Auburn National Bancorporation, Inc. Reports Second Quarter Net Earnings
MWN-AI** Summary
Auburn National Bancorporation, Inc. (Nasdaq: AUBN) reported a strong performance in its second quarter of 2025, achieving net earnings of $1.8 million, or $0.52 per share, reflecting an 18% increase from the previous quarter's earnings of $1.5 million, or $0.44 per share. Compared to the same quarter last year, this marks a slight improvement from $1.7 million. For the first half of 2025, net earnings totaled $3.4 million, up from $3.1 million during the same period in 2024.
Notable highlights from the report include a 4% increase in net interest income to $7.4 million from $7.1 million in the first quarter of 2025, attributed to growth in interest-earning assets and a 7-basis point improvement in the net interest margin to 3.27%. The bank's noninterest expense decreased by 3%, underscoring operational efficiencies.
The company's credit quality remained robust, with nonperforming assets constituting just 0.03% of total assets. The provision for credit losses for the quarter was $113,000, indicating careful risk management amidst slowing loan demand.
AuburnBank, the bank subsidiary, reported total assets of approximately $1.0 billion. The total deposit base grew to $939.9 million, reflecting changes in reciprocal customer deposits. Additionally, stockholder equity reached $86.1 million, or $24.64 per share, demonstrating a solid financial standing, supported by strong liquidity and capital ratios above minimum regulatory requirements.
President and CEO David A. Hedges emphasized ongoing improvements in credit quality and profitability metrics, expressing optimism for future earnings as the bank's net interest margin is expected to continue its upward trend. The company maintains its commitment to meeting customer needs, given its stable foundation and ongoing financial growth.
MWN-AI** Analysis
Auburn National Bancorporation, Inc. (Nasdaq: AUBN) has demonstrated solid performance in its second quarter of 2025, highlighting an 18% increase in earnings per share compared to the previous quarter and an increase in net interest income by 4%. The net interest margin rose to 3.27%, indicating effective asset and liability management which can enhance profitability in a challenging interest rate environment.
Investors should take note of the bank's impressive asset quality, with nonperforming assets comprising only 0.03% of total assets. This remarkably low figure indicates that Auburn National is managing its credit risks effectively, bolstering investor confidence. The bank's robust capital ratios suggest a strong position to weather potential economic turbulence, while the allowance for credit losses shows proactive risk management.
Moreover, despite a slight decline in overall loan volume due to softer loan demand, the bank’s management remains optimistic about future margin improvements as loans and securities re-price favorably. The bank's disciplined cost management is evident in its 3% reduction in noninterest expenses compared to the prior quarter, which will support its bottom line going forward.
Auburn's current stock price, reflecting a price-to-earnings ratio of approximately 13.09, supports its valuation amidst a growing economy. The attractive dividend yield—maintained at $0.27 per share—illustrates a commitment to returning value to shareholders.
Nonetheless, potential investors should remain cautious of macroeconomic conditions that could impact loan demand and interest rates moving forward. With a forward-looking perspective, Auburn National's consistent earnings growth, strong balance sheet, and commitment to prudent financial management make it an appealing investment opportunity for those looking to diversify their portfolios within the banking sector.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Second Quarter 2025 Highlights:
- Earnings per share increased 18% compared to 1Q 2025
- Net interest income increased 4% compared to 1Q 2025
- Net interest margin (tax-equivalent) increased 7 basis points to 3.27%, compared to 1Q 2025
- Noninterest expense decreased 3% compared to 1Q 2025
- Strong credit quality – Nonperforming assets to total assets were 0.03%
AUBURN, Ala., July 22, 2025 (GLOBE NEWSWIRE) -- Auburn National Bancorporation, Inc. (Nasdaq: AUBN) reported net earnings of $1.8 million, or $0.52 per share, for the second quarter of 2025, compared to $1.5 million, or $0.44 per share, for the first quarter of 2025, and $1.7 million, or $0.50 per share, for the second quarter of 2024. Net earnings were $3.4 million, or $0.96 per share, for the first six months of 2025, compared to $3.1 million, or $0.89 per share, for the first six months of 2024.
