UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: January 26, 2016
AUBURN NATIONAL
BANCORPORATION, INC.
(Exact Name of Registrant as Specified in Charter)
|
|
|
|
|
| Delaware |
|
0-26486 |
|
63-0885779 |
| (State or Other Jurisdiction
of Incorporation) |
|
(Commission File Number) |
|
(IRS Employer
Identification No.) |
100 North Gay Street, P.O. Drawer 3110, Auburn, Alabama 36831-3110
(Addresses of Principal Executive Offices, including Zip Code)
(334) 821-9200
(Registrant’s Telephone Number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
| ¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ |
Pre commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. |
Results of Operations and Financial Condition |
The information, including the exhibits
attached hereto, in this Current Report on Form 8-K is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document filed by the Company pursuant to the Securities Act of 1933, as amended, or into any other
filing or document made by the Company pursuant to the Securities Exchange Act of 1934, as amended, except as otherwise expressly stated in any such filing.
Attached and incorporated herein by reference as Exhibit 99.1 is a copy of the press release of Auburn National Bancorporation, Inc., dated
January 26, 2016, reporting the Company’s financial results for the quarter and year ended December 31, 2015.
| Item 9.01. |
Financial Statements, Pro Forma Financial Information and Exhibits. |
| |
(c) |
Exhibits. The following exhibit is furnished herewith: |
|
|
|
| Exhibit No. |
|
Exhibit Description |
|
|
| 99.1 |
|
Press Release, dated January 26, 2016 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
| AUBURN NATIONAL BANCORPORATION, INC. |
| (Registrant) |
|
| /s/ E.L. Spencer,
Jr. |
| E.L. Spencer, Jr. |
| Chairman, President and Chief Executive Officer |
Date: January 26, 2016
EXHIBIT INDEX
|
|
|
| Exhibit No. |
|
Exhibit Description |
|
|
| 99.1 |
|
Press Release, dated January 26, 2016 |
Exhibit 99.1
|
|
|
|
|
|
For additional information, contact:
E.L. Spencer, Jr. President, CEO
and Chairman of the Board
(334) 821-9200 |
Press Release – January 26, 2016
Auburn National Bancorporation, Inc. Reports
Record Full Year Net Earnings of $7.9 million, or $2.16 per share
Full Year 2015 Results – Compared to Full Year 2014:
| • |
|
Net earnings increased 6% |
| • |
|
Net interest income (tax-equivalent) increased 6% compared to 2014 |
| • |
|
Improved profitability – return on average assets of 0.98%, compared to 0.97% in 2014 |
| • |
|
Loan growth – average loans increased $25.4 million or 7% compared to 2014 |
AUBURN, Alabama
– Auburn National Bancorporation (Nasdaq: AUBN) reported record net earnings of $7.9 million, or $2.16 per share for the full year 2015, compared to $7.4 million, or $2.04 per share, for the full year 2014. For the fourth quarter of 2015, the
Company reported net earnings of $1.9 million, or $0.53 per share, compared to $1.9 million, or $0.52 per share, for the fourth quarter of 2014.
E.L. Spencer, Jr., President, CEO and Chairman of the Board, commented: “We are pleased to report record earnings for the full year 2015.
Our full year and fourth quarter results reflect an increase in net interest income driven by loan growth and continued improvements in our cost of funds.”
Net interest income (tax-equivalent) was $6.1 million for the fourth quarter of 2015, an increase of 4% compared to the fourth quarter
of 2014. This increase reflects management’s continued efforts to increase earnings by shifting the Company’s asset mix through loan growth, focusing on deposit pricing, and repaying higher-cost wholesale funding. Average loans were $426.2
million in the fourth quarter of 2015, an increase of $28.3 million, or 7%, from the fourth quarter of 2014. Average deposits were $720.9 million in the fourth quarter of 2015, an increase of $38.0 million, or 6%, from the fourth quarter of 2014.
Nonperforming assets were $3.0 million, or 0.36% of total assets, at December 31, 2015, compared to $1.7 million, or 0.21% of total
assets, at December 31, 2014. The increase in nonperforming assets was primarily due to one nonperforming commercial real estate loan with a recorded investment of $1.5 million at December 31, 2015. Approximately $0.6 million, or 68%, of
net charge-offs recognized in the fourth quarter of 2015 related to this nonperforming commercial real estate loan.
Net charge-offs were
$0.8 million, or 0.79% of average loans on an annualized basis for the fourth quarter of 2015, compared to $0.1 million, or 0.07% of average loans on an annualized basis for the fourth quarter of 2014. Net charge-offs recognized in the fourth
quarter of 2015 primarily related to two impaired loans with corresponding valuation allowances that were established in prior periods, including the above nonperforming commercial real estate loan. The Company recorded no provision for loan losses
in the fourth quarter of 2015, compared to $0.2 million in the fourth quarter 2014.
Noninterest income was $1.0 million in the fourth
quarter of 2015, compared to $1.1 million in the fourth quarter of 2014, primarily due to a decrease in mortgage lending income of $0.1 million as mortgage refinance activity declined.
