Auburn National Bancorporation, Inc. (Nasdaq: AUBN) reported net
earnings of $1.8 million, or $0.51 per share, for the second
quarter of 2022, compared to $2.3 million, or $0.65 per share, for
the second quarter of 2021. Net earnings for the first six months
of 2022 were $3.9 million, or $1.10 per share, compared to $4.3
million, or $1.21 per share, for the first six months of 2021.
“The Company’s second quarter results reflect
another solid quarter. Asset quality remains strong, while
recent Federal Reserve rate increases and balance sheet growth
contributed to the overall increase in revenue,” said Robert W.
Dumas, Chairman, President and CEO.
“With our strong base of core deposits, rising
interest rates should continue to drive revenue growth in the
second half of 2022,” continued Mr. Dumas.
Total revenue increased approximately 2% in the
second quarter of 2022, compared to the second quarter of 2021,
primarily due to net interest income growth.
Net interest income (tax-equivalent) was $6.5 million for the
second quarter of 2022, a 6% increase compared to $6.1 million for
the second quarter of 2021. This increase was primarily due to
balance sheet growth and recent increases in market interest rates.
The Federal Reserve increased the target federal funds range by 25
basis points on March 17, 2022, 50 basis points on May 5 and 75
basis points on June 16. A further increase in this target range is
anticipated at the Federal Reserve Open Market Committee July 2022
meeting, and further increases are possible if inflation remains
elevated. Net interest margin (tax-equivalent) was 2.60% in the
second quarter of 2022 and 2021.
At June 30, 2022, the Company’s allowance for loan losses was
$4.7 million, or 1.07% of total loans, compared to $4.9 million, or
1.08% of total loans, at December 31, 2021, and $5.1 million, or
1.12% of total loans, at June 30, 2021.
The Company had no provision for loan losses during the second
quarter of 2022, compared to a negative provision for loan losses
of $0.6 million during the second quarter of 2021. The provision
for loan losses is based upon various estimates and judgments,
including the absolute level of loans, economic conditions, credit
quality and the amount of net charge-offs.
Noninterest income was $0.8 million for the second quarter of
2022, compared to $1.1 million for the second quarter of
2021. The decrease in noninterest income was primarily due to
a decrease in mortgage lending income of $0.2 million as refinance
activity slowed in our primary market area, as market interest
rates on mortgage loans increased.
Noninterest expense was $5.1 million for the second quarter of
2022, compared to $4.9 million for the second quarter of 2021. The
increase in noninterest expense was primarily due to an increase in
net occupancy and equipment expense of $0.3 million related to the
Company’s new headquarters, which opened in June 2022.
Income tax expense was $0.4 million for the second quarter of
2022, compared to $0.5 million for the second quarter of 2021. The
Company’s effective tax rate for the second quarter of 2022 was
16.77%, compared to 18.06% in the second quarter of 2021. This
decrease was primarily due to an income tax benefit related to a
New Markets Tax Credit investment funded in the fourth quarter of
2021. The Company’s effective income tax rate is principally
impacted by tax-exempt earnings from the Company’s investments in
municipal securities, bank-owned life insurance, and New Markets
Tax Credits.
At June 30, 2022, the Company's consolidated stockholders'
equity was $76.1 million or $21.68 per share, compared to $103.7
million, or $29.46 per share, at December 31, 2021, and $106.0
million, or $29.91 per share, at June 30, 2021. The decrease from
December 31, 2021 was primarily driven by an other comprehensive
loss due to the change in unrealized gains/losses on securities
available-for-sale, net of tax, in the first six months of 2022, of
$29.3 million. The increase in the unrealized loss on securities
was primarily due to increases in market interest rates. These
unrealized losses do not affect the Bank’s capital for regulatory
capital purposes.
The Company paid cash dividends of $0.265 per share in the
second quarter of 2022, an increase of 2% from the same period in
2021. The Company’s share repurchases of $0.3 million since
December 31, 2021 resulted in 10,640 fewer outstanding common
shares at June 30, 2022. At June 30, 2022, 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 continuing effects of the COVID-19 pandemic and
related government, Federal Reserve monetary and regulatory
actions, including the continuing effects of pandemic-related
economic stimulus and 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, effects of inflation, including related tightening of
monetary policies and increases in the Federal Reserve’s target
federal funds rate, interest rates (generally and those applicable
to our assets and liabilities) and changes in asset values as a
result of interest rate changes, 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, 2021 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.