“Our second quarter results reflect strong credit quality and continued improvement in our net interest margin,” said David A. Hedges, President and CEO. “While loan demand has slowed, we remain optimistic that our net interest margin will continue to improve as loans and securities re-price. Once again, our capital and liquidity remain strong and we are well positioned to meet the needs of our customers,” continued Mr. Hedges.
Net interest income (tax-equivalent) was $7.4 million in the second quarter of 2025, compared to $7.1 million in the first quarter of 2025, and $6.7 million in the second quarter of 2024. The increase was due to growth in average interest-earnings assets and improvements in our net interest margin.
Net interest margin (tax-equivalent) was 3.27% in the second quarter of 2025, compared to 3.20% in the first quarter of 2025, and 3.06% in the second quarter of 2024. The increase compared to the first quarter of 2025 was primarily due to a decrease in our cost of interest-bearing deposits. The increase compared to the second quarter of 2024 was primarily due to improved yields on interest-earning assets, and a decrease in our cost of interest-bearing deposits.
Nonperforming assets were $0.3 million, or 0.03% of total assets, at June 30, 2025, compared to $0.5 million, or 0.05% at March 31, 2025, and $0.8 million, or 0.08% of total assets, at June 30, 2024.
The Company recorded a charge to provision for credit losses of $113 thousand in the second quarter of 2025, compared to a negative provision for credit losses of $10 thousand and $123 thousand, respectively, in the first quarter of 2025 and the second quarter of 2024.
At June 30, 2025, the Company’s allowance for credit losses was $7.0 million, or 1.24% of total loans, compared to $6.8 million, or 1.20% of total loans, at March 31, 2025, and $7.1 million, or 1.24% of total loans, at June 30, 2024.
Noninterest income was $0.8 million for the second quarter of 2025, compared to $0.7 million for the first quarter of 2025, and $0.9 million in the second quarter of 2024. These changes reflect fluctuations in mortgage lending income and other noninterest income.
Noninterest expense was $5.7 million for the second quarter of 2025, compared to $5.9 million for the first quarter of 2025, and $5.5 million in the second quarter of 2024. The decrease from the first quarter of 2025 was primarily related to decreases in net occupancy expense and other noninterest expense. The increase compared to the second quarter of 2024 was primarily related to routine increases in salaries and benefits expense and increases in professional fees expense.
The provision for income tax expense was $0.5 million for the second quarter of 2025, compared to income tax expense of $0.4 million for the first quarter of 2025, and income tax expense of $0.5 million for the second quarter of 2024.
The effective tax rate for the second quarter of 2025 was 20.92%, compared to 20.40% for the first quarter of 2025 and 21.50% for the second quarter of 2024. The Company’s effective income tax rate is principally affected by tax-exempt earnings from the Company’s investments in municipal securities and loans, bank-owned life insurance, and New Markets Tax Credits.
Total assets were $1.0 billion at June 30, 2025, compared to $996.8 million at March 31, 2025 and $1.0 billion at June 30, 2024. Loans, net of unearned income were $562.7 million at June 30, 2025, compared to $560.7 million at March 31, 2025 and $578.1 million at June 30, 2024. The decrease from June 30, 2024 is primarily related to the payoff of a $14.9 million loan related to one borrower. Proceeds from this loan payoff were used to repay $15.0 million of high-cost non-core funding. Total deposits were $939.9 million at June 30, 2025, compared to $910.5 million at March 31, 2025, and $946.4 million at June 30, 2024. The increase in deposits compared to March 31, 2025 was primarily due to fluctuations in reciprocal customer deposits sold through the Intrafi network. At June 30, 2025 the Company had no reciprocal deposits sold, compared to $64.7 million sold at March 31, 2025, and none at June 30, 2024. The decrease in deposits compared to June 30, 2024 was primarily related to the repayment of $15.0 million in time deposits held by the State of Alabama, partially offset by growth in both noninterest and interest-bearing demand deposits. The Company had no FHLB advances or other wholesale funding outstanding at June 30, 2025, March 31, 2025, or June 30, 2024.