Noninterest expense was $4.1 million in the fourth quarter of 2015 compared to $3.8 million in fourth quarter of 2014, as gains realized on
the sale of OREO properties decreased by $0.3 million. Any gains or losses on disposal of OREO are reflected in noninterest expense.
Income tax expense was approximately $0.7 million for both the fourth quarter of 2015 and the
fourth quarter of 2014. The Company’s income tax expense for the fourth quarter of 2015 reflects an effective tax rate of 25.19%, compared to 27.94% in the fourth quarter of 2014. The decrease in the effective tax rate was primarily
attributable to an increase in tax exempt earnings from the Company’s investments in municipal securities and bank-owned life insurance.
The Company paid cash dividends of $0.22 per share in the fourth quarter of 2015. At December 31, 2015, the Bank’s regulatory
capital was well above the minimum amounts required to be “well capitalized” under current regulatory standards.
About Auburn National
Bancorporation
Auburn National Bancorporation, Inc. (the “Company”) is the parent company of AuburnBank (the
“Bank”), with total assets of approximately $817 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, 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, 2014 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, including the presentation and calculation of the efficiency ratio.
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. 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 Full Year and Fourth Quarter Net Earnings/page 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial Highlights (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Quarter ended December 31, |
|
|
Years ended December 31, |
|
| (Dollars in thousands, except per share amounts) |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
| Results of Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest income (a) |
|
$ |
6,065 |
|
|
$ |
5,813 |
|
|
$ |
24,060 |
|
|
$ |
22,741 |
|
| Less: tax-equivalent adjustment |
|
|
328 |
|
|
|
331 |
|
|
|
1,342 |
|
|
|
1,288 |
|
| |
|
| Net interest income (GAAP) |
|
|
5,737 |
|
|
|
5,482 |
|
|
|
22,718 |
|
|
|
21,453 |
|
| Noninterest income |
|
|
988 |
|
|
|
1,079 |
|
|
|
4,532 |
|
|
|
3,933 |
|
| |
|
| Total revenue |
|
|
6,725 |
|
|
|
6,561 |
|
|
|
27,250 |
|
|
|
25,386 |
|
| Provision for loan losses |
|
|
— |
|
|
|
150 |
|
|
|
200 |
|
|
|
50 |
|
| Noninterest expense |
|
|
4,137 |
|
|
|
3,780 |
|
|
|
16,372 |
|
|
|
15,104 |
|
| Income tax expense |
|
|
652 |
|
|
|
735 |
|
|
|
2,820 |
|
|
|
2,784 |
|
| |
|
| Net earnings |
|
$ |
1,936 |
|
|
$ |
1,896 |
|
|
$ |
7,858 |
|
|
$ |
7,448 |
|
| |
|
| |
|
|
|
|
|
|
| Per share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted net earnings: |
|
$ |
0.53 |
|
|
$ |
0.52 |
|
|
$ |
2.16 |
|
|
$ |
2.04 |
|
| Cash dividends declared |
|
$ |
0.22 |
|
|
$ |
0.215 |
|
|
$ |
0.88 |
|
|
$ |
0.86 |
|
| Weighted average shares outstanding: |
|
|
3,643,478 |
|
|
|
3,643,328 |
|
|
|
3,643,428 |
|
|
|
3,643,278 |
|
| Shares outstanding, at period end |
|
|
3,643,478 |
|
|
|
3,643,328 |
|
|
|
3,643,478 |
|
|
|
3,643,328 |
|
| Book value |
|
$ |
21.94 |
|
|
$ |
20.80 |
|
|
$ |
21.94 |
|
|
$ |
20.80 |
|
| Common stock price: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| High |
|
$ |
30.39 |
|
|
$ |
24.64 |
|
|
$ |
30.39 |
|
|
$ |
25.80 |
|
| Low |
|
|
26.14 |
|
|
|
22.10 |
|
|
|
23.15 |
|
|
|
22.10 |
|
| Period-end |
|
$ |
29.62 |
|
|
$ |
23.64 |
|
|
$ |
29.62 |
|
|
$ |
23.64 |
|
| To earnings ratio |
|
|
13.78 |
x |
|
|
11.59 |
x |
|
|
13.78 |
x |
|
|
11.59 |
x |
| To book value |
|
|
135 |
% |
|
|
114 |
% |
|
|
135 |
% |
|
|
114 |
% |
| Performance ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on average equity (annualized): |
|
|
9.59 |
% |
|
|
10.21 |
% |
|
|
9.98 |
% |
|
|
10.53 |
% |
