Third Quarter 2018 Highlights
Auburn National Bancorporation, Inc. (Nasdaq: AUBN) reported net
earnings of $2.0 million, or $0.54 per share, for the third quarter
of 2018, compared to $2.1 million, or $0.59 per share, for the
third quarter of 2017. Net earnings for the first nine months
of 2018 were $6.4 million, or $1.77 per share compared to $6.0
million, or $1.65 per share, for the first nine months of 2017.
“The Company's third quarter results reflect strong
asset quality and improvement in our net interest margin," said
Robert W. Dumas, President and CEO. Mr. Dumas continued,
"Through the first nine months of 2018, the Company’s net earnings
increased 7% over the same period last year.”
Net interest income (tax-equivalent) was $6.6
million for both the third quarter of 2018 and 2017. While
net interest income (tax equivalent) was unchanged, the Company’s
net interest margin (tax-equivalent) increased to 3.41% in the
third quarter of 2018, compared to 3.32% for the third quarter of
2017 as earning asset yields improved. This increase was
primarily due to loan growth and increases in short-term market
interest rates. Average loans were up 3.2% to $458.0 million
in the third quarter of 2018 compared to $443.6 million in the
third quarter of 2017.
Nonperforming assets were $1.1 million or 0.13% of total assets
at September 30, 2018, compared to $3.0 million or 0.36% of total
assets at September 30, 2017. The decrease in nonperforming
assets was primarily due to the resolution of one nonperforming
commercial real estate loan with a recorded investment of $1.3
million at September 30, 2017. The allowance for loan losses
was 512% of nonperforming loans and 1.04% of total loans at
September 30, 2018, compared to 161% of nonperforming loans and
1.04% of total loans at September 30, 2017. The Company
recorded no provision for loan losses in the third quarter of 2018
and 2017. The provision for loan loss is based upon various
estimates and judgments, including the absolute level of loans,
loan growth, credit quality and the amount of net
charge-offs.
Noninterest income was $0.8 million for the third quarter of
2018 and $1.0 million for the third quarter of 2017.
The decrease was primarily due to a decline in mortgage lending
income. Noninterest expense was $4.8 million compared to $4.2
million in the third quarter of 2017. The increase was
primarily due to routine annual increases in salaries and benefits
expense and a $0.4 million non-routine loss due to misappropriation
of assets, for which we have made a claim against our insurance
company.
Income tax expense was $0.5 million compared to $0.9 million for
the third quarter of 2017 reflecting an effective tax rate of
19.81% compared to 28.89% for the third quarter of 2017. The
decrease in the effective tax rate was primarily due to the Tax
Cuts and Jobs Act, signed into law December 22, 2017, which lowered
the Company’s statutory federal tax rate from 34% to 21%.
The Company paid cash dividends of $0.24 per share in the third
quarter of 2018, an increase of 4.3% from the same period in 2017.