At June 30, 2025, the Company's consolidated stockholders' equity (book value) was $86.1 million or $24.64 per share, compared to $83.1 million, or $23.79 per share, at March 31, 2025, and $75.2 million, or $21.53 per share, at June 30, 2024. The increase from March 31, 2025 was primarily driven by other comprehensive income of $2.1 million due to a decrease in unrealized losses on securities available-for-sale, net of tax, plus net earnings of $1.8 million. These increases in stockholders’ equity were partially offset by cash dividends paid of $0.9 million. Unrealized losses on our securities portfolio vary with market interest rates and do not affect our capital for regulatory capital purposes.
The Company’s tangible common equity (“TCE”) ratio or total equity to total assets ratio was 8.36% at June 30, 2025, compared to 8.34% at March 31, 2025, and 7.34% at June 30, 2024. All of the Company’s marketable securities are classified as available-for-sale. Therefore, any changes in the fair value of the Company’s securities portfolio are reflected in total equity, net of tax, under generally accepted accounting principles.
The Company paid cash dividends of $0.27 per share in the second quarter of 2025. At June 30, 2025, 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 $1.0 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 currently operates seven 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.
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. All statements with respect to our objectives, expectations, anticipations, estimates and intentions and all statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “designed,” “plan,” “point to,” “project,” “could,” “intend,” “target,” “seek” and other similar words and expressions of the future. Forward looking statements, include, without limitation, statements about future financial and operating results, costs and revenues, government policies and changes in policies, including Federal Reserve monetary and regulatory actions. Forward looking statements also include statements about economic conditions generally in our markets and which may affect us, loan demand, mortgage lending activity, changes in the mix of our earning assets (including those generating tax exempt income or tax credits) and our mix and cost of deposits and wholesale liabilities, net interest income and margin, yields on earning assets, the market values and performance of securities held, effects of inflation and employment, including Federal Reserve monetary policies.
Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, achievements and/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. Forward looking statements may not be realized due to numerous factors, including, without limitation, changes in employment levels, actual and expected changes in interest rates and interest rate expectations (generally and those applicable to our assets and liabilities) and the shape of the yield curve, and related changes in our asset values, especially investment securities, noninterest income, loan performance, loan deferrals and modifications, nonperforming assets, other real estate owned, provision for credit losses, including possible adjustments to the fair values of securities available for sale, charge-offs, collateral values, credit quality, asset sales, insurance claims, and market trends. 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 described in the “Cautionary Note Regarding Forward-Looking Statements” and the risks and uncertainties described under “Risk Factors” and elsewhere in our annual report on Form 10-K for the year ended December 31, 2024 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:
