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  
                                     
                                     
Financial Highlights (unaudited)                              
        Quarter ended September 30,     Nine months ended September 30,  
(Dollars in thousands, except per share amounts)   2021       2020       2021       2020  
Results of Operations                              
Net interest income (a) $ 6,158     $ 5,990     $ 18,308     $ 18,519  
Less: tax-equivalent adjustment   117       122       355       369  
  Net interest income (GAAP)   6,041       5,868       17,953       18,150  
Noninterest income   929       1,374       3,221       3,972  
  Total revenue   6,970       7,242       21,174       22,122  
Provision for loan losses   —           250       (600       1,100  
Noninterest expense   4,709       4,653       14,294       14,468  
Income tax expense   386       403       1,313       1,156  
Net earnings $ 1,875     $ 1,936     $ 6,167     $ 5,398  
                                     
Per share data:                              
Basic and diluted net earnings: $ 0.53     $ 0.54     $ 1.74     $ 1.51  
Cash dividends declared $ 0.26     $ 0.255     $ 0.78     $ 0.765  
Weighted average shares outstanding:                              
  Basic and diluted   3,536,320       3,566,239       3,552,387       3,566,184  
Shares outstanding, at period end   3,529,338       3,566,276       3,529,338       3,566,276  
Book value $ 29.73     $ 29.81     $ 29.73     $ 29.81  
Common stock price:                              
  High $ 35.36     $ 56.80     $ 48.00     $ 63.40  
  Low   33.25       26.26       33.25       24.11  
  Period-end:   33.80       36.26       33.80       36.26  
    To earnings ratio   14.57 x     15.97 x     14.57 x     15.97 x
    To book value   114 %   122 %   114 %   122 %
Performance ratios:                              
Return on average equity (annualized)   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 %   47.22 %   44.83 %   50.66 %
Other financial data:                              
Net interest margin (a)   2.51 %   2.72 %   2.59 %   2.96 %
Effective income tax rate   17.07 %   17.23 %   17.55 %   17.64 %
Efficiency ratio (b)   66.45 %   63.19 %   66.39 %   64.33 %
Asset Quality:                              
Nonperforming assets:                              
  Nonperforming (nonaccrual) loans $ 486     $ 549     $ 486     $ 549  
    Total nonperforming assets $ 486     $ 549     $ 486     $ 549  
                                     
Net (recoveries) charge-offs $ (12     $ (17     $ (101     $ (89  
                                     
Allowance for loan losses as a % of:                              
  Loans   1.13 %   1.18 %   1.13 %   1.18 %
  Nonperforming loans   1,053 %   1,015 %   1,053 %   1,015 %
Nonperforming assets as a % of:                              
  Loans and other real estate owned   0.11 %   0.12 %   0.11 %   0.12 %
  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                              
   as a % of average loans   (0.01 %   (0.01 %   (0.03 %   (0.03 %
Selected average balances:                              
Securities $ 395,529     $ 315,542     $ 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  
Total stockholders' equity $ 106,936     $ 106,709     $ 106,798     $ 103,707  
Selected period end balances:                              
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  
                                     
(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  
                           
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 

Auburn National Bancorpo... (NASDAQ:AUBN)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Auburn National Bancorpo... Charts.
Auburn National Bancorpo... (NASDAQ:AUBN)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Auburn National Bancorpo... Charts.