| Return on average assets (annualized): |
|
|
0.95 |
% |
|
|
0.98 |
% |
|
|
0.98 |
% |
|
|
0.97 |
% |
| Dividend payout ratio |
|
|
41.51 |
% |
|
|
41.35 |
% |
|
|
40.74 |
% |
|
|
42.16 |
% |
| Other financial data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest margin (a) |
|
|
3.12 |
% |
|
|
3.14 |
% |
|
|
3.17 |
% |
|
|
3.15 |
% |
| Effective income tax rate |
|
|
25.19 |
% |
|
|
27.94 |
% |
|
|
26.41 |
% |
|
|
27.21 |
% |
| Efficiency ratio (b) |
|
|
58.66 |
% |
|
|
54.85 |
% |
|
|
57.26 |
% |
|
|
56.62 |
% |
| Asset Quality: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Nonperforming assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Nonperforming (nonaccrual) loans |
|
$ |
2,714 |
|
|
$ |
1,117 |
|
|
$ |
2,714 |
|
|
$ |
1,117 |
|
| Other real estate owned |
|
|
252 |
|
|
|
534 |
|
|
|
252 |
|
|
|
534 |
|
| |
|
| Total nonperforming assets |
|
$ |
2,966 |
|
|
$ |
1,651 |
|
|
$ |
2,966 |
|
|
$ |
1,651 |
|
| |
|
| |
|
|
|
|
|
|
| Net charge-offs |
|
$ |
838 |
|
|
$ |
68 |
|
|
$ |
747 |
|
|
$ |
482 |
|
|
|
|
|
|
| Allowance for loan losses as a % of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans |
|
|
1.01 |
% |
|
|
1.20 |
% |
|
|
1.01 |
% |
|
|
1.20 |
% |
| Nonperforming loans |
|
|
158 |
% |
|
|
433 |
% |
|
|
158 |
% |
|
|
433 |
% |
| Nonperforming assets as a % of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans and other real estate owned |
|
|
0.70 |
% |
|
|
0.41 |
% |
|
|
0.70 |
% |
|
|
0.41 |
% |
| Total assets |
|
|
0.36 |
% |
|
|
0.21 |
% |
|
|
0.36 |
% |
|
|
0.21 |
% |
| Nonperforming loans as a % of total loans |
|
|
0.64 |
% |
|
|
0.28 |
% |
|
|
0.64 |
% |
|
|
0.28 |
% |
| Net charge-offs as a % of average loans (c) |
|
|
0.79 |
% |
|
|
0.07 |
% |
|
|
0.18 |
% |
|
|
0.12 |
% |
| Selected average balances: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Securities |
|
$ |
246,130 |
|
|
$ |
265,616 |
|
|
$ |
255,231 |
|
|
$ |
270,526 |
|
| Loans, net of unearned income |
|
|
426,192 |
|
|
|
397,875 |
|
|
|
411,346 |
|
|
|
385,962 |
|
| Total assets |
|
|
815,616 |
|
|
|
777,548 |
|
|
|
804,127 |
|
|
|
770,972 |
|
| Total deposits |
|
|
720,854 |
|
|
|
682,812 |
|
|
|
710,308 |
|
|
|
681,127 |
|
| Long-term debt |
|
|
7,217 |
|
|
|
12,217 |
|
|
|
8,285 |
|
|
|
12,217 |
|
| Total stockholders’ equity |
|
|
80,764 |
|
|
|
74,307 |
|
|
|
78,724 |
|
|
|
70,714 |
|
| Selected period end balances: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Securities |
|
$ |
241,687 |
|
|
$ |
267,603 |
|
|
$ |
241,687 |
|
|
$ |
267,603 |
|
| Loans, net of unearned income |
|
|
426,410 |
|
|
|
402,954 |
|
|
|
426,410 |
|
|
|
402,954 |
|
| Allowance for loan losses |
|
|
4,289 |
|
|
|
4,836 |
|
|
|
4,289 |
|
|
|
4,836 |
|
| Total assets |
|
|
817,189 |
|
|
|
789,231 |
|
|
|
817,189 |
|
|
|
789,231 |
|
| Total deposits |
|
|
723,627 |
|
|
|
693,390 |
|
|
|
723,627 |
|
|
|
693,390 |
|
| Long-term debt |
|
|
7,217 |
|
|
|
12,217 |
|
|
|
7,217 |
|
|
|
12,217 |
|
| Total stockholders’ equity
|
|
|
79,949 |
|
|
|
75,799 |
|
|
|
79,949 |
|
|
|
75,799 |
|
| |
|
| (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.
|
| (c) |
Net charge-offs are annualized. |
Reports Full Year and Fourth Quarter Net Earnings/page 4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of GAAP to non-GAAP Measures (unaudited): |
|
| |
|
Quarter ended December 31, |
|
|
Years ended December 31, |
|
| (Dollars in thousands, except per share amounts) |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
| Net interest income, as reported (GAAP) |
|
$ |
5,737 |
|
|
$ |
5,482 |
|
|
$ |
22,718 |
|
|
$ |
21,453 |
|
| Tax-equivalent adjustment |
|
|
328 |
|
|
|
331 |
|
|
|
1,342 |
|
|
|
1,288 |
|
| |
|
| Net interest income (tax-equivalent) |
|
$ |
6,065 |
|
|
$ |
5,813 |
|
|
$ |
24,060 |
|
|
$ |
22,741 |
|
| |
|
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