At September 30, 2018, 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 $809 million. 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 8 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,
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,
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,
2017 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) |
|
|
|
|
|
Quarter ended September 30, |
|
|
Nine Months ended September 30, |
|
(Dollars in thousands, except per share amounts) |
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Results of Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income (a) |
$ |
6,575 |
|
|
|
$ |
6,565 |
|
|
$ |
19,484 |
|
|
|
$ |
19,156 |
|
|
Less: tax-equivalent adjustment |
|
153 |
|
|
|
|
304 |
|
|
|
461 |
|
|
|
|
905 |
|
|
|
Net interest income (GAAP) |
|
6,422 |
|
|
|
|
6,261 |
|
|
|
19,023 |
|
|
|
|
18,251 |
|
|
Noninterest income |
|
791 |
|
|
|
|
968 |
|
|
|
2,483 |
|
|
|
|
2,597 |
|
|
|
Total revenue |
|
7,213 |
|
|
|
|
7,229 |
|
|
|
21,506 |
|
|
|
|
20,848 |
|
|
Provision
for loan losses |
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
100 |
|
|
Noninterest
expense |
|
4,750 |
|
|
|
|
4,225 |
|
|
|
13,478 |
|
|
|
|
12,358 |
|
|
Income tax expense |
|
488 |
|
|
|
|
868 |
|
|
|
1,594 |
|
|
|
|
2,369 |
|
|
Net earnings |
$ |
1,975 |
|
|
|
$ |
2,136 |
|
|
$ |
6,434 |
|
|
|
$ |
6,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per
share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted net earnings: |
$ |
0.54 |
|
|
|
$ |
0.59 |
|
|
$ |
1.77 |
|
|
|
$ |
1.65 |
|
|
Cash
dividends declared |
$ |
0.24 |
|
|
|
$ |
0.23 |
|
|
$ |
0.72 |
|
|
|
$ |
0.69 |
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
3,643,834 |
|
|
|
|
3,643,659 |
|
|
|
3,643,750 |
|
|
|
|
3,643,598 |
|
|
Shares
outstanding, at period end |
|
3,643,868 |
|
|
|
|
3,643,668 |
|
|
|
3,643,868 |
|
|
|
|
3,643,668 |
|
|
Book
value |
$ |
23.45 |
|
|
|
$ |
23.75 |
|
|
$ |
23.45 |
|
|
|
$ |
23.75 |
|
|
Common
stock price: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
$ |
53.50 |
|
|
|
$ |
37.71 |
|
|
$ |
53.50 |
|
|
|
$ |
37.79 |
|
|
|
Low |
|
38.31 |
|
|
|
|
34.82 |
|
|
|
35.50 |
|
|
|
|
30.75 |
|
|
|
Period-end: |
|
38.32 |
|
|
|
|
35.00 |
|
|
|
38.32 |
|
|
|
|
35.00 |
|
|
|
|
To earnings
ratio |
|
16.96 |
|
x |
|
|
15.70 |
x |
|
|
16.96 |
|
x |
|
|
15.70 |
|
x |
|
|
To book value |
|
163 |
|
% |
|
|
147 |
% |
|
|
163 |
|
% |
|
|
147 |
|
% |
Performance ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average equity (annualized) |
|
9.08 |
|
% |
|
|
9.87 |
% |
|
|
9.84 |
|
% |
|
|
9.47 |
|
% |
Return on
average assets (annualized) |
|
0.97 |
|
% |
|
|
1.03 |
% |
|
|
1.04 |
|
% |
|
|
0.96 |
|
% |
Dividend
payout ratio |
|
44.44 |
|
% |
|
|
38.98 |
% |
|
|
40.68 |
|
% |
|
|
41.82 |
|
% |
Other financial data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest margin (a) |
|
3.41 |
|
% |
|
|
3.32 |
% |
|
|
3.36 |
|
% |
|
|
3.26 |
|
% |
Effective
income tax rate |
|
19.81 |
|
% |
|
|
28.89 |
% |
|
|
19.86 |
|
% |
|
|
28.24 |
|
% |
Efficiency
ratio (b) |
|
64.49 |
|
% |
|
|
56.09 |
% |
|
|
61.36 |
|
% |
|
|
56.81 |
|
% |
Asset Quality: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming (nonaccrual) loans |
$ |
934 |
|
|
|
$ |
2,902 |
|
|
$ |
934 |
|
|
|
$ |
2,902 |
|
|
|
Other real estate owned |