For additional information, contact:Robert W. DumasChairman,
President and CEO(334) 821-9200
Reports Second Quarter Net Earnings/page 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Highlights (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended June 30, |
|
Six months ended ended June 30, |
(Dollars in thousands, except per share amounts) |
2022 |
|
2021 |
|
2022 |
|
2021 |
Results of Operations |
|
|
|
|
|
|
|
|
|
|
|
Net interest income (a) |
$ |
6,484 |
|
|
$ |
6,093 |
|
|
$ |
12,674 |
|
|
$ |
12,150 |
|
Less: tax-equivalent adjustment |
110 |
|
|
118 |
|
|
222 |
|
|
238 |
|
Net interest income (GAAP) |
6,374 |
|
|
5,975 |
|
|
12,452 |
|
|
11,912 |
|
Noninterest income |
848 |
|
|
1,131 |
|
|
1,756 |
|
|
2,313 |
|
Total revenue |
7,222 |
|
|
7,106 |
|
|
14,208 |
|
|
14,225 |
|
Provision for loan losses |
— |
|
|
(600 |
) |
|
(250 |
) |
|
(600 |
) |
Noninterest expense |
5,058 |
|
|
4,916 |
|
|
9,959 |
|
|
9,606 |
|
Income tax expense |
363 |
|
|
504 |
|
|
617 |
|
|
927 |
|
Net earnings |
$ |
1,801 |
|
|
$ |
2,286 |
|
|
$ |
3,882 |
|
|
$ |
4,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data: |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net earnings: |
$ |
0.51 |
|
|
$ |
0.65 |
|
|
$ |
1.10 |
|
|
$ |
1.21 |
|
Cash dividends declared |
$ |
0.265 |
|
|
$ |
0.26 |
|
|
$ |
0.53 |
|
|
$ |
0.52 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
3,513,353 |
|
|
3,554,871 |
|
|
3,515,991 |
|
|
3,560,554 |
|
Shares outstanding, at period end |
3,509,940 |
|
|
3,545,855 |
|
|
3,509,940 |
|
|
3,545,855 |
|
Book value |
$ |
21.68 |
|
|
$ |
29.91 |
|
|
$ |
21.68 |
|
|
$ |
29.91 |
|
Common stock price: |
|
|
|
|
|
|
|
|
|
|
|
High |
$ |
33.57 |
|
|
$ |
38.90 |
|
|
$ |
34.49 |
|
|
$ |
48.00 |
|
Low |
27.04 |
|
|
34.50 |
|
|
27.04 |
|
|
34.50 |
|
Period-end: |
27.04 |
|
|
35.46 |
|
|
27.04 |
|
|
35.46 |
|
To earnings ratio |
12.52 |
x |
|
15.22 |
x |
|
12.52 |
x |
|
15.22 |
x |
To book value |
125 |
% |
|
119 |
% |
|
125 |
% |
|
119 |
% |
Performance ratios: |
|
|
|
|
|
|
|
|
|
|
|
Return on average equity (annualized) |
8.26 |
% |
|
8.74 |
% |
|
8.10 |
% |
|
8.04 |
% |
Return on average assets (annualized) |
0.66 |
% |
|
0.91 |
% |
|
0.70 |
% |
|
0.86 |
% |
Dividend payout ratio |
51.96 |
% |
|
40.00 |
% |
|
48.18 |
% |
|
42.98 |
% |
Other financial data: |
|
|
|
|
|
|
|
|
|
|
|
Net interest margin (a) |
2.60 |
% |
|
2.60 |
% |
|
2.51 |
% |
|
2.63 |
% |
Effective income tax rate |
16.77 |
% |
|
18.06 |
% |
|
13.71 |
% |
|
17.76 |
% |
Efficiency ratio (b) |
68.99 |
% |
|
68.05 |
% |
|
69.02 |
% |
|
66.42 |
% |
Asset Quality: |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming (nonaccrual) loans |
$ |
359 |
|
|
$ |
628 |
|
|
$ |
359 |
|
|
$ |
