First Quarter 2019 vs. 2018 Highlights
Auburn National Bancorporation, Inc. (Nasdaq: AUBN) reported record
net earnings of $2.5 million, or $0.70 per share, for the first
quarter of 2019, compared to $2.2 million, or $0.60 per share, for
the first quarter of 2018.
“The Company's first quarter results reflect record
net earnings and strong improvement in our net interest margin due
to loan growth and improvements in our balance sheet mix,” said
Robert W. Dumas, Chairman, President and CEO. Mr. Dumas
continued, “In the first quarter of 2019, the Company’s net
interest margin increased 25 basis points over the same period last
year.”
Net interest income (tax-equivalent) was $6.8
million for the first quarter of 2019, a 5% increase compared to
$6.4 million for the first quarter of 2018. This increase was
primarily due to loan growth and improved yields on
interest-earning assets. Average loans were up 6% to $477.3
million in the first quarter of 2019 compared to $451.3 million in
the first quarter of 2018.
Nonperforming assets were $0.3 million or 0.04% of total assets
at March 31, 2019, compared to $3.2 million or 0.39% of total
assets at March 31, 2018. The decrease in nonperforming
assets was primarily due to the resolution of two nonperforming
commercial real estate loans with a recorded investment of $2.1
million at March 31, 2018. The allowance for loan losses was
1.02% of total loans at March 31, 2019, compared to 1.07% of total
loans at March 31, 2018. The Company recorded no provision
for loan losses in the first quarter of 2019 and 2018. 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 $1.2 million for the first quarter of
2019 and $0.9 million for the first quarter of 2018. The
increase was primarily due to a $0.3 million pre-tax gain from an
insurance recovery received in the first quarter of 2019 with
respect to a $0.4 million pre-tax loss incurred in the third
quarter of 2018 related to misappropriation of assets.
Noninterest expense was $4.6 million compared to $4.4 million in
the first quarter of 2018. The increase was primarily due to
routine annual increases in salaries and benefits expense.
Income tax expense was $0.6 million compared to $0.5 million for
the first quarter of 2018. The effective tax rate was 19.75%
compared to 19.74% for the first quarter of
2018.
The Company paid cash dividends of $0.25 per share in the first
quarter of 2019, an increase of 4.2% from the same period in
2018. We purchased 62,518 of our shares in the latest
quarter. At March 31, 2019, 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 $835 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,
2018 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.
Reports First Quarter Net Earnings |
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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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2019 |
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2018 |
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Results of Operations |
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Net
interest income (a) |
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$ |
6,766 |
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$ |
6,440 |
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Less: tax-equivalent adjustment |
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146 |
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156 |
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Net interest income (GAAP) |
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6,620 |
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6,284 |
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Noninterest income |
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1,160 |
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853 |
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Total revenue |
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7,780 |
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7,137 |
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Noninterest
expense |
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4,611 |
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4,402 |
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Income tax expense |
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626 |
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540 |
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Net earnings |
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$ |
2,543 |
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$ |
2,195 |
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Per
share data: |
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Basic and
diluted net earnings |
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$ |
0.70 |
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$ |
0.60 |
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Cash
dividends declared |
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$ |
0.25 |
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$ |
0.24 |
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Weighted
average shares outstanding: |
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Basic and diluted |
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3,614,741 |
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3,643,683 |
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Shares
outstanding, at period end |
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3,581,485 |
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3,643,698 |
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Book
value |
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$ |
25.39 |
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$ |
23.36 |
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Common
stock price: |
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High |
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$ |
39.43 |
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$ |
39.25 |
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Low |
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30.61 |
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35.50 |
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Period-end |
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39.43 |
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39.06 |
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To earnings ratio |
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15.71 |
x |
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17.44 |
x |
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To book value |
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155 |
% |
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167 |
% |
Performance ratios: |
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Return on
average equity (annualized) |
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11.31 |
% |
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9.95 |
% |
Return on
average assets (annualized) |
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1.23 |
% |
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1.04 |
% |
Dividend
payout ratio |
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35.71 |
% |
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40.00 |
% |
Other financial data: |
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Net
interest margin (a) |
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3.54 |
% |
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3.29 |
% |
Effective
income tax rate |
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19.75 |
% |
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19.74 |
% |
Efficiency
ratio (b) |
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58.18 |
% |
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60.36 |
% |
Asset Quality: |
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Nonperforming assets: |
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Nonperforming (nonaccrual) loans |
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$ |
169 |
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$ |
3,239 |
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Other real estate owned |
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172 |
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— |
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Total nonperforming assets |
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$ |
341 |
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$ |
3,239 |
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Net
(recoveries) charge-offs |
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$ |
(18 |
) |
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$ |
25 |
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Allowance for loan losses as a % of: |
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Loans |
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1.02 |
% |
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1.07 |
% |
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Nonperforming loans |
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2,845 |
% |
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146 |
% |
Nonperforming assets as a % of: |
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Loans and other real estate owned |
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0.07 |
% |
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0.73 |
% |
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Total assets |
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0.04 |
% |
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0.39 |
% |
Nonperforming loans as a % of total loans |
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0.04 |
% |
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0.73 |
% |
Annualized
net (recoveries) charge-offs as a % of average loans |
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(0.02) |
% |
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0.02 |
% |
Selected average balances: |
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Securities |
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$ |
240,024 |
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$ |
265,626 |
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Loans, net
of unearned income |
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477,335 |
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451,347 |
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Total
assets |
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827,143 |
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841,820 |
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Total
deposits |
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732,539 |
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744,365 |
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Long-term
debt |
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— |
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3,217 |
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Total
stockholders' equity |
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89,934 |
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88,281 |
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Selected period end balances: |
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Securities |
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$ |
241,287 |
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$ |
259,177 |
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Loans, net
of unearned income |
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472,650 |
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443,804 |
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Allowance
for loan losses |
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4,808 |
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4,732 |
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Total
assets |
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835,014 |
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830,721 |
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Total
deposits |
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739,631 |
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737,332 |
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Long-term
debt |
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— |
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3,217 |
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Total
stockholders' equity |
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90,949 |
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85,108 |
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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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Reports First Quarter Earnings |
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Reconciliation of GAAP to non-GAAP Measures
(unaudited): |
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Quarter ended March 31, |
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(Dollars in thousands, except per share amounts) |
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2019 |
|
2018 |
|
Net interest income, as reported
(GAAP) |
|
|
|
|
$ |
6,620 |
$ |
6,284 |
|
Tax-equivalent adjustment |
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|
|
|
|
146 |
|
156 |
|
Net interest income
(tax-equivalent) |
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$ |
6,766 |
$ |
6,440 |
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For additional information, contact:Robert W. DumasPresident and
CEO(334) 821-9200
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