David A. Hedges
President and CEO
(334) 821-9200
| Financial Highlights (unaudited) | |||||||||||||||||||||||||
| Quarters Ended | Six months ended | ||||||||||||||||||||||||
| (Dollars in thousands, except per share | June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||||||
| amounts) | 2025 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Results of Operations | |||||||||||||||||||||||||
| Net interest income (a) | $ | 7,363 | $ | 7,062 | $ | 6,728 | $ | 14,425 | $ | 13,405 | |||||||||||||||
| Less: tax-equivalent adjustment | 19 | 17 | 19 | 36 | 39 | ||||||||||||||||||||
| Net interest income (GAAP) | 7,344 | 7,045 | 6,709 | 14,389 | 13,366 | ||||||||||||||||||||
| Noninterest income | 789 | 747 | 896 | 1,536 | 1,783 | ||||||||||||||||||||
| Total revenue | 8,133 | 7,792 | 7,605 | 15,925 | 15,149 | ||||||||||||||||||||
| Provision for credit losses | 113 | (10 | ) | (123 | ) | 103 | 211 | ||||||||||||||||||
| Noninterest expense | 5,702 | 5,880 | 5,519 | 11,582 | 11,194 | ||||||||||||||||||||
| Income tax expense | 485 | 392 | 475 | 877 | 639 | ||||||||||||||||||||
| Net earnings | $ | 1,833 | $ | 1,530 | $ | 1,734 | $ | 3,363 | $ | 3,105 | |||||||||||||||
| Per share data: | |||||||||||||||||||||||||
| Basic and diluted net earnings: | $ | 0.52 | $ | 0.44 | $ | 0.50 | $ | 0.96 | $ | 0.89 | |||||||||||||||
| Cash dividends declared | $ | 0.27 | $ | 0.27 | $ | 0.27 | $ | 0.54 | $ | 0.54 | |||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||||
| Basic and diluted | 3,493,699 | 3,493,699 | 3,493,699 | 3,493,699 | 3,493,681 | ||||||||||||||||||||
| Shares outstanding, at period end | 3,493,699 | 3,493,699 | 3,493,699 | 3,493,699 | 3,493,699 | ||||||||||||||||||||
| Book value | $ | 24.64 | $ | 23.79 | $ | 21.53 | $ | 24.64 | $ | 21.53 | |||||||||||||||
| Common stock price: | |||||||||||||||||||||||||
| High | $ | 25.98 | $ | 23.37 | $ | 19.25 | $ | 25.28 | $ | 21.55 | |||||||||||||||
| Low | 19.48 | 20.36 | 16.63 | 19.48 | 16.63 | ||||||||||||||||||||
| Period-end: | 25.00 | 21.59 | 18.29 | 25.00 | 18.29 | ||||||||||||||||||||
| To earnings ratio (c) | 13.09 | x | 11.42 | x | 101.61 | x | 13.09 | x | 101.61 | x | |||||||||||||||
| To book value | 101 | % | 91 | % | 85 | % | 101 | % | 85 | % | |||||||||||||||
| Performance ratios: | |||||||||||||||||||||||||
| Return on average equity (annualized) | 9.00 | % | 7.83 | % | 9.63 | % | 8.26 | % | 8.34 | % | |||||||||||||||
| Return on average assets (annualized) | 0.74 | % | 0.62 | % | 0.71 | % | 0.68 | % | 0.64 | % | |||||||||||||||
| Dividend payout ratio | 51.92 | % | 61.36 | % | 54.00 | % | 56.25 | % | 60.67 | % | |||||||||||||||
| Other financial data: | |||||||||||||||||||||||||
| Net interest margin (a) | 3.27 | % | 3.20 | % | 3.06 | % | 3.24 | % | 3.05 | % | |||||||||||||||
| Effective income tax rate | 20.92 | % | 20.40 | % | 21.50 | % | 20.68 | % | 17.07 | % | |||||||||||||||
| Efficiency ratio (b) | 69.95 | % | 75.30 | % | 72.39 | % | 72.56 | % | 73.70 | % | |||||||||||||||
| Asset Quality: | |||||||||||||||||||||||||
| Nonperforming assets: | |||||||||||||||||||||||||
| Nonperforming (nonaccrual) loans | $ | 302 | $ | 520 | $ | 794 | $ | 302 | $ | 794 | |||||||||||||||
| Total nonperforming assets | $ | 302 | $ | 520 | $ | 794 | $ | 302 | $ | 794 | |||||||||||||||
| Net (recoveries) charge-offs | $ | (48 | ) | $ | 64 | $ | 9 | $ | 16 | $ | (58 | ) | |||||||||||||
| Allowance for credit losses as a % of: | |||||||||||||||||||||||||
