 |
% |
|
0.05 |
% |
|
0.06 |
% |
Nonperforming loans as a % of total loans |
|
0.11 |
% |
|
0.12 |
% |
|
0.11 |
% |
|
0.12 |
% |
Annualized net (recoveries) charge-offs |
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as a % of average loans |
|
(0.01 |
% |
|
(0.01 |
% |
|
(0.03 |
% |
|
(0.03 |
% |
Selected average balances: |
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Securities |
$ |
395,529 |
|
|
$ |
315,542 |
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|
$ |
373,203 |
|
|
$ |
288,164 |
|
Loans, net of unearned income |
|
452,668 |
|
|
|
465,285 |
|
|
|
458,882 |
|
|
|
461,170 |
|
Total assets |
|
1,040,985 |
|
|
|
924,949 |
|
|
|
1,009,131 |
|
|
|
885,941 |
|
Total deposits |
|
927,368 |
|
|
|
810,747 |
|
|
|
895,342 |
|
|
|
775,853 |
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Total stockholders' equity |
$ |
106,936 |
|
|
$ |
106,709 |
|
|
$ |
106,798 |
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|
$ |
103,707 |
|
Selected period end balances: |
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Securities |
$ |
407,474 |
|
|
$ |
320,922 |
|
|
$ |
407,474 |
|
|
$ |
320,922 |
|
Loans, net of unearned income |
|
453,232 |
|
|
|
472,453 |
|
|
|
453,232 |
|
|
|
472,453 |
|
Allowance for loan losses |
|
5,119 |
|
|
|
5,575 |
|
|
|
5,119 |
|
|
|
5,575 |
|
Total assets |
|
1,065,871 |
|
|
|
937,890 |
|
|
|
1,065,871 |
|
|
|
937,890 |
|
Total deposits |
|
954,971 |
|
|
|
823,980 |
|
|
|
954,971 |
|
|
|
823,980 |
|
Total stockholders' equity |
$ |
104,929 |
|
|
$ |
106,314 |
|
|
$ |
104,929 |
|
|
$ |
106,314 |
|
|
|
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|
(a) Tax equivalent. See “Explanation of Certain Unaudited Non-GAAP
Financial Measures” and “Reconciliation of GAAP |
|
|
to non-GAAP Measures
(unaudited).” |
|
(b) Efficiency ratio
is the result of noninterest expense divided by the sum of
noninterest income and tax-equivalent |
|
|
net interest income.
See "Reconciliation of GAAP to non-GAAP Measures (unaudited)"
below. |
|
Reports Third
Quarter Net Earnings/page 5 |
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|
|
Reconciliation
of GAAP to non-GAAP Measures (unaudited): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended September 30, |
|
Nine months ended September 30, |
|
(Dollars in thousands, except per share amounts) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Net interest income, as reported (GAAP) |
$ |
6,041 |
|
$ |
5,868 |
|
$ |
17,953 |
|
$ |
18,150 |
|
Tax-equivalent adjustment |
|
117 |
|
|
122 |
|
|
355 |
|
|
369 |
|
Net interest income (tax-equivalent) |
$ |
6,158 |
|
$ |
5,990 |
|
$ |
18,308 |
|
$ |
18,519 |
|
For additional information, contact:Robert W. DumasChairman,
President and CEO(334) 821-9200
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