|
137 |
|
|
|
|
103 |
|
|
|
137 |
|
|
|
|
103 |
|
|
|
|
Total nonperforming assets |
$ |
1,071 |
|
|
|
$ |
3,005 |
|
|
$ |
1,071 |
|
|
|
$ |
3,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(recoveries) charge-offs |
$ |
(35 |
) |
|
|
$ |
295 |
|
|
$ |
(28 |
) |
|
|
$ |
(222 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses as a % of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
1.04 |
|
% |
|
|
1.04 |
% |
|
|
1.04 |
|
% |
|
|
1.04 |
|
% |
|
Nonperforming loans |
|
512 |
|
% |
|
|
161 |
% |
|
|
512 |
|
% |
|
|
161 |
|
% |
Nonperforming assets as a % of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and other real estate owned |
|
0.23 |
|
% |
|
|
0.67 |
% |
|
|
0.23 |
|
% |
|
|
0.67 |
|
% |
|
Total assets |
|
0.13 |
|
% |
|
|
0.36 |
% |
|
|
0.13 |
|
% |
|
|
0.36 |
|
% |
Nonperforming loans as a % of total loans |
|
0.20 |
|
% |
|
|
0.65 |
% |
|
|
0.20 |
|
% |
|
|
0.65 |
|
% |
Annualized net (recoveries) charge-offs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as a % of average loans |
|
(0.03 |
) |
% |
|
|
0.27 |
% |
|
|
(0.01 |
) |
% |
|
|
0.02 |
|
% |
Selected average balances: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities |
$ |
248,684 |
|
|
|
$ |
273,280 |
|
|
$ |
256,667 |
|
|
|
$ |
268,612 |
|
|
Loans, net
of unearned income |
|
457,969 |
|
|
|
|
443,639 |
|
|
|
452,627 |
|
|
|
|
436,740 |
|
|
Total
assets |
|
813,531 |
|
|
|
|
831,097 |
|
|
|
825,249 |
|
|
|
|
832,637 |
|
|
Total
deposits |
|
721,566 |
|
|
|
|
735,372 |
|
|
|
731,411 |
|
|
|
|
738,255 |
|
|
Long-term
debt |
|
— |
|
|
|
|
3,217 |
|
|
|
2,483 |
|
|
|
|
3,217 |
|
|
Total
stockholders' equity |
$ |
86,958 |
|
|
|
|
86,543 |
|
|
|
87,183 |
|
|
|
$ |
84,780 |
|
|
Selected period end balances: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities |
$ |
243,336 |
|
|
|
$ |
265,171 |
|
|
$ |
243,336 |
|
|
|
$ |
265,171 |
|
|
Loans, net
of unearned income |
|
460,327 |
|
|
|
|
449,378 |
|
|
|
460,327 |
|
|
|
|
449,378 |
|
|
Allowance
for loan losses |
|
4,785 |
|
|
|
|
4,670 |
|
|
|
4,785 |
|
|
|
|
4,670 |
|
|
Total
assets |
|
808,951 |
|
|
|
|
828,546 |
|
|
|
808,951 |
|
|
|
|
828,546 |
|
|
Total
deposits |
|
719,306 |
|
|
|
|
732,648 |
|
|
|
719,306 |
|
|
|
|
732,648 |
|
|
Long-term
debt |
|
— |
|
|
|
|
3,217 |
|
|
|
— |
|
|
|
|
3,217 |
|
|
Total
stockholders' equity |
$ |
85,459 |
|
|
|
|
86,538 |
|
|
|
85,459 |
|
|
|
$ |
86,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to non-GAAP Measures
(unaudited): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended September 30, |
|
Nine Months ended September 30, |
|
(Dollars in thousands, except per share amounts) |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net interest income, as reported
(GAAP) |
$ |
6,422 |
|
$ |
6,261 |
|
$ |
19,023 |
|
$ |
18,251 |
|
Tax-equivalent adjustment (a) |
|
153 |
|
|
304 |
|
|
461 |
|
|
905 |
|
Net interest income
(tax-equivalent) |
$ |
6,575 |
|
$ |
6,565 |
|
$ |
19,484 |
|
$ |
19,156 |
|
(a) Using federal income tax rates of 21% and 34% for
2018 and 2017, respectively. |
|
|
|
For additional information, contact:Robert W. DumasPresident and
CEO(334) 821-9200
Auburn National Bancorpo... (NASDAQ:AUBN)
Historical Stock Chart
From Apr 2024 to May 2024
Auburn National Bancorpo... (NASDAQ:AUBN)
Historical Stock Chart
From May 2023 to May 2024