First Quarter 2017 Highlights
Auburn National Bancorporation, Inc. (Nasdaq:AUBN) reported net
earnings of $1.9 million, or $0.52 per share, for the first quarter
of 2017, compared to $2.2 million, or $0.60 per share, for the
first quarter of 2016.
“Although net earnings decreased compared to the
same quarter last year, the Company's first quarter results reflect
an increase in our net interest income and margin, strong asset
quality, and controlled expenses," said E. L. Spencer, Jr.,
President, CEO, and Chairman of the Board. Mr. Spencer
continued, "The decrease was primarily due to a large loan recovery
that required a negative provision of $600 thousand in the first
quarter of 2016.”
Net interest income (tax-equivalent) was $6.2
million for the first quarter of 2017, compared to $6.0 million for
the first quarter of 2016. This increase was primarily due to
a reduction in interest expense as the Company lowered its deposit
costs and repaid higher-cost wholesale funding sources.
Average loans were $429.8 million in the first quarter of 2017
compared to $429.5 million in the first quarter of 2016.
Average deposits were $742.0 million in the first quarter of 2017,
an increase of $15.6 million or 2%, from the first quarter of
2016.
Nonperforming assets were $2.5 million, or 0.29% of total
assets, at March 31, 2017, compared to $2.3 million, or 0.28% of
total assets, at March 31, 2016. The Company recorded no
provision for loan losses in the first quarter of 2017, compared to
a negative provision of $0.6 million in the first quarter of 2016.
Annualized net charge-offs as a percent of average loans were 0.05%
for the first quarter of 2017 compared to annualized net recoveries
of 1.01% for the first quarter of 2016. The Company
recognized a recovery to the allowance for loan losses of $1.2
million from the payoff of one nonperforming construction and land
development loan during the first quarter of 2016.
Noninterest income and expense were $0.8 million and $4.1
million, respectively, for the first quarter of 2017, unchanged
from the first quarter of 2016. The Company had an improved
efficiency ratio of 58.62% for the first quarter of 2017, compared
to 59.96% in the first quarter of 2016.
Income tax expense and the effective tax rate were $0.8 million
and 27.50%, respectively, for the first quarter of 2017 unchanged
from the first quarter of 2016.
The Company paid cash dividends of $0.23 per share in the first
quarter of 2017, an increase of 2.2% from the same period in 2016.
At March 31, 2017, the Bank’s regulatory capital was 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 $843 million. The Bank is an Alabama state-chartered
bank that is a member of the Federal Reserve System and 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 full-service branches in Auburn, Opelika, Valley, and
Notasulga, Alabama. In-store branches are located in the
Kroger and Wal-Mart SuperCenter stores in Opelika. The Bank also
operates a commercial loan production office in 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,
economic conditions 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), loan
performance, nonperforming assets, other real estate owned,
provision for loan losses, charge-offs, other-than-temporary
impairments, collateral values, credit quality, asset sales, 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,
2016 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 includes 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.