628 |
|
Total nonperforming assets |
$ |
359 |
|
|
$ |
628 |
|
|
$ |
359 |
|
|
$ |
628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net recoveries |
$ |
(58 |
) |
|
$ |
(25 |
) |
|
$ |
(27 |
) |
|
$ |
(89 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses as a % of: |
|
|
|
|
|
|
|
|
|
|
|
Loans |
1.07 |
% |
|
1.12 |
% |
|
1.07 |
% |
|
1.12 |
% |
Nonperforming loans |
1,314 |
% |
|
813 |
% |
|
1,314 |
% |
|
813 |
% |
Nonperforming assets as a % of: |
|
|
|
|
|
|
|
|
|
|
|
Loans and other real estate owned |
0.08 |
% |
|
0.14 |
% |
|
0.08 |
% |
|
0.14 |
% |
Total assets |
0.03 |
% |
|
0.06 |
% |
|
0.03 |
% |
|
0.06 |
% |
Nonperforming loans as a % of total loans |
0.08 |
% |
|
0.14 |
% |
|
0.08 |
% |
|
0.14 |
% |
Annualized net recoveries |
|
|
|
|
|
|
|
|
|
|
|
as a % of average loans |
(0.05 |
)% |
|
(0.02 |
)% |
|
(0.01 |
)% |
|
(0.04 |
)% |
Selected average balances: |
|
|
|
|
|
|
|
|
|
|
|
Securities |
$ |
427,426 |
|
|
$ |
370,582 |
|
|
$ |
431,240 |
|
|
$ |
361,855 |
|
Loans, net of unearned income |
428,612 |
|
|
460,672 |
|
|
434,131 |
|
|
462,040 |
|
Total assets |
1,092,759 |
|
|
1,005,041 |
|
|
1,103,523 |
|
|
992,940 |
|
Total deposits |
999,867 |
|
|
894,757 |
|
|
1,001,620 |
|
|
879,063 |
|
Total stockholders' equity |
$ |
87,247 |
|
|
$ |
104,591 |
|
|
$ |
95,822 |
|
|
$ |
106,729 |
|
Selected period end balances: |
|
|
|
|
|
|
|
|
|
|
|
Securities |
$ |
429,220 |
|
|
$ |
384,865 |
|
|
$ |
429,220 |
|
|
$ |
384,865 |
|
Loans, net of unearned income |
440,872 |
|
|
456,984 |
|
|
440,872 |
|
|
456,984 |
|
Allowance for loan losses |
4,716 |
|
|
5,107 |
|
|
4,716 |
|
|
5,107 |
|
Total assets |
1,084,251 |
|
|
1,036,232 |
|
|
1,084,251 |
|
|
1,036,232 |
|
Total deposits |
1,002,698 |
|
|
923,462 |
|
|
1,002,698 |
|
|
923,462 |
|
Total stockholders' equity |
$ |
76,107 |
|
|
$ |
106,043 |
|
|
$ |
76,107 |
|
|
$ |
106,043 |
|
(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 Second
Quarter Net Earnings/page 5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of GAAP to non-GAAP Measures (unaudited): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended June 30, |
|
Six months ended ended June 30, |
(Dollars in thousands, except per share amounts) |
2022 |
|
2021 |
|
2022 |
|
2021 |
Net interest income, as reported (GAAP) |
$ |
6,374 |
|
|
$ |
5,975 |
|
|
$ |
12,452 |
|
|
$ |
11,912 |
|
Tax-equivalent adjustment |
|
110 |
|
|
|
118 |
|
|
|
222 |
|
|
|
238 |
|
Net interest income (tax-equivalent) |
$ |
6,484 |
|
|
$ |
6,093 |
|
|
$ |
12,674 |
|
|
$ |
12,150 |
|
Auburn National Bancorpo... (NASDAQ:AUBN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Auburn National Bancorpo... (NASDAQ:AUBN)
Historical Stock Chart
From Apr 2023 to Apr 2024