| Loans | 1.24 | % | 1.20 | % | 1.24 | % | 1.24 | % | 1.24 | % | |||||||||||||||
| Nonperforming loans | 2,306 | % | 1,298 | % | 899 | % | 2,306 | % | 899 | % | |||||||||||||||
| Nonperforming assets as a % of: | |||||||||||||||||||||||||
| Loans and other real estate owned | 0.05 | % | 0.09 | % | 0.14 | % | 0.05 | % | 0.14 | % | |||||||||||||||
| Total assets | 0.03 | % | 0.05 | % | 0.08 | % | 0.03 | % | 0.08 | % | |||||||||||||||
| Nonperforming loans | |||||||||||||||||||||||||
| as a % of total loans | 0.05 | % | 0.09 | % | 0.14 | % | 0.05 | % | 0.14 | % | |||||||||||||||
| Annualized net (recoveries) charge-offs | |||||||||||||||||||||||||
| as a % of average loans | (0.03 | ) | % | 0.05 | % | 0.01 | % | 0.01 | % | (0.02 | ) | % | |||||||||||||
| Selected average balances: | |||||||||||||||||||||||||
| Securities | $ | 240,177 | $ | 240,588 | $ | 258,228 | $ | 240,381 | $ | 262,917 | |||||||||||||||
| Loans, net of unearned income | 559,770 | 566,082 | 573,443 | 562,909 | 567,100 | ||||||||||||||||||||
| Total assets | 990,523 | 987,272 | 978,107 | 988,907 | 977,518 | ||||||||||||||||||||
| Total deposits | 905,227 | 906,805 | 900,673 | 906,011 | 898,862 | ||||||||||||||||||||
| Total stockholders' equity | $ | 81,447 | $ | 78,158 | $ | 72,059 | $ | 81,447 | $ | 74,503 | |||||||||||||||
| Selected period end balances: | |||||||||||||||||||||||||
| Securities | $ | 239,681 | $ | 242,468 | $ | 254,359 | $ | 239,681 | $ | 254,359 | |||||||||||||||
| Loans, net of unearned income | 562,714 | 560,650 | 578,068 | 562,714 | 578,068 | ||||||||||||||||||||
| Allowance for credit losses | 6,965 | 6,750 | 7,142 | 6,965 | 7,142 | ||||||||||||||||||||
| Total assets | 1,029,224 | 996,786 | 1,025,054 | 1,029,224 | 1,025,054 | ||||||||||||||||||||
| Total deposits | 939,851 | 910,503 | 946,405 | 939,851 | 946,405 | ||||||||||||||||||||
| Total stockholders' equity | $ | 86,071 | $ | 83,115 | $ | 75,209 | $ | 86,071 | $ | 75,209 | |||||||||||||||
| (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. | |||||||||||||||||||||||||
| (c) Calculated by dividing period end share price by earnings per share for the previous four quarters. | |||||||||||||||||||||||||
| Reconciliation of GAAP to non-GAAP Measures (unaudited): | ||||||||||||||||
| Quarters Ended | Six months ended | |||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
| (Dollars in thousands, except per share amounts) | 2025 | 2025 | 2024 | 2025 | 2024 | |||||||||||
| Net interest income, as reported (GAAP) | $ | 7,344 | $ | 7,045 | $ | 6,709 | $ | 14,389 | $ | 13,366 | ||||||
| Tax-equivalent adjustment | 19 | 17 | 19 | 36 | 39 | |||||||||||
| Net interest income (tax-equivalent) | $ | 7,363 | $ | 7,062 | $ | 6,728 | $ | 14,425 | $ | 13,405 |
FAQ**
How does Auburn National Bancorporation Inc. AUBN plan to sustain its 18% increase in earnings per share moving forward, given the recent slowdown in loan demand?
What specific strategies is Auburn National Bancorporation Inc. AUBN implementing to further enhance its net interest margin, which has increased by 7 basis points?
With nonperforming assets at only 0.03%, what risk management practices does Auburn National Bancorporation Inc. AUBN employ to maintain such strong credit quality?
Can Auburn National Bancorporation Inc. AUBN provide insights into how the decrease in noninterest expense will affect its 2025 financial performance in comparison to previous quarters?
**MWN-AI FAQ is based on asking OpenAI questions about Auburn National Bancorporation Inc. (NASDAQ: AUBN).
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