Financial Highlights (unaudited) |
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Quarter ended March 31, |
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(Dollars in thousands, except per share amounts) |
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2017 |
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2016 |
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Results of Operations |
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Net
interest income (a) |
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$ |
6,189 |
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$ |
6,019 |
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Less: tax-equivalent adjustment |
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300 |
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322 |
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Net interest income (GAAP) |
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5,889 |
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5,697 |
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Noninterest income |
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836 |
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834 |
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Total revenue |
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6,725 |
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6,531 |
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Provision
for loan losses |
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— |
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(600 |
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Noninterest
expense |
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4,118 |
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4,109 |
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Income tax expense |
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717 |
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831 |
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Net earnings |
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$ |
1,890 |
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$ |
2,191 |
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Per
share data: |
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Basic and
diluted net earnings |
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$ |
0.52 |
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$ |
0.60 |
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Cash
dividends declared |
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$ |
0.23 |
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$ |
0.225 |
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Weighted
average shares outstanding: |
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Basic and diluted |
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3,643,541 |
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3,643,484 |
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Shares
outstanding, at period end |
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3,643,543 |
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3,643,503 |
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Book
value |
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$ |
22.88 |
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$ |
22.75 |
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Common
stock price: |
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High |
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$ |
33.69 |
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$ |
30.49 |
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Low |
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30.75 |
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24.56 |
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Period-end |
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33.00 |
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28.25 |
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To earnings ratio |
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15.28 |
x |
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12.61 |
x |
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To book value |
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144 |
% |
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124 |
% |
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Performance ratios: |
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Return on
average equity (annualized) |
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9.09 |
% |
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10.82 |
% |
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Return on
average assets (annualized) |
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0.90 |
% |
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1.07 |
% |
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Dividend
payout ratio |
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44.23 |
% |
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37.50 |
% |
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Other financial data: |
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Net
interest margin (a) |
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3.19 |
% |
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3.12 |
% |
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Effective
income tax rate |
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27.50 |
% |
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27.50 |
% |
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Efficiency
ratio (b) |
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58.62 |
% |
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59.96 |
% |
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Asset Quality: |
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Nonperforming assets: |
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Nonperforming (nonaccrual) loans |
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$ |
2,318 |
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$ |
1,938 |
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Other real estate owned |
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152 |
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397 |
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Total nonperforming assets |
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$ |
2,470 |
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$ |
2,335 |
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Net
charge-offs (recoveries) |
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$ |
55 |
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$ |
(1,085 |
) |
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Allowance
for loan losses as a % of: |
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Loans |
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1.07 |
% |
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1.11 |
% |
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Nonperforming loans |
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198 |
% |
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246 |
% |
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Nonperforming assets as a % of: |
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Loans and other real estate owned |
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0.57 |
% |
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0.54 |
% |
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Total assets |
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0.29 |
% |
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0.28 |
% |
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Nonperforming loans as a % of total loans |
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0.54 |
% |
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0.45 |
% |
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Annualized
net charge-offs (recoveries) as a % of average loans |
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0.05 |
% |
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(1.01 |
)% |
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Selected average balances: |
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Securities |
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$ |
257,894 |
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$ |
237,087 |
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Loans, net
of unearned income |
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429,784 |
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429,528 |
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Total
assets |
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835,679 |
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821,382 |
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Total
deposits |
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742,002 |
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726,354 |
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Long-term
debt |
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3,217 |
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7,217 |
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Total
stockholders' equity |
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83,191 |
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80,965 |
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Selected period end balances: |
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Securities |
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$ |
273,853 |
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$ |
234,109 |
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Loans, net
of unearned income |
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430,553 |
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431,763 |
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Allowance
for loan losses |
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4,588 |
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4,774 |
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Total
assets |
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842,781 |
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833,328 |
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Total
deposits |
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750,302 |
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737,361 |
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Long-term
debt |
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3,217 |
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7,217 |
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Total
stockholders' equity |
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83,366 |
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82,887 |
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(a) Tax
equivalent. See “Explanation of Certain Unaudited Non-GAAP
Financial Measures” and “Reconciliation |
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of GAAP to
non-GAAP Measures (unaudited).” |
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(b)
Efficiency ratio is the result of noninterest expense divided by
the sum of noninterest income and |
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tax-equivalent net interest income. |
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Reconciliation of GAAP to non-GAAP Measures
(unaudited): |
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Quarter ended March 31, |
(Dollars in thousands, except per share amounts) |
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|
|
2017 |
|
2016 |
Net
interest income, as reported (GAAP) |
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|
|
|
$ |
5,889 |
$ |
5,697 |
Tax-equivalent adjustment |
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|
|
|
|
300 |
|
322 |
Net interest income (tax-equivalent) |
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$ |
6,189 |
$ |
6,019 |
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For additional information, contact:
E.L. Spencer, Jr.
President, CEO and
Chairman of the Board
(334) 821-9200
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