The Company recorded a negative provision for credit losses during the second quarter of 2023 of
$0.4 million, compared to no provision for credit losses during the second quarter of 2022. The negative provision for credit losses was primarily related to the resolution of a collateral dependent nonperforming loan, with a recorded
investment of $1.3 million and a corresponding allowance of $0.5 million, which was collected in full during the second quarter of 2023.
Noninterest income was $0.8 million for both the second quarter of 2023 and 2022.
Noninterest expense was $5.8 million in the second quarter of 2023, compared to $5.1 million for the second quarter of 2022. The increase in
noninterest expense was primarily due to increases in other noninterest expense of $0.4 million. Other noninterest expense increased due to various items including software costs, ATM and check card expenses, impairment related to a new market
tax credit investment due to the remaining tax credit being less than the Companys investment, and a gain on sale of other real estate owned that was realized in the second quarter of 2022.
Income tax expense was $0.3 million for the second quarter of 2023, compared to $0.4 million for the second quarter of 2022. The Companys
effective tax rate for the second quarter of 2023 was 13.00%, compared to 16.77% in the second quarter of 2022. The Companys effective income tax rate is principally affected by tax-exempt earnings from
the Companys investment in municipal securities and bank-owned life insurance, and the benefits of New Markets Tax Credits.
Total assets were
$1.0 billion at June 30, 2023 and December 31, 2022, compared with $1.1 billion at June 30, 2022. Loans, net of unearned income were $520.4 million at June 30, 2023, compared with $504.5 million and
$440.9 million at December 31, 2022 and June 30, 2022, respectively. The increase in loans at June 30, 2023 and December 31, 2022, as compared with June 30, 2022 reflect growth across all major loan categories, except
commercial and industrial loans, which included PPP loans. Total deposits were $950.7 million at June 30, 2023 and $950.3 million at December 31, 2022, compared with $1.0 billion at June 30, 2022. The Company had
$16.0 million in brokered deposits at June 30, 2023, compared to none at December 31, 2022 and June 30, 2022. The Company had no FHLB advances or other wholesale borrowings outstanding at June 30, 2023, December 31,
2022, or June 30, 2022.
At June 30, 2023, the Companys consolidated stockholders equity was $71.0 million or $20.28 per share,
compared to $68.0 million, or $19.42 per share, at December 31, 2022, and $76.1 million, or $21.68 per share, at June 30, 2022. The increase from December 31, 2022 was primarily driven by net earnings of $3.9 million
and other comprehensive income due to the $1.8 million reduction in unrealized gains/losses on securities available-for-sale, net of tax, partially offset by cash
dividends of $1.9 million, the $0.8 million cumulative effect of a one time charge to adopt the CECL accounting standard on January 1, 2023, and $0.1 million repurchases of Companys common stock. Total unrealized losses on available-for-sale securities declined 5% from $54.7 million on December 31, 2022 to $52.2 million on June 30, 2023. These unrealized losses do not affect
the Banks capital for regulatory capital purposes. At June 30, 2023, the Companys equity to total assets ratio was 6.92%, compared to 6.65% at December 31, 2022, and 7.02% at June 30, 2022. All of the Companys
securities are classified as available-for-sale and not held-to-maturity. Therefore, any
changes in the fair value of the Companys securities portfolio are fully reflected in total equity under generally accepted accounting principles.
The Company paid cash dividends of $0.27 per share in the second quarter of 2023, an increase of 2% from the same period in 2022. The Companys share
repurchases of $0.1 million since December 31, 2022 resulted in 4,225 fewer outstanding common shares at June 30, 2023. At June 30, 2023, the Banks 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
$1.0 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 a loan production office in Phenix City, Alabama.
Additional information about the Company and the Bank may be found by visiting www.auburnbank.com.